Title 6 — Banks and Banking

Title 6 Banks and Banking

CHAPTER 1 GENERAL PROVISIONS

§ 6:1 Short title

This Act shall be known and may be cited as the "Louisiana Banking Law."

Amended by Acts 1972, No. 747, §1; Acts 1984, No. 719, §1, eff. Jan. 1, 1985.

§ 6:2 General definitions

As used in this law:

(1) "Bank" means any state bank or any national bank.

(2) "Branch" or "branch office" means any manned office of a bank, including a branch of an out-of-state bank, other than an automated teller machine, electronic fund transfer terminal, point of sale terminal, or similar device or terminal. The term "branch" or "branch office" shall not include a loan production office or deposit production office or any combination thereof.

(3) "Business of banking" or "banking business" means lending money, and either receiving deposits, or paying checks anywhere within this state.

(4) "Commercial lender" means any person not otherwise subject to regulation or required to be licensed under the laws of this state who takes assignment of or defers payment of any obligation for any domestic corporation, foreign corporation, partnership in commendam formed pursuant to the laws of this state, foreign limited partnership, or a partnership in which all of the partners are either corporations, foreign limited partnerships, partnerships in commendam or partnerships comprised of corporations, foreign limited partnerships, or partnerships in commendam, or ordinary partnerships or any other person entering into obligations for commercial or business purposes.

(5) "Commissioner" means the commissioner of financial institutions.

(6) "Credit union" means a financial institution organized in accordance with the provisions of R.S. 6:641 et seq. or in accordance with similar provisions of the laws of the United States.

(7)(a) "Electronic financial terminal" means an electronic information processing device other than a telephone which is established to do either or both of the following:

(i) Capture the data necessary to initiate financial transactions.

(ii) Through its attendant support system store or initiate the transmission of the information necessary to consummate a financial transaction.

(b) The term includes without limitation point-of-sale terminals, merchant-operated terminals, cash-dispensing machines, and automated teller machines.

(8) "Financial institution" means any person organized to engage in the business of banking pursuant to the laws of the United States or any person organized to engage in the business of banking pursuant to this Title.

(9) "Gross negligence" means a reckless disregard of, or a carelessness amounting to indifference to the best interests of the corporation or the shareholders thereof, and involves a substantial deviation below the standard of care expected to be maintained by a reasonably careful person under like circumstances.

(10) "Mutual state bank" means a form of state bank organized under the provisions of Chapter 3 of this Title.

(11) "National bank" means any corporation organized under the provisions of the National Banking Act (12 U.S.C. 1 et seq.).

(12) "Person", unless the context requires limiting the use thereof to only natural persons, means any natural or juristic person.

(13) "Savings and loan association" means a financial institution organized under the provisions of Chapter 9 of this Title or a financial institution formed pursuant to 12 U.S.C. 1461 et seq., including homesteads, building and loan associations, savings and loan associations, state chartered savings banks insured by the Federal Deposit Insurance Corporation, or societies, including both capital stock and mutual associations organized under the laws of this state or such institutions or federal savings banks organized under the laws of the United States.

(14) "State bank" means any corporation organized under the provisions of Chapter 3 of this Title.

(15) "Temporary scholastic branch" means a branch opened by a state or federally chartered financial institution on a college or university campus without the necessity of obtaining a certificate of authority from the commissioner, provided that the services offered at the facility are only on a temporary basis during registration and for an additional period of up to seven days per year.

(16) "Trust company" means a corporation or a limited liability trust company organized under this Chapter or organized under the laws of the United States, including a trust company organized under the laws of this state before June 27, 2003, or an entity chartered to act as a fiduciary that is neither a depository institution nor a foreign bank.

(17) "Unsafe and unsound practice or condition" means the inability of a financial institution to meet its withdrawal requests, the violation of the institution's articles of incorporation, or the violation of any law or any regulation governing that institution.

Amended by Acts 1976, No. 498, §1; Acts 1984, No. 719, §1, eff. Jan. 1, 1985; Acts 1985, No. 716, §1; Acts 1985, No. 359, §2, eff. July 9, 1985; Acts 1986, No. 163, §1; Acts 1992, No. 650, §1, eff. July 2, 1992; Acts 1995, No. 354, §1, eff. June 16, 1995; Acts 1997, No. 42, §2; Acts 1997, No. 929, §1; Acts 2008, No. 124, §1; Acts 2020, No. 183, §1.

§ 6:3 Effect on existing banks

The certificates of authority of state banks existing at the time of the effective date of this law shall continue in full force and effect, but all state banks and to the extent applicable all banks shall thereafter be operated in accordance with the provisions of this law; and, any state bank by filing an application to amend its articles of incorporation with the commissioner shall thereafter be subject to the provisions of this law.

Amended by Acts 1976, No. 498, §1; Acts 1984, No. 719, §1, eff. Jan. 1, 1985.

§ 6:4 Employment reference; release of certain information

A. A bank, savings and loan association, trust company, or credit union may provide to any other such financial institution a written employment reference which may include information reported to federal banking regulators pursuant to federal law and regulations involving a theft, embezzlement, misappropriation, or other defalcation. Where the written employment reference contains such information and where a copy of the written employment reference is sent to the employee in question at the last known address of such employee, a bank, savings and loan association, trust company, or credit union shall not be liable for providing such an employment reference unless the information provided is false and the financial institution providing the false information does so with knowledge and malice.

B. The provisions in Subsection A of this Section are supplemental to and shall not preclude or limit a bank, savings and loan association, trust company, or credit union from being governed by the provisions of R.S. 23:291.

Acts 1989, No. 249, §1; Acts 2008, No. 124, §1.

§ 6:5 Public policy

It is the declared public policy of the state of Louisiana to encourage and to foster the development of financial institutions under a dual chartering system of the state and federal governments. In order to carry out this policy, the office of financial institutions is authorized and requested to use its resources in the promotion and development of the dual chartering system under the laws of Louisiana.

Acts 1990, No. 203, §1, eff. July 3, 1990; Acts 1993, No. 960, §1; Acts 2021, No. 17, §1.

CHAPTER 2 OFFICE OF FINANCIAL INSTITUTIONS

PART I GENERAL PROVISIONS

§ 6:101 Establishment of office; commissioner

A. There is hereby created the Office of Financial Institutions as a state agency, within the office of the governor. It shall have supervisory and regulatory jurisdiction over all financial institutions and other persons as provided by this Title, and such other jurisdiction as is conferred on the office or commissioner in other legislation. The commissioner of the Office of Financial Institutions shall have exclusive supervisory and regulatory jurisdiction and authority over Louisiana state-chartered financial institutions and other financial entities regulated by the Office of Financial Institutions, and the state legislature shall have exclusive lawmaking authority, except for rulemaking authority, regarding the supervision and regulation of the same. The provisions of this Subsection are subject to and do not supersede the provisions of Part IV, Interstate Banking, of Chapter 6 of Title 6 of the Revised Statutes of 1950. The provisions of this Subsection shall not apply to any litigation pending on August 15, 2003.

B. The chief officer of the office of financial institutions shall be the commissioner of financial institutions. The commissioner shall be appointed by the governor, shall be submitted to the Senate for confirmation, and shall have five years of active experience as one of the following:

(1) An accountant with a degree in accounting from an accredited institution or a certified public accountant authorized to practice in Louisiana.

(2) An attorney licensed to practice law within this state.

(3) A certified licensed agent, broker, or principal who is registered as such pursuant to R.S. 51:701 et seq. or under the Securities and Exchange Act of 1934.

(4) An officer of an institution regulated by the Office of Financial Institutions or shall be a person who possesses at least fifteen years of active experience as a state or federal financial institutions regulator. The commissioner shall have been active in such major policymaking function and actively employed by the state or federal financial institutions regulatory authority within the previous five years of the appointment.

C. The commissioner shall also serve as commissioner of securities.

D. The commissioner shall receive a salary set and determined by the governor payable monthly on the commissioner's own authorization.

E. The commissioner qualifies by taking and filing the necessary oath of office. He shall serve for a term of four years from the date of his induction and until his successor qualifies.

Acts 1984, No. 719, §1, eff. Jan. 1, 1985; Acts 1999, No. 344, §1, eff. June 16, 1999; Acts 2001, No. 8, §2, eff. July 1, 2001; Acts 2001, No. 9, §1, eff. July 1, 2001; Acts 2003, No. 521, §1; Acts 2003, No. 869, §1.

§ 6:102 Officers and employees; post-employment restriction

A. The commissioner may appoint a deputy commissioner of financial institutions who shall be subject to applicable civil service laws, rules, and regulations. In the absence of the commissioner, the deputy commissioner of financial institutions shall exercise any of the powers conferred by law on the commissioner.

B. The commissioner may also appoint one or more chief examiners within the office of financial institutions who shall have such authority as the commissioner may delegate over specific areas within the jurisdiction of the office. The chief examiners as well as all employees other than the commissioner shall be subject to applicable civil service laws, rules, and regulations.

C. The commissioner may employ a principal assistant, a private secretary, and such other examiners and employees as may be necessary for the efficient operation of the office. The commissioner may delegate to any officer or employee of the office such powers as he may deem appropriate and may designate any officer or employee of the office to perform any of his duties. The commissioner and such employees as he may designate may administer an oath to any person whose testimony may be required in the investigation of the affairs of financial institutions and other entities subject to the jurisdiction of the office of financial institutions.

D.(1) Each officer and employee, including the commissioner, shall be prohibited for a period of two years following the termination of his employment with the office of financial institutions from:

(a) Assisting another person for compensation in a particular transaction or in an appearance in connection with a particular transaction for which the officer or employee had responsibility to effectively direct the action of the office of financial institutions at any time during his employment and which involves the office of financial institutions; or

(b) Rendering on a contractual basis to or for the office of financial institutions any service which the officer or employee rendered to the office of financial institutions during his employment there.

(2) However, the provisions of Paragraph (1) of this Subsection shall not apply to post-employment work done for or with a federally chartered agency regulating financial institutions or their holding companies.

(3) A legal entity in which a former officer or employee of the office of financial institutions is an officer, director, trustee, partner, or employee shall be prohibited for a period of two years following the termination of his employment, from assisting another person for compensation in a particular transaction or in an appearance in connection with a particular transaction for which such officer or employee had responsibility to effectively direct the action of the office of financial institutions at any time during his employment and which involves the office of financial institutions. This restriction shall not apply to a legal entity which is a federally chartered agency regulating financial institutions or their holding companies. Subject to the provisions of Paragraphs (1), (2) and (4) of this Subsection, such a legal entity may continue to participate in particular transactions commenced prior to termination of the employment of the former officer or employee of the office of financial institutions.

(4) No former officer or employee shall share in any compensation received by another person for assistance which such former officer or employee is prohibited from rendering by this Subsection.

(5) Notwithstanding any other law to the contrary, this Subsection shall be applicable to each officer and employee of the office of financial institutions and shall be the sole controlling provision on post-employment restrictions.

Acts 1984, No. 719, §1, eff. Jan. 1, 1985; Acts 1986, No. 452, §1.

§ 6:103 Records of the Office of Financial Institutions

A. Except as provided in Subsections B and H, all records of the Office of Financial Institutions shall be kept strictly confidential within the office, and such records and reports shall not be subject to subpoena or other legal process except as provided for in Subsection H.

B. The commissioner, in his sole discretion, may disclose or cause the employees of the Office of Financial Institutions to disclose:

(1) Information about a particular financial institution to that institution.

(2) Information about any financial institution to any other financial institution regulatory authority.

(3) Information about a financial institution, upon resolution of the board of directors of that institution, that is being considered for merger or acquisition to the proposed merger or acquisition partner.

(4) Information about a financial institution that is in an impaired, unsafe, or unsound condition to another institution that has under consideration the merger or acquisition of that institution when the information is necessary to enable that institution to prepare a merger or acquisition after notification to the impaired institution by the commissioner.

(5) The public portion of an application for a certificate of authority to organize a new state bank or additional branch office.

(6) Information to the state treasurer or to the legislative auditor concerning any failure by a financial institution to secure public funds when such security is required by law, regulation, or contract.

(7) Information obtained under the provisions of R.S. 15:587(A) to any financial institution.

(8)(a) Information about a certified public accountant, real estate appraiser, or attorney to their respective boards and associations.

(b) Information about a particular financial institution to the commissioner of insurance when that financial institution is affiliated with an insurance company or other entity licensed and regulated by the commissioner of insurance.

(9) Information submitted pursuant to R.S. 6:124.

(10) Confidential information or records of either the Office of Financial Institutions or financial institutions and other supervised entities chartered or licensed in accordance with Title 6 of the Louisiana Revised Statutes of 1950, produced by discovery or introduced into evidence as part of an administrative hearing conducted in accordance with the Administrative Procedure Act, and notwithstanding any other provision of law to the contrary, such records shall remain confidential and shall not be deemed public.

(11) Statistical information compiled by the Office of Financial Institutions, provided the information does not reveal the identity of any person or entity which is the source of that information.

(12) Any action taken by the commissioner of the Office of Financial Institutions and any legal grounds upon which such action is based relative to the fitness of any person to receive, or to continue to hold any license the issuance of which requires the approval of the commissioner of the Office of Financial Institutions.

(13) The status of, and any action taken by the commissioner of the Office of Financial Institutions regarding, any application any person is required to file with the commissioner, or the Office of Financial Institutions.

(14) Any action taken by the commissioner of the Office of Financial Institutions to deny, suspend, or revoke a license, order refunds, impose civil money penalties, or enter into a consent agreement against any person pursuant to the enforcement powers of the commissioner authorized in R.S. 6:121.1, or otherwise authorized by law.

(15) Guidance, advisory opinions and interpretations issued by the Office of Financial Institutions from time to time, provided that any names or other identifying information contained within the original of such issuances, shall be excised from any text or summary, unless those parties who would be identified, consent in writing to such disclosure.

(16) Information that may be obtained in connection with any online licensing system, as provided for in R.S. 6:1088.1, to other regulatory agencies that utilize the same system and to third-party providers of the system.

(17) Records of the Office of Financial Institutions, other than criminal history record information provided to the office by a state or federal law enforcement agency, concerning any person subject to its jurisdiction when such records are requested by another state or federal agency having authority to license or investigate such entity or person.

C. Records made by the office shall be retained by the office for seven years, except those records that pertain to the internal business operations of the office.

D. A copy of any document on file with the office which is declared public by the laws of this state or by regulation of the commissioner and is certified by the commissioner as being a true copy may be introduced in evidence as if it were the original. The commissioner shall establish a schedule of fees for copies of those documents.

E.(1) Copies of agency records and reports of examination of financial institutions which from time to time may be left with such financial institutions by the Office of Financial Institutions shall be:

(a) Kept strictly confidential by all persons.

(b) In whatever form, the property of the Office of Financial Institutions.

(c) Obtainable only from the Office of Financial Institutions by the procedures established pursuant to Subsection H.

(d) Deemed a privileged communication under applicable state law and Federal Rule of Evidence 501 and shall not be admissible in evidence in any court action or proceeding except pursuant to subpoena of a court of record.

(e) For the purposes of this Title and Titles 9, 44, and 51 of the Louisiana Revised Statutes of 1950, read in pari materia with R.S. 44:4.

(2) The board of directors of a financial institution may, by resolution, authorize the disclosure of information contained in its report of examination to attorneys, CPA's, and consultants employed by the financial institution, agents of a licensed banker's blanket bond company for the purpose of obtaining blanket bond coverage, and to prospective directors of the financial institution. Such a person, if not covered by a written code of professional conduct provided for by Louisiana law, shall enter into a written confidentiality agreement with the financial institution establishing his status and affirming that he will not disclose any information that he has obtained from the report of examination other than for the purposes expressly provided for in the agreement.

F.(1) Any information disclosed by the commissioner or employees of the Office of Financial Institutions to any person pursuant to Paragraphs B(1) through (4), (6), and (8) of this Section and any information received by the commissioner from any other financial institution regulatory authority shall be kept strictly confidential by all persons and all such information, in whatever form, shall not be subject to subpoena or other legal process.

(2)(a) It shall be unlawful for any person, including current and former employees of the Office of Financial Institutions, who receives information pursuant to Subsection B of this Section to disclose such information to anyone other than a state or federal bank regulatory agency without authority from the commissioner of the Office of Financial Institutions.

(b) Anyone who is found guilty of violating Subparagraph (2)(a) of this Subsection shall be fined not more than five hundred dollars or imprisoned for not more than ninety days, or both.

G. Office of Financial Institutions employees or officers, or employees of financial institutions or licensed lenders, or members of the public making good faith criminal referrals to either federal, state, or local law enforcement officials shall not be liable to retaliatory lawsuits by those individuals suspected of the commission of a crime.

H. Notwithstanding any other provision of law to the contrary, except for documents or information of other federal or state regulatory and law enforcement agencies in the possession of the Office of Financial Institutions, any federal or state district court within the state of Louisiana may order the Office of Financial Institutions to disclose information and produce documents belonging to the Office of Financial Institutions, which are relevant to claims or disputes at issue in a lawsuit, including but not limited to any writings, records, accounts, letters, letter books, photographs, reports of examination, work papers of examiners, loan write-ups, line sheets, handwritten notes, loan classification documents, or other applicable materials of the Office of Financial Institutions, subject to all of the following conditions:

(1) The person seeking any such information or documents shall file a motion in a federal or state district court in the state of Louisiana having jurisdiction over the subject matter.

(2) The motion shall specifically set forth a concise summary of the claims or disputes at issue in the suit or proceeding and shall describe the information and documents sought to be produced or disclosed by the Office of Financial Institutions.

(3) The person seeking such information or documents shall provide a copy of any motion, pleadings, or documents relating to the motion to the Office of Financial Institutions prior to any hearing or proceeding relating to the request for disclosure of information or documents in the possession of the Office of Financial Institutions to allow the office a reasonable period of time within which to respond to such filing in an adequate manner, but in no event fewer than ten days prior to such scheduled hearing date.

(4) When no other source is available, and upon a showing of good cause and substantial need, the court may order the disclosure and production of such information or documents sought by the motion.

(5) In the event the court orders the disclosure and production of such information or documents, the court shall enter a protective order limiting the disclosure and production of any such information or documents to any of the following:

(a) The person requesting the information or documents.

(b) Any other party to the lawsuit or proceeding.

(c) The state or federal district court and any duly authorized officials thereof.

(d) Any witness who testifies under oath during a deposition, hearing, or trial.

(e) Any attorney for any such party or witness.

(f) Any other person as deemed necessary and appropriate by the court.

(6) Any such protective order shall require any person to whom any such information or documents are disclosed or produced to hold such information or documents strictly confidential and prohibit the dissemination or disclosure of any such information or documents to any other person except as authorized by the court.

(7) The private financial records of clients of open or closed financial institutions in the custody of the Office of Financial Institutions shall remain confidential under this Section and R.S. 44:4. If a civil litigant seeks access via court order to the financial records of clients of financial institutions for purposes of litigation, those records must be subpoenaed from the client of the financial institution. The procedure in R.S. 6:333 shall be used for open and closed financial institutions.

I. Persons injured by negligent or intentional disclosure of confidential or privileged communications covered by this Title or Titles 9, 44, or 51 of the Louisiana Revised Statutes of 1950 shall have a civil cause of action under Civil Code Article 2315 et seq.

J. Notwithstanding any other provision of law to the contrary, including but not limited to R.S. 49:975.1(8)(c), there shall be no liability on the part of, and no cause of action of any nature shall arise against, the Office of Financial Institutions or its agents or employees, for any good faith release or disclosure of information or for statements made in good faith in any administrative hearings or in any reports or communications concerning safety or soundness, other regulatory issues, and the supervision and regulation of all entities under the jurisdiction of the Office of Financial Institutions.

Acts 1984, No. 719, §1, eff. Jan. 1, 1985; Acts 1985, No. 359, §1, eff. July 9, 1985; Acts 1986, No. 800, §1, eff. July 10, 1986; Acts 1987, No. 103, §1; Acts 1987, No. 810, §2; Acts 1991, No. 199, §1, eff. July 2, 1991; Acts 1991, No. 961, §1, eff. July 24, 1991; Acts 1992, No. 113, §1, eff. Sept. 1, 1992; Acts 1992, No. 144, §1; Acts 1993, No. 282, §1, eff. Oct. 1, 1993; Acts 1993, No. 837, §1, eff. July 1, 1993; Acts 1995, No. 1084, §§1, 2, eff. June 29, 1995; Acts 1997, No. 366, §1; Acts 2001, No. 915, §1, eff. June 26, 2001; Acts 2004, No. 587, §1, eff. June 29, 2004; Acts 2006, No. 456, §1, eff. June 15, 2006; Acts 2007, No. 36, §1, eff. June 18, 2007; Acts 2008, No. 220, §1, eff. June 14, 2008; Acts 2011, No. 136, §1.

NOTE: See Acts 1993, Nos. 282 and 837, for apparent conflicts in R.S. 6:103(E).

PART II POWERS AND DUTIES OF THE COMMISSIONER

§ 6:121 Regulatory powers; promulgation of rules and regulations

A. The commissioner shall have in addition to those powers specifically enumerated in this Title any power necessary and appropriate to perform his duties under this Title as well as any power necessary and appropriate to prevent or terminate any condition which he may reasonably deem to create an emergency relative to a particular financial institution or financial institutions in general. Such power may include, but shall not be limited to, the granting of temporary lending authority to a financial institution, taking into account that institution's current net operating income and whether it has such negative undivided profits that might render the bank unable to make a loan as provided in R.S. 6:415(A)(1), (2), or (3) or to make a purchase or sell as provided in R.S. 6:303(A) and (B). In granting such temporary lending authority, the amount of which shall be at the discretion of the commissioner, the commissioner shall be guided by safety and soundness of the financial institution.

B.(1) The commissioner shall have the power to enact and promulgate rules and regulations as may be necessary or appropriate to implement the provisions of this Title. The commissioner in making rules and regulations pursuant to this power shall consider among other matters the impact any such rule or regulation will have on the dual banking system as well as the impact any such rule or regulation will have on the public interest in the business of banking. The commissioner may also consider the regulations of the Comptroller of the Currency, the Federal Reserve Board, the Federal Deposit Insurance Corporation, and the Office of Thrift Supervision to allow financial institutions organized under the laws of this state to offer services consistent with services offered by financial institutions organized under the laws of the United States.

(2) Notwithstanding any other provision of this Title, the commissioner shall not authorize any bank, bank holding company, subsidiary, or employee thereof to engage in any insurance activity except an insurance activity authorized by R.S. 6:242. However, any bank which was engaged as a general insurance agent or broker on January 1, 1984, may continue to be so engaged.

(3) The commissioner of financial institutions shall make a report to the legislature no later than March first of each year indicating what actions have been taken by financial institutions in this state to assist economically disadvantaged urban and rural communities, minorities, and small businesses.

(4) The commissioner of financial institutions may promulgate such rules as are necessary to carry out the regulatory function of this office, including but not limited to the organization, administration, and supervision of mutual state banks as defined by R.S. 6:2(10).

C. All regulations enacted and promulgated under this Section shall be subject to the provisions of R.S. 49:951, 953, 956, and 961, and prior to the promulgation of any such rule or regulation, the commissioner shall give each financial institution organized under this Title affected by the rule or regulation written notification of the content of such rule or regulation and the date and time of any public hearing held pursuant to the above Sections. The commissioner shall provide notice at least ten days prior to the adoption of such rule or regulation, but the failure of a particular financial institution to receive notice thereof shall not affect the validity of such rule or regulation.

Acts 1984, No. 719, §1, eff. Jan. 1, 1985; Acts 1988, No. 935, §1, eff. July 26, 1988; Acts 1989, No. 130, §1, eff. June 22, 1989; Acts 1990, No. 611, §1, eff. July 19, 1990; Acts 1993, No. 851, §1; Acts 1995, No. 681, §1; Acts 1997, No. 929, §1; Acts 1997, No. 1475, §1, eff. July 15, 1997.

§ 6:121.1 Enforcement powers of commissioner

A. The commissioner may, in his discretion, conduct such investigations and hearings as he deems necessary to ascertain possible violations of this Title or any rule, regulation, or order promulgated or issued thereunder. Such hearings shall be private unless the commissioner, in his sole discretion and after considering the views of the person afforded the hearing, determines that a public hearing is necessary to protect the public interest. If the commissioner determines that a public hearing is necessary to protect the public interest, the confidentiality provisions of this Title and the Administrative Procedure Act, R.S. 49:950 et seq., shall not apply.

B. Any person who is engaged in or is engaging in or is about to engage in any act or practice which is prohibited by this Title or any rule, regulation, or order promulgated or issued thereunder, or any person who has failed to act or is failing to act or is about to fail to act under any affirmative duty imposed by this Title or any rule, regulation, or order promulgated or issued thereunder shall be subject to appropriate action by the commissioner. Such action shall include but shall not be limited to the issuance of orders assessing civil money penalties, entering into compliance agreements, seeking injunctive relief from a court of competent jurisdiction, or any combination thereof.

C. The commissioner may report egregious violations to the attorney general or to the district attorney of the appropriate parish, who may institute the proper proceedings to enjoin the violation and enforce the penalties provided herein.

D. In addition to the enforcement powers of the commissioner authorized in this Title and any other Title of the Louisiana Revised Statutes of 1950, he shall also have those enforcement powers authorized by Subsections A, B and C of this Section with respect to any person subject to licensing, registration, or regulation by the commissioner.

Acts 1990, No. 266, §1, eff. July 4, 1990; Acts 2006, No. 460, §1, eff. June 15, 2006.

§ 6:121.1.1 Restrictions on enforcement power; cannabis-related legitimate businesses and service providers; egregious violations

A. For purposes of this Section:

(1) "Cannabis-related legitimate business" means any person or company that participates in any business or organized activity that involves handling, cultivating, producing, manufacturing, selling, transporting, displaying, dispensing, distributing or purchasing cannabis or cannabis products, pursuant to a law established by this state.

(2) "Service provider" means a business, organization, or other person who sells goods or provides services to a cannabis-related legitimate business.

B. The commissioner shall not do any of the following:

(1) Prohibit or otherwise discourage a state bank or credit union from providing financial services to a cannabis-related legitimate business or service provider solely because the account holder is a cannabis-related legitimate business, or is an employee, owner, or operator of a cannabis-related legitimate business.

(2) Penalize a state bank or credit union for providing financial services to a cannabis-related legitimate business or service provider solely because the account holder is a cannabis-related legitimate business or service provider or is an employee, owner, or operator of a cannabis-related legitimate business or service provider.

(3) Recommend, incentivize, or encourage a state bank or credit union not to offer financial services to an account holder or to downgrade or cancel the financial services offered to an account holder solely because the account holder is a cannabis-related legitimate business or service provider or is an employee, owner, or operator of a cannabis-related legitimate business or service provider.

(4) Take any adverse or corrective supervisory action on a loan made to a cannabis-related legitimate business or service provider solely because the business is a cannabis-related legitimate business or service provider.

(5) Take any adverse or corrective supervisory action on a loan made to an employee, owner, or operator of a cannabis-related legitimate business or service provider solely because the employee, owner, or operator is employed by, owns, or operates a cannabis-related legitimate business or service provider.

(6) Prohibit or otherwise discourage a state bank or credit union from authorizing, processing, clearing, settling, billing, transferring, reconciling, or collecting payments for a cannabis-related legitimate business or service provider.

(7) Penalize a state bank or credit union for authorizing, processing, clearing, settling, billing, transferring, reconciling, or collecting payments for a cannabis-related legitimate business or service provider.

C. A state bank or credit union's providing financial services to a cannabis-related legitimate business or service provider shall not be considered an egregious violation for purposes of R.S. 6:121.1(C).

Acts 2020, No. 100, §1.

§ 6:121.2 Authority to obtain criminal history record information

A. As used in this Section:

(1) "Bureau" means the Louisiana Bureau of Criminal Identification and Information of the office of state police within the Department of Public Safety and Corrections.

(2) "Criminal history record information" means information collected by state and federal criminal justice agencies or individuals consisting of identifiable descriptions and notations of arrests, detentions, indictments, bills of information, or any formal criminal charges, and disposition arising therefrom, including sentencing and criminal correctional supervision and release, but does not include intelligence for investigatory purposes, nor does it include any identification information which does not indicate involvement of the individual in the criminal justice system.

(3) "FBI" means the Federal Bureau of Investigation of the United States.

(4) "Licensure" means any charter, license, or registration which the commissioner is authorized to issue.

B. The commissioner shall have the authority to:

(1) Request and obtain state or FBI criminal history record information, or both, on any person listed on any application, registration, or renewal filed with the Office of Financial Institutions.

(2) Require any person listed on any application, registration, or renewal, to submit two full sets of fingerprints, in a form and manner prescribed by the commissioner, as a condition of the commissioner's consideration of his application, registration, or renewal unless:

(a) The Office of Financial Institutions is in possession of criminal history record information obtained from the bureau in conjunction with any previous application, registration, or renewal.

(b) The criminal history record information is dated within five years of the date of the application, registration, or renewal being considered.

(3) Charge and collect from any person listed on any application, registration, or renewal, in addition to all other applicable fees and costs, such amount as may be incurred by the commissioner in requesting and obtaining criminal history record information on the person.

(4) Promulgate rules and regulations necessary to the administration and implementation of this Section.

C. In accordance with the provisions and procedures prescribed in this Section, the commissioner may request and obtain state or FBI criminal history record information, or both, from the bureau relative to any person whose fingerprints he has obtained pursuant to this Section for the purpose of determining that person's suitability and eligibility for licensure, registration, or renewal.

D. Upon the commissioner's submission of a person's fingerprints and such other identifying information as may be required, the bureau shall conduct a search of the state or FBI's criminal history record information, or both as requested by the commissioner, relative to the person and report the results of its search to the commissioner within sixty days after receipt of any such request. The bureau may charge the commissioner a reasonable processing fee for conducting and reporting the results of any such search. The commissioner is hereby authorized to pay such processing fee.

E. Any and all state or national criminal history record information obtained by the commissioner from the bureau which is not already a matter of public record shall be deemed nonpublic and confidential information restricted to the exclusive use of the commissioner, his employees, agents, and attorneys in evaluating the applicant's eligibility or disqualification for licensure. No such information or records related thereto shall, except with the written consent of the applicant or by any order of a court of competent jurisdiction, be released or otherwise disclosed by the commissioner to any other person or agency.

F. The authority set forth in this Section applies to all persons seeking licensure, registration, or approval by the commissioner to operate as any of the following:

(1) A state bank pursuant to R.S. 6:201 et seq.

(2) A trust company pursuant to R.S. 6:571 et seq.

(3) A credit union pursuant to R.S. 6:641 et seq.

(4) A savings and loan association pursuant to R.S. 6:702 et seq.

(5) A currency exchange service or check-casher pursuant to R.S. 6:1001 et seq.

(6) A sale of checks or money transmission business pursuant to R.S. 6:1031 et seq.

(7) A mortgage broker, mortgage lender, mortgage servicer, or mortgage loan originator pursuant to R.S. 6:1081 et seq.

(8) A savings bank pursuant to R.S. 6:1161 et seq.

(9) A licensed lender pursuant to R.S. 9:3510 et seq.

(10) A loan broker pursuant to R.S. 9:3572.1 et seq.

(11) A pawnbroker pursuant to R.S. 37:1781 et seq.

(12) A salesman or investment adviser representative pursuant to R.S. 51:701 et seq.

(13) A Louisiana capital company pursuant to R.S. 51:1925 et seq.

(14) A Louisiana business and industrial development company pursuant to R.S. 51:2392 et seq.

(15) A bond for deed escrow agent pursuant to R.S. 6:414 and LAC 10:XV.901 et seq.

(16) A repossession agency and repossession agent pursuant to R.S. 6:965 et seq. and LAC 10:XV.1301 et seq.

Acts 1995, No. 1083, §1, eff. June 29, 1995; Acts 2006, No. 236, §1, eff. June 2, 2006; Acts 2007, No. 376, §1, eff. July 10, 2007; Acts 2019, No. 13, §1, eff. May 24, 2019.

§ 6:121.3 Guidance by commissioner; advisory opinions

A. Advisory opinions and interpretations of the office shall not be considered rules requiring compliance with the rulemaking process under the Louisiana Administrative Procedure Act.

B. This Section shall only have prospective application.

Acts 1997, No. 58, §1.

§ 6:121.4 Addition of directors and executive officers of troubled state- chartered institutions and holding companies

A. If a state-chartered financial institution or holding company whose lead institution is state chartered is in troubled condition as defined by Subsection D of this Section, such financial institution or holding company may file an application with the commissioner of financial institutions seeking permission to add one or more new directors or employ one or more new executive officers. The addition of a new director or employment of a new executive officer shall be allowed only with permission of the commissioner.

B. An application form may be developed by the commissioner, or the commissioner may accept a standardized form utilizing the criteria established by the appropriate federal regulator of the institution or holding company. The application must be filed at least thirty days prior to the proposed effective date of the addition of the director or employment of the executive officer.

C. The commissioner shall issue a written notice approving or disapproving the addition or employment of any new officers or directors not later than forty-five days following the date the application was filed with the commissioner. However, this period of time may be extended for a reasonable period of time upon a showing of good cause by the commissioner that additional information is required for a determination to be made upon the application. The commissioner shall give written notice of his reasons for any extension.

D. For purposes of this Section, "troubled condition" means that a state-chartered financial institution or holding company meets any one of the following criteria:

(1) Has a composite rating, as determined in its most recent report of examination, of 4 or 5 under the Uniform Financial Institutions Rating Systems (UFIRS).

(2) Is subject to a proceeding initiated by the appropriate state or federal insurer for termination or suspension of deposit insurance.

(3) Is subject to a cease and desist order or written agreement issued by either the commissioner or the appropriate federal regulatory agency that requires action to improve the financial condition of the financial institution or holding company, or is subject to a proceeding initiated by the commissioner or the appropriate federal regulatory agency, which contemplates the issuance of an order that requires action to improve the financial condition of the financial institution or holding company, unless otherwise informed in writing by the commissioner.

(4) Is informed in writing by the commissioner or the appropriate federal regulatory agency that it is in troubled condition for purposes of the requirements of this Subsection on the basis of its most recent report of condition, report of examination, or other information available to the commissioner.

E. The commissioner may adopt rules to prescribe conditions under which the prior notice requirement of Subsection A of this Section may be waived in the event of extraordinary circumstances. Such waivers shall not affect the authority of the commissioner to issue notices of disapproval of such additions or employment of such individuals within thirty days after each such waiver.

F. The commissioner shall issue a notice of disapproval with respect to an application submitted pursuant to this Section, if the competence, experience, character, or integrity of the individual with respect to whom such notice is submitted indicates that it would not be in the best interests of the depositors of the institution or in the best interests of the public to permit the individual to be employed by or associated with the state-chartered financial institution or holding company.

Acts 2001, No. 628, §1, eff. June 22, 2001.

§ 6:121.5 Application containing false information or misrepresentations

It shall be unlawful for any person to knowingly submit an application for a financial institution charter, license, registration, or notification, or any other document to the commissioner which contains false information or misrepresentations regarding any applicant's personal or business background information, for the purpose of deceiving the commissioner into granting a charter, license, registration, or notification to the applicant. Any person who violates this Section is guilty of a misdemeanor, and upon conviction may be fined not less than one thousand dollars nor more than two thousand five hundred dollars, or sentenced to imprisonment not exceeding one year, or both.

Acts 2001, No. 531, §1, eff. June 21, 2001.

§ 6:121.6 Authority of the commissioner; nondepository institutions; emergencies

A. In addition to any other powers specifically authorized, the commissioner is authorized to waive, suspend, or delay compliance with all or part of any statute it is the duty of the commissioner to administer or enforce with respect to a nondepository institution, if he reasonably deems compliance with such statute is impossible or impractical as a result of conditions created during a declared state of emergency or as a result of conditions the commissioner reasonably deems to create an emergency.

B. For the purposes of this Section, the term "nondepository institutions" shall mean those persons or entities required by statute to be certified, licensed by, or registered with the commissioner, other than financial institutions as defined in R.S. 6:2.

C. This Section shall apply to emergencies declared by the governor or the commissioner on or after August 29, 2005.

Acts 2005, 1st Ex. Sess., No. 33, §1, eff. Nov. 29, 2005.

§ 6:121.7 Return of payment; imposition of fee

The commissioner is authorized to impose a fee of twenty-five dollars on any person who submits a payment with an instrument or other method of payment and which payment is returned unpaid, refused, or declined.

Acts 2006, No. 232, §1, eff. June 2, 2006.

§ 6:121.8 Licensing systems

A. Notwithstanding any other law to the contrary, the commissioner shall have the authority to take all action regarding the utilization of an electronic database licensing system or systems with respect to any person subject to licensure by him, in his discretion as he deems necessary and appropriate, including but not limited to those contained within the Louisiana S.A.F.E. Residential Mortgage Lending Act, R.S. 6:1081, et seq.; provided, however, that any action taken pursuant to this Section shall not authorize the creation of an online system which shall be utilized to restrict or limit the authority of licensees to offer loans which are statutorily authorized.

B. For the purposes of this Section, the term "licensure" shall mean licensing, registration, regulation, and notification of all persons by the commissioner, except financial institutions as defined in R.S. 6:2(8).

Acts 2011, No. 10, §1.

§ 6:122 Power to issue cease and desist orders

A.(1) The commissioner shall have the power to issue cease and desist orders to prevent or terminate an unsafe or unsound practice or condition or a violation of any Section of this Title or any regulation or order of the commissioner issued pursuant to this Title whenever he knows or has reasonable cause to believe that such practice exists or is likely to occur.

(2) Before issuing a cease and desist order, the commissioner shall send by registered mail a notice containing a statement of the facts constituting the grounds for issuance of the cease and desist order and fixing a time and place at which a meeting with the alleged violator or violators, whether they be a financial institution, its officers, directors, stockholders, employees, or any combination thereof, will be held to determine whether an order to cease and desist therefrom should be issued. If the violator fails to appear at the meeting, it shall be deemed to have consented to the issuance of a cease and desist order. In the event of such consent or if after the meeting the commissioner should find that the grounds specified in the notice have been established, the commissioner may issue an order to cease and desist from the violation or practice. Such order may require the violator to cease and desist from any such violations or practice and to further take affirmative action to correct the conditions resulting from such violation or practice.

B. Any order issued pursuant to this Section shall become effective upon service thereof in person or by registered mail on the violator, and shall remain effective except to the extent modified, stayed, terminated, or set aside by action of the commissioner or of the district court of the judicial district in which the state bank is domiciled.

C. The commissioner may apply to the district court in the parish of domicile of the violator for the enforcement of any order issued pursuant to this Section and such court shall have the jurisdiction and power to order and require compliance therewith.

D. All proceedings other than judicial proceedings pursuant to this Section shall be exempt from the Public Records Act as provided in R.S. 44:4.

Acts 1984, No. 719, §1, eff. Jan. 1, 1985.

§ 6:123 Visitation and examination of state financial institutions

A.(1) The commissioner either in person or through an employee appointed by him shall visit and examine each financial institution chartered by his office on a recurring schedule consonant with the use to the fullest extent possible of the resources of the office in accordance with good examination practice. On every examination, inquiry shall be made as to the quality of the assets and the condition and resources of the financial institution, and may be made into the mode of conducting business and managing its affairs, the action of its directors, the investment and disposition of its funds, the safety and prudence of its management, the compliance with the requirements of its articles of incorporation and this Title in the administration of its affairs, and other matters as the commissioner may determine.

(2) The commissioner, in like manner, may examine any financial institution under his jurisdiction whenever in his judgment its condition and management is in such condition as to render an examination of its affairs necessary and expedient. Such an examination, at the commissioner's discretion and upon good cause shown, may include an examination of the affairs of all of the affiliates of the financial institution as shall be necessary to fully disclose the relations between the financial institution and its affiliates and the effect of such relations upon the affairs of the financial institution. The officers, directors, and employees of every state financial institution shall answer under oath interrogatories concerning their bank as may be required by the commissioner or any other examiner during the course of an examination.

B.(1) If a state bank is a member of the Federal Reserve System or its deposits are insured by the Federal Deposit Insurance Corporation, the commissioner may accept in lieu of any visitation and examination required by this Section examinations and reports thereof made pursuant to the Federal Reserve Act or statutes of the United States authorizing Federal Deposit Insurance. If a state savings and loan association is insured by the Federal Deposit Insurance Corporation, the commissioner may accept in lieu of his own examination an examination made pursuant to statutes of the United States.

(2) The commissioner may accept supervisory reports and other information from any state, federal, or foreign supervisory agency, or from any financial institution doing business or domiciled in the state which is subject to the jurisdiction of any state, federal, or foreign supervisory agency, which in the commissioner's opinion evidences a good faith effort on the part of the affected financial institution to comply with the provisions of the Louisiana Consumer Credit Law, R.S. 9:3510 et seq.

C. For the purposes of this Section, the following terms shall have the following meanings:

(1) "Affiliate" means any company that controls the financial institution, any company that is controlled by the company that controls the financial institution, any subsidiary of the financial institution, any company controlled by a common shareholder who beneficially or otherwise controls the financial institution or any company that controls the financial institution, any company in which a majority of its directors are also a majority of the directors of the financial institution or the company that controls the financial institution, any company that is sponsored or advised on a contractual basis by the financial institution or any subsidiary or affiliate of the financial institution, or any investment company in which the financial institution or any affiliate of the financial institution is an investment advisor.

(2) "Control" means owning, controlling, or having the power to vote, directly or indirectly, twenty-five percent or more of any class of voting securities; or controlling in any manner the election of a majority of the directors or trustees; or after notice and opportunity for hearing, the commissioner determines that such company or shareholder, directly or indirectly, exercises a controlling influence over the management or policies of the other company. No company shall be deemed to own or control another company by virtue of its ownership of shares in a fiduciary capacity unless a trustee controls twenty-five percent or more of the voting shares of a company for the benefit of shareholders who control twenty-five or more of the voting shares of a financial institution or its holding company or the ownership or control of one company by another through a business trust creates an affiliate relationship.

Acts 1984, No. 719, §1, eff. Jan. 1, 1985; Acts 1985, No. 360, §1, eff. July 9, 1985; Acts 1993, No. 883, §1, eff. Oct. 1, 1993; Acts 1999, No. 261, §1.

§ 6:124 Call reports; statement of financial condition

Four times a year, at the end of each calendar quarter, the commissioner shall require each state bank, savings and loan association, and savings bank to report to him, in the manner prescribed, its current financial condition.

Acts 1984, No. 719, §1, eff. Jan. 1, 1985; Acts 1985, No. 359, §1, eff. July 9, 1985; Acts 1991, No. 199, §1, eff. July 2, 1991; Acts 1992, No. 64, §1, eff. Sept. 1, 1992; Acts 1993, No. 883, §1, eff. Oct. 1, 1993; Acts 1997, No. 47, §1.

§ 6:124.1 Community reinvestment rating; acceptance of public funds

A. The legislature hereby finds and declares that:

(1) Regulated financial institutions are obligated to demonstrate that their deposit facilities serve the convenience and needs of the communities in which they are chartered to do business.

(2) The convenience and need of communities include the need for credit services as well as deposit services.

(3) Regulated financial institutions have a continuing and affirmative obligation to help meet the credit needs of the local communities in which they are chartered.

(4) Since 1977, the federal Community Reinvestment Act (12 U.S.C. §2901 et seq.) has required that each financial institution receive an annual rating indicating the degree to which the institution has met such community credit needs.

B. Each financial institution shall include in its statement of condition required by R.S. 6:124, at a minimum, a single sentence, printed in boldface type, which states its most recent rating received pursuant to the federal Community Reinvestment Act. Notwithstanding any other provision of R.S. 6:124 to the contrary, such rating need not be included in the financial institution's statement of condition to be submitted to the office of financial institutions.

C. Repealed by Acts 2013, No. 32, §2.

Acts 1992, No. 776, §1; Acts 1993, No. 509, §1, eff. April 1, 1994; Acts 1994, 3rd Ex. Sess., No. 61, §1, eff. July 6, 1994; Acts 1997, No. 65, §1; Acts 2002, 1st Ex. Sess., No. 162, §1, eff. April 26, 2002; Acts 2013, No. 32, §2.

§ 6:125 Reports of financial condition

Upon their request, the commissioner shall report to the governor, any statewide elected officials, or any member of the legislature on the condition of the state-chartered financial institutions under his jurisdiction.

Acts 1984, No. 719, §1, eff. Jan. 1, 1985; Acts 1999, No. 261, §1.

§ 6:126 Assessments on financial institutions; disposition of fees; creation of special fund

A. Every financial institution subject to the jurisdiction of the office of financial institutions shall be assessed by the commissioner as provided by law or regulation. The commissioner shall have the authority to promulgate regulations affecting assessments and fees levied upon financial institutions and to amend existing regulations to change assessments periodically as he deems necessary and appropriate.

B.(1) Subject to the exceptions contained in Article VII, Section 9 of the Constitution of Louisiana, all monies, funds, proceeds, and fees received or collected by the commissioner under the provisions of Titles 6, 9, and 51 of the Louisiana Revised Statutes of 1950 and any other provision of law, as well as all regulations promulgated thereunder, shall be deposited immediately upon receipt into the state treasury and shall be credited to the Bond Security and Redemption Fund.

(2), (3), and (4) REPEALED BY ACTS 1992, No. 984, §18.

Acts 1984, No. 719, §1, eff. Jan. 1, 1985; Acts 1985, No. 766, §1; Acts 1986, No. 465, §1, eff. July 1, 1986; Acts 1992, No. 232, §1, eff. Sept. 30, 1992; Acts 1992, No. 984, §18.

§ 6:127 Retention of records of financial institutions; microfilm

A. The commissioner may by regulation prescribe periods of time for the retention of records by any financial institution subject to his supervision. Records of any financial institution, including records of financial institutions not subject to the commissioner's supervision, that have been retained for the periods so prescribed may thereafter be destroyed, and no liability shall thereby arise against, or attach to, the financial institution destroying them. In any legal action in which any such records may be called in question or demanded of any financial institution or any officer, employee, or other agent thereof, a showing that the periods so prescribed have elapsed shall be a sufficient defense for the failure to produce them by reason of their destruction.

B. Any records required to be retained pursuant to this Section or regulations promulgated hereunder may be reproduced by any photographic, photostatic, microfilm, microcard, or miniature or microphotographic process, or by any mechanical or electronic recording or re-recording, electronic or optical imaging, chemical process, or other process or technique which accurately reproduces the original or forms or creates a durable medium for accurately reproducing the original record.

C. Except as otherwise provided in R.S. 13:3733.1, each reproduction shall be treated for all purposes as if it were the original record, item, document, or instrument.

Acts 1984, No. 719, §1, eff. Jan. 1, 1985; Acts 1991, No. 283, §1; Acts 1995, No. 1093, §1; Acts 1997, No. 39, §1; Acts 1999, No. 123, §1, eff. June 9, 1999.

§ 6:128 Financial institutions' holidays; regulations

A. Repealed by Acts 1995, No. 1248, §2, eff. June 29, 1995.

B. Whenever it is customary or desirable to observe a day or part of a day as a holiday, any financial institution may, at its option, close for business any or all of its branches or offices, provided that:

(1) Its board of directors adopts a resolution signifying its intention to close, written notice of which shall be sent to the commissioner; and

(2) Prior notice of at least three business days shall be provided by the posting of notices or by publication in one issue of a newspaper of general circulation published in the parish in which the office to be closed is located or through other means of notification.

C.(1) The commissioner may issue regulations establishing additional holidays for financial institutions governed by this Title.

(2) The commissioner may authorize a financial institution to take a holiday or holidays if an emergency arises. Permission to take such a holiday or holidays may be requested by telephonic or facsimile communication with the office of the commissioner.

D. Nothing contained in any law of this state shall in any manner whatsoever affect the validity of, or render void or voidable the payment, certification, or acceptance of a check or other negotiable instrument or any other transaction by a financial institution in Louisiana because done on any holiday, if the payment, certification, acceptance, or transaction could have validly been done on any other day.

E. The provisions of this Section are comprehensive, and are intended to and shall be construed as constituting the entire and exclusive authority governing holidays of financial institutions in the state, notwithstanding the provisions of R.S. 1:55 or any other statute, rule, or regulation governing the same or similar subject matter.

Acts 1984, No. 719, §1, eff. Jan. 1, 1985; Acts 1986, No. 3, §1; Acts 1989, No. 132, §1, eff. June 22, 1989; Acts 1989, No. 245, §1; Acts 1991, No. 281, §1; Acts 1995, No. 1248, §2, eff. June 29, 1995; Acts 1997, No. 42, §1.

§ 6:129 Circulating rumor respecting condition of financial institution

Any employee of the office of financial institutions who makes, circulates, or transmits in violation of the policies of the office of financial institutions any written, printed, or spoken statement, rumor, report, or suggestion concerning the financial condition of any financial institution organized under the laws of this state shall be dismissed from the office.

Acts 1984, No. 719, §1, eff. Jan. 1, 1985.

§ 6:130 Relocation of main office

The commissioner shall promulgate rules and regulations providing for the establishment and relocation of bank offices.

Acts 1995, No. 1248, §1, eff. June 29, 1995.

PART III DECISIONS AND REVIEW

§ 6:131 Applicability

This Part applies to the decision of the commissioner to:

A. Grant a certificate of authority for:

(1) The organization of a bank or savings and loan association.

(2) The opening of a branch of an existing bank, trust company, or savings and loan association.

B. Grant permission for:

(1) A bank, trust company, or savings and loan association to convert from a national charter to a state charter.

(2) The merger or consolidation of banks, trust companies, or savings and loan associations.

(3) The transfer of assets of a bank, trust company, or savings and loan association.

(4) The voluntary dissolution of a bank, trust company, or savings and loan association.

Acts 1986, No. 730, §1.

§ 6:132 Written decision; reasons; hearing

A. A decision of the commissioner shall be in writing and mailed to the applicant and to any other person who had requested a copy thereof.

B. The commissioner may, in his sole discretion, assign written reasons for his decision which shall be released only to the applicant.

C. The commissioner shall not be required to grant a hearing to any person.

Acts 1986, No. 730, §1.

§ 6:133 Reconsideration of decision

A. A person aggrieved by a decision of the commissioner may file an application for reconsideration by the commissioner. An application for reconsideration must be received by the commissioner within fifteen days of his mailing of the original decision on the matter. The right to apply for reconsideration does not automatically stay the decision or enforcement of the decision of the commissioner.

B. An application for reconsideration shall be in writing, identify the decision for which reconsideration is requested, and must include all additional evidence or argument that the applicant wants considered. No hearing or oral argument shall be allowed.

C. The commissioner shall consider the application for reconsideration and render a decision, in writing, which shall be mailed to the applicant and to all persons who had requested a copy of the original decision. The commissioner may, in his sole discretion, assign written reasons which shall be released only to the applicant.

Acts 1986, No. 730, §1.

§ 6:134 Judicial review; venue; effect

A. A person aggrieved by a decision of the commissioner after the commissioner's decision upon reconsideration, may petition the court for judicial review of the decision.

B. The petition for judicial review must be filed within thirty days of the mailing of the decision of the commissioner on the reconsideration of the original decision.

C. A petition for judicial review shall be proper only in the district court of the judicial district in which the office of financial institutions is domiciled.

D. Judicial review shall be by the court without a jury.

E. The filing of the petition does not itself stay the decision or enforcement of the decision of the commissioner. The commissioner may stay or the court may order a stay of the decision upon application of the aggrieved party and upon appropriate terms.

Acts 1986, No. 730, §1.

§ 6:135 Record filed with court

A. Within thirty days of service of the suit upon the commissioner, he shall file a copy of the record of the application and reconsideration, certified by him, with the court.

B. The record shall be confidential and for the in camera review of the court only.

Acts 1986, No. 730, §1.

§ 6:136 Basis for judicial review

A. The review by the court shall be based solely upon the record. No additional testimony or evidence may be introduced.

B. The court may allow oral argument and accept written briefs.

Acts 1986, No. 730, §1.

§ 6:137 Judicial review; test; burden

A. The review by the court shall be limited to whether the decision of the commissioner was arbitrary, capricious, or an abuse of discretion.

B. The petitioner shall bear the burden of proof.

Acts 1986, No. 730, §1.

§ 6:138 Remand to the commissioner

Upon review, if the court finds the decision of the commissioner to be arbitrary, capricious, or an abuse of discretion, it shall remand the proceedings to the commissioner for action consistent with the court's orders.

Acts 1986, No. 730, §1.

CHAPTER 3 STATE BANKS

SUBCHAPTER A ORGANIZATION AND OPERATION OF STATE BANKS

PART I DEFINITIONS

§ 6:201 Definitions

As used in this Chapter, unless the context requires otherwise:

(1) "Articles" means the original articles of incorporation and all amendments thereto including those contained in merger agreements or, if restated, the latest restatement thereof except in those instances in which the context refers expressly to the original articles of incorporation only.

(2) "Assets" means all of a state bank's property and rights of every kind.

(3) "Capital" means the sum of capital stock, surplus, and undivided profits or, as to mutual state banks, as defined by R.S. 6:215(B).

(4) "Capital stock" means the sum of the par value of the shares outstanding plus any amounts in excess of par value transferred from surplus to capital stock in respect of such shares less any part of such amounts transferred from capital stock to surplus as permitted by this Chapter.

(5) "Certificate of stock" means a properly executed instrument evidencing the fact that the person therein named is the registered owner of the shares therein described.

(6) "Fiduciary" means any person, firm, partnership, association, or state bank, including a usufructuary, who or which occupies a position of peculiar confidence toward any person, firm, association, partnership, trust, or estate.

(7) "Insolvency" means that the assets of a state bank are insufficient to satisfy its obligations to its creditors and depositors.

(8) "Issued shares" means outstanding shares.

(9) "Net assets" means the excess of assets over liabilities.

(10) "Stockholder" means the holder of record of one or more shares.

(11) "Shares" means the units into which the stockholders' rights to participate in the control of the state bank, in its profits, or in the distribution of corporate assets are divided.

(12) "Subscriber" means one who subscribes for shares in a state bank whether before or after incorporation.

(13) "Surplus" means sums contributed by stockholders in excess of the par value of shares outstanding plus any amounts transferred from undivided profits pursuant to action by the board of directors.

(14) "Total voting power" means the entirety of the voting power.

(15) "Undivided profits" means paid-in or accumulated net income less distributions to stockholders and transfers to capital stock or surplus.

(16) "Voting power" means the right vested by law or by the articles or the bylaws in the stockholder or in one or more classes of stockholder to vote in the determination of any particular question or matter coming before meetings of the stockholders.

(17) "Voting power present" means that part of the voting power exercisable by the stockholders present in person or represented by proxy at the meeting at which the stockholders take action on a particular question or matter.

(18) "Retained earnings" means the accumulated net income of the mutual state bank since its organization less all distributions to its members.

Acts 1984, No. 719, §1, eff. Jan. 1, 1985; Acts 1997, No. 929, §1.

PART II ORGANIZATION OF STATE BANKS

§ 6:211 Incorporation; number of incorporators, application for certificate of authority, filing fee; organization as a limited liability company

A. Only those corporations which organize under the provisions of this Chapter shall be "state banks" under the laws of this state.

B. One or more natural persons, the majority of whom must be domiciled in this state, desiring to incorporate and operate a state bank shall file with the commissioner an application for a certificate of authority to operate a state bank upon such form as the commissioner may from time to time prescribe and the articles of incorporation required by R.S. 6:213. At the time of the filing of the application, the commissioner shall collect the filing fee required in R.S. 6:331.

C. Notwithstanding Subsections A and B, a person may apply to the commissioner to obtain a certificate of authority to organize and operate as a financial institution under this Title as a limited liability company, if the company is formed to have perpetual existence, centralized management, limited liability, and free transferability of interests. An existing financial institution may apply to the commissioner to change its certificate of authority and reorganize and operate as a limited liability company. The commissioner may promulgate rules to clarify any organizational, operational, or other aspects of financial institutions which choose to operate as limited liability companies.

Acts 1984, No. 719, §1, eff. Jan. 1, 1985; Acts 2003, No. 361, §1.

§ 6:212 Corporate name

A. The corporate name of a state bank shall include the word "bank" or a form of that word in any combination with other words.

B. Nothing in this Section shall abrogate or limit the law as to unfair competition or unfair practice in the use of trade names nor derogate from the principles of law or the statutes of this state or of the United States with respect to the right to acquire and protect trade names.

C. Repealed by Acts 1997, No. 64, §1.

Acts 1984, No. 719, §1, eff. Jan. 1, 1985; Acts 1995, No. 247, §1, eff. June 14, 1995; Acts 1997, No. 64, §1.

§ 6:213 Articles of incorporation, filing, form, content; letter of acceptance for filing

A.(1) The articles of incorporation or a multiple original thereof of a state bank shall be filed with the office of financial institutions. They may be delivered to the office of financial institutions in advance for filing as of any specified date and, if specified upon such delivery, as of any given time on such date within thirty days after the date of delivery.

(2) The articles shall be upon a form acceptable to the commissioner. The articles of incorporation as originally filed with the commissioner shall contain the name and parish of domicile of the bank, the duration or a statement that the duration shall be perpetual, the classes of stock, the number of shares authorized, the par value of the shares, the names and addresses of the proposed incorporators, and the name, address, and occupation of each of the proposed directors. The parish of domicile of a bank shall be the parish in which the main office of the bank is located.

B.(1) Notwithstanding the provisions of R.S. 6:291, the articles of incorporation may contain other provisions for the regulation of the business and the conduct of the affairs of the state bank including any provision authorized in Paragraphs (2) or (3) of this Subsection, but they shall not contain any provision which is in derogation of the provisions of this law or violates any other provision of the laws of this state or of the laws of the United States.

(2)(a) The articles of incorporation of a bank or bank holding company may contain a provision that any of the following not claimed by the entitled shareholder despite reasonable efforts by the corporation to pay dividends or redemption price or deliver certificates for shares to the shareholder shall revert in full ownership to the corporation:

(i) Cash.

(ii) Property or share dividends.

(iii) Shares issuable to shareholders in connection with a reclassification of stock.

(iv) The redemption price of redeemed shares.

(b) An obligation of the corporation to pay the dividend or the redemption price or issue the shares shall, in any event, exist for no less than one year after the dividend or redemption price became payable or after the shares became issuable.

(c) The obligation of the corporation to pay the dividend or redemption price or issue the shares shall thereupon cease, but the board of directors may, at any time and for any reason satisfactory to the board, authorize either of the following:

(i) Payment of the amount of any cash, property dividend, or redemption price, ownership of which has reverted to the corporation pursuant to a provision of the articles authorized by this Section, to the entity who would be entitled thereto had such reversion not occurred.

(ii) Issuance of any shares, ownership of which has reverted to the corporation pursuant to a provision of the articles authorized by this Section, to the entity who would be entitled thereto had such reversion not occurred.

(3)(a) The articles of incorporation of a bank or a bank holding company may contain a provision eliminating or limiting the personal liability of a director or officer to the corporation or its shareholders for monetary damages for breach of fiduciary duty as a director or officer, provided that the provision shall not eliminate or limit the liability of a director or officer for any of the following:

(i) A breach of a duty of loyalty, which is imposed on a director or officer, to the bank, bank holding company, or its shareholders.

(ii) Acts or omissions not in good faith or involving intentional misconduct or involving a knowing violation of law.

(iii) Liability incurred pursuant to R.S. 12:1-833.

(iv) Any transaction from which the director or officer derived an improper personal benefit.

(b) For the purposes of this Paragraph, no provision shall eliminate or limit the liability of a director or officer for any act or omission that occurred prior to the date the provision becomes effective.

C. When all fees and charges have been paid as required by law, the commissioner shall review the filed articles and, if the articles comply with the provisions of this law, shall issue a letter of acceptance for filing endorsed with the date and hour, if requested, of his acceptance. If the commissioner finds that the articles of incorporation violate any part of this law, he shall notify the proposed incorporators of such violation and shall require that the articles be amended to conform to the provisions of this Section.

Acts 1984, No. 719, §1, eff. Jan. 1, 1985; Acts 1987, No. 261, §3, eff. July 3, 1987; Acts 1997, No. 965, §1; Acts 2001, No. 915, §1, eff. June 26, 2001; Acts 2015, No. 83, §1.

§ 6:214 Investigation into proposed state bank

When an application for a certificate of authority has been filed with the commissioner, he shall conduct an investigation to determine whether the public interest will be served by permitting the organization of the proposed state bank. In making this investigation, the commissioner shall determine whether the character, financial responsibility, and general fitness of the persons named in the application as proposed incorporators, proposed directors, proposed stockholders, and proposed executive officers are such as to command the confidence of the community in which such bank is proposed to be located. The commissioner shall also examine the need for additional banking facilities in the community where the bank is to be located and the ability of the community to support additional facilities. The commissioner may consider such other facts and circumstances bearing on the proposed bank and its relation to the community as he may deem relevant.

Acts 1984, No. 719, §1, eff. Jan. 1, 1985.

§ 6:215 Capital requirements; additional condition precedent

A. The articles of incorporation of a state bank must provide for an amount of capital stock with which the state bank will begin business, which amount may not be less than five hundred thousand dollars. The commissioner may require a greater amount of capital if he reasonably deems it necessary for the safe, sound, and proper operation of the state bank.

B. The capital of a mutual state bank shall consist of its retained earnings and such other forms of equity deemed to be qualifying capital by the commissioner.

C. One hundred percent of the capital stock shall be paid in full in cash or by contributions of the initial organizers to defray organizational expenses that may have been approved by the commissioner before a certificate of authority may be issued by the commissioner.

D. This Section shall not apply to banks organized solely for the purpose of effecting a merger with an existing bank.

Acts 1984, No. 719, §1, eff. Jan. 1, 1985; Acts 1997, No. 929, §1; Acts 2001, No. 915, §1, eff. June 26, 2001.

§ 6:216 Certificate of authority; issuance, refusal

A. The commissioner shall issue a certificate of authority to transact banking business as a state bank only upon the fulfillment of the requirements of this Chapter.

B. If the commissioner finds that the public interest will not be served by permitting the organization of the proposed state bank, that there is no need for additional banking facilities in the community where the bank is to be located, or that there is a lack of ability within that community to support additional banking facilities, he shall refuse to issue the certificate of authority.

C. The commissioner shall not issue a certificate of authority until the proposed bank presents evidence to him that the deposits of the proposed bank will be insured by the Federal Deposit Insurance Corporation.

Acts 1984, No. 719, §1, eff. Jan. 1, 1985; Acts 1985, No. 359, §1, eff. July 9, 1985; Acts 1987, No. 107, §1.

§ 6:217 Effect of issuance of certificate of authority, filing requirements

A. Upon the issuance of the certificate of authority, the bank shall be duly incorporated and the corporate existence shall begin as of the time when the articles were accepted for filing with the office of financial institutions, except that if the articles of incorporation are filed within five days exclusive of legal holidays after execution thereof, the bank shall be duly incorporated and the corporate existence shall begin as of the time of execution of the articles.

B. Upon issuance of the certificate of authority the Office of Financial Institutions shall record the articles of incorporation and the certificate of authority and issue a certificate of incorporation which shall show the date on which corporate existence began.

C. A multiple original of the articles, a copy of the certificate of authority, and a copy of the certificate of incorporation shall be filed in the office of the recorder of mortgages of the parish of the main office of the bank within thirty days of the issuance of the certificate of authority.

Acts 1984, No. 719, §1, eff. Jan. 1, 1985; Acts 1999, No. 342, §3; Acts 1999, No. 860, §1, eff. July 2, 1999; Acts 2003, No. 17, §1, eff. May 23, 2003; Acts 2003, No. 60, §1, eff. May 23, 2003.

§ 6:218 Expenses of organization and financing

The charges and expenses of organization of a state bank and the expenses of and compensation for the sale and underwriting of its shares may not be paid or allowed by the state bank out of the consideration received by it in payment for its shares to the extent that such payment constitutes the bank's capital stock. This restriction does not prohibit the payment, with approval of the commissioner, of reasonable charges and expenses out of surplus or undivided profits.

Acts 1984, No. 719, §1, eff. Jan. 1, 1985.

§ 6:219 Bylaws

A. Except as specifically provided in this Chapter and unless the articles provide otherwise, the board of directors of a state bank may make and alter bylaws, including bylaws fixing directors' qualifications, number or term of office, or fixing their compensation, subject to the power of the stockholders to change or repeal any bylaws so made.

B. The bylaws may contain any provision relating to the business of the state bank, the conduct of its affairs, its rights or powers, or the rights or powers of its stockholders, directors, or officers not inconsistent with law or the articles.

C. No person not an officer or director, dealing with the state bank, shall be charged with constructive notice of the bylaws.

Acts 1984, No. 719, §1, eff. Jan. 1, 1985.

§ 6:220 Stockholders' agreements

A.(1) Any lawful provision regulating the affairs of a state bank or the rights and liabilities of its stockholders which is not required to be set forth in the articles may be set forth in an agreement among all of the stockholders who would be entitled to vote on the provisions thereof if proposed as an amendment to the articles.

(2) Such an agreement shall be binding on all persons who are at the time such agreement is made or who thereafter become stockholders of the state bank. No other person dealing with the state bank shall be charged with constructive notice of such an agreement.

(3) Such an agreement may be terminated or modified by amendment at any time in the manner, except that no amendment thereto need be filed or recorded except as provided in Subsection B of this Section, and by the vote which would be required for adoption of an amendment to the articles deleting or similarly modifying the provisions thereof if they had been set forth in the articles, or by such larger vote as may be specified in the agreement.

B. A copy of each such agreement and of each amendment thereto or a certified copy of the minutes of the meeting at which the amendment was adopted by vote shall be filed in the state bank's main office and shall be open daily during business hours to the inspection of any stockholder or his attorney, agent, or legal representative.

Acts 1984, No. 719, §1, eff. Jan. 1, 1985.

PART III AMENDMENT AND RESTATEMENT OF ARTICLES

§ 6:231 Method of amending articles generally

A. A state bank may in the manner herein provided amend its articles in any respect to include or change any provision authorized by this Chapter or to omit any provision not required by this Chapter.

B. Except as hereinafter provided in this Section, an amendment altering the articles may be adopted by two-thirds of the voting power present or by such larger or smaller vote, not less than a majority of the voting power present, as the articles may require, at an annual or special meeting of stockholders the notice of which sets forth the proposed amendment or a summary of the changes to be made thereby.

C.(1) Prior to the adoption of the amendment, the proposed amendment shall be submitted to the commissioner for his approval. The commissioner shall review the amendment, and if it is in a form acceptable to him, does not reduce capital stock below an amount necessary for the safe and sound operation of the bank, and does not violate any provisions of law or any regulation issued by him, he shall issue a letter of approval of the amendment. No proposed amendments or restatement shall be valid unless a letter of approval has been issued by the commissioner.

(2) If an amendment is adopted by the shareholders and the bank failed to comply with the prior notice requirements of Paragraph (1) of this Subsection, the bank shall submit after-the-fact notification to the commissioner, accompanied by the appropriate fee. If the commissioner finds that the submission complies with this Subsection, absent the timely notification, he shall issue a letter of approval of the amendment.

D.(1) If an amendment would adversely affect the rights of the holders of shares of any class or series, then, in addition to the vote required by Subsection B of this Section, the holders of each class or series of shares so affected by the amendment shall be entitled to vote as a class upon such amendment, whether or not by the terms of the articles such class or series is entitled to vote; and the vote of the holders of two-thirds, or such larger or smaller proportion not less than a majority as the articles may require, of the shares of each class or series so affected by the amendment, present or represented at the meeting, shall be necessary for the adoption thereof.

(2) Except as otherwise provided in the articles, the rights of a stockholder shall not be considered adversely affected unless the amendment, otherwise than as permitted by the articles:

(a) Alters or abolishes any preferential right of his shares having preferences;

(b) Alters or abolishes any preemptive right in respect of his shares;

(c) Creates or alters, other than to abolish, any restriction on transfer applicable to his shares;

(d) Excludes or limits his right as a stockholder to vote on a matter, except as such right may be limited by voting rights of new shares then being authorized of an existing or new class; or

(e) Alters or abolishes any right of his shares to receive dividends, except as such right may be affected by dividend rights of new shares then being authorized of an existing or new class.

E.(1) In the event that the duration of a state bank as fixed in the articles may heretofore have expired or may hereafter expire without any action having been taken with reference thereto and without proceedings having been undertaken or instituted to dissolve and wind up the state bank, the articles may be so amended as to extend the duration of the state bank as specified in the articles in the same manner and with the same force and effect as if the articles had been amended prior to the expiration of the duration of the state bank as set forth in the articles, except that if the state bank's name is no longer available for use by it, its name shall be changed appropriately.

(2) The declaration in the minutes of the meeting of the stockholders, at which the articles are amended by extending the duration of the state bank, that prior to the expiration of the duration of the state bank no action had been taken with reference thereto and that no proceedings had been undertaken or instituted to dissolve and wind up the state bank shall constitute prima facie evidence of those facts.

Acts 1984, No. 719, §1, eff. Jan. 1, 1985; Acts 2003, No. 55, §1, eff. May 23, 2003.

§ 6:232 Articles of amendment; contents and filing

A. After an amendment has been duly adopted as provided in R.S. 6:231, articles of amendment setting forth the amendment, the date and manner of adoption thereof, and the number of shares of each class or series represented at the meeting and voted for and against the amendment shall be executed in the state bank's name by the president, cashier, or any other person thereto authorized by resolution or consent of the stockholders. If the articles of amendment are not executed by the president or cashier, a copy of the resolution or consent of stockholders authorizing the person who executed the article, certified a true copy by the secretary of the board, shall be annexed to the articles of amendment. The articles of amendment shall be acknowledged by the president, cashier, or other authorized person who signed them or may instead be in the form of an authentic act.

B. After an amendment has been duly adopted and executed as provided in Paragraph A of this Section, the articles of amendment shall be filed with the office of financial institutions. Articles of amendment may be delivered to the commissioner for filing as of any specified date within thirty days after the date of delivery. The articles of amendment shall be effective as of the date and, if requested, the hour of filing with the commissioner, except that if the articles of amendment were filed within three days, exclusive of legal holidays, after acknowledgment thereof or execution thereof as an authentic act, the amendment shall be effective as of the time of the acknowledgment or execution.

C. The articles of amendment shall thereafter be filed for record in the office of the recorder of mortgages of the parish of domicile of the bank.

Acts 1984, No. 719, §1, eff. Jan. 1, 1985; Acts 1999, No. 342, §3; Acts 2003, No. 17, §1, eff. May 23, 2003; Acts 2003, No. 60, §1, eff. May 23, 2003.

§ 6:233 Restatement of articles

A. On authorization of the board of directors, a state bank may execute and file restated articles. Such restated articles shall contain the entire text of the original articles as amended by all amendments thereto except that names and addresses of incorporators and directors may be omitted, and may contain new amendments adopted by a method prescribed in R.S. 6:231 or 6:232, and shall recite:

(1) That the restatement accurately copies the articles and all amendments thereto in effect at the date of the restatement without substantive change except as made by any new amendment or amendments contained in the restatement and indicate any such changes.

(2) That each amendment has been effected in conformity with law.

(3) The date of incorporation and the date of the restatement.

(4) Such other information as may be required by R.S. 6:232 if the restatement contains any new amendment.

B. The restated articles shall be executed, filed, and recorded in the manner provided for articles of amendment in R.S. 6:232 and shall be effective when filed with the commissioner as of the date and, if endorsed on the restated articles, the hour of filing with him.

C. Upon effectiveness of the restated articles, the original articles and all amendments thereto shall be superseded, and the restated articles shall be deemed to be the articles of incorporation of the state bank.

Acts 1984, No. 719, §1, eff. Jan. 1, 1985; Acts 1985, No. 359, §1, eff. July 9, 1985.

§ 6:234 Special amendment provisions

A.(1) If authorized by the articles, the board may establish a series of shares of any class and may adopt an amendment to the articles fixing the preferences, limitations, and relative rights of the shares of any class, or establishing, and fixing variations in relative rights and preferences as between a series of any preferred or special class. Unless otherwise provided in the articles, the number of shares of any such series to which such amendment applies may be increased, but not above the total number of authorized shares of the class, or decreased, but not below the number of shares thereof then outstanding, by an amendment likewise adopted by the board. In case the number of such shares shall be decreased, the number of shares constituting the decrease shall resume the status of authorized but unissued shares.

(2) When no shares of any such class or series are outstanding, either because none were issued or because no issued shares of any such class or series remain outstanding, the board may adopt an amendment eliminating from the articles any or all matters set forth in any amendment previously adopted by the board with respect to such class or series. Unless otherwise provided in the articles, if no shares have been issued of a class or series established by an amendment to the articles adopted by the board, and there exists no binding commitment to issue any such shares of such class or series, the preferences, limitations, and relative rights thereof may be amended by a further amendment to the articles adopted by the board.

(3) Prior to the adoption of an amendment by the board of directors in accordance with this Section, such amendment shall be submitted to the commissioner for approval in the same manner as provided for in R.S. 6:231.

B. In case of an amendment pursuant to Subsection A of this Section, appropriate articles of amendment, reciting the relevant facts and the articles have been amended as provided in this Section shall forthwith be executed, acknowledged, and filed by the proper officers of the state bank in the manner provided in R.S. 6:232.

Acts 1997, No. 965, §1; Acts 2001, No. 915, §1, eff. June 26, 2001.

PART IV POWERS AND FUNCTIONS OF STATE BANKS

§ 6:241 General corporate powers

A. A state bank may be organized to exercise the powers provided in this law and such other general powers as are appropriate to its purpose.

B. A state bank shall, without specific mention thereof in its articles of incorporation, have all the powers conferred by this law and the following general corporate powers:

(1) To have and enjoy succession by a corporate name to be selected by it and by that corporate name to contract and to appear as a natural person in all courts of justice and elsewhere.

(2) To receive, hold, purchase, acquire, and convey by and under its corporate name any property including bonds, stocks, and securities of the United States of America, of any of the states, or of any corporation, board, or body, public or private, as may be necessary, proper, or convenient to the objects of the bank and to exercise in relation thereto all the direct and incidental rights of ownership. State banks may lawfully purchase, acquire, hold, and convey, unless acting as trustee or agent, immovable property only in accordance with the provisions of this Chapter.

(3) To make and use a corporate seal.

(4) To name and appoint such officers and directors to administer the affairs of the state bank as it thinks necessary and proper, to establish the number and title of the directors or officers, and to fix the compensation of all persons in its employment.

(5) To make bylaws for the proper management of the affairs of the state bank as may be necessary and proper and in conformity with the banking law set out in this Title and the articles of incorporation, and to repeal or amend the bylaws.

(6) To accept and execute trusts or agencies of any description which may be committed or transferred with its consent to it by any person whomsoever or by any court of this state, of the United States of America, or of any state, territory, or possession thereof.

(7) To invest the funds of persons of which such bank has been appointed tutor or curator in any common trust fund established by such bank under the provisions of R.S. 9:2128, such investments to be administered in conformity with that Section.

(8) To become a member of the Federal Reserve Bank or the Federal Home Loan Bank and to purchase stock or securities thereof or deposit money therewith, and to comply with any other condition of membership or credit.

Acts 1984, No. 719, §1, eff. Jan. 1, 1985; Acts 1991, No. 340, §1, eff. July 6, 1991.

§ 6:242 Banking powers

A. In addition to the general corporate powers conferred in R.S. 6:241 and the powers conferred by other provisions of the laws of this state, a state bank shall have the following banking powers and those incidental to the exercise of these powers:

(1) To receive and pay out deposits, with or without interest, and pay checks.

(2) To lend money at interest on a secured or unsecured basis and, pursuant to regulations issued by the commissioner, to vary from time to time the interest rate charged on loans according to the terms and conditions contained in the promissory note. Such conditions shall not be deemed to rely upon the whim of the obligor so as to render them null nor shall such conditions destroy the negotiability of the promissory note.

(3) To accept for payment at a future date drafts drawn upon it by its customers.

(4) To issue letters of credit.

(5) To discount and buy and sell promissory notes, bills of exchange and other evidences of indebtedness, gold and silver, and bonds of the United States, of this state, and of the several levee districts, parishes, school districts, drainage districts, road districts, and municipal corporations of this state, on which bonds there shall have been no default in the payment of interest for the lesser of the last five years or the existence of the bonds.

(6)(a) To act as the agent for any insurance company authorized to do insurance business in this state by soliciting and selling insurance and to receive for services so rendered such lawful commissions or fees as may be agreed upon between the bank and the insurance company for which it is acting as agent. The location of the insurance agency shall be the address shown on the license application submitted to the Department of Insurance pursuant to the provisions of the Louisiana Insurance Code, notwithstanding the conduct of insurance sales activities at other locations.

(b) Notwithstanding any other law to the contrary, any bank which was engaged as a general insurance agent or broker on January 1, 1984, may continue to be so engaged.

(7) To maintain and lease safe deposit boxes and to accept property or documents for safekeeping.

(8) To subscribe to the capital stock and become a member of the Federal Reserve System and to comply with the rules and regulations thereof.

(9) To obtain insurance from the Federal Deposit Insurance Corporation and to comply with the rules and regulations thereof.

(10) To invest in mortgages, obligations, stocks, or other securities of the Federal National Mortgage Association, the Federal Home Loan Mortgage Corporation, the Student Loan Marketing Association, the Government National Mortgage Association, or any agency of the United States and to invest in bonds issued, assumed, or guaranteed by the African Development Bank.

(11) To engage in the business of selling, issuing, or offering shares of stock and to be exempt from all provisions of the laws of this state, other than the provisions of this law, which provide for supervision, reporting, registration, or regulation in connection with the sale, issuance, or offering of securities, and the sale, issuance, or offering of any shares of stock shall be legal without any action or approval whatsoever on the part of any official other than the commissioner authorized to license, regulate, or supervise the sale, issuance, or offering of securities. This exemption shall apply with the same force to any officer or employee of any bank when acting within the scope of his employment. Nothing contained herein shall be construed to extend the powers of state banks to underwrite the sale of stock beyond that currently permitted either under the laws of this state or of the United States.

(12) To make loans and advances of credit secured by mortgages insured by the Federal Housing Administration, the Veterans' Administration, and other similar federal agencies and to otherwise purchase and invest in obligations of those agencies.

(13) To borrow money and to mortgage, pledge, hypothecate, or grant a security interest in any of its assets to secure such borrowings when authorized by resolution of the board of directors, which resolution specifies the maximum amount which may be borrowed.

(14) To agree to repurchase securities sold by the state bank commonly referred to as repurchase agreements.

(15) To enjoy such powers as may be accorded through regulations issued by the commissioner.

(16) Notwithstanding any other provision of law to the contrary state-chartered banks are authorized to sell annuities to the same extent as federally chartered banks. The commissioner of insurance shall license employees of banks or bank subsidiaries to fulfill the purposes of this Paragraph.

(17) Notwithstanding any other provision of law to the contrary, to engage in the business of making and facilitating refund anticipation loans and to assess interest charges and fees in relation to such loans to the same extent as a state-chartered bank in any other state or a bank chartered under the laws of the United States. For purposes of this Paragraph, the term "refund anticipation loan" means a loan whereby the creditor arranges to be repaid directly by the Internal Revenue Service from the anticipated proceeds of the debtor's income tax refund.

(18) In furtherance of the Louisiana Community Development Financial Institutions Act and in low-income communities affected by Hurricanes Katrina and Rita, to make investments in Louisiana Community Development Financial Institutions to promote the public welfare such as developing housing, fostering economic growth and revitalization, and creating small businesses, including minority-owned businesses, provided that such investments do not expose a bank to unlimited liability and that a bank's aggregate investments made under this Paragraph shall not exceed the maximum amount allowed by federal law for investments in Community Development Financial Institutions.

B. A state bank shall have the powers conferred by Subsection A without specific mention thereof in its articles of incorporation or certificate of authority.

C.(1)(a) In addition to any other preexisting powers, a state bank shall have and possess such rights, powers, privileges, and immunities of a national bank or national bank branch domiciled in this state only if both of the following conditions are met:

(i) The state bank notifies the commissioner in writing of its intent to exercise such rights, powers, privileges, and immunities.

(ii) The commissioner does not raise an objection within forty-five days of receipt of the written notice of intent from the state bank.

(b) The commissioner shall, upon request, notify the bank in writing as to the nature of his objection.

(2) In the event of a conflict between this Subsection, or any rule or regulation promulgated hereunder, and any other provision of law, the provisions of this Subsection shall control.

D.(1) Any state-chartered bank or trust company which desires to surrender trust or fiduciary powers shall file with the commissioner of financial institutions and the Federal Deposit Insurance Corporation, if applicable, a certified copy of the resolution of its board of directors signifying such desire. Upon receiving the resolution the commissioner shall make an investigation and, if satisfied that the bank or trust company has been relieved of all duties as trustee, executor, administrator, registrar of stocks and bonds, assignee, receiver, curator of the property of minors or interdicts, or other fiduciary duties, whether under court, private, or other appointments previously accepted under any law, may, in his discretion, issue to such bank or trust company a certificate that such bank or trust company is no longer authorized to exercise trust or fiduciary powers. Upon the issuance of the commissioner's certificate, such bank or trust company shall not thereafter exercise any trust or fiduciary powers without paying a reapplication fee to be established by regulation and obtaining a new permit to exercise such powers.

(2) The commissioner is authorized and empowered to promulgate such regulations, in conformity with R.S. 49:950 et seq., the Administrative Procedure Act, as he may deem necessary to enforce compliance with this Subsection.

E.(1) If, in the opinion of the commissioner, a state chartered bank has unlawfully or unsoundly exercised, or has failed for a period of five consecutive years to exercise, the trust or fiduciary powers granted by R.S. 6:241(B)(6) and (7), or otherwise fails or has failed to comply with the duties of trustees as set forth in the Louisiana Trust Code, the commissioner may issue and serve upon the bank a notice of intent to revoke the authority of the bank to exercise trust or fiduciary powers. The notice shall contain a statement of the facts constituting the alleged unlawful or unsound exercise of powers, or failure to exercise powers, or failure to comply, and shall fix a time and place at which a hearing will be held to determine whether an order revoking authority to exercise such powers should issue against the bank.

(2) The revocation hearing shall be conducted in accordance with the Administrative Procedure Act. The hearing shall be fixed for a date not earlier than thirty days nor later than sixty days after service of such notice by certified mail, return receipt requested.

(3) If a duly authorized representative of the banks fails to appear at the hearing, it shall be conclusively presumed that the bank has consented to the issuance of the revocation order. In the event that consent is by letter communicated to the commissioner, or consent is conclusively presumed as provided for in the preceding sentence, or if, upon the record made at the hearing, the commissioner shall find that the allegations specified in the notice of charges have been established by sufficient competent and relevant evidence, the commissioner may issue and serve upon the bank an order prohibiting it from accepting any new or additional trust accounts and revoking authority to exercise any and all powers granted by R.S. 6:241(B)(6) and (7). Such order shall specify a reasonable time for the bank to expeditiously divest or terminate all previously accepted trust accounts. The bank shall be held to the statutory duties of trustee for all previously accepted trust accounts until they have been divested or terminated.

(4) A revocation order issued after a hearing on the merits or based on the conclusive presumption of consent arising from nonappearance at a scheduled hearing shall become effective not earlier than thirty days after service of such order upon the bank by certified mail, return receipt requested, and shall remain effective and enforceable except to the extent as it is stayed, modified, terminated, or set aside by action of a reviewing court or the commissioner. A revocation order based on the affirmative, written communication of the bank to the commissioner, consenting to the revocation, shall become effective at the time specified in the bank's written consent to revocation. If the written consent to revoke does not specify an effective date, the revocation order shall establish the revocation date as the date on which the commissioner receives the bank's communication.

(5) Judicial review of a revocation order shall be in accordance with the Administrative Procedure Act.

Acts 1984, No. 719, §1, eff. Jan. 1, 1985. Acts 1985, No. 359, §1, eff. July 9, 1985; Acts 1985, No. 784, §1; Acts 1988, No. 40, §1, eff. June 10, 1988; Acts 1989, No. 134, §1; Acts 1989, No. 397, §1, eff. June 30, 1989; Acts 1990, No. 611, §1, eff. July 19, 1990; Acts 1990, No. 637, §1; Acts 1990, No. 1079, §2, eff. Sept. 1, 1990; Acts 1993, No. 281, §1, eff. July 1, 1993; Acts 1993, No. 952, §1; Acts 1995, No. 355, §1, eff. Sept. 29, 1995; Acts 1995, No. 681, §1; Acts 1997, No. 606, §1; Acts 1997, No. 1475, §1, eff. July 15, 1997; Acts 2003, No. 573, §1, eff. June 27, 2003; Acts 2003, No. 665, §1, eff. June 27, 2003; Acts 2005, 1st Ex. Sess., No. 53, §1, eff. Jan. 21, 2006.

§ 6:243 Immovable property; dealings

A. A state bank may lawfully purchase, hold, and convey any immovable property:

(1) Which is necessary for the proper transaction of its business.

(2) Which has been mortgaged to it in good faith as security for loans.

(3) Which has been conveyed to it in satisfaction of debts previously contracted bona fide in the course of its business.

(4) Which it purchases at sales under judgment of mortgages held by it or in which it has an interest by being subrogated to rights according to Civil Code Article 1829.

(5) Pursuant to participation in a shared appreciation loan or home equity conversion loan, including but not limited to reverse mortgages and shared appreciation mortgages, wherein the bank has a right to receive a share of the appreciation in value of the security property upon maturity of the loan. Such loans shall be authorized when any of the following exist:

(a) The security property of the borrower is designed principally as a single-family residence.

(b) The borrower is the owner and occupant of the security property.

(c) The loan is authorized pursuant to the Alternative Mortgage Transaction Parity Act of 1982, 12 U.S.C. 3801 et seq., and regulations issued thereunder, or regulations issued by the office of financial institutions as provided in this Title.

B. Except for property held pursuant to Paragraphs (A)(1) and (5) of this Section, a state bank shall not hold immovable property as an asset for a longer time than ten years, except as provided in Paragraph (E)(2) or (F)(1) of this Section. Any bank holding immovable property which is subject to the ten-year divestiture period shall enter the immovable property on its books in accordance with generally accepted accounting principles (GAAP).

C.(1) For immovable property provided for in Paragraphs (A)(2), (3), and (4) of this Section, a state bank shall obtain, within a reasonable time before or after the property is acquired, a current appraisal of the fair market value of any such property and shall account for the property in accordance with generally accepted accounting principles (GAAP). For purposes of this Paragraph, a state bank may perform an evaluation in lieu of an appraisal for residential real estate valued at or below two hundred fifty thousand dollars and for commercial real estate valued at or below five hundred thousand dollars.

(2) An additional appraisal shall be required for immovable property every third calendar year from the date the initial appraisal was obtained pursuant to Paragraph (1) of this Subsection. For purposes of this Paragraph, a state bank may perform an evaluation in lieu of an appraisal for residential immovable property valued at or below two hundred fifty thousand dollars and for commercial immovable property valued at or below five hundred thousand dollars.

(3) Notwithstanding Paragraph (2) of this Subsection, for commercial immovable property valued above five hundred thousand dollars, an additional appraisal shall be required every second calendar year from the date the initial appraisal was obtained pursuant to Paragraph (1) of this Subsection.

D.(1) The commissioner may require additional appraisals or evaluations of immovable property provided for in Paragraphs (A)(2), (3), and (4) of this Section, not more often than annually, if the commissioner determines either of the following to be true:

(a) The appraisal or evaluation is necessary for safety and soundness reasons.

(b) The appraisal or evaluation is necessary due to a material decline in the condition or market value of a specific property or local real estate market.

(2) For purposes of this Subsection, the commissioner may require an appraisal for immovable properties of any value pursuant to this Section, regardless of the thresholds established in this Section.

E.(1) A state bank may, at its option, select the method of valuation as provided for in Subsection C of this Section, or may reduce the value of the immovable property by at least one-tenth of the original book value each year that the property is held. The bank shall divest itself of that property within the ten-year period, regardless of which method of valuation is selected. The bank shall continue to apply this method consistently throughout the divestiture period.

(2) The ten-year divestiture requirement shall not apply to immovable property which has been held by a state bank for more than five years as of January 1, 1980.

(3) A bank which acquires the assets of a failed or failing bank shall be allowed ten years from the date it acquires the immovable property of the failed or failing bank within which to divest itself of such property. A bank shall value the acquired property in accordance with the requirements of Paragraph (1) of this Subsection. A bank shall establish the anniversary date to be the original acquisition date of the other immovable property as determined by the failed or failing institution or the date the bank acquires the other immovable property of the failed or failing institution. Once the anniversary date has been established, that date will remain as such for as long as the property is held by the bank.

(4) Except as otherwise provided by rule or regulation promulgated by the commissioner, a state bank shall not exchange any property, whether movable or immovable, acquired in the course of its business as provided in Subsection A of this Section.

F.(1) A state bank may hold immovable property in perpetuity, exempt from the divestiture requirements of this Section, if all of the following conditions are met:

(a) The property is not being operated by the financial institution as an ongoing business.

(b) The property has been written down to the value of one dollar on the books of the bank.

(c) The property has been transferred into a subsidiary of the bank.

(d) Written approval has been obtained from the commissioner.

(2) Property held in perpetuity subject to Paragraph (1) of this Subsection shall also be exempt from the valuation requirements contained in Subsection C of this Section.

Acts 1984, No. 719, §1, eff. Jan. 1, 1985; Acts 1985, No. 503, §1; Acts 1986, No. 55, §1; Acts 1989, No. 399, §1; Acts 1991, No. 340, §1, eff. July 6, 1991; Acts 1991, No. 789, §1; Acts 1992, No. 877, §1, eff. Sept. 1, 1992; Acts 1995, No. 1202, §1; Acts 1999, No. 860, §§1, 3, eff. July 2, 1999; Acts 2001, No. 544, §1, eff. June 21, 2001; Acts 2004, No. 40, §1; Acts 2012, No. 29,§§1,2; Acts 2016, No. 74, §1; Acts 2019, No. 16, §1; Acts 2019, No. 348, §1.

§ 6:244 Transfers by bank and other acts in contemplation of insolvency

A. The following, when made with a view to prevent the application of the assets of any state bank in the preference of one creditor to another, shall be utterly null and void:

(1) All transfers of the notes, bonds, bills of exchange, or other evidences of debt owing to such state bank, or of deposits to its credit.

(2) All assignments of mortgages, sureties on real estate, or of judgments or decrees in its favor.

(3) All deposits of money, bullion, or other valuable thing for its use, or for the use of any of its shareholders or creditors.

(4) All payments of money to either its shareholders or creditors, made after the commission of an act of insolvency, or in contemplation thereof.

B. No attachment, injunction, or execution shall be issued against such bank or its property before final judgment in any suit, action, or proceeding in any court.

Acts 1990, No. 528, §1.

§ 6:245 Changes in core business

A. Whenever a state-chartered financial institution, or holding company thereof, intends to materially change its core business as conducted at the time of its last safety and soundness examination or filing pursuant to this Section, whichever is later, it shall provide notice to the commissioner at least forty-five days prior to implementation.

B. If the commissioner does not raise an objection or defer his decision in writing, within forty-five days of receipt of the written notice of intent, the financial institution or holding company may proceed with its plans.

C. The commissioner shall have the authority to promulgate or establish rules, regulations, notifications, filing procedures, instructions, and fees as he deems necessary to carry out the provisions of this Section.

Acts 2003, No. 570, §1, eff. June 27, 2003.

§ 6:246 Bank operating subsidiaries

A. A state bank may, through a wholly-owned operating subsidiary, conduct any activity or make any investment that the state bank is authorized to conduct or make under state or federal law. A state bank that establishes a subsidiary in accordance with this Subsection shall provide the commissioner written notice within thirty days after establishing the subsidiary or commencing the new activity in the subsidiary.

B. Except as provided in Subsection A of this Section, a state bank shall obtain written approval from the commissioner in order to conduct any activity through a subsidiary.

Acts 2019, No. 16, §1.

PART V SHARES

§ 6:251 Classes of shares; fractional shares

A. The shares of a state bank may be divided into classes with such designations, voting powers, preferences, dividend or other relative rights or restrictions, limitations, or qualifications as may be provided in the articles, with the prior approval of the commissioner. The state bank may issue shares with optional or conversion rights according to the provisions of R.S. 6:254. The state bank may issue shares of any preferred or special class in series with such designations of series and such variations in the relative rights and preferences as between series as fixed in the articles.

B. All of the shares shall have a par value as provided in the articles.

C. Except as provided in the articles and referred to in the certificate of stock, each share shall be in all respects equal to every other share.

D.(1) Except as otherwise provided in the articles, a state bank may, but shall not be obliged to, issue certificates for fractional shares and by action of its board of directors may, but shall not be obliged to, issue in lieu thereof scrip in registered or bearer form which may be void if not exchanged for full shares within a limited time stated therein or may provide that after a limited time stated therein the aggregate shares represented by scrip will be sold for account of the holders thereof.

(2) The holder of fractional-share certificates or scrip shall be entitled to receive a certificate for a full share upon the surrender, within any limited time stated therein, of fractional-share certificates or scrip aggregating a full share. Unless otherwise provided in the articles, the holder of a fractional-share certificate shall, but the holder of scrip shall not, have all rights of a stockholder except voting rights.

Acts 1984, No. 719, §1, eff. Jan. 1, 1985.

§ 6:252 Issuance of shares; consideration

A. Shares shall be issued initially for such consideration expressed in dollars, not less than the par value thereof, as shall be fixed in the articles as approved by the commissioner. All fully paid shares shall be nonassessable except as provided in R.S. 6:262.

B. Shares issued in payment of a stock dividend, pursuant to exercise of conversion rights, or in a merger or consolidation as provided in the merger or consolidation agreement, shall be considered as fully paid when so issued.

C. The consideration for shares issued otherwise than as stated in Subsection B of this Section shall be paid in cash before the shares are issued. Cash consideration for shares may not be paid by the purchaser's note, secured or unsecured, or uncertified check; and in case of delivery of such a note or check in payment for shares, the shares shall not be issued until the note or check has been paid in full.

Acts 1984, No. 719, §1, eff. Jan. 1, 1985.

§ 6:253 Reservation of shares

A state bank shall reserve from its authorized but unissued shares sufficient shares to meet its issuance obligations under subscription rights, warrants, options, and conversion privileges.

Acts 1984, No. 719, §1, eff. Jan. 1, 1985.

§ 6:254 Convertible securities and stock-purchase rights

A. Unless the articles provide otherwise and with prior notice to the commissioner, the board of directors of a state bank shall have authority, whether or not in connection with the issuance and sale of any of its shares or other securities, to create and issue rights and options in any form, granting to the holders thereof:

(1) The right to convert, upon such terms and conditions as the state bank may deem expedient, shares or obligations into shares of any class; or

(2) The right or option to purchase, upon such terms and conditions as it may deem expedient, shares of any class.

B. No shares shall be issued pursuant to the exercise of option rights created independently of issuance and sale of shares or other securities unless the creation of such rights shall have been either:

(1) Authorized or approved by the stockholders; or

(2) If the optionee is neither a director nor the holder, directly or indirectly, of record or beneficially or both, of more than ten percent of the total voting power, authorized by vote of at least two-thirds of the directors in office.

C. Such conversion or option rights shall be exercisable at such price as determined by the board of directors or by the stockholders by vote of a majority of the voting power present if the articles reserve to the stockholders the right to fix the consideration for issuance of the shares.

D. Converted shares shall be cancelled.

Acts 1984, No. 719, §1, eff. Jan. 1, 1985; Acts 1997, No. 965, §1; Acts 2001, No. 915, §1, eff. June 26, 2001.

§ 6:255 Certificates of stock

A. Shares must be represented by certificates of stock unless the issuing corporation is a participant in the Direct Registration System, or its successor, of the Depository Trust & Clearing Corporation, then shares need not be represented by certificates of stock. Unless expressly provided elsewhere, the rights and obligations of shareholders are not affected regardless of whether the shares are represented by certificates of stock.

B. At a minimum each share certificate shall state on its face:

(1) The name of the issuing corporation and that the corporation is organized under the laws of this state.

(2) The name of the person to whom issued.

(3) The number and class of shares and the designation of the series, if any, the certificate represents.

C. If the issuing corporation is authorized to issue different classes of shares or different series within a class, the designation, relative rights, preferences, and limitations applicable to each class and the variation in rights, preferences, and limitations determined for each series and the authority of its board of directors to determine variations for future series shall be summarized on the front or back of each certificate. Alternatively each certificate may state conspicuously on its front or back that the corporation will furnish the shareholder this information on request in writing and without charge.

D. Each share certificate shall be signed, either manually or in facsimile, by either:

(1) Two officers designated in the bylaws.

(2) The clerk and an officer designated in the bylaws.

(3) The corporation's board of directors.

E. A share certificate may bear the corporate seal or its facsimile.

F. If the person who signed a share certificate pursuant to Subsection D no longer holds office when the certificate is issued, the certificate is nevertheless valid.

G. Unless the articles of incorporation or bylaws provide otherwise, the board of directors of a corporation may authorize the issue of some or all of the shares of any or all of its classes or series of shares without certificates. The authorization does not affect shares already represented by certificates until they are surrendered to the corporation.

H. Within a reasonable time after the issue or transfer of shares without certificates, the corporation or its agent shall send the shareholder a written statement of the information required on certificates by Subsections B and C and, if applicable, R.S. 6:257.

Acts 1984, No. 719, §1, eff. Jan. 1, 1985; Acts 2005, No. 97, §1.

§ 6:256 Transfer of shares

A. The transfer of certificates of stock and the shares represented thereby may be regulated by bylaws not inconsistent with the provisions of the articles or other provisions of the law.

B. A state bank may employ a transfer agent to keep a share register and to record transfers of shares therein, and acts of the agent shall be binding on the state bank. The duties and liabilities of the agent shall be such as may be agreed to by the state bank.

Acts 1984, No. 719, §1, eff. Jan. 1, 1985.

§ 6:257 Restriction on transfer of shares and other securities

A. For purposes of this Section, "share" includes a security convertible into or carrying a right to subscribe or acquire shares.

B. A corporation's articles of incorporation or bylaws, an agreement among shareholders or an agreement between shareholders and the corporation, may impose restrictions on the transfer or registration of transfer of shares of the corporation. A restriction does not affect shares issued before the restriction was adopted unless the holders of the shares are parties to the restriction agreement or voted in favor of the restriction.

C. A restriction on the transfer or registration of transfer of shares is valid and enforceable against the holder or a transfer¹ of the holder if the restriction is authorized by this Section and its existence is noted conspicuously on the front or back of the certificate or is contained in the information statement required by R.S. 6:255(H). Unless so noted, a restriction is not enforceable against a person who has no knowledge of the restriction.

D. A restriction on the transfer or registration of transfer of shares is authorized for any of the following:

(1) To maintain the corporation's status when it is dependent on the number or identity of its shareholders.

(2) To preserve exemptions under federal or state securities law.

(3) For any other reasonable purpose.

E. A restriction on the transfer or registration of transfer of shares may do any of the following:

(1) Obligate the shareholder first to offer the corporation or other persons, separately, consecutively, or simultaneously, an opportunity to acquire the restricted shares.

(2) Obligate the corporation or other persons, separately, consecutively, or simultaneously, to acquire the restricted shares.

(3) Require the corporation, the holders of any class of its shares or another person to approve the transfer of the restricted shares if the requirement is not manifestly unreasonable.

(4) Prohibit the transfer of the restricted shares to designated persons or classes of persons if the prohibition is not manifestly unreasonable.

Acts 2005, No. 97, §1.

¹As appears in enrolled bill. Should be "transferee".

PART VI CAPITAL, SURPLUS, DIVIDENDS

§ 6:261 Accounting procedures

A. Upon initial issuance of shares, that part of the consideration received therefor which is equal to the par value thereof shall be allocated to capital stock, and the remainder shall be allocated to surplus.

B. Except as otherwise provided in R.S. 6:263 and 416, a state bank may transfer from or reduce its capital stock or surplus only in conformity with written permission of the commissioner.

C. Repealed by Acts 2003, No. 570, §2, eff. June 27, 2003.

Acts 1984, No. 719, §1, eff. Jan. 1, 1985; Acts 1997, No. 966, §1; Acts 2001, No. 915, §1, eff. June 26, 2001; Acts 2003, No. 570, §2, eff. June 27, 2003.

§ 6:262 Impairment of capital; special meeting; notice to restore capital; assessments against stockholders; voluntary restoration

A. If the commissioner believes after examination that the capital of any bank is impaired, he shall immediately call a special meeting of its board of directors, notify them of the result of the examination and of his findings thereon, certify to the amount of the impairment of capital as of the date of the examination which revealed the impairment, and shall then direct the deficient bank to make good the impairment of its capital within sixty days.

B.(1) Upon receipt of the notice and upon authorization by majority vote of the board of directors, the board shall levy a special assessment against every stockholder of record for the amount required to remedy the impairment. Notice of the assessment shall be sent by registered or certified mail to each stockholder at his place of residence as evidenced by the stockholder records of the bank.

(2) Each stockholder shall have thirty days from the date the notice is sent to pay in full the amount of the assessment. If, at the expiration of the thirty days, a stockholder has failed or refused to pay the required assessment, the stockholder may not be assessed personally, but the board of directors shall declare his stock to be in default and shall proceed to sell his shares. The sale price shall not be less than the assessment levied on the stock. Upon receipt of the sale price and payment of the assessment, the excess shall be paid over to the defaulting stockholder who shall thereupon surrender his stock certificate.

C. Notwithstanding the provisions of Subsection B, the state bank may raise the necessary funds by other methods with prior approval of the commissioner.

D. The commissioner may suspend the certificate of authority of the bank until the capital is restored if he finds that the capital is severely impaired or that the impairment results in an unsafe and unsound condition.

Acts 1984, No. 719, §1, eff. Jan. 1, 1985; Acts 1985, No. 359, §1, eff. July 9, 1985.

§ 6:263 Dividends; stock purchased or redeemed; capital surplus required

A. The board of directors of a state bank may not declare or pay any dividends in cash or property for a period of two years from the issuance of its certificate of authority or as the commissioner may prescribe. Thereafter, the board of directors of a state bank may declare or pay cash or property dividends on shares of its capital stock by complying with the provisions of this Section and the bank's articles of incorporation and bylaws.

B. A state bank shall not declare or pay cash or property dividends, or purchase or redeem shares of its capital stock unless the bank has unimpaired surplus that equals or exceeds fifty percent of the outstanding capital stock of the bank. The bank's unimpaired surplus shall not be reduced below fifty percent as a result of the payment of any combination of cash or property dividends, or the purchase or redemption of any shares of its capital stock.

C.(1) Prior approval of the commissioner shall be required if the total of all year-to-date cash or property dividends declared and paid by the state bank and amounts used by the state bank to redeem or purchase shares of its capital stock would exceed the total of the bank's year-to-date net income combined with its net income from the immediately preceding year, after deducting all of the following:

(a) Amounts paid or accrued for the payments of cash dividends.

(b) The value of all property paid in dividends.

(c) Amounts paid or accrued to redeem or purchase shares of the bank's capital stock over the calculation period.

(2) Negative net income shall not be rounded to zero in the calculation.

D. A state bank shall not purchase or redeem shares of its capital stock when its combined capital stock and unimpaired surplus accounts are less than, or such purchase or redemption would reduce its combined capital stock and unimpaired surplus accounts below, the aggregate amount payable on liquidation upon any issued shares which have a preferential right to participate in the assets in the event of liquidation and that remain after the purchase or redemption of any shares in connection therewith.

E. Shares of a state bank's capital stock acquired pursuant to R.S. 6:416(B) shall be canceled and thereby restored to the status of authorized and unissued shares upon the expiration of the period permitted under that Section unless prior to that date the stock had been disposed of by the state bank.

F. Shares of a state bank's capital stock purchased or redeemed by the bank shall be deemed cancelled and thereby restored to the status of authorized and unissued shares unless the bank's articles, bylaws, or a resolution of the board of directors provides that such shares may be held as treasury stock following the purchase or redemption thereof.

Acts 1984, No. 719, §1, eff. Jan. 1, 1985; Acts 1986, No. 10, §1; Acts 1991, No. 232, §1, eff. July 2, 1991; Acts 1992, No. 231, §1, eff. Sept. 1, 1992; Acts 1997, No. 1003, §1; Acts 2001, No. 915, §1, eff. June 26, 2001; Acts 2003, No. 570, §1, eff. June 27, 2003; Acts 2010, No. 77, §1.

PART VII STOCKHOLDERS

§ 6:271 Stockholders' preemptive rights

A. Stockholders shall have only such preemptive rights as may be provided in the articles. If the articles provide simply that "stockholders shall have preemptive rights", then:

(1) Each holder of shares having voting rights shall, upon issuance for cash of shares having voting rights, have a preemptive right, during a reasonable period to be fixed by the board of directors which need not exceed fifteen days after the giving or mailing of written notice to him of the terms and conditions on which such right is exercisable, to subscribe at such price and upon such terms as may be fixed in the manner provided in R.S. 6:252 for such proportion of the shares to be issued as the number of shares having voting rights held by him bears to the total number of shares having voting rights then outstanding.

(2) A stockholder shall have no preemptive right to subscribe for shares:

(a) Which are to be issued for consideration other than cash.

(b) Which are to be issued to satisfy conversion or option rights.

(c) Which are issued pursuant to an employee benefit plan.

(3) Shares which have been offered to stockholders having a preemptive right at a price or upon terms duly fixed and which have not been subscribed for by them within the period fixed by the board of directors may thereafter, for one year following the end of such period, be issued, sold to, or subjected to rights or options in favor of, any other person or persons at a price not less than that at which they were offered to such stockholders.

Acts 1984, No. 719, §1, eff. Jan. 1, 1985.

§ 6:272 Stockholders' meetings

A.(1) Unless otherwise provided in the articles or bylaws, stockholders' meetings may be held anywhere in this state or by remote communication as provided in R.S. 12:1-709.

(2) At least one meeting of the stockholders shall be held in each calendar year for election of directors, if any are to be elected, but failure to hold the annual meeting shall not affect or vitiate the corporate existence of the state bank. If no annual stockholders' meeting is held for a period of eighteen months, any stockholder may call such a meeting to be held at the main office of the bank.

B.(1) Special meetings of stockholders may be called at any time by the president, the board of directors, or in any manner provided for in the articles or bylaws.

(2) At any time upon written request of any stockholder or stockholders holding in the aggregate one-fifth, or such lesser or greater proportion as may be fixed in the articles or in a bylaw adopted by the stockholders, of the total voting power, the secretary shall call a special meeting of stockholders to be held at the registered office, or by remote communication as provided in R.S. 12:1-709 at such time as the secretary may fix, not less than fifteen nor more than sixty days after the receipt of said request, and if the secretary shall neglect or refuse to fix such a time or to give notice of the meeting, the stockholder or stockholders making the request may do so.

C. Adjournments of any annual or special meeting of stockholders may be taken without new notice being given unless a new record date is fixed for the adjourned meeting, but any meeting at which directors are to be elected shall be adjourned only from day to day until such directors shall have been elected.

D.(1) Unless otherwise provided in the articles or bylaws and except as otherwise provided in this Chapter, the authorized person or persons calling a stockholders' meeting shall cause written notice of the time, place, and purpose of the meeting to be given to all stockholders entitled to vote at such meeting at least ten days and not more than sixty days prior to the day fixed for the meeting. Notice of the annual meeting need not state the purpose thereof, except as otherwise provided in this Chapter, if a specified action is to be taken at the meeting. If the state bank has authorized participation at a stockholders' meeting by means of remote communication, as provided in R.S. 12:1-709, notice of the place shall include the means of remote communication to be used and any required access instructions.

(2) If such a written notice is placed in the United States mail, postage prepaid, and addressed to a stockholder at his last known address, notice shall be deemed to have been given him.

(3) Notice of any stockholders' meeting may be waived in writing by any stockholder at any time; the written waiver need not specify the purpose of or the business to be transacted at the meeting; and such notice shall be deemed to have been given to or waived by all stockholders present or represented at any such meeting except any stockholder who, at the beginning of the meeting, objects to the transaction of any business because the meeting is not lawfully called or convened.

(4) Notice need not be given to any stockholder with whom communication is made unlawful by any law of the United States of America or by any rule, regulation, proclamation, or executive order issued under any such law; and any action or meeting taken or held without notice to any such stockholder shall have the same force and effect as if notice had been given to him as otherwise required.

(5) Notwithstanding any other provision of law to the contrary, the articles of incorporation or bylaws of a bank may authorize delivery of notices of meetings and other communications to stockholders by electronic transmission to the same extent and in the same manner as permitted for a Louisiana corporation in accordance with R.S. 12:1-141.

E. At any meeting of the stockholders, a list of stockholders entitled to vote, arranged alphabetically and certified by the secretary of the board or by the agent of the state bank having charge of transfers of shares, showing the number and class of shares held by each stockholder on the record date for the meeting shall be produced on the request of any stockholder. This list shall be prima facie evidence of the ownership of shares in the state bank and of the right of the stockholders listed therein to vote.

Acts 1984, No. 719, §1, eff. Jan. 1, 1985; Acts 2018, No. 88, §1; Acts 2021, No. 23, §1, eff. June 1, 2021.

§ 6:273 Quorum

A. A stockholders' meeting properly called on due notice, if notice is required, may be organized for the transaction of business whenever a quorum is present.

B. Except as otherwise provided in this Chapter or in the articles or bylaws:

(1) The presence, in person, by remote communication as provided in R.S. 12:1-709, or by proxy, of the holders of the majority of the total voting power shall constitute a quorum, except that in no event shall a quorum consist of less than one-fourth of the total voting power.

(2) The stockholders present or represented at a duly organized meeting shall constitute a quorum and may continue to do business until adjournment notwithstanding the withdrawal of enough stockholders to leave less than a quorum as fixed in Paragraph (1) of this Subsection or in the articles or bylaws or the refusal of any stockholders present to vote.

(3)(a) If a meeting cannot be organized because a quorum has not attended, those present may adjourn the meeting to such time and place as they may determine, subject however, to the provisions of R.S. 6:272(C).

(b) In the case of any meeting called for the election of directors, those who attend the second of such adjourned meetings, although less than a quorum as fixed in Paragraph (1) of this Subsection or in the articles or bylaws, shall nevertheless constitute a quorum for the purpose of electing directors.

Acts 1984, No. 719, §1, eff. Jan. 1, 1985; Acts 2021, No. 23, §1, eff. June 1, 2021.

§ 6:274 Voting of stockholders

A. Except as otherwise provided in the articles, each stockholder of record shall have the right at every stockholders' meeting to one vote for each share standing in his name on the books of the state bank.

B. Cumulative voting is prohibited.

C.(1) A stockholder shall have the right to cast his vote either in person, by remote communication as provided in R.S. 12:1-709, or, subject to the following provisions, by proxy duly authorized in writing, signed by the stockholder, and filed with the secretary at or before the meeting.

(2) The authority of the holder of a proxy to act shall not be revoked by the death of the stockholder who executed the proxy unless, before the authority is exercised, written notice of such death is received by the corporate officer responsible for maintaining the list of stockholders.

(3)(a) A proxy shall be revocable at will unless otherwise validly provided by agreement or by any provision of the proxy. The validity of every unrevoked proxy shall cease eleven months after the date of its execution unless some other definite period of validity shall expressly be provided therein, but in no case shall an outstanding proxy be valid for longer than three years.

(b) The revocation of a proxy, if revocable, shall not be effective until written notice thereof has been given to the secretary of the board or unless a proxy of later date is filed with the secretary at or before the meeting.

(4) A proxy regular on its face and signed in the name of a stockholder entitled to vote at the meeting shall be deemed valid unless challenged before it is voted, and the burden of proving invalidity shall be on the challenger.

(5) When shares are registered in the names of two or more persons, other than fiduciaries, a proxy signed by any one or more of them shall be deemed valid unless the state bank receives written notice to the contrary from a nonsigning registered holder before the proxy is voted.

D. A person whose shares are pledged shall be entitled to vote thereon unless and until such shares have been transferred on the books of the state bank to the pledgee, and thereafter the pledgee shall be entitled to vote thereon.

E.(1) Any person in whose name shares are registered in a fiduciary capacity may, so far as concerns the state bank, vote the same in person or by proxy for all purposes and without the necessity of any authorization by a court or of any judicial or other proceeding provided in particular laws. A legal representative, other than a receiver or trustee, may vote shares held by him, either in person or by proxy, without transfer of the shares into his name.

(2) When shares are registered in the names of three or more fiduciaries, voting thereof shall be in accordance with the will of the majority of the fiduciaries unless the instrument or order appointing the fiduciaries directs that the shares shall be voted in some other way. When, in any case, the fiduciaries are equally divided as to the manner of voting the shares registered jointly in their names, any court of competent jurisdiction may, upon petition filed by any of the fiduciaries or by any beneficiary, appoint an additional person to act with the fiduciaries in determining the manner in which the shares shall be voted on the particular questions as to which the fiduciaries are divided.

F. Except as provided in Subsection G of this Section, a state bank owning shares in another corporation may vote the same by its president, cashier, any vice president, or by proxy appointed in writing by any of such officers unless some other person appointed by bylaws or resolution of the board of directors to vote the shares shall produce a certified copy of such bylaws or resolution, in which case the other person shall be entitled to vote the shares.

G. Unissued shares shall be neither voted nor counted in calculating the voting power of stockholders of a state bank.

H. Except as otherwise provided in the articles or bylaws or in other provisions of this Chapter, a majority of votes actually cast shall decide any matter properly brought before a stockholders' meeting organized for the transaction of business, except that directors shall be elected by plurality vote.

Acts 1984, No. 719, §1, eff. Jan. 1, 1985; Acts 2021, No. 23, §1, eff June 1, 2021.

§ 6:275 Consent of stockholders

A. Whenever by any provision of law, the articles, or the bylaws the affirmative vote of stockholders is required to authorize or constitute corporate action, the consent in writing to such corporate action signed by all of the stockholders having voting power on the particular question shall be sufficient for the purpose without necessity for a meeting of stockholders.

B. If the articles provide that such consent may be signed by fewer than all of the stockholders having voting power on any question, the consent need be signed only by stockholders holding that proportion of the total voting power on the question that is required by the articles or by law, whichever requirement is higher.

C. The consent, together with a certificate by the secretary of the board to the effect that the subscribers to the consent constitute all or the required proportion of the stockholders entitled to vote on the particular question, shall be filed with the records of proceedings of the stockholders. If the consent is signed by fewer than all of the stockholders having voting power on the question, prompt notice shall be given to all of the stockholders of the action taken pursuant to the consent.

Acts 1984, No. 719, §1, eff. Jan. 1, 1985.

§ 6:276 Fixing record date

A. For the purpose of determining stockholders entitled to notice of and to vote at a meeting, to receive a dividend, to receive or exercise subscription or other rights, or to participate in a reclassification of stock, or in order to make a determination of stockholders for any other proper purpose, the board of directors may fix in advance a record date for determination of stockholders for such purpose, such date to be not more than sixty days, or such shorter period as the bylaws may prescribe, and, if fixed for the purpose of determining stockholders entitled to notice of and to vote at a meeting, not less than ten days prior to the date on which the action requiring the determination of stockholders is to be taken.

B. Except as the board may provide otherwise, if no record date is fixed for the purpose of determining stockholders entitled to notice of and to vote at a meeting, the close of business on the day before the notice of the meeting is mailed, or if notice is waived, the close of business on the day before the meeting shall be the record date for such purpose, or for any other purpose, the close of business on the day on which the board of directors adopts the resolution relating thereto shall be the record date for such purpose.

C. A determination of stockholders entitled to notice of and to vote at a meeting shall apply to any adjournment thereof unless otherwise provided by the board of directors.

Acts 1984, No. 719, §1, eff. Jan. 1, 1985.

§ 6:277 Voting trusts

A.(1) Two or more stockholders of a state bank may, pursuant to an agreement in writing, transfer their shares to any one or more natural persons having authority to act as trustees for the purpose of vesting in the transferees, as trustees, for a period not exceeding fifteen years and upon the terms and conditions stated in the agreement, all voting or other rights pertaining to such shares.

(2) The voting trust agreement may stipulate that the time of the agreement may be extended under the same terms and conditions for an additional period not to exceed ten years from the date of expiration of the original agreement. When the original agreement contains such a stipulation, it shall provide for the manner, method, time, and place for a meeting of all of the depositing stockholders to vote on the extension. At least a majority in interest of all depositing stockholders, and a larger percentage if stipulated, must vote for extension if the original agreement is to remain effective beyond its original expiration date.

B. Unless the agreement provides otherwise, any other stockholder may at any time transfer his shares to the same trustee or trustees upon the terms and conditions stated in the agreement and thereupon shall be bound by and shall have the benefits of all of the provisions of the voting trust agreement.

C. The certificates of shares transferred to a trustee or trustees shall be surrendered and cancelled and new certificates therefor issued in the name of the trustee or trustees. In the new certificates it shall appear that they are issued pursuant to the voting trust agreement. In the entry of transfer on the records of the state bank, it shall be noted that the transfer is made pursuant to the agreement.

D. The trustee or trustees shall execute and deliver voting trust certificates to the transferors. Such voting trust certificates shall be transferable in the same manner and with the same effect as certificates of stock.

E. The trustee or trustees shall possess all voting and other rights pertaining to the shares so transferred and registered in his or their names, subject to the terms and conditions of, and for the period specified in, the agreement.

F. Unless otherwise provided in the agreement:

(1) The trustee or trustees may vote in person or by proxy.

(2) If there are two or more trustees, the manner of voting shall be determined as provided in R.S. 6:274(E).

(3) Vacancies among the trustees shall be filled by the remaining trustee or trustees.

(4) A trustee shall incur no responsibility as trustee except for his individual neglect or malfeasance.

G. The trustee or trustees shall keep at a place available to holders of voting trust certificates correct and complete books and records of account relating to the trust, a record containing the names and addresses of all persons who are holders of voting trust certificates, the number and class of shares represented by each certificate held by them, and the dates when they became the owners thereof. The record may be in written form or in any other form capable of being converted into written form within reasonable time.

H. A duplicate of every voting trust agreement shall be filed in the main office of the state bank, and it and the record of voting trust certificate holders shall be subject to the same right of inspection by a stockholder of record or a holder of a voting trust certificate, in person or by agent or attorney, as are the records of the state bank under R.S. 6:279.

Acts 1984, No. 719, §1, eff. Jan. 1, 1985.

§ 6:278 Registered holder of shares

Except as otherwise provided in the articles or bylaws, a state bank and its directors, officers, and agents may recognize and treat a person registered on its records as the owner of shares, as the owner in fact thereof for all purposes, and as the person exclusively entitled to have and to exercise all rights and privileges incident to the ownership of such shares; and rights under this Section shall not be affected by any actual or constructive notice which the state bank or any of its directors, officers, or agents may have to the contrary.

Acts 1984, No. 719, §1, eff. Jan. 1, 1985.

§ 6:279 Inspection of books and records of state banks; annual report to stockholders

A. Every stockholder, except a business competitor of the state bank as described in Subsection C, who has been the holder of record of at least two percent of all outstanding shares of a state bank for at least six months shall have the right to examine, in person or by agent or attorney, at any reasonable time and for any proper and reasonable purpose, books showing the amount of common stock subscribed, the names and residences of owners of stock, the amount of stock owned by each of them, the amount of said stock paid and by whom, the last transfer of said stock with the date of transfer, the names and residences of its officers, the records of proceedings of the stockholders, of the directors, and of the committees of the board, and the articles of incorporation and bylaws of the bank. Two or more stockholders, each of whom has been a holder of record of shares for the period aforesaid and whose aggregate holdings at least equal the percentage aforesaid, may join in such request and jointly exercise these rights.

B. Every stockholder, except a business competitor of the state bank as described in Subsection C, who has been a holder of record of at least twenty-five percent of all of the outstanding shares of the bank for at least six months shall have the right to examine in person, by agent or attorney, at any reasonable time and for any proper and reasonable purpose, any and all of the books and records of the bank, except files and records relating to credit information, loan transactions, and deposit accounts of individual customers of the bank, which records shall be deemed confidential and shall not be subject to stockholder inspection. Two or more stockholders, each of whom has been the holder of record of shares for at least six months and whose aggregate holdings equal at least twenty-five percent, may join in such request and jointly exercise these rights.

C. In the case of stock held or acquired by a business competitor of the state bank, or held by or through an interposed person for a business competitor, or a person who owns stock or is otherwise interested in a corporation which is a business competitor, the business competitor must own at least forty percent of the outstanding stock of the bank for a period of six months before he may demand the rights and privileges set forth in Subsections A and B.

D. A certified copy or a published copy of the bank's annual financial statement shall be made available to any stockholder upon request.

E. The owner of shares of a bank holding company of which the state bank is a subsidiary in the amounts required in this Section shall afford the owner of such shares the corresponding rights of examination with regard to the state bank subsidiary as are provided herein.

Acts 1984, No. 719, §1, eff. Jan. 1, 1985; Acts 1986, No. 975, §1, eff. July 14, 1986; Acts 1987, No. 109, §1; Acts 1990, No. 226, §1, eff. July 3, 1990.

PART VIII DIRECTORS, OFFICERS, AND EMPLOYEES

§ 6:281 Board of directors; powers, number, term

A.(1) Subject to the provisions of its articles of incorporation and bylaws, all of the powers and duties of a state bank shall be vested in, and the business and affairs of the bank shall be managed by, a board of directors of not less than five nor more than thirty natural persons as established by the articles or bylaws.

(2) The initial board of directors shall be those named in the articles accepted by the commissioner.

(3) No amendments reducing the number of directors shall have the effect of shortening the term of any incumbent director.

(4) Unless otherwise provided by the articles, the directors of a state bank shall hold office for one year or until their successors are chosen and qualified. Except as otherwise provided in the articles or bylaws, a director may succeed himself. No director shall be elected for a longer single term than five years.

B. Except as provided in R.S. 6:282(C)(3), directors other than the initial directors named in the articles shall be elected by the stockholders.

C. The number, qualifications, compensation, term of office, manner of election, time and place of meeting, and powers and duties of the directors may, subject to the provisions of this law and subject to regulations of the commissioner, be prescribed by the articles or the bylaws.

D. The articles or bylaws may provide for the appointment of honorary, advisory, or emeritus members of the board of directors and prescribe the number of and compensation for those directors. Any person appointed to such position need not satisfy the eligibility requirements provided in R.S. 6:282(A). Honorary, advisory, or emeritus directors shall have no voting power on the board of directors. Any listing of such honorary, advisory, or emeritus directors must distinguish those directors from the bank's board of directors or indicate their advisory status.

Acts 1984, No. 719, §1, eff. Jan. 1, 1985

§ 6:282 Board of directors; eligibility, election, oath

A. At least a majority of the board of directors shall be domiciliaries of Louisiana.

B. Before entering upon his duties, each director elected or appointed shall take an oath that he will administer the affairs of the bank honestly and with that degree of diligence, care, judgment, and skill as provided in R.S. 6:291(B) and that he will not knowingly violate or permit to be violated any law applicable to the state bank, and shall further declare whether or not he is a domiciliary of the state of Louisiana. This oath shall be subscribed to by the director taking and making it and shall be entered into the minutes of the next regular or special meeting of the board of directors. The oath shall be retained in the records of the bank for examination by the commissioner.

C.(1) The office of director shall become vacant if he dies or resigns.

(2) The board of directors or the commissioner may declare vacant the office of a director:

(a) If he is interdicted or adjudicated an incompetent.

(b) If he is adjudicated a bankrupt.

(c) If he becomes incapacitated by illness or other infirmity to perform his duties for a period of six months or longer.

(d) If he ceases at any time to have the qualifications required by the articles, bylaws, or this Section.

(e) If he is convicted of a felony.

(3) The remaining directors, even though not constituting a quorum, may by a majority vote fill any vacancy on the board, including any vacancy resulting from an increase in the authorized number of directors or from failure of the stockholders to elect the full number of authorized directors, for an unexpired term, provided that the stockholders shall have the right, at any special meeting called for that purpose prior to such action by the board, to fill the vacancy.

D.(1) The stockholders, by vote of a majority of the total voting power at any special meeting called for that purpose, unless the articles provide for a greater amount, may remove from office any one or more of the directors, notwithstanding that his or their terms of office may not have expired, and may forthwith at such meeting proceed to elect a successor for the unexpired term.

(2) Whenever the holders of the shares of any class or series are entitled to elect one or more directors, the provisions of this Subsection shall apply, in respect of the removal of a director or directors so elected, and the election of a successor or successors, to the vote of the holders of the outstanding shares of that class or series or of those obligations, and not to the vote of the outstanding shares as a whole.

Acts 1984, No. 719, §1, eff. Jan. 1, 1985; Acts 1993, No. 276, §1, eff. Oct. 1, 1993; Acts 1997, No. 66, §1; Acts 2001, No. 637, §1, eff. June 22, 2001.

§ 6:283 Meetings of the board; quorum, written consent

A. The meetings of the board of directors may be held at such place, whether in this state or elsewhere, as a majority of the directors may from time to time appoint or as may be fixed in the call of the meeting.

B.(1) Such notice of meetings of the board shall be given no less than five working days prior to the date of the meeting or such longer period as provided in the bylaws.

(2) Directors present at a meeting shall be deemed to have received due notice or to have waived notice thereof. Notice of the meeting may be waived in writing at any time, and the waiver need not specify the purpose of or the business to be transacted at the meeting.

(3) Notice need not be given to any director or member of a committee of the board of directors with whom communication is made unlawful by any law of the United States or by any rule, regulation, proclamation, or order issued under this law, and any action or meeting taken or held without notice to any such director or committee member shall have the same force and effect as if notice had been given to him as otherwise required.

(4) Notwithstanding any other provision of law to the contrary, the articles of incorporation or bylaws of a bank may authorize or require delivery of notices of meetings and other communications to directors by electronic transmission to the same extent and in the same manner as permitted for a Louisiana corporation in accordance with R.S. 12:1-141.

C.(1) If authorized by the articles of incorporation, the members of the board or its committees may participate in and hold meetings by means of:

(a) Conference telephone or other similar means of communication; and

(b) With respect to extensions of credit only, communication or contact by the chairman, chief executive officer, or their designee through the use of any oral, electronic, or written means of communication, including the use of telephone, telegraph, facsimile transmittal, or other means of communication, provided that:

(i) No member objects to a meeting being held in this manner;

(ii) The chairman, chief executive officer, or their designee certifies in writing the proposal to be acted upon, their good faith attempt to communicate the contents of such writing to all members eligible to vote to determine their position on the proposal, the affirmative or negative position taken by any member, and the objection of any member under Item (i) of this Subparagraph; and

(iii) All actions taken pursuant to this Subparagraph or proposed pursuant to this Subparagraph, but not taken due to the lack of the necessary votes required for approval or the objection of a member under Item (i) of this Subparagraph, be evidenced by the filing of the written certification required under Item (ii) of this Subparagraph in the records of proceedings of the board or its committees, as applicable, for review at the next meeting of such board or committee.

(2) Participation in a meeting pursuant to this Subsection shall constitute presence in person at such meeting except where the person participates for the sole, express purpose of objecting to the transaction of any business on the ground that the meeting is not lawfully called or convened or objects under the provisions of R.S. 6:283(C)(1)(b)(i).

D. The number of directors necessary to form a quorum for the transaction of business shall be a simple majority or as fixed by the articles of incorporation or the bylaws, but a quorum shall never be less than one-third of the entire board. The acts of a majority, unless some greater number is fixed in the articles or bylaws, of the directors present shall constitute the acts of the entire board. If a quorum is present when the meeting is convened, the directors may continue to do business, taking action by a vote of the required vote of a quorum as fixed above, until adjournment notwithstanding the withdrawal or recusal of enough directors to leave less than a quorum.

E. Any action that may be taken at a meeting of the board of directors or any committee thereof may be taken by a consent in writing signed by all of the directors or by all members of the committee, as the case may be, and filed with the records of proceedings of the board or committee.

F. Voting of directors by proxy is prohibited.

Acts 1984, No. 719, §1, eff. Jan. 1, 1985; Acts 1989, No. 162, §1; Acts 1995, No. 589, §1; Acts 1995, No. 623, §1; Acts 2018, No. 88, §1.

§ 6:284 Committees of the board of directors

The board of directors may designate one or more committees, each committee to consist of two or more of the directors of the bank, which to the extent provided by resolution or in the articles or bylaws shall have the powers of the board of directors in the management of the business and affairs of the bank. Such committee or committees shall have such name or names as may be stated in the articles or bylaws or as may be determined, from time to time, by the board of directors. Any vacancy occurring in any committee shall be filled by the board of directors, but the chairman may designate another director to serve on the committee pending action by the board. Each such committee shall hold office during the term of the board constituting it unless otherwise ordered by the board. The designation or delegation of authority to any committee shall not relieve the directors of any responsibility otherwise imposed on them by law.

Acts 1984, No. 719, §1, eff. Jan. 1, 1985.

§ 6:284.1 Compliance review committees; privilege created

A. A board of directors may create a compliance review committee for the purpose of establishing procedures for and engaging in self-evaluations, self-assessments, self-testing, and self-corrections with respect to compliance with applicable state and federal banking laws and regulations.

B. Notwithstanding any other provision of law to the contrary, the results of any such self-evaluation, self-assessment, self-testing, or self-correction, and any notes, reports, or work product derived therefrom, whether prepared by internal personnel or outside attorneys, accountants, third-party service providers, or consultants, shall be deemed privileged for all purposes and shall not be subject to discovery and shall not be admissible as evidence, unless specifically agreed to by the FDIC-insured financial institution, holding company, subsidiary, or affiliate, in any private, public, or administrative civil action brought against the FDIC-insured financial institution, its holding company, subsidiaries, or affiliates alleging noncompliance with or violation of applicable state and federal banking laws and regulations.

Acts 1995, No. 589, §1; Acts 2012, No. 35, §1.

§ 6:285 Officers and agents; election, powers, duties

A. The board of directors shall elect a president or chief executive officer, a cashier or chief financial officer, and a secretary, who shall each be a different person, and shall elect a chairman of the board. One or more vice presidents may be elected. None of the officers except the president or chief executive officer and the chairman need be a director. No person holding more than one office may sign in more than one capacity any instrument required by law to be signed by two officers.

B. The board may elect and appoint such other officers and agents as may be necessary for the business of the state bank in the manner provided by the bylaws.

C.(1) Every bank shall be deemed to have the following registered agents, who shall be the president or chief executive officer, the cashier or chief financial officer, and the secretary of the bank. Service of citation or other legal process on a bank shall be made by personal service on any one of the named registered agents. If the officer making service certifies that he is unable after diligent effort to have service made on the registered agents, then the service may be made on any officer of the bank at the main office of the bank.

(2) Every bank may also designate a corporate agent for service of process. However, if a corporate agent for service is so designated, service shall be made on such agent. The commissioner shall be notified prior to the changing or renaming of such agent.

D. The officers and agents shall have such rights and perform such duties in the management of the state bank as may be prescribed by the articles or bylaws or by the board of directors.

E. Election or appointment of an officer shall not of itself create contract rights. Any officer or agent may be removed by the board of directors with or without cause at any time, without prejudice, however, to the contract rights of the person so removed.

F. Except as otherwise provided in the articles or bylaws or by resolution of the board, the president or chief executive officer, or cashier or chief financial officer, shall have the power in the name and on behalf of the state bank to authorize the institution, prosecution, or defense of any suit or other legal proceeding; and no exception of want of authority shall lie on the part of any other party. Such persons shall have the authority in the state bank's name to direct the issuance of conservatory writs and to bond property in custodia legis, to execute bonds in connection with any legal proceedings, and to make affidavits required by law or rules of court. Such acts shall have the same force and effect as an act of the state bank itself and be binding upon it.

Acts 1984, No. 719, §1, eff. Jan. 1, 1985; Acts 1991, No. 656, §1; Acts 1997, No. 42, §1; Acts 1999, No. 860, §1, eff. July 2, 1999; Acts 2001, No. 637, §1, eff. June 22, 2001; Acts 2003, No. 72, §1, eff. May 28, 2003.

§ 6:286 Indemnification of officers, directors, employees, and agents

A.(1) Except as provided in Paragraph (4), a state bank may indemnify an individual made a party to a proceeding because he is or was a director against liability incurred in the proceeding if:

(a) He conducted himself in good faith; and

(b) He reasonably believed:

(i) In the case of conduct in his official capacity with the state bank, that his conduct was in its best interests;

(ii) In all other cases, that his conduct was at least not opposed to its best interests; and

(c) In the case of any criminal proceeding, he had no reasonable cause to believe his conduct was unlawful.

(2) A director's conduct with respect to an employee benefit plan for a purpose he reasonably believed to be in the interests of the participants in and beneficiaries of the plan is conduct that satisfies the requirement of Subparagraph (1)(b)(ii).

(3) The termination of a proceeding by judgment, order, settlement, conviction, or upon a plea of nolo contendere or its equivalent is not of itself determinative that the director did not meet the standard of conduct described in this Section.

(4) A state bank may not indemnify a director under this Section:

(a) In connection with a proceeding by or in the right of the state bank in which the director was adjudged liable to the state bank; or

(b) In connection with any proceeding charging improper personal benefit to him, whether or not involving action in his official capacity, in which he was adjudged liable on the basis that personal benefit was improperly received by him.

(5) Indemnification permitted under this Section in connection with a proceeding by or in the right of the state bank is limited to reasonable expenses incurred in connection with the proceeding.

B. Unless limited by its articles of incorporation, a state bank shall indemnify a director who was wholly successful, on the merits or otherwise, in the defense of any proceeding to which he was a party because he is or was a director of the state bank against reasonable expenses incurred by him in connection with the proceeding.

C.(1) A state bank may pay for or reimburse the reasonable expenses incurred by a director who is a party to a proceeding in advance of final disposition of the proceeding if:

(a) The director furnishes the state bank a written affirmation of his good faith belief that he has met the standard of conduct described in Subsection A;

(b) The director furnishes the state bank a written undertaking, executed personally or on his behalf, to repay the advance if it is ultimately determined that he did not meet the standard of conduct; and

(c) A determination is made that the facts then known to those making the determination would not preclude indemnification under this Section.

(2) The undertaking required by Subparagraph (1)(b) must be an unlimited general obligation of the director but need not be secured and may be accepted without reference to financial ability to make repayment.

(3) Determination and authorizations of payments shall be made in the manner specified in Subsection E.

D. Unless limited by a state bank's articles of incorporation, a director of the state bank who is a party to a proceeding may apply for indemnification to the court conducting the proceeding or to another court of competent jurisdiction. On receipt of an application, the court, after giving any notice the court considers necessary, may order indemnification if it determines that:

(1) The director is entitled to mandatory indemnification under Subsection B, in which case the court shall also order the state bank to pay the director's reasonable expenses incurred to obtain court-ordered indemnification; or

(2) The director is fairly and reasonably entitled to indemnification in view of all the relevant circumstances, whether or not he met the standard of conduct set forth in Subsection A or was adjudged liable as described in Paragraph A(4), but if he was adjudged so liable, his indemnification is limited to reasonable expenses incurred.

E.(1) A state bank may not indemnify a director under Subsection A unless authorized in the specific case after a determination has been made that indemnification of the director is permissible in the circumstances because he has met the standard of conduct set forth in Subsection A.

(2) The determination shall be made:

(a) By the board of directors by a majority vote of a quorum consisting of directors not at the time parties to the proceeding;

(b) If a quorum cannot be obtained under Subparagraph (2)(a), by majority vote of a committee duly designated by the board (in which designation directors who are parties may participate), consisting solely of two or more directors not at the time parties to the proceeding;

(c) By special legal counsel selected by the board of directors or its committee in the manner prescribed in Subparagraph (2)(a) or (b) or, if a quorum of the board cannot be obtained under Subparagraph (2)(a) and a committee cannot be designated under Subparagraph (2)(b), selected by majority vote of the full board, in which selection directors who are parties may participate; or

(d) By the stockholders, but shares held by directors who are at the time parties to the proceeding may not be voted on the determination.

(3) Authorization of indemnification and evaluation as to reasonableness of expenses shall be made in the same manner as the determination that indemnification is permissible, except that if the determination is made by special legal counsel, authorization of indemnification and evaluation as to reasonableness of expenses shall be made by those entitled under Subparagraph (2)(c) to select counsel.

F. Unless limited by a state bank's articles of incorporation:

(1) An officer of the state bank who is not a director is entitled to mandatory indemnification under Subsection B and is entitled to apply for court-ordered indemnification under Subsection D in each case to the same extent as to a director;

(2) The state bank may indemnify and advance expenses under this Section to an officer, employee, or agent of the corporation who is not a director to the same extent as to a director; and

(3) A state bank may also indemnify and advance expenses to an officer, employee, or agent who is not a director to the extent, consistent with law, that may be provided by its articles of incorporation, bylaws, general or specific action of its board of directors, or contract.

G. A state bank may purchase and maintain insurance on behalf of an individual who is or was a director, officer, employee, or agent of the state bank or who, while a director, officer, employee, or agent of the state bank, is or was serving at the request of the state bank as a director, officer, employee, or agent of another corporation, partnership, joint venture, trust, employee benefit plan, or other enterprise against liability asserted against or incurred by him in that capacity or arising from his status as a director, officer, employee, or agent, whether or not the state bank would have power to indemnify him against the same liability under Subsection A or B.

H.(1) A provision treating a state bank's indemnification of or advance for expenses to directors that is contained in its articles, bylaws, a resolution of its stockholders or directors, or in a contract or otherwise is valid only if and to the extent the provision is consistent with this Section. If articles of incorporation limit indemnification or advance for expenses, indemnification and advance for expenses are valid only to the extent consistent with the articles.

(2) This Section does not limit a corporation's power to pay or reimburse expenses incurred by a director in connection with his appearance as a witness in a proceeding at a time when he has not been made a named defendant or respondent to the proceeding.

Acts 1984, No. 719, §1, eff. Jan. 1, 1985.

§ 6:287 Bond of officers and employees; insurance fund

A. Every state bank shall obtain and maintain a fidelity bond given by a surety company authorized to do business in Louisiana covering each officer and employee who has charge of or who handles cash or securities of the bank, before permitting any of them to enter upon the duties of their offices or employment. This bond may be in the form of individual bonds on individual persons, a schedule fidelity bond, or a blanket bond covering all such persons. The bond shall be in an amount determined by the board of directors of the bank, and may be required to be within guidelines set forth by the appropriate examining authority.

B. In lieu of complying with the provisions of Subsection A, any state bank may establish a reserve fund to cover potential employee defalcations, provide its own fidelity bond from an insurance fund acceptable to the commissioner, or obtain an insurance policy from a surety company approved by the commissioner.

C. Any state bank may, by resolution of its board of directors, make application to the commissioner of financial institutions to waive, for a stated period of time not to exceed one hundred eighty days, the requirement of obtaining and maintaining a fidelity bond as provided in Subsection A of this Section upon a showing to the commissioner that the bank is unable to pay the premium to purchase the fidelity bond insurance, or that the bank is unable to secure fidelity bond coverage.

Acts 1984, No. 719, §1, eff. Jan. 1, 1985; Acts 1985, No. 359, §1, eff. July 9, 1985; Acts 1988, No. 445, §1; Acts 1989, No. 263, §1, eff. June 26, 1989; Acts 1990, No. 608, §1.

§ 6:288 Interested directors; quorum

A. No contract or transaction between a state bank and one or more of its directors or officers, or between a state bank and any other person in which one or more of its directors or officers are directors or officers or have a financial interest, shall be void or voidable solely for this reason or solely because his or their votes were counted for such purpose, if:

(1) The material facts as to his interest and as to the contract or transaction were disclosed or known to the board of directors or the committee, and the board or committee in good faith authorized the contract or transaction by a vote sufficient for such purpose without counting the vote of the interested director or directors;

(2) The material facts as to his interest and as to the contract or transaction were disclosed or known to the stockholders entitled to vote thereon, and the contract or transaction was approved in good faith by vote of the stockholders; or

(3) The contract or transaction was fair to the state bank as of the time it was authorized, approved, or ratified by the board of directors, committee, or stockholders.

B. Common or interested directors may be counted in determining the presence of a quorum at a meeting of the board of directors or of a committee which authorized the contract or transaction.

Acts 1984, No. 719, §1, eff. Jan. 1, 1985.

§ 6:289 Loans to executive officers and employees

A. No executive officer, director, or principal shareholder of any state bank shall borrow any of its funds, which term includes a line of credit, directly or indirectly for himself or for any corporation or other entity of which he has a related interest, in an amount that, when aggregated with the amount of all other loans to that person and to all other related interests of that person, exceeds the higher of twenty-five thousand dollars or five percent of the state bank's unimpaired capital and unimpaired surplus, unless the loan is in pursuance of a resolution of the board of directors passed prior to making the loan at a meeting at which the borrower was not present or participating.

B. As used in this Section, the following terms shall have the following meanings:

(1) "Director" means any director of a state bank, regardless of compensation, excluding advisory directors.

(2) "Executive officer" means an employee who participates or has authority to participate in major policymaking functions of the state bank but does not include a director who is not also employed as an officer of the bank.

(3) "Principal shareholder" means any person that directly or indirectly, or acting through or in concert with one or more persons owns, controls, or has the authority to vote more than ten percent of any class of voting securities of the bank or its parent company. Voting securities owned or controlled by a member of a person's immediate family are considered to be held by that person.

(4) "Related interest" of a person means a company that is controlled by an executive officer, director, or principal shareholder.

(5) "Unimpaired capital and unimpaired surplus" means the state bank's Tier 1 and Tier 2 capital included in the bank's risk-based capital, based on the bank's most recent consolidated report of condition; and the balance of the bank's allowance for loan and lease losses not included in the bank's Tier 2 capital for purposes of the calculation of risk-based capital, based on the bank's most recent consolidated report of condition. For purposes of this Paragraph, the definitions for Tier 1 and Tier 2 capital are the same as the definitions provided in 12 C.F.R. Pt. 325, Appendix A.

C.(1) Notwithstanding any other provision of the law, no state bank may extend credit, which term includes granting a line of credit, to any of its executive officers, directors, or principal shareholders unless:

(a) The extension of credit is made on substantially the same terms, including interest rates and collateral, as those prevailing at the time for comparable transactions by the bank with other persons who are not employed by the bank; or

(b) The extension of credit is made under similar terms and conditions as offered to other bank employees and to the extent permitted under federal banking laws and regulations.

(2) A bank may make loans to its other employees at rates permitted by Titles 6 and 9 of the Louisiana Revised Statutes of 1950, by R.S. 9:3500, or by any applicable provision of federal law.

Acts 1984, No. 719, §1, eff. Jan. 1, 1985; Acts 1999, No. 860, §1, eff. July 2, 1999; Acts 2004, No. 743, §3, eff. Jan. 1, 2005; Acts 2005, No. 231, §1, eff. June 29, 2005.

§ 6:290 Directors' examinations

Every twelve months the board of directors of every state bank shall examine or cause a committee of its members to examine said bank in accordance with the provisions prescribed by rule promulgated by the commissioner of financial institutions.

Acts 1984, No. 719, §1, eff. Jan. 1, 1985; Acts 1989, No. 514, §1, eff. Jan. 1, 1990; Acts 2001, No. 530, §1.

NOTE: See Acts 2001, No. 530, §2, relative to effective date.

PART IX LIABILITY OF DIRECTORS, OFFICERS, STOCKHOLDERS, AND SUBSCRIBERS

§ 6:291 Relation and liability of directors and officers to bank and bank holding company stockholders

A. Bank and bank holding company officers and directors shall be deemed to stand in a fiduciary relation to their bank or bank holding company and its stockholders and shall discharge the duties of their respective positions in good faith and with that diligence, care, judgment, and skill as provided in Subsection B of this Section. Nothing herein contained shall derogate from any indemnification authorized by R.S. 6:286.

B. A director or officer of a bank or bank holding company shall not be held personally liable to the corporation or the shareholders thereof for monetary damages unless the director or officer acted in a grossly negligent manner as defined in R.S. 6:2 or engaged in conduct which demonstrates a greater disregard of the duty of care than gross negligence, including intentional tortious conduct or intentional breach of his duty of loyalty.

C. A director of a bank or bank holding company shall, in the performance of his duties, be fully protected in relying in good faith upon the records of the bank or bank holding company, and upon such information, opinions, reports, or statements presented to him, the bank or bank holding company, the board of directors, or any committee thereof by any of the bank's or bank holding company's officers or employees, or by any committee of the board of directors, or by any counsel, appraiser, engineer, or independent or certified public accountant selected with reasonable care by the board of directors or any committee thereof or any officer having the authority to make such selection, or by any other person as to matters the director reasonably believes are within such other person's professional or expert competence and which person is selected with reasonable care by the board of directors or any committee thereof or any officer having the authority to make such selection.

D. The provisions of this Section shall not affect the right of incorporators or shareholders of banks or bank holding companies to include in articles of incorporation provisions as authorized by R.S. 6:213(B).

E. Notwithstanding any other law to the contrary, the provisions of this Section shall be the sole and exclusive law governing the relation and liability of directors and officers to their bank or holding company or to the shareholders thereof or to any other person or entity, except that the provisions of R.S. 12:1-833 shall remain applicable to directors and officers of bank holding companies.

F. Any person who unsuccessfully attempts to impose a higher standard of responsibility or liability than that provided by this Section may be liable for attorney fees incurred in the defense of such attempt and for damages.

Acts 1984, No. 719, §1, eff. Jan. 1, 1985; Acts 1992, No. 650, §1, eff. July 2, 1992; Acts 1997, No. 42, §3; Acts 2015, No. 83, §1.

§ 6:292 Directors or stockholders not participating in unlawful act

A director or stockholder shall not be liable for the commission of a prohibited act if he was absent from the meeting of directors or stockholders, as the case may be, at which the action was authorized or if he was present or represented at such meeting and his dissent therefrom was either noted in the minutes of the meeting or filed promptly thereafter with the secretary of the board.

Acts 1984, No. 719, §1, eff. Jan. 1, 1985.

§ 6:293 Actions against directors and officers of banks and bank holding companies

A. No action for damages against any director or officer of a bank or bank holding company for breach of the director's or officer's contract with the bank or bank holding company in the capacity of director or officer, or for breach of his duty as a director or officer, including, without limitation, action for gross negligence, but excluding any action covered by the provisions of Subsection B, shall be brought unless filed in a court of competent jurisdiction and proper venue within one year from the date of the alleged act, omission, or neglect, or within one year from the date that the alleged act, omission, or neglect is discovered or should have been discovered; however, even as to actions filed within one year from the date of such discovery, in all events such actions shall be filed at the latest within three years from the date of the alleged act, omission, or neglect.

B. No action for damages against any director or officer of a bank or bank holding company for intentional tortious misconduct, or for an intentional breach of the director's or officer's duty of loyalty, or for acts or omissions in bad faith, or involving fraud, or a knowing and intentional violation of law, shall be brought unless filed in a court of competent jurisdiction and proper venue within two years from the date of the alleged act or omission, or within two years from the date the alleged act or omission is discovered or should have been discovered; however, even as to actions filed within two years from the date of such discovery, in all events such actions shall be filed at the latest within four years from the date of the alleged act or omission.

C. The three-year period provided in Subsection A and the four-year period provided in Subsection B shall be deemed peremptive periods and shall not be subject to renunciation, interruption, or suspension except by timely suit filed in a court of competent jurisdiction and proper venue.

Acts 1992, No. 650, §1, eff. July 2, 1992.

PART X RESERVES

§ 6:301 Cash reserves

A. For the purpose of the reserve requirements provided in this Section, the terms:

(1) "Demand deposits" means the aggregate of deposits which can be required to be paid on demand or within less than fourteen days of demand; however, deposits made in the savings department of a state bank which are made on the condition that they may not be withdrawn except on notice shall not be considered demand deposits.

(2) "Time deposits" means deposits which cannot be required to be paid within less than fourteen days.

(3) "Net demand deposits" means demand deposits less cash items in transit and cash items in process of collection.

(4) "Cash items in transit" means items in transit for collection.

(5) "Cash items in process of collection" means items which are to be collected or credited within twenty-four hours.

B. Every state bank shall at all times maintain a reserve fund in an amount fixed by regulation of the commissioner, provided the minimum and maximum reserve ratios fixed by the commissioner for net demand deposits and for time deposits shall be within the range of such ratios established for member banks of the Federal Reserve System or within the lower minimum and higher maximum for such ratios, if more than one range of ratios are established for member banks of the Federal Reserve System; but in no event shall the commissioner fix a reserve ratio on a particular type of deposit higher than the specific ratio prevailing for member banks of the Federal Reserve System located in the state of Louisiana.

C. Until otherwise provided by regulation of the commissioner, every state bank shall at all times maintain reserves as follows:

(1) Net demand deposits:

Amount of net demand

Reserve percentages

Deposits

Applicable

First $2 million or less

8

percent

Over $2 million to $10 million

10

percent

Over $10 million to $100 million

12

percent

Over $100 million to $400 million

13

percent

Over $400 million

14

percent

(a) Eight percent of its net demand deposits if its aggregate net demand deposits are $2 million or less.

(b) $160,000 plus ten percent of its net demand deposits in excess of $2 million but less than $10 million.

(c) $960,000 plus twelve percent of its net demand deposits in excess of $10 million if its aggregate net demand deposits are in excess of $10 million but less than $100 million.

(d) $11,760,000 plus thirteen percent of its net demand deposits in excess of $100 million if its aggregate net demand deposits are in excess of $100 million but less than $400 million.

(e) $50,760,000 plus fourteen percent of its net demand deposits in excess of $400 million.

(2) Three percent of all time deposits.

D. Notwithstanding reserve requirements provided by Subsections C and E of this Section or by regulation of the commissioner as authorized by Subsection B of this Section, every state bank which complies with the reserve requirements for member banks of the Federal Reserve System shall be deemed to be in full compliance with the reserve requirement of this Chapter.

E.(1) Cash items in transit and cash items in process of collection shall not be included as part of the reserve fund.

(2) Every state bank may include as a part of its required reserve fund an investment up to, but not exceeding, fifty percent of said required reserves, made in direct obligations of the United States government and backed by its full faith and credit, which mature within two years from the date of computation of the required reserve. A portion of said fifty percent maximum, not to exceed one-half thereof, may be made in direct obligations of the state of Louisiana and backed by its full faith and credit, which mature within two years from the date of the computation of the required reserve. Both types of securities shall be owned by the bank on the date of the reserve computation and not be subject to a pledge, right of repurchase, or in any way hypothecated.

F. For the purpose of compliance with the reserve requirement of this Section, a bank may average its reserve of cash and due from banks over a semimonthly period as may be provided by regulation of the commissioner; and the average amount of cash and due from banks computed at the close of each semimonthly period shall determine whether or not the bank is meeting its reserve requirements.

Acts 1984, No. 719, §1, eff. Jan. 1, 1985.

§ 6:302 Depleted reserve; notice, penalty

A. Every state bank shall give written notice to the commissioner, in the manner prescribed by the commissioner for such notice, of any deficiency in the reserve fund required under the provisions of this Title within three business days after the close of any averaging period during which the deficiency occurs.

B. In the event a reported deficiency in the reserve fund is not restored within a period satisfactory to the commissioner or if a deficiency in the reserve fund of which notice has not been given as required in this Section is discovered by or otherwise comes to the attention of the commissioner, the commissioner may assess a penalty of six percent per annum of the amount of the deficiency for the period it is not restored, which penalty shall be collected in the same manner as provided for assessments made by the commissioner under R.S. 6:331.

Acts 1984, No. 719, §1, eff. Jan. 1, 1985.

§ 6:303 Sale and purchase of excess reserves; reports

A.(1) A state bank may sell any of its excess reserves to any other bank or banks in an amount to each bank that is equal to twice the sum of the capital stock and the surplus of the vendor bank.

(2) Notwithstanding any other provision of law to the contrary, a state bank may sell any of its excess reserves without limitation as to amount, to any other bank acting as agent, so long as the amount of cash reserves held by each individual bank acting as principal does not exceed the amount provided in Paragraph (1) of this Subsection.

(3) The provisions of this Subsection shall not apply to the sale of excess reserves to the Federal Reserve Bank or any Federal Home Loan Bank.

B. A state bank may purchase excess reserves from any other bank or banks on a day-to-day, unsecured basis in an amount equal to three times the sum of the capital stock and the surplus of the vendee bank.

C. A state bank which sells or purchases reserves in excess of the amounts provided in the preceding Subsections or which purchases excess reserves from any other bank or banks for thirty continuous calendar days shall immediately report such sales or purchases to the commissioner.

Acts 1984, No. 719, §1, eff. Jan. 1, 1985; Acts 1985, No. 359, §1, eff. July 9, 1985; Acts 1989, No. 129, §1, eff. June 22, 1989; Acts 2015, No. 155, §1.

PART XI DEPOSITS

§ 6:311 Types of accounts authorized to offer

State banks may offer any type of deposit accounts, interest-bearing or not, that are consistent with the provisions of this law, rules and regulations of the commissioner, or applicable rules and regulations of the Federal Deposit Insurance Corporation or the Federal Reserve System, except that in no case may any bank establish any interest-bearing account funded with deposited monies belonging to third persons identified in accordance with the provisions of R.S. 6:317 which allows the interest to be paid to any person other than the owner of the monies, in accordance with Civil Code Art. 510.

Acts 1984, No. 719, §1, eff. Jan. 1, 1985; Acts 1991, No. 546, §1.

§ 6:311.1 Powers of attorney, procuration, and mandate; written notice of revocation

A.(1) Notwithstanding any provision of law to the contrary, any federally insured financial institution presented with an original or certified true copy of a power of attorney, procuration, or mandate that is sufficient to authorize the named agent, representative, or mandatary to transact business in a deposit account, with a certificate of deposit, or with other funds on deposit, or sufficient to authorize access to a safe deposit box, may rely on the authority designated in the power of attorney, procuration, or mandate as being in full force and effect, unless an officer of the federally insured financial institution receives written notice that the power of attorney, procuration, or mandate has been revoked, modified, or terminated, and the institution has had reasonable opportunity to act on it.

(2) For the purposes of this Section, "written notice" shall mean a court order or other writing indicating that the power of attorney, procuration, or mandate has been revoked, modified, or terminated, including a termination pursuant to Civil Code Article 3024.

B. A federally insured financial institution shall not be liable for transactions or activity by an agent, representative, or mandatary occurring prior to the receipt of written notice and a reasonable opportunity to act on it.

Acts 2012, No. 323, §1; Acts 2014, No. 356, §3.

§ 6:312 Alternative deposits; payment

A. When a deposit is made in any bank under the names of two or more persons payable to any one of such depositors, that deposit or any part of it or any interest or dividend on it may be paid to any one of such depositors, whether the other depositor or depositors be living or not, and the receipt or acquittance of the person paid is a full release and discharge of the bank as to any heir, legatee, creditor, or other person having rights or claims to funds of such deceased depositor for any payment made; nor shall any bank paying any such depositor in accordance with the provisions of this Section thereby be liable for any estate, inheritance, or succession taxes that may be due this state.

B.(1) When any such deposit is made in any bank under the names of two or more persons payable to any one of such depositors, if one of such depositors seeks to prevent payments from that account, that depositor must give written notice of his desire to prevent payment. The notice must be signed by him and delivered to the bank. After the receipt of such notice from one or more of such depositors, the bank may refuse to honor any check, draft, or demand upon the said deposit or* by any of the depositors, including the one or ones requesting the stopping of payment, unless all of the depositors upon the said account join in drawing such draft or check or demand for payment or other withdrawal of any of the funds.

(2) In the event any bank has received a notice in writing as provided by this Subsection or a notice as provided in R.S. 10:4-403, such bank shall be relieved of responsibility to each and every one of the depositors upon the account or deposit in question for failure or refusal to honor any check or draft or demand for payment or other withdrawal unless the action is taken by all of the parties in whose names the account or deposit stands.

C. The pledge to a bank of all or part of the deposits in the names of two or more persons, including but not limited to time accounts, savings accounts, or certificates of deposit, executed by a person upon whose signature withdrawals may be made, shall, unless the terms of the deposit provide specifically to the contrary, be a valid pledge to the bank of all the deposits pledged.

D. Notwithstanding the provisions of R.S. 9:1513 and 1514, or any similar provision, the provisions of this Section establish the exclusive method for payment of funds from an alternative account.

E. Notwithstanding any other law to the contrary, any federally insured financial institution may by contract prohibit or otherwise limit the pledge, assignment, collateral assignment, or granting of any other type of security interest in any deposit account maintained or established at such institution, including those deposit accounts evidenced by certificates of deposit issued by such institution.

Acts 1984, No. 719, §1, eff. Jan. 1, 1985; Acts 1988, No. 118, §1; Acts 1989, No. 137, §3, eff. Sept. 1, 1989; Acts 1993, No. 948, §1, eff. Jan. 1, 1994; Acts 2001, No. 128, §3, eff. July 1, 2001; Acts 2004, No. 42, §1.

*As appears in enrolled bill.

§ 6:313 Withdrawal of money or property deposited by or for minors

Any money or other property deposited by a minor or other person in the name of a minor with a bank may be withdrawn by the minor or other person in the manner and under the terms of the written instructions given at the time of the opening of the account or of the making of the deposit.

Acts 1984, No. 719, §1, eff. Jan. 1, 1985.

§ 6:314 Trust deposits; death of depositor; payment

A. Upon the death of a depositor who has deposited a sum in any bank account evidencing by the depositor's signature an intention that upon the death of the depositor, the funds shall belong to one or more named beneficiaries of the depositor, the bank may pay the deposit, together with the dividends or interest accruing thereto, to the named beneficiaries for whom the deposit was made. Upon receiving a death certificate, the bank may disburse funds to the named beneficiaries. The beneficiaries shall be specifically named in the deposit account records of the bank.

B. The title of such an account must include the terms "in trust for", "as trustee for", or "payable on death to", such beneficiary or beneficiaries. Such beneficiaries must be specifically named in the deposit account records of the bank.

C. Repealed by Acts 2009, No. 499, §2.

D.(1) When an account described in Subsection A of this Section is established by more than one depositor, the respective interests of each depositor shall be deemed equal to that of each other depositor, unless otherwise stated in the bank's deposit account records.

(2) When an account described in Subsection A of this Section is established for more than one beneficiary, the respective interests of each shall be deemed equal to that of each other beneficiary, unless otherwise stated in the bank's deposit account records.

E. No bank paying a beneficiary in accordance with this Section shall be liable to the estate or any heir of the decedent nor shall the account holder be liable for any estate or succession taxes which may be due the state, and delivery of the funds shall constitute a full and complete discharge of the bank for the payment or delivery so made and shall relieve the bank from all adverse claims thereto by a person claiming as a surviving or former spouse or a successor to such a spouse. No tax collector, creditor, heir, legatee, personal representative, or any other person shall have any right or cause of action against the financial institution on account of such payment.

F. The provisions of this Section shall apply notwithstanding the fact the decedent designates a beneficiary by last will and testament. The provisions of this Section shall not prohibit any right of forced heirship or the collation or collection of funds due any spouse, heir, legatee, creditor, or other person having rights or claims to funds of the deceased depositor.

Acts 1984, No. 719, §1, eff. Jan. 1, 1985; Acts 1991, No. 535, §1; Acts 1999, No. 633, §1, eff. July 1, 1999; Acts 2009, No. 499, §§1, 2; Acts 2016, No. 166, §1; Acts 2022, No. 257, §1; Acts 2024, No. 84, §1.

§ 6:315 Adverse claims to deposit; procedure, indemnifying bond

A. Notice to any bank of an adverse claim, including an adverse claim of ownership of, right to control, or access to funds, to a deposit standing on the books of the bank to the credit of any person does not require the bank to recognize the adverse claimant unless the notice is given pursuant to either a restraining order, injunction, or other appropriate process against the bank in an action instituted by the adverse claimant wherein the person to whose credit the deposit stands is made a party and served with summons, or the adverse claimant has executed to the bank, in form and with sureties acceptable to it, a bond indemnifying the bank against any liability, loss, damage, costs, and expenses on account of payment or of dishonor of the check or other order of the person to whose credit the deposit stands. However, this Section does not apply where the person to whose credit the deposit stands is a fiduciary for the adverse claimant, and the facts constituting this relationship, as well as the facts showing reasonable cause of belief on the part of the claimant that his fiduciary is about to misappropriate the deposit, are made to appear by the affidavit of the claimant.

B.(1) A bank shall be entitled to act and rely upon:

(a) A restraining order, injunction, or other appropriate process;

(b) An agreement of the parties concerning an adverse claim;

(c) A bond indemnifying the bank against liability, as provided in Subsection A.

(2) Unless the restraining order, injunction, or other appropriate process specifically provides to the contrary, a bank with notice of an adverse claim to a deposit as provided herein may terminate the deposit account and transfer the contested funds into the registry of the court issuing the restraining order, injunction, or other appropriate process, or into the registry of a court of competent jurisdiction located in the parish in which the bank is located.

(3) No bank, acting in reliance upon this Section, shall be liable to the depositor, adverse claimant, or any other person or entity for nonpayment, termination of the deposit account, or for any other damage alleged to have been caused by the bank's reliance on this Section notwithstanding the final disposition of the adverse claim.

C. Nothing in this Section shall impair the effect of a discharge to which a bank would be entitled under R.S. 10:3-603.

Acts 1984, No. 719, §1, eff. Jan. 1, 1985; Acts 1990, No. 530, §1, eff. July 18, 1990.

§ 6:315.1 Transfer of small deposits; death of depositor; affidavits required; penalties

A. Upon the death of a depositor who dies intestate and who has deposits standing in his name alone or jointly with a surviving spouse and heirs, if any, in any depository financial institution, such depository financial institution may pay a sum not to exceed twenty thousand dollars of such deposits to the surviving spouse and heirs, if any, or to the heirs, if there is no surviving spouse, upon receipt of an affidavit establishing jurisdiction and relationship. The affidavit shall also state that the deceased depositor left no will, that the total funds withdrawn do not exceed twenty thousand dollars from all depositories, and that such facts are true and correct.

B. The depository financial institution may issue a draft in the amount that the deceased had on deposit payable to the surviving spouse and heirs named in the affidavit described in Subsection A of this Section.

C. Receipt by the depository financial institution of the affidavit required in Subsection A of this Section shall be a full release and discharge of the depository financial institution in the transfer of the deposits as to anyone, including any heir, legatee, creditor, or other person having rights or claims to funds or property of the decedent, nor shall the depository financial institution be liable for any estate, inheritance, or succession taxes which may be due to the state.

D. Any person who knowingly submits and signs a false affidavit as provided in this Section shall be fined not more than five hundred dollars, or imprisoned for not more than six months, or both.

Acts 1990, No. 735, §1; Acts 1991, No. 535, §1; Acts 1997, No. 168, §1; Acts 2010, No. 26, §1; Acts 2018, No. 96, §1; Acts 2019, No. 188, §1.

§ 6:316 Pledge of deposit accounts; rights and remedies

A. Notwithstanding the provisions of Civil Code Articles 1893 et seq., compensation takes place by operation of law between funds held on deposit with any bank domiciled or having a branch office in this state and any loan, extension of credit, or other obligation incurred by the depositor in favor of the bank. This compensation shall apply to those funds on deposit which the depositor has the right to withdraw on his request or endorsement alone, except funds deposited in an Individual Retirement Account or other type of tax-deferred account. The funds to which this compensation applies shall be deemed to be pledged by the depositor in favor of the depository bank.

B. The pledge of such deposit accounts need not be reflected in writing or comply with the requirements of Civil Code Art. 3158 or R.S. 9:4321, et seq. Such a pledge shall instead be deemed for any and all purposes to constitute a statutory security interest arising by operation of law. The ability of the depositor to withdraw funds from a deposit account at will shall not be deemed to adversely affect the validity of the pledge provided under this Section.

C. In the event that the depositor should default under any loan, extension of credit or other direct or indirect obligation of any nature and kind whatsoever in favor of the depository bank, the bank shall have the right to apply any and all funds that the depositor then has on deposit with the bank or on which the bank has taken a security interest under Chapter 9 of the Louisiana Commercial Laws (R.S. 10:9-101, et seq.) towards the payment of the depositor's indebtedness or obligations, whether such payment satisfies the indebtedness or obligations in whole or in part. The exercise of the bank's remedies under this Subsection shall not affect any other rights and remedies available to the bank following the depositor's default.

D. The bank shall notify the depositor in writing within two business days following the exercise of the bank's remedies under Subsection C of this Section. Such notice shall be forwarded by registered or certified mail to the depositor's most current address reflected in the bank's records. In the event that the bank mails such a notice to the depositor within the above time period, the bank shall have no liability to the depositor or to any other person or persons as a result of the bank's dishonor of checks or drafts drawn on the depositor's accounts with the bank.

E. The rights and remedies afforded to banks under this Section shall be in addition to a depository bank's contractual rights of compensation or setoff as provided in customer notes and agreements and shall further be in addition to any other rights and remedies that a depository bank may have with regard to customer deposit accounts on which the bank may have a security interest subject to Chapter 9 of the Louisiana Commercial Laws.

F. Notwithstanding the provisions of Civil Code Articles 1893 et seq., compensation or setoff shall occur by operation of law between any funds held on deposit with the bank and any and all loans, extensions of credit, or other obligations of the depositor incurred in favor of the bank, except that those funds held in any account designated as a trust account established on behalf of a person or persons other than the named depositor shall not be subject to compensation or setoff as provided in this Section.

Acts 1986, No. 451, §1; Acts 1989, No. 137, §3, eff. Sept. 1, 1989; Acts 1993, No. 825, §1; Acts 1999, No. 146, §1, eff. June 9, 1999.

§ 6:317 Ownership of deposited funds

A bank may conclusively rely on any application, agreement, or signature card used to establish a deposit account as establishing ownership of any and all funds and other credits deposited therein, and may consider and treat any and all funds on deposit in such an account as belonging to and the sole and exclusive property of the depositor or depositors named on the account application, agreement or signature card, unless otherwise notified or directed by such depositor or depositors.

Acts 1988, No. 915, §1.

§ 6:318 Letters of credit; use by banks

In addition to other collateral for public funds deposits authorized by law, banks may also use letters of credit issued by the Federal Home Loan Bank.

Acts 2000, 1st Ex. Sess., No. 27, §1, eff. April 14, 2000.

§ 6:319 Public funds deposits

Notwithstanding any other law to the contrary, including, but not limited to, R.S. 33:2955 and R.S. 49:327, any bank, savings bank or savings and loan association, domiciled or having a branch in Louisiana, that receives public funds deposits may utilize, and public bodies may accept, any recognized system or program to provide FDIC insurance coverage and such funds shall be deemed and considered fully collateralized, provided that the recognized system or program satisfies the FDIC's requirements for agency pass-through deposit insurance coverage. The total dollar amount of state funds received pursuant to the provisions of this Section by a bank, savings bank, or savings and loan association, domiciled or having a branch in Louisiana, must be maintained by that financial institution.

Acts 2005, No. 291, §1, eff. June 29, 2005.

PART XII SAFE DEPOSIT AND SAFEKEEPING

§ 6:321 Access to safety deposit box leased by multiple persons

A. When a safety deposit box is leased from any bank under the names of two or more persons with the right of access being given to any one of such persons, the survivor or survivors, whether or not the other or others are living, has and the bank may permit any of them to have free access to the safety deposit box, including the right to remove the contents thereof. In such case, the entry of any such person or persons into the safety deposit box shall constitute a full release and discharge of the bank permitting such entry as to any heir, legatee, creditor, or other person having rights or claims to funds or property of the decedent. No bank permitting entry into the safety deposit box in accordance with the provisions of this Section shall be liable for any estate, inheritance, or succession taxes which may be due this state.

B. When any such safety deposit box is leased from any bank under the names of two or more persons with the right of access being given to any one of such persons, if one of such lessees seeks to prevent access by any of the lessees, the lessee seeking the denial of access must give notice in writing signed by him and delivered to the bank.

C. After the receipt of such notice from one or more of such lessees, the bank may refuse to permit access to the safety deposit box by any of the lessees, including the one or ones requesting the denial of access, unless all of the lessees of the safety deposit box appoint in writing the person or persons to have access to the safety deposit box.

D. If any bank has received a notice in writing as provided in Subsection B hereof, the bank shall be relieved of responsibility to each and every one of the lessees of the safety deposit box in question for failure or refusal to permit access thereto except where all of the lessees of the safety deposit box enter the box together or appoint in writing the person or persons to have access to the safety deposit box.

Acts 1984, No. 719, §1, eff. Jan. 1, 1985; Acts 1989, No. 357, §1; Acts 1995, No. 1248, §1, eff. June 29, 1995.

§ 6:322 Access to safety deposit box leased by corporation or unincorporated association

When a safety deposit box is leased from any bank under the name of either a corporation or an unincorporated association, with the right of access being given to a person or persons authorized by a resolution of the board of directors of the corporation or of the governing body of the unincorporated association, notwithstanding the death of any such person or persons, the bank may permit the person or persons authorized by a resolution of the board of directors of the corporation or of the governing body of the unincorporated association to have free access to the safety deposit box, including the right to remove the contents thereof. In such case, the entry of any such authorized person or persons into the safety deposit box shall constitute a full release and discharge of the bank permitting such entry as to any heir, legatee, creditor, or other person having rights or claims to funds or property of the decedent. No bank, savings bank, or trust company permitting entry into the safety deposit box in accordance with the provisions of this Section shall thereby be liable for any estate, inheritance, or succession taxes which may be due this state.

Acts 1984, No. 719, §1, eff. Jan. 1, 1985; Acts 1995, No. 1248, §1, eff. June 29, 1995.

§ 6:323 Access to safety deposit box leased by trust estate

When a safety deposit box is leased from any bank by a trust estate, whether in the name of the trust estate or the trustee or trustees thereof, with the right of access being given to the trustee or trustees designated in the instrument creating the trust estate or appointed in accordance with the provisions of R.S. 9:1721 et seq., notwithstanding the death of any such trustee or trustees and notwithstanding the termination of the trust, the bank may permit the trustee or trustees so designated or appointed to have free access to the safety deposit box, including the right to remove the contents thereof. In such case, the entry of the trustee or trustees into the safety deposit box shall constitute a full release and discharge of the bank permitting such entry as to anyone, including any heir, legatee, creditor, or other person having rights or claims to funds or property of the decedent. No bank permitting entry into said safety deposit box in accordance with the provisions of this Section shall thereby be liable for any estate, inheritance, or succession taxes which may be due this state.

Acts 1984, No. 719, §1, eff. Jan. 1, 1985; Acts 1995, No. 1248, §1, eff. June 29, 1995.

§ 6:324 Access to safety deposit box leased by a person or persons with designated agent or deputy

When a safety deposit box is leased from any bank under the name of a person or persons with the right of access being given to said person or persons and to an agent or agents or deputy or deputies appointed by said person or persons, notwithstanding the death of any of the agents or deputies, the bank may permit the person or persons under whose name the safety deposit box is leased or any surviving agents or deputies to have free access thereto including the right to remove the contents thereof. In such case, the entry of any such person or persons into the safety deposit box shall constitute a full release and discharge of the bank, savings bank, or trust company permitting the entry as to any heir, legatee, creditor, or other person having rights or claims to funds or property of the decedent. No bank, savings bank, or trust company permitting entry into the safety deposit box in accordance with the provisions of this Section shall thereby be liable for any estate, inheritance, or succession taxes which may be due this state.

Acts 1984, No. 719, §1, eff. Jan. 1, 1985; Acts 1995, No. 1248, §1, eff. June 29, 1995.

§ 6:325 Death of a customer and access and transfer of contents of safety deposit boxes, money, and other property by bank to succession or estate representatives, legatees, or heirs; authority

A. For all purposes, a bank may deal with a safety deposit box or money, on deposit or otherwise, and any other property in a bank's possession titled in the name of a deceased customer in accordance with its contract with its deceased customer until the bank receives notice in writing specifically addressed to it of the death of its customer.

B.(1) Regardless of whether a bank receives written notice of the death of its customer and regardless of any prior action by a bank to freeze or restrict access and transactions related to its deceased customer's accounts or safety deposit box, upon receipt of letters testamentary, letters of administration, or letters of independent administration, issued by a court of competent jurisdiction in this state or any other state, appointing an authorized succession or estate representative, a bank may grant access to or allow the transfer of contents of a safety deposit box or money or other property titled in the name of the bank's deceased customer to the succession or estate representative.

(2) Notwithstanding the provisions of Code of Civil Procedure Article 3402 or other applicable laws, a bank may grant access to or allow the transfer of contents of a safety deposit box or money or other property titled in the name of the bank's deceased customer to the succession or estate representative appointed by a court outside of Louisiana.

(3) The letters appointing the succession or estate representative shall constitute full and proper authority for allowing the succession or estate representative to access, withdraw, or transfer money or property of the bank's deceased customer, and the bank shall have no liability related to such activity or transaction involving the deceased customer's safety deposit box or money or other property in the bank's possession.

(4) The bank may continue to follow the direction of the authorized succession or estate representative related to the safety deposit box or money or other property of its deceased customer unless and until the bank receives a subsequent court order, issued by a court of competent jurisdiction, specifically naming and directing the bank to cease following the written direction of the succession or estate representative, or the bank receives a subsequent court order, issued by a court of competent jurisdiction, limiting or terminating the authority of or replacing the succession or estate representative.

C. The judgment of possession or court order issued by a court of competent jurisdiction in this state or any other state recognizing and putting the legatees or heirs in possession of the bank's deceased customer's estate shall constitute full and proper authority for the bank holding a safety deposit box or money or other property titled in the name of its deceased customer to transfer those assets to the legatees or heirs entitled to such property under the judgment of possession or court order. When a bank makes such a transfer, the bank shall have full protection from any heir, legatee, creditor, or other person having any right or claim to money or other property of its deceased customer. The bank shall have no liability related to any such transfer or transaction involving its deceased customer's safety deposit box or money or other property in the bank's possession.

D. Conclusive proof to the bank of the letters testamentary, letters of administration, letters of independent administration of the succession or estate representative, or judgment of possession or court order and of the jurisdiction of the court rendering them shall result from copies thereof, duly certified when rendered by a court of this state or of any other state, or certified according to the law of the place when rendered by a court of any possession or dependency of the United States, or certified according to the law of the place with the genuineness of the certification attested by a consular agent of the United States when rendered by a court of any foreign country.

E. A small succession affidavit authorized by Title V of Book VI of the Code of Civil Procedure shall constitute full and sufficient authority for the payment or delivery of any money or property, including property held in a safety deposit box, of the deceased customer described in the affidavit to the heirs or legatees of the deceased customer and the surviving spouse in community, if any, in the percentages listed therein, by the bank having such money or property in its possession or under its control. The transfer of the money or delivery of property identified in the affidavit to the persons named in the affidavit constitutes a full release and discharge for the payment of money or delivery of property and any creditor, heir, legatee, succession representative, or other person whatsoever shall have no right or cause of action against the bank paying the money or delivering the property pursuant to the provisions of this Subsection on account of the payment, delivery, or transfer.

Acts 1984, No. 719, §1, eff. Jan. 1, 1985; Acts 2004, No. 42, §2; Acts 2013, No. 65, §1, eff. May 30, 2013; Acts 2021, No. 44, §1, eff. June 1, 2021; Acts 2024, No. 759, §1.

§ 6:326 Transfer of contents of safety deposit boxes, money and other property by bank to legal representatives of minors or interdicts; authority

A. Upon proper authority and upon obtaining a receipt therefor, any bank may transfer the contents of a safety deposit box or any money and other property in its possession belonging to an interdict or a minor to the legal representative of such interdict or minor. The letters issued to the legal representative by a court of competent jurisdiction shall constitute proper authority for making the transfer which, when so made and receipted for, shall be full protection to the bank.

B. Conclusive proof to the bank of the letters and of the jurisdiction of the court rendering them shall result from copies thereof, duly certified when rendered by a court of this state, or certified according to the Acts of Congress when rendered by a court of any other state, or certified according to the law of the place when rendered by a court of any possession or dependency of the United States, or certified according to the law of the place with the genuineness of the certification attested by a consular agent of the United States when rendered by a court of any foreign country.

C. The receipt to be obtained by the bank may be in any form, but it shall be signed by the legal representative and accompanied by a certified copy of the letters issued to the legal representative of the minor or interdict.

Acts 1984, No. 719, §1, eff. Jan. 1, 1985.

§ 6:327 Abandonment of safety deposit box

A. A safety deposit box leased from any bank shall be deemed abandoned and the bank may remove the contents of such safety deposit box, if the rental therefor remains unpaid, all as provided under Subsection B of this Section, or pursuant to the terms of the safety deposit box contract, or as otherwise permitted by law. Only the safety deposit box itself, and not the contents, may be deemed abandoned as provided herein.

B. If the safety deposit box rental is delinquent for six months, the bank after sixty days' notice by mail addressed to the lessee at his address as shown on the safety deposit box contract may, if the rent is not paid within the time specified in the notice, open the box in the presence of two employees of the bank and a notary public who shall make an inventory of the contents of the box and place such contents in a sealed envelope or other container in the name of the lessee. The bank shall then send notice to the administrator of the Uniform Unclaimed Property Act of 1997 for inclusion in their database and listing on their website that the safety deposit box has been abandoned and that the bank is holding the listed contents thereof. The notice shall include the lessee's name and last known address.

C. After a bank has entered an abandoned safety deposit box and removed the contents thereof, it shall then hold such contents in the name of the lessee subject to a lien and privilege for the unpaid rent, the costs of opening the box and making the inventory of and storing its contents, and any other costs, expenses or other amounts as provided in the lease or by law. If such amounts are not paid in full within one year from the date the safety deposit box became abandoned, the bank may sell all or any part of the contents by public, private, or judicial sale in accordance with Louisiana law and the terms of the safety deposit box contract, and the bank may also dispose of any unsalable contents in accordance with R.S. 6:327.1. After satisfaction of the bank's lien, any remaining proceeds shall be subject to the Uniform Unclaimed Property Act of 1997, R.S. 9:151 et seq. The bank may, but is not required to, treat the remaining proceeds as presumed abandoned and turn them over to the administrator of the Uniform Unclaimed Property Act without having to wait for the passage of time delays set forth in R.S. 9:155.

D. After a bank has entered an abandoned safety deposit box and removed the contents thereof, the bank may immediately re-lease the abandoned safety deposit box without accounting to the lessee, and need not apply any subsequent rental payments received therefor to the payment of any amounts owed by the former lessee.

Acts 1989, No. 357, §1; Acts 1997, No. 658, §2; Acts 2000, 1st Ex. Sess., No. 135, §1, eff. July 1, 2000; Acts 2020, No. 236, §1.

§ 6:327.1 Disposition of abandoned safety deposit box contents

A. If a bank has entered an abandoned safety deposit box in accordance with the requirements of R.S. 6:327, and the bank decides to proceed with disposing of or selling the abandoned contents, then the provisions contained in the safety deposit box rental agreement or the provisions contained in this Section shall apply.

B.(1) Prior to a public or private sale of contents from an abandoned box, the following types of property may be classified as unsalable by an independent appraiser, an auctioneer, a pawn broker, or the bank, and disposed of in the following manner:

(a) Documents, writings, or photographs having little or no commercial value may be destroyed by the bank, except for those contents subject to the provisions of R.S. 9:155(B).

(b) Coins or currency with a face value of twenty dollars or less each that are valued at no more than twice the face value shall be treated as proceeds of a sale and used to satisfy the bank's lien and any excess proceeds shall be remitted to the administrator of the Uniform Unclaimed Property Act by paper check or electronic funds transfer.

(c) Coins or currency with a face value of greater than twenty dollars each that are valued at one hundred twenty-five percent or less of face value shall be treated as proceeds of sale and used to satisfy the bank's lien and any excess proceeds shall be remitted to the administrator of the Uniform Unclaimed Property Act by paper check or electronic funds transfer.

(d) Any other tangible item having an estimated sale value of twenty-five dollars or less may be destroyed by the bank or donated by the bank to a charitable organization qualified under Section 501(c)(3) of the Internal Revenue Code, 26 U.S.C. 501, provided that the aggregate value of the items from a specific abandoned safety deposit box does not exceed two hundred fifty dollars.

(2) A current version of any recognized numismatist publication may be used for purposes of valuation of coins and currency.

C.(1) Prior to a public or private sale of contents from an abandoned safety deposit box that has not been classified as unsalable as provided in Subsection B of this Section, the bank shall obtain an independent valuation of the contents by an independent appraiser, auctioneer, pawn broker, coin or collectibles dealer, a jeweler, or by any other person who is regularly engaged in the business of appraising, buying, or selling like merchandise, or any other combination thereof.

(a) Contents from a safety deposit box with an independent valuation of more than one thousand dollars shall be sold for at least sixty-six percent of the independent valuation price at public or private sale. If no offer is received which meets the minimum valuation requirements, the contents may be sold without a value restriction at a subsequent public or private sale.

(b) Contents from a safety deposit box with an independent valuation of one thousand dollars or less may be sold without a value restriction at public or private sale.

(2) Firearms shall be disposed of in one of the following ways:

(a) Sold through a federal firearms licensed dealer.

(b) Sold through a public auction through an auctioneer who possesses a federal firearms license.

(c) Turned over to law enforcement.

D. Any public or private sale of contents of an abandoned safety deposit box must be a commercially reasonable sale held at a time and place in the judgment of the bank that will bring the most favorable prices for the property involved. For purposes of this Section, "commercially reasonable" includes but is not limited to a sale that would be commercially reasonable under R.S. 10:9-610, or a sale, or sale methodology, that is approved by the commissioner of financial institutions. A bank may sell the contents of an abandoned safety deposit box in a sale conducted exclusively for the bank, or in a sale conducted jointly for the bank and any number of other financial institutions or other entities. A bank may use an online auction service as a commercially reasonable public sale. A party providing an independent valuation is eligible to purchase the contents valued at a public or private sale.

E. A bank and its directors, officers, employees, agents, and other representatives who act in accordance with the authority granted in R.S. 6:327 and this Section relative to the disposition of abandoned safety deposit box contents shall be immune from all civil and administrative liability.

Acts 2020, No. 236, §1.

§ 6:328 Access to safety deposit boxes by authorized persons; security procedures

A bank shall establish reasonable security procedures to ensure that only authorized persons shall have access to safety deposit boxes. Reasonable security procedures shall include but are not limited to comparing the signature of the person seeking access to a safety deposit box with the signatures on file with the bank of those persons authorized to have access to it, comparing the personal identification number provided by the person seeking access with the pre-assigned personal identification numbers of those persons authorized to have access, or requiring that the person seeking access present the key to the safety deposit box he seeks to enter.

Acts 1995, No. 1248, §1, eff. June 29, 1995.

PART XIII MISCELLANEOUS PROVISIONS

§ 6:331 REPEALED BY ACTS 1993, NO. 278, §1, EFF. JAN. 1, 1994.

REPEALED BY ACTS 1993, NO. 278, §1, EFF. JAN. 1, 1994.

§ 6:332 Attorney fiduciary accounts; overdraft notification to office of disciplinary counsel

A. A federally insured financial institution or its affiliate that maintains a fiduciary account for an attorney or law firm designated as a trust or escrow account, as mandated by Louisiana Supreme Court Rule XIX, may execute an agreement with the attorney or firm to authorize written or electronic notification to the office of disciplinary counsel, Louisiana Attorney Disciplinary Board, of an overdraft on such account. Written or electronic notification to the office of disciplinary counsel may only be given after such federally insured financial institution or its affiliate has given notice to the offending attorney and five business days have passed from the date of such notice.

B. A reasonable cost may be charged by the federally insured financial institution or its affiliate for such an overdraft notification service and shall be payable to the federally insured financial institution from the interest earnings on the trust account.

C. The provisions of this Section shall not create any cause of action against a federally insured financial institution or its affiliate for the unintentional failure to provide overdraft notification to the office of disciplinary counsel, nor for the unintentional failure to otherwise comply with the provisions of this Section, nor provide a defense or remedy to any other party for any action against it. No federally insured financial institution or its affiliates, including any of its directors, officers, employees, attorneys, accountants, or other agents, shall be civilly or criminally liable to any person, including any customer, for any disclosure or non-disclosure of financial records made in compliance with or as authorized by the provisions of this Section.

D. No notification shall be made or sent under this Section where the overdraft is caused by charges applicable to the account that are imposed by a federally insured financial institution or are imposed through error by such institution.

Acts 2005, No. 249, §1.

NOTE: Section 2 of Acts 2005, No. 249, provides that the Acts shall become effective six months following adoption of a final rule by the Louisiana Supreme Court requiring attorneys to utilize, in whole or in part, the overdraft notification services provided in R.S. 6:332 as enacted by this Act.

§ 6:333 Disclosure of financial records; reimbursement of costs

A. As used in this Section:

(1) "Affiliate" means a bank's holding company, any subsidiary of a bank or its holding company, any insurer of or surety for the bank, or any attorney, accountant, auditor, or other agent for or of the bank or an affiliate. An affiliate shall include any person who performs services for or functions on behalf of the bank pursuant to a contractual agreement obligating such person to maintain the confidentiality of information received from the bank in the performance of its contract.

(2) "Bank" means any state bank, national bank, or any entity organized to engage in the business of banking pursuant to the laws of any other state or the District of Columbia domiciled in, having its principal place of business in, or engaged in the business of banking in this state. "Bank" shall also mean a savings bank, a savings and loan association, a company issuing credit cards, or any other business offering credit.

(3) "Consumer" means an individual who obtains or has obtained a financial product or service from a bank that is to be used primarily for personal, family, or household purposes, or for that individual's legal representative.

(4) "Customer" means any person who has transacted, or is transacting, any business with a bank or who has used, or is using, any service of a bank, including but not limited to the following: any person who was or is indebted or otherwise obligated to the bank, whether directly or indirectly; any person who has provided, or is providing, any collateral security for any indebtedness or other obligation to the bank; any person who has had, or currently has, any funds on deposit at the bank; or any person for whom the bank is acting or has acted as a fiduciary.

(5) "Disclosure" or "disclose" means and includes producing, providing access to, providing copies of, or giving testimony or making other oral or written statements pertaining to financial records.

(6) "Disclosure demand" means a civil or criminal judicial, administrative, legislative, military courts-martial, juvenile, grand jury, arbitration, or medical review panel subpoena, summons, or order or notice of deposition, interrogatories, request for production or inspection of documents, request for admissions, or other discovery request lawfully directed or propounded to a bank or any affiliate.

(7) "Financial record" means an original, duplicate, or copy of any memorandum, writing, datum, compilation, entry, print, analysis, review, committee minute, internal or external audit report, or other document or record held by, or otherwise in the possession or under the control of, a bank which pertains in any way to a past or current customer or to such customer's past or current relationship with the bank and all information contained therein or derived therefrom. Financial record shall not include "publicly available information".

(8) "Government authority" means an agency, department, or commission of the United States or of any state thereof, or any officer, employee, or agent thereof.

(9) "Person" means any individual, partnership, limited partnership, unincorporated association, joint stock company, corporation, limited liability company, limited liability partnership, state, city, county, municipality, or other governmental subdivision and their respective employees, boards, agencies, and departments.

(10) "Publicly available information" means any information that a bank or any affiliate has a reasonable basis to believe is lawfully made available to the general public from any of the following:

(a) Federal, state, or local government records.

(b) Widely distributed media.

(c) Disclosures to the general public that are required to be made by federal, state, or local law.

(11) "Return date" means the date on which financial records are to be produced or disclosed, either as set forth in a disclosure demand or as such date may be extended by appropriate order or by agreement between the bank and the person requesting such financial records.

(12) "Supervisory agency" means any entity which has statutory authority to examine the financial condition, business operations, records, or transactions of a bank, including but not limited to the following:

(a) The Federal Deposit Insurance Corporation.

(b) The Board of Governors of the Federal Reserve System.

(c) The Comptroller of the Currency.

(d) The Securities and Exchange Commission.

(e) The secretary of the United States Treasury with respect to the Bank Secrecy Act.

(f) The office of financial institutions.

(g) The federal Office of Thrift Supervision.

B. Notwithstanding any other provision of law to the contrary, except R.S. 9:151 et seq. and 3854(B)(2), R.S. 13:3921 et seq., Code of Civil Procedure Articles 2336, 2336.1, and 2411 et seq., R.S. 46:236.1.4, and R.S. 47:1676(D)(2) and 1677, no bank or its affiliate shall disclose any financial records to any person other than the customer to whom the financial records pertain, unless such financial records are disclosed:

(1) In response to a disclosure demand in accordance with the provisions of Subsection C of this Section.

(2) Pursuant to a written request or authorization for disclosure or waiver which meets the requirements of Subsection E of this Section.

(3) As otherwise permitted or allowed by this Section.

C. A bank may disclose financial records pursuant to a disclosure demand if each of the following conditions are met:

(1) The disclosure demand is served on the bank's president, one of the bank's registered agents for service of process, or, if applicable, on the bank's counsel of record unless such service on such individuals is expressly waived by the bank.

(2) Prior to the return date, the person requesting the issuance of the disclosure demand furnishes the bank with an affidavit certifying both of the following:

(a) That such disclosure demand, or a certified copy thereof, has also been personally served upon each customer named in the disclosure demand to whom the financial records being sought pertain or upon such customer's counsel of record in accordance with Subsection D of this Section.

(b) That such service was made at least thirty calendar days prior to the return date.

(3) The bank has not received written notice that a customer to whom the financial records pertain has taken legal action to enjoin or otherwise restrain the release of the financial records.

D. Service of a disclosure demand, or certified copy thereof, on any customer shall be made by utilizing any applicable method for service of citation on said customer authorized by the Code of Civil Procedure, including Articles 1231 through 1265. However, any such service may be made by an individual who is not a party and who is at least eighteen years of age, rather than by the sheriff. Service on any customer's counsel of record shall be made by personal service in the office of such counsel of record on either his secretary, as defined in Code of Civil Procedure Article 1235(C), or any partner or office associate of such counsel of record. Service on a customer or on his counsel of record may be made within or without the state of Louisiana.

E. A customer, or an attorney at law representing such customer, may authorize disclosure of the customer's financial records by providing the bank with a signed and dated statement which authorizes such disclosure, specifies the person to whom such financial records may be disclosed, and reasonably identifies the financial records which are authorized to be disclosed. Any such statement signed by an attorney at law stating or certifying that he represents a customer may, at the bank's discretion, be relied upon and shall constitute proper authority for disclosure pursuant to this Section.

F. The following disclosures by a bank or any affiliate are hereby specifically authorized and, except as otherwise provided in this Subsection, nothing in this Section shall prohibit, restrict, or otherwise apply to:

(1) The disclosure by a bank or any affiliate of any financial record to any person as an incident necessary to: obtaining or perfecting a guaranty, mortgage, lien, security interest, or other encumbrance; proving a claim in bankruptcy, otherwise collecting on, or enforcing its rights with respect to a debt owing either to the bank itself or to it in its role as a fiduciary; or procuring, making a claim on, or otherwise enforcing or exercising its rights with respect to any insurance pertaining or related to a debt owing either to the bank itself or to it in its role as a fiduciary, including single interest insurance.

(2) The disclosure by a bank or any affiliate of any financial record to a supervisory agency in connection with the exercise of the supervisory agency's supervisory, regulatory, or monetary functions with respect to the bank or any affiliate of the bank.

(3) The disclosure by a bank of any financial record to any affiliate of the bank.

(4) The disclosure by a bank or any affiliate of financial records to any person to whom the bank has sold or participated, or may sell or may participate, in all or any part of one or more customer loans or other indebtedness or deposits to which such financial records pertain or to any person to whom the bank has granted, or may grant, one or more assignments, liens, security interests, or other encumbrances in or affecting one or more customer loans or other indebtedness to which such financial records pertain.

(5) The disclosure by a bank or any affiliate, after the execution of a confidentiality agreement between the bank or its affiliate and the person to whom the financial records are to be disclosed, of financial records to any of the following:

(a) Potential investors in the bank or any affiliate and their agents, in the case of a nonpublic offering, or investment banking firms and their agents, in the case of a public offering, in connection with an offering of debt or equity securities of the bank or any affiliate.

(b) Holders of debt or equity securities issued by the bank or by any affiliate, and the agents of such holders, to the extent that such disclosure is required by law or by the terms of one or more agreements or instruments pertaining to such securities.

(c) Any person and its agents in connection with the consideration or completion of mergers, consolidations, acquisitions, or sales of all or substantially all of the assets of the bank or of any affiliate.

(6) The disclosure by a bank or any affiliate of financial records to a government authority or law enforcement agency or department in connection with a known or suspected criminal act against the bank or involving a bank officer or employee.

(7) The disclosure by a bank or any affiliate of general credit information relating to the existence of accounts, promptness of payments, limits of credit, or other general information normally furnished to a credit reporting or rating agency or to another financial institution, including but not limited to another bank or savings and loan association, or to any other person who has made a request for the information and who has a legitimate business need for it in connection with a transaction or proposed transaction between the customer and such person. Unless the request is prompted by the customer, notice of the written request shall be given to the customer.

(8) The disclosure by a bank or any affiliate of financial records to any person in connection with any authorization or approval of a specific extension of credit directly or indirectly by a credit card company or other person offering or extending credit or the exchange of information between the bank and such person as to the bank's experience with the customer.

(9) The disclosure by a bank or any affiliate of financial records to any person having any ownership or joint interest in an account to which the financial records pertain, any person directly or indirectly obligated to the bank on an extension of credit to which the financial records pertain, or any person who has granted a mortgage, lien, security interest, or other encumbrance in favor of the bank or has otherwise provided security to the bank to secure an extension of credit to which the financial records pertain.

(10) The disclosure by a bank or any affiliate of financial records to any legal representative, surviving spouse, heir, or legatee of a customer or to an attorney at law representing the same upon the bank's receiving written notice of the customer's death, interdiction, or other incapacity and upon the bank's receiving evidence satisfactory to it of proper authority which, in the case of a surviving spouse, heir, or legatee of a decedent, may be by affidavit executed by such person attesting to such relationship with the decedent.

(11) The disclosure by a bank or any affiliate of financial records in situations governed by, pursuant to, and in accordance with the provisions of 12 U.S.C. 3401 et seq., 15 U.S.C. 6801 et seq., or pursuant to a search warrant issued in accordance with Title IV of the Code of Criminal Procedure.

(12) The disclosure by a bank or any affiliate of financial records in situations governed by, pursuant to, and in accordance with the provisions of Title 31 of the United States Code.

(13) The disclosure by a bank or any affiliate of financial records pursuant to a subpoena or court order issued in connection with proceedings before a federal or state grand jury in accordance with applicable federal or state law, rule, or regulation; subpoena or court order issued in connection with a state criminal investigation pursuant to Code of Criminal Procedure Article 66; or subpoena issued by the state inspector general or any member of his staff designated by him pursuant to R.S. 49:220.24.

NOTE: Subparagraph (F)(14) eff. until Oct. 1, 2027. See Acts 2025, No. 477.

(14) The disclosure by a bank or any affiliate of data match information on an individual to the secretary of the Department of Children and Family Services, or his designee in the office of children and family services, child support enforcement section, for use in attempting to establish, modify, or enforce a child support obligation of such individual. Such disclosure to the department shall be limited to the name, record address, social security or taxpayer identification number, and an average daily account balance for the most recent thirty-day period, of a noncustodial parent who maintains an account at such institution and who owes past-due support as identified by the state by name and social security or taxpayer identification number. The disclosure authorization provided for in this Paragraph shall apply to all co-owners listed on the applicable account.

NOTE: Subparagraph (F)(14) as enacted by Acts 2025, No. 477, eff. Oct. 1, 2027.

(14) The disclosure by a bank or any affiliate of data match information on an individual to the secretary of the Department of Children and Family Services or his designee in the office of child support for use in attempting to establish, modify, or enforce a child support obligation of such individual. Such disclosure to the department shall be limited to the name, record address, social security or taxpayer identification number, and an average daily account balance for the most recent thirty-day period, of a noncustodial parent who maintains an account at such institution and who owes past-due support as identified by the state by name and social security or taxpayer identification number. The disclosure authorization provided for in this Paragraph shall apply to all co-owners listed on the applicable account.

(15) The disclosure by a bank or any affiliate of publicly available information.

(16) The disclosure by a federally insured financial institution or any of its affiliates of financial records pursuant to R.S. 6:332.

(17) A bank that makes agriculture loans that communicates information, either orally or in writing, in accordance with R.S. 3:3419.1.

(18) The disclosure by a bank or any of its subsidiaries or affiliates of data match information on an account owner to the secretary of the Department of Revenue, and his designee in the office of debt recovery, for use in attempting to enforce a final tax or non-tax assessment or judgment against such individual or entity. Such disclosure to the department or office shall be limited to the name, record address, social security or taxpayer identification number, other identifying information, and an average daily account balance for the most recent thirty-day period, of a state tax or state non-tax debtor who maintains an account or is a customer at such institution and who purportedly owes a final state tax or state non-tax assessment or judgment. The disclosure authorization provided for in this Paragraph shall apply to all co-owners listed on the applicable account.

(19) The disclosure by a bank or any of its subsidiaries or affiliates of financial records pursuant to a written request from the office of elderly affairs within the office of the governor certifying that receipt of the records is necessary to the performance of the office's duties under the Adult Protective Services Act.

G. A bank shall be given a reasonable period of time prior to the return date, and in no event less than thirty calendar days prior thereto, in which to complete the action necessary to disclose financial records which are the subject of a request. Whether the bank is a party to litigation or not, prior to making any disclosure and notwithstanding any contrary provisions of this Section, R.S. 13:4521, Code of Civil Procedure Article 2411, or of any other law, the bank shall be reimbursed by the requesting person for the reasonable fees and costs incurred or to be incurred by the bank in the course of compliance with the request, including but not limited to document reproduction costs, research and processing costs, personnel costs, and travel expenses, whether any or all such costs are internal costs or are costs incurred by the bank in favor of a person acting on behalf of or performing services for the bank. If the bank and the requesting party disagree as to the amount of the fees and costs to be reimbursed to the bank under this Section, the bank need not produce the financial records until the court or other appropriate body issuing the disclosure demand has fixed the amount to be paid to the bank upon a motion of any party or the bank. The court or other appropriate body, in its discretion, may order a contradictory hearing to fix the fees and costs to be reimbursed.

H.(1) Unless the disclosure demand specifically provides otherwise, it shall be sufficient compliance therewith if the bank, on or before the return date or the first business day thereafter if the return date is not a business day for the bank, either deposits with an overnight courier service or sends by U.S. registered or certified mail copies of the financial records to be disclosed. When the financial records are disclosed in accordance with the provisions of this Subsection, the copies of said financial records shall be accompanied by a written certificate executed by a representative of the bank in substantially the following form:

"Date:_______________

I, ______________________, a representative of ___________________________ (Bank) do hereby certify that the document(s) attached to or accompanying this certificate, consisting of ______ page(s) is (are each) a true and correct copy of the original records represented thereby.

---

Name

---

Title

---

Address

---

Telephone Number"

(2) When financial records are disclosed in accordance with the provisions of this Subsection, disclosure occurs when the financial records are deposited with the overnight courier service or in the U.S. mail, as applicable.

I.(1) No bank or its affiliates, including any of its directors, officers, employees, attorneys, accountants, or other agents, shall be civilly or criminally liable to any person, including any customer, for any disclosure of publicly available information or for any disclosure of financial records made in compliance with or as authorized by the provisions of this Section. However, if the bank actually receives written notice that the customer has taken legal action to enjoin or otherwise restrain the disclosure of financial records, and the bank receives such written notice sufficiently in advance of disclosure so as to allow the bank a reasonable time to act on said notice, then the bank shall postpone disclosure of such financial records until such time as it is provided with satisfactory evidence that the disclosure of the financial records by it is permitted.

(2) Notwithstanding any law to the contrary, all financial records prepared by or for the bank in connection with the bank's evaluation, analysis, or review of any loan or other extension of credit or of any collateral security therefor or reserve therefor shall be confidential and shall not be discoverable or admissible in evidence in any civil action pertaining to or arising out of any such loan, other extension of credit, or the collateral security therefor.

Acts 1984, No. 719, §1, eff. Jan. 1, 1985; Acts 1989, No. 779, §1, eff. July 9, 1989; Acts 1990, No. 694, §1, eff. July 20, 1990; Acts 1990, No. 904, §1, eff. July 25, 1990; Acts 1991, No. 694, §1; Acts 1995, No. 709, §1; Acts 1995, No. 1094, §1; Acts 1997, No. 44, §1; Acts 1997, No. 1278, §1, eff. July 1, 1997; Acts 2001, No. 380, §1; Acts 2003, No. 639, §1, eff. June 27, 2003; Acts 2005, No. 249, §1; Acts 2006, No. 259, §1; Acts 2008, No. 532, §2; Acts 2010, No. 860, §2; Acts 2012, No. 255, §1; Acts 2013, No. 399, §1, eff. June 17, 2013; Acts 2014, No. 356, §3; Acts 2015, No. 215, §1; Acts 2019, No. 34, §1; Acts 2022, No. 91, §2; Acts 2024, No. 351, §1; Acts 2025, No. 38, §1; Acts 2025, No. 56, §1; Acts 2025, No. 171, §1, eff. June 8, 2025; Acts 2025, No. 477, §3, eff. Oct. 1, 2027.

NOTE: Section 2 of Acts 2005, No. 249, provides that the Act shall become effective six months following adoption of a final rule by the Louisiana Supreme Court requiring attorneys to utilize, in whole or in part, the overdraft notification services provided in R.S. 6:332 as enacted by the Act. (Act 249 enacted Paragraph (F)(16))

§ 6:334 Foreclosure of mortgage

In the event of foreclosure by executory process of a mortgage on either movable or immovable property in favor of a supervised financial organization, the certificate of any officer thereof, under the seal of the supervised financial organization, certifying as to the amount due on the mortgage, the interest rate as applicable, and the maturity thereof by reason of the failure of the mortgagor, his assigns, or successors to comply with the obligations imposed on him by the act of the mortgage is authentic evidence of the facts recited in the certificate.

Acts 1984, No. 719, §1, eff. Jan. 1, 1985.

§ 6:335 Sharing of electronic financial terminals

A. A financial institution may share an electronic financial terminal with other financial institutions, or with other nonfinancial institutions if such nonfinancial institution agrees in writing that its electronic financial terminal may be subject to examination by the commissioner.

B. An agreement to share electronic financial terminals shall not prohibit, limit, or restrict the right of a financial institution to charge a customer a usage fee.

Acts 1993, No. 456, §1, eff. Oct. 1, 1993.

§ 6:336 Legal and regulatory compliance; self-evaluations; privilege of results

A. It is the intent of the legislature to encourage FDIC-insured financial institutions, their holding companies, subsidiaries, and affiliates to engage in self-evaluations, self-assessments, self-testing, and self-corrections with respect to compliance with applicable state and federal banking laws and regulations. To that end, and notwithstanding any other law to the contrary, the results of any such self-determination, self-assessment, self-testing, or self-corrections, and any notes, reports, or work product derived therefrom, whether prepared by internal personnel or by outside attorneys, accountants, third-party service providers, or consultants, shall be deemed privileged for all purposes and shall not be subject to discovery and shall not be admissible as evidence, unless specifically agreed to by the FDIC-insured financial institution, its holding company, subsidiary, or affiliate, in any private, public, or administrative civil action brought against the FDIC-insured financial institution, holding company, subsidiaries, or affiliates alleging noncompliance with or violation of such applicable state and federal banking laws and regulations.

B.(1) The submission by any FDIC-insured financial institution of any information to any federal banking agency or bureau, including but not limited to the Consumer Financial Protection Bureau, or to the commissioner of the office of financial institutions, or to any other state agency or department, for any purpose in the course of any supervisory, regulatory, or enforcement process of such agency, bureau, commissioner, or state agency or department, shall not be construed as waiving, destroying, or otherwise affecting any privilege the FDIC-insured financial institution may claim with respect to such information under federal or state law as to any person or entity other than such agency, bureau, commissioner, or state agency or department.

(2) The provisions of Paragraph (1) of this Subsection shall not be construed as implying or establishing either of the following:

(a) That any FDIC-insured financial institution waives any privilege applicable to information that is submitted or transferred under any circumstances to which Paragraph (1) of this Subsection does not apply.

(b) That any FDIC-insured financial institution would waive any privilege applicable to any information by submitting the information to any federal banking agency or bureau or the commissioner of the office of financial institutions, but for the provisions of this Section.

Acts 1995, No. 1084, §1, eff. June 29, 1995; Acts 2012, No. 35, §1.

§ 6:337 Duty of secured party upon payment of insurance claim for damage to mortgaged residential property

A. All of the following provisions shall apply to a mortgagee or mortgage servicer servicing residential mortgage loans secured by a property that contains one to four residential dwelling units in this state:

(1) The mortgagee or mortgage servicer shall promptly endorse a check, draft, or other negotiable instrument for insurance settlement proceeds payable jointly to the mortgagee or mortgage servicer and the borrower-payee by the insurance company. However, the mortgagee or mortgage servicer is not required to endorse such instrument if the borrower-payee refuses to endorse the instrument.

(2) Insurance settlement proceeds received by a mortgagee or mortgage servicer that relate to compensation for damage to property or contents insurance coverage in which the mortgagee or mortgage servicer has a mortgage or security interest shall be promptly deposited into a segregated account of a federally insured financial institution, unless the mortgagee or mortgage servicer returns such insurance settlement proceeds to the borrower-payee or the check, draft, or negotiable instrument is missing the borrower-payee's endorsement. The segregated account may at the discretion of the mortgagee or mortgage servicer be an individual deposit account for each borrower-payee or a master account containing subaccounts for each borrower-payee.

(3) Insurance settlement proceeds received by a mortgagee or mortgage servicer that relate to contents insurance coverage in which the mortgagee or mortgage servicer does not have a security interest in the contents shall be promptly distributed to the borrower-payee via traceable delivery or electronic transfer.

(4) Insurance settlement proceeds received by a mortgagee or mortgage servicer that relate to additional living expenses shall be promptly distributed to the borrower-payee via traceable delivery or electronic transfer.

B. Notwithstanding the provisions of Subsection A of this Section, the mortgagee or mortgage servicer is not required to remit the portion of the insurance settlement proceeds relating to additional living expenses and contents insurance if the mortgagee or mortgage servicer is not able to determine which part of the proceeds relate to additional living expenses and contents insurance.

C.(1) If a mortgagee or mortgage servicer holds all or part of the insurance settlement proceeds pending completion of all or part of the repairs to the damaged property, the mortgagee or mortgage servicer shall notify the borrower-payee of each requirement with which the borrower-payee shall comply for the mortgagee or mortgage servicer to release the insurance settlement proceeds. The notice required by this Paragraph shall be provided not later than the tenth business day after the date the mortgagee or mortgage servicer receives payment of the insurance settlement proceeds.

(2) Not later than the tenth business day after the date a mortgagee or mortgage servicer receives from the borrower-payee a request for release of all or part of the insurance settlement proceeds held by the mortgagee or mortgage servicer, the mortgagee or mortgage servicer shall do either of the following:

(a) If the mortgagee or mortgage servicer does not require a property inspection to be conducted and has received sufficient evidence of the borrower-payee's compliance with the requirements specified by the mortgagee or mortgage servicer pursuant to Paragraph (1) of this Subsection for release of the insurance settlement proceeds, release to the borrower-payee, as requested, all or part of the proceeds.

(b) Provide notice to the borrower-payee that explains with specificity both of the following:

(i) The reason for the mortgagee or mortgage servicer's refusal to release the insurance settlement proceeds to the borrower-payee.

(ii) Each requirement with which the borrower-payee shall comply for the mortgagee or mortgage servicer to release the insurance settlement proceeds.

(3)(a) Property inspections related to residential mortgage loans covered by this Section shall be conducted not later than the fifteenth business day after receipt by the mortgagee or mortgage servicer of both a request by the borrower-payee for a property inspection and receipt of sufficient evidence of the borrower-payee's compliance with the requirements specified by the mortgagee or mortgage servicer pursuant to Paragraph (1) of this Subsection, provided that the borrower-payee is cooperative and that the premises are accessible.

(b) A mortgagee or mortgage servicer may, at their discretion, allow property inspections to be conducted in person, through photographic or video evidence submitted by the borrower-payee, through a servicer-directed video call with the borrower-payee, or by any other means to document the progress or completion of repairs of the property.

(c) Photographic or video evidence shall also clearly identify the repairs that are being documented and confirm the repairs were completed in accordance with the repair plan. Any photographic or video evidence provided to a mortgagee or mortgage servicer may not be accepted if it does not allow the mortgagee or mortgage servicer to determine the repairs are from the location of the property subject to the mortgage loan, does not authenticate when it was taken, or if it is believed by the mortgagee or mortgage servicer to have been altered in any way.

(4)(a) The commissioner may impose civil money penalties of up to five hundred dollars per day for each day that a mortgagee or mortgage servicer fails to comply with the requirements of Paragraph (1) or (2) of this Subsection. The penalties provided by this Paragraph shall not exceed five thousand dollars per violation.

(b) Penalties shall be due and payable upon notice of their assessment to the mortgagee or mortgage servicer, unless such penalties are set aside after an administrative hearing pursuant to the provisions of the Administrative Procedure Act. The assessment of civil money penalties shall be final and definitive and subject to enforcement by the commissioner through judicial proceedings.

D.(1) When the damaged property is replaced or otherwise repaired to the satisfaction of the borrower-payee and the mortgagee or mortgage servicer, then any remaining balance in the segregated account shall be paid to the borrower-payee together with all interest that accrued while the funds were in the segregated account in accordance with Paragraph (2) of this Subsection.

(2) Interest shall accrue on insurance settlement proceeds where the funds equal twenty-five thousand dollars or more after being held by the mortgagee or mortgage servicer in a segregated account for more than thirty days. For the purposes of this Subsection, compliance with Fannie Mae or Freddie Mac servicing guidelines for payment of interest on property damage claim funds held by the mortgagee or mortgage servicer constitutes compliance with this Section.

E. The provisions of this Section and R.S. 6:338 shall be applicable to state chartered federally insured financial institutions and their affiliates to the same extent that such provisions are applicable to federally chartered financial institutions.

F. The provisions of this Section shall apply only to residential mortgage loans secured by a property that contains one to four residential dwelling units. However, the provisions of this Section shall not apply to a mortgagee or mortgage servicer when the borrower-payee is in default on his mortgage loan, past due with payments on his mortgage loan, or in foreclosure related to his mortgage loan.

Acts 2006, 1st Ex. Sess., No. 14, §1, eff. Feb. 23, 2006; Acts 2022, No. 744, §1.

§ 6:338 Insurance settlement proceeds; return of excess funds; enforcement

A. If a mortgagee or mortgage servicer is presented with a jointly payable insurance proceeds check, draft, or other negotiable instrument for residential immovable property damage, which contains the borrower-payee's endorsement, and the mortgagee or mortgage servicer receives a written request from the borrower-payee to release excess funds, then the mortgagee or mortgage servicer shall have fifteen business days after receiving such request and such check, draft, or other negotiable instrument to provide its endorsements and return all excess funds provided for in Subsection B of this Section. The fifteen-business-day timeline for releasing excess funds provided by this Section shall not apply when the insurance proceeds check, draft, or other negotiable instrument requires the endorsement of multiple mortgagees or lien holders.

B. For purposes of this Section, the term "excess funds" shall mean insurance funds in excess of both of the following:

(1) All loan balances of any mortgagee or mortgage servicer named as payee on the insurance claim check, draft, or other negotiable instrument calculated as of the thirtieth day following receipt of the request and check or draft as outlined in Subsection A of this Section.

(2) Six months of future accrued interest as calculated pursuant to the terms of the mortgage loans and calculated from the date of the payoff explained in Paragraph (1) of this Subsection.

C.(1) The commissioner may impose civil money penalties of up to five hundred dollars per day of each day a mortgagee or mortgage servicer fails to comply with the requirements of Subsection B of this Section. The penalties provided in this Paragraph shall not exceed five thousand dollars per violation.

(2) Penalties shall be due and payable upon notice of their assessment to the mortgagee or mortgage servicer, unless set aside after an administrative hearing pursuant to the provisions of the Administrative Procedure Act. The assessment of civil money penalties shall be final and definitive and subject to enforcement by the commissioner through judicial proceedings.

D. The provisions of this Section shall apply only to residential mortgage loans secured by a property that contains one to four residential dwelling units. However, the provisions of this Section shall not apply to a mortgagee or mortgage servicer when the borrower-payee is in default on his mortgage loan, past due with payments on his mortgage loan, or in foreclosure related to his mortgage loan.

E. The provisions of this Section shall not impair the contractual rights of a mortgagee or mortgage servicer related to all loan balances and accrued interest as described in Paragraphs (B)(1) and (2) of this Section.

Acts 2006, 1st Ex. Sess., No. 21, §1, eff. April 1, 2006; Acts 2022, No. 744, §1.

PART XIV GOLD AND SILVER LEGAL TENDER

§ 6:341 Tender and acceptance of United States government gold and silver

A. Any gold or silver coin, specie, or bullion recognized by the United States government as legal tender or any gold-backed debit instrument that can convert gold in a depository to fiat currency shall be recognized as legal tender in the state of Louisiana.

B. No person shall be required to offer or accept any recognized legal tender as described in Subsection A of this Section for the payment of debts, deposit, or any other purpose, nor shall any person incur any liability for refusing to offer or accept such legal tender, except as specifically provided for by contract.

Acts 2024, No. 396, §1; Acts 2025, No. 304, §1.

SUBCHAPTER B MERGERS, CONSOLIDATIONS, LIQUIDATIONS, AND CONVERSIONS

PART I MERGERS, CONSOLIDATIONS, AND SHARE EXCHANGES

§ 6:351 Authorization for mergers, consolidations, and share exchanges

A. Any two or more state banks, and any one or more state banks and any one or more national banks, may, upon approval of the commissioner if the surviving or consolidated bank will be a state bank, be:

(1) Merged into one of the banks; or

(2) Consolidated into a new bank.

B. Notwithstanding any provision of this Title, or any other state law to the contrary, and upon prior written approval of the commissioner and the appropriate federal regulatory agencies, any one state bank may be merged or consolidated with a Louisiana bank holding company that owns all the issued and outstanding stock of the bank, with the resulting entity being the state bank, subject to the requirements for a bank merger or consolidation established by R.S. 6:352 et seq., as if the bank holding company were a state bank. Any such merger or consolidation shall only be effected for the purposes of voluntarily liquidating or dissolving the bank holding company.

C. With the approval of the commissioner and subject to the provisions of R.S. 6:352.1, all of the outstanding shares of one or more classes or series of capital stock of a state bank, savings bank, or an association, hereinafter referred to as a "financial institution", may be acquired by another bank, savings bank, or association, or a holding company or holding company in formation for any of the foregoing, hereinafter referred to as the "acquiring entity" in exchange for shares, obligations, or other securities of the acquiring entity or for cash or other property, in whole or in part, with the state financial institution and the acquiring entity remaining in existence upon consummation of the exchange.

D. When, as a result of a merger or consolidation, a state bank relinquishes its state charter to the commissioner, it shall provide a copy of the executed agreement, not later than thirty days prior to the effective date of the merger or conversion, and pay a fee in an amount to be determined by the commissioner by rule. Within thirty days after the issuance of the certificate of merger or consolidation, the relinquishing bank shall file the certificate and a certified copy of the agreement in accordance with the procedures established by R.S. 6:352(7). A certified copy of the agreement shall also be filed in the parish where the state bank was domiciled, except that the certificate of merger shall be filed in the parish of domicile of the bank whose certificate of authority has been canceled.

Acts 1984, No. 719, §1, eff. Jan. 1, 1985; Acts 1988, No. 117, §1, eff. June 29, 1988; Acts 1993, No. 457, §1, eff. Jan. 1, 1994; Acts 2001, No. 876, §1, eff. June 26, 2001; Acts 2003, No. 57, §1, eff. May 23, 2003.

§ 6:352 Merger or consolidation procedure

Merger or consolidation may be effected only as a result of a joint agreement entered into, approved, and filed as follows:

(1) The board of directors of each of the banks which desires to merge or consolidate may enter into a joint agreement signed by a majority of the directors of each prescribing the terms and conditions of merger or consolidation and the mode of carrying the same into effect and containing such other provisions as are deemed necessary.

(2) The agreement must be approved by the stockholders of the banks involved which were not organized under the provisions of this law in the manner provided by the laws under which they were formed and by the stockholders of any state bank in the manner provided in Paragraph (3) of this Section.

(3)(a) The agreement shall be submitted to the stockholders of each of the merging or consolidating banks at an annual or special meeting. Each stockholder of each such bank shall be entitled to cast one vote as to the agreement for each share having voting power held by him of record on the record date for the meeting.

(b) Written notice shall be given by each such bank to each stockholder of record entitled to vote at the meeting at least ten days and not more than sixty days prior to the day fixed for the meeting. A copy or summary of the agreement shall be included in or enclosed with such notice, and the notice shall include, if applicable, the following statement: "Dissenting stockholders who comply with the procedural requirements of the Louisiana Banking Law will be entitled to receive payment of the fair cash value of their shares if the merger or consolidation is effected, upon approval by less than eighty percent of the bank's total voting power."

(c) The agreement must be approved by the stockholders of each bank organized under the provisions of this law by vote of at least two-thirds of the voting power present or by such larger or smaller proportion not less than a majority of the voting power present as the articles may provide.

(4) The stockholders shall have the right, exercisable by the vote required for approval of the agreement, to propose amendments to the agreement, and if such amendments be concurred in by the stockholders of all of the other parties to the agreement in each case by the vote required for approval of the agreement, the agreement so amended, when certified, signed, and acknowledged as provided in this Section, shall be considered the merger or consolidation agreement.

(5) The fact that the agreement has been approved by the stockholders of each party thereto as hereinabove provided shall be certified on the agreement by the respective secretaries or assistant secretaries or cashiers or assistant cashiers, and the agreement, so approved and certified, shall be signed and acknowledged by the president or chief executive officer of each of the parties thereto.

(6) If the merger agreement does not amend the articles of the surviving bank, and if the shares of such bank to be issued or delivered under the agreement do not exceed fifteen percent of the shares of such bank of the same class outstanding immediately prior to the effectiveness of the merger, approval of the agreement by such bank's stockholders shall not be required, and the secretary or assistant secretary or cashier or assistant cashier shall certify on the agreement that such approval is not required and the reasons therefor.

(7)(a) The agreement, so adopted, certified, and acknowledged, shall be filed with the commissioner, who, after all fees and charges have been paid as required by law, shall record the same in his office, endorse thereon the date and, if requested, the hour of filing thereof with him, and issue a certificate of merger or consolidation, which shall recite the names of all the merging and consolidating banks, whether a merger or consolidation is involved, the name of the surviving or consolidated bank, the date and, if endorsed on the agreement, the hour of filing the agreement with him, and the effective time of the merger or consolidation, if stated in the agreement. The agreement may be delivered to the commissioner in advance for filing as of any specified date and, if specified upon such delivery, as of any given time on such date within thirty days after the date of delivery.

(b) A copy of the certificate of merger or consolidation certified by the commissioner as well as the merger or consolidation agreement shall, within thirty days after issuance of the certificate, be filed for record with the office of the recorder of mortgages in the parish of the surviving or consolidated bank's domicile.

(8) Notwithstanding stockholder approval and at any time prior to the effectiveness of the merger or consolidation, the merger or consolidation may be abandoned pursuant to a provision for such abandonment, if any, contained in the agreement of merger or consolidation.

(9) An agreement of merger or consolidation may provide that any consideration to be delivered to stockholders of any party to the consolidation or merger may consist of shares or secured or unsecured obligations of any corporation or bank, whether or not a party to the consolidation or merger, or cash or other consideration.

(10) Except for any merger or consolidation in which the surviving or consolidated bank is a national bank, before issuing a certificate of merger or consolidation, the commissioner shall consider the financial and managerial resources and future prospects of the existing and proposed institutions and whether the convenience and needs of the community will be served. If he finds that the public interest will not be served by permitting such merger or consolidation, he shall refuse to issue the certificate.

Acts 1984, No. 719, §1, eff. Jan. 1, 1985; Acts 1988, No. 117, §1, eff. June 29, 1988; Acts 2003, No. 577, §1, eff. June 27, 2003.

§ 6:352.1 Share exchange procedure

A. With the approval of the commissioner, all of the outstanding shares of one or more classes or series of capital stock of a financial institution may be acquired by another bank, savings bank or association, or a holding company or holding company in formation for any of the foregoing, hereinafter referred to as the "acquiring entity", if the board of directors of each party to the transaction adopts a plan of exchange and the shareholders of the financial institution whose shares will be acquired approve the plan of exchange in the manner provided in Subsection E of this Section.

B. The plan of exchange, accompanied by all fees and charges, shall be submitted to the commissioner for approval and shall set forth all of the following:

(1) The name of the state financial institution whose shares will be acquired and the name of the acquiring entity.

(2) The terms and conditions of the share exchange.

(3) The manner and basis of exchanging the shares to be acquired for shares, obligations, or other securities of the acquiring entity, or for cash or other property in whole or part.

C. The plan of exchange may set forth other provisions relating to the exchange.

D. This Section does not limit the power of an acquiring entity to acquire all or part of the shares of one or more classes or series of another state financial institution through a voluntary exchange or otherwise.

E. After adopting a plan of exchange, the board of directors of the state financial institution whose shares will be acquired in the share exchange shall submit the plan of exchange for approval by its shareholders. The financial institution shall give written notice to each shareholder, whether or not entitled to vote, of the annual or special meeting at which the plan of exchange will be voted on. The notice shall include a statement that the purpose, or one of the purposes, of the meeting is to consider the plan of exchange and shall contain or be accompanied by a copy or summary of the plan of exchange, and the notice shall include, if applicable, the following statement:

"Dissenting shareholders who comply with the procedural requirements of the Louisiana Banking Law will be entitled to receive payment of the fair cash value of their shares if the share exchange is effected upon approval by less than eighty percent of the corporation's total voting power."

F. Unless this Chapter, or the articles of the state financial institution whose shares are to be acquired, require a greater vote or a vote by class or series, the plan of exchange to be authorized shall be approved by a vote of at least two-thirds of the voting power present of each class or series included in the share exchange, voting separately as a class, or by such larger or smaller vote, though not less than a majority of the voting power present, or of the total voting power of each class or series included in the share exchange, voting separately as a class, as the articles may require, at a meeting of shareholders of the state financial institution for which notice has been given in accordance with Subsection E of this Section. When the articles specify the vote required to effect a merger of such institution but do not specify the vote required for a share exchange, the vote specified in the articles to effect a merger shall be the vote required to effect the share exchange. It shall not be necessary for the shareholders of the acquiring entity to approve a share exchange, unless that entity's articles provide otherwise or provide expressly that a shareholder vote shall be required to approve a merger that under this Chapter would not otherwise be required to be approved by shareholders, in which case the share exchange shall be approved by the same vote as required to approve a merger.

G. After a share exchange is authorized, and at any time before articles of share exchange are filed, the planned share exchange may be abandoned, subject to any contractual rights, without further shareholder action, in accordance with the procedure set forth in the plan of exchange, or if none is set forth, in the manner determined by the respective boards of directors.

H.(1) After a plan of exchange is approved by the shareholders of the financial institution whose shares will be acquired, and the shareholders of the acquiring entity, if required, and after approval by the commissioner of the share exchange, the acquiring entity shall deliver to its chartering agency articles of share exchange or such other documents required by law or regulation governing such acquiring entity. A duplicate original of the articles of exchange or other document required to be filed with the chartering agency of the acquiring entity and a copy of any certificate or other document issued by such agency shall, within thirty days after issuance of the certificate or other document by the chartering agency, be filed for record with the commissioner and in the appropriate records of the parish of domicile of the financial institution whose shares have been acquired.

(2)(a) If no document is required to be filed with the acquiring entity's chartering agency, after a plan of exchange is approved by the shareholders of the financial institution whose shares will be acquired, and the shareholders of the acquiring entity, if required, and after approval by the commissioner of the share exchange, the state financial institution whose shares are being acquired shall deliver to the commissioner for filing articles of exchange executed by the president and acknowledged by the secretary or cashier of the state financial institution, setting forth the following:

(i) The plan of exchange.

(ii) The designation, number of outstanding shares, and number of votes entitled to be cast by each class or series included in the share exchange.

(iii) Either the total number of votes cast for and against the plan of exchange by each class or series entitled to vote, or the total number of votes cast for the plan of exchange by each class or series entitled to vote, and a statement that the number cast for the plan of exchange by each class or series entitled to vote was sufficient for approval by that class or series.

(b) Upon receipt of the articles of share exchange, the commissioner, after all fees and charges have been paid as required by regulation, shall record the articles of share exchange in his office, endorse thereon the date, and, if requested, the hour of filing thereof with him, and issue a certificate of share exchange, which shall recite the names of the acquiring entity and of the financial institution whose shares were acquired, the date, and, if endorsed on the agreement, the hour of filing of the articles of share exchange with him, and the effective time of the share exchange. The articles of share exchange may be delivered to the commissioner in advance for filing as of any specified date, and, if specified upon such delivery, as of any given time on such date within thirty days after the date of delivery. Unless otherwise specified in the plan of exchange, the share exchange shall take effect on the date on which the articles of share exchange were delivered to the commissioner for filing. A copy of the certificate of share exchange certified by the commissioner as well as the executed articles of exchange shall, within thirty days after issuance of the certificate, be filed in the appropriate records of the parish of the domicile of the financial institution whose shares have been acquired.

(3), (4) Repealed by Acts 2003, No. 57, §2, eff. May 23, 2003.

I. When a share exchange takes effect, the shares of the acquired financial institution are exchanged as provided in the plan of exchange, and the former holders of the shares are entitled only to the exchange rights provided in the plan of exchange or, if applicable, to those rights as established under R.S. 6:376.

Acts 2001, No. 876, §1, eff. June 26, 2001; Acts 2003, No. 17, §1, eff. May 23, 2003; Acts 2003, No. 57, §§1 and 2, eff. May 23, 2003; Acts 2003, No. 60, §1, eff. May 23, 2003.

§ 6:353 Consolidation; articles of incorporation

A. If the joint agreement is for a consolidation into a new bank to be formed under this law, articles of incorporation for the new bank shall be prepared in the manner and form prescribed by law except that:

(1) The banks consolidating shall be named as the incorporators of the new bank.

(2) The articles shall be signed by the president or chief executive officer and secretary or assistant secretary or cashier or assistant cashier of each of the banks, and the articles shall be acknowledged by the officers so signing the articles.

(3) In addition to the provisions required by law to be contained therein, the articles shall state the shares, secured or unsecured obligations, cash, or other consideration to be delivered to the stockholders or members of each of the consolidating banks or the manner of converting shares thereof into securities of the new bank.

B. The articles shall be filed and recorded and a certificate of incorporation issued as provided in this law.

Acts 1984, No. 719, §1, eff. Jan. 1, 1985.

§ 6:354 When merger or consolidation effective

A. A merger shall be effective when the joint agreement has been recorded by the commissioner as of the time of filing of the agreement with the commissioner or as of any later effective time not more than thirty days after the date of filing stated in the agreement.

B. A consolidation shall be effective when the joint agreement and the articles have been recorded in the office of the commissioner as of the time of filing of the agreement with the commissioner or as of any later effective time not more than thirty days after the date of such filing stated in the agreement.

Acts 1984, No. 719, §1, eff. Jan. 1, 1985.

§ 6:355 Effect of merger or consolidation

Upon the effectiveness of the merger or consolidation, the effect thereof shall be that:

A. The several parties to the joint agreement shall be one bank which shall be:

(1) In the case of merger, one of the constituent banks into which it has been agreed that the others shall be merged, and which shall survive the merger for that purpose.

(2) In the case of consolidation, the new bank into which it has been agreed that the others shall be consolidated.

B. The separate existence of the constituent banks shall cease except that of the surviving bank in the case of merger.

C. The surviving or new bank shall possess all the rights, privileges, and franchises possessed by each of the former banks merged or consolidated.

D. All of the property and assets of whatsoever kind or description of each of the constituent banks, all franchises and interests including appointments, designations, and nominations, and all other rights and interests as trustee, executor, administrator, registrar of stocks and bonds, guardian of estates, assignee, receiver, and in every other fiduciary capacity, all debts due on whatever account to any of the constituent banks including subscriptions for shares and other rights of action belonging to any of them shall be taken and be deemed to be transferred to and vested in the surviving or new bank without further act or deed, in the same manner and to the same extent as such rights, franchises, and interests would have been held or enjoyed by any one of the constituent banks whenever such matter comes into existence as a result of one of the nonsurviving constituent banks having been named in the act or document or other evidence that creates the right, interest, fiduciary relationship, or responsibility, such as a testament, trust indenture, or suspensively conditioned contract.

E. The surviving or new bank shall be responsible for all of the liabilities and obligations of each of the banks merged or consolidated in the same manner as if such surviving or new bank had itself incurred such liabilities or obligations; but the liabilities of such constituent banks or of their stockholders, members, directors, or officers shall not be affected, nor shall the rights of the creditors thereof, or of any persons dealing with such banks, be impaired by such merger or consolidation; and any claim existing or action or proceeding pending by or against any of such constituent banks may be prosecuted to judgment as if such merger or consolidation had not taken place, or the surviving or new bank may be proceeded against or substituted in place of such constituent bank.

F. In the case of a merger, the articles of the surviving bank shall be deemed amended to the extent of any changes therein stated in the merger agreement.

Acts 1984, No. 719, §1, eff. Jan. 1, 1985.

PART II CONVERSIONS

§ 6:361 National bank converting into state bank

A.(1) A national bank domiciled in this state which complies with the procedure prescribed by the laws of the United States for the conversion of a national bank into a state bank may be granted a certificate of authority by the commissioner if he finds that the requirements for the incorporation of a state bank have been met.

(2) Any requirements that shares of stock must be paid in cash may be satisfied by the exchange of shares of stock of the new state bank for those of the converting national bank. The procedures applicable to incorporation of a state bank may be modified to the extent made necessary by the difference between an ordinary incorporation and a conversion.

B.(1) The national bank may apply for a certificate of authority by filing with the commissioner:

(a) A certificate signed by its president and cashier and by a majority of the board of directors setting forth the corporate action taken in compliance with the provisions of the laws of the United States governing the conversion of a national bank into a state bank; and

(b) The plan of conversion and the proposed articles of incorporation approved by the stockholders for the operation of the bank as a state bank.

(2) Additionally, the certificate of authority and the articles of incorporation are to be filed with the recorder of mortgages in the parish of domicile of the state bank as provided in R.S. 6:217.

Acts 1984, No. 719, §1, eff. Jan. 1, 1985; Acts 2003, No. 17, §1, eff. May 23, 2003; Acts 2003, No. 60, §1, eff. May 23, 2003.

§ 6:362 State bank converting into national bank

A. A state bank may convert into a national bank by complying with the laws of the United States and the provisions of Subsection B. Upon the completion of the conversion, the certificate of authority of the converting state bank shall automatically terminate.

B. A converting state bank shall give notice of its intention to convert to a national bank at least thirty days prior to the proposed effective date of the conversion. A vote of the holders of two-thirds of each class of voting stock at a duly scheduled stockholders' meeting shall be required for approval of the conversion. Upon approval of the conversion, the rights of dissenting stockholders shall be the same as those specified in R.S. 6:376.

Acts 1984, No. 719, §1, eff. Jan. 1, 1985.

§ 6:363 Continuation of corporate entity; use of old name

A. A resulting state or national bank shall be considered the same business and corporate entity as the converting bank, with all the property, rights, powers, duties, and obligations of the converting bank, except as may be affected by other provisions of the law, and by the certificate of authority and articles of incorporation of the resulting bank.

B. A resulting bank shall have the right to use the name of the converting bank for a reasonable time immediately following the conversion when circumstances make it appropriate.

C. Any reference to the converting bank in any writing, whether executed or taking effect before or after the conversion, shall be deemed a reference to the converted bank if not inconsistent with the other provisions of such writing.

Acts 1984, No. 719, §1, eff. Jan. 1, 1985.

§ 6:364 State bank converting into state stock savings and loan association

A. A state bank may convert into a state stock savings and loan association as defined by and subject to the provisions of R.S. 6:701, et seq. upon:

(1) Complying with the laws of the United States.

(2) Adopting and filing with the commissioner:

(a) An application for approval of the plan of conversion.

(b) An application for approval of such amendments to its articles, bylaws, and lending plan as may be necessary to carry out the conversion, which amendments shall not be effective until approved by the commissioner and the conversion becomes effective.

(3) Determination by the commissioner that the requirements for a state stock savings and loan association have been met.

(4) Complying with the provisions of Subsection C of this Section.

B. Upon completion of the conversion, the certificate of authority of the converting state bank shall automatically terminate, and the commissioner shall issue to the resulting state stock savings and loan association a certificate of authority authorizing it to transact business as a state stock savings and loan association, subject to the provisions of R.S. 6:701, et seq.

C. A converting state bank shall give notice to its shareholders of its intention to convert to a state stock savings and loan association at least thirty days prior to the proposed effective date of the conversion. A vote of the holders of two-thirds of each class of voting stock at a duly scheduled stockholders meeting shall be required for approval of the conversion. Upon approval of the conversion, the rights of the dissenting stockholders shall be the same as those specified in R.S. 6:376.

D. Before a conversion becomes effective, the converting state bank shall give to its depositors such notice of the conversion as may be required by federal statute or regulation, or by the commissioner. If the rate of interest will be reduced as a result of the conversion, depositors may withdraw the deposit on demand at any time during the period commencing with the giving of the notice called for above and ending on the sixtieth day after the conversion becomes effective, subject to the provisions of any applicable federal statute or regulation.

Acts 1985, No. 405, §1.

§ 6:364.1 Approval of conversion; effective date of conversion

A. After an application for conversion has been approved by the commissioner, the commissioner shall approve the amendments to the articles of incorporation of the resulting state stock savings and loan association and shall issue a certificate of authority at which time the conversion shall become effective and corporate existence of the resulting state stock savings and loan association shall begin.

B. The articles, together with a copy of the certificate of authority issued by the Office of Financial Institutions, shall be filed with the recorder of mortgages of the parish of the main office of the resulting state stock savings and loan association as provided in R.S. 6:217.

Acts 1985, No. 405, §1; Acts 1999, No. 342, §3; Acts 2003, No. 17, §1, eff. May 23, 2003; Acts 2003, No. 60, §1, eff. May 23, 2003.

§ 6:364.2 Effect of conversion from state bank into state stock savings and loan association

Upon completion of the conversion from a state bank into a state stock savings and loan association:

(1) The resulting state stock savings and loan association shall possess all the rights, privileges, and franchises possessed by a state stock savings and loan association under and shall be subject to the provisions of R.S. 6:701, et seq.

(2) Except as otherwise provided by law, the articles of incorporation or the certificate of authority of the resulting state stock savings and loan association, all of the property and assets of any kind and description of the converting state bank, and all other rights and interests as trustee, executor, administrator, register of stocks and bonds, guardian of estates, assignee, receiver, or in any other fiduciary capacity, and all debts due on whatever account to the converting state bank including subscriptions for shares and other rights of action belonging to the converting state bank, shall be taken and deemed to be transferred and vested in the new state stock savings and loan association without further act or deed. This transfer shall have the same effect as if such rights, franchises, and interests had been held or enjoyed by either the converting state bank or the resulting state stock savings and loan association, whenever such rights, franchises, and interests come into existence as a result of the non-surviving state bank having been named in the act, document, or other evidence that creates the right, interest, fiduciary relationship, or responsibility, such as a testament, trust, indenture, or suspensively conditioned contract.

(3) Except as otherwise provided by law or the articles of incorporation or certificate of authority of the resulting state stock savings and loan association, the resulting state stock savings and loan association shall be responsible for all of the liabilities and obligations of the converting state bank in the same manner as if the resulting state stock savings and loan association had itself incurred such obligations. The liabilities of the converting state bank or resulting state stock savings and loan association or their stockholders, members, directors or officers shall not be affected, nor shall the rights of creditors thereof or of any persons dealing with the converted state bank prior to the effective date of the conversion be impaired by such conversion. Any claim existing or act or proceeding pending by or against the converted state bank may be prosecuted to judgment as if such conversion had not taken place, or the resulting state stock savings and loan association may be proceeded against or substituted in place of such converted state bank.

(4) Within a reasonable time after the effective date of the conversion, but not more than two years unless a longer period of time is approved by the commissioner, the resulting state stock savings and loan association shall divest itself of all assets and liabilities of the converting state bank which are not in conformity with R.S. 6:701, et seq.

Acts 1985, No. 405, §1.

§ 6:365 Federal or state stock savings and loan association converting into a state-chartered bank or savings bank

A. A federal or state stock savings and loan association may convert into a state-chartered bank or savings bank as defined by and subject to the provisions of R.S. 6:1 et seq., upon:

(1) Complying with the laws of the United States.

(2) Adopting and filing with the commissioner:

(a) An application for approval of the plan of conversion.

(b) An application for approval of such amendments to its articles, bylaws, and lending plan as may be necessary to carry out the conversion, which amendments shall not be effective until approved by the commissioner and the conversion becomes effective.

(c) Documentation showing the approval of at least two-thirds of the voting power present or by such larger or smaller proportion not less than a majority of the voting power present or as the articles may provide.

(3) Determination by the commissioner that the requirements for a state bank have been met.

(4) Complying with the provisions of Subsection C of this Section.

B. Upon completion of the conversion, the certificate of authority of the converting state stock savings and loan association shall automatically terminate, and the commissioner shall issue to the resulting state bank a certificate of authority authorizing it to transact business as a state bank, subject to the provisions of R.S. 6:1, et seq.

C. A converting state stock savings and loan association shall give notice to its shareholders of its intention to convert to a state bank at least thirty days prior to the proposed effective date of the conversion. A vote of the holders of two-thirds of each class of voting stock at a duly scheduled stockholders meeting shall be required for approval of the conversion.

D. Before a conversion becomes effective, the converting state stock savings and loan association shall give to its depositors such notice of the conversion as may be required by federal statute or regulation, or by the commissioner. If the rate of interest will be reduced as a result of the conversion, depositors may withdraw the deposit on demand at any time during the period commencing with the giving of the notice called for above and ending on the sixtieth day after the conversion becomes effective, subject to the provisions of any applicable federal statute or regulation.

Acts 1988, No. 114, §1, eff. June 29, 1988; Acts 1992, No. 111, §1, eff. Sept. 1, 1992; Acts 2001, No. 915, §1, eff. June 26, 2001.

§ 6:365.1 Merger or conversion of an existing financial institution

A. With the approval of the commissioner, and notwithstanding any other law to the contrary, an existing federally insured financial institution may merge with or convert to any other form of federally insured financial institution by filing an acceptable plan, which has been adopted by a majority vote of all members of the board of directors of each institution, and by doing all of the following:

(1) Obtaining the approval of at least two-thirds of the voting power present or by such larger or smaller proportion not less than a majority of the voting power present as the articles may provide.

(2) Complying with all applicable provisions of this Title and the rules and regulations of the commissioner, except that the commissioner may waive any requirements of publication, notice, and public hearing.

(3) Paying all outstanding bills for supervisory fees, examination fees, membership fees, and other fees, penalties, and assessments associated with the original charter.

(4) Recording its new charter, as provided in R.S. 6:232(C) in the parish of its domicile and complying with the requirements of its current chartering authority. If applicable, any certificate of merger and accompanying merger agreement shall be filed in accordance with the procedures established in R.S. 6:352.

B. Any such merger or conversions shall become effective in accordance with the procedures established in R.S. 6:354.

C. Notwithstanding the provisions of Subsection A of this Section, a mutual state bank may be created only through the conversion of a federally insured financial institution in existence as of August 15, 1997.

Acts 1997, No. 929, §1; Acts 2001, No. 915, §1, eff. June 26, 2001; Acts 2003, No. 17, §1, eff. May 23, 2003; Acts 2003, No. 60, §1, eff. May 23, 2003.

PART III TRANSFER OF ASSETS

§ 6:366 Voluntary transfer of assets

A.(1) Any state bank may sell, lease, exchange, or otherwise dispose of all or substantially all of its assets to any other bank after having obtained both the consent of the stockholders of the selling bank holding of record at least two-thirds of the voting stock of the bank and the consent of the commissioner. Consent of the stockholder shall be expressed either in writing executed and acknowledged by the stockholders and attached to the instrument of sale or other disposition or to a copy thereof, or by a vote at a stockholders' meeting called for that purpose. Consent of the commissioner shall be expressed in writing and attached to the instrument of sale or other disposition of assets.

(2) The transfer agreement shall contain provisions for the payment of liabilities of the selling bank, and it may contain provisions for the transfer of all deposits to a purchasing bank subject however to the right of every depositor of the selling bank to withdraw his deposit in full on demand after the transfer, irrespective of the terms under which it was deposited with the selling bank.

B. After such authorization by a vote of the stockholders, the board of directors may nevertheless, in its discretion, abandon such sale, lease, exchange, or other disposition of assets subject to the rights of third parties under any contracts relating thereto without action or approval by the stockholders.

C. This Section shall not be construed to authorize a conveyance or other disposition of assets in fraud of the bank's creditors or minority stockholders or stockholders without voting rights.

D. An action or suit to enjoin or set aside a conveyance by a state bank on the ground that there has not been compliance with the provisions of this Section relating to the sale or other disposition of assets of the state bank must be brought within ninety days after the action purporting to authorize such disposition was taken, and this time limit shall not be subject to suspension on any ground nor to interruption except by timely suit.

E. Upon the sale of all or substantially all of the assets of the bank, the certificate of authority of that bank shall be canceled as of the effective date of the agreement. The canceled certificate of authority shall then be filed by the bank with the recorder of mortgages in the parish of the selling bank's main office. This filing shall be made no later than thirty days following the cancellation of the certificate of authority.

Acts 1984, No. 719, §1, eff. Jan. 1, 1985; Acts 2001, No. 915, §1, eff. June 26, 2001; Acts 2003, No. 17, §1, eff. May 23, 2003; Acts 2003, No. 60, §1, eff. May 23, 2003.

§ 6:367 Voluntary purchase of assets and liabilities

A. A Louisiana state-chartered bank, savings bank, or association, hereinafter referred to as the "acquiring institution", may, with the approval of the commissioner, purchase all or a portion of the assets and assume all or a portion of the liabilities of another bank, savings bank, or association, hereinafter referred to as the "selling institution". At least thirty days prior to the effective date of the transaction, the acquiring institution shall file with the commissioner all applications which are required to be filed with its appropriate federal regulator.

B. The transaction may be effected only as a result of a purchase and assumption agreement entered into, approved, and filed as follows:

(1) The board of directors of both the acquiring institution and the selling institution desiring to effect the transaction shall enter into a joint agreement, signed by a majority of each institution's directors, which prescribes the terms and conditions of the purchase and assumption and the mode of carrying the same into effect and containing such other provisions as are deemed necessary.

(2) In those instances where a state-chartered acquiring institution is purchasing all or substantially all of the assets or liabilities of a state-chartered selling institution, the approval of both institutions' shareholders shall be obtained prior to the effective date of the transaction. If the selling institution is not organized under the laws of this state, the agreement must be approved in the manner provided by the laws under which it was chartered. If the acquisition does not involve all or substantially all of the assets or liabilities, this statute shall not require shareholder approval of either institution.

(3) If shareholder approval is required, the agreement must be approved by the stockholders of each institution organized under the provision of this law by a vote of at least two-thirds of the voting power present or by such larger or smaller proportion not less than a majority of the voting power present as the articles may provide.

(4) The fact that the agreement has been approved by the stockholders of each party thereto as hereinabove provided shall be certified on the agreement by the respective secretaries or assistant secretaries or cashiers or assistant cashiers, and the agreement, so approved and certified, shall be signed and acknowledged by the president or chief executive officer of each of the parties thereto.

(5) If the agreement does not amend the articles of the acquiring institution, and if, as a result of the purchase, the total assets of the acquiring institution as of the most recent call report does not increase by ten percent, approval of the agreement by such institution's stockholders shall not be required, and the secretary or assistant secretary or cashier or assistant cashier shall certify on the agreement that such approval is not required and the reasons therefor.

(6) The agreement, so adopted, certified, and acknowledged, shall be filed with the commissioner, who, after all fees and charges have been paid as required by law, shall record the same in his office, endorse thereon the date and, if requested, the hour of filing thereof with him, and issue a certificate of purchase and assumption, which shall recite the names of all the institutions involved, the date and, if endorsed on the agreement, the hour of filing the agreement with him, and effective time of the purchase and assumption, if stated in the agreement. The agreement may be delivered to the commissioner in advance for filing as of any specified date and, if specified upon such delivery, as of any given time on such date within thirty days after the date of delivery.

(7) A copy of the certificate of purchase and assumption certified by the commissioner as well as the purchase and assumption agreement shall, within thirty days after issuance of the certificate, be filed for record in the office of the recorder of mortgages in the parish of each institution's domicile.

(8) Notwithstanding stockholder approval and at any time prior to the effective date of this transaction, the purchase and assumption agreement may be abandoned pursuant to a provision for such abandonment, if any, contained in the agreement.

(9) Before issuing a certificate of purchase and assumption, the commissioner shall consider the financial and managerial resources and future prospects of the acquiring institution. If he finds that the public interest will not be served by permitting such transaction, he shall refuse to issue the certificate.

C. If any of the acquired assets or liabilities will be operated as a branch, the acquiring institution shall notify the commissioner of its desire to obtain a certificate of authority for each location. Following the approval of the transaction by the commissioner, the acquiring institution shall notify the office of financial institutions as to the opening date of each branch. The commissioner shall then issue a certificate of authority for each location.

Acts 2001, No. 915, §1, eff. June 26, 2001; Acts 2003, No. 17, §1, eff. May 23, 2003; Acts 2003, No. 60, §1, eff. May 23, 2003.

PART IV VOLUNTARY DISSOLUTIONS

§ 6:371 Voluntary liquidations and dissolutions of solvent banks with prior approval of commissioner

A. The stockholders of a state bank, by vote of two-thirds of the total voting power of the corporation or such larger vote as the articles may require, at a special meeting of the stockholders the notice of which shall set forth the proposed dissolution as the purpose of the meeting, may agree to appoint a liquidator and dissolve the state bank.

B. If the public interest will thereby be served, the commissioner shall approve the liquidation unless the bank is insolvent or in an impaired, unsafe, or unsound condition.

Acts 1984, No. 719, §1, eff. Jan. 1, 1985; Acts 1989, No. 396, §1.

§ 6:372 Liquidation procedure

A. A voluntary liquidation takes effect upon:

(1) The appointment of a liquidator in the stockholder agreement provided for in R.S. 6:371(A); and

(2) Approval of the commissioner.

B. When the voluntary liquidation takes effect, all the rights, powers, and duties of the officers and board of directors, except as otherwise provided by law, shall be vested in the liquidator appointed by the stockholders, and the authority and duties of the officers and directors of the bank shall cease, except insofar as may be necessary in the opinion of the liquidator to preserve the corporate assets or insofar as they may be continued by the liquidator or as may be necessary for termination of the proceeding for dissolution.

C.(1) Within thirty days of the approval, a notice of liquidation shall be sent by mail to all known creditors of the bank and all other persons interested in funds or other property held by the bank. The notice shall be posted conspicuously on the premises of the bank and shall be given such other publication as the commissioner may require. The bank shall send with the notice a statement of the amount on the books to be the claim of the depositor or creditor. The notice shall demand that property held by the bank as depositary or in a safe deposit box be withdrawn by the person entitled thereto and that claims of depositors and creditors, if the amount claimed differs from that stated in the notice to be due, be filed with the bank before a specified date not earlier than sixty days thereafter in accordance with the procedure prescribed in the notice.

(2) As soon after approval of the liquidation by the commissioner as may be practicable, the state bank shall resign all fiduciary positions and take such action as may be necessary to settle its fiduciary accounts.

(3) Safety deposit boxes, the contents of which have not been removed within sixty days after notice of liquidation, shall be opened and the contents shall be placed in sealed packages which shall be transferred to the liquidator, who shall retain them for one year unless sooner claimed by the persons entitled to them. After one year the liquidator shall transfer the property to the commissioner, who shall dispose of the property as provided in R.S. 9:151 et seq.

(4) The approval of an application for liquidation shall not impair any right of a depositor or creditor to payment in full, and all lawful claims of creditors and depositors shall be promptly paid. The unearned portion of the rental of a safety deposit box shall be returned to the lessee.

(5)(a) Any assets remaining after the discharge of all obligations shall be distributed to the stockholders in accordance with their respective interests. No such distribution shall be made before:

(i) All claims of depositors and creditors have been paid or, in the case of any disputed claim, the bank has deposited to the registry of the district court of the judicial district in which the liquidating bank is domiciled a sum adequate to meet any liability that may be judicially determined; and

(ii) Any funds payable to a depositor or creditor and unclaimed have been transmitted to the commissioner.

(b) Any unclaimed distribution to a stockholder or depositor shall be held until ninety days after the final distribution and then transmitted to the commissioner. Such unclaimed funds shall be held by the commissioner for two years and, unless sooner claimed by the person entitled thereto, shall be transferred to the administrator of the Uniform Unclaimed Property Act of 1997 as unclaimed property.

D. If the commissioner finds that the assets will be insufficient for the full discharge of all obligations or that completion of the liquidation has been unduly delayed, he may take possession and complete the liquidation in the manner provided in this law for involuntary liquidations.

E. The commissioner may require reports of the progress of the liquidation, and whenever he is satisfied that the liquidation has been properly completed, he shall cancel the certificate of authority of the bank.

Acts 1984, No. 719, §1, eff. Jan. 1, 1985; Acts 2000, 1st Ex. Sess., No. 135, §1, eff. July 1, 2000.

PART V RIGHTS OF DISSENTING STOCKHOLDERS

§ 6:376 Rights of a stockholder dissenting from certain actions

A. Except as provided in Subsection B of this Section, if a state bank has, by vote of its stockholders, authorized a sale, lease, or exchange of all or substantially all of its assets, or become a party to a merger, consolidation, or share exchange, or authorized a conversion into a national bank, or authorized a voluntary liquidation, then, unless such authorization or action shall have been given or approved by at least eighty percent of the total voting power, a stockholder who voted against such action shall have the right to dissent.

B. The right to dissent provided by this Section shall not exist in the case of stockholders holding shares of any class of stock which, at the record date fixed to determine stockholders entitled to receive notice of and to vote at the meeting of stockholders at which a merger, consolidation, or share exchange was acted on, were listed on a national securities exchange, unless the articles of the bank issuing such stock provide otherwise, or the shares of such stockholders were not converted by the merger, consolidation, or share exchange solely into shares of the surviving or new bank.

C.(1) Except as provided in the last sentence of this Subsection, any stockholder electing to exercise such right of dissent shall file with the bank, prior to or at the meeting of stockholders at which such proposed action is submitted to a vote, a written objection to such proposed action and shall vote his shares against such action.

(2) If such proposed action be taken by the required vote but by less than eighty percent of the total voting power, and the merger, consolidation, share exchange, sale, liquidation, or conversion authorized thereby be effected, the bank shall promptly thereafter give written notice thereof, by registered mail, to each stockholder who filed such written objection to and voted his shares against such action at such stockholder's last address on the bank's records.

(3) Each such stockholder may, within twenty days after the mailing of such notice to him but not thereafter, file with the bank a demand in writing for the fair cash value of his shares as of the day before such vote was taken, provided that he state in such demand the value demanded and a post office address to which the reply of the bank may be sent and at the same time deposit in escrow in a bank or trust company located in the parish of the domicile of the bank the certificates representing his shares, duly endorsed and transferred to the escrow bank upon the sole condition that said certificates shall be delivered to the bank upon payment of the value of the shares determined in accordance with the provisions of this Section. With his demand, the stockholder shall deliver to the bank the written acknowledgment of such escrow bank or trust company with which such certificates have been deposited that it so holds his certificates of stock.

(4) Unless the objection, demand, and acknowledgment aforesaid be made and delivered by the stockholder within the period described in this Subsection, he shall conclusively be presumed to have acquiesced in the action proposed or taken.

D. If the bank does not agree to the value so stated and demanded or does not agree that a payment is due, it shall, within twenty days after the receipt of such demand and acknowledgment, notify in writing the stockholder at the designated post office address of its disagreement and shall state in such notice the value it will agree to pay if any payment should be held to be due; otherwise, it shall be liable for and shall pay to the dissatisfied stockholder the value demanded by him for his shares.

E.(1) In case of disagreement as to such fair cash value or as to whether any payment is due after compliance by the parties with the provisions of Subsections C and D of this Section, the dissatisfied stockholder within sixty days after receipt of notice in writing of the bank's disagreement but not thereafter may file suit against the bank or the merged or consolidated bank, as the case may be, in the district court of the parish in which the bank or the merged or consolidated bank, as the case may be, is domiciled praying the court to fix and decree the fair cash value of the dissatisfied stockholder's shares as of the day before the action complained of was taken, and the court shall, on such evidence as may be adduced in relation thereto, determine summarily whether any payment is due and, if so, such cash value, and render judgment accordingly.

(2) Any stockholder entitled to file such a suit may, within such sixty-day period but not thereafter, intervene as a plaintiff in such a suit filed by another stockholder and recover therein judgment against the bank for the fair cash value of his shares. No order or decree shall be made by the court staying the proposed action, and any such action may be carried to completion notwithstanding any such suit.

(3) Failure of the stockholder to bring suit or to intervene in such a suit within sixty days after receipt of notice of disagreement by the bank shall conclusively bind the stockholder:

(a) By the bank's statement that no payment is due; or

(b) If the bank does not contend that no payment is due, to accept the value of his shares as fixed by the bank in its notice of disagreement.

F. When the fair value of the shares has been agreed upon between the stockholder and the bank, or when the bank has become liable for the value demanded by the stockholder because of failure to give notice of disagreement and of the value it will pay, or when the stockholder has become bound to accept the value the bank agrees is due because of his failure to bring suit within sixty days after receipt of notice of the bank's disagreement, the action of the stockholder to recover such value must be brought within five years from the date the value was agreed upon or the liability of the bank became fixed.

G. If the bank or the merged or consolidated bank, as the case may be, shall, in its notice of disagreement, have offered to pay the dissatisfied stockholder on demand an amount in cash deemed by it to be fair cash value of his shares, and if, on the institution of a suit by the dissatisfied stockholder claiming an amount in excess of the amount offered, the bank or the merged or consolidated bank, as the case may be, shall deposit in the registry of the court, there to remain until the final determination of the cause, the amount so offered; then, if the amount finally awarded such stockholder, exclusive of interest and costs, be more than the amount offered and deposited as aforesaid, the costs of the proceeding shall be taxed against the bank or the merged or consolidated bank, as the case may be, and judicial interest may be awarded against such bank only on the amount of the award in excess of the amount deposited in the registry of the court; otherwise, the costs of the proceeding shall be taxed against such stockholder.

H. Upon filing a demand for the value of his shares, the stockholder shall cease to have any of the rights of a stockholder except the rights accorded by this Section. Such a demand may be withdrawn by the stockholder at any time before the bank gives notice of disagreement as provided in Subsection D of this Section. After such notice of disagreement is given, withdrawal of a notice of election shall require the written consent of the bank. If a notice of election is withdrawn, or the proposed corporate action is abandoned or rescinded, or a court should determine that the stockholder is not entitled to receive payment for his shares, or the stockholder should otherwise lose his dissenter's rights:

(1) He shall not have the right to receive a payment for his shares;

(2) His share certificates shall be returned to him and, on his request, new certificates shall be issued to him in exchange for the old ones endorsed to the bank; and

(3) He shall be reinstated to all his rights as a stockholder as of the filing of his demand for value, including any intervening preemptive rights and the right to payment of any intervening dividend or other distribution, or, if any rights have expired or any such dividend or distribution other than in cash has been completed, in lieu thereof, at the election of the bank he shall receive the fair value thereof in cash as determined by the board as of the time of such expiration or completion, but without prejudice otherwise to any proceeding that may have been taken in the interim.

Acts 1984, No. 719, §1, eff. Jan. 1, 1985; Acts 1988, No. 93, §1; Acts 2001, No. 876, §1, eff. June 26, 2001.

SUBCHAPTER C CONSERVATORSHIPS, RECEIVERSHIPS, AND INVOLUNTARY LIQUIDATIONS

PART I CONSERVATORSHIPS OF STATE BANKS

§ 6:381 Definitions

As used in this Subchapter:

(1) "Conservator" means the commissioner or his designee.

(2) "FDIC" means the Federal Deposit Insurance Corporation, and includes any successor to the corporation or other agency or instrumentality of the United States which may undertake to discharge the purposes of the corporation.

(3) "Receiver" means the person liquidating a state bank pursuant to Part II of this Subchapter.

(4) "Receivership court" means the district court for the parish in which the state bank is domiciled.

Acts 1984, No. 719, §1, eff. Jan. 1, 1985.

§ 6:382 Authority of commissioner to take possession and commence conservatorship of state bank

A. The commissioner may, with the consent of the governor, take possession and act as conservator of a state bank in any case in which he finds that the bank:

(1) Is insolvent or in an unsafe or unsound condition to continue the business of banking.

(2) Has refused to pay its depositors or obligations in accordance with the terms under which such deposits or obligations were incurred.

(3) Has refused to submit its records and affairs for inspection or examination by federal or state banking authorities.

(4) Has violated any court order, statute, rule or regulation, or its articles, and the commissioner determines that continued control of its own affairs threatens injury to the public, the financial community, or its depositors and other creditors.

(5) Requests through its board of directors that the commissioner take possession for the benefit of depositors, other creditors, and stockholders.

(6) Has had its deposit insurance contract with the Federal Deposit Insurance Corporation terminated or is subject to an agreement or a final order to terminate that insurance.

B. The commissioner shall file an application to confirm the conservator and commence the conservatorship with the receivership court. The application shall recite one of the grounds for conservatorship provided in this Section. The court shall act upon the application forthwith and may proceed without notice to any person.

Acts 1984, No. 719, §1, eff. Jan. 1, 1985; Acts 1987, No. 107, §1.

§ 6:383 Transfer of title to bank assets; extension of prescriptive periods

A. Upon confirmation of a conservator, title to all assets of the bank shall vest in the conservator without the execution of any instruments of conveyance, assignment, transfer, or endorsement.

B. Notwithstanding any other laws to the contrary, the prescriptive period shall be extended for a period of six months on all causes of action accruing to the conservator pursuant to Subsection A.

Acts 1984, No. 719, §1, eff. Jan. 1, 1985.

§ 6:384 Notice of conservatorship; effect

Upon commencement of the conservatorship of any state bank, the conservator shall immediately post an appropriate notice of the conservatorship at the main entrance to the main office of the bank. No person who has actual knowledge of the conservatorship or who has been notified pursuant to this Section shall have a privilege for any payment, advance, or clearance thereafter made or for any liability thereafter incurred against any of the assets of the bank possessed by the conservator, nor shall the directors, officers, or agents of such bank thereafter have authority to act on behalf of said bank or to convey, transfer, assign, pledge, mortgage, or encumber any assets thereof.

Acts 1984, No. 719, §1, eff. Jan. 1, 1985.

§ 6:385 Conservator's power to manage and control bank

When a conservator has taken control of a state bank, he shall be vested with the full and exclusive power of management and control, including the power:

(1) To take possession of all books, records, and assets of the bank.

(2) To collect all debts, claims, and judgments belonging to the bank and to do such other acts as are necessary to preserve and liquidate its assets.

(3) To execute in the name of the bank any instrument necessary and proper to effectuate its powers or perform its duties as conservator.

(4) To initiate, pursue, and defend litigation involving any right, claim, interest, or liability of the bank.

(5) To exercise any and all fiduciary functions of the bank as of the date of appointment as conservator.

(6) To borrow money as necessary in the conservatorship of the bank and to secure such borrowings by the pledge or mortgage of bank assets; the repayment of money borrowed under this Subsection and interest thereon shall be considered an expense of administration.

(7) To abandon or convey title to any holder of a mortgage, privilege, lien, or other security interest against property in which the bank has an interest whenever the conservator determines that to continue to claim such interest is burdensome and of no advantage to the bank, its depositors, creditors, or stockholders.

(8) Subject to the approval of the receivership court, to sell any and all movable and immovable property, to compromise any debt, claim, or judgment due to the bank, and to discontinue any action or other proceeding pending therefor.

(9) To terminate the conservatorship by restoring the bank to its board of directors or to commence a receivership of the state bank in accordance with Part II of this Subchapter.

Acts 1984, No. 719, §1, eff. Jan. 1, 1985.

§ 6:386 Objection to conservatorship

Within ten days after the commencement of the conservatorship, any interested party may file an application with the receivership court for an order vacating such conservatorship. Unless a receiver has been confirmed, the court shall grant the order if it finds that the action of the conservator was unauthorized under this Part.

Acts 1984, No. 719, §1, eff. Jan. 1, 1985.

§ 6:387 Decision to liquidate bank or terminate conservatorship

A. After conducting such investigations as circumstances may require and within six months of the initial filing of the petition pursuant to R.S. 6:382, the conservator shall terminate the conservatorship of the state bank or commence liquidation of the state bank if the state bank is insolvent, has had its deposit insurance with the Federal Deposit Insurance Corporation terminated, or is subject to an agreement or a final order to terminate that insurance. The conservator shall consult with the board of directors of the bank before making such decision.

B. If the conservator shall decide to terminate his possession of the state bank, he shall file a motion in the receivership court requesting dismissal of his petition. Upon the issuance of that order, the conservator shall relinquish management and control of the bank.

Acts 1984, No. 719, §1, eff. Jan. 1, 1985; Acts 1987, No. 107, §1.

PART II INVOLUNTARY LIQUIDATION PROCEDURE

§ 6:391 Commencement of receivership; confirmation of receiver

A. If the conservator shall determine to liquidate the state bank, he shall file a motion for an order from the receivership court to close the bank and commence liquidation thereof. The motion shall name the receiver of the state bank, who shall be the conservator unless some other person is appointed by the commissioner. The receiver shall apply for and shall be entitled to an ex parte order of the receivership court confirming his appointment.

B. The commissioner shall appoint the FDIC receiver if any of the deposits of the state bank are insured by the FDIC. The FDIC shall not be required to post bond.

C. Upon confirmation, the receiver shall be vested with all the powers granted a conservator in Part I of this Subchapter.

Acts 1984, No. 719, §1, eff. Jan. 1, 1985.

§ 6:392 Emergency sale of assets; purchase and assumption of assets

The receiver may, with ex parte approval of the receivership court, sell all or any part of the bank's assets to another state or national bank or to the FDIC. In like manner, the receiver may borrow from the FDIC any amount necessary to facilitate the assumption of deposit liabilities by a newly chartered or existing bank, assigning any part or all of the assets of the bank as security for such loan.

Acts 1984, No. 719, §1, eff. Jan. 1, 1985.

§ 6:393 Notice to creditors and depositors

A. All persons having claims against the bank shall present their claims substantiated by legal proof to the receiver within one hundred eighty days after the bank is closed.

B. The receiver shall cause notice of the claims procedure to be published once a week for twelve consecutive weeks in a newspaper of general circulation in the parish of domicile of the bank and to be mailed to each person whose name appears as a creditor or depositor upon books of the bank at his last address of record.

C. Within one hundred eighty days following receipt of the claim, the receiver shall notify in writing any claimant whose claim has been rejected. Notice is effective when mailed. Any claimant whose claim has been rejected by the receiver may petition the receivership court for a hearing on his claim within sixty days from the date his claim is rejected.

Acts 1984, No. 719, §1, eff. Jan. 1, 1985.

§ 6:394 Payment of claims

All claims filed after the one hundred eighty day claim period prescribed by R.S. 6:393 and subsequently accepted by the receiver or allowed by the receivership court shall be entitled to share in the distribution of assets only to the extent of the undistributed assets in the hands of the receiver on the date such claims are accepted or allowed.

Acts 1984, No. 719, §1, eff. Jan. 1, 1985.

§ 6:394.1 Right of set-off

Notwithstanding Civil Code Articles 1893, et seq. or any other provision of law to the contrary, any funds held on deposit with any state bank on behalf of a depositor may be used by the depositor as a set-off against any and all loans, extensions of credit, or other obligations or indebtedness of the depositor owed to the depository bank in the event such bank is liquidated.

Acts 1986, No. 379, §1.

§ 6:395 Distribution of assets

A. All claims against the bank's assets, proved to the receiver's satisfaction or approved by the receivership court, shall be paid in the following order:

(1) Administration expenses of the liquidation.

(2) Claims given priority under other provisions of state or federal law.

(3) Deposit obligations.

(4) Other general liabilities.

(5) Debt subordinated to the claims of depositors and general creditors.

(6) Equity capital securities.

B. No interest on any claim shall be paid until all claims within the same class have received the full principal amount of the claim.

Acts 1984, No. 719, §1, eff. Jan. 1, 1985.

§ 6:396 Termination of executory contracts

Within one hundred eighty days of the date of commencement of liquidation of the bank, the receiver may at his election reject any executory contract to which the bank is a party without any further liability to the bank or the receiver or any obligation of the bank as a lessee of movable or immovable property. The receiver's election to reject a lease creates no claim for rent other than rent accrued to the date of termination or for actual damages, if any, for such termination not to exceed the equivalent of six months' payment.

Acts 1984, No. 719, §1, eff. Jan. 1, 1985.

§ 6:397 Subrogation to rights of bank depositors

Whenever the FDIC pays or makes available for payment the insured deposit liabilities of a closed bank, the FDIC, whether or not it acts as receiver, shall be subrogated to all rights of depositors against the closed bank to the same extent as subrogation is provided for in the Federal Deposit Insurance Act, 12 U.S.C. 1811 et seq., in the case of a national bank.

Acts 1984, No. 719, §1, eff. Jan. 1, 1985.

§ 6:398 Liquidation procedures involving trust assets

A.(1) The receiver, with the approval of the receivership court, has the authority to appoint a successor to all rights, obligations, assets, deposits, agreements, and trusts held by the closed bank as trustee, administrator, executor, guardian, agent, and all other fiduciary or representative capacities.

(2) The successor's duties and obligations commence upon appointment to the same extent binding upon the former bank and as though the successor has originally assumed such duties and obligations. Specifically, the successor shall succeed to and be entitled to administer all trusteeships, administrations, executorships, guardianships, agencies, and all other fiduciary or representative proceedings to which the closed bank is named or appointed by any other instrument, court order, or by operation of law.

B. Nothing in this Section shall be construed to impair the right of the grantor or beneficiaries of trust assets to secure the appointment of a substituted trustee or manager.

C. Within thirty days after appointment, the successor shall give written notice, insofar as practicable, to all interested parties named in the books and records of the bank or in trust documents held by it that such successor has been appointed in accordance with state law.

Acts 1984, No. 719, §1, eff. Jan. 1, 1985.

§ 6:399 Destruction of records

Subject to the approval of the receivership court, the closed bank's records may be destroyed after the receiver determines that there is no further need for them.

Acts 1984, No. 719, §1, eff. Jan. 1, 1985.

§ 6:400 Discharge of receiver

A. Whenever the receiver has paid all necessary costs and expenses of the liquidation of a bank, and has paid to every depositor and creditor of the bank, not including stockholders and their claims on account of stock owned by them, whose claims have been duly approved and allowed either the full amount of their claims or their equal and ratable proportion, and has made proper provision for all unclaimed balances on deposit, he shall call a meeting of the stockholders by giving notice thereof by advertisement published at least once a week for four weeks in a newspaper of general circulation in the parish of domicile of the bank. At this meeting the receiver shall appear and deliver to the stockholders or to the trustees hereinafter provided for, all of the remaining property, effects, books, records, or other assets of the bank.

B. At the meeting called by the receiver, the stockholders, by majority vote of those present or represented, may elect to retain some or all of the remaining assets in lieu of a dissolution thereof. Upon election by the stockholders to retain any of the assets, the corporate existence shall continue solely for the purpose of administering the assets for the benefit of the stockholders.

C. If the stockholders elect to retain any of the assets in lieu of dissolution, the stockholders, by majority vote of those present or represented, shall adopt a resolution providing for the following:

(1) The designation of three trustees, who need not be stockholders, to administer the affairs of the corporation, the term for which they shall serve, the manner of filling vacancies, and the method of electing their successors.

(2) The fixing of a day and date for the holding of an annual stockholders' meeting and the method of notice to the stockholders.

(3) The powers and duties of the trustees.

(4) The designation of a secretary who may be one of the three trustees and the term for which he shall serve.

D. Upon transfer and delivery the receiver is discharged from further liability to the corporation and its creditors.

Acts 1984, No. 719, §1, eff. Jan. 1, 1985.

§ 6:401 Exclusive procedures

This Part provides the full and exclusive powers and procedures for the liquidation of state banks under the laws of this state, and no receiver or other liquidating agent shall be appointed for such purpose except as expressly provided in this Part.

Acts 1984, No. 719, §1, eff. Jan. 1, 1985.

CHAPTER 4 PROHIBITED PRACTICES; SANCTIONS

§ 6:411 Engaging in business of banking without authority; penalty

A. It shall be unlawful for any person other than a financial institution to engage in the business of banking anywhere in this state.

B. Financial institutions may only engage in the business of banking to the extent expressly permitted by the laws under which they are organized or licensed.

C. Whoever violates this Section shall be fined not more than one thousand dollars a day for each day or part of a day during which the violation continues.

Acts 1984, No. 719, §1, eff. Jan. 1, 1985.

§ 6:412 Unauthorized use of the word "bank" or similar words

A. It shall be unlawful for any person other than a bank to:

(1) Use the word "bank", "banker", "banking", "trust", "trustee", "trust company", or any other word of similar import as part of its name or title, except that a trust created and operated pursuant to the provisions of the Louisiana Trust Code as contained in R.S. 9:1721 et seq., and a real estate investment trust authorized under the provisions of R.S. 12:491 et seq., may use the word "trust" as part of its name or title, and a trust company created and operated pursuant to the Louisiana Trust Company Law as contained in R.S. 6:571 et seq. shall use only the words "trust", "trustee", or "trust company" as part of its name or title;

(2) Make use of any office sign at the place where the business is transacted having thereon any words indicating that the place or office is that of a bank;

(3) Make use of or circulate any written, printed, or partly written and partly printed paper heading thereon any words indicating that the business is that of a bank; or

(4) Otherwise purport or represent to the public that that person is a bank or is engaged in the business of banking as a bank.

B. Whoever violates this Section shall be fined not more than one thousand dollars a day for each day or part of a day during which the violation continues.

C. Nothing in this Section shall be construed to prevent the use of the words "bank", "banks", "banker", "bankers", "banking", or any similar word in a context clearly not purporting to refer to a general banking business.

D. Nothing in this Section shall be construed to prevent the use of the word "trust", "trustee", "trust company" or any word of similar import as part of a name or title in a context clearly not purporting to refer to engaging in a general trust, trustee, or trust company business.

Acts 1984, No. 719, §1, eff. Jan. 1, 1985; Acts 1986, No. 7, §1; Acts 1991, No. 200, §1; eff. July 2, 1991; Acts 2003, No. 573, §1, eff. June 27, 2003; Acts 2019, No. 190, §1, eff. June 11, 2019.

§ 6:412.1 Soliciting using lender's name or customer loan information; restrictions; injunction; damages; attorney fees; enforcement

A. For purposes of this Section, the following terms shall have the following meanings:

(1) "Lender" means a state or federally chartered bank, savings bank, credit union, or savings and loan association, which is operating in Louisiana with one or more physical branches or a main office, and any affiliate thereof, or any third party operating with the consent of the lender. A person shall not be considered a lender solely on the basis of the person's former employment with the lender.

(2) "Publicly available information" means any information that a bank, credit union, or any affiliate has a reasonable basis to believe is lawfully made available to the general public from any of the following:

(a) Federal, state, or local government records.

(b) Widely distributed media.

(c) Disclosures to the general public that are required to be made by federal, state, or local law.

(3) "Solicit" or "solicitation" means the initiation of a communication to a consumer for the purpose of encouraging the consumer to purchase property, goods, or services or apply for an extension of credit. "Solicit" shall not include communications initiated by the consumer or directed to the general public.

(4) "Solicitor" means any individual, firm, corporation, limited liability company, partnership, organization, association, or other legal entity seeking to sell or market products or services. The term "solicitor" shall not include a lender as defined in this Subsection.

B.(1) No solicitor may use a lender's name, trade name, service mark, or trademark in a solicitation for the offering of services or products to a consumer without the written authorization of the lender, unless the oral, electronic, or written solicitation discloses all of the following:

(a) The name, address, and telephone number of the solicitor making the solicitation.

(b) A statement explaining that the solicitor making the solicitation is not affiliated with the referenced lender.

(c) A statement that the solicitation is not authorized or sponsored by the referenced lender.

(d) A statement that the referenced loan information was not provided by the lender.

(2) The disclosures required by Paragraph (1) of this Subsection shall be located on the front page of all written or electronic solicitations. The disclosures shall be clear and conspicuous, in bold-faced type that is the same font size as is predominantly used in the solicitation.

(3) There shall be a clear and audible recitation of the disclosures required by Paragraph (1) of this Subsection at the beginning of all oral solicitations.

C. A solicitation for the purchase of services or products shall not contain a loan number, loan amount, or other specific loan information that is not publicly available information.

D.(1) A solicitor may not use a loan number, loan amount, or other specific loan information that is publicly available information in a solicitation for the purchase of services or products unless the oral, written, or electronic solicitation discloses all of the following:

(a) The name, address, and telephone number of the solicitor making the solicitation.

(b) A statement that the solicitor making the solicitation is not affiliated with the lender.

(c) A statement that the solicitation is not authorized or sponsored by the lender.

(d) A statement that the loan information referenced was not provided by the lender and that the information was retrieved from public records.

(2) The disclosures required by Paragraph (1) of this Subsection shall be located on the front page of all written or electronic solicitations. The disclosures shall be clear and conspicuous, in bold-faced type that is the same font size as is predominantly used in the solicitation.

(3) There shall be a clear and audible recitation of the disclosures required by Paragraph (1) of this Subsection at the beginning of all oral solicitations.

E. This Section shall not apply to a lender who uses a loan number, loan amount, or other specific loan information derived from the business relationship between the lender and a current or former customer in communications with the current or former customer of the lender.

F. Any reference to a lender and any reference to a loan number, loan amount, or other specific loan information appearing on the outside of an envelope, visible through the envelope window, or on a postcard in connection with any written communication that includes or contains a solicitation for services or products, shall be prohibited unless express consent is given by the lender to the solicitor.

G. It shall not be a violation of this Section for a solicitor or lender to use the trade name of another lender in an advertisement for services or products to compare the services or products offered by the other lender.

H. A lender may seek an injunction against a solicitor who violates this Section to enjoin the unlawful use of the name, trade name, trademark, service mark, or loan information. The lender seeking the injunction shall not be required to prove actual damages as a result of the violation. Irreparable harm to the lender or owner shall be presumed. The lender seeking the injunction may seek to recover actual damages as a result of the violation. The lender, if it prevails in any action brought pursuant to this Section, shall be entitled to recover costs associated with the action and reasonable attorney fees from the solicitor.

I. The commissioner may use the enforcement powers of R.S. 6:121.1 against a solicitor who violates this Section. If the commissioner seeks injunctive relief against a solicitor who violates this Section to enjoin the unlawful use of the name, trade name, trademark, service mark, or loan information, the commissioner shall not be required to prove actual damages as a result of the violation. Irreparable harm shall be presumed. If the commissioner prevails in any action brought pursuant to this Section, the commissioner shall be entitled to recover costs associated with the action and reasonable attorney fees from the solicitor. Any action brought by the commissioner pursuant to this Subsection shall be brought in the Nineteenth Judicial District Court.

J. In addition to the remedies provided in Subsections H and I of this Section, a solicitor who violates this Section shall be deemed to have violated the false advertising law contained in R.S. 51:411 and the penalties contained in R.S. 51:411(E) may be enforced by the state attorney general.

Acts 2011, No. 14, §1; Acts 2021, No. 267, §1; Acts 2021, No. 267, §1.

§ 6:413 Prohibited use of the term "insured savings"

A. No person shall offer, hold out, represent, or advertise any account, deposit, investment, stock purchase, indenture, passbook, or other evidence of a credit on deposit or maintained as an account as constituting "insured savings", or use the term "insured savings" with regard to any such account or deposit in any manner whatsoever unless such account or deposit is insured by the Federal Deposit Insurance Corporation or such other instrumentality of or corporation chartered by the United States as hereafter may be established for the purpose of insuring the withdrawal of any account or deposit.

B. Any person who is found guilty of a violation of any of the provisions of this Section shall be punishable by a fine of not more than one thousand dollars, and each day of violation shall constitute a separate offense.

Acts 1984, No. 719, §1, eff. Jan. 1, 1985.

§ 6:414 Use of certain terms by persons other than financial institutions prohibited

A. No person other than a financial institution shall in any manner directly or indirectly in written or verbal advertising or other communication purport to offer a savings account, savings deposit, certificate of deposit, savings certificate, money market certificate, share account, share draft account, passbook account, checking account, or withdrawals from such accounts. This provision, however, shall not be construed to prohibit any person from describing in verbal or written advertisement in this state the investment services it is offering, provided that such advertisement does not mislead the public by implying that such investment services are the equivalent of those stated above.

B. No person other than a financial institution or other person subject to the general supervision or regulation of the commissioner pursuant to this Title or Title 9 of the Louisiana Revised Statutes of 1950 shall engage in business as a bond for deed escrow agent on or after November 1, 1993, unless such person has first obtained a license pursuant to regulations issued by the commissioner. A person engaged in business as such an agent on January 1, 1993, may continue to be so engaged and shall have until December 31, 1993, to obtain a license in conformity herewith. The commissioner shall promulgate such rules and regulations as deemed necessary to implement this provision.

C. Any person who is found guilty of a violation of any of the provisions of this Section shall be punishable by a fine of not more than one thousand dollars, and each day of violation shall constitute a separate offense.

Acts 1984, No. 719, §1, eff. Jan. 1, 1985; Acts 1993, No. 932, §1, eff. Sept. 1, 1993.

§ 6:414.1 Derogatory statements regarding financial condition of financial institution prohibited; penalty

A. It shall be unlawful for any person maliciously to make, circulate, or transmit to another person any statement, rumor, or suggestion which is directly or by inference derogatory as to the financial condition or which affects the solvency of any financial institution doing business in this state, or to counsel, aid, procure, or induce another to make, circulate, or transmit any such statement or rumor.

B. Truth of the statement made shall be a defense to the crime set forth in this Section.

C. Whoever violates this Section shall be fined not more than five hundred dollars or imprisoned for not more than six months, or both.

Acts 1986, No. 371, §1.

§ 6:415 Loans; other credit exposure; derivative transactions; restrictions; penalties

A. A state bank shall not loan on an unsecured basis to any one borrower, directly or indirectly, an amount in excess of twenty percent of the sum of its capital stock and surplus.

B. A state bank shall not loan on a secured basis to any one borrower, directly or indirectly, an amount in excess of one-half the sum of its capital stock and surplus, provided that all amounts loaned on an unsecured basis up to the limit set forth in Subsection A of this Section shall be added to all amounts loaned on a secured basis pursuant to this Subsection, and the total thereof shall not exceed one half of the state bank's capital stock and surplus. However, a state bank may loan to one borrower an amount not to exceed the sum of its capital stock and surplus, but only when such loan is secured by a pledge of obligations of the United States, or of the state of Louisiana, or any subdivision or municipality thereof, or is a commodity loan secured by readily marketable staples.

C. Loans and other extensions of credit which are fully secured by a pledge of any deposit of the lending bank are not subject to any of the limits prescribed by this Section. For the purposes of this Subsection, a loan or other extension of credit is "fully secured" only to the extent of the dollar amount of the funds in the deposit account at any time while the loan or other extension of credit is outstanding, and provided that the funds in the deposit account that are relied upon for the exemption provided in this Subsection comply with all of the following requirements:

(1) A security interest has been and remains perfected as to third parties pursuant to applicable state and federal laws and regulations.

(2) The bank maintains adequate internal controls and procedures to prevent improper release of the pledged deposit account funds.

(3) The funds in the pledged deposit account are fully collected and subject to no superior or intervening right or order of a party other than the bank.

(4) The funds remain on deposit in the deposit account at all times while the loan or extension of credit is outstanding.

D. The acceptance of drafts, the issuance of letters of credit, and the entering into any credit exposure arising from a derivative transaction, repurchase agreement, reverse repurchase agreement, securities lending transaction, or securities borrowing transaction between the lending bank and the borrower shall also be subject to this Section. For purposes of this Section, a "derivative transaction" shall include any transaction that is a contract, agreement, swap, warrant, note or option that is based, in whole or in part, on the value of, any interest in, any quantitative measure of, or the occurrence of any event relating to, one or more commodities, securities, currencies, interest or other rates, indices, or other assets.

E. A state bank's capital stock and surplus shall be reduced by the amount of the negative undivided profits taking into account current operating income for purposes of calculating the maximum loan amounts in Subsections A and B of this Section. This Subsection shall not apply to the renewal of a loan that was within the legal loan limit when originated.

F. A state bank may acquire a pool of loans and other extensions of credit or a participation in such pool of loans or extensions of credit from other entities, with partial or full recourse to those entities to the extent that the limits prescribed in Subsections A and B of this Section apply to individual loans contained in the pool, provided that an executive officer of the bank, designated by the board of directors, affirm by affidavit that a representative portion of the individual loans has been reviewed by him, or by a qualified third party who has contracted with the bank for that purpose, to determine that they appear to be credit worthy, and that the bank is relying primarily on the responsibility of each maker for payment of the loans or extensions of credit and not on a full or partial recourse endorsement and guarantee by the transferor.

G. A state bank may make a loan or other extension of credit which would otherwise exceed the limits prescribed in Subsections A and B of this Section when the purpose of the loan is to finance the sale of real estate acquired for debts previously contracted or for use as bank premises. Such loans may only be made upon prior written approval of the commissioner.

H. Whoever violates any of the provisions of this Section may be subject to a fine of not more than one thousand dollars per day for each day such violation continues.

I. The commissioner of financial institutions shall have the authority to promulgate rules and regulations in accordance with the Administrative Procedure Act regarding the provisions of this Section.

Acts 1984, No. 719, §1, eff. Jan. 1, 1985; Acts 1986, No. 9, §1; Acts 1991, No. 200, §1, eff. July 2, 1991; Acts 1992, No. 1129, §1, eff. Sept. 1, 1992; Acts 1993, No. 281, §1, eff. July 1, 1993; Acts 1999, No. 260, §1; Acts 2001, No. 529, §1, eff. June 21, 2001; Acts 2012, No. 30, §1, eff. May 4, 2012.

§ 6:416 Loan on pledge of own stock and pledge of own stock prohibited

A. Except as otherwise provided by rule or regulation promulgated by the commissioner, no loan shall be made by any bank to any borrower on pledge of the bank's own stock or the stock of its parent company. Except as provided in R.S. 6:263(C) and Subsection B of this Section, a state bank may not purchase or redeem any of its own stock or the stock of its parent company.

B. A state bank may acquire its own stock or the stock of its parent company for a debt previously contracted, in which case the stock shall not be held for more than one year, subject to extension by the commissioner.

Acts 1984, No. 719, §1, eff. Jan. 1, 1985; Acts 1991, No. 371, §1, eff. July 6, 1991; Acts 1997, No. 1003, §1; Acts 2001, No. 529, §1, eff. June 21, 2001; Acts 2003, No. 570, §1, eff. June 27, 2003.

§ 6:417 Unlawful solicitation or acceptance of gratuity or compensation by officer, director, or employee

A. No officer, director, or employee of any bank shall solicit, accept, or agree to accept, directly or indirectly, from any person other than the bank any gratuity, compensation, or other personal benefit for any action taken by the bank or for endeavoring to procure any such action.

B. Each officer, director, or employee who violates or consents to a violation of this Section shall be fined not more than one thousand dollars.

Acts 1984, No. 719, §1, eff. Jan. 1, 1985.

§ 6:418 Pledge of assets to secure deposits; exceptions; penalty

A. No bank shall pledge or hypothecate any of its assets for the purpose of securing any depositor or for the purpose of furnishing an indemnity bond to secure any depositor from any loss that might be occasioned to the depositor by reason of the failure or inability of the bank to pay in full all of its depositors.

B.(1) Nothing contained in Subsection A shall impair the rights of banks to secure deposits of public entities as they may be required to be secured from time to time by other provisions of law or to secure deposits pursuant to any federal deposit insurance program.

(2) Any bank or trust company acting as tutor, curator, executor, administrator, or other fiduciary, whose trust department makes deposits with its banking department of moneys for which it is responsible as tutor, curator, executor, administrator, or other fiduciary, may secure those deposits by delivering to its trust department, as collateral security, readily marketable bonds or other obligations or assets of that institution having and maintaining a market value at least equal to the amount of those deposits.

C. Any officer or employee who violates this Section shall be fined not less than one thousand dollars nor more than five thousand dollars.

Acts 1984, No. 719, §1, eff. Jan. 1, 1985; Acts 1986, No. 6, §1.

§ 6:419 Receipt of deposits while insolvent

A. After an officer, director, or employee of a bank learns that the bank is insolvent, he shall not assent to the receipt of any deposit of which all or any portion thereof would not be insured by the Federal Deposit Insurance Corporation or the creation of any debt by the bank.

B. Whoever violates this Section shall be fined not more than one thousand dollars and shall be individually responsible for any such deposit or debt.

Acts 1984, No. 719, §1, eff. Jan. 1, 1985; Acts 1987, No. 108, §1.

§ 6:420 False entries or reports; failure to exhibit books; reporting of criminal violations

A. No director, officer, or employee of any state bank shall knowingly make false entries or knowingly omit and neglect to make proper entries in any of the books of the bank for the purpose of deceiving the commissioner, the board of directors, or the public concerning the true condition of the bank.

B. No director, officer, or employee of any state bank shall knowingly concur in the making or publication of any false written report or false statement of its affairs or pecuniary condition or, having the custody and control of its books, refuse to exhibit or allow to be exhibited the books and records for inspection by the commissioner or any of his examiners. No director shall knowingly make or cause to be made any false entry on its books with intent to deceive or, having the custody and control of its books, willfully refuse or neglect to make any proper entry in the books of the bank.

C. No director, officer, or employee of any state bank shall knowingly fail or omit to file any report required by the provisions of this law.

D. If requested by the commissioner, each state-chartered financial institution, trust company, and money transmission or sale of checks licensee shall provide the Office of Financial Institutions with information relating to any report of suspicious activity a state-chartered entity may be required by federal law or regulation to submit to any federal agency. A state-chartered financial institution, trust company, or money transmission or sale of checks licensee shall incur no liability to its customer for compliance with the reporting requirements imposed herein or with the reporting requirements imposed by any federal law or regulation.

E. The commissioner in his sole discretion may refer to the attorney general or the district attorney of the appropriate jurisdiction any suspicious activity reported pursuant to this Section for further proceedings.

F. Any person who violates this Section shall be fined not less than one thousand dollars nor more than five thousand dollars.

Acts 1984, No. 719, §1, eff. Jan. 1, 1985; Acts 1986, No. 4, §1; Acts 1997, No. 42, §1; Acts 2008, No. 345, §1, eff. June 21, 2008.

§ 6:421 Overdrafts

A. No officer of any state bank shall knowingly permit the aggregate amount of unsecured overdrafts due the bank to exceed ten percent of the sum of its capital stock and surplus. Overdrafts by parishes, municipalities, school boards, and other political subdivisions of the state which are under contract with the bank to make advances to those political subdivisions at a fixed rate of interest shall not be computed in calculating unsecured overdrafts for the purpose of this Section.

B. Any person who violates this Section shall be fined not more than one thousand dollars, and each day the violation continues shall be considered a separate violation.

Acts 1984, No. 719, §1, eff. Jan. 1, 1985.

§ 6:422 Excessive borrowings or repurchase agreements

No state bank shall borrow additional sums as long as it has borrowed upon bills payable, rediscounts, or otherwise, or entered into repurchase agreements in any sum equal to three times its total capital less undivided profits. This prohibition shall not apply to borrowings from or repurchase transactions with a federal reserve bank or federal home loan bank.

Acts 1984, No. 719, §1, eff. Jan. 1, 1985; Acts 1995, No. 424, §1, eff. June 17, 1995.

§ 6:423 Check-cashing facility; location of business limited

A. No license shall be granted for the operation of a check-cashing facility which will be situated within three hundred feet or less of any official gaming establishment or designated docking facility of a riverboat licensed to conduct gaming activities or gaming operations pursuant to Chapter 4 or 5 of Title 27 of the Louisiana Revised Statutes of 1950. As to official gaming establishments, this distance shall be measured as a person walks using the sidewalk from the nearest point of the property line of the official gaming establishment to the nearest point of the facility. As to docking facilities, this distance shall be measured in a straight line from the nearest point of the docking facility to the nearest point of the check-cashing facility.

B. The subsequent construction, erection, development, or movement of an official gaming establishment or designated docking facility which causes a check-cashing facility to be located within the prohibited distance shall not be cause for revocation, withholding, denial, or nonrenewal of a license.

C. For purposes of this Section, "check-cashing facility" means a facility whose primary business is the cashing of checks, drafts, money orders, or travelers checks for a fee. The term does not include a bank, trust company, savings bank, savings and loan association, or credit union.

D. The provisions of this Section shall not apply to an individual, partnership, unincorporated association, or corporation that charges no fee to the presenter or payor for the cashing of a check, draft, money order, or traveler's check.

Acts 1993, No. 743, §1; Acts 1999, No. 1208, §1, eff. July 9, 1999.

CHAPTER 5 MISCELLANEOUS FINANCIAL INSTITUTIONS

§ 6:451 Repealed by Acts 1991, No. 197, §1, eff. July 2, 1991.

Repealed by Acts 1991, No. 197, §1, eff. July 2, 1991.

§ 6:452 Loan production offices; power of commissioner to adopt rules and regulations

A.(1) Any Louisiana state-chartered bank, savings bank, or savings and loan association, or a wholly owned operating subsidiary of such bank, savings bank, or savings and loan association, may open one or more loan production offices. Prior to opening a loan production office, the financial institution shall give written notice to the commissioner. Upon receiving the written notice, the commissioner has forty-five days to object. If the commissioner does not raise a timely objection, the financial institution may proceed with opening the loan production office. If the commissioner raises an objection, the commissioner shall, upon request, notify the financial institution in writing as to the nature of the objection.

(2) "Loan production office" means a physically manned location, other than the main office or branch office of a bank, savings bank, or savings and loan association, with the authority to conduct the solicitation and origination of applications for loans.

B. The commissioner shall authorize permissible activities of a loan production office by rule or regulation. The commissioner shall have the right, and is empowered to promulgate any rules, regulations, filing procedures, instructions, and fees that he deems necessary for the creation of loan production offices in the state.

C. Notwithstanding Subsections A and B of this Section, or any other law, rule, or regulation to the contrary, any state-chartered bank, savings bank, or savings and loan association may seek to conduct any activity at a loan production office that is a permissible activity for a loan production office of a national bank by complying with R.S. 6:242(C).

Acts 1992, No. 112, §1, eff. Sept. 1, 1992; Acts 2020, No. 183, §1.

§ 6:453 Deposit production offices; power of commissioner to adopt rules and regulations

A.(1) Any Louisiana state-chartered bank, savings bank, or savings and loan association, or a wholly owned operating subsidiary of such bank, savings bank, or savings and loan association, may open one or more deposit production offices. Prior to opening a deposit production office, the financial institution shall give written notice to the commissioner. Upon receiving the written notice, the commissioner has forty-five days to object. If the commissioner does not raise a timely objection, the financial institution may proceed with opening the deposit production office. If the commissioner raises an objection, the commissioner shall, upon request, notify the financial institution in writing as to the nature of his objection.

(2) "Deposit production office" means a physically manned location, other than the main office or branch office of a bank, savings bank, or savings and loan association, with the authority to solicit deposits, provide information about deposit products, and assist persons in completing application forms and related documents to open deposit accounts.

B. The commissioner shall authorize permissible activities of a deposit production office by rule or regulation. The commissioner shall have the right, and is empowered to promulgate any rules, regulations, filing procedures, instructions, and fees that he deems necessary for the creation of deposit production offices in the state.

C. Notwithstanding Subsections A and B of this Section, or any other law, rule, or regulation to the contrary, any state-chartered bank, savings bank, or savings and loan association may seek to conduct any activity at a deposit production office that is a permissible activity for a deposit production office of a national bank by complying with R.S. 6:242(C).

Acts 2020, No. 183, §1.

§ 6:454 Combination of loan production office, deposit production office, and electronic financial terminal

Any Louisiana state-chartered bank, savings bank, or savings and loan association may operate, at the same location, a loan production office, a deposit production office, and an electronic financial terminal, or any combination of these facilities, and it shall not be considered a branch. Prior to opening a combined loan production office, deposit production office, and electronic financial terminal, the financial institution shall give written notice to the commissioner. Prior to opening a combined loan production office and deposit production office, a financial institution may satisfy the notice requirements of R.S. 6:452 and 453 by giving one combined written notice to the commissioner. Upon receiving the written notice, the commissioner has forty-five days to object. If the commissioner does not raise a timely objection, the financial institution may proceed with opening the combined office. If the commissioner raises an objection, the commissioner shall, upon request, notify the financial institution in writing as to the nature of the objection.

Acts 2020, No. 183, §1.

CHAPTER 6 BANK STRUCTURE

PART I BRANCHING

§ 6:501 Branch offices; authority

A. All banks domiciled in this state may open one or more branch offices within or outside the state or may acquire one or more banks or any or all branches thereof, or both.

B. No branch office shall be opened without a certificate of authority from the commissioner.

Acts 1984, No. 719, §1, eff. Jan. 1, 1985; Acts 1986, No. 458, §2; Acts 1988, No. 39, §1, eff. June 10, 1988; Acts 2021, No. 17, §1.

§ 6:502 Repealed by Acts 1988, No. 39, §2, eff. June 10, 1988.

Repealed by Acts 1988, No. 39, §2, eff. June 10, 1988.

§ 6:503 Repealed by Acts 1988, No. 39, §2, eff. June 10, 1988.

Repealed by Acts 1988, No. 39, §2, eff. June 10, 1988.

§ 6:504 Branches in foreign countries

A. All banks, savings banks, and trust companies having a paid-in capital and surplus of one million dollars or more may open and maintain branches in foreign countries, appoint correspondents, and establish agencies wherever they deem best for the purpose of purchasing, selling, and collecting bills of exchange. They may buy with or without endorsement, through such correspondents or agencies, bills of exchange or acceptances arising out of the actual commercial transactions. However, the exchange or acceptances purchased shall mature not later than ninety days from the date of purchase, exclusive of days of grace. They may also conduct all usual transactions authorized by this Title.

B. The designation of the branch, agency, or correspondent shall be approved by the commissioner and is subject to examination by him at the expense of the principal office in Louisiana. Expenses include traveling expenses incurred in making the examination as well as any usual examination fee charged by the commissioner.

C. These agencies may conduct all other transactions authorized by the banking laws set out in this Title.

Acts 1984, No. 719, §1, eff. Jan. 1, 1985.

§ 6:505 Repealed by Acts 1988, No. 39, §2, eff. June 10, 1988.

Repealed by Acts 1988, No. 39, §2, eff. June 10, 1988.

§ 6:506 Certificate of authority for branch office

A. Repealed by Acts 1988, No. 39, §2, eff. June 10, 1988.

B. An application for a certificate of authority to open a branch office shall be in the manner and in the form required by the commissioner.

C.(1) To determine whether to grant a certificate of authority for the establishment of a proposed branch office the commissioner shall consider:

(a) The financial history and condition of the applicant.

(b) The distribution and adequacy of the capital structure of the applicant.

(c) The future earning prospects of the applicant.

(d) The management of the applicant.

(e) The convenience and needs of the community or area in which the proposed branch office is to be located and the ability of that community or area to support additional facilities.

(f) The corporate powers of the applicant.

(g) Any other factors required by rule to be considered.

(2) If the commissioner finds, after considering the above factors, that the public interest will not be served by permitting the establishment of the proposed branch office, he shall refuse to issue the certificate of authority.

D. A bank may acquire a business engaging in any of the banking powers described in R.S. 6:242(A) and operate the facility as a branch upon submission of an application for a certificate of authority to the commissioner and approval thereof as provided herein. The facility may be operated as a branch even if the bank does not lend money, receive deposits, or pay checks at that location.

E. No bank, savings bank, or savings and loan association shall lease a branch office unless such lease contract contains provisions that allow the bank, savings bank, or savings and loan association to comply with R.S. 6:507.

Acts 1986, No. 8, §1; Acts 1988, No. 39, §2, eff. June 10, 1988; Acts 1997, No. 606, §1; Acts 2003, No. 53, §1, eff. May 23, 2003.

§ 6:507 Closure of branch office

A. No bank or savings bank shall close a branch office except pursuant to the procedure provided by this Section.

B. At least ninety days prior to the closure date, the bank shall submit in writing to the commissioner detailed reasons for the necessity of the closure, evidence that the appropriate federal banking agency has been notified of said closure, and, if applicable, the location to which the branches' accounts and safe deposit boxes are to be transferred.

C. At least thirty days prior to the closure date, the bank shall post a notice in a conspicuous location in the branch office to be closed, that the branch office will be closed, stating the closure date and, if applicable, the location to which the branches' accounts and safe deposit boxes are to be transferred.

D. The requirements contained in Subsections B and C may be waived by the commissioner to prevent or alleviate any condition which he may reasonably expect to create an emergency relative to that financial institution, its employees, or its customers.

Acts 1987, No. 104, §1; Acts 1992, No. 62, §1, eff. Sept. 1, 1992; Acts 2003, No. 53, §1, eff. May 23, 2003.

PART II BANK HOLDING COMPANIES

§ 6:511 Declaration of policy

It is declared to be the policy of this state to foster commerce in this state by encouraging effective competition among banking institutions and to accomplish these objectives by permitting bank holding companies to own or control one or more banking institutions in Louisiana. It is further declared that a bank holding company is intended to contribute to the overall safety and soundness of its subsidiary banks and that bank holding companies as a whole should contribute to the health of the Louisiana banking industry.

Acts 1962, No. 275, §1, eff. July 10, 1962; Amended by Acts 1968, No. 610, §1; Acts 1984, No. 50, §1, eff. Jan. 1, 1985; Acts 1984, No. 719, §3, eff. Jan. 1, 1985; Acts 1985, No. 809, §1.

§ 6:512 Definitions

A.(1) "Bank holding company" means any company:

(a) Which directly or indirectly owns, controls, or has power to vote twenty-five percent or more of any class of the voting shares of any bank.

(b) Which controls in any manner the election of a majority of the directors of any bank.

(c) For the benefit of whose shareholders of which twenty-five percent or more of the voting shares of any bank or any bank holding company is held by trustees.*

(2) For the purposes of this Chapter, any successor to a bank holding company shall be deemed to be a bank holding company from the date as of which such predecessor company became a bank holding company.

(3) Notwithstanding Paragraphs (1) and (2):

(a) No company shall be deemed to be a bank holding company by virtue of its ownership or control of shares acquired in connection with its underwriting of securities, provided such shares are held only for such period of time as will permit the sale thereof upon a reasonable basis.

(b) No company formed for the sole purpose of participating in a proxy solicitation shall be deemed to be a bank holding company by virtue of its control of voting rights of shares acquired in the course of such solicitation.

(c) No company shall be deemed to be a bank holding company by virtue of its ownership or control of shares acquired in securing or collecting a debt previously contracted in good faith, provided such shares are disposed of within a period of two years from the date on which they were acquired. The commissioner is authorized upon application by a company to extend, from time to time for not more than one year at a time, the two-year period referred to herein, under such terms and conditions as required by the commissioner, but no such extension shall in the aggregate exceed three years.

(d) No company shall be deemed to be a bank holding company by virtue of its ownership or control of shares acquired in a fiduciary capacity except where such shares are held for the benefit of the shareholders of such company.

B. "Company" means any corporation, business trust, partnership, association, or similar organization including a bank but shall not include any corporation the majority of the shares of which are owned by the United States or by any state.

C. "Bank" means any commercial bank, savings bank, trust company, or similar organization.

D. "Subsidiary" with respect to a specified bank holding company means the following:

(1) Any company twenty-five percent or more of the voting shares of which, excluding shares owned by the United States or by any company wholly owned by the United States, is directly or indirectly owned or controlled by such bank holding company or is held by it with power to vote.

(2) Any company the election of a majority of the directors of which is controlled in any manner by such bank holding company.

(3) Any company twenty-five percent or more of the voting shares of which is held by trustees for the benefit of the shareholders of such bank holding company.

E. "Successor" includes any company which acquires directly or indirectly from a bank holding company shares of any bank, when and if the relationship between such company and the bank holding company is such that the transaction effects no substantial change in the control of the bank or beneficial ownership of such shares of such bank.

F. "Branch" or "branch office" means any manned office of a bank which would constitute a branch office within the meaning of R.S. 6:501 other than an automated teller machine, electronic funds transfer terminal, point of sale terminal, or similar electronic device or terminal.

Acts 1962, No. 275, §2. Acts 1984, No. 50, §1, eff. Jan. 1, 1985; Acts 1984, No. 719, §3, eff. Jan. 1, 1985; Acts 1986, No. 5, §1.

*AS APPEARS IN ENROLLED BILL.

§ 6:513 Prohibitions

It shall be unlawful:

(1) Until July 1, 1989, for any bank holding company or subsidiary thereof to open for business any bank not now opened for business whether or not a charter, permit, license, or certificate to open for business has already been issued.

(2) For any company to become a bank holding company unless the primary purpose of the corporation is the ownership or control of one or more banks.

(3) For any bank holding company, subsidiary, or employee thereof to engage in any insurance activity except an insurance activity authorized by R.S. 6:242. However, any bank holding company or subsidiary thereof which was engaged as a general insurance agent, or broker on January 1, 1984, may continue to be so engaged.

Acts 1962, No. 275, §3. Amended by Acts 1968, No. 610, §2; Acts 1983, No. 470, §1; eff. July 6, 1983; Acts 1984, No. 50, §1, eff. Jan. 1, 1985; Acts 1984, No. 719, §3, eff. Jan. 1, 1985; Acts 1986, No. 458, §1; Acts 1988, No. 39, §1, eff. June 10, 1988; Acts 1990, No. 611, §1, eff. July 19, 1990; Acts 1995, No. 681, §1; Acts 1997, No. 1475, §1, eff. July 15, 1997.

§ 6:514 Penalties

A. Any bank holding company or any subsidiary thereof which willfully violates any provision of this Chapter or any regulation or order issued by the commissioner of financial institutions pursuant thereto shall upon conviction be fined not less than five hundred dollars nor more than one thousand dollars for each day during which the violation continues.

B. Any individual who willfully participates in a violation of any provision of this Chapter shall upon conviction be fined not less than one thousand dollars nor more than five thousand dollars or imprisoned not more than one year, or both.

Acts 1962, No. 275, §4. Acts 1984, No. 50, §1, eff. Jan. 1, 1985; Acts 1984, No. 719, §3, eff. Jan. 1, 1985.

§ 6:515 Administration

A. The commissioner of financial institutions shall administer and carry out the provisions of this Chapter and may issue such regulations and orders as may be necessary to discharge this duty and to prevent evasions of this Chapter.

B. The commissioner may promulgate reporting, examination, and fee regulations for bank holding companies in accordance with the Administrative Procedure Act. Such regulations may include, but shall not exceed, the requirements established herein:

(1) Reports. Each bank holding company shall provide the office of financial institutions with a copy of its annual report submitted to the Federal Reserve Board. A bank holding company subject to a formal enforcement action by the Federal Reserve Board or any of its banks shall provide the office with copies of reports submitted to the Federal Reserve Board or one of its banks arising from such action.

(2) Examinations. The office may examine annually a bank holding company which has as its bank subsidiary or subsidiaries only state banks. The office may examine a bank holding company having more than one bank subsidiary, one of which is a national bank, whenever the commissioner knows or has reasonable cause to believe that an unsafe or unsound practice or condition exists or is likely to occur in any state bank subsidiary of such bank holding company.

(3) REPEALED BY ACTS 1992, No. 63, §1, Eff. JUNE 4, 1992.

Acts 1962, No. 275, §5. Acts 1984, No. 50, §1, eff. Jan. 1, 1985; Acts 1984, No. 719, §3, eff. Jan. 1, 1985; Acts 1985, No. 809, §1; Acts 1992, No. 63, §1, eff. June 4, 1992.

§ 6:516 Savings clause

A. Nothing herein contained shall be interpreted or construed as approving any act, action, or conduct which is or has been or may be in violation of any existing law, nor shall anything herein contained constitute a defense to any action, suit, or proceeding pending or hereafter instituted on account of any prohibited antitrust or monopolistic act, action, or conduct.

B. Repealed by Acts 1988, No. 39, §2, eff. June 10, 1988.

Acts 1962, No. 275, §6. Amended by Acts 1984, No. 50, §1, eff. Jan. 1, 1985; Acts 1984, No. 719, §3, eff. Jan. 1, 1985; Acts 1988, No. 39, §2, eff. June 10, 1988.

§ 6:517 Minority stockholders' rights

A. Subject to the provisions of Subsection B of this Section, it shall be unlawful for a bank holding company to purchase for cash or any other form of consideration any voting security or percentage of equity ownership of any bank or bank holding company if, after consummation thereof, such bank holding company would, directly or indirectly, be the beneficial owner of more than ten percent of the voting power or equity ownership of such bank or bank holding company, unless such purchase is made pursuant to a tender offer to the holders of all of the voting securities or all of the equity ownership. Any such tender offer shall provide that if more securities or ownership interests are tendered than are proposed to be acquired by the offeror, the securities shall be taken up, as nearly as may be, pro rata according to the number of voting securities or amount of equity ownership tendered by each shareholder or equity owner.

B. The provisions of Subsection A of this Section shall not apply to:

(1) Purchases by a bank holding company of:

(a) Its own shares; or

(b) The shares of any bank or bank holding company of which it owns more than fifty percent of the total voting power.

(2) Purchases which, when cumulated with all other acquisitions of voting securities or equity ownership during the preceding twelve months by such bank holding company, whether by purchase or otherwise, do not exceed two percent of the voting power or equity ownership.

(3) Open market purchases on an exchange or in the over-the-counter market effected through a broker in which neither the purchaser nor the broker, or any person acting on their behalf, solicits the seller.

(4) Purchases by any company which is not a bank holding company immediately prior to the purchase, including purchases in connection with the formation of a one-bank holding company.

(5) Transactions effected other than by way of a purchase of shares or equity ownership from the owner thereof.

Acts 1984, No. 50, §2, eff. Jan. 1, 1985; Acts 1984, No. 719, §3, eff. Jan. 1, 1985; Acts 1985, No. 127, §1, eff. June 29, 1985.

§ 6:518 Oppressed shareholder's remedies

A. For the purposes of R.S. 12:1-1435(I), if the corporation is a bank holding company, any obligation to purchase a withdrawing shareholder's shares shall be subject to any policy, limitation, requirement, order, plan, directive, or enforcement action of any regulatory agency having jurisdiction over the bank holding company or any subsidiary insured by the Federal Deposit Insurance Corporation and shall not cause the bank holding company or any subsidiary insured by the Federal Deposit Insurance Corporation to cease to be sufficiently capitalized under applicable law and regulations, or otherwise jeopardize the safety and soundness of the bank holding company or any of its subsidiaries insured by the Federal Deposit Insurance Corporation.

B. For the purposes of this Section, the term "bank holding company" has the meaning as set forth in 12 U.S.C. 1841.

Acts 2022, No. 261, §1.

PART III NONBANK BANKS

§ 6:521 Prohibitions

A. It shall be unlawful for a bank holding company to acquire direct or indirect ownership or control of any voting shares of any bank in this state if, after such acquisition, such bank holding company will, directly or indirectly, own or control five percent or more of the voting shares of such bank, or for any company to become a bank holding company as a result of the acquisition of control of a bank in this state, unless:

(1)(a) The bank being acquired is a bank for purposes of the Federal Bank Holding Company Act of 1956, as amended (12 U.S.C. 1841) and its deposits are insured by the Federal Deposit Insurance Corporation; or

(b) The bank being acquired is, for purposes of this Part, a federal savings and loan, a state savings and loan, or a federal savings bank and its deposits are insured by the Federal Deposit Insurance Corporation; and

(2) Until July 1, 1989, such bank being acquired has been in existence and continuously operating as a bank for a period of five years or more prior to the date of acquisition.

B. Nothing in this Section, however, shall prohibit a bank holding company from acquiring all, or substantially all, of the shares of the bank, or from organizing solely for the purpose of facilitating the acquisition of a bank which has been in existence and continuously operating as a bank for a period of five or more years.

C. Nothing in this Part shall be construed to permit a bank holding company or a bank with its principal office outside of Louisiana to establish a branch office or subsidiary within this state.

Acts 1985, No. 108, §1, eff. June 29, 1985.

PART IV INTERSTATE BANKING

§ 6:531 Declaration of policy

It is declared to be the policy of this state to facilitate the economic development of this state, to promote a more efficient allocation of financial resources, to improve access to credit for Louisiana individuals and businesses, and to reinforce the overall stability and soundness of the Louisiana banking industry by permitting the orderly expansion of competition among banking institutions on a multistate basis.

Acts 1986, No. 577, §1, eff. July 2, 1986.

§ 6:532 Definitions

As used in this Part, unless the context otherwise requires, the term:

(1) "Acquire", as applied to a bank holding company, means any of the following actions or transactions by a company:

(a) The merger or consolidation with one or more bank holding companies.

(b) The assumption of direct or indirect ownership or control of any of the following:

(i) More than twenty-five percent of any class of voting shares of a bank holding company or a bank, if the acquiring company was not a bank holding company prior to such acquisition.

(ii) More than five percent of any class of voting shares of a bank holding company or a bank, if the acquiring company was a bank holding company prior to such acquisition.

(iii) All or substantially all of the assets of a bank holding company or a bank.

(c) To take any other action that results in the direct or indirect acquisition or control by such company of a bank holding company or a bank.

(2) "Affiliate" means any company that controls, is controlled by, or is under common control with another company.

(3) "Bank" means any "insured bank", as such term is defined in Section 3(h) of the Federal Deposit Insurance Act, 12 U.S.C. 1813(h), or any institution eligible to become an insured bank as such term is defined therein, which, in either event:

(a) Accepts demand deposits, and

(b) Makes commercial loans.

(4) "Banking office" means any branch of an out-of-state bank.

(5) "Bank holding company" means any company that directly or indirectly controls a bank, and, unless the context requires otherwise, includes a Louisiana bank holding company, an out-of-state bank holding company, or a foreign bank holding company.

(6) "Branch" and "branch office" means any manned office of a bank but shall not include a trust production office, an automated teller machine, electronic funds transfer terminal, point of sale terminal, or similar electronic device or terminal. The term "branch" or "branch office" shall not include a loan production office or deposit production office or any combination thereof.

(7) "Commissioner" means the commissioner of financial institutions for the state of Louisiana.

(8) "Company" means any corporation, business trust, partnership, association, or similar organization, including a bank, but shall not include any corporation the majority of the shares of which are owned by the United States or by any state.

(9)(a) "Control" means any of the following:

(i) The power or ability, directly or indirectly, to vote or cause to be voted twenty-five percent or more of any class of voting securities of a company.

(ii) The power or ability in any manner to elect a majority of the directors or trustees of a company.

(b) This definition shall be construed consistently with the provisions of Section 2(a) of the Bank Holding Company Act, 12 U.S.C. 1841.

(10) "Deposits" means average daily deposits for a continuous period of six months ending on the date the determination of deposits is made.

(10.1) "Enter Louisiana" means to acquire control of the voting stock of a Louisiana bank or bank holding company owning one or more Louisiana banks. Additionally, it shall also include the acquisition of voting stock whereby the out-of-state bank or holding company does not obtain control of the voting stock but acquires a majority interest in any nonvoting stock or subordinated debt.

(11) "Established Louisiana bank" means a Louisiana bank which either:

(a) Has been in existence and actively engaged in business as a Louisiana bank for at least five years; or

(b) Is the successor by merger, consolidation, or purchase of the assets and assumption of the liabilities of a Louisiana bank which meets the test of Subparagraph (a) of this Paragraph.

(12) "Home state" means:

(a) With respect to a national bank, the state in which the main office of the bank is located.

(b) With respect to a state-chartered bank, the state which charters the institution.

(c) With respect to a bank holding company, the state in which the total deposits of all bank subsidiaries are the largest on the later of:

(i) July 1, 1966, or

(ii) The date upon which the company becomes a bank holding company pursuant to this Part.

(13) "Host state" means:

(a) With respect to a bank, a state, other than the home state of the bank in which the bank maintains, or seeks to establish and maintain, a branch or a loan or trust production office, and

(b) With respect to a bank holding company, a state, other than the home state of the company in which the company controls, or seeks to control, a bank subsidiary.

(14) "Louisiana bank" means a bank that has Louisiana as its home state.

(15) "Louisiana bank holding company" means a bank holding company that has Louisiana as its home state.

(16) "Out-of-state bank" means a bank other than a Louisiana bank.

(17) "Out-of-state bank holding company" means a bank holding company other than a Louisiana bank holding company.

(18) "Principal place of business" of a bank holding company means the state in which the aggregate deposits of the bank subsidiaries of such holding company are the largest.

(19) "Subsidiary" with respect to any bank holding company means any of the following:

(a) Any company twenty-five percent or more of the voting shares of which, excluding shares owned by the United States or by any company wholly owned by the United States, is directly or indirectly owned or controlled by such bank holding company or is held by it with power to vote.

(b) Any company the election of a majority of the directors of which is controlled in any manner by such bank holding company.

(c) Any company twenty-five percent or more of the voting shares of which is held by trustees for the benefit of the shareholders of such bank holding company.

Acts 1986, No. 577, §1, eff. July 2, 1986; Acts 1995, No. 1249, §1; Acts 1999, No. 263, §1; Acts 2001, No. 540, §1, eff. June 21, 2001; Acts 2020, No. 183, §1.

§ 6:533 Scope of Part

Subject to the other provisions of this Part:

(1) A Louisiana bank or bank holding company may acquire one or more out-of-state banks or branches thereof, or bank holding companies and, subject to the laws of the host state may convert these to branches of the Louisiana bank. For the purposes of this Paragraph, the term "bank" shall have the meaning set forth in R.S. 6:512(C).¹

(2) An out-of-state bank or bank holding company may acquire a Louisiana bank holding company, a Louisiana bank, or another out-of-state bank holding company having a Louisiana bank subsidiary.

(3) Effective June 1, 1997, an out-of-state bank holding company may convert its Louisiana bank or banks into branches of the out-of-state bank.

Acts 1986, No. 577, §1, eff. July 2, 1986; Acts 1989, No. 686, §2, eff. July 7, 1989; Acts 1995, No. 1249, §1.

¹As appears in enrolled bill.

§ 6:534 Law applicable to interstate bank branches; purpose

A. Pursuant to the Riegle-Neal Interstate Banking and Branching Efficiency Act of 1994 and the enactment of R.S. 6:531 et seq., the state permits and encourages interstate banking mergers to facilitate economic development of this state. In furtherance thereof, it is the purpose of this Section to ensure that Louisiana law applies to all banks conducting business in this state to the extent that such law is not preempted by federal law.

B. Pursuant to the Riegle-Neal Interstate Banking and Branching Efficiency Act of 1994 and R.S. 6:531 et seq., any multistate bank with a branch in the state of Louisiana may provide any banking services, including but not limited to collection, deposit, lock box, fiscal agency, fiduciary, custodial, or investment services, and state law shall not prohibit multistate banks having in-state banking offices paying the bank shares tax from providing such services. These multistate banks may provide such services to any party including, without limitation, the state and any state agency, board or commission, local board, political subdivision, and any other public or private entity, and such entities may procure such services from any such multistate bank, on the same terms as any bank with its main or principal office in Louisiana.

Acts 2001, No. 18, §1.

§ 6:535 Interstate acquisitions; filings with commissioner

A. An out-of-state bank holding company shall not acquire, directly or indirectly, a Louisiana bank holding company or a Louisiana bank or an out-of-state bank holding company having one or more Louisiana banks as subsidiaries unless it has filed with the commissioner all applications and other information filed with any federal agency in connection with such acquisition and paid a fee as prescribed by regulation of the commissioner.

B. If any out-of-state bank holding company makes an acquisition or engages in an activity or causes any of its subsidiaries to engage in an activity that is prohibited by this Part, the commissioner shall require such out-of-state bank holding company to terminate such activity or divest itself of its direct or indirect ownership or control of any Louisiana banks acquired in violation of this Part. In addition, the commissioner shall have the power to enforce any other prohibitions in this Part by requiring divestitures of nonconforming banks, bank holding companies, or assets, through the imposition of fines and penalties or through the exercise of such other remedies as shall be appropriate, including but not limited to judicial actions.

C. It shall be unlawful for any out-of-state bank holding company to enter this state, either directly or indirectly, by the acquisition of a Louisiana bank that is not an established Louisiana bank or a bank holding company that owns a Louisiana bank, as a subsidiary, that is not an established Louisiana bank.

Acts 1986, No. 577, §1, eff. July 2, 1986; Acts 1995, No. 1249, §1; Acts 1999, No. 122, §1, eff. Sept. 1, 1999; Acts 2021, No. 17, §1.

§ 6:536 Interstate bank acquisitions; filings with commissioner

A. An out-of-state bank shall not acquire, directly or indirectly, a Louisiana bank holding company or a Louisiana bank or an out-of-state bank holding company having one or more Louisiana banks as subsidiaries or the Louisiana branches of an out-of-state bank unless it has filed with the commissioner all applications and other information filed with any federal agency in connection with such acquisition, and paid a fee as prescribed by regulation of the commissioner.

B. If any out-of-state bank makes an acquisition or engages in an activity or causes any of its subsidiaries to engage in an activity that is prohibited by this Part, the commissioner shall require such out-of-state bank holding company to terminate such activity or divest itself of its direct or indirect ownership or control of any Louisiana banks or branches acquired in violation of this Part. In addition, the commissioner shall have the power to enforce any other prohibitions in this Part by requiring divestiture of nonconforming bank branches, bank holding companies, or assets, through the imposition of fines and penalties or through the exercise of such other remedies as shall be appropriate, including but not limited to judicial actions.

C. It shall be unlawful for any out-of-state bank to enter this state, either directly or indirectly, by the acquisition of a Louisiana bank that is not an established Louisiana bank or a bank holding company which owns, as a subsidiary, a Louisiana bank that is not an established Louisiana bank. However, if an out-of-state bank is operating in this state through branches, then another out-of-state bank company may enter Louisiana by acquisition of those branches.

Acts 1986, No. 577, §1, eff. July 2, 1986; Acts 1989, No. 686, §2, eff. July 7, 1989; Acts 1995, No. 1249, §1; Acts 1999, No. 122, §1, eff. Sept. 1, 1999; Acts 2021, No. 17, §1.

§ 6:537 Emergency acquisitions

A. The commissioner may approve any acquisition of a Louisiana bank that will be lawful under the provisions of R.S. 6:535, if all the following exist with respect to the Louisiana bank:

(1) It has an adjusted capital to assets ratio of less than four percent, according to the latest examination by the office of financial institutions or the Federal Deposit Insurance Corporation.

(2) It is the conclusion of the commissioner that the bank has major and serious problems or unsafe and unsound conditions which are not being satisfactorily addressed or resolved.

(3) It is the conclusion of the commissioner that the bank has a high potential for failure, although failure is not necessarily imminent.

B.(1) When the conservator has commenced the liquidation of a state bank under R.S. 6:391, the commissioner may authorize the formation of a new bank by a Louisiana or out-of-state bank holding company when a new bank will be used in a purchase and assumption or other transfer of assets and liabilities of a failed bank to maintain banking service to the community and prevent any loss on deposits of the failed bank.

(2) However, the following provisions shall govern the bid procedure in such a circumstance:

(a) The Federal Deposit Insurance Corporation shall set minimum bid requirements for assets and liabilities of the failed bank.

(b) The Federal Deposit Insurance Corporation's calculations and estimates of the minimum bid requirements shall be determinative.

(c) Bids for such assets and liabilities may be solicited from in-state banks, Louisiana bank holding companies, Louisiana multi-bank holding companies, individuals, groups of individuals, and out-of-state banks, out-of-state bank holding companies, out-of-state multi-bank holding companies, individuals and groups of individuals.

(d) The Federal Deposit Insurance Corporation may solicit such bids as are practicable from prospective purchasers or merger partners it determines, in its sole discretion, are both qualified and capable of acquiring assets and liabilities of the bank.

(e) If the minimum bid requirements are met by any of such entities, the bank shall be acquired by the bidder whose bid was determined by the Federal Deposit Insurance Corporation, in its sole discretion, to be the least costly and most acceptable bid from among those submitted.

(f)-(i) Repealed by Acts 1989, No. 686, §2, eff. July 7, 1989.

Acts 1986, No. 577, §1, eff. July 2, 1986; Acts 1989, No. 686, §§1 and 2, eff. July 7, 1989; Acts 1995, No. 1249, §1.

§ 6:537.1 Parity provision

In accordance with the provisions of the Riegle-Neil Interstate Banking and Branching Efficiency Act, a Louisiana bank or bank holding company may acquire an out-of-state bank or bank holding company or may branch into any other state to the same extent as any state chartered bank, national bank, foreign bank, or other similar institution in the host state in question may do so and shall have the right and power to exercise and enjoy all rights, powers, privileges, and immunities accorded to any state chartered bank, national bank, foreign bank, or other similar institution in the host state.

Acts 1995, No. 1249, §1.

§ 6:538 Five-year continuous operation requirement

The commissioner shall not approve an application for an acquisition under this Part unless the Louisiana bank to be acquired, or at least one Louisiana bank subsidiary of the bank holding company to be acquired, has as of the proposed date of acquisition been in existence and in continual operation for at least five years.

Acts 1986, No. 577, §1, eff. July 2, 1986; Acts 1995, No. 1249, §1.

§ 6:539 Agency activities; prohibitions

A. In accordance with the rules, regulations, policies, and procedures of the office of financial institutions, any Louisiana state-chartered financial institution may receive deposits, renew time deposits, close loans, service loans, and receive payments on loans and other obligations as an agent for any other financial institution.

B. Notwithstanding any other provision of law, any Louisiana financial institution acting as an agent in accordance with Subsection A of this Section shall not be considered to be a branch of the other financial institution for which it acts as agent.

C. In acting as an agent pursuant to this Section, a state-chartered bank may:

(1) Conduct any activity which such institution is not prohibited from conducting as a principal under any applicable federal or state law, or

(2) As a principal, have an agent conduct under this Section any activity which the institution is not prohibited from conducting under any applicable federal or state law.

D. No provision of this Section shall be construed as affecting either of the following:

(1) The authority of any financial institution to act as an agent on behalf of any other financial institution under any other provision of law.

(2) Whether a financial institution which conducts any activity as an agent on behalf of any other financial institution under any other provision of law shall be considered to be a branch of such other institution.

E. Agency relationships by and between financial institutions as provided in this Section shall be on terms that are consistent with safe and sound banking practices and all applicable regulations of any appropriate state or federal banking supervisory agency.

Acts 1986, No. 577, §1, eff. July 2, 1986; Acts 1995, No. 1249, §1.

§ 6:540 Authority to issue regulations; cooperative agreements; fees; enforcement

A. In order to carry out the purpose of this Part, the commissioner may:

(1) Adopt regulations, in accordance with the Administrative Procedure Act, consistent with the scope of this Part, which are designed to regulate and supervise the activities of financial institutions doing business in Louisiana.

(2) Enter into cooperative, coordinating, or information-sharing agreements with any other banking supervisory agency.

(3) Accept any report of examination or investigation by another banking supervisory agency having concurrent jurisdiction over a Louisiana bank holding company, a Louisiana bank, or a banking office, in lieu of conducting the commissioner's own examination or investigation of such bank holding company or bank.

(4) Perform joint examinations or enter into joint enforcement actions with any other state or federal bank supervisory agency having concurrent jurisdiction over any state bank holding company or state bank. However, the commissioner may take any such action independently if the commissioner determines that such action is necessary or appropriate to carry out his responsibilities under this Chapter and insure compliance with the laws of this state.

(5) Assess supervisory and examination fees that shall be payable by Louisiana banks and Louisiana bank holding companies in connection with the commissioner's performance of his duties under this Title and in accordance with regulations adopted by the commissioner. Such fees may be shared with other bank supervisory agencies in accordance with agreements between them and the commissioner.

(6) Notwithstanding any other provisions of law to the contrary, enter into agreements with other state and federal bank supervisory agencies having jurisdiction over a state bank or state bank holding company for the purpose of providing compensation to personnel of said bank supervisory agencies for their services in connection with the commissioner's performance of his duties under this Title and in accordance with regulations adopted by the commissioner. Such contracts or like business agreements entered into by the commissioner under the provisions of this Section shall not be considered professional services contracts for the purchase of professional, personal, consulting, or contract services pursuant to R.S. 39:1482. As such, such contracts or like business agreements shall not require the prior approval of the office of state procurement of the division of administration.

B.(1) Any out-of-state bank holding company that has a Louisiana bank subsidiary and that is not organized under the laws of this state shall:

(a) Qualify to do business in this state.

(b) Advise the commissioner of the location of its registered office within this state and the name of its initial registered agent at such location.

(c) Agree to be bound by all the provisions of this Part.

(d) Promptly advise the commissioner of any changes in its registered office and registered agent.

(2) To the extent specified by the commissioner by regulation, order, or written request, each bank holding company that controls a Louisiana bank, Louisiana bank holding company, or banking office shall submit the following information to the commissioner:

(a) One or more copies of each report filed with any bank supervisory agent, except for any report the disclosure of which would be prohibited by applicable federal or state law, within fifteen days after the filing thereof with such agency.

(b) An annual report to be submitted no later than April fifteenth of each year, specifying, as to the end of the preceding calendar year, for each bank and branch, except for an ATM located in Louisiana and owned or controlled by the bank holding company:

(i) The location.

(ii) The amount of deposits held.

(iii) The amount of loans outstanding.

(3) At the request of the commissioner, to the extent permitted by applicable state or federal law, each bank holding company that controls a Louisiana bank, Louisiana bank holding company, or banking office shall provide to the commissioner copies of the reports of examination of any Louisiana bank or Louisiana bank holding company.

C. The commissioner may enforce the provisions of this Part according to the authority granted to him in R.S. 6:121.1.

Acts 1986, No. 577, §1, eff. July 2, 1986; Acts 1995, No. 1249, §1; Acts 1999, No. 263, §1; Acts 2014, No. 864, §§4 and 5.

§ 6:540.1 Savings clause

Nothing in this Part shall be interpreted or construed as approving any act, actions, or conduct which is or has been or may be in violation of any existing law, nor shall anything herein contained constitute a defense to any action, suit, or proceeding pending or hereafter instituted on account of any prohibited antitrust or monopolistic act, action, or conduct.

Acts 1995, No. 1249, §1.

§ 6:540.2 Construction with other laws

A. The provisions of R.S. 6:511 through 517 shall be applicable to a bank holding company, as defined in this Part, operating in Louisiana, but the restrictions on acquisitions contained therein shall continue to apply only to acquisitions in this state and the restrictions on activities shall continue to apply only to restrict activities in this state.

B. Except as expressly provided herein, nothing contained in this Part shall be construed to amend or modify the provisions of any other law governing the supervision or regulation of banks and bank holding companies or the organization and powers of the commissioner with respect thereto. In particular, and not by way of limitation of the scope of the preceding sentence, nothing in this Part shall be construed to alter, amend, or repeal the prohibitions against the establishment of branch banking offices contained in R.S. 6:501 through R.S. 6:506.

C. The provisions of R.S. 6:124.1 shall apply to out-of-state banks and bank holding companies acquiring Louisiana banks, bank holding companies, or banking offices to the same extent as they apply to in-state banks and bank holding companies.

D. The provisions of R.S. 9:3554(L) shall apply to all national banks, foreign bank branches, out-of-state banks, and bank holding companies in the same manner as they apply to Louisiana banks.

Acts 1995, No. 1249, §1; Acts 1999, No. 263, §1.

PART V FINANCIAL SERVICE CENTER BANKS

§ 6:541 Declaration of policy

In order to encourage the development of the financial services industry within this state, thereby increasing employment opportunities and broadening the tax base, it is declared to be the policy of the state of Louisiana to promote the organization of financial service center banks and the retention of existing financial services within the state.

Acts 1987, No. 808, §1.

§ 6:542 Definitions

The following definitions shall apply for purposes of this Part:

(1) "Bank" means a banking or similar corporation organized under the banking or currency laws of the United States of America or of this state which:

(a) Makes commercial or consumer loans; or

(b) Accepts deposits; and

(c) Is eligible for insurance by the Federal Deposit Insurance Corporation.

(2) "Bank holding company" means "bank holding company" as defined in R.S. 6:512(A)(1) and includes bank holding companies domiciled in other states.

(3) "Financial service center bank" means a bank organized and operating in accordance with the provisions of this Part.

(4)(a) "Louisiana borrower" or "Louisiana customer" means any of the following:

(i) A person domiciled in Louisiana.

(ii) A corporation, partnership, or trust organized under Louisiana law.

(iii) A corporation, partnership, or trust organized under the laws of another state which has its principal offices in Louisiana.

(iv) A Louisiana governmental agency or instrumentality.

(b) "Louisiana borrower" does not include a Louisiana guarantor of a loan to a borrower domiciled outside of Louisiana or an employee of the financial service center bank.

(5) "Resident" means anyone living in Louisiana at the time of acquiring a license of institution.

Acts 1987, No. 808, §1.

§ 6:543 Limited exception to bank holding company acts

A. Notwithstanding any other law to the contrary, a bank holding company, including a bank holding company domiciled in another state, may establish one or more financial service center banks in Louisiana, provided that each financial service center bank limits its activities to those authorized under this Part and complies with the applicable requirements of R.S. 6:547.

B. Nothing in this Section or in this Part shall be construed to permit a bank holding company with principal offices outside of Louisiana to acquire, own, or control a bank in this state which is not a financial service center bank organized under this Part.

Acts 1987, No. 808, §1.

§ 6:544 Organization of financial service center banks

A. Financial service center banks shall be organized in the manner provided in Subchapter A of Chapter 3 of this Title, except that:

(1) The articles of incorporation of a financial service center bank shall expressly provide that such bank shall limit its activities to only those authorized in this Part.

(2) At least one of the organizers or directors of a financial service center bank must be a resident of Louisiana.

(3) A financial service center bank shall include the phrase "financial service center bank" in its corporate name.

(4) A financial service center bank organized under this Part shall have a minimum initial capital of five million dollars.

(5) A financial service center bank may not merge with or acquire another financial institution domiciled in this state, nor may a financial service center bank convert into another type of financial institution.

B. In addition to the criteria provided in R.S. 6:214, to the extent applicable, the commissioner shall consider the unemployment figures for the community in which the proposed financial service center bank is to be located when granting a charter for such an institution.

Acts 1987, No. 808, §1.

§ 6:545 Powers and functions

A. Financial service center banks shall have all of the powers and functions authorized in Part IV of Subchapter A of Chapter 3 of this Title, except that a financial service center bank or any subsidiary thereof may not:

(1) Make or purchase a loan or other extension of credit to a Louisiana borrower.

(2) Accept deposits from a Louisiana customer.

(3) Be the lessor of movable property to be initially located in this state.

(4) Perform trust services for a Louisiana customer.

(5) Perform discount brokerage services for a Louisiana customer.

(6) Advertise for loans, deposits, leases of movable property, trust or discount brokerage services, where such advertisements are primarily directed to Louisiana customers.

(7) Advertise in any manner, directly or indirectly, as being engaged in the business of banking in this state, unless such advertisements are primarily directed towards non-Louisiana residents or companies.

(8) Maintain teller windows or drive-up facilities at any location within this state.

(9) Own or operate electronic funds terminals at any location within this state.

B. Notwithstanding the provisions of R.S. 6:545(A)(1), a financial service center bank may purchase a participation interest in a loan or other extension of credit to a Louisiana borrower where such a participation interest is purchased from a bank or other lender domiciled outside of Louisiana or from a non-affiliated bank or savings and loan association with its principal offices in this state.

C. A financial service center bank may make a loan or other extension of credit to a non-Louisiana borrower that is secured by immovable or movable property located in Louisiana.

D. A financial service center bank may enter into agreements for sharing electronic funds terminals with financial institutions domiciled in this state, subject to the restrictions contained in R.S. 6:545(A)(9).

Acts 1987, No. 808, §1.

§ 6:546 Additional powers; rate export

A. Financial service center banks shall have the following additional powers:

(1) To engage in permissible activities authorized under this Part in other states, including but not limited to the making of loans to non-Louisiana borrowers, without such activities being considered or criticized as being extra-territorial.

(2) To establish loan production offices at locations outside of Louisiana. All loans arranged by such loan production offices shall be approved in advance by the financial service center bank at its main office in Louisiana. While such loans may be closed in other states, the loan proceeds must be disbursed from Louisiana.

(3) To lease movable property to be initially located outside of Louisiana without limitation or restrictions. Financial service center banks may establish wholly-owned leasing subsidiaries for such purposes, which may have offices outside of Louisiana. Loans by financial service center banks to their wholly-owned leasing subsidiaries shall be exempt from the lending limit restrictions of R.S. 6:415.

(4) To provide discount brokerage services to non-Louisiana customers without limitation or restrictions and to establish wholly-owned discount brokerage subsidiaries for such purposes, which may have offices outside of Louisiana.

(5) To perform such additional activities as may be approved by regulations of the commissioner.

B.(1) Notwithstanding any other law to the contrary, there shall be no limitation on the amount or rates of interest that may be assessed by a financial service center bank in connection with any loan or other extension of credit.

(2) There shall be no limitation on the amount of additional fees and charges that may be assessed by a financial service center bank in connection with any loan or other extension of credit. Such additional fees and charges shall be deemed to be material to the determination of the interest rate for purposes of this Subsection and for purposes of the most favored lender doctrine of federal law.

(3) Financial service banks entering into loans and other extensions of credit may provide in their promissory notes or credit agreements that such transactions will be subject to the substantive laws of this state.

Acts 1987, No. 808, §1.

§ 6:547 Additional requirements

A. Except as provided in R.S. 6:547(B), a financial service center bank shall have:

(1) A minimum of twenty-five full-time employees in Louisiana of whom twenty shall be residents of Louisiana within twelve weeks from the time of commencement of business and continuously thereafter throughout its first year of operation.

(2) A minimum of fifty full-time employees in Louisiana of whom forty shall be residents of Louisiana by the end of the first full year of operation and continuously for one year thereafter.

(3) A minimum of seventy-five full-time employees in Louisiana of whom sixty shall be residents of Louisiana by the end of the second full year of operation and continuously for one year thereafter.

(4) A minimum of one hundred full-time employees in Louisiana of whom seventy-five shall be residents of Louisiana by the end of the third full year of operation and at all times thereafter.

B. All data processing activities of financial service center banks shall be performed in Louisiana by the financial service center bank, its Louisiana subsidiary, or by a bank holding company domiciled in Louisiana or by a subsidiary thereof. If the financial service center bank's data processing activities are performed by a bank holding company domiciled in Louisiana or a subsidiary thereof, such activity shall not be considered to constitute branch banking prohibited by R.S. 6:501, et seq. For financial service center banks whose data processing activities are performed by a Louisiana bank holding company or a subsidiary thereof, the employee requirements established in R.S. 6:547(A) shall be reduced to (1) twelve, (2) twenty-five, (3) thirty-seven, and (4) fifty full-time employees, respectively.

C. All credit related decisions by a financial service center bank shall be made in Louisiana.

D. All books and records and all loan documentation of a financial service center bank shall be maintained at its principal office in Louisiana and shall be available for inspection and examination by the office of financial institutions.

E. Financial service center banks shall be subject to taxation by the state in the same manner as state banks.

F. Unless otherwise provided in this Part or in regulations issued by the commissioner, financial service center banks shall be subject to all applicable laws of the state of Louisiana.

Acts 1987, No. 808, §1.

§ 6:548 Interest rate parity; open-end credit

A. It is the purpose of this Section to provide for parity between Louisiana creditors and non-Louisiana financial institutions extending open-end credit in this state, as well as to promote the retention of existing financial services within the state by encouraging Louisiana creditors to continue their open-end credit operations in this state rather than relocating those operations to other states with interest rates, fees, and credit terms which may not be available under Louisiana law and exporting such interest rates, fees, and credit terms back to Louisiana under the "most favored lender" doctrine of federal law.

B. Louisiana creditors offering open-end credit may assess finance charges, and credit service charges, as well as fees and charges that are material to the determination of the interest rate, in connection with open-end credit accounts, at such rates and in such amounts which equal or are less than the amounts that financial institutions domiciled in any other state are permitted to impose and collect when extending credit to Louisiana customers as a result of the "most favored lender" doctrine of federal law.

C. A Louisiana creditor which seeks to utilize the provisions of Subsection B of this Section shall file with the office of financial institutions an affidavit setting forth the rates and fees to be charged, the state where such rates and fees are permissible, and the identity of one or more of the financial institutions domiciled in that state which offer open-end credit accounts to Louisiana customers. A Louisiana creditor may file an affidavit to assess rates and fees from other states in amounts which are otherwise permissible under Louisiana law.

D. "Open-end credit account" means an arrangement between a creditor and a customer in which:

(1) The creditor permits the customer to obtain credit advances on a pre-authorized basis.

(2) The creditor reasonably contemplates repeated transactions.

(3) The creditor may assess interest on the outstanding unpaid balance of the customer's account.

(4) The amount of credit that may be extended to the customer, up to any limit set by the creditor, is generally made available to the extent that any unpaid balance is repaid.

E. As used in this Section, "Louisiana creditor" means any state bank or national bank, savings and loan association, credit union, or other extender of retail credit.

F. For purposes of this Section, and Title 12, Sections 85, 1831d, and 1730g of the U.S. Code, all as applicable to the exportation of interest rates and any fees and charges which are material to their determination, any interest rates, finance charges, credit service charges, and other fees and charges imposed by Louisiana creditors pursuant to this Section shall be authorized interest rates, finance charges, credit service charges, and other fees and charges in amount as well as manner and method of computation under Louisiana law.

G. Any interest, finance charges, credit service charges, or other fees or charges which are adopted from another state by a Louisiana creditor, including those which are otherwise permissible in an amount under Louisiana law, may be assessed, accrued, earned, or charged in the same manner or according to the same method as permitted under the law of the state from which they have been adopted, regardless of whether such manner or method is material to the determination of the interest rate under the law of that state.

H. For purposes of this Section, Louisiana creditors may impose interest, finance charges, credit service charges, or other fees and charges from one or more open-end credit accounts offered by financial institutions in other states in connection with a single open-end credit account.

Acts 1987, No. 808, §1; Acts 1990, No. 198, §1; Acts 1990, No. 709, §1, eff. July 20, 1990; Acts 1997, No. 1207, §1.

{{NOTE: Acts 1990, No. 709, §3, provides that its provisions supersede those of Acts 1990, No. 198, to the extent of conflict (Subsection F).}}

CHAPTER 7 INTERNATIONAL BANKING ACTIVITIES

PART I ACTIVITIES OF FOREIGN BANKS

§ 6:551.1 Definitions

For purposes of this Part the following definitions shall apply:

(1) "Agency" means any office or any place of business of a foreign bank located in any state of the United States at which credit balances are maintained incidental to or arising out of the exercise of banking powers, checks are paid, or money is lent, but at which deposits may not be accepted.

(2) "Branch" means any office or any place of business of a foreign bank located in any state of the United States at which nonretail deposits are received, specifically only those allowed by the International Banking Act of 1978.

(3) "Commissioner" means the commissioner of financial institutions.

(4) "Credit balances" are funds received at the agency incidental to or arising out of the exercise of its authorized activities in this state that are not intended to be deposits and that do not remain in the agency after the transaction or transactions to which they relate are completed.

(5) "Federal agency" means an agency of a foreign bank established and operating under the International Banking Act of 1978.

(6) "Federal branch" means a branch of a foreign bank established and operating under the International Banking Act of 1978.

(7) "Foreign bank" means any company organized under the laws of a foreign country, a territory of the United States, Puerto Rico, Guam, American Samoa, or the Virgin Islands, which engages in the business of banking, or any subsidiary or affiliate, organized under such laws, of any such company. For the purposes of this Part the term "foreign bank" includes without limitation foreign commercial banks, foreign merchant banks, and other foreign institutions that engage in banking activities usual in connection with the business of banking in the countries where such foreign institutions are organized or operating. The term "foreign bank" shall include a corporation of which the sole shareholders are one or more foreign banks or holding companies which own or control one or more foreign banks which are authorized to carry on a banking business, or a central bank or government agency of a foreign country and any affiliate or division thereof, which has the power to receive deposits from the general public in the country where it is chartered and organized, and which is under the supervision of the central bank or other bank regulatory authority of such country.

(8) "Limited federal agency" means a federal agency licensed by the comptroller which, pursuant to an agreement between the parent foreign bank and the Federal Reserve Board, can receive only such deposits and make only such loans as are permissible under the International Banking Act of 1978.

(9) "Office" means any state representative office, agreement corporation, state administrative office, or international bank facility.

(10) "State agency" means an agency of a foreign bank established and operating under the laws of this state.

(11) "State branch" means a branch of a foreign bank established and operating under the laws of this state.

(12) "State representative office" means a representative office of a foreign bank which has been granted a certificate of authority and is operating in this state that engages solely in representative and administrative functions, such as soliciting new business or acting as a liaison between the bank's main office and customers in this state. Such offices shall not make business decisions, except those relating to the premises and personnel of the office, for the foreign bank including contracting for any deposit or deposit-like liability on behalf of the foreign bank.

Acts 2004, No. 420, §1.

§ 6:551.2 Foreign banking activities; authorized

A foreign bank may open and operate a representative office, administrative office, agency, branch, subsidiary bank, or an Edge Act or agreement corporation or operate as an international banking facility in this state subject to the provisions of this Chapter and applicable federal law.

Acts 2004, No. 420, §1.

§ 6:551.3 Subsidiary bank; authorization

A. A foreign bank may establish a subsidiary bank in this state subject to the provisions of this Chapter and applicable federal law.

B. A foreign bank may acquire a subsidiary bank in this state in accordance with the federal Bank Holding Company Act and other applicable federal and state law.

C.(1) A foreign bank may operate a subsidiary bank in this state by organizing a new bank in this state either under a charter issued by the office of the comptroller of the currency under the National Bank Act or a state charter issued by the commissioner of financial institutions.

(2) An application for a state-chartered subsidiary bank shall be submitted to the commissioner of financial institutions and shall comply with all applicable provisions of state law.

D. All deposits in the subsidiary bank shall be insured by the Federal Deposit Insurance Corporation.

E. A subsidiary bank of a foreign bank shall have the same banking powers, subject to the same restrictions, limitations, reporting, and other requirements as domestic banks and may engage in the same banking activities as other domestic banks.

Acts 2004, No. 420, §1.

§ 6:551.4 Edge Act or agreement corporation; authorization

A. Any United States bank or foreign bank may organize or acquire a subsidiary to engage in international banking activities specifically authorized in the Edge Act. This subsidiary may be an Edge Act corporation chartered pursuant to federal law or an agreement corporation chartered under state law.

B. An agreement corporation is a corporation chartered under the provisions of this Chapter subject to the approval by the commissioner of financial institutions in which the corporation agreed with the board of governors of the federal reserve system to limit its activities to those permitted to an Edge Act corporation.

Acts 2004, No. 420, §1.

§ 6:551.5 Location; limitation

A foreign bank may, upon compliance with this Part, establish and operate a state agency, branch, bank, or office in any parish of this state.

Acts 2004, No. 420, §1.

§ 6:551.6 Filing requirements

Before transacting business in this state through a state agency, branch, or office a foreign bank shall file with the commissioner:

(1) A duly authenticated copy of its articles of incorporation and bylaws or other constitutive documents, and if a copy is in a language other than English, a translation of the document, under the oath of the translator, must be attached.

(2) A duly executed instrument, by its terms of indefinite duration and irrevocable, appointing the commissioner as its agent for service of process on whom a notice or process issued by a court in this state may be served in an action or proceeding relating to the business of the foreign bank in this state.

(3) A written certificate of designation, which may be changed from time to time by the filing of a new certificate of designation, specifying the name and address of the officer, agent, or other person to whom such notice or process shall be forwarded by the commissioner.

Acts 2004, No. 420, §1.

§ 6:551.7 Requirements to operate; fees

A foreign bank may not maintain and operate a state agency, branch, or office in this state unless the foreign bank:

(1) Is authorized by its charter to carry on such a business and the foreign bank has complied with the laws of the country under which it is chartered.

(2) Has furnished to the commissioner proof of the nature and character of its business and of its financial condition that the commissioner requires.

(3) Has filed with the commissioner a certified copy of the information required by R.S. 6:551.6.

(4) Has paid an application fee to be determined by the commissioner as reasonable, fair, and sufficient for the management and oversight required by this Chapter.

(5) Has been issued a certificate of authority by the commissioner.

Acts 2004, No. 420, §1.

§ 6:551.8 Application required; contents

A. To obtain a certificate of authority for, or authority to operate, a state agency, branch, or office, a foreign bank must submit to the commissioner an application which shall set forth:

(1) The name of the foreign bank, together with the country under the laws of which it was organized.

(2) The date of its incorporation and the period of its duration.

(3) The address of its principal office in the country under the laws of which it was organized.

(4) The name of other states and countries in which it is admitted or qualified to transact business.

(5) The names and addresses of its directors and principal officers.

(6) A complete and detailed statement of its financial condition including the actual value of its assets.

(7) A copy of any applications it is required to file with any federal agencies to establish the agency, branch, or office.

(8) Such additional information as may be necessary and appropriate or as may be required by the commissioner.

B. The approval of the Office of Financial Institutions shall be required to establish any subsequent state branches, agency offices, or other offices. The Office of Financial Institutions shall be authorized to promulgate any necessary rules and fees in order to provide for these additional locations.

C. Any applications or notifications filed under this Section shall also be filed with the Louisiana Tax Commission.

D. All applications, notifications, and correspondence filed with the Office of Financial Institutions shall be in English.

Acts 2004, No. 420, §1.

§ 6:551.9 Approval or disapproval of application

A. The commissioner may approve or disapprove an application but may not approve an application unless the requirements of this Part relating to the foreign banks are met.

B. The commissioner may disapprove an application if he determines that:

(1) The foreign bank is organized in a country that does not permit banks organized under the laws of this state to undertake activities similar to those described in this Part; or

(2) Granting an application of a foreign bank would be detrimental to the public interest.

Acts 2004, No. 420, §1.

§ 6:551.10 Certificate of authority; transfer prohibited; display required

A foreign bank may engage in the business authorized by the provisions of this Part for not more than one year after the date of the certificate of authority or until the certificate of authority is suspended or revoked. No such certificate of authority shall be transferable or assignable. Every such certificate of authority shall be, at all times, conspicuously displayed in the place of business specified in the certificate of authority.

Acts 2004, No. 420, §1.

§ 6:551.11 Renewal

A certificate of authority may be renewed annually within thirty days before the expiration of such certificate of authority upon application to the commissioner. Such certificate of authority may be renewed upon a determination that the foreign bank is in a safe and satisfactory condition, that it has complied with the requirements of law with respect to the branch, agency, or office, that such renewal is duly authorized by proper corporate action, and that a renewal fee of one thousand dollars has been paid.

Acts 2004, No. 420, §1.

§ 6:551.12 Revocation and surrender

A. A certificate of authority may be revoked by the commissioner at any time upon a determination that the foreign bank has not met the criteria established by R.S. 6:551.11 for the renewal of a certificate of authority.

B. In the event that a certificate of authority is revoked or a renewal refused by the commissioner, all rights and privileges of the foreign bank to transact the business thus granted through the certificate of authority shall cease, and such certificate of authority shall be surrendered to the commissioner within twenty-four hours after the licensee has received written notice of such decision.

Acts 2004, No. 420, §1.

§ 6:551.13 State agency; authorized actions

A foreign bank granted a certificate of authority to transact business in this state through a state agency may:

(1) Borrow and lend money with or without real or personal security.

(2) Purchase, sell, and make loans whether or not secured by bonds or mortgages on immovable property.

(3) Engage in foreign exchange transactions.

(4) Issue, advise, confirm, and otherwise deal with letters of credit and pay, accept, or negotiate drafts drawn thereunder.

(5) Accept bills of exchange or drafts.

(6) Buy or acquire and sell or dispose of but not discount bills of exchange, drafts, notes, acceptances, and other obligations for the payment of money.

(7) Maintain credit balances.

(8) Receive money for transmission and transmit the money from its authorized office in this state to any other place.

(9) Perform such other activities as the commissioner may from time to time determine are analogous or incidental to the foregoing; provided that the foreign bank corporation may not exercise fiduciary powers or receive deposits in this state and may not otherwise exercise banking or discounting privileges in this state.

Acts 2004, No. 420, §1.

§ 6:551.14 State representative office; authorization; permitted activities

A. With the authorization of the commissioner of financial institutions, a foreign bank may, subject to approval from the Federal Reserve Board, establish a representative office in this state subject to the provisions of this Chapter and applicable federal law.

B. A representative office may engage in the following activities in this state:

(1) Promote and assist the deposit-taking, lending, or other financial or banking activities of a foreign bank.

(2) Serve as liaison in this state between a foreign bank and its existing or potential customers.

(3) Solicit business for the foreign bank and its subsidiaries and affiliates.

(4) Provide information to foreign bank customers concerning their accounts, answer questions, and receive applications for extensions of credit and other banking services, and transmit documents on behalf of customers.

(5) Make arrangements for customers to transact business on their accounts.

C. A representative office may not receive deposits, pay checks or other instruments, or make loans.

Acts 2004, No. 420, §1.

§ 6:551.15 State administrative office; authorization; permitted activities

A. With the authorization of the commissioner of financial institutions, a foreign bank may, subject to approval from the Federal Reserve Board, establish a state administrative office in this state subject to the provisions of this Chapter and applicable federal law.

B. An administrative office may engage only in the following activities:

(1) Administration of personnel and operations.

(2) Engage in data processing or recordkeeping activities.

Acts 2004, No. 420, §1.

§ 6:551.16 Branch banks and agencies

A. A federal agency or branch may engage in activities in this state as authorized under the International Banking Act of 1978, as amended, and any other applicable federal law.

B. A foreign bank may establish a state-authorized branch or agency in this state pursuant to a certificate of authority issued by the commissioner.

C. A state branch may establish one or more branches in this state to the same extent permitted banks from other states and shall have the same rights and privileges as federally licensed foreign branch banks. A federal branch shall maintain accounts and records separate from those of its parent foreign bank of which it is a branch.

D. A branch of a foreign bank operating in this state may not accept public deposits.

Acts 2004, No. 420, §1.

§ 6:551.17 State international banking facilities

A. Any branch or agency of a foreign bank, domestic bank, and any Edge Act or agreement corporation may establish and maintain a state international banking facility, subject to the authorization of the commissioner of financial institutions.

B. A state international banking facility is a separate set of accounts segregated on the books and records of such financial entity which includes only international time deposits and international loans, as well as income and expense accounts relating to its international loans and accounts.

C. An entity establishing a state international banking facility may accept deposits only in such facility from foreign residents, other international banking facilities, and other offices of the institution which created the state international banking facility. Deposits and extensions of credit shall be used only to support customer operations outside the United States.

Acts 2004, No. 420, §1.

§ 6:551.18 Purchase of real estate

A foreign bank's authority to purchase and own real estate and loan money in this state is subject to the limitations imposed on state banks.

Acts 2004, No. 420, §1.

§ 6:551.19 Paid-in capital; surplus; undivided profits

Before opening a branch, agency, or office in this state and annually thereafter so long as a branch, agency, or office is maintained in this state, a foreign bank granted a certificate of authority pursuant to this Part shall certify to the commissioner the amount of its paid-in capital, its surplus, and its undivided profits, each expressed in the currency of the country of its incorporations; the dollar equivalent of which amount, as determined by the commissioner, shall be deemed to be the amount of its capital, surplus, and undivided profits.

Acts 2004, No. 420, §1.

§ 6:551.20 Capital requirements

Every foreign bank issued a certificate of authority to transact business in this state under the provisions of this Chapter shall comply with the following requirements, in addition to other requirements specifically provided in this Chapter:

(1) Except as provided in Paragraph (2) of this Subsection, a foreign bank shall have total capital accounts in the following minimum amounts:

(a) Twenty-five million dollars for the establishment of an agency, a branch, administrative office, agreement corporation, or international bank facility.

(b) Ten million dollars for the establishment of an international representative office.

(2) The commissioner of financial institutions may approve an application for a certificate of authority to establish an agency, branch, or office if:

(a) The foreign bank is licensed to receive deposits from the general public in the country where it is organized and licensed to engage in such other activities as are usual in connection with the business of banking in such country;

(b) The commissioner receives a certificate that is issued by the banking or supervisory authority of the country in which the foreign bank is organized and licensed which states that the foreign bank is duly organized and licensed and lawfully existing in good standing, and is empowered to conduct a banking business; and

(c) The foreign bank has been in the business of banking for at least ten years. However, the commissioner shall not approve any application under this Section for a foreign bank having capital accounts of less than ten million dollars.

(3) The commissioner may specify such other conditions as he determines appropriate, considering the public interest, the need to maintain a sound and competitive banking system, and the preservation of an environment conducive to the conduct of an international banking business in this state. In translating the capital accounts of a foreign bank, the commissioner may consider monetary corrections accounts that reflect results consistent with the requirements of generally accepted accounting principles in the United States.

(4) For the purpose of this Chapter, the capital accounts of a foreign bank shall be determined in accordance with rules adopted by the commissioner. In adopting such rules, the commissioner shall consider similar rules adopted by bank regulatory agencies in the United States and the need to provide reasonably consistent regulatory requirements for international banking corporations which will maintain the safe and sound condition of international banking corporations doing business in this state.

Acts 2004, No. 420, §1.

§ 6:551.21 Purchase of credit instruments

Purchases and discounts of bills of exchange, bonds, debentures, and other obligations and extensions of credit and acceptances by an agency or branch within this state shall be subject to the same limitations as to amount in relation to capital, surplus, and undivided profits as are applicable to banks organized under the laws of this state; provided that with the prior approval of the commissioner, the capital notes and capital debentures of such foreign banks may be treated as capital in computing such limitations.

Acts 2004, No. 420, §1.

§ 6:551.22 Annual report and periodic reporting requirements

A. Every foreign bank doing business in this state and subject to this Chapter shall, at such times and in such form as the commissioner shall prescribe, make written reports in the English language to the commissioner under the oath of one of its officers, managers, or agents transacting business in this state, showing the amount of its assets and liabilities and containing such other matters as the commissioner shall prescribe. If any foreign bank shall fail to make any such report, as directed by the commissioner, or if any such report shall contain any false statement knowingly made, the same shall be grounds for revocation of the certificate of authority of the foreign bank.

B. Every foreign bank operating in this state and subject to this Chapter shall file with the Office of Financial Institutions all periodic reports it is required to file with any federal agency.

C. The commissioner of the Office of Financial Institutions shall have the authority to require any foreign bank operating within Louisiana, which is subject to this Chapter, to provide to the Office of Financial Institutions annual audited financial statements of its total operations, as well as an audited special purpose financial presentation of its Louisiana operations detailed on a separate basis.

D. The commissioner of the Office of Financial Institutions is authorized to assess fees regarding the late filing of any required filings or reports.

Acts 2004, No. 420, §1.

§ 6:551.23 Termination

A. When a foreign bank which has been granted a certificate of authority to maintain an agency, branch, or office in this state is dissolved or its authority or existence is otherwise terminated or canceled in the jurisdiction of its incorporation, a certificate of the official responsible for records of banking corporations of the jurisdiction of incorporation of such foreign bank attesting to the occurrence of any such event or a certified copy of an order or decree of a court of such jurisdiction directing the dissolution of such foreign bank or the termination of its existence or the cancellation of its authority shall be delivered by the commissioner. The filing of the certificate, order, or decree shall have the same effect as the revocation of such foreign bank's certificate of authority.

B. The commissioner shall continue as agent of the foreign bank upon whom process against it may be served in any action based upon any liability or obligation incurred by the foreign bank within this state prior to the filing of such certificate, order, or decree; and the commissioner shall promptly cause a copy of such process to be mailed by registered or certified mail, return receipt requested, to such foreign bank at the post office address specified for such purpose on file with the commissioner.

Acts 2004, No. 420, §1.

§ 6:551.24 Rules and regulations

The commissioner may promulgate rules and regulations in accordance with the Administrative Procedure Act to provide for the regulation of bank agencies, branches, and representative offices and any other authorized offices of foreign banks operating in this state. Additionally, the commissioner may promulgate any necessary rules and regulations regarding fees and assessments to ensure that the costs of regulation of these entities are adequately recaptured.

Acts 2004, No. 420, §1.

§ 6:551.25 Examination authority

The Office of Financial Institutions shall have full authority to examine, at any time, any branch, agency, or other office authorized under this Chapter.

Acts 2004, No. 420, §1.

§ 6:551.26 Asset pledge requirements

The commissioner of the Office of Financial Institutions is authorized to promulgate any necessary rules relating to asset pledge requirements for foreign banks operating in Louisiana and subject to this Chapter.

Acts 2004, No. 420, §1.

CHAPTER 7-A LOUISIANA TRUST COMPANY LAW

PART I GENERAL PROVISIONS

§ 6:571 General authority

When authorized by the commissioner, a corporation may be chartered pursuant to the provisions of Chapter 3 of this Title for the purpose of becoming a trust company. The commissioner may apply the provisions of Chapter 3 of this Title, regarding state banks, and Chapters 1 and 22 of Title 12, the Business Corporations Law, and the law regarding limited liability companies, respectively, for purposes of administering and regulating the activities of trust companies and for purposes of voluntary and involuntary dissolution.

Acts 2003, No. 573, §1, eff. June 27, 2003.

§ 6:572 Definitions

As used in this Chapter:

(1) "Trust business" means the holding out by a person to the public by advertising, solicitation, or other means that the person is available to perform any service of a fiduciary in this state or another state.

(2) "Trust company" means a corporation or a limited liability trust company organized under this Chapter, including a trust company organized under the laws of this state before June 27, 2003, or an entity chartered to act as a fiduciary that is neither a depository institution nor a foreign bank.

(3) "Trust office" means an office, other than the principal office, at which a trust company is licensed by the commissioner to act as a fiduciary.

(4) "Trust representative office" means an office of an out-of-state trust company at which the company has been authorized by the commissioner to engage in a trust business other than acting as a fiduciary. At these offices, a trust company is permitted to market and solicit trust services and provide office and administrative support to their trust operations, but may not act as a fiduciary at these offices, or anywhere in this state. Any account originated at such office shall be governed by the laws of the state in which the trust company is domiciled.

Acts 2003, No. 573, §1, eff. June 27, 2003.

§ 6:573 Organization

A. A trust company shall be organized pursuant to this Title and shall be managed and governed pursuant to this Chapter. The organizational documents of a trust company must contain the following statement: "This corporation, limited liability company, limited partnership or limited liability partnership is subject to Chapter 7-A of Title 6 of the Louisiana Revised Statutes of 1950, and does not have the power to solicit, receive, or accept money or its equivalent on deposit or to lend money, except for lending reasonably related to and derived from its service as fiduciary or its conduct of trust business." This organizational document must be submitted to the commissioner. Upon approval by the commissioner, organizational documents shall be submitted for filing in the same manner as provided by in R.S. 6:213.

B. Any charter which has been issued to a trust company becomes automatically canceled and must be returned to the commissioner immediately in the event the trust company becomes inactive or ceases to do the business for which it was chartered.

Acts 2003, No. 573, §1, eff. June 27, 2003.

§ 6:574 Capital

A. The commissioner shall not issue a charter to a trust company having required capital of less than two million dollars. Any trust company chartered pursuant to this Chapter shall maintain a minimum of two million dollars in capital at all times.

B. The commissioner may require additional capital for a proposed or existing trust company if he finds the condition and operations of an existing trust company or the proposed scope or type of operations of a proposed trust company requires additional capital. The safety and soundness factors to be considered by the commissioner in the exercise of such discretion include but are not limited to the following:

(1) The nature and type of business conducted.

(2) The nature and degree of liquidity in assets held in a corporate capacity.

(3) The amount of fiduciary assets under management.

(4) The type of fiduciary assets held and the depository of such assets.

(5) The complexity of fiduciary duties and degree of discretion undertaken.

(6) The competence and experience of management.

(7) The extent and adequacy of internal controls.

(8) The presence or absence of annual unqualified audits by an independent certified public accountant.

(9) The reasonableness of business plans for retaining or acquiring additional capital.

(10) The existence and adequacy of insurance obtained or held by the trust company for the purpose of protecting its clients, beneficiaries, and grantors.

C. The proposed effective date of an order requiring an existing trust company to increase its capital must be stated in the order. Unless the trust company requests a hearing before the commissioner in writing before the effective date of the proposed order, the order becomes effective and is final and nonappealable.

D. Any institution that fails to maintain capital in accordance with this Section may be subject to enforcement action. The course of action taken shall be determined by the commissioner and governed by this Title.

Acts 2003, No. 573, §1, eff. June 27, 2003.

§ 6:575 Powers

A. A trust company shall have all powers necessary to conduct fiduciary and trust functions. However, a trust company does not have the power to solicit, receive, or accept money or its equivalent on deposit, or to lend money, except in transactions reasonably related to and derived from its service as fiduciary.

B. A trust company may deposit cash, whether constituting principal or income, in any financial institution whether in Louisiana or any other state, if the account is held either in the name of the trust to which the cash belongs or in the name of the trust company, and is composed entirely of cash belonging to trust accounts, the respective contributions of which are reflected in the books and records of the trust company.

C. A trust company may not use as a part of the name or title under which its business is conducted or in designating its business the word or words "bank", "banker", or "banking" or the plural of or any abbreviation of those words. A trust company shall include as a part of its name the word "trust" unless otherwise approved by the commissioner for good cause shown.

Acts 2003, No. 573, §1, eff. June 27, 2003.

§ 6:576 New application, supervision, regulation, and examination of trust bank

A. One or more natural persons, the majority of whom must be domiciled in this state, desiring to incorporate and operate a trust company shall file with the commissioner an application for a certificate of authority to operate a trust company upon such form as the commissioner may prescribe. At the time the application is filed, the commissioner shall also collect a nonrefundable filing fee as prescribed by rules or regulations.

B. All trust companies organized under this Chapter shall be subject to the supervision, regulation, and examination of the commissioner, and the Office of Financial Institutions shall have all enforcement powers with respect thereto as provided in this Chapter. Fees for performing examinations and other administrative functions of the trust company shall be governed by rules and regulations promulgated by the commissioner.

C. The commissioner shall have the power to promulgate rules and regulations implementing the provisions of this Chapter.

D. A trust company may establish additional offices with the commissioner's approval. Application for such offices shall be submitted on a form prescribed by the commissioner and shall be accompanied by any applicable fee.

Acts 2003, No. 573, §1, eff. June 27, 2003.

§ 6:577 Trust companies chartered under prior law

A. All provisions of this Chapter are applicable to all state-chartered trust companies domiciled in Louisiana, including existing trust companies.

B. The charter of a state-chartered trust company issued before the effective date of this Chapter shall be presented to the commissioner prior to December 31, 2003, for substitution.

Acts 2003, No. 573, §1, eff. June 27, 2003.

§ 6:578 Affiliates

A. Any person acting as a trustee or in any other fiduciary capacity under this Section may hire and compensate, as a delegate, an affiliate of such person if authorized by any of the following:

(1) A trust or fiduciary instrument.

(2) A court order.

(3) A written document signed by each affected client.

B. Fees paid to an affiliate shall be competitive with fees charged by non-affiliates that provide substantially similar services.

C. An affiliate shall include any of the following:

(1) A company that controls the trust company.

(2) A company that is controlled by the company that controls the trust company.

(3) A subsidiary of the trust company.

(4) A company controlled by a common shareholder who beneficially or otherwise controls the trust company or any company that controls the trust company.

(5) A company in which a majority of its directors are also a majority of the directors of the trust company or the company that controls the trust company.

(6) A company that is sponsored or advised on a contractual basis by the trust company or any subsidiary or affiliate of the trust company.

(7) An investment company in which the trust company or any affiliate of the trust company is an investment advisor.

D. An affiliate shall be subject to examination and visitation by the commissioner in the same manner as provided for by R.S. 6:123.

Acts 2003, No. 573, §1, eff. June 27, 2003.

§ 6:579 Self-dealing

A. No contract or transaction between a trust company and one or more of its directors or officers, or between a trust company and any other person in which one or more of its directors or officers have a financial interest, shall be void or voidable solely for this reason or solely because his or their votes were counted for such purpose if either of the following occurs:

(1) The material facts as to his interest and as to the contract or transaction were disclosed or known to the board of directors or the committee, and the board or committee in good faith authorized the contract or transaction by a vote sufficient for such purpose without counting the vote of the interested director or directors, and the material facts as to his interest and as to the contract or transaction were disclosed or known to the stockholders entitled to vote thereon, and the contract or transaction was approved in good faith by vote of the stockholders.

(2) The contract was fair to the trust company as determined by the commissioner as of the time it was authorized, approved, or ratified by the board of directors, committee, or stockholders.

B. Common or interested directors may be counted in determining the presence of a quorum at a meeting of the board of directors or of a committee which authorized the contract or transaction.

Acts 2003, No. 573, §1, eff. June 27, 2003.

§ 6:580 Insurance coverage

A. A trust company shall obtain and maintain adequate insurance against loss, expense, and liability resulting from errors, omissions, or neglect in the performance of any trust which may be lawfully imposed upon and accepted by the trust company.

B. The board of a trust company shall require protection and indemnity for clients, in reasonable amounts, against dishonesty, fraud, defalcation, forgery, theft, and other similar insurable losses, with a corporate insurance or surety company that is authorized to do business in this state, and that is acceptable to the commissioner. The policy shall cover each executive officer, trust officer, or other employee who handles cash or securities of the trust company. No employee shall be permitted to enter upon the duties of their offices or employment until fidelity bond coverage has been secured. The bond shall be in an amount determined by the board of directors of the trust company and may be required to be within guidelines set forth by the commissioner.

C. Except as otherwise provided herein, coverage required under this Section must include each director, manager, managing participant, officer, and employee of the trust company without regard to whether the person receives salary or other compensation.

D. A trust company may apply to the commissioner for permission to eliminate the bonding requirement of this Section for a particular individual.

Acts 2003, No. 573, §1, eff. June 27, 2003.

§ 6:581 Capital notes or debentures

A. With the prior written approval of the commissioner, any trust company may at any time, through action of its board, and without requiring action of its shareholders or participants, issue and sell its capital notes or debentures, which shall be subordinate to the claims of depositories and may be subordinate to other claims, including the claims of other creditors or classes of creditors or the shareholders or participants. Capital notes or debentures may be convertible into shares or participation shares of any class or series. The issuance and sale of convertible capital notes or debentures are subject to satisfaction of preemptive rights, if any, to the extent provided by law.

B. The commissioner's prior approval shall be required to pay interest due or principal repayable on outstanding capital notes or debentures when the trust company is insolvent or operating in an unsafe and unsound condition, or if the proposed payment will cause the trust company to be in an unsafe and unsound condition or insolvent.

C. As provided by rule or regulation, the commissioner may establish limitations on the amount of outstanding capital notes and debentures that meet the requirements of this Section that may be included in equity capital as required by R.S. 6:574. The amount of any outstanding capital notes or debentures that meet the requirements of this Section and that are subordinated to unsecured creditors of the trust company may be included in equity capital of the trust company for purposes of determining hazardous condition or insolvency, and for such other purposes deemed appropriate by the commissioner.

Acts 2003, No. 573, §1, eff. June 27, 2003.

PART II PRIVATE TRUST COMPANIES

§ 6:591 Private trust company

A. A private trust company engaging in the trust business in this state shall comply with every provision of this Chapter applicable to a trust company, unless expressly exempted therefrom, in writing by the commissioner pursuant to this Section or by rule adopted by the commissioner.

B. A private trust company or proposed private trust company may request in writing that it be exempted from specified provisions of this Chapter. The commissioner may grant the exemption in whole or in part if the commissioner finds that the private trust company does not and will not transact business with the general public. For purposes of this Section, "transact business with the general public" means any sales, solicitations, arrangements, agreements, or transactions to provide trust or other business services, whether or not for a fee, commission, or any other type of remuneration, with any client that is not a family member or a sole proprietorship, partnership, joint venture, association, trust, estate, business trust, or other company that is not completely owned by one or more family members. For purposes of this Section, "family member" means any individual who is related within the fourth degree of affinity or consanguinity to an individual or individuals who control a private trust company or which is controlled by one or more trusts or charitable organizations established by such individual or individuals.

C. All individuals who control a private trust company or establish trusts or charitable organizations controlling such private trust company must be related within the second degree of affinity or consanguinity.

D. At the expense of the private trust company, the commissioner may examine or investigate the private trust company in connection with an application for exemption. Unless the application presents novel or unusual questions, the commissioner shall approve the application for exemption or set the application for hearing not later than the sixty-first day after the date the commissioner considers the application complete and accepted for filing. The commissioner may require the submission of additional information as considered necessary to an informed decision.

E. Any exemption granted under this Part may be subject to conditions or limitations imposed by the commissioner consistent with this Chapter.

F. The commissioner may adopt rules defining other circumstances that do not constitute transaction of business with the public, specifying the provisions of this Chapter that are subject to an exemption request, and establishing procedures and requirements for obtaining, maintaining, or revoking exempt status.

Acts 2003, No. 573, §1, eff. June 27, 2003.

§ 6:592 Requirements to apply for and maintain status as a private trust company

A. A private trust company requesting an exemption under the provisions of this Part shall file an application on a form acceptable to the commissioner.

B. The application shall be accompanied by a nonrefundable fee as set forth by rule or regulation.

C. To maintain status as an exempt private trust company under this Part, the private trust company shall comply with the following:

(1) The trust company shall not transact business with the public.

(2) The trust company shall file an annual certification that it is maintaining the conditions and limitations of its exempt status. This annual certification shall be filed on a form provided by the commissioner and shall be accompanied by a fee determined by the commissioner. The annual certification shall be filed on or before June thirtieth of each year. The commissioner shall have thirty days from the date of receipt to return a copy of the acknowledged annual certification to the private trust company. The burden shall be on the exempt private trust company to notify the commissioner of any failure to return an acknowledged copy of any annual certification within the thirty-day period. The commissioner may examine or investigate the private trust company periodically as necessary to verify the certification.

(3) The trust company shall pay the Louisiana corporate franchise tax.

D. Exemptions granted to a private trust company are nontransferrable and may not be sold. In any change of control, the person acquiring control must comply with the provisions of this Chapter, and the exempt status of the private trust company shall automatically terminate upon the effective date of the transfer. A separate application for exempt status shall be filed if the person acquiring control desires to obtain or continue an exemption pursuant to this Part.

E. The commissioner shall have authority to revoke the exempt status of a private trust company in any the following circumstances:

(1) The exempt private trust company makes a false statement under oath on any document required to be filed by this Chapter or by any rule promulgated by the department.

(2) The exempt private trust company fails to submit to an examination as required by this Chapter.

(3) The exempt private trust company withholds requested information from the commissioner.

(4) The exempt private trust company violates any provision of this Chapter applicable to exempt private trust companies.

F. If the commissioner determines from examination or other credible evidence that an exempt private trust company has violated any of the requirements of this Chapter, the commissioner may, by personal delivery or registered or certified mail, return receipt requested, notify the exempt private trust company in writing that the private trust company's exempt status has been revoked. The notification shall state grounds for the revocation with reasonable certainty. The notice shall state its effective date, which may not be before the fifth day after the date the notification is mailed or delivered. The revocation takes effect for the private trust company if the private trust company does not request a hearing in writing before the effective date. After taking effect, the revocation is final and nonappealable as to that private trust company, and the private trust company shall be subject to all of the requirements and provisions of this Chapter applicable to nonexempt trust companies.

G. A private trust company shall have five calendar days after the revocation is effective to comply with the provisions of this Chapter from which it was formerly exempt. If, however, the commissioner determines, at the time of revocation, that the private trust company has been engaging in or attempting to engage in acts intended or designed to deceive or defraud the public, the commissioner may shorten or eliminate, in the commissioner's sole discretion, the five-calendar day compliance period.

H. If the private trust company does not comply with all of the provisions of this Chapter, including such capitalization requirements as have been determined by the commissioner as necessary to assure the safety and soundness of the private trust company, within the prescribed time period, the commissioner may institute any action or remedy prescribed by this Chapter or any applicable rule or regulation.

Acts 2003, No. 573, §1, eff. June 27, 2003.

§ 6:593 Conversion to public trust company

A. A private trust company may terminate its status as a private trust company and commence transacting business with the general public upon compliance with this Section. A private trust company desiring to commence transacting business with the general public shall file a notice on a form prescribed by the commissioner, which shall set forth the name of the private trust company and an acknowledgment that any exemption granted or otherwise applicable to the private trust company pursuant to this Part shall cease to apply on the effective date of such notice, furnish a copy of the resolution adopted by the board authorizing the private trust company to commence transacting business with the general public, and pay the filing fee, if any, prescribed by the commissioner.

B. The trust company may commence transacting business with the general public on the thirty-first day after the date the commissioner receives the notice, unless the commissioner specifies an earlier or later date. The thirty-day period of review may be extended by the commissioner upon a determination that the written notice raises issues that require additional information or additional time for analysis. If the period for review is extended, the trust company may commence transacting business with the public only on prior written approval by the commissioner.

C. The commissioner may deny a private trust company's request to commence transacting business with the general public if the commissioner finds that the private trust company lacks sufficient financial resources to undertake the proposed expansion without adversely affecting its safety or soundness, or that the proposed transacting of business with the general public would be contrary to the public interest, or if the commissioner determines that the private trust company will not, within a reasonable period of time, be in compliance with any provision of this Chapter from which the private trust company had been previously exempt.

Acts 2003, No. 573, §1, eff. June 27, 2003.

PART III ACQUISITION AND OWNERSHIP OF TRUST COMPANY FACILITIES AND OTHER REAL ESTATE

§ 6:601 Investment in trust company facilities

A. In this Part, "trust company facility" means real estate, including an improvement, owned, or leased to the extent the lease or the leasehold improvements are capitalized, by a trust company for the purpose of providing space for trust company employees to perform their duties and space for parking by trust company employees and customers conducting trust business, including meeting the reasonable needs and convenience of the trust company's customers, computer operations, document and other item processing, maintenance and record retention and storage, holding, improving, and occupying as an incident to future expansion of the trust company's facilities, or conducting another activity authorized by the commissioner and permitted under this Chapter.

B. A trust company shall comply with generally accepted accounting principles, consistently applied, in accounting for its investment in and depreciation of trust company facilities, furniture, fixtures, and equipment.

Acts 2003, No. 573, §1, eff. June 27, 2003.

§ 6:602 Other real estate

A. A trust company may acquire real estate only as permitted by this Part, including rules adopted under this Part, and with the prior written approval of the commissioner.

B. To the extent reasonably necessary to avoid or minimize loss on real estate acquired as permitted by Subsection A of this Section, a trust company may exchange real estate for other real estate or personal property, invest additional funds in or improve real estate acquired under this Subsection or Subsection A of this Section.

C. A trust company may hold other real estate in perpetuity if the property is not being operated by the trust company as a going concern, and the property has been written down to the value of one dollar on the trust company's books.

D. For properties not meeting the requirements of Subsection C of this Section, the trust company must file a divestiture plan with the commissioner outlining its plan to divest itself of the property within a reasonable time period.

Acts 2003, No. 573, §1, eff. June 27, 2003.

PART IV TRUST COMPANY INVESTMENTS

§ 6:611 Securities

A. A trust company may invest its corporate funds in any type or character of equity or investment securities subject to the limitations provided by this Part.

B. Unless the commissioner approves maintenance of a lesser amount in writing, a trust company shall maintain an amount equal to at least forty percent of its capital under R.S. 6:574 in unencumbered cash, cash equivalents, and readily marketable securities.

C. Subject to Subsection D of this Section, the total investment in equity and investment securities of any one issuer, obligor, or maker, held by the trust company for its own account, may not exceed an amount equal to fifteen percent of the trust company's capital. The commissioner may authorize investments in excess of this limitation on written application if the commissioner concludes that the excess investment is not prohibited by other applicable law, and that the safety and soundness of the requesting trust company is not adversely affected.

D. Notwithstanding Subsection C of this Section, a trust company may purchase for its own account, without limitation and subject only to the exercise of prudent judgment, any of the following:

(1) Bonds and other legally created general obligations of an agency or political subdivision of a state, the United States, or an agency or instrumentality of the United States.

(2) An investment security that this state, an agency or political subdivision of the United States, or an agency or instrumentality of the United States has unconditionally agreed to purchase, insure, or guarantee.

(3) Securities that are offered and sold under 15 U.S.C. Section 77d(5).

(4) Mortgage-related securities as defined in 15 U.S.C. Section 78c(a), except that notwithstanding Section 347 of the Riegle Community Development and Regulatory Improvement Chapter of 1994, a note or obligation that is secured by a first lien on one or more parcels of real estate on which is located one or more commercial structures is subject to the limitations of Subsection C of this Section.

(5) Investment securities issued or guaranteed by the Federal Home Loan Mortgage Corporation, the Federal National Mortgage Association, the Government National Mortgage Association, the Federal Agricultural Mortgage Association, or the Federal Farm Credit Banks Funding Corporation.

(6) Investment securities issued or guaranteed by the North American Development Bank.

(7) Securities issued by a Federal Home Loan Bank.

E. Notwithstanding 15 U.S.C. Section 77r-1(c), Subsection C of this Section applies to investments in small business-related securities as defined by 15 U.S.C. Section 78c(a).

Acts 2003, No. 573, §1, eff. June 27, 2003.

§ 6:612 Transactions in trust company shares or participation shares

A. A trust company may acquire its own shares or participation shares if the amount of its undivided profits is sufficient to absorb fully the acquisition of the shares or participation shares under regulatory accounting principles, or if the trust company obtains the prior written approval of the commissioner.

B. A trust company may acquire a lien upon its own shares or participation shares if the aggregate amount of indebtedness so secured is less than the amount of the trust company's undivided profits, or the trust company obtains the prior written approval of the commissioner.

Acts 2003, No. 573, §1, eff. June 27, 2003.

§ 6:613 Subsidiaries

A. Except as otherwise provided by this Chapter or rules adopted under this Chapter, a trust company may acquire or establish a subsidiary to conduct any activity that may lawfully be conducted through the form of organization chosen for the subsidiary.

B. A trust company may not invest more than an amount equal to fifteen percent of its capital in a single subsidiary and may not invest an amount in excess of its capital in all subsidiaries. The amount of a trust company's investment in a subsidiary is the total amount of the trust company's investment in equity or investment securities issued by its subsidiary and any loans and extensions of credit from the trust company to its subsidiary. The commissioner may authorize investments in excess of these limitations upon written application, if the commissioner concludes that the excess investment is not prohibited by other applicable law, and the safety and soundness of the trust company is not adversely affected.

C. A trust company may acquire or establish a subsidiary or begin performing new activities in an existing subsidiary only with the prior written approval of the commissioner. The request to establish the subsidiary or exercise new activities in a subsidiary shall be filed on a form prescribed by the commissioner and accompanied by any applicable fee as established by rule.

D. A subsidiary of a trust company is subject to regulation by the commissioner to the extent provided by this Chapter or rules adopted under this Chapter. In the absence of limiting rule or regulation, the commissioner may regulate a subsidiary as if it were a trust company.

Acts 2003, No. 573, §1, eff. June 27, 2003.

§ 6:614 Mutual funds

A. A trust company may invest for its own account in equity securities of an investment company registered under the Investment Company Chapter of 1940 (15 U.S.C. Section 80a-1 et seq.) and the Securities Chapter of 1933 (15 U.S.C. Section 77a et seq.) if the portfolio of the investment company consists wholly of investments in which the trust company could invest directly for its own account.

B. If the portfolio of an investment company described in R.S. 6:611(D) consists wholly of investments in which the trust company could invest directly without limitation under this Chapter, the trust company may invest in the investment company without limitation.

C. If the portfolio of an investment company described in Subsection A of this Section contains any investment that is subject to the limits of R.S. 6:611(C), the trust company may invest in the investment company not more than an amount equal to fifteen percent of the trust company's capital. This provision does not apply to a money market fund.

D. In evaluating investment limits under this Chapter, a trust company shall not be required to combine the following:

(1) The trust company's pro rata share of the securities of an issuer in the portfolio of an investment company with the trust company's pro rata share of the securities of that issuer held by another investment company in which the trust company has invested.

(2) The trust company's own direct investment in the securities of an issuer with the trust company's pro rata share of the securities of that issuer held by each investment company in which the trust company has invested under this Section.

Acts 2003, No. 573, §1, eff. June 27, 2003.

§ 6:615 Engaging in commerce prohibited

Except as otherwise provided by this Chapter or rules adopted under this Chapter, a trust company may not invest its funds in trade or commerce by buying, selling, or otherwise dealing in goods or by owning or operating a business not part of the trust business, except as necessary to fulfill a fiduciary obligation to a client.

Acts 2003, No. 573, §1, eff. June 27, 2003.

PART V TRUST DEPOSITS LIABILITIES AND PLEDGE OF ASSETS

§ 6:621 Borrowing limit

Except with the prior written approval of the commissioner, a trust company may not have outstanding liabilities exceeding an amount equal to three times its capital. However, the commissioner may impose a lower limit consistent with the safety and soundness of the trust company.

Acts 2003, No. 573, §1, eff. June 27, 2003.

§ 6:622 Pledge of assets

A trust company may not pledge or create a lien on any of its assets except to secure the repayment of money borrowed or authorized or required by this Chapter or by rules adopted under this Chapter. An act, deed, conveyance, pledge, or contract in violation of this Section is void.

Acts 2003, No. 573, §1, eff. June 27, 2003.

§ 6:623 Fiduciary responsibility

The board of a trust company is responsible for the proper exercise of fiduciary powers by the trust company and each matter pertinent to the exercise of fiduciary powers, including determination of policies, investment, and disposition of property held in a fiduciary capacity, and the direction and review of the actions of each officer, employee, and committee used by the trust company in the exercise of its fiduciary powers.

Acts 2003, No. 573, §1, eff. June 27, 2003.

§ 6:624 Reports of apparent crime

A trust company that is the victim of a robbery, that has a shortage of corporate or fiduciary funds in excess of five thousand dollars, or that is the victim of an apparent or suspected misapplication of its corporate or fiduciary funds or property in any amount by a director, manager, managing participant, officer, or employee shall report such robbery, shortages, or apparent or suspected misapplication to the commissioner within forty-eight hours after the time it is discovered. The initial report may be oral if the report is promptly confirmed in writing. The trust company or a director, manager, managing participant, officer, employee, or agent is not subject to liability for defamation or other charge resulting from information supplied in the report.

Acts 2003, No. 573, §1, eff. June 27, 2003.

§ 6:625 Out-of-state activities

To the extent allowed by the laws of another state, a Louisiana trust company may establish and maintain trust offices or solicit and market trust services in a state other than Louisiana by adhering to the following:

(1) To establish a trust office in another state, a Louisiana trust company shall file an application with the office of financial institutions on a form prescribed by the commissioner.

(2) To establish a trust representative office in another state, a Louisiana trust company shall provide the commissioner with notice of its intent to operate the representative office at least thirty days prior to commencing business at the out-of-state location. Upon a showing of good cause, the commissioner may lengthen or shorten the notification period.

(3) To solicit and market trust services in another state through the mail and other means of interstate commerce without maintaining a physical presence in the other state, a Louisiana trust company may do so without filing any applications or notifications with the commissioner of financial institutions.

Acts 2003, No. 573, §1, eff. June 27, 2003.

§ 6:626 Out-of-state trust companies

A.(1) An out-of-state trust company may act as a fiduciary from a trust office only if both of the following conditions are met:

(a) The out-of-state trust company maintains a trust office in the state of Louisiana.

(b) In the state where the out-of-state trust company has its principal location, similar institutions chartered under Louisiana law may establish offices and engage in substantially similar activities authorized under this Chapter.

(2) Subject to the requirements of Paragraph (1) of this Subsection, an out-of-state trust company that maintains one or more trust offices in the state may at each office conduct any activity authorized to be conducted by a Louisiana trust company under this Chapter.

(3) An out-of-state trust company may establish a trust representative office in Louisiana at which the out-of-state trust company may perform trust-related business, except that the company may not enter into any trust agreements pursuant to the laws of this state.

B. An out-of-state trust company may solicit and market its fiduciary trust services in this state through the mail and other means of interstate commerce without maintaining a physical presence in this state and without filing an application or notice with the commissioner.

Acts 2003, No. 573, §1, eff. June 27, 2003; Acts 2019, No. 334, §1, eff. June 11, 2019.

§ 6:627 Interstate supervision and regulation

The commissioner may rely upon applications, notifications, and examination reports provided by the appropriate home states or federal regulator, or enter into agreements with other state regulators to supervise and regulate the trust activities of interstate trust companies.

Acts 2003, No. 573, §1, eff. June 27, 2003.

CHAPTER 8 CREDIT UNIONS

§ 6:641 Organization; act of incorporation

A.(1) A credit union is a cooperative, nonprofit association, incorporated under the provisions of this Chapter for the purposes of encouraging thrift among its members, creating a source of credit at a fair and reasonable rate of interest, and providing an opportunity for its members to use and control their own money on a democratic basis in order to improve their economic and social condition.

(2) Any seven persons who are residents of Louisiana eligible under R.S. 6:645 to become members of the same credit union may apply to the commissioner for permission to organize a credit union by submitting a signed act of incorporation and proposed bylaws in which they shall bind themselves to comply with all the requirements thereof and with all laws and regulations applicable to credit unions. The original act of incorporation shall be filed of record in the mortgage office in the parish in which the credit union is organized. The filing fee shall be two dollars.

B. The act of incorporation shall state the following:

(1) The name of the proposed credit union (which shall include the words "credit union") and the municipality in which its business office is to be located, but not the word "incorporated".

(2) The names and addresses of the subscribers to the certificate and the number of shares subscribed by each.

(3) A statement that incorporation is desired under this Chapter.

(4) The following may be provided for in the act of incorporation or in the bylaws approved by the commissioner:

(a) The initial par value of shares and the number and par value of shares, the minimum number and the maximum number.

(b) The date of the annual meeting, which may be in any month of the year; the manner of notification of meetings and conducting the same; the number of members constituting a quorum; and regulations as to voting.

(c) The number of directors, which shall be not less than five, all of whom must be members; the names of the first board of directors, their powers and duties; and the duties of officers, elected by the board of directors.

(d) The qualifications for membership, including entrance fee, if any.

(e) The number of members of the credit committee and of the supervisory committee, which shall not be less than three each, and their respective powers and duties.

(f) The conditions under which shares may be issued, transferred, and withdrawn; loans made and repaid; and the funds otherwise invested. The determination of these matters may be vested in the board of directors except as otherwise herein provided.

(g) The credit union shall have the power to borrow and to determine the method of receipting for money, the manner of accumulating a reserve fund and determining a dividend, and such other matters consistent with the provisions of this Chapter as are required to perfect the organization and make possible the operation of the credit union. The determination of these matters may be left to the board of directors.

C. Two certified copies of the act of incorporation shall be filed with the commissioner of financial institutions, together with two certified copies of the bylaws, and a certificate showing recordation of the act of incorporation in the mortgage office.

D. The commissioner shall approve the act of incorporation and bylaws if in conformity with this Chapter and if satisfied that the proposed field of operation is favorable to the success of the credit union and that the standing of the proposed incorporators is such as to give assurance that its affairs will be properly administered, and on the condition that the proposed credit union obtain and maintain insurance of the member accounts or share accounts as provided in R.S. 6:644(8). The commissioner shall thereupon issue to the proposed incorporators a certificate of approval, annexed to the duplicate of the certified copy of the act of incorporation and bylaws. Thereupon, the incorporators shall become and constitute a credit union.

E. Credit unions organized under this Chapter shall be required to obtain and maintain primary insurance of its member accounts or share accounts. This requirement may be satisfied by insurance obtained through the National Credit Union Administration or other federal agency. This requirement may also be satisfied by insurance obtained through a state agency or a state share insurance corporation of any state established for the purpose of insuring the member accounts or share accounts in credit unions, with prior approval of the commissioner.

F. A corporate or central credit union whose membership other than incorporators is limited to other credit unions and credit union organizations shall not be subject to the limitations of the provisions of R.S. 6:644(3)(c).

Amended by Acts 1954, No. 530, §1; Acts 1956, No. 311, §1; Acts 1972, No. 160, §1; Acts 1977, No. 165, §1; Acts 1981, No. 166, §1; Acts 1982, No. 436, §1; Acts 1983, No. 351, §1; Acts 1984, No. 581, §1; Acts 2001, No. 887, §1, eff. June 26, 2001.

§ 6:641.1 Public policy

It is the declared public policy of the state of Louisiana to encourage and to foster the development of credit unions under a dual chartering system of the state and federal governments. In order to carry out this policy, the office of financial institutions of the state of Louisiana is authorized and requested to use its resources in the promotion and development of credit unions chartered under the laws of Louisiana.

Added by Acts 1978, No. 480, §1.

§ 6:641.2 REPEALED BY ACTS 1989, No. 495, §6.

REPEALED BY ACTS 1989, No. 495, §6.

§ 6:642 Amendments of act of incorporation; commissioner's approval

At a general meeting convened for that purpose, or at any annual meeting after notice mailed at least ten days previous to the date of the meeting and directed to the last known address of each member of record as of the date of issuance of notice, and after one notice properly displayed at the office of the credit union, the members may make modifications, additions or changes in the act of incorporation by a three-fourths vote of all of the members present at the meeting. All proposed amendments, however, must be approved in writing by the commissioner in advance of their submission to the members.

Amended by Acts 1954, No. 530, §1.

§ 6:643 Restriction of the use of term credit union

A. Except for corporations formed under the provision of this Chapter, any person, partnership, firm, or corporation using any name or title containing the words "credit union" shall be fined not less than one hundred dollars or more than one thousand dollars, or be imprisoned for not more than one year, or both.

B. The provisions of Subsection A do not apply to credit unions organized under the laws of the United States and the several states and to organizations whose membership consist primarily of credit unions.

Amended by Acts 1975, No. 653, §1.

§ 6:644 Powers

A. Every credit union incorporated pursuant to or operating under the provisions of this Chapter shall have all the powers enumerated, authorized, and permitted by this Chapter and such other rights, privileges, and powers as may be incidental to or reasonably necessary or appropriate for the accomplishment of the objects and purposes of the credit union; to enter into such contracts, incur such obligations, and generally do anything necessary or appropriate to take advantage of all membership, loans, subscriptions, contracts, grants, rights, or privileges whatsoever which at any time may be available or inure to credit unions by virtue of any act or resolution of the Congress of the United States, particularly any act of Congress creating a federal credit union system, and regulations issued pursuant thereto.

B. Among others, and except as otherwise limited by the provisions of this Chapter, every credit union shall have the following powers:

(1) To receive the savings of its members in payment for shares.

(2) To make loans exclusively to members.

(3) To invest, through its board of directors, in:

(a) Bonds, certificates, notes, or other evidence of indebtedness of the United States, state of Louisiana, or any municipality of Louisiana, including paving certificates of municipalities, and in federal farm loan bonds issued by federal land banks, debentures issued by federal intermediate credit banks, and debentures issued by banks for cooperatives; such investments may be by book entry and such book entry investments may be pledged as security for loans.

(b) Homestead stock.

(c) The shares of other credit unions. It may deposit funds in savings banks, state banks, trust companies, and national banks. The funds of the credit union shall be used first, however, for loans to members, and preference shall be given to the smaller loan if available funds do not permit all loans to be made which have passed the credit committee. Such investments or deposits may be by book entry and such investments or deposits in the U.S. Central Credit Union and the Louisiana Corporate Credit Union may be pledged as security for loans.

(d) Shares, stocks, loans, or other obligations of any organization, corporation, limited liability company, or association, provided the membership or ownership, as the case may be, of such organization, corporation, limited liability company, or association is primarily confined or restricted to credit unions, or organizations of credit unions, and provided further the purpose for which it is organized is to strengthen or advance the development of credit unions or credit union organizations. No such investment shall exceed one percent of the credit union's capital and surplus.

(e) Investments authorized by law for fiduciaries and approved by the commissioner of financial institutions.

(4)(a) When duly authorized by its board of directors, to lend to any other credit unions at such rates as shall be fixed and determined by the board of directors, not exceeding twenty-five percent of the paid in and unimpaired capital and surplus of the lending credit union.

(b) As evidence of its indebtedness, the borrowing credit union shall execute its promissory note or other written agreement to pay, signed by two of its board officers and shall furnish a certified copy of the resolution of its board of directors to the lending credit union, authorizing the borrowing. The borrowing credit union shall also furnish a financial statement of its condition as of the last day of the preceding month of the application for such loans.

(c) The limitation of Subparagraph (4)(a) that such loans not exceed twenty-five percent of the unimpaired capital and surplus of the lending credit union shall not apply to credit unions commonly referred to as corporate credit unions and central credit unions, which credit unions are defined as credit unions whose field of membership primarily includes other credit unions, officers of other credit unions, or eligible employee groups, or both.

(d) Repealed by Acts 1992, No. 27, §2.

(5) To purchase from any liquidating credit union notes made by individual members of the liquidating credit union at such prices as may be agreed upon by the board of directors of the liquidating credit union and the board of directors of the purchasing credit union.

(6) To invest in and operate a credit union service center, either separately or in cooperation with other credit unions and credit union organizations.

(7) To collect, receive, and disburse money in connection with the sale of money orders and travelers checks and other money type instruments, and for other purposes as may provide benefit or convenience for its members.

(8) To obtain and maintain insurance of its member accounts or share accounts by the National Credit Union Administration, or other federal agency, or state agency or state share insurance corporation of any state, established for the purpose of insuring member accounts or share accounts of credit unions, including any investment that may be required in a share insurance corporation.

(9) To purchase or otherwise provide insurance for the benefit or convenience of its members.

(10) To charge reasonable collection fee incurred in the collection of a delinquent loan to the delinquent member's loan account.

(11) To exercise the powers granted corporations organized under the laws of the state of Louisiana and such incidental powers as may be necessary or requisite to promote and carry on effectively its purposes.

(12) To receive from any officer, employee, or agent of those nonmember units of the United States, the state of Louisiana, any parish, or municipality, and political subdivision thereof, payments on shares, share certificates and share deposits.

(13) To act as trustee and custodian under the Employee Retirement Income Security Act of 1974 (P.L. 93-406), as amended, and the Self-Employed Individuals Tax Retirement Act of 1962. The bylaws shall provide for recordkeeping and segregation of assets and for credit union operations, consistent with the principles of sound custodial administration.

(14) To become a member of the Central Liquidity Facility of the National Credit Union Administration.

(15) To become a member of any federal or state or private corporation that provides electronic funds transfer.

(16) To provide all types of transaction accounts for its members.

(17) To offer its members savings promotion raffles. The term "savings promotion raffle" means a contest in which the sole consideration required for a chance of winning designated prizes is obtained by the deposit of a specified amount of money in an interest-bearing share account, where each ticket or entry has an equal chance of being drawn.

Amended by Acts 1954, No. 530, §1; Acts 1958, No. 199, §2; Acts 1970, No. 401, §1; Acts 1972, No. 160, §2; Acts 1975, No. 653, §1; Acts 1979, No. 487, §1; Acts 1980, No. 210, §1; Acts 1981, No. 166, §1; Acts 1982, No. 436, §1; Acts 1985, No. 65, §1; Acts 1986, No. 36, §1; Acts 1991, No. 162, §1; Acts 1991, No. 655, §1; Acts 1992, No. 27, §§1, 2; Acts 1993, No. 518, §1; Acts 1995, No. 293, §1; Acts 2016, No. 257, §1.

§ 6:645 Membership

A. The membership shall consist of the incorporators and such natural persons as have been duly elected to membership and have subscribed to one or more shares and have paid for the same in whole or in part with the entrance fee as required by the charter and by-laws and have complied with such other requirements as the act of incorporation may contain. Other organizations, incorporated or not, composed primarily of the same individuals who are eligible to membership in the credit union are also eligible to membership.

B. Credit unions shall be organized only within groups that have a common bond of residence within a well defined neighborhood, small community, or rural district, or occupation, or association, or any combination thereof. The minimum potential of one hundred persons shall be required in groups having a common bond of occupation, and a potential of two hundred families shall be required in other type groups. Employee groups with insufficient membership shall be eligible in a central type credit union with the approval of the commissioner. Credit union membership shall consist of the incorporators and such other persons and incorporated and unincorporated organizations, to the extent provided for in the charter and bylaws, as may be elected to membership, and as such shall each subscribe to one share of its stock and a uniform entrance fee if required by the board of directors. A person who has retired from active employment, but receives retirement compensation, may continue to retain full membership.

C. Students who qualify for a student loan under the provisions of the Louisiana Higher Education Assistance Commission Act* shall be eligible for membership in any credit union domiciled in this state solely for the purpose of obtaining a student loan under the provisions of the Louisiana Higher Education Assistance Commission Act.

D. Members of a federally chartered or state chartered credit union in liquidation in Louisiana, who are residents of Louisiana, shall be eligible for membership in a central type credit union.

Amended by Acts 1954, No. 530, §1; Acts 1970, No. 401, §2; Acts 1972, No. 160, §1; Acts 1974, No. 598, §1; Acts 1981, No. 166, §1.

*See, R.S. 17:3021 to 17:3030

§ 6:646 Supervision by commissioner; suspension or revocation of charter; liquidation; reports; examination fees

A.(1)(a) Credit unions are under the supervision of the commissioner. The commissioner may prescribe rules and regulations for the administration of this Chapter and for the administration of a state share insurance corporation, including but not by way of limitation the merger, consolidation, or dissolution of corporations organized under this Chapter.

(b) Any central or corporate credit union chartered under this Chapter shall be subject to such rules, regulations, and orders as the commissioner deems appropriate and, except as otherwise specifically provided in such rules, regulations, or orders, shall be vested with or subject to the same rights, privileges, duties and restrictions, penalties, liabilities, conditions, and limitations that would apply to all credit unions organized under this Chapter. The commissioner may approve bylaws that he deems appropriate to a corporate or central credit union.

(2)(a) The Commissioner shall approve the merger or consolidation of credit unions organized under this Chapter or converted from federal credit unions to a credit union under this Chapter if in conformity with this Chapter, and if satisfied that the proposed field of membership for the merging or consolidating credit unions is favorable to the success of the proposed merger or consolidation. The commissioner shall thereupon issue to the proposed merging or consolidating credit unions a certificate of approval.

(b) The commissioner in granting approval to mergers, consolidations, or expansion of the field of membership shall give consideration to the following: locale of domicile, access to credit union facilities, and whether the proposed merger, consolidation, or expansion of the field of membership is favorable to the success of the credit union.

(3) Repealed by Acts 2003, No. 362, §2, eff. June 18, 2003.

(4)(a) Mergers must be approved by an affirmative vote of a majority of the members of the merging credit union who vote on the proposal and by the board of directors of the continuing credit union. Such membership vote on the merger may be conducted by mail balloting.

(b) Written notice of any annual or special meeting of the members of the merging credit union shall be sent to each member at the address reflected in the credit union's records at least ten days prior to such meeting.

(5) Notwithstanding the provisions of Paragraphs (2) and (3) of this Subsection, the commissioner may approve a merger or consolidation of credit unions without membership approval when the merging credit union is insolvent, or in danger of insolvency, as determined by the commissioner.

B.(1) The commissioner may suspend or revoke the charter of any credit union under his supervision, or place the same in involuntary liquidation and appoint a liquidating agent therefor, upon his finding that the organization is bankrupt or insolvent or has violated any provisions of its charter, its bylaws, or of this Chapter, or of any regulations issued thereunder.

(2) Each credit union shall file quarterly financial reports with the commissioner in a manner and form prescribed by the commissioner. Any credit union failing to file such financial reports postmarked by the required due dates may be fined not more than fifty dollars for each day the report remains unfiled.

(3) Each credit union shall be subject to examination by the commissioner or his authorized deputy on a recurring schedule consonant with the resources of the office and in accordance with good examination practice. The commissioner may order other examinations as necessary, and shall at all times be given free access to all the books, papers, securities, and other sources of information with respect to the credit union. For that purpose he may, personally or through his duly authorized deputies, subpoena and examine witnesses under oath about documents pertaining to the business of credit unions.

(4) Repealed by Acts 1993, No. 278, §1, eff. Jan. 1, 1994.

(5) The commissioner may, by rule, establish a fee schedule for the examination of a corporate credit union.

C. If a credit union neglects for fifteen days to make the required reports or to pay the charges required, including penalties for delay in filing reports, the commissioner shall notify the credit union of his intention to revoke the certificate of approval. If the neglect or failure continues for another fifteen days or if the credit union violates any of the provisions of this Chapter, the commissioner may revoke the certificate of approval and personally or through one of his deputies, shall take possession of the business of the credit union and retain possession until such time as he may permit it to resume business or until its affairs are finally liquidated.

D. If it appears to the commissioner that a credit union has violated any of the provisions of this Chapter, he may by an order made over his hand and official seal after a hearing or an opportunity for hearing has been given the credit union, direct the credit union to discontinue its illegal methods and practices. If a credit union is insolvent or has within a reasonable time failed to comply with any order mailed to the last address filed by the credit union with the commissioner, he shall immediately or within a reasonable time thereafter take possession of the business and property of the credit union and retain possession until such time as he may permit it to resume business or until its affairs are finally liquidated.

E. The commissioner shall prescribe rules and regulations specifying the period of time a credit union must retain its records and permitting a credit union to destroy records after the time required by such regulations has expired.

Acts 1993, No. 278, §1, eff. Jan. 1, 1994; Acts 1993, No. 583, §1; Acts 1997, No. 234, §1; Acts 1999, No. 703, §1, eff. July 1, 1999; Acts 2001, No. 887, §1, eff. June 26, 2001; Acts 2003, No. 362, §§1 and 2, eff. June 18, 2003.

§ 6:646.1 Involuntary dissolution; distribution of assets

A. All claims against the assets of an association whose deposits are insured by an agency of the federal government or other approved insurer, proved to the receiver's satisfaction or approved by the receivership court, shall be paid in the following order:

(1) Administration expenses of the liquidation.

(2) Deposit obligations, member share accounts, and share certificate accounts to the extent the account exceeds the deposit insurance coverage.

(3) Loan advances from other credit unions.

(4) Other general liabilities.

(5) Debt subordinated to the claims of depositors and general creditors.

B. No interest on any claim shall be paid until all claims within the same class have received the full principal amount of the claim.

Acts 1989 1st Ex. Sess., No. 13, §2, eff March 13, 1989; Acts 1989, No. 495, §1.

§ 6:647 Fiscal year; meetings; regulations as to voting

A. The credit union fiscal year shall end at the close of business on the thirty-first day of December.

B. Special meetings of the members of the credit union may be held by order of the board of directors or of the supervisory committee, and shall be held on request of ten percent of the members.

C. At all meetings of the members of the credit union, a member shall have but one vote, irrespective of the number of shares held. The credit union bylaws may prescribe the minimum age for a member to vote or to hold office. No shareholder may vote by proxy, but a society, association, copartnership, or corporation having membership in the credit union may be represented by one person, duly authorized to represent it.

D. At any membership meeting, the members may decide on any matter of interest to the credit union that is not inconsistent with the law, the credit union charter, and bylaws.

Amended by Acts 1976, No. 319, §1; Acts 1979, No. 487, §1.

§ 6:648 Elections; oath of office

A. At an annual meeting the members shall elect a board of directors, and, where bylaws provide, a credit committee, and a supervisory committee. No member of the board shall be a member of either of the committees. All members of the board and committees and all officers hold their offices for such terms as are provided in the charter or bylaws.

B. Immediately following their election, and in every case before assuming the duties of their office the directors shall take an oath of office to discharge their duties as directors properly and conscientiously, which oath shall be entered into the minutes of the next regular or special meeting of the board of directors and shall be retained in the records of the credit union for examination by the commissioner. These oaths shall be in writing and signed, and shall be renewed as to each director upon the occasion of each reelection to the board. Forms of the oath shall be furnished by the commissioner. The commissioner may suspend any director who fails to comply with this requirement and no suspended director may be reinstated, except for good cause shown after taking the oath.

C.(1) No person shall be eligible to serve as a director or committee member of a credit union unless he or she is a shareholder, owning, in his or her own right, at least one fully paid share the par value of which shall be stated in the credit union bylaws.

(2) In the case of a corporate credit union, no designated representative of a credit union, serving as a director or committee member of a corporate credit union, shall be eligible to serve as a director or committee member of a corporate credit union, unless such credit union owns at least one fully paid voting capital share, as defined in the corporate credit union bylaws.

D. The bylaws of the credit union shall clearly define the procedure for election. They shall set forth the number of directors to be elected.

Amended by Acts 1954, No. 530, §1; Acts 1985, No. 65, §1; Acts 1993, No. 276, §1, eff. Oct. 1, 1993; Acts 1995, No. 293, §1.

§ 6:649 Directors; officers; compensation

A.(1) The management of a credit union organized under this Chapter shall be by a board of directors, a supervisory committee, and, when the bylaws so provide, a credit committee.

(2) At the first meeting after the annual meeting of the members, the directors shall elect from their number the board officers specified in the bylaws. The bylaws shall specify such positions, as well as the specific duty of each of the board officers. The board shall elect from their number a financial officer who shall give bond with good and sufficient surety in an amount and character to be determined by the board of directors in compliance with the conditions of this Section.

(3) If authorized in the bylaws approved by the commissioner, meetings of the board of directors may be conducted by means of telephone conference or other similar means of communication.

B. Unless the charter specifically reserves any or all of the duties of the members, it shall be the special duty of the directors to do the following:

(1) To act upon all applications for membership and on the expulsion of members; to appoint a membership officer from among members of the credit union, other than the treasurer, assistant treasurer or loan officer, who may be authorized by the directors to approve applications for membership upon such conditions as the directors may prescribe, except that such membership officer so authorized shall submit at each monthly meeting of the directors a list of approved or pending applications for membership received since the previous monthly meeting, together with such other related information as the bylaws or the directors may require;

(2) To determine from time to time, rates of interest which shall be charged on loans; subject, however, to the maximum rate hereinafter provided;

(3) To purchase a blanket fidelity bond covering the directors, officers, employees, members of official committees, and other agents with protection against loss caused by fraud and dishonesty for persons specified in the bylaws.

(4) To establish par value of shares and to fix the maximum number of shares which may be held by any one member.

(5) To establish lending policies to fix the amount which may be loaned to any one member as provided elsewhere in this Chapter.

(6) To declare dividends as hereinafter provided, to authorize interest refunds, and to recommend amendments to the charter as hereinafter provided.

(7) To fill vacancies on the board of directors until the election and qualification of successors; and, if the bylaws provide for an elected credit committee, fill vacancies on the credit committee until the election and qualification of successors.

(8) To have charge of investments other than loans to members, except that the board may designate a committee of not less than two directors to act as an investment committee, such committee to have charge of investments under rules and procedures established by the board of directors.

(9) To provide a copy of the reports of examination of the office of financial institutions to government agencies deemed advisable and necessary by the board to conduct the affairs of the credit union.

(10) To perform such other duties as the members may from time to time authorize.

(11) To appoint an executive committee of not less than three directors to exercise such authority as may be delegated to it, subject to such conditions and limitations as are prescribed by the board.

C. A credit union may reasonably compensate an officer, director, or committee member for services to the credit union or for expense reimbursement for loss of pay while away from work on credit union business, and for per diem, when provided for in the bylaws. The commissioner may approve such bylaw provision when the credit union's legal reserves are in excess of six percent of risk assets. The payment by the credit union of premiums for liability, travel, accident, health, or life insurance coverage on the director or committee member shall not be considered as compensation under this Section.

Amended by Acts 1954, No. 530, §1; Acts 1966, No. 467, §2; Acts 1970, No. 401, §4; Acts 1972, No. 160, §1; Acts 1975, No. 653, §§1, 2; Acts 1979, No. 487, §1; Acts 1981, No. 166, §1; Acts 1983, No. 351, §1; Acts 1984, No. 581, §1; Acts 1989, No. 495, §2; Acts 2001, No. 887, §1, eff. June 26, 2001; Acts 2021, No. 34, §1, eff. June 1, 2021.

§ 6:649.1 Relation and liability of directors and officers to a credit union and its members

A. Credit union officers and directors shall be deemed to stand in a fiduciary relationship to their credit union and its members and shall discharge the duties of their respective positions in good faith and with the diligence, care, judgment, and skill as provided for in Subsection B of this Section. Nothing herein contained shall derogate from any indemnification otherwise provided for such officers and directors by law. Indemnification of such officers and directors may be provided for in the credit union's articles or bylaws in the manner and to the extent allowed officers and directors of corporations under the Louisiana Business Corporation Law, R.S. 12:1 et seq.

B. A director or officer of a credit union shall not be held personally liable to the corporation, the shareholders, or members thereof for monetary damages unless the director or officer acted in a grossly negligent manner as defined in R.S. 6:2(8) or engaged in conduct which demonstrates a greater disregard of the duty of care than gross negligence, including intentional tortious conduct or intentional breach of his fiduciary duty.

C. A director of a credit union shall, in the performance of his duties, be fully protected in relying in good faith upon the records of the credit union, and upon such information, opinions, reports, or statements presented to him, the credit union, the board of directors, or any committee thereof by any of the credit union's officers or employees, or by any committee of the board of directors, or by any counsel, appraiser, engineer, or independent or certified public accountant selected with reasonable care by the board of directors or any committee thereof or any officer having the authority to make such selection, or by any other person as to matters the director reasonably believes are within such other person's professional or expert competence and which person is selected with reasonable care by the board of directors or any committee thereof or any officer having the authority to make such selection.

D. Notwithstanding any other law to the contrary, the provisions of this Section shall be the sole and exclusive law governing the relation and liability of directors and officers to their credit union, or members thereof, or to any other person or entity, except that the provisions of the Louisiana Business Corporation Law, R.S. 12:1 et seq., regarding indemnification of directors and officers shall be applicable to directors and officers of credit unions.

E. Any person who unsuccessfully attempts to impose a higher standard of responsibility or liability than that provided by this Section may be liable for attorney fees incurred in the defense of such attempt and for damages.

Acts 1993, No. 517, §1, eff. June 10, 1993; Acts 1999, No. 703, §1, eff. July 1, 1999.

{{NOTE: SEE ACTS 1993, NO. 517, §2.}}

§ 6:649.2 Actions against directors and officers of credit unions

A. No action for damages against any director or officer of a credit union for breach of contract with the credit union in the capacity of director or officer, or for breach of his duty as a director or officer, including, without limitation, action for gross negligence, but excluding any action covered by the provisions of Subsection B of this Section, shall be brought unless filed in a court of competent jurisdiction and proper venue within one year from the date of the alleged act, omission, or neglect, or within one year from the date that the alleged act, omission, or neglect is discovered or should have been discovered. As to an action filed within one year from the date of discovery, such an action shall be filed no later than three years from the date of the alleged act, omission, or neglect.

B. No action for damages against any director or officer of a credit union for intentional tortious misconduct, or for an intentional breach of the director's or officer's duty of loyalty, or for acts or omissions in bad faith, or involving fraud, or a knowing and intentional violation of law, shall be brought unless filed in a court of competent jurisdiction and proper venue within two years from the date of the alleged act or omission, or within two years from the date the alleged act or omission is discovered or should have been discovered. As to an action filed within two years from the date of discovery, such an action shall be filed no later than four years from the date of the alleged act, omission, or neglect.

C. The three-year period provided in Subsection A and the four-year period provided in Subsection B shall be deemed preemptive periods and shall not be subject to renunciation, interruption, or suspension except by timely suit filed in a court of competent jurisdiction and proper venue.

Acts 1993, No. 517, §1, eff. June 10, 1993.

{{NOTE: SEE ACTS 1993, NO. 517, §2.}}

§ 6:650 Credit committee

A.(1) If the bylaws provide for a credit committee, then pursuant to the provisions of the bylaws, the board of directors may appoint, or the members may elect, a credit committee. The credit committee shall hold such meetings as the business of the credit union may require, not less frequently than once a month, to consider applications for loans or lines of credit. Reasonable notice of such meetings shall be given to all members of the committee. Except for those loans or lines of credit required to be approved by the board of directors, approval of an application shall be by majority of the committee who are present at the meeting at which it is considered, provided that a majority of the full committee is present. The credit committee may appoint and delegate to loan officers the authority to approve applications.

(2) If the bylaws provide for a credit committee, all applications not approved by the loan officer shall be reviewed by the credit committee, and the approval of a majority of the members who are present at the meeting when such review is undertaken shall be required to reverse the loan officer's decisions, provided a majority of the full committee is present. If there is not a credit committee, a member shall have the right, upon written request, of review by the board of directors of a loan application which has been denied. No individual shall have authority to disburse funds of the credit union with respect to any loan or line of credit for which the application has been approved by him in his capacity as a loan officer.

B. No loan shall be made unless it has received the unanimous approval of the members of the committee present when the loan was considered, except as provided elsewhere in this Chapter, which number shall constitute at least a majority of the committee. An applicant for a loan may appeal to the directors from the decision of the credit committee if it is so provided in the charter or bylaws. The credit committee shall meet as often as required, but due notice shall be given each member.

Amended by Acts 1954, No. 530, §1; Acts 1956, No. 311, §1; Acts 1981, No. 166, §1; Acts 1983, No. 351, §1.

§ 6:650.1 REPEALED BY ACTS 1989, No. 495, §6.

REPEALED BY ACTS 1989, No. 495, §6.

§ 6:650.2 Educational committee

The credit union may establish, in a manner provided for in the bylaws, an educational committee. The committee shall plan, and, with approval of the board of directors, carry out programs to inform members and potential members of the objectives, procedures and services of the credit union, and to encourage maximum participation in all activities of the credit union.

Added by Acts 1968, No. 180, §1.

§ 6:651 Supervisory committee; examination and report

A.(1) Pursuant to the provisions of the bylaws, the board of directors may appoint, or the members may elect, a supervisory committee. The supervisory committee shall at frequent intervals inspect the securities, cash, and accounts of the credit union and supervise the acts of the board of directors, credit committee, and officers, any or all of whom the supervisory committee may suspend at any time by unanimous vote. Within seven days after such a suspension, the supervisory committee shall cause notice to be given to the members and the commissioner of a special meeting to take action on the suspension, the call for the meeting to indicate clearly its purpose.

(2) By a majority vote the committee may call a meeting of the shareholders to consider any violation of this Chapter or of the charter or bylaws, or any practice of the credit union which is unsafe and unauthorized in the opinion of the committee.

B. Supervisory committee vacancies shall be filled in the manner provided for in the bylaws.

C. The supervisory committee shall annually examine the financial condition and internal control structure of the credit union in accordance with applicable federal regulations or rules promulgated by the commissioner.

Amended by Acts 1954, No. 530, §1; Acts 1956, No. 311, §1; Acts 1984, No. 581, §1; Acts 1989, No. 495, §3; Acts 1991, No. 162, §1; Acts 1991, No. 655, §1; Acts 1999, No. 703, §1, eff. July 1, 1999; Acts 2001, No. 887, §1, eff. June 26, 2001.

§ 6:652 Capital

The capital of a credit union shall consist of the payments that have been made to it by the several members thereof on shares. A credit union shall have a privilege on the shares of any member and on the dividends payable thereon for and to the extent of any loan made to him and of any dues and fines payable by him. A credit union may, upon the resignation or expulsion of a member, cancel his shares and apply the withdrawal value of the shares towards the liquidation of his indebtedness.

A credit union may charge an entrance fee as may be provided in the charter. Fully paid up shares of a credit union may be transferred to any person upon election to membership, upon such terms as the charter may provide and upon the payment of a transfer fee which shall not exceed twenty-five cents. No commission or compensation shall be paid for securing members or for the sale of shares.

§ 6:652.1 Types of capital

A credit union may issue any type or kind of share or savings account representing savings of members of the credit union as may be authorized by the board of directors of the credit union, and may agree to pay an additional or different rate of dividend or interest on any share or savings account based upon its classification with respect to the character, amount, duration, or regularity of the transactions with respect to such share or savings account, provided the credit union pays the same dividend or interest rate on all shares or savings accounts in the same classification.

Added by Acts 1977, No. 165, §2. Amended by Acts 1981, No. 166, §1.

§ 6:652.2 Share and share certificate accounts as legal investments

A.(1) Administrators, executors, custodians, conservators, guardians, tutors, curators, trustees, and other fiduciaries of every kind and nature; insurance companies, business and manufacturing companies, banks, trust companies, credit unions, and other types of similar financial organizations; charitable, educational, eleemosynary and public corporations, funds and organizations; the state of Louisiana, its agencies, boards, commissions, departments, municipalities, school boards, parishes, and any other political subdivision of the state, other public corporations and bodies, and the public officials thereof are hereby specifically authorized and empowered to invest without any order of any court funds held by them in share accounts or share certificate accounts of credit unions, federally chartered or state chartered, and such investments shall be deemed and held to be legal investment for such funds.

(2) Investments by banks and trust companies; by the state of Louisiana, its agencies, boards, commissions, and departments; by the state treasurer of state funds standing in the name of the state treasurer; by political subdivisions of the state and other public bodies existing under the constitution and laws of the state of Louisiana, any parish, or any political subdivision of any parish, and city, town, or village, or any political subdivision of any city, town, or village shall not exceed at any one time the sum of the primary amount insured by the National Credit Union Administration and the excess amount insured by a private sector insurance provider or a deposit insurance corporation in any one federally or state chartered credit union, in lieu of collateralization by the pledging of securities in the manner provided by R.S. 39:1221 or R.S. 49:321.

(3) With respect to investments by custodians, credit unions, federally chartered or state chartered, are hereby deemed to be "custodians" within the meaning of that term as used in the Louisiana Gifts to Minors Act of this state as provided in R.S. 9:735 et seq., provided such custodians are limited to investments in share accounts or share certificate accounts in such credit unions, federally or state chartered, or in obligations or securities issued by such credit unions, federally or state chartered.

B. Whenever, under the laws of this state or otherwise, a deposit of securities is required for any purpose, the share accounts or share certificate accounts made legal investments by this Section in the amount of such bond, when deposited therewith, shall be acceptable as security without other security.

C. The provisions of this Section are supplemental to any and all other laws relating to and declaring what shall be legal investments for the persons, fiduciaries, corporations, organizations and officials referred to in this Section, and the laws relating to the deposit of securities and the making and filing of bonds for any purpose.

Added by Acts 1977, No. 165, §2. Amended by Acts 1979, No. 487, §1; Acts 1984, No. 581, §1; Acts 2023, No. 81, §1, eff. July 1, 2023.

§ 6:652.3 Members' share capital

The credit union's financial statements shall classify members' share capital as equity.

Acts 1989, No. 495, §4.

§ 6:653 Shares of minors and in trust

Shares may be issued in the name of a minor and in trust in such manner as the charter may provide. When shares are so issued the name of the beneficiary must be disclosed to the credit union.

§ 6:653.1 Trust deposits; death of depositor; payment

A. Upon the death of a member who has deposited a sum in any federal or state credit union account evidencing an intention that upon the death of the member, the funds shall belong to the named beneficiary or beneficiaries of the member, the federal or state credit union may pay the share account, together with the dividends or accruing interest, to the named beneficiaries for whom the deposit was made, and the federal or state credit union may rely conclusively thereon. Upon receiving a death certificate, the credit union may disburse funds to the named beneficiaries. Such beneficiaries shall be specifically named in the share account records of the federal or state credit union.

B. Repealed by Acts 2016, No. 64, §2.

C. Repealed by Acts 2009, No. 499, §2.

D.(1) When a share account described in Subsection A of this Section is established by more than one member, the respective interests of each member shall be deemed equal to that of each other member, unless otherwise stated in the federal or state credit union's share account records.

(2) When a share account described in Subsection A of this Section is established for more than one beneficiary, the respective interests of each shall be deemed equal to that of each other beneficiary, unless otherwise stated in the federal or state credit union share account records.

E. No federal or state credit union paying a beneficiary in accordance with this Section shall be liable to the estate or any heir of the decedent nor shall the share account holder be liable for any estate, inheritance, or succession taxes which may be due the state, and delivery of the funds shall constitute a full and complete discharge of the federal or state credit union for the payment or delivery so made and shall relieve the federal or state credit union from all adverse claims thereto by a person claiming as a surviving or former spouse or a successor to such a spouse.

F. The provisions of this Section shall apply notwithstanding the fact the decedent designates a beneficiary by last will and testament.

Acts 1991, No. 535, §1; Acts 2001, No. 887, §1, eff. June 26, 2001; Acts 2009, No. 499, §§1 and 2; Acts 2016, No. 64, §§1, 2.

§ 6:653.2 Pledge of share accounts; rights and remedies

A. Notwithstanding the provisions of Civil Code Articles 1893 et seq., compensation takes place by operation of law between shares held on deposit with a credit union organized as provided by law or with a federal credit union domiciled in this state and any loan, extension of credit, or other obligation incurred by the member in favor of the credit union. This compensation shall apply to those shares on deposit which the member has the right to withdraw on his request or endorsement alone, except shares deposited in an Individual Retirement Account or other type of tax-deferred account. The shares to which this compensation applies shall be deemed to be pledged by the member in favor of the credit union.

B. The pledge of such share accounts need not be reflected in writing or comply with the requirements of Civil Code Art. 3158 or R.S. 9:4321 et seq. Such a pledge shall instead be deemed for any and all purposes to constitute a statutory security interest arising by operation of law. The ability of the member to withdraw funds from a share account at will shall not be deemed to adversely affect the validity of the pledge provided under this Section.

C. In the event that the member should default under any loan, extension of credit, or other direct or indirect obligation of any nature and kind whatsoever in favor of the credit union, the credit union shall have the right to apply any shares that the member then has on share with the credit union or on which the credit union has taken a security interest under the Louisiana commercial laws involving secured transactions, R.S. 10:9-101 et seq., towards the payment of the depositor's indebtedness or obligations, whether such payment satisfies the indebtedness or obligations in whole or in part. The exercise of the credit union's remedies under this Subsection shall not affect any other rights and remedies available to the credit union following the member's default, including the privilege and lien provided by R.S. 6:652 or 12 U.S.C. 1757(11).

D. The credit union shall notify the member in writing within two business days following the exercise of the credit union's remedies under Subsection C of this Section. Such notice shall be forwarded by registered or certified mail to the member's most current address reflected in the credit union's records. In the event that the credit union mails such a notice to the member within the above time period, the credit union shall have no liability to the member or to any other person or persons as a result of the credit union's dishonor of checks or drafts drawn on the member's accounts with the credit union.

E. The rights and remedies afforded to credit unions under this Section shall be in addition to a credit union's contractual rights of compensation or setoff as provided in members' notes and agreements and shall further be in addition to any other rights and remedies that a credit union may have with regard to member share accounts on which the credit union may have a security interest subject to the Louisiana commercial laws involving secured transactions.

F. Notwithstanding the provisions of Civil Code Articles 1893 et seq., compensation or setoff shall occur by operation of law between any funds held on share with the credit union and any loans, extensions of credit, or other obligations of the member incurred in favor of the credit union, except that those shares held in any account designated as a trust account established on behalf of a person or persons other than the named member shall not be subject to compensation or setoff as provided in this Section.

Acts 1995, No. 293, §1.

§ 6:653.3 Ownership of shares

A credit union may conclusively rely on any membership application, agreement, or signature card used to establish a share account as establishing ownership of any shares and other credits deposited therein, and may consider and treat any funds on share in such an account as belonging to and the sole and exclusive property of the member or members named on the account membership application, agreement, or signature card, unless otherwise notified or directed by such member or members.

Acts 1995, No. 293, §1.

§ 6:653.4 Death of member or account owner; access and transfer of accounts, shares, and property to succession representative, heirs, legatees, and legal representative

A. For all purposes, credit union may conduct business in accordance with its bylaws, membership agreements, and other relevant contract terms concerning a deceased member or depositor until it receives written notice specifically addressed to it of the death of the member or depositor that identifies therein the accounts, shares, all accrued interest or dividends, safe deposit boxes and their contents, and any other property, either on deposit or otherwise in the credit union's possession, that are standing in the name of the deceased member or depositor or in which the deceased member or depositor has an interest.

B.(1) In addition to the provisions of R.S. 6:664, upon receipt of letters testamentary, letters of administration, or letters of independent administration, issued by a court of competent jurisdiction in this state or any other state, appointing any authorized succession or estate representative, a credit union may grant access to or allow the transfer of contents of a safety deposit box or money or other property titled in the name of its deceased member or depositor to the succession or estate representative.

(2) Notwithstanding the provisions of Code of Civil Procedure Article 3402 or any other applicable law, a credit union may grant access to or allow the transfer of contents of a safety deposit box or money or other property titled in the name of the credit union's deceased member or depositor to the succession or estate representative appointed by a court outside of Louisiana.

(3) The credit union may continue to follow the direction of the authorized succession or estate representative related to the safety deposit box or money or other property of its deceased member or depositor unless and until the credit union receives a subsequent court order, issued by a court of competent jurisdiction, specifically naming and directing the credit union to cease following the direction of the succession or estate representative, or the credit union receives a subsequent court order, issued by a court of competent jurisdiction, limiting or terminating the authority of or replacing the succession or estate representative.

(4) A judgment of possession or court order issued by a court of competent jurisdiction issued by a court of this state or any other state recognizing and putting the legatees or heirs in possession of the estate of its deceased member or depositor shall constitute full and proper authority for the credit union holding a safety deposit box or money or other property titled in the name of the deceased member or depositor to transfer those assets to the legatees or heirs entitled to such property under the judgment of possession.

C. Conclusive proof to a credit union of the letters testamentary, letters of administration, letters of independent administration of the succession or estate representative, or judgment of possession or court order, issued by a court of competent jurisdiction, shall result from copies thereof, duly certified when rendered by a court of this state or of any other state, or certified according to the law of the place when rendered by a court of any possession or dependency of the United States, or certified according to the law of the place with the genuineness of the certification attested by a consular agent of the United States when rendered by a court of any foreign country.

D. Transfers made in accordance with the provisions of this Section shall constitute full protection to a credit union as to any heir, legatee, surviving spouse, creditor, those who are sui juris or claims related to such activity or transaction and the credit union shall have no liability to the state of Louisiana for any taxes due thereon.

Acts 1999, No. 703, §1, eff. July 1, 1999; Acts 2010, No. 175, §6; Acts 2013, No. 65, §1, eff. May 30, 2013; Acts 2024, No. 759, §1.

§ 6:654 Rates of interest

A. Notwithstanding any other provision of the law to the contrary, a credit union may lend to its members at such maximum fixed rates or maximum variable rates of interest, as provided for in the bylaws of the credit union, which have been approved by the commissioner of financial institutions. An endorser, guarantor, or co-maker shall be subject to the same interest charge as a member of the credit union.

B. Notwithstanding any other provision of the law to the contrary, with respect to a loan to a member pursuant to an open-end credit, revolving credit, or line of credit loan account, a credit union may contract to receive and collect a finance charge, which may be such maximum fixed rates or maximum variable rates of interest in any amount, as provided for in the credit union bylaws, which have been approved by the commissioner of financial institutions. The finance charge may be added to the loan balance on the monthly due date or monthly billing date or the proportionate part due may be added when a new advance is made.

C. Notwithstanding any other provision of the law to the contrary, a credit union may provide in the bylaws for fees and costs incidental to the making of loans and for late charges, which have been approved by the commissioner of financial institutions.

Amended by Acts 1954, No. 530, §1; Acts 1972, No. 160, §1; Acts 1975, No. 653, §3; Acts 1979, No. 487, §1; Acts 1980, No. 210, §1; Acts 1982, No. 436, §1.

§ 6:655 Power to borrow

A. A credit union may borrow from any source, but the total of such borrowing at no time shall exceed fifty percent of its paid in and unimpaired capital and surplus.

B. The limitation in Subsection A of this Section shall not apply to a central or corporate credit union. However, the borrowing limitations of a central or corporate credit union shall be provided for in its bylaws as approved by the commissioner.

Amended by Acts 1954, No. 530, §1; Acts 1983, No. 351, §1.

§ 6:656 Loans

A. A credit union may make loans, under terms and conditions specified in the bylaws, to its members, and extend lines of credit to its members, to other credit unions, and to credit union organizations, and to participate with other credit unions, credit union organizations, or financial organizations to credit union members in accordance with the following:

(1) Loans to members shall be made in conformity with criteria established by the board of directors if:

(a) Real estate loans secured by a first mortgage on real estate shall not be in excess of eighty-five percent of the value of the property, as determined by a written appraisal, unless the loan amount in excess of eighty-five percent is covered through private mortgage or equivalent insurance.

(b) A loan to finance the purchase of a mobile home, which shall be secured by a first lien on such mobile home to be used by the credit union member as his residence, or for the repair, alteration, or improvement of a residential dwelling which is the residence of a credit union member shall have a maturity not to exceed twenty years, unless such loan is insured or guaranteed as provided in Subparagraph (c).

(c) A loan secured by the insurance or guarantee of the federal government, a state government, any agency of either, or a private-sector insurance provider may be made for the maturity and under the terms and conditions specified in the law under which such insurance or guarantee is provided.

(d) A loan or aggregate of loans to a director or member of the supervisory or credit committee of the credit union making the loan, including direct obligors, endorsers, cosigners, or guarantors, which exceeds twenty thousand dollars, plus pledged shares, shall be reviewed and approved or denied by the board of directors.

(e) Loans to other members for which directors or members of the supervisory or credit committee act as guarantor or endorser shall be approved or rejected by the board of directors when such loans standing alone or when added to any outstanding loan or loans of the guarantor or endorser exceeds twenty thousand dollars.

(f) No loan may be made to any member, if, upon making of that loan, the member would be indebted to the credit union upon loans made to him in an aggregate amount which would exceed ten per centum of the credit union's unimpaired capital and surplus.

(g) Any director or committeeman who knowingly and willfully makes or agrees to the making of any loan to other than a member or another qualified credit union shall, by such act, become jointly, severally, or solidarily responsible with the maker and endorser for the full amount of the debt.

(h) A borrower may repay his or her loan prior to maturity in whole or in part on any business day without penalty.

(2) A self-replenishing line of credit to a borrower may be established to a stated maximum amount on certain terms and conditions which may be different from the terms and conditions established for another borrower.

(3) Excluding loans made by a corporate credit union, loans to other credit unions shall be approved by the board of directors.

(4) Loans to credit union organizations shall be approved by the board of directors and shall not exceed one per centum of the paid-in and unimpaired capital and surplus of the credit union. A credit union organization means any organization as determined by the board, which is established primarily to serve the needs of its member credit unions, and whose business relates to the daily operations of the credit unions they serve.

(5) Participation loans with other credit unions, credit union organizations, or financial organizations shall be in accordance with written policies of the board of directors; provided that a credit union which originates a loan for which participation arrangements are made in accordance with this Subsection, shall retain an interest of at least ten per centum of the face amount of the loan.

B. A borrower may repay the whole or any part of his loan on any day on which the office of the credit union is open for transaction of business.

C. Any director or committeeman who knowingly and willfully makes or agrees to the making of any loan to other than a member or another qualified credit union shall by such act become jointly, severally, or in solido responsible with the maker and endorsers for the full amount of the debt.

D. A credit union may make loans to its members on a revolving credit, open-end credit, or line of credit loan plan in conformity to Regulation Z of the Truth-in-Lending Act. The terms and maturities of this type of loan shall be the same as in Subsection A of this Section.

Amended by Acts 1954, No. 530, §1; Acts 1964, No. 112, §1; Acts 1968, No. 180, §2; Acts 1970, No. 401, §5; Acts 1972, No. 160, §1; Acts 1974, No. 598, §3; Acts 1975, No. 653, §3; Acts 1977, No. 165, §1; Acts 1978, No. 480, §2; Acts 1979, No. 487, §1; Acts 1980, No. 210, §1; Acts 1981, No. 166, §1; Acts 1991, No. 162, §1; Acts 1991, No. 655, §1; Acts 1999, No. 703, §1, eff. July 1, 1999; Acts 2001, No. 887, §1, eff. June 26, 2001; Acts 2003, No. 362, §1, eff. June 18, 2003; Acts 2023, No. 81, §1, eff. July 1, 2023.

§ 6:657 Repealed by Acts 2001, No. 887, §2, eff. June 26, 2001.

Repealed by Acts 2001, No. 887, §2, eff. June 26, 2001.

§ 6:658 Dividends

A. At such intervals as the board of directors may authorize and after provision for the required reserve and subject to applicable federal regulations, the board of directors may declare a dividend to be paid, at different rates on different types of shares, and at different rates and maturity dates in the case of share certificates, from the remaining net earnings. Dividend credit may be accrued on various types of shares and share certificates as authorized by the board of directors.

B. Provided no credit union shall declare or pay any dividends on its shares except from current net earnings, and undivided profits. Provided, further, that in the event of delinquency in loans there shall be no dividends paid unless the reserve fund shall be equal to or in excess of the sum of 10 percent of the unpaid balance of loans delinquent more than two months and less than six months, plus twenty-five percent of the unpaid balances of loans delinquent from six months to less than twelve months, plus fifty percent of the unpaid balances of loans delinquent from twelve months to less than eighteen months, plus one hundred percent of the unpaid balances of loans delinquent eighteen months or more; provided, further, that in the event the legal reserve fund does not equal the amount required as hereinabove set forth, then and in that event the reserve fund shall be supplemented by a special reserve for delinquent loans in an amount which will make the reserve fund and the special reserve equal to the sum required in accordance with the schedule hereinabove set forth.

Amended by Acts 1954, No. 530, §1; Acts 1970, No. 401, §6; Acts 1975, No. 653, §3; Acts 1977, No. 165, §1.

§ 6:659 Expulsion and withdrawal of members

A.(1) At any regularly called meeting the members may, by a two-thirds vote of those present, expel any member from the corporation for cause. A member may withdraw from a credit union, as provided in this Chapter, by filing a written notice of his intention.

(2) A credit union may expel a member for cause, pursuant to a written policy adopted by its board of directors. This expulsion may occur solely by board action, without the necessity of a meeting of the members. For the purposes of this Section, "cause" includes conduct by the offending member that caused a loss to the credit union, violated the membership agreement or any policy or procedure adopted by the board of directors, or exhibited inappropriate behavior such as physical or verbal abuse of other credit union members or staff.

(3) Any person so expelled shall have the right to file a written request to the board of directors to reconsider the expulsion.

B. All amounts paid in on shares of an expelled or withdrawing member with any dividends credited to his share to the date of expulsion or withdrawal shall be paid to the member, but only as funds for this become available and only after deducting any amount due to the corporation by the member. All deposits and shares of an expelled or withdrawing member, with any interest accrued, shall be paid the member subject to sixty days notice, and any amounts due to the corporation by the member shall be deducted. The member when withdrawing shares has no further right in the credit union or to any of its benefits, but the expulsion or withdrawal does not relieve the member from any remaining liability to the corporation.

Acts 2019, No. 188, §1.

§ 6:659.1 Inactive accounts

Notwithstanding any other provision of law to the contrary, if any credit union domiciled in Louisiana is unable to contact a member, beneficiary or other person via first class mail at the last address shown on the records of the credit union, and if such inability continues for a period of more than two years, all shares, dividends and other sums not in excess of one hundred dollars due to or standing in the name of such member, beneficiary, or other person may, by action of the board of directors, be credited to the reserve for inactive accounts of the credit union, and thereafter no dividends will accrue thereto. The members shall have the right to reclaim any such sums after such action of the board of directors. This provision shall not apply to shares, dividends and other sums due to or standing in the name of two or more persons unless the credit union is unable to contact any of such persons in the manner and during the period specified in this provision.

Added by Acts 1968, No. 180, §3. Amended by Acts 1974, No. 598, §4.

§ 6:659.2 Federally insured credit unions; abandonment of safety deposit box

The provisions of R.S. 6:327 and 327.1 shall apply to abandonment of a safety deposit box leased from a federally insured credit union.

Acts 2019, No. 188, §1; Acts 2020, No. 236, §1.

§ 6:660 Voluntary dissolution

A. A credit union may elect to dissolve voluntarily and liquidate its affairs in the manner prescribed in this Section.

B. The board of directors shall adopt a resolution recommending the credit union be dissolved voluntarily, and directing that the question of liquidation be submitted to the members.

C. Within ten days after the board of directors decides to submit the question of liquidation to the members, the president shall notify the commissioner and any government agency or other organization insuring member accounts thereof in writing, setting forth the reasons for the proposed liquidation. Within ten days after the members act on the question of liquidation, the president shall notify the commissioner and any government agency or other organization insuring member accounts, in writing, as to the action of the members on the proposal.

D. As soon as the board of directors decides to submit the question of liquidation to the members, payments on shares, share certificates, deposits, deposit certificates, withdrawal of shares, making any transfer of shares to loans, and interest, making investments of any kind, and granting loans shall be suspended, pending action by members on the proposal to liquidate. On approval by the members of such proposal, all such business transactions shall be permanently discontinued. Necessary expenses of operation shall continue to be paid on authorization of the board of directors or liquidating agent during the period of liquidation.

E. For a credit union to enter voluntary liquidation, approval by a majority of the members, in writing or by a two-thirds majority of the members present at a regular or special meeting of the members, is required. Where authorization for liquidation is to be obtained at a meeting of the members, notice in writing shall be given to each member, by first class mail, at least ten days prior to such meeting.

F. A liquidating credit union shall continue in existence for the purpose of discharging its debts, collecting on loans, distributing its assets, and doing all acts required in order to wind up its business. It may sue and be sued for the purpose of enforcing such debts and obligations until its affairs are fully concluded.

G. The board of directors or the liquidating agent shall use the assets of the credit union to pay: first, expenses incidental to liquidation including any surety bond that may be required; second, any liability due non-members; third, deposits and deposit certificates as provided in this Section. Assets then remaining shall be distributed to the members proportionately to the shares held by each member as of the date dissolution was voted.

H. As soon as the board of directors or the liquidating agent determines that all assets from which there is a reasonable expectancy of realization have been liquidated and distributed as set forth in this Section, they shall execute a certificate of dissolution on a form prescribed by the commissioner and file the same, together with all pertinent books and records of the liquidating credit union, with the commissioner, whereupon such credit union shall be dissolved.

I. A credit union having an occupational group common bond where the sponsor organization is dissolved must submit to the commissioner of financial institutions for approval to continue the credit union service to its members a plan to protect the rights of all members of record at the time of the loss of the sponsor organizations.

Amended by Acts 1954, No. 530, §1; Acts 1982, No. 436, §1.

§ 6:661 Change of place of business

A credit union may change its place of business upon written notice to the commissioner.

§ 6:661.1 Branch offices

A. A credit union which meets all of the following criteria may open one or more branch offices, without prior approval of the commissioner, by giving the commissioner at least ten days notice prior to the opening of the branch office:

(1) The most recent credit union examination rating is two or better.

(2) The aggregate investment of the credit union in fixed assets, including any additional investment associated with the proposed branch office, is less than fifty percent of its total capital and reserves.

(3) The net worth ratio of the credit union is at least seven percent as of the previous quarter-end.

B. If a credit union does not meet the requirements of Subsection A of this Section, the credit union shall file an application for approval with the commissioner in the manner and form prescribed by him to open a branch office. If the application is denied, the credit union may appeal the decision in the same manner as provided for in R.S. 6:131 et seq.

Acts 2001, No. 887, §1, eff. June 26, 2001; Acts 2003, No. 362, §1, eff. June 18, 2003.

§ 6:662 Taxation

A credit union is an institution for savings. It, together with all accumulations therein, is not subject to taxation except as to immovable property owned. The shares of a credit union are not subject to a stock transfer tax when issued by the corporation or when transferred from one member to another. No fees or taxes nor any of the stipulations as to capital stock set forth in general statutes for corporations apply to credit unions.

§ 6:662.1 Fiscal agents and depositories

Each credit union organized under this Chapter, when requested by the secretary of the treasury, may act as fiscal agent of the United States and may perform such services as the secretary of the treasury may require in connection with the collection of taxes and other obligations due the United States and the lending, borrowing and repayment of money by the United States, including the issue, sale, redemption or repurchase of bonds, notes, treasury certificates of indebtedness, or other obligations of the United States. Any credit union organized under this Chapter, when designated for that purpose by the secretary of the treasury, may be a depository of public money, except receipts from customs, under such regulations as may be prescribed by the secretary of the treasury.

Added by Acts 1979, No. 487, §1.

§ 6:663 Money deposited by minors

Money deposited in shares in credit unions doing business in this state by minors themselves may be drawn out by them upon their own signature without other authorization. The credit union shall prescribe limitations and procedures for minor accounts in the bylaws.

Added by Acts 1950, No. 391, §1; Acts 1995, No. 293, §1.

§ 6:664 Money deposited in a multiple party account

A. In addition to the provisions of R.S. 6:653.4, when a deposit in a share account is made in any credit union under the names of two or more members payable to any one of such members, that share account or any part of it or any interest or dividend on it may be paid to any one of such members, whether the other member or members be living or not, and the receipt or acquittance of the member paid is a full release and discharge of the credit union as to any heir, legatee, creditor, or other person having rights or claims to funds of such deceased member for any payment made; nor shall any credit union paying any such member in accordance with the provisions of this Section thereby be liable for any estate, inheritance, or succession taxes that may be due this state.

B.(1) When any such share deposit is made in any credit union under the names of two or more persons payable to any one of such members, if one of such members seeks to prevent payments from that account, that member must give written notice of his desire to prevent payment. The notice must be signed by him and delivered to the credit union. After the receipt of such notice from one or more of such members, the credit union may refuse to honor any check, draft, or demand upon the share account or by any of the members, including the one or ones requesting the stopping of payment, unless all of the members upon the account join in drawing such draft or check or demand for payment or other withdrawal of any of the funds.

(2) In the event any credit union has received a notice in writing as provided by this Subsection or a notice as provided in R.S. 10:4-403, such credit union shall be relieved of responsibility to each and every one of the members upon the account or share deposit in question for failure or refusal to honor any check or draft or demand for payment or other withdrawal unless the action is taken by all of the parties in whose names the account or share deposit stands.

C. The pledge to a credit union of all or part of the share account in the names of two or more persons including but not limited to term accounts, savings accounts, or share certificates executed by a person upon whose signature withdrawals may be made shall, unless the terms of the share account provide specifically to the contrary, be a valid pledge to the credit union of all the share accounts pledged.

D. Notwithstanding the provisions of R.S. 9:1513 and 1514, or any similar provision, the provisions of this Section establish the exclusive method for payment of funds from an alternative account.

E. Notwithstanding any other law to the contrary, any federally insured credit union may by contract prohibit or otherwise limit the pledge, assignment, collateral assignment, or granting of any other type of security interest in any share account maintained or established at such credit union, including those share deposit accounts evidenced by certificates issued by such credit union.

Added by Acts 1950, No. 391, §1. Amended by Acts 1976, No. 319, §1; Acts 1995, No. 293, §1; Acts 2001, No. 128, §3, eff. July 1, 2001; Acts 2013, No. 65, §1, eff. May 30, 2013; Acts 2014, No. 791, §3.

§ 6:665 Bylaws

A. The members of a credit union may make, amend and repeal the by-laws of the credit union. This power may be expressly vested by the articles, or by a by-law adopted by the members, in the board of directors, subject always to the power of the members to change the action of the directors. Unless the articles or by-laws provide otherwise, the powers hereby conferred shall be exercised by a majority vote of the directors or the members of the credit union, as the case may be, present at any regular or special meeting convened after at least ten days' notice, and the notice has contained a copy of the proposed by-laws or proposed amendment or amendments.

B. No by-laws or amendments of the by-laws shall become effective, however, until approved in writing by the commissioner.

C.(1) Notwithstanding Subsection B of this Section, a credit union may amend its bylaws through a field of membership expansion by providing written notice to the commissioner in the manner and on a form prescribed by him, if the credit union meets all the criteria below:

(a) The most recent credit union examination rating is two or better.

(b) The net worth ratio of the credit union is at least seven percent as of the previous quarter-end.

(c) The group proposed for membership consists of five hundred or fewer individuals.

(2) However, the commissioner may issue a written notice of disapproval within ten days after receiving such form, or longer time if the commissioner determines that additional information is required.

Added by Acts 1954, No. 530, §1. Amended by Acts 1968, No. 180, §4; Acts 2003, No. 363, §1, eff. June 18, 2003.

§ 6:666 Constitutionality

If any clause, sentence, paragraph or part of this Chapter for any reason be adjudged by any court of competent jurisdiction to be invalid, such judgment shall not affect, impair or invalidate the remainder of said Chapter, but shall be confined in its operation to the clause, sentence, paragraph or any part thereof, directly involved in the controversy in which such judgment has been rendered.

Added by Acts 1954, No. 530, §1.

§ 6:667 Conversion from federal to state and from state to federal credit union; division of assets

A.(1) A federal credit union may be converted into a state credit union under this Chapter by (a) complying with all the federal requirements requisite to enabling it to convert to a credit union under this Chapter or to cease being a federal credit union, (b) filing with the commissioner proof of such compliance, satisfactory to the commissioner, and (c) filing with the commissioner an act of incorporation as provided for in R.S. 6:641.

(2) When the commissioner has been satisfied that all of the requirements, and all other requirements of this Chapter, have been complied with, the commissioner shall approve the act of incorporation. Upon such approval the federal credit union shall become a credit union under this Chapter as of the date it ceases to be a federal credit union. The credit union under this Chapter shall be vested with all of the assets and shall continue responsible for all of the obligations of the federal credit union to the same extent as though the conversion had not taken place.

B. A credit union organized under this Chapter may be converted into a federal credit union by complying with the following requirements:

(1) The proposition for such conversion shall first be approved, and a date set for a vote thereon by the members (either at a meeting to be held on such date or by written ballot to be filed on or before such date), by a majority of the directors of the credit union. Written notice of the proposition and of the date set for the vote shall then be delivered in person to each member, or mailed to each member at the address for such member appearing on the records of the credit union, not more than thirty nor less than seven days prior to such date. Approval of the proposition for conversion shall be by the affirmative vote of a majority of the members, in person or in writing.

(2) A statement of the results of the vote, verified by the affidavits of the president or vice-president, and the secretary, shall be filed with the commissioner within ten days after the vote is taken.

(3) Promptly after the vote is taken and in no event later than ninety days thereafter, if the proposition for conversion was approved by such vote, the credit union shall take such action as may be necessary under the applicable federal law to make it a federal credit union, and within ten days after receipt of the federal credit union charter there shall be filed with the commissioner a copy of the charter thus issued. Upon such filing the credit union shall cease to be a credit union organized under this Chapter.

(4) Upon ceasing to be a credit union organized under this Chapter, such credit union shall no longer be subject to any of the provisions of this Chapter. The successor federal credit union shall be vested with all of the assets and shall continue responsible for all the obligations of the credit union organized under this Chapter to the same extent as though the conversion had not taken place.

C.(1) This subsection prescribes the procedure that will enable members of a credit union organized under this chapter who are a separately identifiable group to undertake an equitable division of their assets, liabilities and capital and charter a new credit union.

(2) A credit union may undertake an equitable division of its assets, liabilities and capital when:

(a) A group of persons within the field of membership of the credit union constitutes a separately identifiable group which is eligible for a credit union charter;

(b) A sufficient number of those in the separately identifiable group have authorized transfer of their share and loan accounts to justify the division; and

(c) The other requirements of the law are met.

(3) Upon the board of directors approval of a proposition for the credit union to divide its assets, liabilities and capital between itself and a credit union to be organized to serve persons in a separately identifiable group with the existing credit union's field of membership, the board shall:

(a) Appoint a committee of at least three members of the said group to assist in the preparation and execution of a plan for division and to subscribe to articles of incorporation for the proposed new credit union; and

(b) Promptly notify the commissioner of financial institutions of these actions.

(4) The board of directors shall prepare a plan for division which shall provide that:

(a) The members within the separately identifiable group shall have the option to be exercised in writing by a specified date, of (i) authorizing the transfer of their accounts to the new credit union upon approval of its charter by the commissioner of financial institutions, or (ii) maintaining their accounts in the existing credit union, provided, however, the bylaws of the existing credit union would permit such retention.

(b) The remaining assets, liabilities and capital will be equitably divided; and

(c) The records will be closed and the division effected by a specified date, subsequent to but no later than six months after the date set for members to exercise their options as specified in this subparagraph.

(5) The board of directors shall give written notice of the options set forth in Paragraph (4) to each person who would be eligible for membership in the proposed new credit union. The written notice shall contain a summary of the plan and a form for confirmation of account balances and authorization for transfer of accounts. If authorization is given to transfer an account, it shall be valid for six months from the date fixed for the exercise of the option.

(6) If a number of members, sufficient to make the division reasonable and feasible, have authorized the transfer of their accounts by the date fixed for exercising the option to transfer, the board of directors shall submit the following information to the commissioner of financial institutions:

(a) A copy of the plan for division of assets, liabilities and capital;

(b) A current financial and statistical report;

(c) A certification of acceptance of option to transfer shares and loans; summarizing the result of the notice of option to transfer; and

(d) A schedule of the share and loan balances of all members who authorized the transfer of their accounts.

(7) An examiner will make the necessary investigation. If requirements are met and the plan appears acceptable, the examiner will assist in holding the charter-organization meeting and completing the required forms.

(8) If the commissioner of financial institutions finds that the plan for division complies with this and other parts of this chapter, he will approve the plan and authorize the board of directors of the existing credit union to present the proposal to the members for approval at an annual or special meeting as provided in Paragraph (9).

(9)(a) If the commissioner of financial institutions approves the plan for division, it may be submitted to the members at an annual meeting, if one is to be held at a time which will assure consummation of the plan within six months after the expiration of the option to transfer, or at a special meeting to be called as provided in the bylaws and held within the six month period.

(b) The notice of the meeting shall:

(i) be given to each member of the credit union;

(ii) state that one of the purposes of the meeting is to vote on the proposed plan;

(iii) advise the members of the reasons for the proposal, the fact that the commissioner of financial institutions has given his approval, the number of eligible members who have authorized the transfer of their accounts, and the membership vote required for approval; and

(iv) be accompanied by a copy of the plan for division of assets, liabilities and capital.

(c) A majority of the members present and voting at the meeting must approve the plan in order for the board of directors to proceed with the division.

(d) The board of directors will promptly certify the results of the membership vote to the commissioner of financial institutions.

(10)(a) If the plan was approved by the members of the existing credit union as provided in Paragraph (9), the commissioner of financial institutions will issue the charter to the new credit union.

(b) The division will be completed as of the date specified in the plan. Upon completion of the division, the new credit union will be vested with all assets received and will be responsible for all liabilities and capital assumed.

(c) The boards of directors for both credit unions will promptly certify the completion of the division to the commissioner of financial institutions. Financial and statistical reports for both credit unions, before and after the division, will accompany the certification.

Added by Acts 1966, No. 467, §4. Amended by Acts 1974, No. 598, §5.

§ 6:667.1 Powers, privileges, and exemptions of federal credit unions

A. Unless federal laws or regulations provide otherwise, federal credit unions and federally insured credit unions and the members thereof shall possess all of the rights, powers, privileges, benefits, immunities, and exemptions that are now provided or hereafter may be provided by the laws of this state for credit unions organized under the laws of this state and for the members thereof. This provision is additional and supplemental to any provision which by specific reference is applicable to federal credit unions and the members thereof.

B. Credit unions organized under the laws of this state and the members thereof shall possess all of the rights, powers, privileges, benefits, immunities, and exemptions that are now granted or hereafter may be granted by this state, its agencies and subdivisions, by virtue of federal law, including the Federal Credit Union Act as amended, to federal credit unions and the members thereof.

C. Credit unions organized under the laws of another state and the members thereof, shall possess all of the rights, powers, privileges, benefits, and immunities and exemptions that are provided or hereafter may be provided by the laws of this state for credit unions organized under this Chapter and for the members thereof; provided credit unions organized in this state are granted the same rights, powers, privileges, benefits and immunities and exemptions that are provided the credit unions of that state.

Added by Acts 1975, No. 653, §4. Amended by Acts 1981, No. 166, §1; Acts 1983, No. 351, §1; Acts 1989, No. 495, §5.

§ 6:667.2 Annual report

A. On or before May 15 of each year, the president, treasurer, or other proper officer, or any two directors of each credit union doing business in this state, shall make and sign a report to the commissioner of financial institutions, stating:

(1) The post office address and the municipal address or location, which shall not be a post office box only, of its registered office.

(2) The name and post office address and municipal address or location, which shall not be a post office box only, of each registered agent.

(3) The names and municipal addresses, which shall not be a post office box only, of all its directors, and officers, and when the term of each expires.

(4) The name and address of the government agency or other corporation insuring the shares of its members.

B. Credit unions with their principal office in the state of Louisiana may file a copy of the Report of Officials, NCUA Form 9610, to satisfy the requirements of this Section.

Acts 1985, No. 65, §2.

§ 6:667.3 Records as evidence

A. An official record of a member's account in a credit union doing business in this state, or an entry therein, when admissible for any purpose, may be evidenced by a copy attested by the officer having legal custody of the member's records.

B. Notwithstanding any law or provision to the contrary, with respect to any power exercised by credit unions, each reproduction, as defined in R.S. 13:3733.1(A), shall be an original as defined in Article 1001 of the Louisiana Code of Evidence, and under any other similar codes of evidence or other evidentiary laws or rules of any other jurisdiction.

Acts 1985, No. 65, §2; Acts 2014, No. 440, §1, eff. July 1, 2014.

§ 6:668 Criminal Penalties

Whoever knowingly makes any false statement or report for the purpose of influencing in any way the action of a credit union organized under this Chapter, upon any application, or loan, or any change or extension of any of the same, by refinance or otherwise, or the acceptance, release or substitution of security therefor, shall be fined not more than one thousand dollars or imprisoned not more than one year, or both.

Acts 1970, No. 401, §7.

§ 6:669 Short title

This Chapter shall be known and may be referred to as the "Louisiana Credit Union Law".

Added by Acts 1976, No. 319, §2.

CHAPTER 9 HOMESTEAD AND SAVINGS AND LOAN

§ 6:701 Applicability

This Chapter is enacted under the legislature's police power and reserved constitutional power to enact law for the regulation of associations, and shall be effective as to all associations heretofore or hereafter incorporated or authorized to transact business in this state.

Acts 1983, No. 675, §1.

§ 6:702 Short title

This Chapter shall be known as and cited as the Louisiana Savings and Loan Association Law.

Acts 1983, No. 675, §1.

PART I GENERAL DEFINITIONS

§ 6:703 Definitions

When used in this Chapter, the following words and phrases shall have the following meanings, unless the context otherwise requires:

(1) "Association" means a savings association, thrift institution, homestead, building and loan association, savings and loan association, or society, including both capital stock and mutual associations. The term shall also include associations organized and chartered under the Louisiana Homestead and Building and Loan Law or those existing prior to July 27, 1932.

(2) "Affiliate" of an association means any corporation, business trust, association, or other similar organization:

(a) Of which an association directly or indirectly, owns or controls either a majority of the voting shares or more than fifty percent of the number of shares voted for the election of its directors, trustees, or other persons exercising similar functions at the preceding election, or controls in any manner the election of a majority of its directors, trustees, or other persons exercising similar functions.

(b) Of which control is held, directly or indirectly through stock ownership or in any other manner by the stockholders of an association who own or control either a majority of the shares of such association or more than fifty percent of the number of shares voted for the election of directors of such association at the preceding election, or by trustees for the benefit of the shareholders of any such association.

(c) Of which a majority of its directors, trustees, or other persons exercising similar functions are directors of any one association.

(3)(a) "Capital stock association" means an association, not in the mutual form, having capital stock ownership.

(b) "Mutual association" means an association, not having capital stock ownership and operating in the mutual form.

(4) "Commissioner" means the commissioner of financial institutions, of the state of Louisiana, in his capacity as supervisor of associations.

(5) "Demand account" means an account payable on demand which is not a savings account.

(6) "Depositor" means a holder of a savings, demand, or other type of deposit account of an association.

(7) "Direct-reduction loan" means a loan or other obligation repayable in consecutive installments, sufficient to retire the debt, principal and interest, within a certain stated or specified period of time.

(8) "Financial institution" means a thrift institution, association, commercial bank, or trust company.

(9) "Gross negligence" means a reckless disregard of, or a carelessness amounting to indifference to, the best interests of the financial institution or the shareholders thereof, and involves a substantial deviation below the standard of care expected to be maintained by a reasonably careful person under like circumstances.

(10) "Impaired condition" means a condition in which the assets of an association in the aggregate do not have a fair value equal to the aggregate amount of liabilities of the association.

(11) "Insured association" means an association, the savings accounts or shares of which are insured by the Federal Savings and Loan Insurance Corporation or its successor.

(12) "Liquid assets" means cash on hand; cash on deposit in federal home loan banks, federal reserve banks, in banks performing similar reserve functions, in commercial banks, or associations, which is withdrawable upon not more than thirty days notice, and which is not pledged as security for indebtedness, except that any deposits in a bank or association under the control or in the possession of any supervisory authority shall not be considered as liquid assets; and obligation of, or obligations which are fully guaranteed as to principal and interest by, the United States, this state, or municipalities or political subdivisions of this state, or any other obligation approved by the commissioner.

(13)(a) "Member" means a person or entity holding a savings or demand account of or shares of a mutual association, and may include a person borrowing from or assuming or obligated upon a loan or interest therein held by such association if such is authorized by the charter or the bylaws of the association. A joint relationship, whether of savers or borrowers, constitutes a single membership.

(b) "Stockholder" means the owner of one or more shares of any class of capital stock of a capital stock association.

(14) "One borrower" means any person or entity which is, or which upon the making of a loan becomes, an obligor on a real estate loan or otherwise an obligor to the association, either directly or indirectly.

(15) "Real estate loan" means any loan or other obligation secured, as provided for in this Chapter, by immovable property held in full ownership or under a lease extending or renewable automatically for a period of at least five years beyond the date scheduled for the final principal payment of such loan or obligation, or any transaction out of which a mortgage or vendor's privilege is created against such immovable property including but not limited to the purchase of such real estate by an association and the concurrent or immediate sale thereof on installment contract.

(16) "Savings account" means an account to which earnings, including interest, is paid or accrued. Stock in a capital stock association shall not be deemed a savings account.

(17)(a) "Share" means any share, certificate, security, account, or other evidence of funds invested in a mutual association by a member thereof, other than a savings or demand account.

(b) "Stock" means capital stock of a capital stock association.

(18) "Savings liability" means the aggregate amount of savings accounts of depositors and shares of members, plus earnings credited to such accounts, less redemptions and withdrawals.

(19) "Service organization" means a corporation in which the shares of stock may be owned by one or more associations, financial institutions, or other persons.

(20) "Thrift institution" means an association, a homestead association,society or company, a savings and loan association, a building and loan association, a savings association, a foreign savings association, a federal savings association, a federal savings and loan association, a federal savings bank, or a supervised thrift and residential financing institution of a substantially similar nature.

(21) "Unsafe and unsound condition" means the inability of an association to meet its withdrawal requests or the association having violated its charter.

(22) "Withdrawal value" means the amount credited to the shares of a member or to a savings or demand account, less lawful deductions therefrom, as shown on the records of the association.

Acts 1983, No. 675, §1; Acts 1986, No. 163, §1; Acts 1990, No. 667, §1, eff. July 19, 1990; Acts 1992, No. 586, §1, eff. June 30, 1992; Acts 1999, No. 633, §1, eff. July 1, 1999.

{{NOTE: SEE ACTS 1992, NO. 586, §2, FOR RETROACTIVE APPLICABILITY AND PERIOD OF REPOSE.}}

PART II ORGANIZATION AND INCORPORATION

§ 6:704 Organization

Any number of natural persons, not less than five, who are residents of the state, may organize an association.

Acts 1983, No. 675, §1.

§ 6:705 Incorporation; articles of incorporation; content; bylaws

A. Every association organized under this Chapter shall be incorporated and formed under written articles of incorporation. These articles shall be written in the English language and shall be signed by each incorporator or by an agent of each incorporator duly authorized by a document attached to the articles. The articles shall be acknowledged by any incorporator before a notary public and two witnesses, or may instead be executed by authentic act.

B. The articles shall set forth:

(1) The name of the corporation and the general nature of the business to be transacted or a statement that the corporation may engage in any activity or business permitted by this Chapter.

(2) The duration of the corporation, if other than perpetual.

(3) The place chosen for its domicile, which shall be in this state.

(4) The full name and address of each incorporator and, in the case of a capital stock association, the full name and address of each subscriber and the number of shares subscribed.

(5) The maximum and minimum number of directors and the mode of their election.

(6) Any provision which the incorporators may choose to insert for the regulation of the business and for the conduct of affairs of the corporation and any provision creating, dividing, limiting or regulating the powers of the corporation, the directors and the members or stockholders, or any class of members or stockholders, and also including, but not limited to, in the case of a capital stock association, provisions for cumulative voting for directors, and provisions governing the issuance of stock certificates to replace lost or destroyed certificates.

(7) In the case of capital stock association:

(a) The amount of capital stock authorized, showing the maximum number of shares of par value common stock and of preferred stock, of every kind, class, or series of each, together with the distinguishing characteristics and the par value of each.

(b) The amount of capital with which the corporation will begin business.

(c) A statement that stockholders shall have preemptive rights.

C. The articles may also contain any of the following:

(1) Any provision concerning the powers or rights of the corporation, the directors, or stockholders or members.

(2) Any other provision for the regulation of the business and conduct of the affairs of the corporation not prohibited by this Chapter or other laws of this state, including any provision authorized by R.S. 6:213(B)(3). The provisions of R.S. 6:213(B)(3) may be included in the articles of both mutual and stock associations.

(3) Authorization to adopt bylaws.

Acts 1970, No. 234, §1; Acts 1983, No. 675, §1; Acts 1987, No. 261, §4, eff. July 3, 1987; Acts 2015, No. 83, §1.

§ 6:706 Articles of incorporation; approval by the commissioner

A. The articles of incorporation or a multiple original thereof, shall be filed with the commissioner. The incorporators shall submit with their articles and bylaws any statements, exhibits, maps, and other data which the commissioner may require. All information shall be sufficiently detailed and comprehensive to enable the commissioner to pass upon the petition for incorporation as to the criteria set out in Subsection (B) of this Section.

B.(1) On the receipt of the articles of incorporation, a fifteen hundred dollar application fee, attendant data, and the request from the incorporators for approval of incorporation, the commissioner shall give written notice to each association which he determines may be affected that a petition for a request for approval of incorporation has been made. This notice shall state the name of the proposed association and the place where the incorporators propose to establish a principal office of the association. The commissioner shall not issue a certificate of authority of a mutual association unless he shall affirmatively have found that all the requirements in respect to the subscription and payment of shares or savings accounts at the time of organization and previous to the doing of business by any newly organized association have been complied with strictly and in good faith. The commissioner shall not issue a certificate of authority for a capital stock association unless he shall affirmatively determine that:

(a) The amount of capital stock subscribed for is sufficient for the safe and proper operation of the corporation, but in no event less than five hundred thousand dollars.

(b) The proposed corporation has set aside as a permanent capital reserve an amount sufficient for the safe and proper operation of the association, but in no event less than one hundred thousand dollars, that shall be credited to paid-in surplus and may be used to offset losses from operations.

(c) All subscriptions for capital stock of the proposed corporation have been purchased for cash.

(d) All initial stockholders of the proposed association are natural persons and residents of the state.

(2) The commissioner, before issuing a certificate of authority to any association, local or foreign, shall examine the qualifications, character, and responsibility of the persons organizing the association and shall examine the present and future savings association needs of the community or locality to be served by the proposed association, and generally shall consider the possibility of usefulness and service which the proposed association may reasonably be expected to meet and fulfill in the light of the considerations herein set forth and shall determine that the proposed association has been approved for insurance of accounts. If, in his discretion, the commissioner deems that the public interest will not be served by permitting the organization of the association, he shall refuse to issue a certificate of authority.

C. No association shall commence business in Louisiana until it has procured from the commissioner a certificate of authority. This certificate of authority shall be issued by the commissioner upon approving the request for incorporation. The commissioner shall transmit to the incorporators two copies of the certificate of authority.

D. The certificate of authority shall be conclusive evidence of the fact that the corporation has been duly incorporated, except that in any proceeding brought by the state to annul, forfeit, or vacate a corporation's franchise, the certificate of authority shall be only prima facie evidence of due incorporation.

E. Upon issuance of the certificate of authority, the corporation shall be duly incorporated, and corporate existence shall begin, except that if the articles were filed within three days, exclusive of legal holidays, after acknowledgment thereof or execution thereof as an authentic act, the corporation shall be duly incorporated, and a corporate existence shall begin as of the time of such acknowledgment or execution.

F. A multiple original of the articles with a copy of the commissioner's certificate of authority shall, within thirty days after the incorporation, be filed for record in the office of the recorder of mortgages of the parish in which the association is domiciled.

Acts 1970, No. 234, §1. Amended by Acts 1982, No. 367, §1; Acts 1983, No. 675, §1; Acts 1999, No. 342, §3; Acts 2003, No. 17, §1, eff. May 23, 2003; Acts 2003, No. 60, §1, eff. May 23, 2003.

§ 6:707 Capital stock; types of stock; consideration for issuance; security for loan

A. A capital stock association shall not issue any shares of stock except those authorized by its articles of incorporation. Capital stock shall have the par value stated in the articles of incorporation and, with the prior approval of the commissioner, may consist of common stock and preferred stock, which may be divided into classes and the classes may be divided into series. Each kind, class, and series may have such distinguishing characteristics, including designations, preferences, or restrictions regarding dividends, redemption, voting powers, or restrictions or qualifications of voting powers as are imposed in the articles of incorporation. Restrictions and qualifications of voting powers so imposed shall control in any case in which any vote or consent of stockholders is now or hereafter required by law, unless such a law expressly provides to the contrary. Voting rights shall be exclusively vested in the holders of the capital stock of the association, and depositors and borrowers of the association not holding such stock shall have no voting rights. A capital stock association shall have no members, as defined in this Chapter.

B. Except for stock issued pursuant to a plan of merger, consolidation, conversion from mutual to a capital stock association, or other type of reorganization which has been approved by the commissioner, the consideration for the issuance of voting common capital stock, the par value of which shall be maintained as the permanent capital of the association, shall be paid in cash, and any excess over par value shall be credited to paid in surplus which shall not be available for dividends or other distribution to stockholders except upon liquidation.

C. Except as provided herein, the total of the par value of all outstanding shares of voting common stock shall be the permanent capital of the association and shall not be retired until final liquidation of the association. No association shall reduce its outstanding voting common capital stock without first obtaining the consent of the commissioner. Consent shall be withheld if the reduction will cause the par value of outstanding voting common capital stock to be less than the minimum required by this Chapter or result in less than adequate net worth or reduce the capital of the association below the amount required for a liquidation account established in connection with the conversion of a mutual association to a capital stock association.

D. The provisions of R.S. 6:416 and the rules and regulations promulgated thereunder shall be applicable to associations chartered under the provisions of this Title in the same manner as they are applicable to state banks.

E. Repealed by Acts 1997, No. 1003, §2.

Acts 1983, No. 675, §1; Acts 1997, No. 1003, §§1, 2.

§ 6:708 Directors; number; qualifications; oath; vacancies

A. The business of each association shall be managed and its corporate powers exercised by a board of directors. The board shall consist of not less than five nor more than twenty-five natural persons who shall be elected as established by the articles of incorporation or bylaws. The board shall be elected as hereinafter set forth, by a plurality of the votes at the annual meeting of members or stockholders or at any other meeting of members or stockholders called for that purpose. A director may be removed from the board as provided in the articles of incorporation.

B. At the first annual meeting, the members or stockholders may divide the directors into three classes of as nearly equal numbers as possible. The term of office of directors of the first class shall expire at the next annual meeting after the first election; of the second class, one year thereafter; and of the third class, two years thereafter. At each annual election thereafter the directors may be chosen for a full term of three years to succeed those whose terms expire. Except with respect to their specific terms of office, all directors shall possess equal power. No director shall be elected for a longer single term than three years.

C. At least three-fifths of the directors shall be citizens of the United States during their entire term of service and shall have resided in the United States for at least one year preceding their election. No director of an association shall serve simultaneously as a director of more than one association without the prior approval of the commissioner, except any person serving as a director of more than one association prior to July 29, 1970 may continue to serve in those capacities.

D. Repealed by Acts 2003, No. 360, §1, eff. June 18, 2003.

E. Any person adjudicated a bankrupt or convicted of a criminal offense involving dishonesty or a breach of trust, while serving as a director or officer may, after notice and opportunity to be heard, be suspended or removed by the commissioner. However, no action of the board of directors shall be invalidated by reason of the participation of such a director in any action.

F. Upon assuming office, each director shall take an oath that he will, so far as the duty devolves on him, diligently and honestly administer the affairs of the association and will not knowingly violate, or willfully permit to be violated, any of the provisions of this Chapter. The oath shall be subscribed to by the director making and taking it and each oath shall be entered into the minutes of the next regular or special meeting of the board of directors. The oath shall be retained in the records of the association for examination by the commissioner.

G.(1) The board of directors of each association shall hold meetings at the times and places provided for in the bylaws.

(2) Notwithstanding any other provision of law to the contrary, the articles of incorporation or bylaws of a savings and loan association may authorize or require delivery of notices of meetings and other communications to directors by electronic transmission to the same extent and in the same manner as permitted for a Louisiana corporation in accordance with R.S. 12:1-141.

H. Any director who, without excuse duly accepted by the members of the board present at such meetings and entered upon the minutes of the meetings, fails to attend three consecutive meetings of the board of directors of any association may be deprived of membership on the board, which, pending a reelection of the members, cannot be restored except for good cause shown.

I. In the event of a vacancy on the board of directors, including vacancies created by an increase in the number of directors, the board of directors may fill such vacancy pending election by the members.

Acts 1983, No. 675, §1; Acts 1989, No. 395, §1, eff. June 30, 1989; Acts 1993, No. 276, §1, eff. Oct. 1, 1993; Acts 2003, No. 360, §1, eff. June 18, 2003; Acts 2018, No. 88, §1.

§ 6:709 Members or stockholders meeting

A. There shall be an annual meeting of members or stockholders which shall be held in accordance with the articles of incorporation or bylaws. At this meeting the board of directors, through the secretary or other officer whom they may designate, shall make a statement to the members or stockholders setting forth in general the assets and liabilities of the association during the previous year.

B. Meetings of members or stockholders may be called by the board of directors in their discretion, or as otherwise fixed in the articles of incorporation or the bylaws.

C. Unless otherwise stated in the articles of incorporation or bylaws of the association, or elsewhere in this Chapter, the members or stockholders who shall be entitled to vote at any meeting shall be those who were members or stockholders of record as of the date of record established by the board of directors, except those who subsequently have ceased to be members or stockholders.

D. Unless otherwise provided in the articles of incorporation or bylaws, at every meeting each member or voting stockholder shall be entitled upon each proposal presented to vote as follows:

(1) In the case of a member of a mutual association, for every one hundred dollars or major fraction thereof, held in a savings or demand account, or if borrowers are members of the association, for any amount borrowed, one vote, but no member may cast more than five hundred votes.

(2) In the case of a capital association, each stockholder is entitled to one vote for each share of voting stock recorded in the stockholder's name on the books of the corporation on the record date fixed as provided in Subsection C.

E. Unless otherwise provided in the articles of incorporation or bylaws, voting at any meeting of the members or stockholders may be in person, by means of remote communication as provided in R.S. 12:1-709, or by written proxy signed by the member or stockholder or his duly authorized agent. However, no proxy may be voted at any meeting unless the proxy was filed with the secretary of the association for verification at least five days prior to the date of the meeting at which the proxy is to be voted. When shares of stock or accounts are registered in the name of two or more persons, a proxy signed by any one or more of them shall be deemed valid unless the association receives written notice to the contrary from a nonsigning registered member or stockholder before the proxy is voted.

F. Unless otherwise provided in the articles of incorporation or bylaws, at an annual meeting or at any special meeting of members or stockholders, any number of persons present in person, attending by means of remote communication as provided in R.S. 12:1-709, or by eligible proxy shall constitute a quorum and a majority of all votes cast at any meeting shall determine any question unless this Chapter specifically provides otherwise.

Acts 1983, No. 675, §1; Acts 2021, No. 23, §1, eff. June 1, 2021.

§ 6:710 Notice of meeting

A.(1) Unless a method of notice is provided in the articles of incorporation or bylaws or elsewhere in this Chapter, notice of meetings of members of a mutual association shall be given by publishing on separate days no less than two notices of the meeting not more than thirty days nor less than ten days prior to the date of the meeting in a newspaper of the parish of domicile of the association.

(2) Notwithstanding any other provision of law to the contrary, the articles of incorporation or bylaws of a savings and loan association may authorize or require delivery of notices of meetings and other communications to members of mutual associations by electronic transmission to the same extent and in the same manner as permitted for a Louisiana corporation in accordance with R.S. 12:1-141.

B.(1) Unless a method of notice is provided in the articles of incorporation or bylaws or elsewhere in this Chapter, notice of meetings of stockholders of a stock association shall be given by mailing a notice thereof to those who were stockholders as of the date of record established by the board of directors.

(2) Notwithstanding any other provision of law to the contrary, the articles of incorporation or bylaws of a savings and loan association may authorize or require delivery of notices of meetings and other communications to stockholders of a stock association by electronic transmission to the same extent and in the same manner as permitted for a Louisiana corporation in accordance with R.S. 12:1-141.

C. If an association desires to establish a date of record for notice of meeting or for voting rights at meetings, it can be so provided in the articles of incorporation or bylaws. If it is not so provided, then the date of record for notice or voting rights shall be the last day of the second calendar month immediately preceding the date set for the meeting.

Acts 1983, No. 675, §1; Acts 2018, No. 88, §1.

§ 6:711 Organization meeting

Within thirty days after the corporate existence of an association begins, the directors of the association shall hold an organization meeting and shall elect officers, and adopt bylaws. At the organization meeting the directors shall take such other action as is appropriate with the beginning of the transaction of business by the association. The commissioner may extend by order the time within which the organization meeting shall be held.

Acts 1983, No. 675, §1.

§ 6:712 Corporate name

A. An association shall not adopt a corporate name which indicates or implies that it is organized for any purpose other than one or more of the purposes contained in its articles of incorporation.

B. An association may change its name with consent of the commissioner.

C.(1) No person, firm, company, association, fiduciary, partnership, or corporation, either domestic or foreign, unless it is lawfully authorized to do business in this state under the provisions of this Chapter and actually engaged in carrying on a savings association business shall do business under any name or title which contains the terms "homestead savings association," "savings and loan association," "building and loan association," "building association," "savings association," "savings," or any combination employing either or both of the words "building" or "loan" with one or more of the words "saving," "savings," or any combination employing one or more of the words "saving," "savings," with one or more of the words "association," "institution," "society," "company," "fund," "corporation," or use any name or sign or circulate or use any letterhead, billhead, circular, or paper whatever, or advertise or represent in any manner which indicates or reasonably implies that his or its business is of the character or kind of business carried on or transacted by a savings and loan association or which is likely to lead any person to believe that its business is that of a savings and loan association.

(2) Upon application by the commissioner or any association, a court of competent jurisdiction may issue an injunction to restrain any such entity from violating or continuing to violate any of the foregoing provisions of this Section.

(3) Any violation of the provisions of this Section shall be punishable by a fine of not more than one thousand dollars, and each day of violation shall constitute a separate offense.

D.(1) The words "homestead", "building and loan", "savings and loan", or "savings" shall form a part of the name of every local association organized subsequent to July 27, 1932. Corporations existing prior to December 31, 1982, as building and loan or homestead associations, savings associations, savings and loan associations, societies, or companies, may continue their present name or may use any other names authorized in this Section. An ordinal number may not be used as a single descriptive word preceding the words "Savings Association", or "Savings and Loan Association", unless such words are followed by the words "of ________", the blank being filled by the name of the community, town, city, or parish in which the association has its home office. An ordinal number may be used together with another descriptive word, preceding the words "Savings Association" or "Savings and Loan Association" provided the other descriptive word has not been used in the corporate name of any other association in the state, in which case the suffix mentioned above is not required to be used. An ordinal number may be used together with another descriptive word, preceding the words "Savings Association" or "Savings and Loan Association", even when such other descriptive word has been used in the corporate name of an association in the state, provided the suffix "of ________", as provided above, is also used. The suffix provided above may be used in any corporate name.

(2) The use of the words, "National," "Federal," "United States," "Insured," "Guaranteed," or any form thereof, separately or in any combination thereof with other words or syllables, is prohibited as part of the corporate name of an association.

(3) No certificate of incorporation of a proposed association having the same name as a corporation authorized to do business under the laws of this state or a name so nearly resembling it as to be likely to deceive shall be issued by the commissioner, except to an association formed by the reincorporation, reorganization, or consolidation of the association with other associations, or upon the sale of the property or franchise of an association.

(4) Corporations existing as associations prior to the effective date of this Chapter may continue their present name or may use any of the names authorized in this Section.

Acts 1970, No. 234, §1. Acts 1983, No. 675, §1; Acts 1986, No. 163, §1; Acts 1997, No. 42, §1.

§ 6:713 Forfeiture of charter for nonuse

Any association which fails to commence business within six months after the date upon which its corporate existence begins, shall forfeit its corporate existence, unless the commissioner, before the expiration of the six month period, approves the extension of time within which it may commence business, upon a written application by the association stating the reasons for such delay. Upon such forfeiture the certificate of incorporation shall expire, and all action taken in connection with the incorporation thereof, except the payment of the incorporation fee, shall become void. Amounts credited on shares, savings accounts, or stock subscriptions, less expenditures approved by the commissioner, shall be returned pro rata to the respective holders thereof.

Acts 1970, No. 234, §1. Acts 1983, No. 675, §1.

§ 6:714 Officers and agents; election, powers, duties

A. The board of directors shall elect a president, or chief executive officer, cashier or chief financial officer, and a secretary, who shall each be a different person, and shall elect a chairman of the board. One or more vice presidents may be elected. None of the officers except the chairman and the president or chief executive officer are required to be a director of the association. No person holding more than one office may sign in more than one capacity any instrument required by law to be signed by two officers.

B. The board may elect and appoint such other officers and agents as may be necessary for conducting the business of the association in the manner provided by the bylaws.

C. Every association shall be deemed to have the following registered agents, who shall be the president or chief executive officer, the cashier or chief financial officer, and the secretary of the association. Service of citation or other legal process on an association shall be made by personal service on any of the named registered agents. If the officer making service certifies that he is unable, after diligent effort, to have service made on the registered agents, service may be made on any officer of the association at the main office of the association.

D. The officers and agents shall have such rights and perform such duties in the management of the association as may be prescribed by the articles or bylaws or by the board of directors.

E. Election or appointment of an officer shall not, of itself, create contract rights. Any officer or agent may be removed by the board of directors, with or without cause, at any time, without prejudice, however, to the contract rights of the person so removed.

F. Except as otherwise provided in the articles or bylaws or by resolution of the board of directors, the president or chief executive officer, or the cashier or chief financial officer, shall have the power, in the name and on behalf of the association, to authorize the filing, prosecution, or defense of any suit or other legal proceeding. Such persons shall have the authority to direct, in the association's name, the issuance of conservatory writs and to bond property in legal custody, to execute bonds in connection with any legal proceedings, and to make affidavits required by law or rules of court. Such acts shall have the same force and effect as an act of the association itself and shall be binding upon it.

Acts 1989, No. 133, §1, eff. June 22, 1989; Acts 2001, No. 637, §1, eff. June 22, 2001; Acts 2003, No. 72, §1, eff. May 28, 2003.

PART III AMENDMENT AND RESTATEMENT OF ARTICLES

§ 6:721 Method of amending articles generally

An association may, in the manner provided for state banks in Part III of Subchapter A of Chapter 3 of this Title, amend and restate its articles of incorporation.

Acts 1970, No. 234, §1. Acts 1983, No. 675, §1; Acts 2003, No. 17, §1, eff. May 23, 2003; Acts 2003, No. 60, §1, eff. May 23, 2003; Acts 2003, No. 577, §1, eff. June 27, 2003.

§ 6:722 §§722 to 730 Repealed by Acts 1970, No. 234, §2.

§§722 to 730 Repealed by Acts 1970, No. 234, §2.

PART IV POWERS

§ 6:731 General powers of associations

Every association incorporated pursuant to or operating under the provisions of this Chapter shall have all the powers enumerated, authorized, and permitted by this Chapter and such other rights, privileges, and powers as may be incidental to or reasonably necessary or appropriate for the accomplishment of the objectives and purposes of the association; to enter into such contracts, incur such obligations, and generally do anything necessary or appropriate to take advantage of all membership, loans, subscriptions, contracts, grants, rights, or privileges whatsoever which may at any time be available or inure to associations by virtue of any act or resolution of the Congress of the United States, particularly any act of Congress creating a federal home loan bank system, or any other similar government or private institution, or any agency plan whatsoever for the financing and promotion of home building through or in connection with associations, or for the furnishing of cash funds or other property for any purpose and on any terms and conditions to the associations. Among others, and except as otherwise limited by the provisions of this Chapter, every association shall have the following powers:

A. Existence; seal; bylaws. To have perpetual existence; to adopt and use a corporate seal, which may be affixed by imprint, facsimile, or otherwise; to establish, through the action of its board of directors, such bylaws for the management and regulation of the affairs of the association as are necessary and proper; notwithstanding any contrary provision in the existing bylaws of any association to make from time to time, through the action of its board of directors, such changes and amendments in the bylaws of the association as are advisable and expedient.

B. Plaintiffs; defendants. To contract, sue and be sued, complain and defend in any court of law or equity, in its corporate name and as an entity separate and distinct.

C. Issue shares and accounts. To issue shares or capital stock as appropriate to its form of organization; to issue savings and demand accounts; to assess and collect from members, borrowers, or savers, any of the following: fees, dues, fines, interest, premiums, late charges, and other charges, and the same shall not be held to be usurious; to permit or force members and depositors to withdraw all or part of their shares or savings and demand accounts; to assess and collect from members, borrowers, or savers collection fees, transfer fees, and such other fees as may be authorized by the board of directors.

D. Own and transfer property.

(1) Subject to other provisions of this Chapter, associations may acquire, purchase, hold, develop, lease, encumber and convey property of whatever kind and character, real, personal, or mixed.

(2) In addition, associations may purchase immovable property for the purpose of participating in federal or state community renewal programs involving such acquisition of land, provided that the cost of such immovable property:

(a) Shall not exceed ten percent of the total mortgage loans, or the sum of paid in capital, reserves, and undivided profits, whichever is less; and,

(b) Shall be recovered by charging the cost of that investment against reserves or undivided profits within ten years from the date of acquisition.

(3) The provisions of Paragraph (2) of this Subsection shall not apply to immovable property acquired or owned by an association and used, in whole or in part, for the conduct of the business of the association.

(4) An association, in payment and settlement of the price and consideration of any sales made of any property belonging to it and acquired by repossession or otherwise, may accept unencumbered capital stock or shares of the association and such transfers are in all respects legal and binding. An association may also exchange any of its property for other property. The exchange shall be effected on terms and conditions considered appropriate and advantageous by the board in each case.

E. Borrowing. To borrow, give security, be surety, and issue notes, bonds, debentures, other obligations, or other securities. Any such borrowing shall constitute a claim against the corporate assets, and shall be payable in advance of, and by preference over, all claims or rights of members or stockholders in any of the assets of the association. The commissioner may, in writing, impose limits on the amount of borrowings of an association if the association is in an impaired condition or in an unsafe and unsound condition.

F. Insurance of accounts. To obtain and maintain insurance of its savings or demand accounts or shares by the Federal Deposit Insurance Corporation or other federal or state agency established for the purpose of insuring savings or demand accounts or shares in associations.

G. FHLB memberships. To qualify as and become a member of a Federal Home Loan Bank.

H. Officers, directors, employees. To name and appoint such officers, directors, agents, managers, attorneys, notaries and auditors, and employees as business, interest, and convenience shall require and to provide them suitable compensation; to provide for life, health and casualty insurance for officers and employees, and to adopt and operate reasonable bonus or deferred compensation plans and retirement plans, including plans which qualify as plans under regulations of the Internal Revenue Service, for such officers and employees; and to provide for indemnification of its officers, employees, and directors as prescribed or permitted in this Chapter whether by insurance or otherwise.

I. Facilitating organizations. To become a member of, deal with, or make reasonable payments or contributions to any organization to the extent that such organization assists in furthering or facilitating the association's purposes, powers, or community responsibilities, and to comply with any reasonable conditions of eligibility.

J. Safe deposit boxes. To maintain and let safes, boxes, or other receptacles for the safekeeping of personal property upon such terms and conditions as may be agreed upon.

K. Money orders. To sell money orders, travel checks, and similar instruments drawn by it on its own accounts, or on its accounts at other financial institutions, or as agent for any organization empowered to sell such instruments through agents within this state.

L. Servicing. To service mortgage loans for others.

M. Trust powers.

(1) Limited trusteeship for Keogh and IRA retirement plans.

An association is authorized to act as trustee of any trust created or organized in the United States and forming part of a stock bonus, pension, profitsharing plan, or other qualified plan, which qualifies or qualified for specific tax treatment under Section 401(d) or any other applicable Section of the Internal Revenue Code, and to act as trustee or custodian of an individual retirement account within the meaning of Section 408, or other applicable Section of the Internal Revenue Code. An association may invest trust funds in its own accounts. All funds held in such fiduciary capacity by any such association may be comingled* for appropriate purposes of investment, but individual records shall be kept by the fiduciary for each participant and shall show in proper detail all transactions engaged in under the authority of this Paragraph.

(2) General trust business.

(a) The commissioner is authorized and empowered to grant by special permit to an association applying therefor the right to act as trustee, executor, administrator, guardian, or in any other fiduciary capacity. Subject to the rules and regulations of the commissioner, service organizations may invest in state or federally chartered corporations which are located in the state and which are engaged in trust activities.

(b) Associations exercising any or all of the powers enumerated in this Subsection shall segregate all assets held in any fiduciary capacity from the general assets of the association and shall keep a separate set of books and records showing in proper detail all transactions engaged in under authority of this Subsection.

(c) No association shall receive in its trust department deposits of current funds subject to check or the deposit of checks, drafts, bills of exchange, or other items for collection or exchange purposes. Funds deposited or held in trust by the association awaiting investment shall be carried in a separate account and shall not be used by the association in the conduct of its business unless it shall first set aside as security therefor in the trust department an equivalent amount in United States bonds or other securities approved by the commissioner.

(d) In the event of the failure of such association, the owners of the fund held in trust for investment shall have a lien on the bonds or other securities so set apart, in addition to their claim against the estate of the association.

(e) It shall be unlawful for any association to lend any officer, director, or employee any funds held in trust under the powers conferred by this Subsection. Any officer, director, or employee making such loan, or to whom such loan is made, may be fined not more than five thousand dollars, or imprisoned, for not more than six months, or both.

(f) In passing upon application for permission to exercise the powers enumerated in this Section, the commissioner may take into consideration the amount of net worth of the applying association, whether or not such net worth is sufficient under the circumstances of the case, the needs of the community to be served, and any other facts and circumstances that seem to it proper, and may grant or refuse the application accordingly.

(g)(i) Any association desiring to surrender its right to exercise the powers granted under this Subsection, in order to relieve itself of the necessity of complying with the requirements of this Subsection, or to have returned to it any securities which it may have deposited with state authorities for the protection of private or court trusts, or for any other purposes, may file with the commissioner a certified copy of a resolution of its board of directors signifying such desire.

(ii) Upon receipt of such resolution the commissioner, after satisfying himself that such association has been relieved of all duties as trustee, executor, administrator, guardian or other fiduciary, under court, private, or other appointments, previously accepted under authority of this Subsection, may at the discretion of the commissioner, issue to such association a certificate certifying that such association is no longer authorized to exercise the powers granted by this Subsection.

(iii) Upon the issuance of a certificate by the commissioner an association shall no longer be subject to the provisions of this Subsection or the regulations of the commissioner made pursuant thereto; shall be entitled to have returned to it any securities which it may have deposited with the state for the protection of private or court trust; and shall not exercise thereafter any of the powers granted by this Subsection without first applying for and obtaining a new permit to exercise such powers pursuant to the provisions of this Subsection.

(iv) The commissioner is authorized and empowered to promulgate such regulations as he may deem necessary to enforce compliance with the provisions of this Subsection and the proper exercise of the trust powers granted by this Subsection.

(h)(i) In addition to the authority conferred by other law, if in the opinion of the commissioner, an association is unlawfully or unsoundly exercising or has unlawfully or unsoundly exercised, or has failed for a period of five consecutive years to exercise, the powers granted by this Subsection or otherwise fails to comply with the requirements of this Subsection, the commissioner may issue and serve upon the association a notice of intent to revoke the authority of the association to exercise the powers granted by this Subsection. The notice shall contain a statement of the facts constituting the alleged unlawful or unsound exercise of powers, or failure to exercise powers, or failure to comply, and shall fix a time and place at which a hearing will be held to determine whether an order revoking authority to exercise such powers should be issued against the association.

(ii) Such hearing shall be conducted in accordance with the provisions of R.S. 6:882.

(iii) A revocation order shall become effective not earlier than the expiration of thirty days after service of such order upon the association so served, except in the case of a revocation order issued upon consent, which shall become effective at the time specified therein, and shall remain effective and enforceable, except to such extent as it is stayed, modified, terminated, or set aside by action of the commissioner or a reviewing court.

N. Right to act to avoid loss. Nothing in this Chapter shall be construed as denying to an association the right to invest its funds, operate a business, manage or deal in property, or take any other action over whatever period of time may reasonably be necessary to avoid loss on a loan or investment theretofore made or an obligation created in good faith.

O. Computer services. To purchase, lease, or otherwise obtain a computer or other data processing services from any other organization; to purchase, lease, or otherwise obtain computer or other data processing equipment and machinery; and to render computer, electronic, or other data processing services to others.

P. Loans and investments. To make loans and investments as provided in this Chapter or as authorized by the commissioner.

Acts 1970, No. 234, §1. Amended by Acts 1972, No. 295, §1; Acts 1975, No. 279, §1; Acts 1976, No. 450, §1; Acts 1983, No. 675, §1.

*As appears in enrolled bill.

PART V CAPITAL AND ACCOUNTS

§ 6:741 Authorized capital

The authorized capital of a stock association shall be as provided in its articles of incorporation. The authorized capital of a mutual association shall be unlimited and the actual accumulative capital at any time shall be deemed the authorized capital at such time. No association shall be deceptive in advertising the amount of its capital.

Acts 1970, No. 234, §1. Acts 1983, No. 675, §1.

§ 6:742 Miscellaneous provisions relative to capital and accounts

A. A capital stock association may raise capital by the sale of stock, stock dividends, profits, issuance of capital notes, and subordinated debentures, or by any other method approved by the commissioner.

B. A mutual association may raise capital in the form of such savings deposits, shares, or other accounts, for fixed, minimum, or indefinite periods of time, all of which are referred to in this Section as savings accounts, or in the form of such demand accounts as are authorized in this Chapter and may issue such passbooks, time certificates of deposit, or other evidence of accounts as it deems proper.

C. Subject to restrictions otherwise imposed by law, an association may agree to pay an additional or different rate of dividend or interest on any share or savings account based upon its classification with respect to the character, amount, duration, or regularity of the transactions with respect to such share or savings account, provided the association pays the same dividend or interest rate on all shares or savings accounts in the same classification.

D. An association may accept demand accounts of those persons or organizations that have a business, corporate, commercial, or agricultural loan relationship with that association; a loan relationship includes, but is not limited to, any outstanding loan, the establishment of a line of credit, and a consistent pattern of lending between an association and a business evidencing a legitimate lending relationship between the association and the business. An association may also accept demand accounts from a commercial, corporate, business, or agricultural entity for the sole purpose of effectuating payments thereto by a nonbusiness customer. An association may not pay interest on a demand account. All savings accounts and demand accounts shall have the same priority upon liquidation.

E. Payment of savings accounts that have fixed or minimum terms of not less than fourteen days shall be subject to the right of the association to require written notice of withdrawal not less than fourteen days in advance.

F. The payment of withdrawals from accounts in the event an association does not pay all withdrawals in full, subject to the right of the association, where applicable, to require notice, shall be subject to such rules and procedures as may be prescribed by the association's board of directors, but any association which, except as authorized in writing by the commissioner, fails to make full payment of any withdrawal when due shall be deemed to be in an unsafe or unsound condition to transact business.

G. Accounts may be subject to check or to withdrawal or transfer on negotiable or transferable or other order or authorization to the association.

H. Notwithstanding any limitation of this Section, associations may establish remote service units for the purpose of crediting savings or demand accounts, debiting such accounts, crediting payments on loans, and the conducting of related financial transactions.

I. Borrowing; issuance of securities. The association may borrow in accordance with R.S. 6:731(E), and as otherwise authorized by this Chapter or by the commissioner.

J. Credit card operations. An association is authorized to issue credit cards, extend credit in connection therewith, and otherwise engage in or participate in credit card operations.

Acts 1983, No. 675, §1.

§ 6:743 Issuance of capital

A. The capital of mutual associations may be divided into such classes of shares or savings accounts as is prescribed by the board of directors and may be issued in such full or fractional denominations and subject to such additional rules and regulations as the board of directors of each association may from time to time make and authorize. These shares or savings accounts may be paid for in periodical installments, in cash or in liquidation of matured shares. Such shares or savings accounts shall be payable in the manner designated for each particular class. A member may exchange the value of any such shares or savings accounts owned for any class desired with the assent of the board of directors.

B. A capital stock association may issue capital stock and other capital securities as approved by the commissioner.

Acts 1970, No. 234, §1. Acts 1983, No. 675, §1.

§ 6:744 Shares, savings, and demand accounts; generally

A. Ownership. Shares or savings or demand accounts may be opened and held solely and absolutely in one's own right or in trust or other fiduciary capacity for any person, partnership, association, fiduciary, corporation, political subdivision or public or governmental unit, or other entity. Unless otherwise specified by contract, savings accounts shall be represented only by the account of each savings account holder on the books of the association, and such accounts or any interest therein shall be transferable only on the books of the association and upon proper written application by the transferee upon terms approved by the board of directors; and the association may treat the holder of record of a savings or demand account as the owner thereof for all purposes without being affected by any notice to the contrary unless the association has received in writing a notice of a claim of ownership or of an interest therein by a party other than such holder.

B. Evidence of ownership. An association may issue to a holder of a savings or demand account evidence of such holder's interest therein and the terms thereof, including an account book, certificate, receipt, memorandum or any other medium which may be used for the storage and retrieval of information by the holder. Savings or demand accounts may also be issued in book entry form.

C. Duplicate evidence of accounts. Duplicate evidence of accounts may be issued pursuant to such requirements as the association may prescribe. When an affidavit or written signed statement is executed by the holder of record to the effect that the passbook, account book, certificate receipt, memorandum, or other evidence of account has been lost or destroyed, and that it has not been pledged or assigned in whole or in part, an association, without more, may issue a new evidence of account in the name of the holder of record, such evidence stating that it is issued in lieu of the one lost or destroyed, and the association shall in no way be liable thereafter on account of the original evidence of account. When the association has acknowledged in writing an assignment or pledge of the passbook, account book, certificate receipt, memorandum, or other evidence of account, such association shall remain liable to the assignee of record irrespective of any affidavit executed by the holder of record.

D. Proof of ownership. For the purposes of withdrawals, an association may rely on any application, agreement, or signature card used to establish a savings or demand account as presumptive evidence establishing ownership of any and all funds and other credits deposited therein, and may consider and treat any and all funds on deposit in such an account as belonging to and the sole and exclusive property of the depositor or depositors named on the account application, agreement, or signature card, unless otherwise notified or directed by such depositor or depositors. This Subsection shall have no application in the case of seizure.

Acts 1970, No. 234, §1; Acts 1983, No. 675, §1; Acts 1989, No. 223, §1.

§ 6:745 Cancellation of shares, savings accounts

All shares or savings accounts withdrawn, forfeited, retired, or surrendered shall be cancelled and become the property of the association, and new shares or savings accounts may be issued in lieu of them. Unpaid installments and other charges upon shares or savings accounts shall be a privilege thereon. Payments of dues or interest may be made in advance and dividends or interest may be allowed thereon.

Acts 1970, No. 234, §1. Acts 1983, No. 675, §1.

§ 6:746 Issuance of shares or savings accounts for consideration other than cash

A. Whenever the commissioner deems it expedient or advisable he may authorize any association to issue shares or savings accounts of any class of its capital for a consideration other than cash, provided that the fair value of the consideration, as determined and fixed by its board of directors, is not less than the aggregate value of the shares or savings accounts issued therefor.

B. Whenever shares or savings accounts of any association are, with the approval of the commissioner, paid for in consideration other than cash, an accurate, detailed, and itemized description of all property to be accepted in lieu of cash, together with a statement of its value as determined and fixed by the incorporators or directors, shall be filed in the office of the recorder of mortgages where the corporation's articles of incorporation have been or are to be recorded.

Acts 1970, No. 234, §1. Acts 1983, No. 675, §1.

§ 6:747 Contract for savings programs

A. School savings. An association may contract with the proper authorities of any public or nonpublic elementary or secondary school or institution of higher learning, or any public or charitable institution caring for minors or persons with disabilities, for the participation and implementation by the association, in any school or institutional thrift or savings plan, and it may accept funds for shares or savings accounts at such a school or institution, either by its own collector or by any representative of the school or institution.

B. Payroll savings. An association may contract with any employer with respect to the solicitation, collection, and receipt of savings by payroll deduction to be credited to the designated accounts of its employees who may participate voluntarily.

Acts 1970, No. 234, §1; Acts 1983, No. 675, §1; Acts 2014, No. 811, §2, eff. June 23, 2014.

§ 6:748 Shares or demand deposits and savings accounts as legal investments and as security

A. Legal investments. (1) Administrators, executors, custodians, conservators, guardians, tutors, curators, trustees, and other fiduciaries of every kind and nature; insurance companies, business and manufacturing companies, banks, trust companies, credit unions, and other types of similar financial organizations; charitable, educational, eleemosynary, and public corporations, funds, and organizations; the state of Louisiana, its agencies, boards, commissions, departments, municipalities, school boards, parishes, and any other political subdivisions of the state, other public corporations, and bodies, and the public officials thereof are hereby specifically authorized and empowered to invest funds held by them, without any order of any court, in savings accounts and shares or demand deposits of an association. Such investments shall be deemed and held to be legal investments for such funds.

(2) Investments by banks and trust companies; by the state and its agencies, boards, commissions, departments, parishes, municipalities, or other political subdivisions of the state, and by other public bodies existing under the constitution and laws of the state shall not exceed at any one time the amount insured by the Federal Deposit Insurance Corporation in any one savings and loan association or savings bank, unless the uninsured portion is collateralized by the pledge of securities in the manner provided by R.S. 49:321, R.S. 33:2929, R.S. 39:1221, R.S. 39:1242, or any other provision of law. Savings and loans associations and savings banks having a net worth of at least three percent of liabilities as reflected in the most recent quarterly report to the Federal Home Loan Bank of the Ninth District or its successor are expressly and specifically authorized and empowered to be fiscal agents and depositories for such investments in the same manner and to the same extent as authorized state banks, national banks, and capital stock associations.

(3) With respect to investments by custodians, associations hereby are deemed to be custodians within the meaning of that term as used in the Louisiana Gifts to Minors Act, and as such may invest funds as custodians in its own accounts.

B. Security. Whenever, under the laws of this state or otherwise, a deposit of securities is required for any purpose, the shares or savings accounts made legal investments by this Section shall be acceptable for such deposits, and whenever, under the laws of this state or otherwise, a bond is required with security, such bond may be furnished, and the shares or savings accounts made legal investments by this Section in the amount of such bond, when deposited therewith, shall be acceptable as security without other security.

C. Provisions supplemental. The provisions of this Section are supplemental to any and all other laws relating to and declaring what shall be legal investments for the persons, fiduciaries, corporations, organizations and officials referred to in this Section, and the laws relating to the deposit of securities and the making and filing of bonds for any purpose.

Acts 1970, No. 234, §1. Amended by Acts 1977, No. 341, §1; Acts 1983, No. 675, §1; Acts 1984, No. 130, §2, eff. June 22, 1984; Acts 1986, No. 446, §1, eff. July 2, 1986.

§ 6:748.1 Public funds deposits; additional collateral

A. In addition to other collateral for public funds deposits authorized by law, including but not limited to R.S. 33:2929, R.S. 39:1221, R.S. 39:1242, and R.S. 49:321, savings and loan associations and savings banks, whether chartered on a mutual or stock basis, are hereby authorized and empowered to use as collateral for said funds mortgage pass-through certificates issued by the Federal Home Loan Mortgage Corporation and letters of credit issued by the Federal Home Loan Bank.

B. Notwithstanding any other provisions of the law to the contrary, savings and loan associations and savings banks are specifically designated as depositories for the purpose of holding collateral of other financial institutions when this collateral is security for public funds deposits in excess of the insured limit of the Federal Deposit Insurance Corporation.

C. The Federal Home Loan Bank of the Ninth District or its successor shall be authorized as a depository of collateral for public funds forming the basis for the issuance of the letter of credit offered by the Federal Home Loan Bank.

Acts 1986, No. 99, §1, eff. June 23, 1986.

§ 6:749 Prescription on savings accounts

(1) All claims shall prescribe on any inactive savings account, provided that at least sixty days before any such claim shall prescribe the association shall have mailed by certified or registered mail a notice of the imminent prescription of all claims to the holder of such account at his last known address.

(2) For the purposes of this Section, "inactive savings account" shall mean a savings account with respect to which there has been in absence for at least ten years of:

(a) Additions to the account, other than crediting of earnings;

(b) Withdrawals from the account; and

(c) On which an association has no address and is unable to communicate with the holder.

Acts 1970, No. 234, §1. Acts 1983, No. 675, §1.

§ 6:750 Pledge of deposit accounts; rights and remedies

Savings and loan associations shall have the same rights and remedies with regard to the pledge of funds held on deposit as are afforded to banks under the provisions of R.S. 6:316.

Acts 1990, No. 735, §1.

PART VI MEMBERS, DEPOSITORS, AND OTHER MATTERS

§ 6:761 Members of mutual associations

Members shall be admitted to membership of a mutual association in such manner as may be prescribed in the articles of incorporation or the bylaws.

Acts 1970, No. 234, §1. Acts 1983, No. 675, §1.

§ 6:762 Access to books and records

The right of inspection and examination of the books and records shall be exclusively vested in:

(1) The commissioner or his duly authorized representative as provided in this Chapter; and

(2) Any federal or state instrumentality or agency authorized to inspect or examine the books and records of an insured association.

Acts 1970, No. 234, §1. Acts 1983, No. 675, §1.

§ 6:763 Minors

A. Minors may subscribe for, hold, own, transfer, withdraw, and surrender shares and savings accounts in associations without the authorization or intervention of their tutors, parents, or any other persons, and shall be considered in such matters as if they were the full age of majority. Unless otherwise provided in the savings contract, in case of minors less than ten years of age, either parent, if alive, or else the surviving parent, may transfer, withdraw, and surrender such shares, savings accounts, or evidence of investment, for the minor, or otherwise represent the minor in respect to his shares without the necessity of tutorship proceedings. Minors, as members or depositors, shall have all the rights of membership or of depositors. However, the provisions of this Section shall have no application to shares or savings accounts of an association acquired by inheritance or by testamentary disposition.

B. In the case of a minor less than ten years of age whose parents are alive but divorced or legally separated, the parent to whose custody the child has been committed by any decree of the court allowing the divorce or separation shall exercise the rights of the surviving parent and shall present to the association a certified copy of such decree. Nothing in this Section shall be construed as authorizing any minor to pledge or borrow upon any such shares or savings accounts or to buy or sell immovable property without the authorization required under the existing laws.

Acts 1970, No. 234, §1. Acts 1983, No. 675, §1.

§ 6:764 Authority relative to shares and savings accounts

A person may subscribe for, own, hold, withdraw, transfer, give, pledge, borrow upon, receive interest and dividends from, and surrender shares or savings accounts in associations registered in such person's name and the receipt or acquittance of such person shall be a valid and sufficient release and discharge of the association for the payment or delivery so made.

Acts 1970, No. 234, §1. Amended by Acts 1977, No. 337, §1; Acts 1983, No. 675, §1.

§ 6:765 Shares or savings accounts payable to two or more persons; survivorship

A. When shares or savings accounts have been subscribed for or owned, or when any certificate of any class or evidence of indebtedness shows the investment of funds in any association, in the names of two or more persons, payable to either, or any of them, such funds or any part of them or any interest or dividend on them may be paid, on due delivery of the certificate, book, or other evidence of indebtedness, to either of the persons, whether the other or others are living or not; and the receipt or acquittance of the person paid is a complete release and discharge of the association for any payment made, with respect to anyone.

B. The pledge to an association of all or part of a savings account or shares owned or subscribed for by two or more persons, executed by a person upon whose signature withdrawals may be made shall, unless the terms of the savings account provide specifically to the contrary, be a valid pledge and transfer to the association of all the shares or savings pledges.

C. Repealed by Acts 2010, No. 175, §6.

Acts 1970, No. 234, §1. Amended by Acts 1974, No. 283, §1; Acts 1981, No. 435, §1; Acts 1983, No. 675, §1; Acts 1997, No. 658, §2; Acts 2004, No. 42, §1; Acts 2010, No. 175, §6; Acts 2011, No. 346, §1.

§ 6:766 Accounts of administrators, executors, tutors, custodians, trustees and other fiduciaries

A.(1) Any association may accept savings accounts or issue shares in the name of any administrator, executor, custodian, conservator, tutor, trustee, or other fiduciary for named beneficiary or beneficiaries and the shares or savings accounts shall constitute legal investment for such funds. The association is not liable to beneficiaries, wards, or principals for monies paid to their fiduciaries on account of such shares or savings accounts. Any such fiduciary shall have power to vote as a member as if the membership were held absolutely, to open and to make additions to, and to withdraw any such savings in whole or in part. The withdrawal value of any such savings, and earnings thereon, or other rights relating thereto may be paid or delivered, in whole or part, to such fiduciary without regard to any notice to the contrary as long as such fiduciary is living. The payment or delivery to any such fiduciary or a receipt or acquittance signed by any such fiduciary to whom any such payment or any such delivery of rights is made shall be a valid and sufficient release and discharge of an association for the payment or delivery so made.

(2) Whenever a person holding an account in a fiduciary capacity dies and no written notice of the revocation or termination of the fiduciary relationship shall have been given to an association and the association has no written notice of any other disposition of the beneficial estate, the withdrawal value of such shares or savings accounts and earnings thereon, or other rights relating thereto, at the option of an association, may be paid or delivered, in whole or in part, to the beneficiary or beneficiaries.

(3) Whenever shares or savings accounts shall be obtained by any person describing himself in obtaining such shares or savings accounts as trustee for another and no other notice of the existence and terms of a legal and valid trust than such description shall have been given in writing to such association, in the event of the death of the person so described as trustee, the withdrawal value of such shares or savings accounts or any part thereof, together with the earnings thereon, may be paid to the person for whom the share or savings accounts was thus described to have been obtained.

(4) The payment or delivery to any such beneficiary, beneficiaries, or designated person, or a receipt or acquittance signed by any such beneficiary, beneficiaries or designated person for any such payment or delivery shall be a valid and sufficient release and discharge of an association for the payment or delivery so made. No association paying any such fiduciary, beneficiary, or designated person in accordance with the provisions of this Section shall thereby be liable for any estate, inheritance, or succession taxes which may be due this state.

(5)(a) Whenever an association acts as trustee of any stock, bonus, pension, profit sharing plan, or other qualified plan which qualifies or qualified for specific tax treatment under the Internal Revenue Code of 1954, §401(d) or any other applicable section of the Internal Revenue Code of 1954, or as trustee or custodian of an individual retirement account within the meaning of the Internal Revenue Code of 1954, §408 or other applicable section of the Internal Revenue Code of 1954, the payment of all or a portion of the principal and interest on the account to a designated beneficiary upon the death of the person creating the account shall be a valid and sufficient release and discharge of an association for the payment or delivery so made.

(b) No association paying a beneficiary in accordance with this Section shall be liable to the estate or any heir of the decedent nor shall the association be liable for any estate, inheritance, or succession taxes which may be due the state.

(c) The provisions of this Section shall apply notwithstanding the fact that the decedent designates a beneficiary by last will and testament.

B. When shares or savings accounts are held in any association by a person who becomes incompetent and an adjudication of incompetency has been made by a court of competent jurisdiction, such an association may pay or deliver the withdrawal value of such shares or savings accounts and any earnings that may have accrued thereon to the curator for such person upon proof of his appointment and qualification; provided that if such association has received no written notice and is not on actual notice that such savings holder has been adjudicated incompetent, it may pay or deliver such funds to such holder in accordance with the provisions of the savings contract, and the receipt or acquittance of such holder therefor shall be a valid and sufficient release and discharge of the association for the payment or delivery so made.

Acts 1970, No. 234, §1. Acts 1983, No. 675, §1; Acts 1986, No. 162, §1.

§ 6:766.1 Payable on death accounts

A. Upon the death of a depositor who has deposited a sum in any account evidencing by the depositor's signature an intention that upon the death of the depositor, the funds shall belong to one or more named beneficiaries of the depositor, the association may pay the deposit, together with the dividends or interest accruing thereto, to the named beneficiaries for whom the deposit was made. Upon receiving a death certificate, the association may disburse funds to the named beneficiaries. The beneficiaries shall be specifically named in the deposit account records of the association.

B. The title of such an account must include the terms "in trust for", "as trustee for", or "payable on death to", such beneficiary or beneficiaries. Such beneficiaries must be specifically named in the deposit account records of the bank.

C. Repealed by Acts, 2009, No. 499, §2.

D.(1) When an account described in Subsection A of this Section is established by more than one depositor, the respective interests of each depositor shall be deemed equal to that of each other depositor, unless otherwise stated in the association's account records.

(2) When an account described in Subsection A of this Section is established for more than one beneficiary, the respective interests of each shall be deemed equal to that of each other beneficiary, unless otherwise stated in the association's deposit account records.

E. No association paying a beneficiary in accordance with this Section shall be liable to the estate or any heir of the decedent nor shall the account holder be liable for any estate, inheritance, or succession taxes which may be due the state, and delivery of the funds shall constitute a full and complete discharge of the association for the payment or delivery so made and shall relieve the association from all adverse claims thereto by a person claiming as a surviving or former spouse or a successor to such a spouse.

F. The provisions of this Section shall apply notwithstanding the fact the decedent designates a beneficiary by last will and testament.

Acts 1991, No. 535, §1; Acts 2000, 1st Ex. Sess., No. 28, §1, eff. April 14, 2000; Acts 2009, No. 499, §1 and 2; Acts 2016, No. 166, §1; Acts 2022, No. 257, §1.

§ 6:767 Death of member or depositor and access and transfer of money and property by association to succession or estate representatives, legatees, or heirs; authority

A. Upon the death of a member or depositor, the rights of membership or of a depositor shall continue in the succession representatives, legatees, or heirs of the deceased depositor, as the case may be.

B. For all purposes, an association may deal with money, on deposit or otherwise, held by an association in a savings account, demand account, deposit account, share account, and with any other property, titled in the name of its deceased member or depositor in accordance with its contract with its deceased member or depositor until the association receives notice in writing specifically addressed to it of the death of the member or depositor.

C. Regardless of whether the association has received written notice of the death of its member or depositor and regardless of any prior action by an association to freeze or restrict access and transactions related to its deceased member's or depositor's shares or accounts, upon receipt of the letters testamentary, letters of administration, or letters of independent administration, issued by a court of competent jurisdiction in this state or any other state, appointing an authorized succession or estate representative, an association may grant access to or allow the transfer of money or other property titled in the name of its deceased member or depositor to the succession or estate representative. Notwithstanding the provisions of Code of Civil Procedure Article 3402 or other applicable laws, an association may grant access to or allow the transfer of money or other property titled in the name of the deceased member or depositor to the succession or estate representative appointed by a court outside of Louisiana. The letters of the succession or estate representative shall constitute full and proper authority for the association to grant access to or allow the transfer of the withdrawal value of share accounts, demand accounts, deposit accounts, or savings accounts and any dividends or interest that may have accrued thereon or any money or property held in the name of the deceased member or depositor to such succession or estate representative. The association shall have no liability related to such activity or transactions involving its deceased member's or depositor's money or property in its possession, and the association shall have no liability for any inheritance tax due thereon. The association may continue to follow the direction of the authorized succession or estate representative related to the money or other property titled in its deceased member's or depositor's name unless and until the association receives a subsequent court order, issued by a court of competent jurisdiction, specifically naming the association and directing the association to cease following the written direction of the succession or estate representative, or the association receives a subsequent court order limiting or terminating the authority of or replacing the succession or estate representative.

D. The judgment of possession or court order issued by a court of competent jurisdiction in this state or any other state recognizing and putting the legatees or heirs in possession of the deceased customer's estate shall constitute full and proper authority for the association holding a safety deposit box or money or other property titled in the name of its deceased member or customer to transfer those assets to the legatees or heirs entitled to such property under the judgment of possession or court order, and when an association makes such a transfer, there shall be full protection to the association against any heir, legatee, creditor, or other person having any right or claim to money or property of its deceased customer. The association shall have no liability related to such transfers or transactions involving its deceased customer's money or other property in the association's possession.

E. Conclusive proof to the association of the letters testamentary, letters of administration, or letters of independent administration of the succession representative, or of the judgment of possession, and of the jurisdiction of the court rendering them, shall be as provided in R.S. 6:325(D).

F. A small succession affidavit authorized by Title V of Book VI of the Code of Civil Procedure shall constitute full and sufficient authority for the payment or delivery of any money or property, including property held in a safety deposit box, of the deceased customer described in the affidavit to the heirs or legatees of the deceased customer and the surviving spouse in community, if any, in the percentages listed therein, by the association having such money or property in its possession or under its control. The transfer of the money or delivery of property identified in the affidavit to the persons named in the affidavit constitutes a full release and discharge for the payment of money or delivery of property and any creditor, heir, legatee, succession representative, or other person whatsoever shall have no right or cause of action against the association paying the money or delivering the property pursuant to the provisions of this Subsection on account of the payment, delivery, or transfer.

G. Any association may pay to the surviving spouse the value of any savings or demand account or shares standing in the name of the decedent in such association without authorization by any court proceeding, order, or judgment, whether the savings account or shares belong to the separate estate of the decedent or to the community property regime which existed between the decedent and the surviving spouse, subject to the provisions of R.S. 9:1513.

Acts 1970, No. 234, §1. Acts 1983, No. 675, §1; Acts 2010, No. 175, §6; Acts 2011, No. 346, §1; Acts 2013, No. 65, §1, eff. May 30, 2013; Acts 2021, No. 44, §1, eff. June 1, 2021; Acts 2024, No. 759, §1.

§ 6:767.1 Repealed by Acts 1970, No. 234, §2.

Repealed by Acts 1970, No. 234, §2.

§ 6:768 Transfer of contents of safety deposit boxes by an association to succession or estate representatives, legatees, heirs, minors, or interdicts; authority

A. For all purposes, an association may deal with safety deposit boxes and the contents therein titled in the name of a deceased customer, in accordance with its contract with its customer, until the association receives notice in writing specifically addressed to it of the death of its customer.

B. Regardless of whether an association has received written notice of the death of its customer and regardless of any prior action by an association to freeze or restrict access and transactions related to its deceased customer's safety deposit box, upon receipt of letters testamentary, letters of administration, or letters of independent administration, issued by a court of competent jurisdiction in this state or any other state, appointing an authorized succession or estate representative, an association may grant access to or allow the transfer of the contents of a safety deposit box titled in the name of its deceased customer to the succession or estate representative. Notwithstanding the provisions of Code of Civil Procedure Article 3402 or other applicable laws, an association may grant access to or allow the transfer of contents of a safety deposit box titled in the name of the deceased customer to the succession or estate representative appointed by a court outside of Louisiana. The letters of the succession or estate representative shall constitute full and proper authority for allowing the succession or estate representative to access, remove, or transfer the contents of a safety deposit box titled in the name of the deceased customer, and the association shall have no liability related to such activity or transaction involving its deceased customer's safety deposit box. The association may continue to follow the direction of the authorized succession or estate representative related to safety deposit boxes of its deceased customer unless and until the association receives a subsequent court order, issued by a court of competent jurisdiction, specifically naming and directing the association to cease following the written direction of the succession or estate representative or receives a subsequent court order limiting or terminating the authority of or replacing the succession or estate representative.

C. The receipt of a judgment of possession or court order, issued by a court of competent jurisdiction in this state or any other state, recognizing and putting the legatees or heirs in possession of the deceased customer's estate shall constitute full and proper authority for the association holding a safety deposit box or other property titled in the name of the deceased customer's name to transfer those assets to the legatees or heirs entitled to such property under the judgment of possession or court order. When an association makes such a transfer, there shall be full protection to the association against any heir, legatee, creditor, or other person having any right or claim to funds or property of its deceased customer, and the association shall have no liability related to such transfer or transaction involving its deceased customer's safety deposit box or money or other property in the association's possession, and the association shall have no liability for any inheritance tax due thereon.

D. A small succession affidavit authorized by Title V of Book VI of the Code of Civil Procedure shall constitute full and sufficient authority for the payment or delivery of any money or property, including property held in a safety deposit box, of the deceased customer described in the affidavit to the heirs or legatees of the deceased customer and the surviving spouse in community, if any, in the percentages listed therein, by the association having such money or property in its possession or under its control. The transfer of the money or delivery of property identified in the affidavit to the persons named in the affidavit constitutes a full release and discharge for the payment of money or delivery of property and any creditor, heir, legatee, succession representative, or other person whatsoever shall have no right or cause of action against the association paying the money or delivering the property pursuant to the provisions of this Subsection on account of the payment, delivery, or transfer.

E. Upon proper authority, an association may transfer the contents of a safety deposit box belonging to an interdict or a minor to the legal representative of such interdict or minor. The letters issued to the legal representative by a court of competent jurisdiction shall constitute proper authority for making the transfer, which when so made and receipted for, shall be full protection to the association.

F. Conclusive proof to the association of the letters testamentary, letters of administration, or letters of independent administration of the succession representative, or of the judgment of possession, and of the jurisdiction of the court rendering them, shall be as provided in R.S. 6:325(D).

Acts 1983, No. 675, §1; Acts 1997, No. 658, §2; Acts 2004, No. 42, §2; Acts 2013, No. 65, §1, eff. May 30, 2013; Acts 2021, No. 44, §1, eff. June 1, 2021; Acts 2024, No. 759, §1.

§ 6:769 Access to safety deposit boxes held jointly or standing in the name of a corporation, unincorporated association, trust estate, agents, or others

A. When a safety deposit box is leased from any bank under the names of two or more persons with the right of access being given to any one of such persons, the survivor or survivors, whether or not the other or others are living, has and the bank may permit any of them to have free access to the safety deposit box including the right to remove the contents thereof. In such case, the signature of such person or persons entering the safety deposit box is a full release and discharge of the bank permitting such entry as to any heir, legatee, creditor, or other person having rights or claims to funds or property of the decedent, and no bank permitting entry into the safety deposit box in accordance with the provisions of this Section shall be liable for any estate, inheritance, or succession taxes which may be due this state.

B. When any such safety deposit box is leased from any association under the names of two or more persons, with the right of access being given to any one of such persons, if one of such lessees seeks to prevent access by any of the lessees, the lessee seeking to do so must give notice in writing, signed by him and delivered to the association.

C. After the receipt of such notice from one or more of such lessees, the association may refuse to permit access to the safety deposit box of any of the lessees, including the ones requesting the denial of access, unless all of the lessees of the safety deposit box appoint in writing the persons to have access to the safety deposit box.

D. If any association has received a notice in writing required in Subsection B of this Section, the association shall be relieved of responsibility to each and every one of the lessees of the safety deposit box in question for failure or refusal to permit access thereto, except where all of the lessees of the safety deposit box enter the box together or appoint in writing the persons to have access to the safety deposit box.

E. When a safety deposit box is leased from any association under the name of either a corporation or an unincorporated association, with the right of access being given to persons authorized by a resolution of the board of directors of the corporation or of the governing body of the unincorporated association, notwithstanding the death of any such persons, the association may permit the persons authorized by a resolution of the board of directors of the corporation or of the governing body of the unincorporated association to have free access to the safety deposit box, including the right to remove the contents thereof. In such case, the signature of the authorized persons entering the safety deposit box is a full release and discharge of the association permitting such entry as to any heir, legatee, creditor, or other person having rights or claims to funds or property of the decedent, nor shall any association permitting entry into the safety deposit box in accordance with the provisions hereof be liable for any estate, inheritance, or succession taxes which may be due this state.

F. When a safety deposit box is leased from any association by a trust estate, whether in the name of the trust estate or the trustees thereof, with the right of access being given to the trustees designated in the instrument creating the trust estate or appointed in accordance with the provisions of R.S. 9:1721 et seq., notwithstanding the death of any such trustee and notwithstanding the termination of the trust, the association may permit the trustees so designated or appointed to have free access to the safety deposit box, including the right to remove the contents thereof. In such case, the signature of the trustees entering the safety deposit box is a full release and discharge of the association permitting such entry as to anyone, including any heir, legatee, creditor, or other person having rights or claims to funds or property of the decedent, nor shall any association permitting entry into said safety deposit box in accordance with the provisions hereof be liable for any estate, inheritance, or succession taxes which may be due this state.

G. When a safety deposit box is leased from any association under the name of a person, with the right of access being given to said person and to an agent or deputy appointed by said person, notwithstanding the death of any agent or deputy, the association may permit the person under whose name the safety deposit box is leased or any surviving agent or deputy to have free access thereto, including the right to remove the contents thereof. In such case, the signature of the person entering the safety deposit box is a full release and discharge of the association permitting the entry as to any heir, legatee, creditor, or other person having rights or claims to funds or property of the decedent, nor shall any association permitting entry into the safety deposit box in accordance with the provisions hereof be liable for any estate, inheritance, or succession taxes which may be due this state.

Acts 1983, No. 675, §1; Acts 1989, No. 357, §1.

§ 6:770 Abandonment of safety deposit box

A. A safety deposit box leased from any association shall be deemed abandoned and the association may remove the contents of such safety deposit box, if the rental therefor remains unpaid, all as provided under Subsection B of this Section, or pursuant to the terms of the safety deposit box contract, or as otherwise permitted by law. Only the safety deposit box itself, and not the contents, may be deemed abandoned as provided herein.

B. If the safety deposit box rental is delinquent for six months, the association after sixty days' notice by mail addressed to the lessee at his address as shown on the safety deposit box contract may, if the rent is not paid within the time specified in said notice, open the box in the presence of two employees of the association and a notary public who shall make an inventory of the contents of the box and place such contents in a sealed envelope or other container in the name of the lessee. The association shall then send notice to the administrator of the Uniform Unclaimed Property Act of 1997 for publication as provided by R.S. 9:161 that the safety deposit box has been abandoned and that the bank is holding the listed contents thereof. Such notice shall include the lessee's name and last known address.

C. After an association has entered an abandoned safety deposit box and removed the contents thereof, it shall then hold such contents in the name of the lessee subject to a lien and privilege for the unpaid rent, the costs of opening the box and making the inventory of and storing its contents, and any other costs, expenses, or other amounts as provided in the lease or by law. If such amounts are not paid in full within one year from the date the safety deposit box became abandoned, the association may sell all or any part of the contents by public, private, or judicial sale in accordance with Louisiana law and the terms of the safety deposit box contract.

D. After an association has entered an abandoned safety deposit box and removed the contents thereof, the association may immediately re-lease the abandoned safety deposit box without accounting to the lessee, and need not apply any subsequent rental payments received therefor to the payment of any amounts owed by the former lessee.

Acts 1989, No. 357, §1; Acts 1997, No. 658, §2; Acts 2000, 1st Ex. Sess., No. 135, §1, eff. July 1, 2000.

§ 6:771 Disposition of abandoned safety deposit box contents

The provisions of R.S. 6:327 and 327.1 relative to the disposition of abandoned safety deposit box contents shall be applicable to savings and loan associations chartered under the Louisiana Savings and Loan Association Law in the same manner as they are applicable to state banks.

Acts 2020, No. 236, §1.

PART VII DIRECTORS, OFFICERS, AND EMPLOYEES

§ 6:781 Indemnity bonds

A. Each association shall obtain and maintain a fidelity bond given by a surety company authorized to do business in Louisiana covering each officer, director, or employee before permitting such officer, director, or employee to enter upon the duties of their office or employment. This bond may be in the form of individual bonds on individual employees, a schedule fidelity bond, or a blanket bond covering all such persons. The bond shall be in such amount as may be fixed by regulations of the Federal Deposit Insurance Corporation or its successor. A true copy of each of the bonds shall be filed with the commissioner. Such bonds shall provide that a cancellation thereof by the surety or by the insured shall not become effective until ten days notice in writing first shall have been given to the association.

B. In lieu of complying with the provisions of Subsection A of this Section, any association may provide its own fidelity bond from an insurance fund acceptable to the commissioner or obtain an insurance policy from a surety company approved by the commissioner.

C. Any association may, by resolution of its board of directors, make application to the commissioner of financial institutions to waive, for a stated period of time, the requirement of obtaining and maintaining a fidelity bond as provided in Subsection A of this Section upon a showing to the commissioner that the association is unable to pay the premium to purchase the fidelity bond insurance.

Acts 1970, No. 234, §1; Acts 1983, No. 675, §1; Acts 1989, No. 131, §1.

§ 6:782 Depositories

No association shall deposit any of its funds except with a federal home loan bank, or with a depository insured by the Federal Deposit Insurance Corporation or its successor, or the Federal Savings and Loan Insurance Corporation, or its successor, or the National Credit Union Share Insurance Fund or its successor, and approved by a vote of a majority of the directors of the association.

Acts 1970, No. 234, §1. Acts 1983, No. 675, §1.

§ 6:783 Indemnification of officers, directors, and employees

A. An association may indemnify any person who was or is party or is threatened to be made a party to any action, suit, or proceeding, whether civil, criminal, administrative, or investigative, including any action by or in the right of the corporation, by reason of the fact that he is or was a director, officer, employee, or agent of the association or is or was serving at the request of the association as a director, officer, employee, or agent of another business, corporation, partnership, joint venture, or other enterprise, against expenses, including attorney fees, judgments, fines, and amounts paid in settlement actually and reasonably incurred by him in connection with such action, suit, or proceeding if he acted in good faith and in a manner he reasonably believed to be in or not opposed to the best interests of the association, and, with respect to any criminal action or proceeding, had no reasonable cause to believe his conduct was unlawful; however, in case of actions by or in the right of the association, the indemnity shall be limited to expenses, including attorneys' fees, actually and reasonably incurred in connection with the defense or settlement of such action and no indemnification shall be made in respect of any claim, issue, or matter as to which such person shall have been adjudged to be liable for negligence or misconduct in the performance of his duty to the association.

B. The termination of any action, suit, or proceeding by judgment, order, settlement, conviction, or upon a plea of nolo contendere or its equivalent, shall not, of itself, create a presumption that the person did not act in good faith and in a manner which he reasonably believed to be in or not opposed to the best interests of the association, and with respect to any criminal action or proceeding, had reasonable cause to believe that his conduct was unlawful. A person may, with the approval of the commissioner, be so indemnified or reimbursed for:

(1) Amounts paid in compromise or settlement of any action, suit, or proceeding, including reasonable expenses, fines, and penalties incurred in connection therewith, or

(2) reasonable expenses incurred in connection with a criminal or civil action, suit, or proceeding in which such person has been adjudicated guilty, negligent, or liable,

if it shall be determined by the board of directors and by the commissioner that such person was acting in good faith and in what he believed to be the best interests of the association and without knowledge that the action was illegal, and if such indemnification or reimbursement is approved at an annual or special meeting of the members or stockholders by a majority of the votes eligible to be cast.

C. Amounts paid to the association, whether pursuant to judgment or settlement by any person within the meaning of this Section shall not be indemnified or reimbursed in any case.

D. An association may pay for or reimburse the reasonable expenses incurred by a person authorized to be reimbursed under this Section who is a party to a proceeding in advance of final disposition of the proceeding if:

(1) The person furnishes the association a written affidavit of his good faith belief that he has met the standard of conduct described in Subsection A;

(2) The person furnishes the association a written agreement, executed personally or on his behalf, to repay the advance if it is ultimately determined that he did not meet the standard of conduct; and

(3) As a condition precedent to any advance or reimbursement of the expenses to which reference is made in this Subsection, the board of directors shall, by resolution, attest that to the best of their knowledge and information, the conduct of the party to be reimbursed met the standard of conduct described in Subsection A of this Section.

Acts 1970, No. 234, §1; Acts 1983, No. 675, §1; Acts 1988, No. 597, §1, eff. July 14, 1988.

§ 6:784 Illegal loans

A. Should the directors or officers exceed any of the limitations set out in R.S. 6:822(1), all officers and directors present at any meeting or conference authorizing such illegal loans and consenting to such loans shall be liable in solido for the full amount of the loans; and the attorney general or the commissioner, or the corporation itself though* its proper representatives, or any member or stockholders owning at least two percent of the outstanding shares or savings accounts or stock of the association and acting for the benefit of the association, may at any time institute suit for the foreclosure of the loans without regard to their stipulated maturity.

B. The officers and directors who are responsible for making of the illegal loan may be joined as party defendants in the suits, and judgment may be obtained against them in solido. However, these judgments, although on due recordation constituting judicial mortgages against immovable property of all such officers and directors, shall not become otherwise executory until the association's rights and remedies against the immovable property security on the loans have been liquidated by execution.

Acts 1983, No. 675, §1.

• So in enrolled bill.

§ 6:785 Directors, employees and members not disqualified to make acknowledgments

No public officer qualified to take acknowledgments or proof of written instruments shall be disqualified from taking the acknowledgment or proof of any instrument in writing in which an association is interested by reason of his membership in or employment by an association so interested, and any such acknowledgments or proof heretofore taken are hereby validated.

Acts 1983, No. 675, §1.

§ 6:786 Relation and liability of directors and officers

A. Financial institution officers and directors shall be deemed to stand in a fiduciary relation to their financial institution and its stockholders or members and shall discharge the duties of their positions in good faith and with that diligence, care, judgment, and skill as provided in Subsection B of this Section. Nothing herein contained shall derogate from any indemnification authorized by R.S. 6:705.

B. A director or officer of a financial institution shall not be held personally liable to the financial institution or the shareholders or members thereof for monetary damages unless the director or officer acted in a grossly negligent manner as defined in R.S. 6:703(9) or engaged in conduct that demonstrates a greater disregard of the duty of care than gross negligence, including intentional tortious conduct or intentional breach of the duty of loyalty.

C. A director of a financial institution shall, in the performance of his duties, be fully protected in relying in good faith upon the records of the financial institution, and upon such information, opinions, reports, or statements presented to him, the financial institution, the board of directors, or any committee thereof by any of the financial institution's officers or employees, or by any committee of the board of directors, or by any counsel, appraiser, engineer, or independent or certified public accountant selected with reasonable care by the board of directors or any committee thereof or any officer having the authority to make such selection, or by any other person as to matters the director reasonably believes are within such other person's professional or expert competence and which person is selected with reasonable care by the board of directors or any committee thereof or any officer having the authority to make such selection.

D. The provisions of this Section shall not affect the right of incorporators or shareholders of financial institutions to include in articles of incorporation provisions as authorized by R.S. 6:213(B)(3) or 705.

E. Notwithstanding any other law to the contrary, the provisions of this Section shall be the sole and exclusive law governing the relation and liability of directors and officers to their financial institution or to the shareholders or members thereof or to any other person or entity.

F. Any person who unsuccessfully attempts to impose a higher standard of responsibility or liability than that provided by this Section may be liable for attorney fees incurred in the defense of such attempt and for damages.

Acts 1992, No. 586, §1, eff. June 30, 1992; Acts 2015, No. 83, §1.

NOTE: See Acts 1992, No. 586, §2, for retroactive applicability and period of repose.

§ 6:787 Actions against directors and officers

A. No action for damages against any director or officer of a financial institution for breach of the director's or officer's contract with the financial institution in the capacity of director or officer, or for breach of his duty as a director or officer, including, without limitation, actions for gross negligence, but excluding any action covered by the provisions of Subsection B of this Section, shall be brought unless filed in a court of competent jurisdiction and proper venue within one year from the date of the alleged act, omission, or neglect, or within one year from the date that the alleged act, omission, or neglect is discovered or should have been discovered; however, even as to actions filed within one year from the date of such discovery, in all events such actions shall be filed at the latest within three years from the date of the alleged act, omission, or neglect.

B. No action for damages against any financial institution for intentional tortious misconduct, or for an intentional breach of the director's or officer's duty of loyalty, or for acts or omissions in bad faith, or involving fraud or a knowing and intentional violation of law, shall be brought unless filed in a court of competent jurisdiction and proper venue within two years from the date of the alleged act or omission, or within two years from the date the alleged act or omission is discovered or should have been discovered; however, even as to actions filed within two years from the date of such discovery, in all events such actions shall be filed at the latest within four years from the date of the alleged act or omission.

C. The three-year period provided in Subsection A of this Section and the four-year period provided in Subsection B of this Section shall be deemed peremptive periods and shall not be subject to renunciation, interruption, or suspension except by timely suit filed in a court of competent jurisdiction and proper venue.

Acts 1992, No. 586, §1, eff. June 30, 1992.

{{NOTE: SEE ACTS 1992, NO. 586, §2, FOR RETROACTIVE APPLICABILITY AND PERIOD OF REPOSE.}}

§ 6:788 §§788 to 790 Repealed by Acts 1970, No. 234, §2.

§§788 to 790 Repealed by Acts 1970, No. 234, §2.

PART VIII CORPORATE ADMINISTRATION--RECORDS, REPORTS, AND EXAMINATION

§ 6:791 Records

A. Each association shall keep correct and complete books of account and minutes of the proceedings of members, stockholders, directors, and the executive committee and complete records of all business transacted for a period to be determined by regulation of the commissioner.

B. Each agent of an association shall keep an original record of each transaction of business of the association and shall report promptly to the home office. Complete detailed permanent records of such transactions are not required to be maintained at such agency.

C. Each association shall use such forms and observe such accounting principles and practices as the commissioner may require from time to time.

D. Each state chartered association shall furnish a financial statement at any time the commissioner sees fit. Each association shall close its books annually, either on a fiscal or calendar year basis.

E. Each association shall maintain complete loan and investment records, and shall do so in a manner satisfactory to the commissioner.

F. Each association shall maintain membership or stockholder records, which shall show the name and address of the member or stockholder, the status of a member as a savings or demand account holder, shareholder, obligor, or any combination thereof, and the date of membership or of becoming a stockholder thereof.

G. Any association may cause any or all records kept by such association to be copied or reproduced by any photostatic, photographic, or microfilming process which correctly and permanently copies, reproduces, or forms a medium for copying or reproducing the original record on a film or other durable material, and such association may thereafter dispose of the original record. Any such copy or reproduction shall be deemed to be an original record for all purposes and shall be treated as an original record in all courts or administrative agencies for the purpose of its admissibility in evidence. A facsimile, duplication, or certified copy of any such copy or reproduction from a film record shall, for all purposes, be deemed a facsimile, duplication, or certified copy of the original record.

Acts 1970, No. 234, §1. Amended by Acts 1972, No. 296, §1; Acts 1983, No. 675, §1; Acts 1997, No. 51, §1.

§ 6:792 Misdescriptions of assets; false entries

A.(1) No association by any system of accounting or any device of bookkeeping shall, either directly or indirectly, enter any of its assets upon its books in the name of any other person, partnership, association, or corporation or under any title or designation that is not truly descriptive of such assets.

(2) No officer or employee of any association shall knowingly make false entries in any of the books of the association or knowingly omit and neglect to make proper entries in the books of the association, or concerning any of its assets, for the purpose of deceiving the commissioner, the board of directors, or the public, concerning the true condition of the association, or concealing any crime that might have been committed in connection with the affairs of the association.

B.(1) No person in the course of his employment with or for an association, or in connection with any business or affairs in which an association is concerned, shall forge, counterfeit, or falsely make or alter, or shall procure to be made or assist in falsely making, altering, or counterfeiting any public or private record, any certificate or attestation of any public officer, in any manner wherein his certificate or attestation is receivable, and may be taken as legal proof, any charter, deed, will, testament, bond, letter of attorney, policy of insurance, bill of exchange, promissory note, order, acquittance, discharge for or upon the payment of money or delivery of goods, any acceptance of a bill of exchange, or any endorsement or assignment thereof, or promissory note for the payment of money, any receipt for money or goods, or for any note, bill, security, money, or goods.

(2) No such person shall, with intent to injure or defraud any person, alter or publish as true any such false, altered, forged, or counterfeited record, certificate, attestation, charter, deed, will, testament, bond, letter of attorney, policy of insurance, bill of exchange, promissory note, acceptance, assignment, order, acquittance, discharge, or receipt, knowing the same to be false, altered, forged, or counterfeited.

C. In all cases where any officer or employee of any association has knowingly made false entries or has omitted to make correct entries as set forth in this Part, all of these charges may be embraced in one general indictment, giving each separate offense under a different count, so that at the trial of the case the entire evidence may be admitted concerning all of such cases.

D. Whoever violates this Section shall be fined not less than five hundred dollars nor more than twenty-five hundred dollars, or imprisoned with or without hard labor for not less than six months nor more than five years, or both.

Acts 1970, No. 234, §1. Acts 1983, No. 675, §1.

§ 6:793 Directors' examination of association

The commissioner shall require at least once in each year that each association cause its books, records, and accounts to be examined in accordance with a regulation promulgated by the commissioner.

Acts 1970, No. 234, §1. Amended by Acts 1982, No. 368, §1; Acts 1983, No. 675, §1; Acts 1986, No. 818, §1; Acts 1995, No. 248, §§1, 2, eff. June 14, 1995; Acts 1997, No. 49, §1; Acts 2001, No. 530, §1.

NOTE: See Acts 2001, No. 530, §2, relative to effective date.

§ 6:794 Examination

A. All associations operating under this Chapter or under similar laws, or authorized to transact in Louisiana a business similar to that authorized by this Chapter, shall be under the control and supervision of the commissioner.

B. Repealed by Acts 1995, No. 248, §2, eff. June 14, 1995.

C. Whenever, in the judgment of the commissioner, the condition of any association renders it necessary or expedient to make an extra examination or audit or to devote any extraordinary attention to its affairs, the commissioner shall cause the same to be done. A full and complete copy of the report of all examinations and audits shall be furnished to the association examined. Such report of examination or audit shall be presented by the president to the board of directors at its next regular or special meeting.

D.(1) The commissioner is authorized in connection with any examination or audit of any association to cause to be made appraisals of real estate held by the association or securing the association's assets when specific facts or information with respect to real estate held, secured loans or lending, or when in his opinion the association's policies, practices, operating results and trends, give evidence that an association's appraisals may be excessive, that lending or investment may be of a marginal nature, that appraisal policies and practices may not conform with generally accepted and established professional standards, or that real estate held by the association or assets secured by real estate are overvalued. In lieu of causing such appraisals to be made, the commissioner may accept any appraisal caused to be made by a federal home loan bank, the Federal Home Loan Bank Board, or by the Federal Deposit Insurance Corporation or other insuring agency of an insured association.

(2) Unless otherwise ordered by the commissioner, appraisal of real estate in connection with any examination or audit pursuant to this Section shall be made by a professional appraiser or appraisers selected by the commissioner. The cost of such appraisal shall be paid promptly to the appraiser by the association upon receipt by the association of a statement of the cost bearing the written approval of the commissioner.

(3) A copy of the report of each appraisal caused to be made by the commissioner pursuant to this Subsection shall be furnished to the association within a reasonable time, not to exceed sixty days, following the completion of such appraisals, and may, in the case of an insured association, be furnished to the insuring agency.

E. The commissioner, any deputy commissioner, or his examiners or auditors:

(1) Shall have free access to all books and papers of an association or a service organization, the principal office of which is located in this state and which is principally owned by one or more thrift institutions, which relate to its business and books and papers kept by any officer, agent, or employee, relating to or upon which any record of its business is kept;

(2) May summon witnesses and administer oaths or affirmations in the examination of the directors, officers, agents, or employees of any such association, service organization, or any other person in relation to its affairs, transactions, and conditions; and

(3) May require and compel the production of records, books, papers, contracts, or other documents by court order, if not voluntarily produced.

F. Any reports made by the commissioner as to the condition of any association and any data or information obtained and gathered by him in the course of his inspection and examination of any association shall be available at all times with the consent of the association, without charge or expense to any duly authorized representative of any corporation, institution, department, or agency of the United States for the sole purpose of the acquisition of any credit or other relevant information relating to the financial structure, condition, business, and affairs of any association.

Acts 1970, No. 234, §1. Amended by Acts 1982, No. 430, §1; Acts 1983, No. 675, §1; Acts 1995, No. 248, §2, eff. June 14, 1995.

§ 6:795 §§795, 796 Repealed by Acts 1970, No. 234, §2.

§§795, 796 Repealed by Acts 1970, No. 234, §2.

PART IX CORPORATE ADMINISTRATIONS--SAVINGS LIABILITY; RESERVES; ACCOUNTING

§ 6:801 Savings liability; demand deposit liability

A. The savings account liability and the demand deposit account liability of an association is not limited, and shall consist only of the aggregate amount of accounts of depositors and shares of members, plus earnings credited to such shares and accounts, less redemption and withdrawal payments.

B. Except as limited by the board of directors, a depositor or member may make additions to his shares or savings or demand accounts in such amounts and at such times as he may elect.

C. The depositors shall not be responsible for any losses which their savings liability and demand deposit liability shall not be sufficient to satisfy, nor shall the holders thereof be liable for any unpaid installments on their accounts.

D. Depositors' savings or demand accounts shall be non-assessable, and depositors shall stand as general creditors of the association.

E. No preference between members of mutual associations shall be created with respect to the distribution of assets upon voluntary or involuntary liquidation, dissolution, or winding up of an association.

F. No association shall issue, sell, negotiate, or advertise for issuance or sale to depositors any type of savings or investment media or contract with respect to the savings liability in a manner inconsistent with the provisions of this Chapter.

Acts 1970, No. 234, §1. Acts 1983, No. 675, §1.

§ 6:802 Contingent loss account

A contingent loss account may be established and shall be established if the commissioner so directs.

Acts 1970, No. 234, §1. Acts 1983, No. 675, §1.

§ 6:803 Earnings; payment

Except as otherwise provided by this Chapter and the articles or bylaws, an association may pay earnings on its savings accounts or shares from sources available for payment of earnings at such rate and at such times as shall be determined by resolution of its board of directors. The board of directors, by resolution, may determine that earnings shall not be paid on any shares or savings accounts which have a withdrawal value of a specified amount of less than fifty dollars or which, by written agreement, is intended to be closed within a specified period less than fifteen months from the date on which such share or savings account is opened or purchased. An exception may be made in earnings paid on shares or savings accounts opened or purchased pursuant to R.S. 6:747.

Acts 1970, No. 234, §1. Acts 1983, No. 675, §1.

§ 6:804 Casual deposits

An association may receive casual deposits in connection with incomplete loans, fire losses, or building contracts and any other monies which an association may hold for its members, stockholders, or other persons in accordance with its business and operations.

Acts 1970, No. 234, §1. Acts 1983, No. 675, §1.

§ 6:805 Withdrawal of savings accounts and shares

A. Except as otherwise provided in the instrument or document evidencing a savings account or shares, any member, depositor, or his authorized representative, or a person authorized by law may present at any time a written application for withdrawal of all or any part of his unpledged savings accounts or shares. This application shall be filed at any office of the association and shall request immediate withdrawal of a stated amount in accordance with this Part.

B. Any member or depositor may cancel his application at any time in full or in part by submitting such cancellation in writing.

C. Every association may number, date, and file in the order of actual receipt every withdrawal application.

D. No member or depositor shall have on file in any one association more than one application for the withdrawal of savings accounts or shares.

Acts 1970, No. 234, §1. Acts 1983, No. 675, §1.

§ 6:806 Board to determine amounts to be withdrawn

The attribution to be made from receipts or other assets for the payment of withdrawals shall be under the sole control and administration of the board of directors, which shall determine the amount to be used for the payment of said withdrawals. Before making any appropriation of the receipts which may be applied to the liquidation of the claims of withdrawing members or depositors, the board may make use of such receipts and funds as are needed for all operating expenses, the maintenance and improvements of all repossessed property, the payment or renewal of obligations, and the creation of cash reserves needed for the declaration of dividends or interest.

Acts 1970, No. 234, §1. Acts 1983, No. 675, §1.

§ 6:807 Amounts payable

A. If sufficient funds have been made available and if the association so elects, it may at any time pay in full each application as presented. It shall not, however, pay some in full unless it can pay every application on file in full.

B. Payments shall be made in order of actual receipt of applications in the form of cash or one or more checks or similar instruments payable to the order of the member, depositor, or to the order of others as directed, in the following amounts:

(1) The withdrawal value of savings accounts, together with any earnings which may have been declared and may have accrued thereon, for the current period.

(2) The withdrawal value of shares or savings accounts, together with all earnings or interest declared thereon or earnings allotted thereto, previous to the date of the filing of the application.

C. From the amounts to be received by the withdrawing member or depositor, there shall be deducted:

(1) The percentage of allotted earnings or interest that may be retained on account of withdrawing before its maturity in accordance with the articles of incorporation or bylaws, and

(2) In the case of either shares or savings accounts, the unpaid charges and pro rata share of any losses prior to the date of the filing of the application in excess of the amount in the contingent loss account, if such account is determined by the commissioner to be necessary.

D. However, holders of fixed maturity savings accounts may not withdraw prior to maturity except for a recognized emergency, in which case the members or depositors holding such accounts shall be paid the withdrawal value of the accounts, plus all earnings or interest allotted thereto, previous to the date the accounts were presented to the association for withdrawal.

Acts 1970, No. 234, §1. Acts 1983, No. 675, §1.

§ 6:808 Insufficient funds; notices

A. Whenever the proportion of receipts ordinarily made applicable to the demands of withdrawing members or depositors is not sufficient to pay all such demands for either savings accounts or shares, including those accounts which have matured due to an emergency situation, within sixty days from the date of application for withdrawal, applications for withdrawal shall be paid out of funds available as hereinafter set forth and shall be liquidated as follows:

(1) The applicant first on the list shall be paid one thousand dollars on account, or in full if the amount of the notices for withdrawal or the unpaid balance of such application is less than one thousand dollars. For any balance remaining due the applicant after the aforesaid payment, the application shall be transferred at once to the bottom of the withdrawal list and no further payments shall be made except as hereinafter set forth, until the applicant's name again appears at the head of the withdrawal list. Each other applicant shall be treated in exactly the same manner and reached in order. All new applicants shall be placed at the bottom of the list immediately upon the filing of their respective applications.

(2) In addition to the above, the board of directors may use its discretion in meeting on demand at all times all applications for withdrawals for either savings accounts or shares by members or depositors whose entire claim in the savings accounts or shares respectively amounts to less than two hundred dollars. Additionally, the board of directors in its discretion may pay the sum of not more than one hundred dollars per month to any applicant on the withdrawal list. Such payments of one hundred dollars per month shall be made only when emergency circumstances justify the payment and only after a thorough investigation of each applicant has been made. These emergency applications shall be kept on file in the association's office.

(3) When an application to withdraw is reached for payment as provided above, a written notice shall be sent to the applicant by mail at his last address as recorded on the books, and unless the applicant shall apply in person or in writing for such withdrawal within thirty days from the date of such notice, no payment on account of such application shall be made and such application shall be cancelled.

B. In no event shall an association voluntarily or involuntarily delay or postpone the whole or partial payment of the value of any savings account or share pursuant to a written withdrawal application for a period exceeding sixty days following the receipt of such application without first notifying the commissioner, and, in the case of an association whose accounts are insured by the Federal Deposit Insurance Corporation, said corporation. No association can obligate itself to pay withdrawals on any plan other than authorized in this Chapter.

Acts 1970, No. 234, §1. Acts 1983, No. 675, §1.

§ 6:809 Board may prescribe rules

A. The board of directors shall have full authority to prescribe such rules as, in its discretion, may be suitable to prevent members or depositors from making any simulated or otherwise improper transfer of shares or savings accounts in order to appear more than once on the withdrawal list, and all rules thus made shall be binding on the members of the association.

B. The board of directors may prescribe, grant, and order the payment of an allowance on the amount of unpaid withdrawals under such terms and conditions as to the amount of individual withdrawals or period of time on the withdrawal list, or otherwise, as the board may determine; but the rate of allowance which may be thus paid shall never exceed sixty percent of the rate of dividend or interest currently and actually paid in cash on the shares or savings accounts of continuing members or depositors. The allowance may be discontinued by the board at any time or under any conditions, especially without affecting the right to continue to pay earnings and interest on the shares or savings accounts of continuing members or depositors. Whenever an allowance is made to members or depositors on the withdrawal list as authorized, any member or depositor withdrawing shares or accounts, who accepts the allowance, shall bear his proportion of all losses and charges on such shares or accounts, as stated in R.S. 6:807 up to the time of the final payment to him in respect of his application.

Acts 1970, No. 234, §1. Acts 1983, No. 675, §1.

§ 6:810 Rights of withdrawing members

A. A member or depositor who has served notice of his intention to withdraw remains a member or depositor, but shall have the status of and be classified as a withdrawing member or depositor. His rights and privileges are prescribed, limited, and defined exclusively by the provisions and restrictions of this Section.

B. Except as stated in R.S. 6:807, no liabilities or losses as of a date subsequent to the time and filing of the notice of withdrawal shall be chargeable or assessable against the member's or depositor's shares or accounts.

C. From the date of the application and as long as his application for withdrawal has not been withdrawn, he shall not be entitled to vote or to any other benefit on his shares or savings accounts beyond the collection of the face value thereof, nor to allowance or dividend in the distribution of the accumulated or current profits or earnings.

D. No earnings or interest shall be declared upon that portion of an account which has been noticed for withdrawal, which for earning or interest purposes is required to be deducted from the latest previous additions to such account, so long as such application is on file.

Acts 1970, No. 234, §1. Acts 1983, No. 675, §1.

§ 6:811 New loans and payment of debts during existence of withdrawal list

A. The existence of a withdrawal list shall not prevent the making of new loans to new or continuing members or depositors, or to those to whom loan commitments have been given; however, when there is a withdrawal list, not more than twenty-five percent of the gross receipts shall be used for the making of loans.

B. Notwithstanding the existence of a withdrawal list, the board, as long as there are debts due by the association, may use all or any part of the funds and current receipts for the payment of such debts, no matter at what time or under what circumstances incurred, as well as for the payment of all operating expenses and all other expenses incidental to the doing of business; and earnings or interest in such amounts and at such rates as may be considered proper by the board may be declared by the board out of the earnings or undivided profits for the benefit of the continuing members or depositors, although there is a list of unpaid withdrawals.

Acts 1970, No. 234, §1. Acts 1983, No. 675, §1.

§ 6:812 Commissioner's action may stop withdrawal procedure

A. Whenever the amount of withdrawal exceeds sixty percent of the accumulated capital of any mutual association, the commissioner, if he believes that the condition of the association justifies such an order, may direct that the payment or withdrawals as above provided be discontinued, and that thereafter all withdrawals from the association be paid on a pro rata basis, from time to time, to all persons appearing on the withdrawal list of the association. This distribution shall be made to all persons actually on the withdrawal list on a date not less than ten days previous to the day on which the pro rata distribution checks are issued.

B. Whenever the commissioner takes charge of any association, or in the event of merger, consolidation, or liquidation, the withdrawal list shall be cancelled.

Acts 1970, No. 234, §1. Acts 1983, No. 675, §1.

§ 6:813 Prohibition against institution of action

No suit shall be instituted by a withdrawing member or by a depositor against an association, its officers, or representatives, except for a violation of the provisions of this Part or to enforce compliance therewith.

Acts 1970, No. 234, §1. Acts 1983, No. 675, §1.

§ 6:814 Redemption

A. At any time funds are on hand for the purpose of redeeming accounts or shares, the association shall have the right to redeem by lot or otherwise, as the board of directors may determine, all or any part of any of its savings accounts or shares on an earnings or interest date by giving thirty days notice by registered or certified mail addressed to each affected member or depositor at his or her last address as recorded on the books of the association.

B. No association shall redeem any of its savings or demand accounts or shares when the association is in an impaired condition or when it has applications for withdrawal which have been on file more than sixty days and have not been reached for payment.

C. The redemption price of savings accounts or shares redeemed shall be the full value of the account redeemed as determined by the board of directors and approved by the commissioner.

D. If the aforesaid notice of redemption shall have been duly given, and if on or before the redemption date the funds necessary for such redemption shall have been set aside so as to be and continue to be available therefor, earnings or interest upon savings accounts or shares called for redemption shall cease to accrue from the earnings or interest date specified as the redemption date, and all rights with respect to such accounts shall forthwith, after such redemption date, terminate, except only for any right of the member or depositor of record to receive the redemption price without interest.

Acts 1983, No. 675, §1.

PART X INVESTMENT OPERATIONS

§ 6:822 Loans and investments

An association may invest in, sell, participate, or otherwise deal in or with the following loans or other investments as hereinafter provided:

(1) No association shall make a loan to one borrower if the sum of (a) the amount of such loan, and (b) the total balances of all outstanding loans owed to such association by such borrower exceeds an amount equal to the lesser of (i) ten percent of such association's savings liability, or (ii) an amount equal to such association's paid-in capital, surplus, reserves for losses, and undivided profits; except that any loan may be made if the sum of (a) and (b) does not exceed five hundred thousand dollars. The requirements of (i) and (ii) of this Paragraph shall be measured by the amounts reported at the end of the month immediately preceding the month in which the loan or written commitment for a designated loan amount is made. The limits relative to unsecured loans to one borrower shall be subject to such limitations as the commissioner may impose. The limits contained in this Paragraph shall not apply to loans made to a service organization of which an association directly or indirectly owns or controls a majority of the voting shares or more than fifty percent of the number of shares voted for the election of the directors of the service organization.

(2) Without limitation as a percentage of assets, the following are permitted:

(a) Account Loans. Loans on the security of its savings accounts and loans specifically related to demand accounts.

(b) Real Estate Loans.

(i) Loans on the security of liens or mortgages upon residential or nonresidential real estate, except that the loans and investments in loans of an association on nonresidential real estate shall not exceed forty percent of its assets.

(ii) Sales of loans or participating interest therein on residential real estate may be sold with right of substitution. Any other loan shall only be sold without recourse.

(c) United States Government securities. Investments in obligations of, or fully guaranteed as to principal and interest by the United States. An association may act as agent for the United States in the sale or other disposition of such obligations.

(d) Federal Home Loan Bank and Federal National Mortgage Association securities. Investments in the stock or bonds of a federal home loan bank or in the stock of the Federal National Mortgage Association.

(e) Federal Home Loan Mortgage Corporation instruments. Investments in mortgages, obligations, or other securities sold by the Federal Home Loan Mortgage Corporation pursuant to the Federal Home Loan Mortgage Corporation Act.

(f) Other government securities. Investments in obligations, participations, securities, or other instruments of, or issued by, or fully guaranteed as to principal and interest by, the Federal National Mortgage Association, the Student Loan Marketing Association or the Government National Mortgage Association, Federal Home Loan Mortgage Corporation, or any other agency of the United States or any other securities guaranteed pursuant to the National Housing Act.

(g) Deposits. Investments in the time deposits, certificates, or accounts of any bank the deposits of which are insured by the Federal Deposit Insurance Corporation, or in the savings accounts, certificates, or other accounts of any institution the accounts of which are insured by the Federal Deposit Insurance Corporation or the National Credit Union Share Insurance Fund, or other insuring entity designated by the commissioner.

(h) State Securities. Investments in obligations of, or issued by, any state or political subdivision thereof, including any agency, corporation, or instrumentality of a state or political subdivision, except that an association may not invest more than ten percent of its capital and surplus in obligations of any one issuer, exclusive of investments in general obligations of any one issuer.

(i) Purchase of insured loans. Purchase of loans secured by liens on improved real estate which are insured under provisions of the National Housing Act, or insured as provided in the Servicemen's Readjustment Act of 1944 or Chapter 37 of Title 38 of the United States Code.

(j) Home improvement and manufactured home loans. Loans made for the repair, equipping, alteration, or improvement of any residential real property, and loans made for the purpose of manufactured home financing.

(k) Insured loans to finance the purchase of immovable property. Loans as to which the association has the benefit of insurance under the National Housing Act, or of a commitment or agreement therefor.

(l) Loans to financial institutions, brokers, and dealers. Loans to financial institutions with respect to which the United States or an agency or instrumentality thereof has any function of examination or supervision, or to any broker or dealer registered with the Securities and Exchange Commission, if such loans are secured by loans, obligations, or investments in which the association has the statutory authority to invest directly.

(m) Liquidity investments. Investments which, at the time of making, are assets eligible for inclusion toward satisfaction of any liquidity requirement imposed by the Federal Home Loan Bank Board pursuant to the Federal Home Loan Bank Act.

(n) Investment in the National Housing Partnership Corporation, partnership, and joint ventures. Investments in shares of stock issued by a corporation authorized to be created pursuant to Title IX of the Federal Housing and Urban Development Act of 1968, and investments in any partnership, limited partnership, or a joint venture formed pursuant to Section 907(a) or 907(b) of that Act.

(o) Housing, land, and urban development; insured or guaranteed investments. Loans secured by mortgages as to which the association has the benefit of insurance under Title X of the National Housing Act or a commitment or agreement for such insurance, or as to which the association has the benefit of any guarantee under Title IV of the Federal Housing and Urban Development Act of 1969 or under Part B of the National Urban Policy and New Community Development Act of 1970 or under Section 802 of the Federal Housing and Community Development Act of 1974, or of a commitment or agreement therefor.

(p) State housing corporation investments. Investments in, commitments to invest in, loans to, or commitments to lend to any state housing corporation, provided that such obligations or loans are secured directly or indirectly through an agent or fiduciary, by a first lien on improved real estate which is insured under the provisions of the National Housing Act, and that in the event of default, the holder of such obligations or loans would have the right directly or indirectly to cause the real estate described in the first lien or the insurance proceeds under the National Housing Act to be subject to the satisfaction of such obligation or loans.

(q) Investment companies. An association may invest in, redeem, or hold shares or certificates in any investment company which is registered with the securities and exchange commissioner under the Investment Company Act of 1940 and the portfolio of which is restricted by such company's investment policy solely to any such investments as an association by law or regulation, without limitation as to percentage of assets, may invest in, sell, redeem, hold, or otherwise deal with.

(r) Commercial and other loans. Secured or unsecured loans for commercial, corporate, business, or agricultural purposes other than loans on nonresidential real estate. The aggregate amount of loans under this Subparagraph shall not exceed ten percent of the assets of the association.

(3) The following loans or investments are permitted, but are limited except as provided in this Section to not in excess of the percentage of the assets of the association set forth as follows:

(a) Investments in movable property. Investments in tangible movable property, or leases thereon including, without limitation, vehicles, manufactured homes, machinery, equipment, or furniture, for rental or sale, but such investment shall not exceed ten percent of the assets of the association.

(b) Consumer loans and certain securities. An association may make secured or unsecured loans for personal, family, or household purposes, including loans reasonably incident to the provision of such credit and may invest in, sell, or hold commercial paper and corporate debt securities, as defined and approved by the commissioner, except that loans of an association under this Subparagraph shall not exceed thirty percent of the assets of the association.

(c) Community development investments. Investments in immovable property and obligations secured by liens on immovable property located within a geographic area or neighborhood receiving concentrated development assistance by a local government under Title I of the Housing and Community Development Act of 1974, as amended, but no investment in immovable property made pursuant to this Subparagraph shall exceed an aggregate investment of ten percent of the assets of the association.

(d) Real estate investments for other than association's offices. The provisions of R.S. 6:243 and 246, and the rules and regulations promulgated thereunder shall be applicable to associations in the same manner as they are applicable to banks.

(e) Real estate for an association's offices. Investments in immovable property for an association's offices shall not exceed an aggregate investment as provided in rules and regulations by the commissioner.

(f) Service organizations. Investments in the capital stock, obligations, or other securities of any service organization shall not exceed ten percent of the assets of the association.

(4) The following loans or investments are permitted, but are limited to not in excess of five percent of assets of the association for each type of loan set forth in the following Subparagraphs.

(a) Education loans. Loans made for the payment of educational expenses.

(b) Nonconforming loans. Loans secured by immovable property or interests therein, used primarily for residential or farm purposes that are not otherwise authorized by this Section.

(c) Home equity conversion loans and shared appreciation loans. Loans made pursuant to participation in a shared appreciation loan or home equity conversion loan, including but not limited to reverse mortgages and shared appreciation mortgages, wherein the association has a right to receive a share of the appreciation in value of the security property upon maturity of the loan. Such loans shall be authorized when any of the following exist:

(i) The security property of the borrower is designed principally as a single-family residence.

(ii) The borrower is the owner and occupant of the security property.

(iii) The loan is authorized pursuant to the Alternative Mortgage Transaction Parity Act of 1982, 12 U.S.C. 3801 et seq., and regulations issued by the office of financial institutions as provided in this Title.

(5) The following additional loans and other investments are permitted:

(a) Business development credit corporations. An association whose general reserves, surplus, and undivided profits aggregate a sum in excess of five percent of its withdrawable accounts is authorized to invest in, lend to, or to commit itself to lend to, any business development credit corporation doing business in the state, but the aggregate amount of such investments, loans, and commitments of any such association shall not exceed one percent of the total assets of the association.

(b) Foreign assistance investments. Investments in housing project loans having the benefit of any guaranty under Section 221 of the Foreign Assistance Act of 1961 or loans having the benefit of any guaranty under Section 224 of that Act, or any commitment or agreement with respect to such loans, made pursuant to either of such sections, in the share capital and capital reserve of the Inter-American Savings and Loan Bank or of the African Development Bank. This authority extends to the acquisition, holding, and disposition of loans having the benefit of any guaranty under Sections 221 or 222 of that Act as hereafter amended or extended, or of any commitment or agreement for any such guaranty. Investments under this Subparagraph shall not exceed in the case of any association, one percent of the assets of an association.

(c) Small business investment companies. An association may invest in stock, obligations, or other securities of any small business investment company formed pursuant to the Small Business Investment Act of 1958, but no association may make any investment under this Subparagraph if its aggregate outstanding investment under this Subparagraph would exceed one percent of the assets of such association.

(d) Loans secured by mortgages other than first mortgages. An association may make loans secured by mortgages other than first mortgages.

(e) Loans secured by other loans or insurance policies. Associations shall have the power to invest in loans and other investments which are secured by the pledge of loans or other investments, the assignment of which need not be recorded, of a type in which the association is authorized to invest, however, the loans and investments so pledged shall be subject to all restrictions and requirements which would be applicable were the association to invest directly in such loans or investments. Associations may also require the pledge of life insurance policies, the assignment of which is properly acknowledged by the insurer, as additional security for any loan which it is authorized to make.

(f) Notwithstanding other limitations contained in this Section, the sum of an association's aggregate direct investments in service organizations, real estate, and equity securities may be in an amount equal to or less than twice the association's paid-in capital, surplus, reserves for losses, and undivided profits.

(6) An association may make such other investments or loans of whatever character or description, including joint ventures for redevelopment, not to exceed ten percent of assets.

(7) The commissioner may permit an association to exceed the limitations otherwise provided in this Section for good cause shown by the association, where to permit an association to exceed such limits would be in the best interest of the association, its depositors, or members.

Acts 1970, No. 234, §1. Amended by Acts 1974, No. 282, §1; Acts 1975, No. 277, §1; Acts 1976, No. 199, §1; Acts 1978, No. 663, §1; Acts 1983, No. 675, §1; Acts 1985, No. 503, §1; Acts 1985, No. 784, §1; Acts 1986, No. 243, §1, eff. July 1, 1986; Acts 2001, No. 544, §1, eff. June 21, 2001; Acts 2019, No. 16, §1.

{{NOTE: SEE ACTS 1986, NO. 243, §3 FOR RETROACTIVE EFFECT TO JUNE 1, 1986.}}

§ 6:823 Appraisal

No investment in a real estate loan shall be made until either an independent qualified person, a central appraisal bureau, or an appraisal committee approved by the board of directors shall have made a physical inspection and submitted a signed appraisal of the value of the real estate securing such loan.

Acts 1970, No. 234, §1. Acts 1983, No. 675, §1.

§ 6:824 Payments

A.(1) A borrower shall repay his loan when due in accordance with the contract by which the loan is made.

(2) All loans made by an association shall be repaid in cash, except that in the discretion of the board of directors, appropriate adjustments may be made for the cash settlement of any loan or for accepting the transfer of property to the association in payment of the loan. Failure to do so subjects any pledged shares or savings accounts to forfeiture without judicial process and additionally entitles the association or the holder of the note to the enforcement of any mortgage or vendor's privilege or other security for any balance due.

(3) If the security proves insufficient, the borrower shall be liable personally for the full amount of the balance due and any person who may have assumed his obligations either with or without the consent or knowledge of the association shall be liable in solido with him. However, nothing prevents an association from proceeding by ordinary proceedings in any case for personal judgment as well as for the recognition and enforcement of its rights against the immovable property and other security.

(4) In every case in which property burdened with a mortgage or vendor's privilege in favor of an association is sold, the effect of the sale, whether or not the payment of the mortgage or vendor's privilege is assumed, constitutes the vendee as fully liable for the payment of the amount due the association as if he had originally contracted the loan. However, where in order to participate in or be eligible under any lending or financing program under the direction of or authorized by any federal governmental department, agency, or corporation, it is necessary for an association to use a standard mortgage form and promissory note, as for example, but not limited to, standard mortgage forms of the Federal Home Loan Mortgage Corporation, then in such event a borrower to whom the association loan is made shall repay the loan as provided in such approved standard mortgage form.

B. A borrower may repay his loan at any time as provided in the loan documents, but no loan shall be cancelled unless all the charges, fines, interest, premiums, plus any prepayment fee which may be due under the loan contract or in the charter or bylaws of the association, together with the sum actually borrowed, have been fully paid in cash. In the discretion of the board appropriate adjustment may be made for the cash settlement of any loan.

C. By resolution of its board of directors, an association may provide that a prepayment fee may be collected in all cases in which a loan is prepaid in whole or part before maturity. This prepayment fee shall be stated in the loan contract. Unless otherwise agreed in writing, any prepayment of principal may, at the option of the association, be applied on the final installment of the note or other obligation until fully paid, and thereafter on the installments in the inverse order of their maturity.

D.(1) Whenever a borrower is in arrears in the payment of his dues, interest, premium, bonus, or any other sum due, or otherwise defaults on his loan contract, his whole loan at the option of the association, may become due and payable. In such case, the association as pledgee of his shares or savings account, may cancel and withdraw the credit value of them and apply it toward the liquidation of the debt on which the default has occurred, and may foreclose by either ordinary or executory proceedings upon the mortgage held by the association for the balance due.

(2) In the ordinary suit, the association may obtain a sequestration of the property subject to its mortgage or vendor's lien upon furnishing bond conditioned according to law, in an amount to be fixed by the court.

(3) In either ordinary or executory proceedings the association may recommend to the court the appointment of a responsible person or entity as a receiver, who, upon such appointment by the court shall be responsible for the administration, management, and safekeeping of the property, and for the collection of rents.

(4) The receiver shall not be entitled to any fee or charge in excess of that which would have been authorized if the property had been under the custody and administration of the sheriff as provided in the Louisiana Code of Civil Procedure.

(5) The receiver so appointed shall furnish bond in such amount as may be fixed by the court, and upon his appointment shall have the right and authority to enter the premises and take such action as may be required or necessary in order to protect and preserve same, except that the receiver may not evict the owner of the property unless authorized by the court as being necessary to protect and preserve the property during the foreclosure proceedings.

(6) Any rent collected by the receiver during the pendency of the suit, less proper costs and expenses, shall be applied to the reduction of the claim of the association, which shall have a first privilege thereon.

E. When the payment of dues, together with all dividends or earnings on them, has reached the matured value of the pledged shares, the payments of dues on them shall cease and all borrowers at such maturity may have obligations cancelled and returned to them. An association, at any dividend period, may retire any type of unpledged shares by enforcing their withdrawal, at paid-in value plus accredited dividends, as provided by the charter or bylaws of the association.

F. On all loans secured by a vendor's privilege or mortgage on immovable property, the board of directors, when it finds a condition of public crisis to exist, may authorize for renewable periods of six months the maintenance of such loans by the acceptance of interest payments only plus taxes and insurance.

Acts 1970, No. 234, §1. Amended by Acts 1972, No. 294, §1; Acts 1983, No. 675, §1; Acts 2001, No. 925, §1; Acts 2003, No. 522, §1.

§ 6:824.1 Late charges prohibited on certain payments

No association organized under this Chapter shall assess a late charge or impose any penalty upon a borrower as to any payment received by it when the due date of the payment falls on a day during which the association is not open to the public during its normal business hours and when the payment is received on the next succeeding day during which the association is open to the public during its normal business hours.

Acts 1985, No. 161, §1.

§ 6:825 REPEALED BY ACTS 1993, NO. 280, §1, EFF. OCT. 1, 1993.

REPEALED BY ACTS 1993, NO. 280, §1, EFF. OCT. 1, 1993.

§ 6:826 Provision for taxes, insurance

An association may require the borrower to pay monthly in advance, in addition to interest and principal payments, the equivalent of one-twelfth of the estimated annual taxes, assessments, insurance premiums, ground rents, and other charges upon the real estate securing a loan, or any of such charges, so as to enable the association to pay such charges as they become due from the funds so received. Such funds are to be held by the association, without paying interest thereon, for the credit of the borrower.

Acts 1970, No. 234, §1. Acts 1983, No. 675, §1.

§ 6:827 REPEALED BY ACTS 1993, NO. 280, §1, EFF. OCT. 1, 1993.

REPEALED BY ACTS 1993, NO. 280, §1, EFF. OCT. 1, 1993.

§ 6:828 Loan expenses

A. Every association may require borrowers to pay all reasonable expenses incurred in connection with the making, closing, disbursing, extending, readjusting, or renewing of loans. Without limiting the generality of the foregoing, such expenses may include appraisal, attorney, abstract, notary, recording, necessary certificates, researching, and registration fees, title examination, title insurance, loan insurance, credit report, survey, drawing of papers, escrow services, loan closing costs, and taxes or charges imposed upon or in connection with the making and recording of any loan.

B. Every association also may require borrowers to pay the cost of all other necessary and incidental services rendered by the association or by others in connection with real estate and other loans. Without limiting the generality of the foregoing, such costs may also include the costs of services of inspectors, engineers, and architects. The charges may be collected by the association from the borrower and paid to any person, including any director, officer, or employee of the association or others rendering such services, or may be paid directly by the borrower.

C. The fees and charges authorized by this and the preceding Section shall be in addition to interest authorized by law, and shall not be deemed to be a part of the interest collected or agreed to be paid on such loans within the meaning of any law of this state which might limit the rate of interest which may be exacted in any transaction.

D. No director, officer, or employee of an association shall receive any fee or other compensation of any kind in connection with procuring any loan for an association, except for services actually rendered as above provided or except for incentive commission plans or bonus programs.

E. This Section shall not supersede the Louisiana Consumer Credit Law or the Louisiana Motor Vehicle Sales Financing Law.

Acts 1970, No. 234, §1. Acts 1983, No. 675, §1.

§ 6:829 Repealed by Acts 2003, No. 69, §1, eff. May 28, 2003.

Repealed by Acts 2003, No. 69, §1, eff. May 28, 2003.

§ 6:830 Security for loan on immovable properties; purchase and sale of property

A. Except as otherwise provided in this Chapter, every loan on immovable property shall be secured by a mortgage upon the property, and also, where applicable, accompanied by a pledge to the association of any shares or savings accounts borrowed upon. Such mortgage shall provide specifically for full protection to the association with respect to the loan and additional advances, and the usual insurance risks, taxes, assessments, other governmental levies, maintenances, and repairs. The mortgage may provide for a pledge of leases and rents. A declaration of the pledge creates a valid and complete pledge of the shares or savings accounts and of all future payments or credits thereon.

B. Repealed by Acts 2015, No. 336, §2, eff. Jan. 1, 2016.

C. Repealed by Acts 1995, No. 1087, §5.

D.(1) If an association, to accomplish any of the powers granted it pursuant to this Chapter, purchases or secures property from any person and afterward sells or disposes of the same property to a borrower, the association has a privilege of equal rank as the vendor's privilege upon the property so acquired, sold, and disposed of for the security of the payment of the money due by the borrower.

(2) An association may contract with any person to acquire or purchase from him any property and afterward to sell or dispose of the same property to a borrower even though the agreement is at one and the same time. This contract shall not be considered or treated as a loan, but as a purchase or acquisition by the association and a sale by the association to the borrower, and the association, to secure payment of the amount due by the borrower, has a privilege of equal rank with a vendor of immovable property and enjoys for the protection of its claim and the enforcement of its loan all the rights, privileges, and securities which are now accorded by law to the vendor of immovable property.

(3) Repealed by Acts 2015, No. 336, §2, eff. Jan. 1, 2016.

E. In all sales made by associations of property acquired by them for the purpose of making a loan on the security of such property, the warranties and obligations imposed by law on vendors shall not apply to such associations.

F. A mortgage granted in favor of a savings and loan association and a vendor's privilege created in favor of a savings and loan association shall be subject to the rules provided by Chapter 2 of Title XXII-A of Book III of the Louisiana Civil Code.

G.(1) In all cases where immovable property is sold partly for cash and partly for credit and the credit portion of the purchase price is represented by a note secured by vendor's privilege and special mortgage, the note may be made payable to any association doing business under this Chapter and the association may purchase this note from the vendor. This note and vendor's lien or mortgage or obligation shall have the same preference and priority over other liens, charges, privileges, and encumbrances and shall have the same legal force and effect as if the vendor had sold the property to the association and the association had thereupon sold the property back to the purchaser, and shall in every regard enjoy the same rank as the vendor privilege and mortgage created under the provisions of Subsections A and C of this Section.

(2) There may be inserted in the act of sale any and all provisions applicable to loans made through such associations and to the vendor's privilege and mortgage held by them, including a subscription to shares in the association, and the pledge of such shares or any savings accounts, and the purchaser's agreement to abide by the regulations of the association as set out in its articles of incorporation and bylaws.

(3) The association may intervene in the act of sale through its proper officer and acknowledge and accept the undertakings of the purchaser in its favor.

(4) This act of sale with vendor's privilege and mortgage, if recorded within three working days of its execution, when the registry is required to be made in the parish where the act was executed, and within five working days, if the registry is required to be made in any other parish of this state, shall have the same priority with regard to the effective date of recordation as is accorded vendor's privileges under the provisions of Louisiana Civil Code Article 3274, without regard to the time for recordation as provided therein.

(5) Repealed by Acts 2015, No. 336, §2, eff. Jan. 1, 2016.

H.(1) All mortgages executed upon immovable property in Louisiana in favor of associations organized and operating under the laws of the state shall have a rank equal to that of a vendor's privilege upon immovable property and shall have priority over all other liens, privileges, encumbrances, and mortgages upon the property, and the improvements and component parts thereon which are recorded or arise in any manner subsequent to the date of recordation of the mortgage in favor of the association, including tax privileges of any nature and character, except ad valorem taxes on immovable property and assessments for paving.

(2) If any mortgage provided for in this Section is placed on record within three working days of its execution, when the registry is required to be made in the parish where the act was executed, and within five working days, if the registry is required to be made in any other parish of this state, it shall have and enjoy the same priority in regard to the effective date of such recordation as is accorded vendor's liens under the provisions of Louisiana Civil Code Article 3274, without regard to the time for recordation as provided therein.

(3) The associations adopting the procedure set forth in this Section shall have all of the rights and privileges of a vendor to the same extent and in the same manner as if a sale to the association, and a sale by the association to a borrower had in fact been consummated, the intent of this Section being merely to provide an optional procedure without altering in any manner any of the rights accorded to, and obligations incurred by, associations prior to the passage of this Section.

I. No mortgage provided for in this Section can be cancelled, removed from the public records, or in any manner affected by any sale in a succession, liquidation, insolvency, receivership, bankruptcy, or partition proceedings, unless prior to the application or petition for the sale, at least ten days written notice of the sale is given by certified or registered mail to the association in whose favor the mortgage was executed. Waiver of this notice by the association shall be in writing and shall be filed in the court authorizing or ordering the sale. In the event the sale is made, the mortgage in favor of the association shall not be made secondary to and shall not be primed by any costs, fees, or charges of any kind in such proceeding, except the costs of advertising and selling the property.

Acts 1970, No. 234, §1. Amended by Acts 1977, No. 689, §1; Acts 1981, No. 292, §1; Acts 1981, No. 328, §1; Acts 1983, No. 675, §1; Acts 1985, No. 349, §1, eff. Jan. 1, 1986; Acts 1986, No. 161, §1; Acts 1995, No. 1087, §5; Acts 2015, No. 336, §§1, 2, eff. Jan. 1, 2016.

§ 6:831 Shares or savings accounts as additional security

An association may accept its own shares or its savings accounts as additional security.

Acts 1983, No. 675, §1.

§ 6:832 Immovables

A. Until all indebtedness due an association and secured by a mortgage on real estate and home appliances and equipment has been paid, the home appliances and equipment shall be considered a part of the immovable property and as such, immovables.

B. Any mobile home upon which an association has a mortgage and which is installed in such a manner as to make it an immovable, shall remain movable insofar as the mortgage upon it is concerned and shall not pass by the sale of the immovable property to which it has been attached, whether such sale be conventional or judicial. No sale or mortgage of the immovable property shall in any manner affect or impair the rank or privilege of the chattel mortgage or the remedies of the holder thereof for its enforcement.

Acts 1983, No. 675, §1.

§ 6:833 Conveyance of property securing loan

A. Whenever property subject to a mortgage in favor of an association is sold or transferred by contract without the written consent of the association, either with or without the assumption of the association's loan, the loan and obligation held by the association shall at the option of the association immediately mature and become subject to enforcement according to law and to the terms of the loan contract. In all such cases where the loan was assumed by the purchaser even without the consent of the association, the purchaser shall remain liable in solido with the original borrower on the loan.

B. In the event the ownership of the real estate security or any part thereof becomes vested in a person other than the party originally executing the security instrument, and if there is not an agreement by the association in writing to the contrary, an association, without notice to such party, may deal with such successor in interest with reference to said mortgage, and the debt hereby secured in the same manner as with such party, and may forbear to sue and may extend time for payment of or otherwise modify the terms of the debt secured thereby, without discharging or any way affecting the original liability of such party or parties thereunder or upon the debt thereby secured.

Acts 1983, No. 675, §1.

§ 6:833.1 Repealed by Acts 1970, No. 234, §2.

Repealed by Acts 1970, No. 234, §2.

§ 6:834 Solicitation or acceptance of gifts for making, or assisting in, procuring a loan

A. Any officer or director who accepts or solicits anything of value from any person for making, or assisting in procuring, or advising the making, of any loan in or with any association, and whoever aids, advises, and abets such person in these matters shall be imprisoned at hard labor for not less than one year nor more than three years, and shall be fined not more than five thousand dollars and, additionally, shall be held responsible in solido with the maker of any loan for the full amount thereof. The attorney general, the corporation itself through its authorized representative, or any stockholders or members owning at least two percent of the outstanding capital stock or outstanding shares or savings accounts, respectively, acting for the benefit of the association, may at any time institute suit for the foreclosure of the loan without regard to the stipulated maturity of the loan.

B. The person charged with the violation of the provisions of this Section may be joined as party defendant in the suit and judgment may be obtained against the person in solido with the maker of the loan.

C. The right to proceed in the civil courts against a person who has violated the provisions of this Section does not in any case depend upon the institution of the criminal prosecution herein authorized.

D. The provisions of this Section shall not apply to incentive commissions or bonus programs for employees of an association.

Acts 1983, No. 675, §1.

PART XI OFFICES

§ 6:851 Home office

The home office is the principal office of the association.

Acts 1970, No. 234, §1. Acts 1983, No. 675, §1; Acts 1995, No. 248, §1, eff. June 14, 1995.

§ 6:852 Branch office

A. A branch office is a legally established place of business of the association, other than the home office, authorized by the board of directors and approved by the commissioner.

B. Each association shall be operated from the home office. All branch offices shall be subject to direction from the home office.

C.(1) No association may establish or maintain a branch office without the prior written approval of the commissioner. Subject to such written approval, a branch office may be established or maintained at any point within the state. Each application for approval of the establishment and maintenance of a branch office shall be in the manner and in the form required by the commissioner.

(2) To determine whether to grant a certificate of authority for the establishment of a proposed branch office, the commissioner shall consider:

(a) The financial history and condition of the applicant.

(b) The distribution and adequacy of the capital structure of the applicant.

(c) The future earning prospects of the applicant.

(d) The management of the applicant.

(e) The convenience and needs of the community or area in which the proposed branch office is to be located and the ability of that community or area to support additional facilities.

(f) The corporate powers of the applicant.

(g) Any factors required by rule to be considered.

(3) If the commissioner finds, after consideration, that the public interest will not be served by permitting the establishment of the proposed branch office, he shall refuse to issue the certificate of authority.

Acts 1970, No. 234, §1; Acts 1983, No. 675, §1; Acts 1988, No. 145, §1, eff. June 29, 1988; Acts 1992, No. 66, §1, eff. Sept. 1, 1992.

§ 6:853 Closure of branch office

A. No savings and loan association or savings bank shall close a branch office except pursuant to the procedure provided by this Section.

B. At least ninety days prior to the closure date, the association or savings bank shall submit in writing to the commissioner detailed reasons for the necessity of the closure, evidence that the appropriate federal banking agency has been notified of said closure, and, if applicable, the location to which the branches' accounts and safe deposit boxes are to be transferred.

C. At least thirty days prior to the closure date, the association or savings bank shall post a notice in a conspicuous location in the branch office to be closed, that the branch office will be closed, stating the closure date and, if applicable, the location to which the branches' accounts and safe deposit boxes are to be transferred.

Acts 1987, No. 105, §1; Acts 1992, No. 66, §1, eff. Sept. 1, 1992.

PART XII MERGER, CONSOLIDATION, DISSOLUTION AND LIQUIDATION

§ 6:861 Power to merge or consolidate; consent of commissioner; rules and regulations

A. Pursuant to a plan adopted and approved by a two-thirds vote of each board of directors, two or more associations may merge or consolidate. A plan of merger or consolidation shall be evidenced by a written agreement. The agreement shall state that it is effective only when approved by the commissioner and the Federal Home Loan Bank Board and shall specify the following:

(1) Which association will be the resulting association.

(2) The name it will use.

(3) The location of its home office and branch offices.

(4) The basis on which its savings accounts will be issued.

(5) The number of directors and their names, addresses, and the length of their terms.

B. The commissioner may require that such plan of merger or consolidation be submitted to the voting members or stockholders at a duly called meeting and that the plan, to be effective, be approved by them.

C. The commissioner may enact and promulgate rules and regulations, pursuant to the Administrative Procedure Act, governing the merger or consolidation of service organizations, as defined in R.S. 6:703, into other service organizations or into financial institutions, including retroactive approval of such actions of particular financial institutions or of financial institutions in general, provided such activities are not specifically prohibited by this Title.

Acts 1983, No. 675, §1; Acts 1991, No. 789, §1.

§ 6:862 Merger; when effective

A. If the joint agreement is for a merger, the agreement, duly acknowledged by the president and secretary of each association which is a party to it, together with an affidavit by the president and secretary of each association establishing that the agreement was approved by the required vote of the directors, and the written approval of the commissioner, shall be delivered as one instrument to the commissioner who shall file it and record it in his office.

B. The merger shall become effective as of the time of filing of the agreement or certificate with the commissioner, or as of any later effective date, not more than thirty days after the date of such filing, stated in the agreement or certificate.

C. A multiple original thereof or a copy certified by the commissioner shall be filed for record in the mortgage records in each parish in which any of the corporate parties to the agreement has its domicile, and shall also be recorded in the conveyance records of each parish in which any of the corporate parties to the agreement owns immovable property, the title to which will be transferred as a result of the merger.

Acts 1970, No. 234, §1. Amended by Acts 1982, No. 366, §1, eff. July 20, 1982; Acts 1983, No. 675, §1; Acts 2003, No. 17, §1, eff. May 23, 2003; Acts 2003, No. 60, §1, eff. May 23, 2003.

§ 6:863 Consolidation; when effective

A. If the joint agreement is for consolidation, articles of incorporation for the new corporation shall be prepared, approved, and filed, as required by law, except that the associations consolidating shall be named as the incorporators of the new corporation.

B. The new corporation shall become effective at the time the joint agreement, duly acknowledged by the president and secretary of each association which is a party to it together with an affidavit by the president and secretary of each association stating that the agreement was approved by the required two-thirds majority of the board of directors of each association, the written consent of the commissioner, and the new articles of incorporation and bylaws have been recorded in the office of the commissioner, or as of any later effective date, not more than thirty days after date of recording, as stated in the agreement.

C. A multiple original of the agreement, the consent of the commissioner, and the articles of incorporation shall be filed for record in the mortgage records of each parish in which any of the corporate parties to the agreement has its domicile, and shall also be recorded in the conveyance records of each parish in which any of the corporate parties to the agreement owns immovable property, the title to which will be transferred as a result of the consolidation.

D. The agreement, the consent of the commissioner, and the articles of incorporation shall also be filed in the mortgage records of the parish of domicile of the new corporation if such domicile is different from that of any of the associations forming the consolidated association.

Acts 1970, No. 234, §1. Acts 1983, No. 675, §1; Acts 2003, No. 17, §1, eff. May 23, 2003; Acts 2003, No. 60, §1, eff. May 23, 2003.

§ 6:864 Effect of merger or consolidation

When the merger or consolidation becomes effective, the separate existence of each constituent association ceases except for that of the surviving association in a merger. The surviving associations, or the new association in case of a consolidation, shall possess all the rights and privileges, and is invested with title to all property, rights, and actions whatever possessed by or belonging to each of the constituent associations, without the necessity of any further act or deed. The surviving association or the new association shall be responsible for all of the liabilities and obligations of each of the associations merged or consolidated, to the extent of the value of the property received from each of them.

Acts 1983, No. 675, §1.

§ 6:865 Voluntary transfer of assets

A.(1)(a) With the prior written consent of the commissioner, which consent shall be attached to the instrument of sale or other disposition, any state stock or mutual association may sell, lease, exchange, or otherwise dispose of all, or substantially all of its assets to any other financial institution after having obtained the consent of the stockholders holding at least two-thirds of the voting stock of a stock association or at least a majority of the members present in person, or by proxy, at a meeting of a mutual association, and also taking into consideration the institution's compliance with R.S. 6:124.1.

(b) Consent of each stockholder or member shall be expressed either in writing executed and acknowledged by the stockholders or members and attached to the instrument of sale or other disposition, or to a copy thereof, or by a vote at a stockholders or members meeting called for that purpose.

(2) The transfer agreement shall contain provisions for the payment of liabilities of the selling association, and it may contain provisions for the transfer of all deposits to a purchasing financial institution. However, the transfer agreement shall be subject to the right of every depositor of the selling association to withdraw their deposit in full on demand after the transfer, irrespective of the terms under which it was deposited with the selling association.

B. After such authorization by vote of the stockholders or members, the board of directors may abandon such sale, lease, exchange, or other disposition of assets subject to the rights of third parties under any contracts relating thereto without action or approval by the stockholders or members.

C. This Section shall not be construed to authorize a conveyance or other disposition of assets which would defraud the association's creditors or minority stockholders or members or its stockholders or members without voting rights.

D. An action or suit to enjoin or set aside a conveyance by a state association on the grounds that there has not been compliance with the provisions of this Section, relating to the sale or other disposition of assets of the state association, must be brought within ninety days after the action purporting to authorize such disposition was taken. This time limit shall not be subject to suspension on any ground nor to interruption except by timely filing of suit.

Acts 1983, No. 675, §1; Acts 1993, No. 459, §1, eff. July 1, 1993; Acts 1994, 3rd Ex. Sess., No. 61, §1, eff. July 6, 1994.

§ 6:866 Commissioner may provide for members or stockholders to vote on plan

Notwithstanding any other provision of Part XII of this Chapter, the commissioner may require that the plan be submitted to the voting members or stockholders of the acquiring association at a duly called meeting and that the plan, to be effective, be approved by them.

Acts 1983, No. 675, §1.

§ 6:867 Dissolution or liquidation

An association may be dissolved or liquidated either voluntarily or involuntarily. If the proceedings are voluntary, they may be instituted by any member or stockholder of the association and the board of directors shall maintain control over the activities, subject to the consent and supervision of the commissioner. If the proceedings are involuntary, they may be instituted by any member or stockholder of the association or the commissioner, but the commissioner shall take possession of and control over the association and its activities.

Acts 1970, No. 234, §1. Acts 1983, No. 675, §1.

§ 6:868 Voluntary proceedings for dissolution

A. No association shall be permitted to dissolve and liquidate voluntarily without the written consent of the commissioner.

B. An association may be voluntarily dissolved and liquidated upon the vote of two-thirds of the members or stockholders of the association present or represented by proxy at a special meeting called for that purpose. All meetings of members or stockholders shall be called only after the notices have been given as required for meetings called for amending the articles of incorporation of the association as provided in R.S. 6:721(A).

C. Upon such vote, five originals of the certificate of dissolution, which shall state the vote cast in favor of voluntary dissolution and liquidation, shall be signed by the president or vice president and the secretary or assistant secretary of the corporation and acknowledged by one of the signing officers.

D. The board of directors shall act as liquidators in a voluntary dissolution and liquidation. Notice of the authorization by the members or stockholders to dissolve and liquidate, stating that the association is to be liquidated voluntarily and giving the name and address of each liquidator shall be published at least once in a newspaper of general circulation in the parish in which the association is domiciled, and a copy of such notice, with the affidavit of the publisher of the newspaper to the fact of such publication shall be obtained.

E. The five originals of the certificate of dissolution, along with a copy of the published notice and the publisher's affidavit, shall be filed with the commissioner. The commissioner shall examine such association, and if he finds that it is not in an impaired condition, shall so note, together with his approval of such dissolution. The commissioner shall place a copy of the certificate of dissolution, along with the copy of the published notice and the publisher's affidavit, in the files of his office, and shall return the remaining copies of the certificate of dissolution to the liquidators who shall file one copy in the mortgage records of the parish in which the association is domiciled.

Acts 1970, No. 234, §1. Acts 1983, No. 675, §1; Acts 2003, No. 17, §1, eff. May 23, 2003; Acts 2003, No. 60, §1, eff. May 23, 2003.

§ 6:869 Association continues as corporate entity for sole purpose of winding up affairs

Upon the approval of the commissioner, the association shall be dissolved and shall cease to carry on business, but shall continue as a corporate entity for the sole purpose of paying, satisfying, and discharging existing liabilities and obligations, collecting and distributing assets, and doing all other acts required to adjust, wind up, and dissolve its business and affairs.

Acts 1970, No. 234, §1. Acts 1983, No. 675, §1.

§ 6:870 Powers of liquidating trustees

A. While acting as liquidators, the board of directors shall proceed as quickly as may be practicable to wind up the affairs of the association and, to the extent necessary or expedient to that end, shall exercise all the powers of such dissolved association and may fill vacancies, elect officers, carry out the contracts, make new contracts, borrow money, mortgage or pledge the property, sell its assets at public or private sale, or compromise claims in favor of or against the association, apply assets to the discharge of liabilities, distribute assets either in cash or in kind among its members or stockholders according to their respective pro rata interests after paying or adequately providing for the payment of other liabilities and perform all acts necessary or expedient to the winding up of the association.

B. All deeds or other instruments shall be in the name of the association and executed by the president or a vice president and the secretary or an assistant secretary.

C. The board of directors shall also have power to exchange or otherwise dispose of or to put in trust all or any part of the assets, upon such terms and conditions and for such considerations, which may be money, stocks, bonds, shares, or accounts of any insured association or of any federal association, or other considerations, as the board of directors may deem reasonable or expedient, and may distribute such considerations or the proceeds thereof, or trust receipts, or certificates of beneficial interest among the members or stockholders in proportion to their pro rata interests therein.

D. In the absence of fraud, any determination of value made by the board of directors for any such purposes shall be conclusive.

Acts 1970, No. 234, §1. Acts 1983, No. 675, §1.

§ 6:871 Association subject to commissioner during liquidation

A. The association, during the liquidation of the assets of the association by the board of directors, shall continue to be subject to the supervision of the commissioner, and the board of directors shall report the progress of such liquidation to the commissioner from time to time as he may require.

B. Upon completion of liquidation, the board of directors shall file with the commissioner a final report and accounting of such liquidation. The approval of such report by the commissioner shall operate as a complete discharge of the board of directors and each member or stockholder in connection with the liquidation of such association.

C. No such dissolution or any action of the board of directors in connection therewith shall impair any contract right between such association and any borrower or other person or the vested rights of any member or stockholder of such association.

Acts 1970, No. 234, §1. Acts 1983, No. 675, §1.

§ 6:872 Involuntary dissolution; generally

A.(1) Whenever it appears:

(a) That any association has violated its charter;

(b) That its officers or directors have violated any law regulating the operation of such institutions;

(c) That the association is in an impaired condition;

(d) That the institution has been unable for any period of twelve months to meet in full the demands made upon it for withdrawals or has been unable for a like period to earn reasonable profits;

(2) Whenever the commissioner has reason to conclude:

(a) That any such association is in an unsound or unsafe condition to transact the business for which it was organized, or

(b) That it is unsafe or inexpedient for it to continue its business,

the commissioner may at once close the association and take possession until final liquidation or other disposition of its affairs, as provided for in this Chapter.

B. Moreover, in all cases where any association is in such condition that it is subject to being taken over for liquidation by the commissioner, and the members or stockholders vote to dissolve the corporation, it shall be taken over for liquidation by the commissioner. In that case, the action of the members or stockholders voting dissolution is sufficient authority for the commissioner to close the association at once and take possession of its books, property, and affairs, and retain possession until its affairs are finally liquidated.

C. However, as long as any of the accounts of the association remain insured as provided in R.S. 6:731(F), the commissioner may not take over for liquidating the association on the ground that it has been unable for any period of twelve months to meet in full the demands made upon it for withdrawals or has been unable for a like period to earn reasonable profits. In addition, no association shall be liquidated involuntarily and none of its property shall be seized when it is not in an impaired condition and the alleged wrongdoing can be otherwise corrected as provided in this Chapter or as* otherwise as provided by law.

Acts 1970, No. 234, §1. Acts 1983, No. 675, §1.

*SO IN ENROLLED BILL.

§ 6:873 Involuntary dissolution; commissioner shall take possession

A. In all cases when the commissioner has closed an association and taken possession of the affairs, books, and property of the association, he shall as soon as practicable thereafter file a motion in the district court of the domicile of the association setting forth that he has closed and taken possession of the association and request that the closure be affirmed. By that motion, the commissioner shall appoint a liquidator, who shall either be the commissioner or his designee. Provided, however, if any accounts in the association are insured by the Federal Deposit Insurance Corporation, he shall appoint the Federal Deposit Insurance Corporation as liquidator. The commissioner shall be entitled to an ex parte order of the court affirming the closure and confirming the appointment of the liquidator.

B. Upon affirming the closure and confirming the liquidator, title to all assets of the association shall vest in the liquidator without the execution of any instruments of conveyance, assignment, transfer, or endorsement. Notwithstanding any other law to the contrary, the prescriptive period on all causes of action accruing to the liquidator shall be extended for a period of six months from the date of the court order confirming the liquidator's appointment.

C. No appeal shall be allowed from an order affirming the liquidation unless taken and perfected by the giving of bond, in such sum as the court fixes, within forty-eight hours from the rendition of the order. The appeal shall not operate suspensively.

D. The commissioner may appeal from an order refusing to confirm him as liquidator within the same delay of forty-eight hours, but without the necessity of giving bond. He shall remain in possession and control of the property and affairs of the corporation pending the determination of his appeal.

E. All appeals shall be made returnable to the appellate court within ten days and shall be tried in ten days from the filing of the transcript and the decision of the appellate court shall be rendered within the least possible delay. The decision shall be final when rendered, and neither party shall have the right to a rehearing.

Acts 1970, No. 234, §2. Acts 1983, No. 675, §1; Acts 1986, No. 12, §1, eff. May 28, 1986.

§ 6:874 Involuntary dissolution; notice to creditors

Upon his confirmation as liquidator, the commissioner shall give written notice of that fact to all creditors of the association holding or having possession of any of its assets. No creditor knowing of the taking possession or notified as aforesaid has a privilege or charge for any advance payment or purchase of stock thereafter made or for any liability thereafter incurred against any of the assets.

Acts 1983, No. 675, §1.

§ 6:875 Involuntary dissolution; powers of commissioner; court approval

A. The commissioner may perform any acts and take all steps he deems necessary to conserve and collect the association's assets.

B. On the order of the court having jurisdiction, he may release, compromise, or otherwise settle all debts or claims due to or by the association, and he may sell all property of the corporation in such manner and on such terms as the court may direct.

C. He may also, on the order of the court, borrow money on the assets of the association in liquidation subject to the valid mortgages, pledges, or hypothecations already existing against them. The proceeds of this loan shall be used for any purpose furthering the interest of the liquidation, including the payment of creditors or distributive shares to members, stockholders, or others. These loans shall be secured in such manner and shall be made under such terms and conditions as the court may approve.

D. Subject to the approval of the court having jurisdiction, the commissioner may use the assets or any part of the assets of any association being liquidated by him in the organization of a new association; or he may merge the assets or part of the assets of one or more associations being liquidated by him for the organization of a new or new associations; or he may consolidate one or more of the associations being liquidated by him with the association not in liquidation, with the latter's consent.

E. With the approval of the court having jurisdiction of the association being liquidated, the commissioner may enter into any agreement for the disposition of the assets or part of the assets of one or more of the associations as may result in a reorganization, the creation of a new association, or the consolidation or merger of the associations, or of their assets or any part of them as may be deemed to the advantage of the members or stockholders with due regard to the rights of creditors.

F. Any court order or approval required of the commissioner, conservator, or liquidator by this Part shall be by ex parte proceeding and without notice at which time the commissioner shall show the advisability of adopting or carrying out the recommendations, plan, or proposition submitted by him.

G. Whenever the stocks, shares, or savings accounts of another association are to be paid for in consideration other than cash in accordance with R.S. 6:746, and when the property to be accepted in lieu of cash is being held by the commissioner as liquidator of one or more associations, the commissioner, after having obtained the approval of the court having jurisdiction of the liquidation, in the manner provided by law, may subscribe for stocks, shares, or savings accounts in an association for and on behalf of the association or associations being liquidated, according to their respective interests, and may transfer to the other association issuing the stocks, shares, or savings accounts complete title to the property accepted in lieu of cash.

H. The commissioner may appoint special agents to assist him in his duties. A certificate of appointment shall be filed in the liquidation proceedings. The special agent shall give bond as the court requires.

I. The commissioner may employ legal counsel and expert clerical assistance as he deems necessary and expedient to assist in performing the work of liquidation and he may retain such officers or employees of the association as he deems necessary and expedient. He may require from these persons bonds for the faithful performance of their duties as he deems proper.

Acts 1970, No. 234, §1. Acts 1983, No. 675, §1; Acts 1986, No. 12, §1, eff. May 28, 1986.

§ 6:876 Involuntary dissolution; inventory

A. As soon as practicable the commissioner shall make or cause to be made in duplicate an inventory of all the property and other assets of the association. One copy shall be retained by him or his special agent and one copy shall be filed in the record of the proceedings.

B.(1) As soon as practicable after taking possession of an association the commissioner shall publish a notice at least once a week for three months in such newspapers of the parish of the association's domicile as he may select, calling upon all persons who have claims, either as creditor, stockholder, member or otherwise, to file such claims with him and make legal proof thereof at a place and within a time not later than the last day of publication of the notice, which day shall be specified in the notice.

(2) If the commissioner doubts the justice or validity of any claim filed he may reject it.

(3) An action upon a rejected claim shall be brought within six months after the date of the rejection.

(4) The commissioner shall investigate fully the validity of the accounts of any member or stockholder who has failed to present his claim at the place and within the time specified in the notice. If after this investigation these claims are found to be correct, they shall be recognized.

(5) The stockholder or member holding an account or shares of the association shall participate in an equitable and ratable proportion in the distribution of the assets or the proceeds of the assets, whether in cash or in shares or stock in other associations. However, all charges and expenses of administration and all claims of creditors duly proved shall first be paid.

C.(1) If for any reason any member or stockholder has failed to file his claim with the commissioner, or if for any reason whatever any distributive shares or the equitable and ratable proportion thereof have remained uncalled for and unnoticed by a member or stockholder for a period of six months after the giving of the notice hereinabove provided for, the commissioner shall deliver such distributive shares or savings accounts or the equitable and ratable proportion thereof to the state treasurer, giving names, amounts, and the addresses of the members or stockholders as shown on the books of the association.

(2) Distributive shares or savings accounts or the equitable and ratable proportion thereof delivered or paid to the state treasurer may be recovered upon proper identification and proof of claim as may be required by the state treasurer.

(3) Whenever delivery has been made, the commissioner and his special agents are relieved from any further liability.

Acts 1970, No. 234, §1. Acts 1983, No. 675, §1.

§ 6:877 Involuntary dissolution; fees

A. The compensation of the special agent, counsel, clerical assistant, and all other necessary expenses of involuntary liquidation and distribution shall be fixed by the commissioner, subject to the approval of the district court having jurisdiction.

B. These fees shall be paid out of the funds of the association in his hands, before the funds are applied to any other liabilities of the association.

C. The commissioner shall not receive any fees or other emoluments for special services or for any other reason out of the funds of any association liquidated involuntarily and no assistant in the pay of the department, except a special agent, shall receive any such fee or emolument for special services or for any other reason out of the funds of an association so liquidated.

D. However, a reasonable amount to be fixed by the commissioner and approved by the court shall be paid from the funds of the association to compensate for his general supervision of the association.

Acts 1970, No. 234, §1. Acts 1983, No. 675, §1.

§ 6:878 Involuntary dissolution; distribution of assets

A. At any time after the date fixed in the notice for the presentation of claims, the commissioner may make distributions to members or stockholders out of the assets in his hands, after paying all expenses and fees authorized in R.S. 6:877, of cash or of other assets or of shares or stock of other corporations acquired through mergers, consolidations, or in any other way.

B. All claims against the assets of an association whose deposits are insured by an agency of the federal government, proved to the receiver's satisfaction or approved by the receivership court, shall be paid in the following order:

(1) Administration expenses of the liquidation.

(2) Deposit obligations and member share accounts.

(3) Other general liabilities.

(4) Debt subordinated to the claims of depositors and general creditors.

(5) Equity capital securities.

C. No interest on any claim shall be paid until all claims within the same class have received the full principal amount of the claim.

Acts 1970, No. 234, §1; Acts 1983, No. 675, §1; Acts 1989 1st Ex. Sess., No. 13, §1, eff. March 13, 1989.

§ 6:879 Involuntary dissolutions; creditors may not dispose of pledged securities

A. A creditor of an association shall not dispose of securities pledged by the association prior to its being taken charge of by the commissioner, for less than the face value of the securities, without the written consent of the commissioner and the approval of the court in which the liquidation proceedings are being conducted, until at least twelve months have passed from the date the borrowing association was taken charge of by the commissioner.

B. A creditor of an association whose business has been taken charge of by the commissioner and who disposes of the pledged assets of the association in a manner otherwise than as provided for in this Section, shall be liable to the liquidator of the association in an amount equal to the difference between the amount realized from the sale of the pledged securities and the amount of their face value.

C. Whoever violates this Section shall be fined not more than five hundred dollars, or imprisoned for a term of not more than six months, or both.

Acts 1970, No. 234, §1. Acts 1983, No. 675, §1.

§ 6:880 Liquidation by federal corporation

A. Upon the appointment of the federal corporation by the commissioner as liquidator, the federal corporation shall apply to the court for confirmation. The application for confirmation may be by joint motion with the commissioner in the original motion applying for affirmation of the closure of the association. In any case, the federal corporation, when it is the insurer of any accounts in the association, shall be entitled to an ex parte order confirming its appointment as liquidator and shall serve without bond.

B. Whether or not serving as liquidator, the federal corporation, upon proper order of the court, may make loans on the security of, may bid for, and may purchase at public or private sale all or any part of the assets of any such institution. When serving as liquidator, the federal corporation shall have all of the rights, powers, privileges, and duties of the commissioner as liquidator of such an institution, as well as all of the rights, powers, privileges, and duties conferred or imposed upon the federal corporation by federal statutes, and shall receive as compensation as liquidator the fees and commissions allowed to the commissioner as liquidator.

C. If the federal corporation pays or makes available for payment the insured liabilities of such an institution, the federal corporation, whether or not it becomes liquidator of the institution, shall be subrogated upon the surrender and transfer to it of an insured account with respect to the insured account, but this surrender and transfer shall not affect any right which the holder of the account may have in the uninsured portion of his account or any right which he may have to participate in the distribution of the net proceeds remaining after the disposition of the assets of the institution.

D. However, the rights of investors and creditors of the institution shall be determined in accordance with the applicable provisions of the laws of this state.

Acts 1970, No. 234, §1; Acts 1983, No. 675, §1; Acts 1986, No. 12, §1, eff. May 28, 1986.

§ 6:881 Commissioner may examine association

A.(1) The commissioner, at any time he deems it expedient or necessary, may proceed to make an examination of the books and records of the association.

(2) If, after the examination, he believes that the capital of the association is impaired, he shall immediately call a special meeting of its board of directors, notify them of the result of the investigation and of his findings, certify to the percentage of the impairment of the capital at the date of examination, and shall at once direct the board of directors to scale the face value of its outstanding shares in such amounts as will reduce its total liabilities to the aggregate value of its resources.

(3) In lieu of the scaling of shares, the commissioner may direct the board of directors to take such steps as he deems wise and expedient to protect the best interests of all concerned.

B. The commissioner may cause an appraisement to be made of any property owned by any association or on which any association has a privilege or mortgage at any time that he deems it expedient or necessary for the protection of its creditors, members, or stockholders, or for the determination of its solvency, or for the purpose of determining whether or not earnings, interest, or dividends declared by it are justified by its condition. This appraisement shall be made by one or more appraisers selected or appointed by the commissioner. The fee of the appraiser shall be paid by the association whose property or security has been appraised.

Acts 1970, No. 234, §1. Acts 1983, No. 675, §1.

§ 6:882 Commissioner may order association to discontinue any illegal practice

A. If the commissioner, as a result of any examination or from any report made to him, finds that any association is violating the provisions of its certificate of incorporation or bylaws, or the laws of this state or of the United States, or any lawful order or regulation of the commissioner, he shall state, by a formal written order delivered to the association as provided in R.S. 6:927, any alleged violation, together with a statement of the facts alleged to be such violation, and order discontinuance of such violation and conformance with all requirements of law. Such order shall specify the effective date thereof, which may be immediate or may be at a later date, and such order shall remain in effect until withdrawn by the commissioner or until terminated by a court order.

B. Such order of the commissioner, upon application made on or after the effective date thereof by the commissioner in the district court of the domicile of the association, shall be enforced ex parte and without notice by an order to comply entered by said court.

C. Such proceedings shall be given preference over other cases pending in such court, and shall in every way be expedited. Any association affected by such order of the commissioner shall have the right to apply within thirty days after receipt of the order to the district court for an immediate hearing and for an order suspending the order of the commissioner until such time as the hearing has been completed. The hearing of such application to the court shall be upon such notice to the commissioner as the court shall provide.

Acts 1970, No. 234, §1. Acts 1983, No. 675, §1.

§ 6:883 Conservator

A.(1) If the commissioner, as a result of an examination or from any report made to him, believes that the public interest may be served by the appointment of a conservator, and if he finds that any association is in an impaired condition; is engaging in practices which threaten to result in an impaired condition; or is in violation of an order or injunction which has become final in that the time to appeal has expired without appeal or a final order entered from which there can be no appeal, the commissioner may appoint a conservator for such association.

(2) The commissioner may appoint either himself or any other person as the conservator. Upon appointment, the conservator shall apply to the district court for confirmation of his appointment.

(3) The conservator shall have the power and authority provided in this Chapter and such other power and authority as may be expressed in the order of the court. The conservator shall endeavor promptly to remedy the situations complained of by the commissioner in his application for confirmation of the appointment.

(4) Within six months after the date of the appointment, the association shall be returned to the board of directors thereof and thereafter shall be managed and operated as if no conservator had been appointed, a merger may be effected by the conservator with the approval of the commissioner, or the association shall be involuntarily liquidated. Upon application by the commissioner, the court may extend the period of the conservator an additional six months.

(5) If the commissioner, his deputy, or examiner is appointed conservator, he shall receive no additional compensation, but if another person is appointed, the compensation of the conservator, as determined by the court, shall be paid by the association. A certified copy of the order of the court discharging such conservator and returning such association to the board of directors shall be sufficient evidence.

B.(1) A conservator shall have all the rights, powers, and privileges possessed by the officers, board of directors, stockholders, and members of the association and shall be vested with the full and exclusive power of management and control of the association.

(2) Upon confirmation of the conservator, title to all assets of the association shall vest in the conservator without the execution of any instruments of conveyance, assignment, transfer, or endorsement. Notwithstanding any other law to the contrary, the prescriptive period on all causes of action accruing to the conservator shall be extended six months from the date of the court order confirming the conservator's appointment.

C. The conservator shall not retain special counsel or other experts, incur any expense other than normal operating expenses, or liquidate assets except in the ordinary course of operations.

D. The directors and officers may remain in office and the employees may remain in their respective positions, but the conservator may remove any director, officer, or employee, provided the order of removal of a director or officer shall be approved in writing by the commissioner.

E.(1) While the association is in the charge of a conservator, members or borrowers of the association shall continue to make payments to the association in accordance with the terms and conditions of their contracts, and the conservator, in his discretion, may permit members or depositors to withdraw their accounts from the association pursuant to the provisions of this Chapter or under and subject to such rules and regulations as the commissioner may prescribe.

(2) The conservator shall have power to accept and issue shares and savings or demand accounts and additions to savings or demand accounts, but any amounts received by the conservator may be segregated if the commissioner shall so order in writing, and, if so ordered, the amounts shall not be subject to offset and shall not be used to liquidate any indebtedness of the association existing at the time the conservator was appointed or any subsequent indebtedness incurred for the purposes of liquidating the indebtedness of any association existing at the time the conservator was appointed.

(3) All expenses of the association during conservatorship shall be paid by the association.

Acts 1970, No. 234, §1. Acts 1983, No. 675, §1; Acts 1986, No. 12, §1, eff. May 28, 1986.

§ 6:884 §§884 to 890 Repealed by Acts 1970, No. 234, §2.

§§884 to 890 Repealed by Acts 1970, No. 234, §2.

PART XIII FOREIGN ASSOCIATIONS

§ 6:891 Foreign association defined

For the purposes of this Chapter, the term "foreign association" shall include any person, firm, company, association, fiduciary, partnership, corporation, foreign building and loan association, society, or any corporation representing itself to be a building association, thrift syndicate, installment investment company, trust, or association, or doing business on the mutual association plan, or in any manner provided for building and loan associations, societies, or companies by this Chapter, or any similar plan, by whatever name called, actually engaged in the business of an association, which is not organized under the provisions of this Chapter or the laws of the United States the principal business office of which is located outside the territorial limits of this state.

Acts 1970, No. 234, §1. Acts 1983, No. 675, §1.

§ 6:892 Conduct of business in accordance with this Part; certificate of authority and public necessity

Other laws notwithstanding, no foreign association shall be permitted to conduct its business in Louisiana except in accordance with the provisions of this Chapter governing local associations, and no foreign association may do business in Louisiana until the commissioner has conducted an investigation as provided in R.S. 6:706(B), and has issued a certificate of authority and public necessity. Upon issuance of the certificate, and prior to the conduct of its business, the association shall comply with the following provisions:

(1) It shall deposit with the state treasurer one hundred thousand dollars, either in cash or in bonds of the United States, or of Louisiana.

(2) It shall file with the commissioner a certified copy of its charter, constitution, and bylaws, and information showing its manner of doing business, together with a statement such as is required annually from the associations of its kind.

(3) It shall also file with the commissioner a written instrument duly executed, agreeing that citations or other legal process may issue against it from any parish, directed to the sheriff of the parish in which an office of the commissioner is situated, commanding him to serve a certified copy of the same personally upon the commissioner, or by leaving a copy at his office. The commissioner shall mail a copy of any paper served on him, prepaid, to the home office of the association.

Acts 1970, No. 234, §1. Acts 1983, No. 675, §1.

§ 6:893 Certificate of authority; exceptions

A. Nothing in this Part shall be construed to repeal R.S. 12:302(K) or to require foreign associations to qualify under this Part for the purpose of:

(1) Participating in mortgage notes or loans with local associations, national or state banks having their banking offices in this state, or with other persons, firms, or corporations regularly and properly engaged in the business of making or servicing mortgage loans in Louisiana and qualified to do business in Louisiana;

(2) From purchasing mortgage notes or loans secured by mortgages on immovable property having a situs in this state pursuant to commitments, agreements, or arrangements made with persons, firms, or corporations regularly and properly engaged in business in Louisiana, prior to or following the origination or creation of such loans; or

(3) From purchasing mortgage notes or loans secured by mortgages on immovable property in this state if the original loan was made by a local association, a national or state bank having its banking office in this state, or by some other person, firm, or corporation regularly and properly engaged in the business of making mortgage loans in Louisiana and qualified to do business in Louisiana.

B. However, no foreign association may make, solicit, or engage in the direct mortgage loan business or may itself directly make or solicit loans secured by mortgages or vendor's privileges on immovable property in this state without first procuring from the commissioner a certificate of authority and public necessity under this Part.

Acts 1970, No. 234, §1. Acts 1983, No. 675, §1.

§ 6:894 Certificate of authority; examination of qualifications

Before issuing a certificate of authority to any foreign homestead or building and loan association, society, or company, the commissioner shall examine the qualifications and responsibility of the persons managing the association, society, or company, and examine the present and future homestead and savings and building and loan needs of the community or locality in Louisiana to be served by the proposed association, and generally shall consider the possibility of usefulness and service which the foreign association may reasonably be expected to meet and fulfill in the light of the considerations set forth in this Part. If, in his judgment, the commissioner deems that the public interest will not be served by permitting the foreign association to do business locally, he shall refuse to issue his certificate of public necessity.

Acts 1970, No. 234, §1. Acts 1983, No. 675, §1.

§ 6:895 Penalty for doing business without certificate of authority

Any person acting for himself or as the agent or representative of any person who does business, solicits, or attempts to do business in this state for any foreign association or their agents that has not procured certificates of authority and public necessity from the commissioner shall be fined not less than one thousand dollars nor more than three thousand dollars, or shall be imprisoned for not less than three months nor more than six months, or both.

Acts 1970, No. 234, §1. Acts 1983, No. 675, §1.

§ 6:896 Issuance of certificate of authority; renewal annually

Whenever the foreign association has complied with provisions of this Part and the commissioner is satisfied that it is doing business according to the provisions of this Part, that it is in sound financial condition and that there is a real need for it to be permitted to enter the state, he shall issue a certificate of authority and of public necessity. Thereafter, upon each filing of the annual statement provided for in this Part, if the commissioner is satisfied with the condition of the association and with its usefulness and necessity as an agency for thrift and for building and loan purposes generally in this state he shall issue a renewal certificate of authority.

Acts 1970, No. 234, §1. Acts 1983, No. 675, §1.

§ 6:897 Deposits as security; foreign association ceasing to do business in Louisiana

A. The deposit made with the state treasurer shall be held as security for all claims of residents of Louisiana against the association and subjected to the payment of claims in the same manner as the property of other nonresidents. If any foreign association ceases to do business in Louisiana, the state treasurer may release the securities on a certificate from the commissioner, which certificate the commissioner shall issue in his discretion, a sufficient amount being retained to satisfy all outstanding liabilities.

B. A foreign association may collect and use the interest on any securities deposited as required by this Part, as long as it fulfills its obligations and complies with the provisions of this Part.

Acts 1970, No. 234, §1. Acts 1983, No. 675, §1.

§ 6:898 Supervision and examination

The commissioner shall examine and supervise all foreign associations doing any such business in this state in the same manner as he examines and supervises associations of this state. Foreign associations shall pay the supervision and examination fee imposed by R.S. 6:911, plus all fees imposed by R.S. 6:912, plus any additional costs as determined by the commissioner. The commissioner, in his discretion, may rely on such official examination, public and private audits, and copies of reports which are supplied to him. The commissioner is hereby authorized and directed to obtain an injunction or take any other action necessary to prevent any foreign association from doing any business of an association in this state without approval.

Acts 1970, No. 234, §1. Acts 1983, No. 675, §1.

PART XIV FEDERAL ASSOCIATIONS

§ 6:901 Powers, privileges, and exemptions of federal associations

A federal savings association, federal savings and loan association, or federal savings bank incorporated pursuant to the laws of the United States and having its principal business office located within the territorial limits of this state is not a foreign association. Unless federal laws or regulations provide otherwise, such federal associations and the members or stockholders thereof shall possess all of the rights, powers, privileges, benefits, immunities, and exemptions as provided by law.

Acts 1970, No. 234, §1; Acts 1983, No. 675, §1; Acts 1985, No. 332, §1, eff. July 9, 1985.

§ 6:902 Companion authority

A. It is expressly provided that such powers, privileges, benefits, immunities, and exemptions that are provided by the laws of this state for associations organized under the laws of this state and for the members, stockholders, depositors, or borrowers thereof; and the vendors liens, mortgages on movables or immovables, or both, acts of pledge and other forms of security contracts executed in favor of federal associations shall, in all respects, have the same effect, rank, and priority against all other privileges, liens, encumbrances, and creditors of the mortgagor, pledgor, or other debtor granting security and all debtors subsequently affected thereby, and shall also confer all rights, powers, advantages, privileges, remedies, and immunities conferred upon associations organized under the laws of this state, and inscription of any such security contract in favor of a federal association shall have effect for the same period of time without necessity of reinscription, and reinscription shall also have effect for the same period of time as is now or may hereafter be provided by laws of this state for associations organized under the laws of this state. All contracts made by, or in favor of such federal associations shall confer upon them the same rights, powers, advantages, privileges, remedies, and immunities as conferred by this state upon state associations.

B. Notwithstanding any other provision of this Chapter, and for the purpose of providing a means by which state associations may have authority consistent with that granted federal associations, the commissioner shall have the power to establish and promulgate regulations he deems necessary and in the best interest of the state associations, consistent with the regulations of the Federal Home Bank and the Federal Deposit Insurance Corporation, consistent with services offered by and authority vested in, federal associations, and in furtherance of and/or incidental to the exercise of the powers of associations generally and as enumerated in R.S. 6:731.

Acts 1970, No. 234, §1. Amended by Acts 1975, No. 278, §1; Acts 1983, No. 675, §1.

§ 6:903 Additional companion authority

Notwithstanding any other provision of law to the contrary, the commissioner shall have the authority to promulgate rules and regulations granting to associations the same authority granted to federally chartered savings and loan associations, or to a foreign association which has been issued a certificate of authority pursuant to R.S. 6:896.

Acts 1983, No. 675, §1.

§ 6:904 Conversion into state-chartered association

A. At an annual meeting or at any special meeting of the members or stockholders called to consider such action, any federal association may convert itself into an association under this Chapter upon a vote of fifty-one percent or more of the total number of votes of the members or stockholders of such federal association eligible to be cast. Copies of the minutes of the proceedings of the meeting verified by the affidavit of the secretary or an assistant secretary, shall be filed in the office of the commissioner and mailed to the Federal Home Loan Bank Board, Washington, D.C., within ten days after the meeting. A verified copy of the proceedings of the meeting, when filed, shall be presumptive evidence of the holding and action of the meeting.

B. At the meeting at which conversion is voted upon, the members or stockholders shall also vote upon the directors who shall be the directors of the state chartered association after conversion takes effect. The directors then shall execute the articles of incorporation, bylaws, and attendant data as provided in this Chapter. The commissioner shall insert in the certificate of incorporation at the end of the paragraph preceding the testimonium clause, a statement that this association is incorporated by conversion from a federal association.

C. All of the directors who are chosen for the association shall sign and acknowledge the articles of incorporation and the proposed bylaws as incorporators of the association. The provisions of this Chapter shall, so far as applicable, apply to such conversion under this Chapter. The commissioner may provide by regulation for the procedure to be followed by any such federal association converting into an association under this Chapter.

D. Upon the conversion of any federal association into a state association, the corporate existence of such association shall not terminate, but such state association shall be deemed to be a continuation of the entity of the federal association so converted and all property of the converted association, including its right, title, and interests in and to all property of whatever kind, and every right, privilege, interest, and asset of any value or benefit then existing, or pertaining to it, or which would inure to it, shall immediately by operation of law and without any conveyance or transfer and without any further act or deed, remain and be vested in the state association into which the federal association has converted, and such state association shall have the same right to the same extent as the same was possessed by the converting association.

E. The state association, as of the time of the taking effect of such conversion, shall succeed to all the rights, obligations, and relations of the converting association. All pending actions and other judicial proceedings to which the converting state association is a party shall not be deemed to have abated or to have discontinued by reason of the conversion, but may be prosecuted to final judgment, order, or decree in the same manner as if the conversion into a state association had not been made and the state association resulting from the conversion may continue such action in its corporate name as a state association, and any judgment, order, or decree may be rendered for or against it which might have been rendered for or against the converting federal association theretofore involved in the judicial proceedings.

Acts 1970, No. 234, §1. Acts 1983, No. 675, §1.

§ 6:905 Limitation

No conversion of a federal association, direct or indirect, shall be permitted except as specifically authorized by this Chapter.

Acts 1970, No. 234, §1. Acts 1983, No. 675, §1.

§ 6:906 Conversions; locations

Any federal association that converts to a state association or any state association that converts to a federal association shall have the right to keep open and operate office locations that it has in operation on the effective date of the conversion.

Acts 1983, No. 675, §1.

§ 6:907 Formation of savings and loan holding companies

Notwithstanding any other provision of law to the contrary, a savings and loan association whether chartered on a mutual or capital stock basis may form a savings and loan holding company. The commissioner of financial institutions shall promulgate regulations for the implementation of this Section, not inconsistent with federal law and regulations.

Acts 1987, No. 110, §1, eff. June 18, 1987.

§ 6:908 Oppressed shareholder's remedies

The provisions of R.S. 6:518 shall be applicable to savings and loan holding companies and their subsidiaries insured by the Federal Deposit Insurance Corporation.

Acts 2022, No. 261, §1.

PART XV FEES

§ 6:911 REPEALED BY ACTS 1993, NO. 278, §1, EFF. JAN. 1, 1994.

REPEALED BY ACTS 1993, NO. 278, §1, EFF. JAN. 1, 1994.

§ 6:912 Additional foreign association fees

Any foreign association applying for a certificate from the commissioner shall pay such fee as he shall determine. Furthermore, the commissioner may assess an extra fee, including actual expenses, for all examinations which may be needed in respect to the examination of the home office of any such foreign association situated outside the state. His fee shall be payable in advance. Failure to pay on demand of the commissioner constitutes a cause for revocation of the certificate of authority of the foreign association.

Acts 1970, No. 234, §1. Acts 1983, No. 675, §1.

PART XVI MISCELLANEOUS PROVISIONS

§ 6:921 Thrift and home financing organizations; exceptions

A. Any person accepting moneys from the public and engaged in home financing, whether or not incorporated, and any person hereafter formed or doing business as a building and loan association, society, company, or thrift institution, every corporation heretofore incorporated under the statutes of this state which has for its purpose the promotion of thrift and the financing of homes, except savings banks, and all persons doing business on the building association plan in the manner provided for mutual or stock building and loan or homestead associations, societies, or companies, by this Chapter, or upon any similar plan by whatever name, shall incorporate and organize, shall operate and function, and shall have the rights and prerogatives, as well as the duties and obligations of the association and of their members or stockholders and of all persons dealing with the associations, shall be regulated, and subject to, the terms and provisions of this Chapter.

B.(1) The name, rights, powers, privileges, and immunities of every association heretofore incorporated in this state shall be governed, controlled, construed, extended, limited, and determined by the provisions of this Chapter to the same extent and effect as if the association had been incorporated pursuant hereto, and the articles of association, certificate of incorporation, charter, bylaws, constitution, or other rules of every such corporation heretofore made or existing are hereby modified, altered, and amended to conform to the provisions of this Chapter, without the approval of the commissioner, except that the obligations of any such existing association, whether between such association and its members, or stockholders, or any of them, or any other person, or any valid contract between the members or stockholders of any such association, or between such association and any other person, existing on December 31, 1982, shall not be in any way impaired by the provisions of this Chapter, and, with such exceptions, every such association shall possess the rights, powers, privileges, and immunities and shall be subject to the duties, liabilities, disabilities, and restrictions conferred and imposed by this Chapter, notwithstanding anything to the contrary in its certificate of incorporation, bylaws, constitution, or rules.

(2) Provided, that if any association organized on a nonmutual basis prior to January 1, 1902 and prior to July 27, 1932 was making loans secured by mortgages with vendor's privilege arising from sale and resale under its original charter or any existing members thereof, it may continue to operate on that basis, but such association shall, in all other respects, be subject to all the provisions of this Chapter in any manner applicable thereto.

C. All obligations due any association heretofore contracted and all evidence of indebtedness heretofore executed and the mortgages or other security devices given to secure such indebtedness shall be enforceable by the association and in its name, and demands, claims, and rights of action against any association may be enforced against it as fully and completely as they could have been enforced heretofore.

Acts 1970, No. 234, §1. Acts 1983, No. 675, §1.

§ 6:922 Powers of attorney

Any association may continue to recognize the authority of an attorney-in-fact authorized in writing to manage or to make withdrawals either in whole or in part from the savings accounts or of the shares and the sums paid in on account of unpledged savings accounts or shares of a member or stockholder, whether minor or adult, until it receives written notice or is on actual notice of the revocation of his authority. For the purposes of this Section, written notice of the death or adjudication of incompetency of such member or stockholder shall constitute written notice of revocation of the authority of his attorney. No institution shall be liable for damages, penalty, or tax by reason of any payment made pursuant to this Section.

Acts 1970, No. 234, §1. Acts 1983, No. 675, §1.

§ 6:923 Exemption from security laws

Associations, their officers, employees or agents, savings or demand accounts, shares and stock, and the sale, issuance, or offering of savings or demand accounts, stock or shares of any association are hereby exempted from all provisions of law of this state, other than this Chapter, which provide for supervision, reporting, registration, or regulation in connection with the sale, issuance, or offering of securities, and the sale, issuance, or offering of any shares, stock or savings or demand accounts shall be legal without any action or approval whatsoever on the part of any official, other than the commissioner, authorized to license, regulate, or supervise the sale, issuance, or offering of securities.

Acts 1970, No. 234, §1. Acts 1983, No. 675, §1.

§ 6:924 Holder of note may enforce

Any pledgee or other lawful holder of any note or other evidence of indebtedness due to any association may enforce in its own name or in the name of the association all appropriate remedies to enforce collection, whether or not the shares or savings account described in connection with the note is held by the pledgee or holder.

Acts 1970, No. 234, §1. Acts 1983, No. 675, §1.

§ 6:925 Unlawful to destroy property

A. It shall be unlawful for any person to conceal, destroy, damage, or remove any property, improvement, fixture, appliance, or equipment from any immovable property without the written consent of the association having an unpaid vendor's privilege or mortgage on the improvement, fixture, appliance, or equipment or on the immovable property itself. This prohibition applies to such property at all times, even when under foreclosure and in the hands of liquidators or under the custody and administration of the sheriff as provided in Code of Civil Procedure Articles 326 and 328.

B. Whoever conceals, destroys, damages, or removes such property, or whoever aids, advises, and abets such person in these matters shall be fined not less than three hundred dollars nor more than one thousand dollars or imprisoned for not less than three months nor more than one year, or both.

Acts 1970, No. 234, §1. Acts 1983, No. 675, §1.

§ 6:926 Foreclosure of mortgage

In the event of foreclosure by executory process of a mortgage, on either movable or immovable property, in favor of an association, the certificate of any officer of the association, certifying as to the amount due on the mortgage and the maturity thereof by reason of the failure of the mortgagor, his assigns, or successors, to comply with the obligations imposed by the act of mortgage, the bylaws, or the savings contract is authentic evidence of the facts recited in the certificate.

Acts 1970, No. 234, §1. Acts 1983, No. 675, §1.

§ 6:927 Communication from commissioner having effect of approval or order to be in writing and signed

Every approval by the commissioner given pursuant to the provisions of this Chapter and every communication having the effect of an order or instruction to any association shall be in writing and signed and shall be sent to the association affected thereby, addressed to its president, at the home office of the association.

Acts 1970, No. 234, §1. Acts 1983, No. 675, §1.

§ 6:928 Right of commissioner to utilize courts

At any time after any controversy has arisen between the commissioner and an association with respect to any question of law or regulation or with respect to any question involving irreparable damage to the association, the commissioner, prior to an administrative hearing, may apply to the district court for a declaratory judgment as to such question.

Acts 1970, No. 234, §1. Acts 1983, No. 675, §1.

§ 6:929 Rights of association to contest decisions of commissioner

Whenever any controversy has arisen between the commissioner and an association with respect to any question of law or regulation or with respect to any other question involving immeasurable or irreparable damage to the association, including but not limited to any decision by the commissioner to close the association and take possession, the members or stockholders of the association or the board of directors, may by a two-thirds vote of the members or stockholders or directors present in person, or by proxy, at a meeting called for such purpose, authorize an officer of the association to apply to the district court for a declaratory judgment as to such question. Nothing contained herein precludes any member, stockholder, depositor, or borrower from exercising any right provided him individually under the laws of this state.

Acts 1970, No. 234, §1. Acts 1983, No. 675, §1.

§ 6:930 Defamation of institutions prohibited; fine

Whoever willfully and knowingly makes, issues, circulates, transmits, or causes or knowingly permits to be made, issued, circulated, or transmitted, any statement or rumor, written, printed, reproduced in any manner, or by word of mouth, which is untrue and is directly or by inference false, malicious in that it is calculated to injure reputation or business, or derogatory to the reputation, financial condition, or standing of any association, federal association, federal savings bank, foreign association holding a certificate of authority pursuant to R.S. 6:896, Federal Home Loan Bank, the Federal Home Loan Bank Board, or the Federal Deposit Insurance Corporation, shall be fined not more than one thousand dollars or imprisoned for not more than six months.

Acts 1970, No. 234, §1. Acts 1983, No. 675, §1.

§ 6:931 False statements and similar actions prohibited; fine

Whoever knowingly makes or causes to be made, directly or indirectly, or through any agency whatsoever, any false statement or report, or willfully overvalues any land, property, or security for the purpose of influencing in any way the action of any association or federal association, federal savings bank, or foreign association holding a certificate of authority pursuant to R.S. 6:896, upon any application, advance, discount, purchase or repurchase agreement, commitment or loan or any change or any extension of the same, by renewal, deferment of action or otherwise, or the acceptance, release, or substitution of security therefor, shall be fined not more than five thousand dollars or imprisoned for not more than two years, or both.

Acts 1970, No. 234, §1. Acts 1983, No. 675, §1.

§ 6:932 Act of controlling

Insofar as the provisions of this Chapter are inconsistent with the provisions of any other law affecting saving* associations, the provisions of this Chapter shall control. More particularly, the provisions of this Chapter, with respect to the organization, management, and operation, and those for the supervision, liquidation, and the administration of associations, are exclusive, and the other laws of the state, especially the laws providing for the receivership of corporations, do not apply to associations.

Acts 1970, No. 234, §1. Acts 1983, No. 675, §1.

*So in enrolled bill.

§ 6:933 Application to existing associations

Except as otherwise expressly provided in this Chapter, all of the provisions of this Chapter shall be applicable to every existing association heretofore formed under the laws of this state for a purpose or purposes for which such an association might be formed under this Chapter; however, this Chapter shall not affect or impair any right of any existing association which is guaranteed or protected by the constitution of this state or of the United States; and provided further that this Chapter shall not be construed to impair or affect any act done, offense committed, or right accruing, prior to July 29, 1970, at noon, but the same may be enjoyed, asserted and enforced, prosecuted or inflicted as fully, and to the same extent, as if this Chapter had not been enacted.

Acts 1970, No. 234, §1. Acts 1983, No. 675, §1.

PART XVII MISCELLANEOUS PROVISIONS RELATIVE TO CAPITAL STOCK ASSOCIATIONS

§ 6:937 Dividends; requirements

A. The provisions of R.S. 6:1207, and any rules and regulations promulgated thereunder, shall be applicable to associations in the same manner as they are to savings banks.

B. If a capital stock association results from conversion of a mutual association, a cash dividend shall not be declared to the holders of common stock of the association during the two-year period immediately following the conversion if the payment of a cash dividend would result in the reduction of the net worth account below the amount which existed in that account at the time of conversion.

Acts 1983, No. 675, §1; Acts 2003, No. 56, §1, eff. May 23, 2003.

§ 6:938 Power of state or federal mutual association to convert to capital stock association; procedures; approval of department required; minutes of meeting; succession

A.(1) If two-thirds of the members of the board of directors determine, and the commissioner concurs, that a substantial business benefit to the association will or may result, and if federal law, regulations, or administrative rulings authorize state or federal or mutual associations to convert to capital stock associations, the voting members of a mutual association organized pursuant to this Chapter, or otherwise subject to the provisions of this Chapter, or a federal mutual association located in Louisiana may vote to convert the association into a capital stock association by adopting a plan of conversion which is approved by the commissioner. However, when a state chartered mutual association is nearing an impaired condition, as determined by the commissioner, the commissioner may approve a supervisory conversion from a mutual to a stock form of charter without approval of the voting members. In all other cases, the plan of conversion shall be approved at a meeting of voting members called to consider such action by a majority vote of the total number of votes eligible to be cast, voted in person or by eligible proxy, unless federal law or regulation permits a lesser percentage of votes for a federal mutual association to convert, in which case that percentage shall control.

(2) The commissioner shall have discretion to approve or disapprove the plan of conversion, but he shall not approve the plan unless he finds that the plan is fair and equitable to members of the association, that the interests of the savings account holders and the public are adequately protected, and that the plan conforms to Federal Deposit Insurance Corporation regulations.

(3) Notice of the meeting, giving the time, place, and purpose thereof, together with a proxy statement and proxy form approved by the commissioner covering all matters to be brought before the meeting, shall be mailed to the commissioner and to each voting member at his last address as shown on the books of the association at least thirty days before the date on which the meeting is to be held.

B. Copies of the minutes of each meeting of the members, verified by the affidavit of the secretary or assistant secretary of the association, shall be filed in the office of the commissioner and with the Federal Home Loan Bank Board within a reasonable time after the meeting. When so filed, the verified copies of the minutes are presumptive evidence of the holding of the meeting and of the action taken.

C. The directors of the association shall execute and file with the commissioner proposed articles of incorporation as provided for in R.S. 6:706, together with an application for conversion and a firm commitment for or evidence of insurance of deposits and other savings accounts of a withdrawable type. The articles shall contain a statement that the corporation resulted from the conversion of a state or federal mutual association to a capital stock association. Approval by the commissioner shall be affixed to the articles of incorporation. The copy of the articles of incorporation and the certificate of incorporation shall be returned to the association. The association shall cease to be a mutual association on the date and at the time specified in the approved articles of incorporation.

D.(1) Upon conversion of a mutual association, the legal existence of the mutual association shall not terminate, but the capital stock association shall be a continuation of the entity of the mutual association.

(2) All property of the mutual association, including but not necessarily restricted to its rights, title, and interest in all property of whatever kind, whether real, personal, or mixed, and including all obligations due the mutual association, security interests under mortgages, or other security devices in favor of the mutual association, things in action, demands, claims and rights of action, and every right, privilege, interest, and every asset of any value or benefit then existing or pertaining to it, or which would inure to it immediately, by act of law, and without any conveyance or transfer and without any further act or deed shall vest and remain in the capital stock association into which the mutual association has converted itself.

(3) All mortgages or other security instruments belonging to the mutual association shall retain the respective ranks as of the date of original recordation and no further recordation or inscription shall be necessary in order to preserve such rank in favor of the capital stock association. The capital stock association shall have, and enjoy the same, in its own right as fully as the same was possessed, held, and enjoyed by the mutual association.

(4) The capital stock association, upon the conversion taking effect, shall continue to have and succeed to all the rights, obligations, and relations of the mutual association. No pending actions and other judicial proceedings to which the mutual association is a party shall be abated or discontinued by reason of the conversion, but may be prosecuted to final judgment, order, or decree in the same manner as if the conversion had not been made, and the capital stock association resulting from the conversion may continue the actions in its corporate name as a mutual association. Any judgment, order, or decree may be rendered for or against it which might have been rendered for or against the mutual association theretofore involved in the proceedings.

Acts 1983, No. 675, §1; Acts 2003, No. 17, §1, eff. May 23, 2003; Acts 2003, No. 60, §1, eff. May 23, 2003.

§ 6:939 Plan of conversion from mutual to capital stock association; mandatory and permissive requirements

A. The plan of conversion shall provide:

(1) That each savings account holder of the mutual association shall receive a withdrawable account in the capital stock association equal in amount to his withdrawable account in the mutual association.

(2) That each eligible account holder shall receive, without payment, nontransferable subscription rights to purchase entitlement shares of stock in an amount equal to the product, rounded down to the next whole number, obtained by multiplying the total number of shares of capital stock to be issued by a fraction of which the numerator is the amount of the qualifying deposit of the eligible account holder and the denominator is the total amount of qualifying deposits of all eligible account holders in the converting insured institution.

(3) That if the commissioner fixes a record date, that record date shall be used for determining savings account holders.

(4) With particularity, the business purpose to be accomplished by the conversion.

(5) That savings account holders shall have preemptive rights to all stock proposed to be issued.

(6) Other information in a form, as is required by the commissioner to enable him to determine that the plan is fair and equitable to members of the association and that the interest of the savings account holders and the public is adequately protected.

B. A plan of conversion shall not be considered unfair or inequitable merely because it contains provisions:

(1) That shares of stock will be issued to savings account holders with or without cost.

(2) That shares of stock will be issued at cost to all savings account holders and that no stock will be issued without cost.

(3) That savings account holders, including or excluding past savings account holders, will have a right to purchase shares of voting common stock at the fair market value thereof.

(4) That those persons who were savings account holders during a particular number of years will have preemptive rights to purchase voting common stock at the fair market value thereof.

(5) That employment contracts will be provided for officers and employees of the association.

(6) That after all subscriptions of the members of the association have been satisfied, officers, directors, and employees, in their capacity as such, will be permitted to purchase an amount no greater than twenty percent of the total stock being offered.

C. A plan of conversion may include provisions for a stock option plan to be implemented as part of the plan of conversion. The number of shares of stock to be allocable to such stock option plan shall be approved by the commissioner and the Federal Deposit Insurance Corporation.

D. The commissioner may add further mandatory or permissive requirements which he determines are necessary for an equitable conversion or which may be necessary to comply with regulations of the Federal Deposit Insurance Corporation or the Federal Home Loan Bank Board.

Acts 1983, No. 675, §1.

§ 6:940 Acquisition of control over an existing association

In any case in which a person or group of persons acting in concert propose to purchase or acquire voting common stock of any capital stock association after its organization or conversion, and the purchase or acquisition would cause the person or group of persons, acting in concert, to have control of the association, as defined in R.S. 6:941, such person or group of persons, acting in concert, first shall make application to the commissioner for a certificate of approval of such purchase or acquisition. The application shall contain the name and address of the proposed new owners of voting common stock. The commissioner shall issue a certificate of approval only after he is satisfied that the proposed new owners of voting common stock are qualified by character, experience, and financial responsibility to control the association in a legal and proper manner and that the interest of the stockholders, depositors, and creditors of the association and the interest of the public generally will not be jeopardized by the proposed purchase or acquisition of voting common stock.

Acts 1983, No. 675, §1.

§ 6:941 Restrictions on acquisition of control of capital stock associations

A. As used in this Section, unless the context otherwise requires:

(1) "Business organization" or "company" means any corporation, partnership, trust, joint stock company, or similar organization, but does not include any company, the majority of the stock of which is owned by the United States or this state, by an officer of the United States or this state in his official capacity, or by an instrumentality of the United States or this state.

(2) "Person" means an individual or company.

(3) "Savings and loan holding company" means any company which directly or indirectly controls a savings and loan association or controls any other company which is a savings and loan holding company by virtue of this Section.

(4) "Subsidiary of a person" means any company which is controlled by that person or by a company which is a subsidiary of that person by virtue of this Section.

B. For purposes of this Section, a person or business organization shall be deemed to have control of a savings and loan association, savings and loan holding company, or any other business organization if the person or business organization:

(1) Directly or indirectly, or acting in concert with one or more persons or through one or more subsidiaries, owns, controls, holds with power to vote, or holds proxies representing more than twenty-five percent of the voting common stock of the savings and loan association, savings and loan holding company, or other business organization.

(2) Controls in any manner the election of a majority of the directors of the savings and loan association, savings and loan holding company, or other business organization.

(3) Exercises a controlling influence over the management or policies of the savings and loan association, savings and loan holding company, or other business organization.

C. If a bank or bank holding company acquires a savings and loan association, the surviving financial institution or bank holding company and its subsidiaries shall not engage in any insurance activity except an insurance activity authorized by R.S. 6:242.

D. No business organization or person shall acquire control of a capital stock association located in Louisiana or of a savings and loan holding company of such association without first obtaining the prior written approval of the commissioner. Prior to such acquisition, the business organization shall file an application with the commissioner containing such information as the commissioner may require and any that will aid in determining that the acquisition will not be detrimental to the public interest.

E. Each savings and loan holding company and each subsidiary thereof shall file such reports as the commissioner may require. Each savings and loan holding company and each subsidiary thereof shall be subject to such examinations as the commissioner shall prescribe. The cost of examinations shall be assessed against the holding company.

Acts 1983, No. 675, §1; Acts 1985, No. 139, §1; Acts 1986, No. 243, §1, eff. July 1, 1986; Acts 1997, No. 1475, §1, eff. July 15, 1997.

{{NOTE: SEE ACTS 1986, NO. 243, §3 FOR RETROACTIVE EFFECT TO JUNE 1, 1986.}}

§ 6:942 Listing and assessment of capital stock; procedure; exemption

A. The shares of stock of all capital stock associations are hereby declared subject to taxation for all purposes in this state.

B. Shares of stock of all capital stock associations shall be assessed for the purpose of taxation at fifteen percent of their valuation, commencing with taxable year 1980, made by assessing authorities in accordance with law, calculated and ascertained by the method hereinafter set forth.

C. The basis for arriving at the valuation of the shares of stock in any capital stock association shall be the stockholder equity capital, which shall be determined by the addition of paid-in common stock, surplus, undivided profits, and all reserves, excluding those reserves for loan losses as allowed by the United States Internal Revenue Service. Equity capital shall be adjusted to remove that portion of equity capital based on United States obligations by deducting a percentage of equity capital based on the ratio of United States obligations to total assets. Borrowed money and value of the preferred stock issued by any such association and actually owned by the United States of America or any agency thereof shall not be construed as equity capital for the purposes of this Section.

D. For the purpose of determining the fair market value of association stock, the following criteria shall be used: stockholder equity, as defined in Subsection C of this Section, shall serve as a four times factor, eighty percent; annual net earnings of the individual capital stock association shall serve as a one time factor, twenty percent. Annual net earnings shall be adjusted to remove that portion of earnings based on United States obligations by deducting a percentage of annual net earnings based on the ratio of interest on United States obligations to total operating income. Negative earnings shall not be considered in this formula, and there shall be no earnings loss carried forward or backward. For the purpose of computing the one time, twenty percent earnings factor, the earnings shall be capitalized by multiplying the annual net earnings of the capital stock association by the average price earnings ratio for all capital stock associations in the United States as published by a nationwide recognized bond and securities rating firm.

E. For the purpose of arriving at fair market value of capital stock in the formula outlined in Subsection D of this Section, the tax commission or its successor shall compute the formula as follows:

(1) In the case of capital stock associations created under the laws of the United States, from those statements made to the comptroller of the currency and required to be published as of December 31 of each year; or

(2) In the case of capital stock associations created under the laws of this state, from the statement made to the commissioner of financial institutions and required to be published as of December 31 of each year.

F. From the assessment determined by the application of the fifteen percent of fair market value provided for above, there shall be deducted fifty percent of the assessed value of real estate, improvements, buildings, furniture, and fixtures owned by the capital stock association. If such real estate, improvements, buildings, furniture, and fixtures are owned by a separate corporation, the deduction will be allowed if all the capital stock, except directors' qualifying shares, if any, is owned by the capital stock association.

G. Except as provided herein, no assessment shall hereafter be made against the capital stock, surplus, undivided profits, or reserves of any capital stock association engaged in the savings and loan business, chartered under the laws of this state or of the United States doing business in this state whose capital stock is represented by shares.

H. The capital stock of any capital stock association, as defined in R.S. 6:703(3)(a), either (1) all of which is owned by another capital stock association, the capital stock of which is subject to taxation under the laws of this state, or (2) all of which is owned by another corporation all of the stock of which, in turn, is owned by a capital stock association, the capital stock of which is subject to taxation under the laws of this state, is hereby declared exempt from ad valorem taxation under the laws of this state.

Acts 1983, No. 675, §1; Acts 1984, No. 107, §2; Acts 1986, No. 629, §1.

{{NOTE: SEE ACTS 1986, NO. 629, §§2, 3 REGARDING EFFECTIVE DATE.}}

§ 6:943 Listing and assessing of stock; place

A. The stock shall be assessed at the percent of their valuation made by the assessing authorities to the stockholders at the domicile or location of the capital stock association who appear as such upon the books, regardless of the domicile of the stockholders and regardless of any transfer not registered or entered upon the books. When any capital stock association operates one or more branch offices in any parish or parishes other than the parish of its domicile, its assessment shall be divided for state and local purposes, and the number of shares of stock, or fractions thereof, to be assessed in each parish in which such capital stock association and its branches are maintained shall be determined by the proportion which the capital stock association and branch of such association bears to the whole capital stock.

B. In the event that for any reason it should be held by the courts that any portion of this Section is unconstitutional, such invalidity shall not affect the enforcement of the remainder of this Section and all such capital stock associations shall then be assessed at the location or domicile of the main office in the same manner as capital stock associations without branches for current and back taxes.

Acts 1983, No. 675, §1.

§ 6:944 Listing and assessing of stock; branch capital stock associations

A. When any capital stock association chartered under the laws of the state or the United States, doing business in this state, operates a branch capital stock association office or offices in different municipalities wholly within the limits of the parish of its legal domicile, its tax assessment for state and local purposes may be assessed at its domicile or may be apportioned among the various municipalities in which the capital stock association and its branch or branches are located in the proportion which the respective amount of deposits in such branches bears to the total deposits of such capital stock association and its branches, the amount of deposits to be determined as of the thirty-first day of December of the preceding year.

B. This Section shall not affect, supersede, or modify other laws upon the same subject matter, but shall be supplementary thereto, and its exercise shall be discretionary with a capital stock association affected hereby. This Section shall not apply to the parish of Orleans.

Acts 1983, No. 675, §1.

§ 6:945 Listing and assessing of real estate of capital stock associations

A. The capital stock association house and all real estate owned by any capital stock association shall be assessed directly to it in accordance with law at not to exceed its actual cash value, or whatever percentage thereof is determined by the tax commission for state assessment purposes, and by the local taxing authorities for local purposes, without regard to the value of the property as shown on the statement of such capital stock association, but such actual cash value or such percentage thereof shall be equal and uniform with all other property of the same class. The real estate of any capital stock association shall be assessed in the parish where it is located and the taxes paid in such parish.

B.(1) All state or national capital stock associations shall make and furnish on or before the fifteenth day of February of each year, to the local assessor and to the tax commission, a duly authenticated statement similar to those made by them as above set out to the comptroller of the currency or to the commissioner showing their condition at the close of business on the thirty-first day of December of the previous year.

(2) All capital stock associations also shall furnish on or before the fifteenth day of February of each year to the tax commission a list of real estate and the assessed value thereof, as shown upon the assessment rolls of the current year or upon the last completed assessment rolls, certified as to the assessed value by the parish assessor of the parishes where the real estate is located, owned by the association as of the first of January of each year, or owned by any corporation, all the capital stock of which, except directors' qualifying shares, if any, is owned by the association, and all or substantially all of the assets of which consist of real estate acquired for debt, or the building or buildings in which are located the main or branch capital stock association house or houses of the capital stock association or the land on which they are situated, which list, certified by the local assessor, shall be the basis for deduction of assessed value of real estate as hereinabove provided for.

Acts 1983, No. 675, §1.

§ 6:946 Listing and assessing of stock and real estate; payment of tax; recovery from stockholders

All the taxes assessed against shares of stock shall be paid by the capital stock association, and it shall be entitled to collect the amount thus paid from the stockholders or their transferees. The taxes on the shares of the stock and real estate owned by any capital stock association shall be collected in the same manner as the taxes on the other property of like nature are collected. In the event any capital stock association doing business in this state, chartered under the laws of the United States or this state, is by decision of the courts, held not to be liable to pay the taxes on the shares of stock of the stockholders, then the taxes shall be collected from and paid by such stockholders, and each stockholder failing to pay the taxes may be proceeded against in the manner provided for the collection of taxes on movable property.

Acts 1983, No. 675, §1.

§ 6:947 Listing and assessing of stock; report by official

A. In the event the association has not timely paid its taxes, the assessor may require the president, vice president, secretary, treasurer, or other person so designated, to furnish a complete sworn list of those who are carried on its books as stockholders.

B. Any president, vice president, secretary, treasurer, or other persons so designated of any capital stock association engaged in the savings and loan business who fails or refuses to comply with any of the provisions of Subsection A of this Section shall be fined not less than fifty dollars or more than five hundred dollars or be imprisoned for not less than thirty days nor more than one year.

Added by Acts 1980, No. 608, §1; Acts 1983, No. 675, §1.

PART XVIII IMPLEMENTATION AND AUGMENTATION POWERS OF COMMISSIONER

§ 6:948 Power of commissioner to issue rules, regulations, and orders to implement this Chapter

The commissioner may issue rules, regulations, or orders to implement this Chapter and to further its purposes, and when issued in accordance with R.S. 49:961, such rules, regulations, and orders shall have the force of law.

Added by Acts 1980, No. 608, §1. Acts 1983, No. 675, §1.

CHAPTER 9-A PUBLIC FUNDS IN CAPITAL STOCK SAVINGS AND LOAN ASSOCIATIONS AND CAPITAL STOCK SAVINGS BANKS

§ 6:949 Savings and demand accounts of capital stock savings and loan associations and capital stock savings banks as legal investments

Notwithstanding and irrespective of any provisions of Titles 6, 39, or 49 of the Louisiana Revised Statutes of 1950, or any other statute, law, rule, or regulation to the contrary, banks, trust companies, the state of Louisiana, its agencies, boards, commissions, and departments, the state treasurer of state funds standing in the name of the state treasurer, political subdivisions of the state and other public bodies existing under the constitution and laws of the state of Louisiana, any state depositing authority, any local depositing authority, any parish, or any political subdivisions of any parish, and any city, town, or village, or any political subdivision thereof, are hereby specifically authorized and empowered to invest or deposit funds held by them, without any order of any court, in savings and/or demand accounts of capital stock savings and loan associations and capital stock savings banks, to the same extent as are authorized national or state banks, and without limitations as to whether or not the amount invested or deposited exceeds at any time the amount insured by the Federal Deposit Insurance Corporation. Capital stock associations and capital stock savings banks are specifically authorized and empowered to be depositories and fiscal agents for these funds.

Acts 1984, No. 635, §1.

{{NOTE: SEE ACTS 1984, NO. 635, §2 REGARDING MUTUAL SAVINGS AND LOAN ASSOCIATIONS.}}

CHAPTER 9-B INTERSTATE ACQUISITIONS AND MERGERS OF ASSOCIATIONS

§ 6:950.1 Declaration of policy

It is declared to be the policy of this state to facilitate the econmomic development of this state, to promote a more efficient allocation of financial resources, to improve access to credit for Louisiana individuals and businesses, and to reinforce the overall stability and soundness of the Louisiana savings and loan industry by permitting the orderly expansion of competition among savings and loan associations institutions on a multistate basis.

Added by Acts 1986, No. 595, §1, eff. July 2, 1986.

§ 6:950.2 Definitions

As used in this Part, unless the context otherwise requires, the term:

(1) "Acquire", as applied to an association or savings and loan holding company, means any of the following actions or transactions:

(a) The merger or consolidation of one association with another association or a savings and loan holding company with another savings and loan holding company.

(b) The acquisition of the direct or indirect ownership or control of voting shares of another savings and loan holding company or association if, after such acquisition, such savings and loan holding company or association will directly or indirectly own or control more than five percent of any class of voting shares of such savings and loan holding company or association.

(c) The direct or indirect acquisition of all or substantially all of the assets of another savings and loan holding company or association.

(d) The taking of any other action that would result in the direct or indirect control of another savings and loan holding company or association.

(2) "Association" means a savings association, thrift institution, homestead, building and loan association, savings bank, savings and loan association, or society, including both capital stock and mutual associations, whether chartered pursuant to the laws of any state or the United States.

(3) "Association office" means any main office or branch.

(4) "Branch" or "branch office" means any manned office of an association which would constitute a branch within the meaning of R.S. 6:852, other than an automated teller machine, electronic funds transfer terminal, point of sale terminal, or similar electronic device or terminal.

(5) "Commissioner" means the commissioner of financial institutions for the state of Louisiana.

(6) "Company" means any corporation, business trust, partnership, association, or similar organization, including an association, but shall not include any corporation the majority of the shares of which are owned by the United States or by any state.

(7) "Control" means either:

(a) The power or ability, directly or indirectly, to vote or cause to be voted twenty-five percent or more of any class of voting securities of a company; or

(b) The power or ability in any manner to elect a majority of the directors or trustees of a company.

(8) "Deposits" means average daily deposits for a continuous period of six months ending on the date the determination of deposits is made.

(9) "Established Louisiana association" means a Louisiana association which either:

(a) Has been in existence and actively engaged in business as a Louisiana association for at least five years; or

(b) Is the successor by merger, consolidation, or purchase of the assets and assumption of the liabilities of a Louisiana association which meets the test of Subparagraph (a) of this Paragraph.

(10) "Louisiana association" means an association organized under the laws of this state or of the United States and having its domicile and not less than a majority of its total deposits at offices in this state.

(11) "Louisiana savings and loan holding company" means a savings and loan holding company that:

(a) Has its executive offices and its principal place of business in this state; and

(b) Is not controlled by a savings and loan holding company other than a Louisiana savings and loan holding company.

(12) "New association" means any association not opened for business as an association on June 1, 1985, whether or not a charter, permit, license, or certificate to open for business had been issued on June 1, 1985.

(13) "Out-of-state association" means an association other than a Louisiana association.

(14) "Out-of-state savings and loan holding company" means a savings and loan holding company other than a Louisiana savings and loan holding company.

(15) "Principal place of business" of a savings and loan holding company means the jurisdiction in which the aggregate deposits of the association subsidiaries of such holding company are the largest, except that for purposes of determining the principal place of business of a savings and loan holding company the deposits of any association subsidiary of such holding company acquired in one of the following transactions shall not be considered:

(a) An association acquired pursuant to the provisions of Section 116 or 123 of the Garn-St. Germain Depository Institutions Act of 1982, 12 U.S.C. Section 1823(f) or 1730a(m).

(b) For a period of two years from the date of acquisition, an association acquired in the regular course of securing or collecting a debt previously contracted in good faith.

(16) "Region" means the states of Alabama, Arkansas, Florida, Georgia, Kentucky, Maryland, Mississippi, North Carolina, Oklahoma, South Carolina, Tennessee, Texas, Virginia, West Virginia, and the District of Columbia.

(17) "Regional association" means an out-of-state association organized under the laws of one of the states in the region or of the United States and having its domicile and not less than eighty percent of its total deposits in offices within the region.

(18) "Regional savings and loan holding company" means an out-of-state savings and loan holding company that:

(a) Has its principal place of business in one of the jurisdictions within the region; and

(b) Has at least eighty percent of the total deposits of its association subsidiaries at offices located within the region and Louisiana; however, for purposes of such calculation the deposits of those association subsidiaries acquired in any of the following transactions shall not be considered:

(i) An association acquired pursuant to the provisions of Section 116 or 123 of the Garn-St. Germain Depository Institutions Act of 1982, 12 U.S.C. Section 1823(f) or 1730a(m); or

(ii) For a period of two years from the date of acquisition, an association acquired in the regular course of securing or collecting a debt previously contracted in good faith; and

(c) Is not controlled by a savings and loan holding company other than a Louisiana or regional savings and loan holding company.

(19) "Savings and loan holding company" means any company which directly or indirectly controls an association or controls any other company which is a savings and loan holding company.

(20) "Subsidiary", with respect to an out-of-state savings and loan holding company, means any of the following:

(a) Any company twenty-five percent or more of the voting shares of which, excluding shares owned by the United States or by any company wholly owned by the United States, is directly or indirectly owned or controlled by such savings and loan holding company or is held by it with power to vote.

(b) Any company the election of a majority of the directors of which is controlled in any manner by such savings and loan holding company.

(c) Any company twenty-five percent or more of the voting shares of which is held by trustees for the benefit of the shareholders of such savings and loan holding company.

Added by Acts 1986, No. 595, §1, eff. July 2, 1986.

§ 6:950.3 Scope of Part; effective dates

A. Subject to the other provisions of this Part:

(1) A Louisiana savings and loan holding company or a Louisiana association may acquire one or more out-of-state savings and loan holding companies and one or more out-of-state associations.

(2) Beginning July 1, 1987: (a) a regional savings and loan holding company or regional association may acquire a Louisiana savings and loan holding company, a Louisiana association, or another regional savings and loan holding company having a Louisiana association subsidiary, and (b) a regional savings and loan holding company having a Louisiana association subsidiary may acquire another regional savings and loan holding company; provided that the commissioner determines that the law of the state in which the regional savings and loan holding company or regional association has its principal place of business permits Louisiana savings and loan holding companies or associations to acquire savings and loan holding companies or associations in that state.

(3) Beginning January 1, 1989: (a) an out-of-state savings and loan holding company or out-of-state association may acquire a Louisiana savings and loan holding company, a Louisiana association, or another out-of-state savings and loan holding company having a Louisiana association subsidiary, and (b) an out-of-state savings and loan holding company having a Louisiana association subsidiary may acquire another out-of-state savings and loan holding company; provided that the commissioner determines that the law of the state in which the out-of-state savings and loan holding company or out-of-state association has its principal place of business permits Louisiana savings and loan holding companies or associations to acquire savings and loan companies or associations in that state.

B. Notwithstanding anything contained in Subsection (A) of this Section, no out-of-state savings and loan holding company or out-of-state association may use the provisions of this Part to operate branches of an association in this state unless the association is a Louisiana association.

C. The commissioner may approve an acquisition of a Louisiana association that will be lawful under the provisions of this Chapter but for the fact that the date on which the acquisition is to occur is before the authorized date, if all of the following exist with respect to the Louisiana association:

(1) It has an adjusted net worth-to-assets ratio of less than one percent, according to the latest examination by the office of financial institutions or the Federal Home Loan Bank Board.

(2) It is the conclusion of the commissioner that the association has major and serious problems or unsafe and unsound conditions which are not being satisfactorily addressed or resolved.

(3) It is the conclusion of the commissioner that the association has a high potential for failure, although failure is not necessarily imminent.

Added by Acts 1986, No. 595, §1, eff. July 1, 1986.

§ 6:950.4 Applicability of commissioner's rules and regulations; operation of Louisiana association subsidiaries by foreign corporations; reciprocal agreements; penalties

A. The commissioner shall administer and carry out the provisions of this Part and may issue such rules, regulations, and orders as may be necessary to discharge this duty and to prevent evasions of this Part. Any out-of-state savings and loan holding company that controls a Louisiana association or any out-of-state association that acquires a Louisiana association shall be subject to such rules, regulations, and orders.

B. Any out-of-state savings and loan holding company that has a Louisiana association subsidiary and that is not organized under the laws of this state or any out-of-state association that acquires a Louisiana association shall:

(1) Qualify to do business in this state;

(2) Advise the commissioner of the location of its registered office within this state and the name of its initial registered agent at such location;

(3) Agree to be bound by all the provisions of this Part; and

(4) Promptly advise the commissiner of any changes in its registered office and registered agent.

C. The commissioner may enter into cooperative and reciprocal agreements with the regulatory authorities of any state for the periodic examination of savings and loan holding companies or associations pursuant to the authority of the commissioner in R.S. 6:794 and may accept reports of examination and other records from such authorities in lieu of conducting his own examinations. The commissioner may enter into joint actions with other regulatory bodies having concurrent jurisdiction or may enter into such actions independently to carry out his responsibilities under this Title and assure compliance with the laws of this state.

D. Any out-of-state association or out-of-state savings and loan holding company or any subsidiary thereof which willfully violates any provision of this Part or any regulation or order issued by the commissioner pursuant thereto shall upon conviction be fined not less than five hundred dollars nor more than one thousand dollars for each day during which the violation continues. Any individual who willfully participates in a violation of any provision of this Part shall upon conviction be fined not less than one thousand dollars nor more than five thousand dollars or imprisoned not more than one year, or both.

Added by Acts 1986, No. 595, §1, eff. July 1, 1986.

§ 6:950.5 Interstate acquisitions; filings with commissioner

A. An out-of-state savings and loan holding company or out-of-state association shall not acquire, directly or indirectly, a Louisiana savings and loan holding company or a Louisiana association or an out-of-state savings and loan holding company having one or more Louisiana associations as subsidiaries unless it has filed with the commissioner all applications and other information filed with any federal agency in connection with such acquisition and paid a fee of one thousand dollars.

B. If any out-of-state savings and loan holding company or out-of-state association makes an acquisition or engages in an activity or causes any of its subsidiaries to engage in an activity that is prohibited by this Part, the commissioner shall require such out-of-state savings and loan holding company or out-of-state association to terminate such activity or divest itself of its direct or indirect ownership or control of any Louisiana associations acquired in violation of this Part. In addition, the commissioner shall have the power to enforce any other prohibitions in this Part by requiring divestitures of nonconforming associations, savings and loan holding companies, or assets, through the imposition of fines and penalties or through the exercise of such other remedies as shall be appropriate, including but not limited to judicial actions.

Acts 1986, No. 595, §1, eff. July 2, 1986.

§ 6:950.6 Prohibited acquisitions and activities

It shall be unlawful for an out-of-state savings and loan holding company or out-of-state association to open for business in this state a new association or to acquire a Louisiana association other than an established Louisiana association, except that:

(1) During the period from the later of July 1, 1989, or one year from the date it acquires an established Louisiana association, to June 30, 1994, an out-of-state savings and loan holding company for so long as it has at least one established Louisiana association subsidiary may not open for business in this state more than (a) one new association in each calendar year or (b) an aggregate of three new associations.

(2) During the period from July 1, 1989, to June 30, 1994, an out-of-state savings and loan holding company may acquire a Louisiana savings and loan holding company that controls one or more nonestablished Louisiana associations if:

(a) At the time of acquisition such Louisiana savings and loan holding company controls at least one established Louisiana association;

(b) The nonestablished Louisiana associations controlled by such Louisiana savings and loan holding company were lawfully acquired by it in good faith and not in contemplation of its acquisition by an out-of-state savings and loan holding company; and

(c) The number of such nonestablished Louisiana associations, which are subsidiaries of such Louisiana savings and loan holding company, does not exceed:

(i) One association for each calendar year period which has elasped between July 1, 1989 and the date of such acquisition; or

(ii) An aggregate of three such associations.

(3) An out-of-state savings and loan holding company which acquires an out-of-state savings and loan holding company having a Louisiana association subsidiary will be subject only to the restrictions and limitations on opening new associations and acquiring nonestablished Louisiana associations applicable to the out-of-state savings and loan holding company acquired by it.

(4) After July 1, 1994, an out-of-state savings and loan holding company that has, and for so long as it has, as a subsidiary at least one established Louisiana association may open for business in this state any new association or acquire any nonestablished Louisiana association.

Added by Acts 1986, No. 595, §1, eff. July 1, 1986.

§ 6:950.7 Minority stockholders' rights

A. Subject to the provisions of Subsection (B) of this Section, it shall be unlawful for an out-of-state savings and loan holding company or an out-of-state association to purchase for cash or any other form of consideration any voting security or percentage of ownership of any Louisiana association or Louisiana savings and loan holding company if, after consummation thereof, such out-of-state savings and loan holding company or out-of-state association would, directly or indirectly, be the beneficial owner of more than ten percent of the voting power or equity ownership of such Louisiana association or Louisiana savings and loan holding company, unless such purchase is made pursuant to a tender or exchange offer to the holders of all of the voting securities or all of the equity ownership, as the case may be. Any such tender or exchange offer shall provide that if more securities or ownership interests are tendered than are proposed to be acquired by the offeror, the securities or interests shall be taken up, as nearly as may be, pro rata according to the number of voting securities or amount of equity ownership interests tendered by each shareholder or equity owner.

B. The provisions of Subsection (A) of this Section shall not apply to:

(1) Purchases by an out-of-state savings and loan holding company or out-of-state association of the shares of any Louisiana association or Louisiana savings and loan holding company of which it owns more than fifty percent of the total voting power.

(2) Purchases which, when cumulated with all other acquisitions of voting securities or equity ownership interests during the preceding twelve months by such out-of-state savings and loan holding company or out-of-state association, whether by purchase or otherwise, do not exceed two percent of the voting power or equity interest.

(3) Open market purchases on an exchange or in the over-the- counter market effected through a broker in which neither the purchaser nor the broker, or any person acting on their behalf, solicits the seller.

(4) Transactions effected other than by way of a purchase of shares or equity ownership interests from the owner thereof.

C. Solely for the purposes of this Section, the purchase of shares of or equity ownership interests in a Louisiana savings and loan holding company shall not be deemed to constitute the purchase of the shares of any association controlled by such savings and loan holding company.

Added by Acts 1986, No. 595, §1, eff. July 2, 1986.

§ 6:950.8 Savings clause

Nothing in this Part shall be interpreted or construed as approving any act, actions, or conduct which is or has been or may be in violation of any existing law, nor shall anything herein contained constitute a defense to any action, suit, or proceeding pending or hereafter instituted on account of any prohibited antitrust or monopolistic act, action, or conduct.

Added by Acts 1986, No. 595, §1, eff. July 2, 1986.

CHAPTER 10 THE MOTOR VEHICLE SALES FINANCE ACT

§ 6:951 Repealed by Acts 1999, No. 794, §2, eff. July 2, 1999.

Repealed by Acts 1999, No. 794, §2, eff. July 2, 1999.

§ 6:952 Repealed by Acts 1999, No. 794, §2, eff. July 2, 1999.

Repealed by Acts 1999, No. 794, §2, eff. July 2, 1999.

§ 6:953 Repealed by Acts 1999, No. 794, §2, eff. July 2, 1999.

Repealed by Acts 1999, No. 794, §2, eff. July 2, 1999.

§ 6:954 Repealed by Acts 1999, No. 794, §2, eff. July 2, 1999.

Repealed by Acts 1999, No. 794, §2, eff. July 2, 1999.

§ 6:955 Repealed by Acts 1999, No. 794, §2, eff. July 2, 1999.

Repealed by Acts 1999, No. 794, §2, eff. July 2, 1999.

§ 6:956 Repealed by Acts 1999, No. 794, §2, eff. July 2, 1999.

Repealed by Acts 1999, No. 794, §2, eff. July 2, 1999.

§ 6:956.1 Repealed by Acts 1999, No. 794, §2, eff. July 2, 1999.

Repealed by Acts 1999, No. 794, §2, eff. July 2, 1999.

§ 6:956.2 Repealed by Acts 1999, No. 794, §2, eff. July 2, 1999.

Repealed by Acts 1999, No. 794, §2, eff. July 2, 1999.

§ 6:957 Repealed by Acts 1999, No. 794, §2, eff. July 2, 1999.

Repealed by Acts 1999, No. 794, §2, eff. July 2, 1999.

§ 6:958 Repealed by Acts 1999, No. 794, §2, eff. July 2, 1999.

Repealed by Acts 1999, No. 794, §2, eff. July 2, 1999.

§ 6:959 Repealed by Acts 1999, No. 794, §2, eff. July 2, 1999.

Repealed by Acts 1999, No. 794, §2, eff. July 2, 1999.

§ 6:960 Repealed by Acts 1999, No. 794, §2, eff. July 2, 1999.

Repealed by Acts 1999, No. 794, §2, eff. July 2, 1999.

§ 6:961 Repealed by Acts 1999, No. 794, §2, eff. July 2, 1999.

Repealed by Acts 1999, No. 794, §2, eff. July 2, 1999.

§ 6:962 Repealed by Acts 1999, No. 794, §2, eff. July 2, 1999.

Repealed by Acts 1999, No. 794, §2, eff. July 2, 1999.

§ 6:963 Repealed by Acts 1999, No. 794, §2, eff. July 2, 1999.

Repealed by Acts 1999, No. 794, §2, eff. July 2, 1999.

§ 6:964 Repealed by Acts 1999, No. 794, §2, eff. July 2, 1999.

Repealed by Acts 1999, No. 794, §2, eff. July 2, 1999.

CHAPTER 10-A ADDITIONAL DEFAULT REMEDIES

§ 6:965 Scope and definitions

A. This Chapter may be cited as the "Additional Default Remedies Act".

B. This Chapter provides additional remedies on default by the debtor under a secured transaction under Chapter 9 of the Louisiana Commercial Laws, R.S. 10:9-101 et seq., R.S. 9:5351 et seq., R.S. 9:5367 et seq., and R.S. 32:701 et seq., as applicable, entitling the secured party to obtain possession and dispose of the collateral as provided herein. These remedies shall be in addition to all other remedies applicable to nonpossessory security interests affecting collateral in which a security interest or chattel mortgage, as applicable, has been granted, which shall remain available and in full force and effect in their entirety.

C. As used in this Chapter, the following terms have the following meanings:

(1) "Breach of peace" shall include but not be limited to the following:

(a) Unauthorized entry by a repossessor into a closed dwelling, whether locked or unlocked.

(b) Oral protest by a debtor to the repossessor against repossession prior to the repossessor seizing control of the collateral shall constitute a breach of the peace by the repossessor.

(2) "Collateral" shall refer to "motor vehicles" and "motorcycles" and has the meanings set forth in R.S. 32:1252.

(3) "Debtor" shall have the meaning set forth in R.S. 10:9-102(a).¹

(4) "Default" means nonpayment of two consecutive payments on the date due. In the event that payments are required to be made more frequently than on a monthly basis, "default" shall mean nonpayment for a period of sixty days.

(5) "Secured party" shall have the meaning set forth in R.S. 10:9-102(a) and shall also mean a lessor of a motor vehicle as defined in R.S. 9:3306.

D. Repealed by Acts 2010, No. 519, §1.

Acts 1992, No. 235, §1, eff. Jan. 1, 1993; Acts 1993, No. 927, §1; Acts 2001, No. 943, §1; Acts 2004, No. 191, §1, eff. Jan. 1, 2005; Acts 2010, No. 519, §1; Acts 2016, No. 205, §1.

¹See R.S. 10:9-102(a)(28), Acts 2001, No. 128.

§ 6:966 Procedure

A.(1) The procedures set forth in this Chapter may be used to obtain possession and dispose of collateral following default by a debtor without previous citation and judgment to enforce a security interest evidenced by a security agreement or a lease.

(2) Prior to the use of the procedures set forth in this Chapter, a secured party shall send notice to all debtors in writing at the last known address of the debtors, of the right of the secured party to take possession of the collateral without further notice upon default as defined in R.S. 6:965(C). Such notice shall include the debtor's name, last known address, and description of the collateral and the following in at least twelve-point type:

"Louisiana law permits repossession of motor vehicles upon default without further notice or judicial process."

(3) After obtaining possession of the collateral, the secured party may dispose of it in any manner permitted by Chapter 9 of the Louisiana Commercial Law, R.S. 10:9-101 et seq. or by resort to available judicial procedures, and may cause the collateral to be retitled. Unless the secured party causes the collateral to be sold at judicial sale under ordinary or executory process, all receipts from the secured party's disposition of the collateral shall be applied as set forth in R.S. 10:9-601, and the secured party shall be obligated to account to the debtor for any surplus.

B. Unless otherwise agreed, a secured party has, on default, the right to take possession of the collateral. In taking possession, a secured party may proceed without judicial process if this can be done without a breach of the peace or may proceed by other remedies available by law.

C. The provisions of this Section may be utilized only by the following:

(1) Financial institutions chartered under the laws of the state of Louisiana, another state, or the United States.

(2) Persons licensed or regulated as lenders by the commissioner of financial institutions pursuant to the Louisiana Consumer Credit Law, R.S. 9:3510 et seq.

(3) Persons licensed or regulated as lenders by the Louisiana Motor Vehicle Commission pursuant to the Louisiana Motor Vehicle Sales Finance Act, R.S. 6:969.1 et seq.

D.(1)(a) Any individual who physically obtains possession of the collateral pursuant to this Chapter shall obtain a repossession agent license from the Office of Financial Institutions.

(b) On or before January 1, 2005, the commissioner of financial institutions shall issue licenses to repossession agents who are members of the following organizations: National Finance Adjusters, Inc., Allied Finance Adjusters Conference, Inc., Time Adjusters Conference, Inc., or the American Recovery Association, Inc., or a Louisiana association of duly licensed repossession agents recognized as a viable association by the commissioner of financial institutions, and who meet any additional qualifications for licensure established by the commissioner of financial institutions pursuant to rules and regulations adopted in accordance with the Administrative Procedure Act.

(2) In the event a tow truck, as defined in R.S. 32:1713, is required to be used in the repossession, the provisions of Chapter 16 of Title 32 of the Louisiana Revised Statutes of 1950 pertaining to said tow truck shall apply. The tow truck owner or operator, as defined in R.S. 32:1713, shall possess a common carrier certificate issued by the Louisiana Public Service Commission pursuant to R.S. 45:164.

E. The secured party shall have and retain all of the possessory and enforcement rights provided under Chapter 9 of the Louisiana Commercial Laws, R.S. 10:9-101 et seq., including the right to recover a deficiency or any other costs associated with the seizure proceeding provided for in this Chapter.

F. If the debtor has personal property of his own or of another inside the repossessed collateral, the owner of the personal property shall have ten days in which to contact the repossessing creditor and demand the return of his property. The secured party shall immediately return the personal effects upon request of the debtor. At the end of thirty days following the repossession of the collateral, the personal effects located inside of the repossessed collateral shall be deemed abandoned and the secured party shall no longer be responsible for such personal effects.

G. Notwithstanding any law or regulation to the contrary, a repossession agent shall not be required to obtain, and a secured party shall not be required to provide to a repossession agent, a copy of the notice required to be sent to a debtor by Paragraph (A)(2) of this Section.

Acts 1992, No. 235, §1, eff. Jan. 1, 1993; Acts 1993, No. 927, §1; Acts 2001, No. 8, §2, eff. July 1, 2001; Acts 2001, No. 9, §1, eff. July 1, 2001; Acts 2001, No. 943, §§1 and 2; Acts 2003, No. 646, §1; Acts 2004, No. 191, §1, eff. Jan. 1, 2005; Acts 2011, No. 358, §1.

§ 6:966.1 Notice of repossession; contents; fees

A. Within three business days of taking possession of collateral, a secured party who utilizes the additional default remedies provided by this Chapter to obtain possession of collateral shall deliver in person or send by mail a "Notice of Repossession" to the recorder of mortgages in the parish where the collateral was located and to the appropriate official for filing purposes. The "Notice of Repossession" shall contain the debtor's name, last known address, date of birth, and a description of the collateral repossessed. If the "Notice of Repossession" is sent by mail, the timeliness of the mailing shall be shown only by an official United States postmark or by official receipt or certificate from the United States Postal Service or private delivery service. For purposes of this Section, the appropriate official shall be:

(1) The constable of the justice of the peace court, if the debtor's last known address is within the election district of the justice of the peace court and the outstanding balance is within the jurisdictional limits of the court.

(2) The constable or marshal of the city court, if the debtor's last known address is within the geographic boundaries of the city court and the outstanding balance is within the jurisdictional limits of the court.

(3) The sheriff for the parish of the debtor's last known address, if there is no other appropriate official as defined in this Subsection. Notwithstanding Paragraphs (1) and (2) of this Subsection, if a secured party files a "Notice of Repossession" with the sheriff for the parish of the debtor's last known address, then the sheriff is deemed to be the appropriate official and the secured party has satisfied the requirements of this Subsection.

B. Within three business days of taking possession of collateral, the secured party shall deliver in person or send by mail a payment of seventy-five dollars to the recorder of mortgages and two hundred fifty dollars to the appropriate official for each "Notice of Repossession" filed. If the payment is sent by mail, the timeliness of the mailing shall be shown only by an official United States postmark or by official receipt or certificate from the United States Postal Service or private delivery service. Notwithstanding any other provision of law to the contrary, the recorder of mortgages shall not assess any additional fees for the filing of the "Notice of Repossession".

C. If the sheriff is the appropriate official in the parish of Orleans, then there shall be no fee paid to the sheriff; however, the "Notice of Repossession" shall still be filed with the sheriff pursuant to the requirement set forth in Subsection A of this Section.

D. The commissioner of financial institutions shall have the authority to promulgate rules and regulations in accordance with the Administrative Procedure Act to implement the provisions of this Chapter, including but not limited to establishing fees and assessments.

Acts 2004, No. 191, §1, eff. Jan. 1, 2005; Acts 2004, No. 814, §1, eff. Jan. 1, 2005; Acts 2011, 1st Ex. Sess., No. 26, §1; Acts 2014, No. 516, §1; Acts 2016, No. 171, §1; Acts 2016, No. 205, §1.

§ 6:967 Appeal from order

A suspensive appeal shall not be granted unless the debtor has answered the rule pleading that the debt was paid or extinguished, or that the debt or security interest is otherwise unenforceable, and the appeal has been applied for and the appeal bond filed within twenty-four hours after the issuance of the order.

Acts 1992, No. 235, §1, eff. Jan. 1, 1993; Acts 1993, No. 927, §1.

§ 6:968 §§968, 969 Repealed by Acts 1974, No. 466, §3.

§§968, 969 Repealed by Acts 1974, No. 466, §3.

CHAPTER 10-B LOUISIANA MOTOR VEHICLE SALES FINANCE ACT

PART I GENERAL PROVISIONS AND DEFINITIONS

§ 6:969.1 Short title

This Chapter shall be known and may be cited as the "Louisiana Motor Vehicle Sales Finance Act".

Acts 1999, No. 794, §1, eff. July 2, 1999.

§ 6:969.2 Scope

A. Subject to the provisions of Subsections B and C of this Section, the parties to a motor vehicle credit transaction may agree that the law of the place where the motor vehicle credit transaction is entered into or the law of the residence of the consumer shall apply.

B. Whenever an action is brought in this state to enforce rights arising from a motor vehicle credit transaction wherever made, and whatever state's law shall contractually govern, the extender of credit shall, where applicable, reduce the charges sought to be collected so that they do not exceed those provided in this Chapter. This requirement applies only to then unpaid charges sought to be collected. The extender of credit shall not be required to refund or credit the consumer for any charges previously paid that are permitted under the laws of the chosen forum, but which are in excess of those permitted under this Chapter.

C. Except as otherwise provided herein, the agreements by a consumer to consent to the jurisdiction of another state and fix venue are invalid with respect to motor vehicle credit transactions, or modifications thereof, to which this Chapter applies.

D. All fees and charges authorized under this Chapter, whether or not such fees and charges constitute or are considered to be loan finance charges or credit service charges, shall be deemed to be "material to the determination of the interest rate" for purposes of exportation to consumers residing in other states under the most favored lender doctrine of federal law.

Acts 1999, No. 794, §1, eff. July 2, 1999.

§ 6:969.3 Exclusions

A. Except as provided in Subsection B of this Section, this Chapter does not apply to any of the following:

(1) Extensions of credit to business entities, including government or governmental agencies or instrumentalities.

(2) Extensions of credit primarily for business, commercial, or agricultural purposes.

(3) Open-end credit transactions, including without limitation, revolving loan and lender credit card transactions that may involve the secured purchase money financing of a motor vehicle.

(4) Consumer credit transactions subject to the Louisiana Consumer Credit Law, R.S. 9:3510 et seq.

(5) Credit transactions by federally and state-chartered credit unions to their members.

(6) Federally related mortgage loans subject to R.S. 9:3503 et seq. and 12 U.S.C. 1735F(7).

B. All persons financing the purchase or acquisition of a motor vehicle, irrespective of whether the transaction otherwise is subject to this Chapter, shall comply with the requirements of R.S. 32:1251 et seq. and the rules and regulations of the Louisiana Motor Vehicle Commission pertaining to advertising.

Acts 1999, No. 794, §1, eff. July 2, 1999.

§ 6:969.4 Waiver, agreement to forego rights

A consumer may not waive or agree to forego rights or benefits under this Chapter except that a claim, if disputed in good faith, may be settled by compromise, agreement, or arbitration.

Acts 1999, No. 794, §1, eff. July 2, 1999.

§ 6:969.5 Repealed by Acts 2001, No. 1066, §1.

Repealed by Acts 2001, No. 1066, §1.

§ 6:969.6 Definitions

As used in this Chapter:

(1) "Administrator" means any person, except an employee of an administrator, who directly or indirectly solicits or effects coverage of, underwrites, collects charges or premiums from, or adjusts or settles claims on residents of this state in connection with debt waiver or debt forgiveness agreements.

(2) "Amount deferred" means the cash price subtracting any down payment under a consumer credit sale, plus any other amounts for goods or services including without limitation, any negative equity trade-in allowance, insurance, extended warranty, service contract, and other fees and charges that are financed by the extender of credit under the transaction, and included in the principal balance of the consumer's indebtedness subject to credit service charges.

(3) "Amount financed" means the amount borrowed under a consumer loan, plus any other amounts for goods or services including without limitation, any negative equity trade-in allowance, insurance, extended warranty, service contract, notary fees, license, title, filing and lien release fees, and other fees and charges that are financed by the extender of credit under the transaction, and included in the principal balance of the consumer's indebtedness subject to loan finance charges.

(4) "Cash price" means the price for which the seller would have sold the motor vehicle to the consumer and the consumer would have bought from the seller if such sale had been a sale for cash instead of on credit. The cash price may include any sales taxes, documentary fees, notary fees, license, title, filing and lien release fees, negative equity trade-in allowances, insurance premiums, extended warranty, service contract, and similar fees, and charges for delivery, installation, repair, alteration, or improvement to the vehicle.

(5) "Commission" means the Louisiana Motor Vehicle Commission.

(6) "Consumer" means a natural person who enters into a consumer loan or consumer credit sale of a motor vehicle to be used primarily for personal, family, or household purposes.

(7) "Consumer credit insurance" means insurance, other than insurance on property, by which the satisfaction of debt in whole or in part is a benefit provided, but does not include insurance indemnifying the extender of credit against loss due to the debtor's default and non-filing insurance.

(8) "Consumer credit sale" means the sale of a motor vehicle on credit under which the seller acquires a purchase money security interest in the purchased vehicle, and incident to which a credit service charge is charged and the consumer is permitted to defer all or part of the purchase price or other consideration in two or more installments excluding the down payment. A "consumer credit sale" does not include a lease of a motor vehicle under any circumstance, whether or not the lease constitutes a true lease or a financed lease within the context of the Louisiana Lease of Movables Act, R.S. 9:3301 et seq. A consumer credit sale may be secured by other collateral in addition to the purchased vehicle.

(9) "Consumer loan" means a loan of money or its equivalent made by a lender, the proceeds of which are used by the consumer to purchase or refinance the purchase of a motor vehicle, or which proceeds are used for personal, family, or household purposes, including debts created by the use of a lender credit card, revolving loan account, or similar arrangement, as well as insurance premium financing, with the lender acquiring a purchase money security interest in the purchased motor vehicle. A consumer loan may be secured by other collateral in addition to the purchased vehicle. The provisions of this Paragraph shall not apply to a consumer loan made pursuant to the Louisiana Deferred Presentment and Small Loan Act, R.S. 9:3578.1 et seq.

(10) "Contract" means the consumer's retail installment contract, note, agreement, or other evidence of indebtedness executed in connection with a motor vehicle credit transaction.

(11) "Contract rate" means the interest rate factor applied to compute precomputed interest or simple interest under the transaction.

(12) "Credit health and accident insurance" means disability insurance purchased in conjunction with a motor vehicle credit transaction which provides for a monthly benefit sufficient to pay all or part of the required monthly payment, during the continued disability of the insured, over the term of coverage.

(13) "Credit life insurance" means term life insurance purchased in conjunction with a motor vehicle credit transaction which provides a death benefit payable to the lender, or to the insured consumer's beneficiary to the extent the death benefit exceeds the amount necessary to fully pay and satisfy the transaction, in the event of the insured consumer's death during the term of coverage.

(14)(a) "Credit service charge" means the sum of the following:

(i) All charges payable directly or indirectly by the consumer and imposed directly or indirectly by the seller as a requirement of the extension of credit, including any of the following types of charges that are applicable: interest; time price differential; service; carrying or other charge, however denominated; points and discount fees; and premium or other charge for any guarantee or insurance protecting the extender of credit against the consumer's default or other credit loss.

(ii) Charges paid by the consumer for investigating the consumer's credit worthiness.

(b) The term does not include default charges, delinquency charges, charges for checks returned for having nonsufficient funds, documentation fees, factory-built home appraisal and title search fees, other fees and charges permitted in accordance with this Chapter, and any additional fees and charges that the seller agrees to finance under the transaction that are not considered to be a finance charge in accordance with 12 CFR 226.4.

(15) "Debt waiver" or "debt forgiveness" is an agreement whereby an extender of credit agrees with the consumer to waive any unpaid balance on a consumer loan, consumer credit sale or lease due to physical damage, total loss or constructive loss or unrecovered theft to the covered collateral secured by an eligible security device.

(16) "Down payment" means an amount, including the value of any property used as a trade-in, paid to a seller to reduce the cash price of a motor vehicle purchased under a consumer credit sale.

(17) "Extender of credit" or "creditor" means a seller in a consumer credit sale, or a lender in a consumer loan. An "extender of credit" or "creditor" also includes an assignee or transferee of the consumer's contract, but does not include a bona fide pledgee of the creditor.

(18) "Factory-built home" has the meaning given to that term in R.S. 9:1149.2.

(19) "Federally related mortgage loan" means a loan secured by a first lien or mortgage on one-to-four family residential immovable property subject to 12 U.S.C. 1735F(7).

(20) "Free-look period" means the period of time from the effective date of the debt waiver or debt forgiveness agreement until the date the consumer may cancel the contract with a full refund. This period of time shall not be less than thirty days.

(21) "GAP coverage" means a contract or insurance policy that covers a consumer's deficiency balance between the net payoff of the consumer's loan retail installment sales contract at the time of a loss and the amount paid by the consumer's primary insurance after a vehicle is deemed a total loss due to any direct or accidental physical damages or unrecovered theft which may be in the form of the following:

(a) Guaranteed auto protection offered by a property and casualty company licensed and regulated by the Department of Insurance.

(b) Guaranteed auto protection offered by a property residual value insurer licensed and regulated by the Department of Insurance.

(c) Debt waiver or debt forgiveness agreements issued by a lender licensed or regulated by the commission.

(22) "Insurer" means an insurance company licensed, registered, or otherwise authorized to do business under the insurance laws of this state.

(23) "Lender" means the originator of credit under a consumer loan, as well as any assignee or transferee of the consumer's contract.

(24)(a) "Loan finance charge" means the sum of the following:

(i) All charges payable directly or indirectly by the consumer and imposed directly or indirectly by the lender as a requirement of the extension of credit, including any of the following types of charges that are applicable: interest, and any amount payable under a point, discount, or other system of charges, however denominated.

(ii) Charges paid by the consumer for investigating the consumer's credit worthiness.

(b) The term does not include fees paid to a nonaffiliated loan broker, default charges, deferral charges, delinquency charges, charges for checks returned for having nonsufficient funds, factory-built home appraisal, title search fees and closing costs, other fees and charges permitted in accordance with this Chapter, and any additional fees and charges that the lender agrees to finance under the transaction that are not considered to be a finance charge in accordance with 12 CFR 226.4.

(25)(a) "Motor vehicle" means any new or used transportation device, including automobiles, motorcycles, trucks, and other vehicles that are operated over the public highways and the streets of this state, but does not include traction engines, boat trailers, road rollers, implements of husbandry, and other agricultural vehicles. A factory-built home is deemed to be a "motor vehicle" for purposes of this Chapter only if it is anticipated at the time of the transaction that the factory-built home will not be immobilized pursuant to R.S. 9:1149.6.

(b) "Motor vehicle" for purposes of GAP coverage means self-propelled or towed vehicles designed for personal use, including but not limited to automobiles, trucks, motorcycles, recreational vehicles, all-terrain vehicles, snowmobiles, campers, boats, personal watercraft, and motorcycle, boat, camper, and personal watercraft trailers.

(26) "Motor vehicle credit transaction" means a consumer loan or a consumer credit sale involving a Louisiana consumer, or that is otherwise made subject to this Chapter.

(27) "Person" means an individual or corporation, partnership, limited liability company, trust, association, joint venture pool, syndicate, sole proprietorship, unincorporated organization, or any other form of entity not specifically listed herein.

(28) "Precomputed transaction" means a motor vehicle credit transaction under which loan finance charges or credit service charges are computed in advance over the entire scheduled term of the transaction and capitalized into the face amount of the contract.

(29) "Prepaid finance charge" in connection with a simple interest transaction means any loan finance charge or credit service charge that is paid separately in cash or by check before or at consummation of the transaction, or withheld from the proceeds of the transaction at any time. Prepaid finance charges may be funded at the consumer's request by increasing the original principal balance of the consumer's contract, with such increased principal amount, including prepaid finance charges, being subject to simple interest over the contract term. Prepaid finance charges shall not be included in the contract rate of interest.

(30) "Pro rata" refers to a method of computing deferral charges by dividing the precomputed loan finance charge or precomputed credit service charge by the total number of days in the contract term and multiplying the sum by the number of days that are deferred.

(31) "Salesman" or "agent" means any person licensed by the commission whose duties include the sale of a debt waiver or debt forgiveness agreement on behalf of the administrator.

(32) "Seller" means the seller of a motor vehicle, including the seller of a motor vehicle under a consumer credit sale, as well as any assignee or transferee of the consumer's contract.

(33) "Simple interest transaction" means a motor vehicle credit transaction under which loan finance charges or credit service charges are assessed by application of a contractual simple interest rate or rates to the unpaid principal balance of the contract.

(34) "Supervised financial organization" means a banking, thrift, or similar organization organized, certified, and supervised by an agency of the United States of America, the state of Louisiana, or any other state pursuant to the banking, currency, and related laws of the United States of America, the state of Louisiana, or any other state.

(35) "Total sum payable under such contract including all loan finance charges and credit service charges" means the total sum of all scheduled payments under the contract assuming that each payment is made on its due date.

Acts 1999, No. 794, §1, eff. July 2, 1999; Acts 2004, No. 70, §1; Acts 2005, No. 255, §1; Acts 2010, No. 374, §1; Acts 2024, No. 287, §1.

§ 6:969.7 Terms; construction; additional fees and charges

A. As a general rule of construction, persons may look to comparable rules, definitions, and principles under the Federal Truth in Lending Act, 15 U.S.C. 1601 et seq., and Regulation Z of the Board of Governors of the Federal Reserve System, 12 C.F.R. 226.1 et seq., for guidance in further defining and interpreting terms and concepts that are not otherwise defined or specified under the provisions of this Chapter. Specifically, those fees and charges that are not classified as or considered to be finance charges under 12 C.F.R. 226.4 are not considered to be loan finance charges or credit service charges for purposes of this Chapter.

B. Except as limited in amount or prohibited by this Chapter, an extender of credit may impose and collect additional fees and charges contractually provided for under the consumer's promissory note, installment sales contract, or credit agreement.

Acts 1999, No. 794, §1, eff. July 2, 1999.

§ 6:969.8 Construction against implicit repeal

This Chapter being a general act intended as a unified coverage of its subject matter, no part of it shall be deemed impliedly repealed by subsequent legislation if such construction can reasonably be avoided.

Acts 1999, No. 794, §1, eff. July 2, 1999.

PART II MAXIMUM CHARGES

§ 6:969.9 Consumer loans

A. The maximum loan finance charge for any consumer loan that may be charged, contracted for, or received may equal either Paragraph (1) or (2) of this Subsection but not exceed:

(1) The sum of all of the following:

(a) Thirty-six percent per annum for that portion of the unpaid principal amount of the loan not exceeding one thousand four hundred dollars.

(b) Twenty-seven percent per annum for that portion of the unpaid principal amount of the loan exceeding one thousand four hundred dollars and not exceeding four thousand dollars.

(c) Twenty-four percent per annum for that portion of the unpaid principal amount on the loan exceeding four thousand dollars and not exceeding seven thousand dollars.

(d) Twenty-one percent per annum for that portion of the unpaid principal amount of the loan exceeding seven thousand dollars.

(2) The credit service charge rate that would otherwise apply under R.S. 6:969.10 to a comparable consumer credit sale of a Class 2, Class 3, or Class 4 motor vehicle, as applicable, and regardless of amount.

B. This Section does not limit or restrict the manner of contracting for loan finance charges whether by way of precomputed interest, simple interest, or otherwise, so long as the annualized loan finance charge rate computed on an actuarial or United States Rule basis over the entire scheduled term of the transaction, assuming that all payments will be made when due and disregarding the possible effects of early prepayment or acceleration of maturity, does not exceed the maximum rates permitted in this Chapter. Demand loans shall have a presumed term of five years.

C. For the purposes of this Section, the term of a consumer loan commences with the date the contract is signed or the funds advanced, whichever occurs first. Differences in the lengths of months may be disregarded and a day may be counted as one-thirtieth of a month. Subject to classifications and differentiations the lender may reasonably establish, a part of a month in excess of fifteen days may be treated as a full month if periods of fifteen days or less are disregarded and if that procedure is not consistently used to obtain a greater yield than would otherwise be permitted.

D. Notwithstanding any provision of Subsection A, the extender of credit may contract for and receive a minimum loan finance charge of not more than fifteen dollars when the amount financed does not exceed two hundred dollars, or twenty-five dollars when the amount financed exceeds two hundred dollars; such charge shall be in lieu of all other loan finance charges.

Acts 1999, No. 794, §1, eff. July 2, 1999.

§ 6:969.10 Consumer credit sale

A. Except as otherwise provided by R.S. 6:969.11, the maximum credit service charge for any consumer credit sale that may be charged, contracted for, or received may not exceed:

(1) Class 1. For any new motor vehicle designated by the manufacturer by a year model not earlier than the year in which the sale is made: Eighteen percent per annum.

(2) Class 2. For any new motor vehicle not in Class 1, and any used motor vehicle designated by the manufacturer by year model of the same or not more than two years prior to the year in which the sale is made: Twenty-four percent per annum.

(3) Class 3. For any used motor vehicle not in Class 2 and designated by the manufacturer by year model not more than four years prior to the year in which the sale is made: Twenty-seven percent per annum.

(4) Class 4. For any used motor vehicle not in Class 2 or Class 3 and designated by the manufacturer by year model more than four years prior to the year in which the sale is made: Thirty-three percent per annum.

B. This Section does not limit or restrict the manner of contracting for credit service charges under a consumer credit sale, whether by way of precomputed interest, simple interest, or otherwise, so long as the annualized credit service charge rate computed on an actuarial or United States Rule basis over the entire scheduled term of the transaction, assuming that all payments will be made when due and disregarding the possible effects of early prepayment or acceleration of maturity, does not exceed the maximum rates permitted in this Chapter.

C. For purposes of this Section, the term of a consumer credit sale commences with the date the contract is signed or the sale of the motor vehicle is complete, whichever occurs first. Differences in lengths of months may be disregarded and a day may be counted as one-thirtieth of a month. Subject to classifications and differentiations the lender may reasonably establish, a part of a month in excess of fifteen days may be treated as a full month if periods of fifteen days or less are disregarded and if that procedure is not constantly used to obtain a greater yield than would otherwise be permitted.

D. Notwithstanding Subsection A, the extender of credit may contract for and receive a minimum credit service charge of not more than fifteen dollars when the amount deferred does not exceed two hundred dollars, or twenty-five dollars when the amount deferred exceeds two hundred dollars.

Acts 1999, No. 794, §1, eff. July 2, 1999.

§ 6:969.11 Maximum charges after negotiations

A. The obligation arising out of any consumer credit sale may be evidenced by a written contract which may provide for a credit service charge not in excess of the maximum loan finance charge rate which could be charged, contracted for, or received in a consumer loan where the amount deferred is the same as the amount financed and the term is a corresponding term.

B.(1) Such written contract must be transferred or assigned to an assignee that is either licensed under this Chapter, or that is exempt from licensing under R.S. 6:969.36, within thirty-five days from the date of making.

(2) If such assignment is not made within the said time limit, the seller shall do all of the following:

(a) Notify the consumer that the contract, note, or agreement was not transferred or assigned.

(b) Credit the obligation with any amounts contracted for in excess of the credit service charge authorized by R.S. 6:969.10. Such computation shall be made as of the date of making and the consumer shall be notified of such credit.

(c) Provide the consumer, prior to the first installment due date, with a new payment schedule reflecting the change in terms.

(d) Notify the consumer of the address where payments are to be made if such address is different from the address previously given to the consumer.

Acts 1999, No. 794, §1, eff. July 2, 1999.

§ 6:969.12 Maximum charges after maturity

In the case of a precomputed transaction which is unpaid at contractual maturity, the rate of the loan finance charge or the credit service charge for the period beginning as of contractual maturity until payment in full may not exceed the rate of the loan finance charge or the credit service charge previously agreed to by the extender of credit and the consumer at the time the motor vehicle credit transaction was entered into.

Acts 1999, No. 794, §1, eff. July 2, 1999.

§ 6:969.13 Leap years

The effects of a leap year may be disregarded for purposes of determining whether the annualized loan finance charge rate or credit service charge rate exceeds the maximum rate limitations provided in this Part.

Acts 1999, No. 794, §1, eff. July 2, 1999.

§ 6:969.14 Variable rates

An extender of credit may enter into variable rate motor vehicle credit transactions under this Chapter in the manner provided under R.S. 6:242(A)(2).

Acts 1999, No. 794, §1, eff. July 2, 1999.

§ 6:969.15 Maximum delinquency charges

A. The parties to a motor vehicle credit transaction may contract for the payment of a delinquency charge on any installment or other regular payment not paid in full within ten days after its scheduled or deferred due date in either one of the following amounts:

(1) Five percent of the amount of the installment in default,or ten dollars, whichever is greater.

(2) The deferral charge that would be permitted to defer the unpaid amount of the delinquent installment for the period that it is delinquent.

B.(1) A delinquency charge may be collected only once on an installment or other payment however long it remains delinquent. No such delinquency charge may be collected if the installment or other payment has been deferred and a deferral charge has been paid or incurred, provided that the deferred payment is paid within ten days of its deferred date. Such a delinquency charge may be collected at the time it accrues or at any time thereafter.

(2) No such delinquency charge may be collected on an installment or other regular payment that is paid in full within ten days after its scheduled due date even though an earlier maturing installment or other payment or a delinquency charge on an earlier installment or other payment may not have been paid in full. For purposes of determining delinquency, payments are deemed to be applied first to current installments or other payments due and then to delinquent installments or other payments and then to delinquency and other charges.

(3) An extender of credit is prohibited from levying or collecting any delinquency charge on a payment when the only delinquency is attributable to delinquency charges assessed on earlier installments, and the payment is otherwise a full payment for the applicable period and is paid on its due date or within an applicable grace period.

(4) Nothing in this Section shall be construed to prohibit the extender of credit from assessing and collecting a loan finance charge or credit service charge on any delinquency or deferral charges not paid when due. Such loan finance charges or credit service charges shall not exceed the contract rate of interest charged on the motor vehicle credit transaction.

C. If two installment payments or parts thereof of a precomputed transaction are in default for ten days or more, the extender of credit may, upon first giving the consumer written notice, elect to convert the precomputed transaction into a simple interest transaction. The notice must state the exact date on which the conversion will occur, the loan finance charge or credit service charge rate to be charged under the simple interest transaction, the balance due at the time of the conversion, and whether or not there will be a balloon payment. In this event, the extender of credit shall make a rebate pursuant to the provisions on rebate upon prepayment as of the maturity date of a delinquent installment or other regular payment, and thereafter may make a loan finance charge or credit service charge as authorized by this Part. The amount of the rebate shall not be reduced by the amount of any minimum loan finance charge or minimum credit service charge as provided in this Part; however, the extender of credit may deduct a prepayment charge as provided in R.S. 6:969.20(A).

D. An extender of credit may contractually reserve the right to prospectively increase the simple interest rate under a motor vehicle credit transaction upon or at any time following the consumer's default. However, such a default interest rate shall not exceed the loan finance charge or credit service charge rate, as applicable, and as authorized in this Part.

Acts 1999, No. 794, §1, eff. July 2, 1999; Acts 2003, No. 337, §1.

§ 6:969.16 Maximum deferral charges

A. With respect to a precomputed transaction, the parties before or after default may agree in writing to a deferral of all or part of one or more unpaid installments, and the extender of credit may make and collect a charge not exceeding the contract rate previously stated to the consumer calculated without regard to differences in the lengths of months, but proportionately for a part of a month, counting each day as one-thirtieth of a month. A deferral charge may be collected at the time it is assessed or at any time thereafter. Deferral charges on a precomputed transaction may be computed on a pro rata basis or any other method of calculation that does not yield a greater sum than the maximum rates permitted in this Part. In lieu of the above, the entire unpaid balance of the transaction may be deferred by charging an amount equal to the contract rate of interest under the transaction times the balance at the time of deferral for the period of deferral. In such a case, the transaction maturity date will be extended by the number of months that the balance is deferred.

B. The parties may agree in writing at the time of a precomputed transaction that if an installment is not paid within ten days after its due date, the extender of credit may unilaterally grant a deferral and make charges as provided in this Section. No deferral charge may be made for a period after the date that the extender of credit elects to accelerate the maturity of the agreement. A delinquency charge made by the extender of credit on an installment may not be retained if a deferral charge is made pursuant to this Section with respect to the period of delinquency.

C. In addition to the continued assessment of loan finance charges or credit service charges that may be assessed on the outstanding balance of a simple interest transaction, the parties may before or after default agree in writing to a deferral of all or part of one or more unpaid installments, and the extender of credit may make and collect an additional deferral charge in an amount not to exceed twenty-five dollars. This deferral charge may be collected at the time it is assessed or at any time thereafter.

D. The extender of credit, in addition to the deferral charge, may make appropriate charges for insurance for the extended period and the amount of these charges which is not paid in cash may be added to the amount for the purpose of calculating the deferral charge.

Acts 1999, No. 794, §1, eff. July 2, 1999.

§ 6:969.17 Charges for checks returned for insufficient funds

The parties in a motor vehicle credit transaction may contract for an additional charge to be assessed if the consumer tenders a check in payment or a payment by electronic means and such check or electronic payment is returned from any bank, savings and loan association, thrift institution, credit union, or any other organization or institution authorized to issue checks, drafts, or similar negotiable instruments or electronic payments, due to insufficient credit or funds in the account for payment of the check or electronic payment in full upon its presentation, or due to account closure, stop payment, drawn on uncollected funds, or any other reason for which the instrument or electronic payment is not paid. The additional charge shall be five percent of the amount of the check or electronic payment, but in no case shall this charge exceed fifteen dollars. The charge shall be in addition to any delinquency charge assessed under the provisions of R.S. 6:969.15. For the purposes of this Section, the phrase "due to insufficient credit or funds" means a check or electronic payment returned unpaid for any reason.

Acts 1999, No. 794, §1, eff. July 2, 1999; Acts 2004, No. 65, §1; Acts 2008, No. 476, §1.

§ 6:969.18 Documentation and compliance fees; notary fees; transfer of equity and other fees; disclosure

A.(1) The extender of credit may charge the consumer up to a thirty-five dollar documentation fee for services performed in documenting a motor vehicle credit transaction.

(2)(a)(i) The seller, who may also be an extender of credit, may, in connection with any retail sale, including but not limited to a retail installment transaction, charge a fee for credit investigation, compliance with federal and state law, preparation of the documents necessary to perfect or satisfy a lien upon the objects sold, and any other functions incidental to the titling of the retail sale. The base maximum amount permitted to be charged shall be four hundred twenty-five dollars. Beginning January 1, 2026, the base maximum fee shall be adjusted annually to equal the lesser of the following:

(aa) The base maximum fee of four hundred twenty-five dollars adjusted by the cumulative percentage change in the annual average of the Federal Consumer Price Index for All Urban Consumers, or CPI-U, or its successor index. The CPI-U shall be calculated using the unadjusted monthly index values averaged over the calendar year, as published by the United States Department of Labor, Bureau of Labor Statistics, or its successor agency, relative to the annual average for calendar year 2024.

(bb) The amount resulting from applying a growth rate of three percent to the adjusted maximum fee for the previous calendar year.

(ii) If the year-over-year percentage change in the CPI-U is negative, the adjusted maximum fee shall remain the same as the amount in effect for the prior calendar year. The division of administration shall calculate the adjusted maximum fee in accordance with this Paragraph, which shall be verified by the legislative auditor, and the division of administration shall transmit the updated amount to the Louisiana Motor Vehicle Commission by February first each year. If the calculated adjustment results in a fee with a fractional dollar amount of less than fifty cents, the fee shall be rounded down to the nearest whole dollar. If the calculated adjustment results in a fee with a fractional dollar amount of fifty cents or more, the fee shall be rounded up to the next whole dollar. The Louisiana Motor Vehicle Commission shall publish the adjusted maximum fee on its official website.

(b) When a seller, who may also be an extender of credit, charges a fee pursuant to this Paragraph, a written disclosure shall be provided to the consumer stating the amount of the fee collected pursuant to this Paragraph, along with the following statements in conspicuous type: "This fee is authorized by R.S. 6:969.18(A)(2). It is not a mandatory state fee. The seller, who may also be an extender of credit, may charge the fee for credit investigation, compliance with federal and state law, preparation of the documents necessary to perfect or satisfy a lien upon the objects sold, and any other functions incidental to the titling of the retail sale." The disclosure shall be printed on the bill of sale, buyer's order, or sales contract which is signed by the buyer and retained by the buyer and seller.

(3) The seller or extender of credit may additionally collect a convenience charge from the consumer, as provided by R.S. 47:532.1(A)(7)(c), for services performed in obtaining a motor vehicle license or title on the consumer's behalf.

(4) The fees provided for in this Section are not considered to be additional loan finance charges or credit service charges under this Chapter and are nonrefundable and not subject to rebate.

(5) The seller or extender of credit may charge the consumer fees and expenses for electronic lien and title services or E.L.T. services, pursuant to R.S. 32:707.2, provided in connection with a motor vehicle credit transaction.

(6) The extender of credit may charge for any fees and expenses incurred for flood determination and flood zone monitoring services in connection with the financing of a factory-built home.

(7) Notwithstanding the limitation provided for in Paragraph (1) of this Subsection or any other law to the contrary, a federally insured depository institution, its subsidiary, holding company or affiliate, that extends credit under this Chapter may contract for and receive compensation for loan documentation in any amount agreed to in a written agreement signed by the consumer.

B. A seller or extender of credit may charge the consumer a fifteen-dollar fee for notarizing acts of sale, applications for license and title, and such other documents that are required to be notarized, which fee is not considered an additional loan finance charge or credit service charge, and which fee is nonrefundable and not subject to rebate. Under no circumstances may the amount of notary fees charged in a single transaction exceed fifteen dollars in the aggregate.

C. A consumer may transfer his equity in the secured motor vehicle at any time to another person upon written agreement by the then holder of the consumer's contract, but in such event the holder shall be entitled to receive a transfer of equity fee not to exceed twenty-five dollars.

D. In connection with a motor vehicle credit transaction under which the consumer has the option to transfer title and ownership of the secured motor vehicle to the seller, the lender, or its assignee, at any time during the credit term, or at the maturity thereof, the extender of credit may permissibly contract for and receive payment of additional fees and charges payable at the time of subsequent sale or transfer, which additional fees and charges may include without limitation, disposition fees, excess wear and tear fees, and excess mileage charges.

E. To the extent not otherwise limited in amount or prohibited by this Chapter, an extender of credit may contract for and receive payment of additional fees and charges not specifically mentioned hereunder, provided that such additional fees and charges are not considered to be additional finance charges for purposes of 12 C.F.R. 226.4.

F. The seller in a consumer credit sale shall disclose to the consumer the amount and identity of each item, fee, or charge that is included in the cash price and the amount deferred under the transaction. Such disclosure shall be made in conformity with 12 C.F.R. 226.18(c)(1). Disclosures may be made either in the contract or in a separate writing.

G. Repealed by Acts 2014, No. 36, §2, eff. May 16, 2014.

Acts 1999, No. 794, §1, eff. July 2, 1999; Acts 2001, No. 877, §1; Acts 2003, No. 309, §1, eff. June 13, 2003; Acts 2004, No. 153, §1; Acts 2007, No. 131, §1, eff. June 25, 2007; Acts 2008, No. 57, §1, eff. June 5, 2008; Acts 2010, No. 65, §1, eff. June 1, 2010; Acts 2010, No. 366, §1; Acts 2010, No. 936, §1, eff. Jan. 1, 2011; Acts 2011, No. 137, §1; Acts 2014, No. 36, §§1, 2, eff. May 16, 2014; Acts 2021, No. 40, §1; Acts 2021, No. 69, §1; Acts 2024, No. 287, §1; Acts 2025, No. 502, §1, eff. July 4, 2025.

PART III PREPAYMENT OF MOTOR VEHICLE CREDIT TRANSACTIONS

§ 6:969.19 Right to prepay

Notwithstanding any contrary provision of the consumer's contract, the consumer may prepay in full the unpaid balance at any time. An extender of credit may within its discretion accept the amount tendered by the consumer to be a prepayment in full of a simple interest transaction if the amount tendered is within one dollar, or to the extent provided by federal law, more or less, of the amount actually owed. Under such circumstances, the extender of credit may retain any excess amount tendered by the consumer provided that the amount tendered does not exceed the amount actually owed by more than one dollar, or to the extent provided by federal law.

Acts 1999, No. 794, §1, eff. July 2, 1999.

§ 6:969.20 Rebates upon prepayment; prepayment charges; return of lien documents upon payment in full of the balance due

A. Upon prepayment in full of a precomputed transaction, the extender of credit shall refund unearned precomputed loan finance charges or credit service charges, and such refund shall represent at least ninety percent as great a portion of the loan finance charge or credit service charge, after first deducting from such precomputed charge a prepayment charge of not more than twenty-five dollars, as the sum of the monthly time balances beginning one month after the month in which prepayment is made, bears to the sum of all the monthly time balances under the schedule of payments in the contract. This method of rebate upon prepayment is commonly referred to as the "Rule of 78's" or the "Sum of Digits" rebate method. If more than one-half of the term of the precomputed transaction has elapsed, the rebate shall be computed without deducting a prepayment charge. For the purposes of rebate upon prepayment, deferral charges are not required to be rebated. No rebate less than one dollar, or to the extent provided for by federal law, is required.

B. An extender of credit may charge the consumer a twenty-five dollar prepayment charge upon prepayment in full of a simple interest transaction. The extender of credit must include a contractual covenant in the consumer's contract under which the consumer agrees to pay such a prepayment charge.

C.(1) There is no requirement that prepaid finance charges be rebated upon prepayment in full of a simple interest transaction, provided that all of the following conditions are satisfied:

(a) The original amount financed or amount deferred was five thousand dollars or more.

(b) The original scheduled term of the transaction was twenty-four months or longer.

(c) Other than in connection with a credit transaction involving a factory-built home, prepaid finance charges assessed under the transaction did not exceed five percent of the original amount financed or amount deferred.

(2) Where any one or more of the conditions in Paragraph (1) of this Subsection are not satisfied, prepaid finance charges shall be subject to rebate upon prepayment in full of a simple interest transaction under the same method as provided in Subsection A of this Section.

D.(1) If the lender or holder of the retail installment contract receives from the consumer or the consumer's designee payment in full in an amount in accordance with the outstanding balance information, then the lender or holder of the retail installment contract shall accept the amount as payment in full, release the lender's or the retail installment contract holder's lien against the motor vehicle, and return the title or a lien satisfaction certification no later than the fourteenth day after the date upon which payment in full is received at the location designated by the lender or holder of the retail installment loan for such payments. If the lender or holder of the retail installment loan fails to return the title to the consumer or the consumer's designee within the specified time period, then the lender or holder of the retail installment contract shall provide sufficient funds to the consumer or the consumer's designee in order to obtain a duplicate title no later than fourteen days after payment in full is received at the location designated by the lender or holder of the retail installment contract for such payments.

(2) For the purposes of this Subsection, a payment in cash or certified funds shall be deemed to be received on the date that the lender or holder of the retail installment contract receives payment. All other forms of payment shall be deemed to be received on the date that the lender or the holder of the retail installment loan receives notice that the financial institution upon which payment is drawn has honored the payment.

Acts 1999, No. 794, §1, eff. July 2, 1999; Acts 2008, No. 236, §1; Acts 2024, No. 287, §1.

§ 6:969.21 Rebate after acceleration of maturity

A. If the maturity of a precomputed transaction is accelerated for any reason and suit is filed, the obligation shall be credited with the same rebate required under R.S. 6:969.20(A) as if prepayment in full had been made as of the date the maturity of the obligation is accelerated at the creditor's election, except that any consumer credit insurance, property insurance, and other insurance coverages in force at such time shall not be rebated until payment is made in full. Thereafter, the obligation sued upon shall be deemed to bear a loan finance charge or credit service charge on the amount due at the annualized rate previously agreed to by the consumer until the transaction is paid in full.

B. If the maturity of a simple interest transaction is accelerated for any reason, the extender of credit may charge the consumer a twenty-five dollar prepayment charge as provided under R.S. 6:969.20(B).

Acts 1999, No. 794, §1, eff. July 2, 1999.

PART IV LIMITATIONS ON AGREEMENTS AND PRACTICES

§ 6:969.22 Attorney fees

A motor vehicle credit contract may provide for the payment of collection and enforcement attorney fees by the consumer in an amount not to exceed twenty-five percent of the total amount payable under the transaction.

Acts 1999, No. 794, §1, eff. July 2, 1999.

§ 6:969.23 Collection and enforcement costs and expenses

The consumer shall be obligated and responsible to reimburse the extender of credit for its out-of-pocket collection costs and expenses incurred in collecting the consumer's obligation and in enforcing the creditor's security rights against the secured motor vehicle and any other collateral. The consumer shall be further obligated and responsible to reimburse the extender of credit for such additional collection costs and expenses as may be authorized under Chapters 3 and 9 of the Louisiana Commercial Laws, R.S. 10:3-101 et seq., and R.S. 10:9-101 et seq.

Acts 1999, No. 794, §1, eff. July 2, 1999.

§ 6:969.24 Use of multiple agreements

An extender of credit shall not divide a consumer loan into multiple agreements for the purpose of obtaining a higher loan finance charge than would otherwise be permitted.

Acts 1999, No. 794, §1, eff. July 2, 1999.

§ 6:969.24.1 Acts to lessen or eliminate competition prohibited

A. Any person or any affiliates thereof, subject to the provisions of this Chapter, shall be prohibited from making statements, threats, promises, acts, contracts, or offers of contracts that the intended or actual effect of which is to coerce or attempt to coerce any seller to sell or offer to sell any extended service contract, extended maintenance plan, or GAP product offered, sold, backed, or sponsored by a particular entity, including but not limited to any manufacturer or distributor of motor vehicles or affiliates thereof, as defined in R.S. 32:1252, by setting limits for the amount financed in regard to the financing of premium or other charges for any insurance coverage, product, or service financed on the retail installment contract, when the discrimination in the amount financed limits is based, in whole or in part, upon whether or not the product, insurance, or service is provided by the person or affiliates thereof, subject to the provisions of this Chapter, or to the extent any such statements, threats, promises, acts, contracts, or offers of contracts shall lessen or eliminate competition to sell the aforementioned products.

B. Nothing contained in this Section shall prohibit a person or any affiliates thereof, subject to the provisions of this Chapter, from offering or providing incentive benefits or bonus programs to a seller or prospective seller who makes the voluntary decision to sell or offer to sell any extended service contract, extended maintenance plan, or GAP product offered, sold, backed, or sponsored by a particular entity, including but not limited to any manufacturer or distributor of motor vehicles or affiliates thereof, as defined in R.S. 32:1252, or to sell, assign, or transfer any retail installment sale or lease by him of motor vehicles manufactured or sold by the manufacturer or distributor to a specified finance company or leasing company.

Acts 2010, No. 258, §1.

§ 6:969.24.2 Mandatory sales prohibited

It shall be a violation of this Chapter for any person subject to the provisions of this Chapter to require a seller to sell any insurance coverage, product, or service, which is provided, administered, or sold by a person or any affiliates thereof, subject to the provisions of this Chapter, in order to secure preferential financing or preferential limits on the amounts financed rates for the dealership or its customers.

Acts 2010, No. 258, §1.

PART V INSURANCE

§ 6:969.25 Consumer credit insurance

A. An extender of credit may request or require a consumer to provide consumer credit insurance as additional security under the transaction. The extender of credit may also offer consumer credit insurance to the consumer for purchase on an optional basis. If the extender of credit offers consumer credit insurance for purchase on an optional basis, the creditor shall disclose to the consumer at the time of contracting his option to purchase such insurance coverage, and shall make such disclosures as are required by Regulation Z, 12 C.F.R. 226.1 et seq. The cost of consumer credit insurance, if required by the extender of credit, is deemed to be a portion of the credit service charge or loan finance charge for the purpose of computing maximum rates.

B. Consumer credit insurance may be written with respect to each individual who is an obligor or co-obligor under a motor vehicle credit transaction. The amount of credit life insurance coverage on any one obligor or co-obligor with respect to any one motor vehicle credit transaction may not exceed the total sum payable under such contract including all loan finance charges and credit service charges. Additionally, the amount of credit health and accident insurance coverage on any one obligor or co-obligor with respect to any one motor vehicle credit transaction may not exceed the total sum payable under such contract including all loan finance charges and credit service charges.

C.(1) The premium rate for declining balance credit life insurance shall not exceed eighty cents per one hundred dollars per annum.

(2) The premium rate for level term credit life insurance shall not exceed one dollar and sixty cents per one hundred dollars per annum.

(3) The premium rate for joint credit life insurance shall not exceed one dollar and twenty cents per one hundred dollars per annum.

(4) The premium rate for joint level term credit life insurance shall not exceed two dollars and forty cents per one hundred dollars per annum.

D. The premium rate for credit dismemberment insurance shall not exceed twenty-five cents per one hundred dollars per annum.

E.(1) No policy of credit health and accident insurance may be issued pursuant to a motor vehicle credit transaction other than seven-day, fourteen-day, or thirty-day retroactive health and accident insurance.

(2) The premium rates for retroactive credit accident and health insurance issued pursuant to a motor vehicle credit transaction shall not exceed the rates set forth in the following schedule:

Amount per $100.00

7-Day

14-Day

30-Day

Months

Retro

Retro

Retro

0 - 6

$1.75

$1.10

$ .85

more than 6 through 12

3.50

2.20

1.70

more than 12 through 24

4.30

3.00

2.50

more than 24 through 36

5.10

3.80

3.30

more than 36 through 48

5.60

4.60

4.10

more than 48 through 60

6.00

5.40

4.90

more than 60 through 72

6.80

6.20

5.70

more than 72 through 84

7.60

7.00

6.50

more than 84 through 96

8.40

7.80

7.30

more than 96 through 108

9.20

8.60

8.10

more than 108 through 120

10.00

9.40

8.90

F. Notwithstanding any other provision of law to the contrary, an extender of credit may offer any insurance authorized by the Louisiana Insurance Code in connection with any extension of credit subject to this Chapter.

Acts 1999, No. 794, §1, eff. July 2, 1999.

§ 6:969.26 Property insurance

A. An extender of credit may, in addition, request or require a consumer to insure the secured motor vehicle and its use and operation, and any additional collateral securing the transaction, and include the cost of the insurance as a separate charge in the consumer's contract. This insurance and the premiums or charges thereon shall bear a reasonable relationship to the amount, term, and conditions of credit, and to the existing hazards or risk of loss, damage, or destruction. This insurance and the premiums or charges thereon shall also bear a reasonable relationship to the value of the motor vehicle and other collateral insured or to be insured, when, in the event of loss, such insurance policy does not pay off the entire balance of the transaction.

B. When a consumer fails to maintain required property insurance or fails to provide the extender of credit with timely notice of the purchase or renewal of such insurance coverage, the extender of credit may, after notice to the consumer and expiration of a fifteen-day curative period from the mailing of said notice, purchase insurance on the customer's property, including insurance protecting only the creditor's interest in such property. Such insurance premiums may be added to the outstanding balance of the customer's contract and made subject to additional loan finance charges or credit service charges at the rate previously agreed to by the consumer.

C. Every seller or lender who obtains or provides insurance to a consumer to ensure a motor vehicle subject to a motor vehicle credit transaction shall inform the consumer in writing, at the time the seller or lender agrees to obtain or provide insurance, as to whether or not such insurance, by itself, satisfies the requirements of R.S. 32:851 et seq. When the insurance, by itself, does not satisfy the requirements of R.S. 32:851 et seq., the seller or lender shall advise the consumer that all motorists are required by law to be covered by an automobile liability policy with a legally prescribed liability limit which exceeds the liability limits of the policy provided, and further that failure to meet those limits will subject the consumer to penalties which may include the suspension or revocation of driving privileges.

D.(1) The seller shall and the lender may, in addition, offer the consumer the option of voluntarily purchasing gap coverage protecting the consumer from possible liability as a result of the consumer's property insurance being insufficient to fully pay and satisfy the then unpaid balance under the consumer's contract as a result of a total loss of vehicle. The cost of gap coverage may be financed under the transaction and made subject to loan finance charges or credit service charges, as applicable.

(2) Notwithstanding any other provision of law to the contrary, for purposes of this Subsection, a federally insured depository institution at all times, including during a repossession, shall be considered a lender.

Acts 1999, No. 794, §1, eff. July 2, 1999; Acts 2001, No. 1211, §1; Acts 2001, No. 1213, §1; Acts 2003, No. 415, §1.

§ 6:969.27 Existing insurance

When consumer credit insurance is required in connection with a motor vehicle credit transaction, the extender of credit shall furnish the consumer a statement which shall clearly and conspicuously state that consumer credit insurance is required and that the consumer shall have the option of furnishing the required insurance either through existing policies of insurance coverages or through any insurance company authorized to transact business in Louisiana.

Acts 1999, No. 794, §1, eff. July 2, 1999.

§ 6:969.28 Limitations on insurance rates; contract requirements

Any insurance provided, sold, or obtained through an extender of credit shall be written at lawful rates and in accordance with the provisions of the Louisiana Insurance Code by a company authorized to do business in this state which is not under a court-ordered rehabilitation, conservation, liquidation, or dissolution; however, such insurance may be written in accordance with R.S. 22:432 through 444 if the provisions thereof are applicable. Any extender of credit that writes insurance in compliance with the preceding requirements shall not be liable to any insured as a result of the insurer's inability to pay any claim to an insured due to insolvency, or pursuant to any court-ordered rehabilitation, conservation, liquidation, or dissolution. The contract or agreement must briefly indicate the kind, coverage, term, and amount of premium of such insurance.

Acts 1999, No. 794, §1, eff. July 2, 1999; Acts 2008, No. 415, §2, eff. Jan. 1, 2009.

§ 6:969.29 Choice of insurer

The consumer shall have the privilege at the time of execution of the contract of purchasing any required or requested insurance from an agent or broker of his own selection and of selecting an insurance company acceptable to the extender of credit but, in such cases, the inclusion of the insurance premium in the contract shall be optional with the extender of credit. However, any licensed admitted property and casualty insurer possessing a valid certificate of authority to transact property and liability insurance coverage in the state of Louisiana shall be deemed to be an acceptable insurer for the provisions of this Chapter. The extender of credit may refuse any otherwise acceptable insurer which is under court-ordered rehabilitation, conservation, liquidation, or dissolution.

Acts 1999, No. 794, §1, eff. July 2, 1999.

§ 6:969.30 Conditions applying to insurance provided by the extender of credit

If an extender of credit agrees with a consumer to obtain or provide insurance, the insurance shall either be evidenced by an individual policy or certificate of insurance delivered to the consumer, or sent to him at his address as stated by him, within forty-five days after the term of the insurance commences or the extender of credit shall promptly notify the consumer of any failure or delay in providing or obtaining the insurance, individual policy, or certificate of insurance.

Acts 1999, No. 794, §1, eff. July 2, 1999.

§ 6:969.31 Cancellation of insurance; refund or credit upon cancellation

A. When a motor vehicle credit transaction is paid in full for any reason, the insurance paid by the consumer and provided, sold, or obtained through the seller or extender of credit in connection therewith shall be canceled; however, this provision shall not apply to insurance which is the subject of a specific written request by the consumer requesting that such insurance remain in force beyond the provision of this Section.

B. When insurance paid by the consumer is terminated for any reason, the refund for unearned insurance premiums received by the extender of credit shall, at the creditor's option, be applied toward payment of the premium for insurance to replace the coverage canceled, adjusted, or terminated, or toward payment of the unpaid balance of the motor vehicle credit transaction. The order of applying said unearned premium shall be inverse to the order in which the installments of the motor vehicle credit transaction are payable according to its terms, beginning with the installment due on the final due dates and not to the next ensuing installment which shall remain payable as originally scheduled. The remaining balance of unearned insurance premiums, if any, shall be refunded to the consumer; however, no cash refund shall be required if the amount thereof is less than one dollar or to the extent provided for by federal law.

Acts 1999, No. 794, §1, eff. July 2, 1999.

§ 6:969.32 Gain from insurance

Any gain or advantage to the seller or extender of credit, or any employee, officer, director, agent, general agent, affiliate, or associate, from such insurance or its provisions or sale shall not be considered as a further charge nor a further credit service charge or loan finance charge in violation of this Chapter.

Acts 1999, No. 794, §1, eff. July 2, 1999.

PART VI VIOLATIONS

§ 6:969.33 Effect of violations on rights of parties

A.(1)(a) If the court finds that the extender of credit has intentionally or as a result of error not in good faith violated the provisions of Part II of this Chapter regulating loan finance charges, credit service charges, and other fees and charges, the affected consumer is entitled to a refund of all loan finance charges or credit service charges and has the right to recover three times the amount of such loan finance charge or credit service charge together with reasonable attorney fees.

(b) The right to recover the civil penalty under this Subsection accrues only after all of the following have occurred:

(i) The affected consumer or his representative delivers written notice to the extender of credit by certified mail addressed to the extender of credit's place of business in which the motor vehicle credit transaction arose.

(ii) A copy of such notice is mailed to the extender of credit's agent for service of process.

(iii) Thirty days have elapsed since receipt of such notice by the extender of credit and the violation has not been corrected.

(c) Except as otherwise provided herein, if the notices provided for in Subparagraph (b) of this Paragraph have been given by the consumer, the extender of credit shall be presumed to have committed an intentional violation or a violation not resulting from good faith error if the extension of credit fails to return or give credit for an overcharge in the loan finance charge or credit service charge or, fails to return a deficiency in the rebate within the time period set forth in Item (b)(iii) of this Paragraph, provided that such overcharge or deficiency exceeds the greater of either ten percent of such loan finance charge, credit service charge, or rebate or fifteen dollars.

(d) If the extender of credit fails to return or give credit for an overcharge or deficiency as provided in Subparagraph (c) of this Paragraph, in addition to the penalties in Subparagraph (a) of this Paragraph, the consumer executing the motor vehicle credit transaction and giving the required notices shall be entitled to collect from the extender of credit up to one hundred dollars of his actual documented out-of-pocket expenses incurred as a direct result of such failure to act.

(e) In the case of multiple violations involving an overcharge in the loan finance charge, credit service charge, or rebate of the size described in Subparagraph (c) of this Paragraph, the extender of credit must notify the commission of the existence of such multiple violation and must give the commission a reasonable description of such multiple violation within thirty days after the receipt of the written notice from the complaining consumer, and the extender of credit must correct such multiple violation as to each consumer affected thereby within thirty days of the receipt of the written notice from the complaining consumer. Upon good cause shown, the commission may grant up to two thirty-day extensions within which the extender of credit must correct the violation. If the extender of credit fails to give the commission the required notice or fails to correct such multiple violation as required herein, then from such failure it shall be presumed that such multiple violation was intentional or not in good faith.

(2)(a) If a violation of Part II of this Chapter is not intentional or is made in good faith on the part of the extender of credit, or if the consumer violates any other provision of this Chapter, the court may require the extender of credit to correct the violation, but the consumer is not entitled to the civil remedies granted by this Section.

(b) If a complaining consumer gives the extender of credit the written notice required by Items (1)(b)(i) and (ii) of this Subsection of an alleged violation of the provisions of this Chapter, although such violation was unintentional or resulted from good faith error or did not in fact exist, the extender of credit must give the complaining consumer a reasonable response to the complaint in writing within thirty days of the receipt of written notice from the individual complaining consumer. If the extender of credit fails to give such response timely, the complaining consumer shall be entitled to collect from the extender of credit up to one hundred dollars of his actual documented out-of-pocket expenses incurred as a direct result of the failure of the extender of credit to comply with the provisions hereof.

B. An extender of credit has no liability for the civil remedies granted by this Section, including without limitation any liability for payment of fees to the consumer's attorney, whether under this Chapter or under any other law of the state, in all instances and, whether intentional or resulting from good faith error or not, if within sixty days after discovering a violation, or within thirty days following receipt of notice from the consumer, the extender of credit corrects the violation. If the violation consists of a prohibited agreement, giving the consumer a corrected copy of the contract containing the violation is sufficient correction. If the violation consists of an excess charge, correction shall be made by an adjustment or refund.

C.(1) Except as otherwise provided herein, any written notice required in this Section may be mailed by registered, certified, first class, or air mail at the sender's option. Proof of receipt by the extender of credit may consist of a return receipt executed by an employee of the extender of credit. Proof of receipt by the consumer may be a return receipt executed by the consumer. Proof of mailing any written notice may be a postmarked registered mail receipt, a postmarked certified mail receipt, or a post office certificate of mailing. Each written notice required by Subparagraph (A)(1)(b) of this Section shall identify the individual contract at issue, the name of the extender of credit, and the name of the individual consumer, and shall include the date and a reasonable description of the alleged violation.

(2) In any case where the extender of credit must respond in writing to a complaining consumer, the written notice or other required written response shall be mailed to the last address contained in the extender of credit's file on that consumer, unless the consumer specifies a different address in his written notice sent to the extender of credit.

D. Any civil action under this Section must be brought within one year of the date of the violation. Motor vehicle credit contracts may include compulsory arbitration clauses.

E. As used in this Section, the following terms shall have these meanings:

(1) "Civil remedies" means civil penalties, attorney fees, and out-of-pocket expenses.

(2) "Good faith error" means errors of law as well as errors of fact.

(3) "Multiple violation" means a violation which has recurred more than one hundred times as a result of a common error.

F. Attorney fees shall be measured by the time reasonably expended by the consumer's attorney and not by the amount of recovery.

G. The remedies provided in this Section shall be exclusive and shall apply prospectively to all motor vehicle credit transactions consummated on and after July 1, 1999.

Acts 1999, No. 794, §1, eff. July 2, 1999.

§ 6:969.34 Guidance by commission; advisory opinions

Any action taken by an extender of credit pursuant to any rulings or interpretive opinions made by the commission or made by its officers or attorneys shall not be deemed to be a violation of this Chapter. Advisory opinions and interpretations of the commission or its employees and attorneys shall not be considered rules requiring compliance with the rulemaking process under the Administrative Procedure Act. The commission or its employees and attorneys shall have no liability to any person with respect to the issuance of a ruling or interpretive opinion made under this Section.

Acts 1999, No. 794, §1, eff. July 2, 1999.

PART VII LICENSING PROVISIONS

§ 6:969.35 Authority to make consumer loans; assignees; authority to issue debt waiver or debt forgiveness agreements

A.(1) Unless a person has first obtained a license from the commission or is exempt from licensing under R.S. 6:969.36, he shall not engage in the business of making consumer loans or the origination of consumer credit sales subject to this Chapter.

(2) Unless a person has first obtained a license from the commission, or is a supervised financial organization, he shall not engage in business as an administrator or as a salesman or agent involving debt waiver or debt forgiveness agreements.

B. An assignee may not take assignments of and undertake direct collection of payments from or enforce rights against consumers under a consumer loan or consumer credit sale subject to this Chapter without first having obtained a license from the commission. An assignee may, however, collect and enforce consumer obligations of which it has taken assignment for three months without a license if the assignee notifies the commission in writing, the assignee promptly applies for a license, and the application is not rejected.

C. There is no requirement that a licensee have one or more offices in this state.

D. Any person violating this Section may be fined one thousand dollars for each contract originated or purchased or for each debt waiver or debt forgiveness agreement issued or guaranteed without that person being properly licensed. The fine shall be payable to the commission.

Acts 1999, No. 794, §1, eff. July 2, 1999; Acts 2005, No. 255, §1; Acts 2010, No. 374, §1.

§ 6:969.36 License not required

A. All of the following shall be exempt from the licensing requirements of this Chapter:

(1) Supervised financial organizations.

(2) Trusts and trustees, including without limitation securitization trusts and trustees.

(3) Assignees with no offices in this state holding motor vehicle contracts on an interim basis for a period of ninety days or less.

(4) Governmental agencies, instrumentalities, or public entities organized by Act of Congress or the Legislature of Louisiana.

(5) Qualified pension plans when entering into an extension of credit to a plan participant.

(6) Bona fide pledgees of motor vehicle credit contracts.

(7) Persons holding motor vehicle contracts for servicing or collection on behalf of the actual owner of such obligations.

(8) Licensed motor vehicle dealers to the extent that they regularly sell, assign, and transfer contracts originated by them to third party assignees within sixty days following origination. A licensed motor vehicle dealer may retain at any one time, and from time to time thereafter, a maximum of twelve contracts for its own account without being subject to the licensing requirements of this Chapter.

B. The commission is authorized to waive the licensing and examination requirements for a subsidiary of an entity as described in Paragraph (A)(1) of this Section.

Acts 1999, No. 794, §1, eff. July 2, 1999; Acts 2007, No. 131, §1, eff. June 25, 2007.

§ 6:969.37 Licensing procedures

A.(1) The application for a license under this Chapter shall be in writing, under oath, and in the form prescribed by the commission. The application shall contain: (a) the name of the applicant; (b) date of incorporation or organization; (c) the address of all offices from which consumer loans are originated; (d) the name and resident address of the owners, members, or partners or, if a corporation or association, of the directors and principal officers; and (e) such other pertinent information as the commission may require to make an evaluation of the applicant.

(2) As part of the pertinent information considered, the commission shall consider information relative to all of the following:

(a) Financial standing and business integrity of the applicant.

(b) Ability of the applicant to conduct properly the business for which a license is sought.

(c) Adequacy of the applicant's established place of business for the purpose for which a license is sought.

(d) Effect on the motor vehicle finance business and the consuming public in the community or territory and state of Louisiana.

B. No license shall be issued unless the commission, upon investigation, finds that the applicant, and the partners or members thereof if the applicant is a partnership or limited liability company, and of the officers and directors thereof if the applicant is a corporation, are such as to warrant a reasonable belief that the business will be operated honestly and fairly within the purposes of this Chapter.

C.(1) The applicant shall be entitled to a hearing on the question of his qualifications for a license if the applicant requests such in writing to the commission and either of the following have occurred:

(a) The applicant has received notification from the commission that his application has been denied; or

(b) The commission has not issued the applicant a license and it has been sixty days since the date that the application for the license was filed with the commission.

(2) A request for a hearing based on the denial of an application must be received by the commission, in writing, within fifteen days of the date that the commission mailed the denial notice to the applicant.

(3) The denial notice from the commission to the applicant shall be in writing and shall state, in substance, the commission's findings supporting the denial of the application. Such notice shall be sent by certified mail, return receipt requested, to the primary business address on the application.

D.(1) The license fee for every licensed lender subject to this Chapter for each calendar year or part thereof shall be the sum of four hundred dollars for the principal place of business of the licensee and the sum of four hundred dollars for each branch of the licensee maintained in this state. If a lender makes direct consumer loans to consumers at a seller location, that location is not deemed to be a branch office of the lender.

(2) The license fee for every administrator for each calendar year or part thereof shall be fixed by the commission and shall not exceed fifteen hundred dollars.

(3) The license fee for every salesman or agent for each calendar year or part thereof shall be fixed by the commission and shall not exceed seventy-five dollars.

E. License fees shall be in addition to other fees and taxes paid by the licensee. All license fees collected under the provisions of this Chapter shall be paid to the commission and shall be used for administration of this Chapter by the commission. The commission is authorized to employ personnel necessary for administration under this Chapter.

F. Each license shall specify the location of the licensee's office or branch and, if that office or branch is located within this state, the license must be conspicuously displayed there. In case such location is changed, the commission shall endorse the change of location on the license without charge.

G. Upon approval of such application and the payment of such fee, the commission shall issue a license to the applicant to engage in the origination of consumer loans or the purchase of motor vehicle credit contracts, notes, and agreements by assignment, or issue a license to sell or administer debt waiver and debt forgiveness agreements under and in accordance with the provisions of this Chapter for a period which shall expire the last day of December following the date of issuance. Such license shall not be transferable or assignable. No licensee shall transact any business provided for by this Chapter under any other name.

H. All foreign corporations, limited partnerships, and limited liability companies seeking to maintain a license under the provisions of this Chapter shall be registered to do business in this state with the secretary of state. Evidence showing such registration shall be furnished by applicant or licensee upon request by the commission.

Acts 1999, No. 794, §1, eff. July 2, 1999; Acts 2003, No. 340, §1; Acts 2004, No. 910, §1; Acts 2005, No. 255, §1; Acts 2006, No. 785, §1.

§ 6:969.38 Denial, suspension, or revocation of licenses

A. Renewal of a license originally granted under this Chapter may be denied or a license may be suspended or revoked by the commission for any of the following grounds:

(1) Material misstatements in the application for a license.

(2) Failure to comply with any provision of this Chapter.

(3) Defrauding any borrower to the borrower's damage.

(4) Fraudulent misrepresentation, circumvention, or concealment by the licensee through whatever subterfuge or device of any of the material particulars or the nature thereof required to be stated or furnished to the borrower under this Chapter.

B. If the licensee is a partnership, limited liability company, or corporation, it shall be sufficient cause for the suspension or revocation of a license that any partner, member, officer, director, or employee of the licensee has so acted or failed to act as would be cause for suspending or revoking a license to such party as an individual. Each licensee shall be responsible for the acts of any and all of its employees while acting as its agent.

C.(1) No license shall be denied, suspended, or revoked except after hearing thereon. The commission shall give the licensee at least thirty days written notice, in the form of an order to show cause, of the time and place of such hearing by certified mail addressed to the principal place of business in the state of such licensee. The said notice shall contain the grounds of complaint against the licensee.

(2) Any order suspending or revoking such license shall recite the grounds upon which the same is based. The order shall be entered upon the records of the commission and shall not be effective until after thirty days written notice thereof given after such entry forwarded by certified mail to the licensee at such principal place of business.

(3) No revocation, suspension, or surrender of any license shall impair or affect the obligation under any motor vehicle credit contract or agreement entered into or acquired previously thereto by the licensee.

D. Within thirty days after such denial, suspension, or revocation of a license, the licensee may apply for a review thereof by application to the district court for the parish of Jefferson in accordance with the Administrative Procedure Act.

Acts 1999, No. 794, §1, eff. July 2, 1999; Acts 2006, No. 785, §1.

§ 6:969.39 Investigations and complaints

A. The commission, if it has reason to believe that any licensee or any other person has violated any of the provisions of this Chapter, shall have the power to make such investigations as it shall deem necessary and, to the extent necessary for this purpose, the commission may examine such licensee or any other person and shall have the power to compel the production of all relevant books, records, accounts, and documents.

B. Any borrower having reason to believe that this Chapter has been violated may file with the commission a written complaint setting forth the details of such alleged violation. The commission, upon receipt of such complaint, may inspect the pertinent books, records, letters of the lender and of the borrower involved relating to such specific written complaint.

Acts 1999, No. 794, §1, eff. July 2, 1999; Acts 2006, No. 785, §1.

§ 6:969.40 Powers of commission

A. The commission shall have the power to issue subpoenas to compel the attendance of witnesses and the production of documents, papers, books, records, and other evidence before it in any matter over which it has jurisdiction, control, or supervision pertaining to this Chapter. The commission shall have the power to administer oaths and affirmations to any person whose testimony is required.

B. If any person shall refuse to obey any such subpoena, to give testimony, or to produce evidence as required thereby, any judge of the district court for the parish of Jefferson may, upon application and proof of such refusal, make an order awarding process of subpoena or subpoena duces tecum out of the district court for the witness to appear before the commission and to give testimony and to produce evidence as required thereby. Upon filing such order in the office of the clerk of the district court, the clerk shall issue process of subpoena, as directed under the seal of said court requiring the person to whom it is directed, to appear at the time and place therein designated.

C. If any person served with any such subpoena shall refuse to obey the same and to give testimony and to produce evidence as required thereby, the commission may apply to any judge of the district court for an attachment against such person, as for contempt. The judge, upon satisfactory proof of such refusal, shall issue an attachment, directed to any sheriff, constable, or police officer, for the arrest of such person and, upon his being brought before such judge, proceed to a hearing of the case. The judge shall have the power to enforce obedience to such subpoena, the answering of any question, and the production of any evidence that may be proper, by a fine not exceeding one hundred dollars, by imprisonment, or by both fine and imprisonment, and to compel such witness to pay the costs of such proceeding to be taxed.

D. The commission is hereby vested with the powers and duties necessary and proper to enable it to fully and effectively carry out the provisions and objects of this Chapter, including without limitation the imposition of fines and penalties against persons violating this Chapter and is hereby authorized and empowered to make and enforce all reasonable rules and regulations and to adopt and prescribe all forms necessary to accomplish said purpose, and the enumeration of any power or authority herein shall not be construed to deny, impair, disparage, or limit any others necessary to the attainment thereof. A copy of all rules and regulations adopted by the commission shall be published and recorded in the manner prescribed by law and may be amended, modified, or repealed from time to time.

E. The chairman and members of the commission shall receive fifty dollars per diem for each and every day actually and necessarily spent in attending to the business of the commission with respect to administration, regulation, and enforcement of this Chapter and shall be reimbursed for actual expenses incurred in performance of the duties provided for in this Section.

Acts 1999, No. 794, §1, eff. July 2, 1999; Acts 2006, No. 785, §1.

§ 6:969.41 Fines imposed by the commission

A. Any person who willfully violates any provision of this Chapter shall be subject to a fine by the commission in an amount not to exceed five thousand dollars per violation.

B. The commission may render judgment for costs, or any part thereof, against any party to proceedings held or scheduled to be held before the commission as it may consider equitable. These costs shall include but shall not be limited to court reporter fees, commission attorney fees, the mileage and per diem of the commission, and other applicable reasonable costs.

C. Any person who is required to be licensed under this Chapter and who fails to timely obtain a license as herein provided may be ordered by the commission to pay a penalty of one hundred dollars in addition to the regular license fee herein provided.

Acts 1999, No. 794, §1, eff. July 2, 1999; Acts 2006, No. 785, §1.

§ 6:969.42 Venue for litigation or arbitration; choice of law

A. A provision contained in any document relating to a motor vehicle credit transaction or debt waiver or debt forgiveness agreement that was entered into in the state of Louisiana requiring that litigation or arbitration be conducted outside of this state is void and unenforceable.

B. Except as to a supervised financial organization, a provision contained in any document relating to a motor vehicle credit transaction or debt waiver or debt forgiveness agreement that was entered into in the state of Louisiana that seeks to apply any law other than Louisiana law to a dispute between the parties to such transaction is void and unenforceable.

Acts 2007, No. 131, §1, eff. June 25, 2007; Acts 2010, No. 374, §1.

PART VIII GAP COVERAGE

§ 6:969.51 GAP coverage; requirements

A. Debt waiver or debt forgiveness agreements may be offered, sold, or provided to consumers in this state in compliance with this Chapter.

B. Debt waiver or debt forgiveness agreements shall be sold for a single premium.

C. Notwithstanding any other provision of law to the contrary, any cost to a consumer for a debt waiver or debt forgiveness agreement entered into in compliance with The Truth in Lending Act, 15 U.S.C. 1601 et seq., and its implementing regulations, as they may be amended from time to time, shall be separately stated and shall not be considered a finance charge or interest.

D. A seller shall insure its debt waiver or debt forgiveness agreement's obligations under a contractual liability or other insurance policy issued by an insurer. A lender, other than a seller, may insure its debt waiver or debt forgiveness agreement's obligations under a contractual liability policy or other such policy issued by an insurer. Any such insurance policy may be directly obtained by a lender, seller, or may be procured by an administrator to cover a lender's or seller's obligations; however, sellers that are lessors on motor vehicles shall not be required to insure obligations related to debt waiver or debt forgiveness agreements on such leased vehicles.

E. The debt waiver or debt forgiveness agreement remains a part of the contract upon the assignment, sale, or transfer of such contract by the seller or lender.

F. Neither the extension of credit, the term of credit, nor the term of the related motor vehicle sale or lease may be conditioned upon the purchase of a debt waiver or debt forgiveness agreement.

G. Any seller or lender that offers a debt waiver or debt forgiveness agreement shall report the sale of, and forward funds received on, all such waivers to the designated party, if any, as prescribed in any applicable administrative services agreement, contractual liability policy, other insurance policy, or other specified program documents.

Acts 2006, No. 280, §1; Acts 2010, No. 374, §1.

§ 6:969.52 Liability; contractual or insurance policies

A. Contractual liability or other insurance policies insuring debt waiver or debt forgiveness agreements shall state the obligation of the insurer to reimburse or pay to the creditor any sums the lender is legally obligated to waive under the debt waiver or debt forgiveness agreement issued by the seller or lender and purchased or held by the consumer.

B. Coverage under a contractual liability or other insurance policy insuring a debt waiver or debt forgiveness agreement shall also cover any subsequent assignee upon the assignment, sale, or transfer of the contract.

C. Coverage under a contractual liability or other insurance policy insuring a debt waiver or debt forgiveness agreement shall remain in effect unless cancelled or terminated in compliance with applicable insurance laws of this state.

D. The cancellation or termination of a contractual liability or other insurance policy shall not reduce the insurer's responsibility for debt waiver or debt forgiveness agreements issued by the seller or lender prior to the date of cancellation or termination and for which premium has been received by the insurer.

Acts 2010, No. 374, §1.

§ 6:969.53 Cancellation

A. Debt waiver or debt forgiveness agreements may be cancelled. Debt waiver or debt forgiveness agreements shall provide that if a consumer cancels a waiver within the "free-look period", the consumer shall be entitled to a full refund of the purchase price, so long as no benefits have been provided; or in the event benefits have been provided, the consumer may receive a full or partial refund pursuant to the terms of the waiver.

B. In the event of a consumer cancellation of the debt waiver or debt forgiveness agreement or early termination of the contract, after the agreement has been in effect beyond the "free-look period", the consumer is entitled to a refund of any unearned portion of the purchase price of the waiver on terms no less favorable to the consumer than the method of refund commonly known as the "Rule of 78s" or the "sum of digits" refund method. In order to receive a refund, the consumer, in accordance with any applicable terms of the waiver, shall provide a written request to the lender, administrator, or other party.

C. If the cancellation of a debt waiver or debt forgiveness agreement occurs as a result of a default under the contract or the repossession of the motor vehicle associated with the contract, or any other termination of the contract, any refund due may be paid directly to the lender or administrator and applied as set forth in Subsection D of this Section.

D. Any cancellation refund under the provisions of this Section may be applied by the lender as a reduction of the amount owed under the contract, unless the consumer can show that the contract has been paid in full.

E. No consumer shall be charged a cancellation fee.

Acts 2010, No. 374, §1.

§ 6:969.54 Disclosures

Debt waiver or debt forgiveness agreements shall disclose, as applicable, in writing and in clear, understandable language that is easy to read, the following:

(1) The name and address of the initial lender and the consumer at the time of sale and the identity and address of any administrator if different from the lender.

(2) The purchase price and the terms of the debt waiver or debt forgiveness agreement, including without limitation, the requirements for protection, conditions, or exclusions with the debt waiver or debt forgiveness agreement.

(3) A clear statement in the debt waiver or debt forgiveness agreement given to the consumer that by its acceptance as an amendment to the contract upon assignment, the lender agrees to waive the consumer's liability for the difference between the amount owed, excluding past due amounts, payment extensions, insurance, prior unrepaired damage for which the consumer has been paid by an insurer, or other charges, under the consumer's contract and the amount paid by the consumer's primary insurer after a vehicle is deemed a total loss from a peril covered by the consumer's primary insurance company or if there is no primary insurance on the date of loss, the actual cash value of the motor vehicle at the time of loss as determined by an established value guide.

(4) That the consumer may cancel the debt waiver or debt forgiveness agreement within a "free-look period" as specified in the waiver, and shall be entitled to a full refund of the purchase price, so long as no benefits have been provided; or in the event benefits have been provided, the consumer may receive a full or partial refund of the premium paid pursuant to the terms of the waiver.

(5) The procedure the consumer shall follow, if any, to obtain debt waiver or debt forgiveness agreement benefits under the terms and conditions of the waiver, including a telephone number and address where the consumer may apply for waiver benefits.

(6) That in order to receive any refund due in the event of a debt waiver or debt forgiveness agreements's cancellation of the debt waiver or debt forgiveness agreements or early termination of the contract after the "free-look period" of the debt waiver or debt forgiveness waiver, the consumer, in accordance with terms of the waiver, shall provide a written request to cancel to the lender, administrator, or such other party, within ninety days of the occurrence of the event terminating the contract.

(7) Any refund of the unearned purchase price of the debt waiver or debt forgiveness agreement due, in the event of cancellation of the debt waiver or debt forgiveness agreement or early termination of the contract, shall be on terms no less favorable to the consumer than the method of refund commonly known as the "Rule of 78s" or the "sum of digits" refund method.

(8) That neither the extension of credit, the terms of the credit, nor the terms of the related motor vehicle sale or lease, may be conditioned upon the purchase of the debt waiver or debt forgiveness agreements.

Acts 2010, No. 374, §1.

CHAPTER 11 EXTRAORDINARY ACQUISITIONS OF FINANCIAL INSTITUTIONS

§ 6:970 Purchase, merger, or consolidation of impaired financial institutions

Notwithstanding any other provisions of this Title, whenever a conservatorship of a state bank has been commenced pursuant to R.S. 6:381 et seq., when the commissioner has taken possession of a savings and loan association pursuant to R.S. 6:872 et seq., or when the commissioner has placed a credit union in involuntary liquidation pursuant to R.S. 6:646 et seq., the commissioner may approve the sale of assets and assumption of liabilities, merger, or consolidation of the impaired financial institution to or with another financial institution. Before authorizing the proposed purchase, merger, or consolidation, the commissioner shall examine the qualifications, responsibility, and standing of the prospective purchase, merger, or consolidation candidate. He shall refuse to authorize the transaction if he finds that the public interest will not be served.

Acts 1985, No. 107, §1; Acts 1993, No. 457, §1, eff. Jan. 1, 1994.

§ 6:971 Approval of transaction; priorities

A. In considering transactions under this Chapter, the commissioner shall consider the need to minimize disruption in providing banking services to the citizens of Louisiana, and the need to preserve the strength and soundness of the banking system. The commissioner shall authorize transactions under this Chapter considering the following priorities in this order:

(1) Between financial institutions of the same type within the same parish.

(2) Between financial institutions of the same type anywhere within the state.

(3) Between financial institutions of different types within the same parish.

(4) Between financial institutions of different types anywhere within the state.

B. In considering transactions between financial institutions in different parishes, the commissioner shall give priority to prospective purchasers, merger, or consolidation candidates from adjoining parishes.

Acts 1985, No. 107, §1.

§ 6:972 Retention of branches

Any financial institution created by operation of this Chapter may retain and operate any existing branch or branches of the financial institution merged with or acquired under the provisions of R.S. 6:971. Such financial institution, however, shall be subject to the conditions upon which it may establish and operate branches within the state.

Acts 1985, No. 107, §1.

§ 6:973 Prohibited insurance activities

If a bank or bank holding company acquires a savings and loan association, the surviving financial institution or bank holding company and its subsidiaries shall not engage in any insurance activity except an insurance activity authorized by R.S. 6:242.

Acts 1985, No. 107, §1; Acts 1997, No. 1475, §1, eff. July 15, 1997.

§ 6:974 Acquisition of state bank in impaired condition

A. Notwithstanding any other provisions of this Title, upon a determination by the commissioner of financial institutions that a state bank is in such an impaired condition that it may fail, the commissioner may approve the sale of assets and assumption of liabilities, merger, or consolidation of the failing state bank or its holding company, if any, by another bank or a bank holding company domiciled in this state. In considering transactions under this Section, the commissioner shall consider the need to minimize disruption in providing banking services to the citizens of Louisiana and the need to preserve the strength and soundness of the banking system.

B. The commissioner may authorize purchases, mergers, or consolidations under this Section considering the following priorities in the following order:

(1) Between entities domiciled in the same parish;

(2) Between entities domiciled in adjoining parishes;

(3) Between entities domiciled in any parish of the state.

C. For the purposes of this Section and no other, the commissioner may determine that a state bank is a failing bank if all the following exist:

(1) It has an adjusted capital to assets ratio of less than four percent, according to the latest examination by the office of financial institutions or the Federal Deposit Insurance Corporation.

(2) It is the conclusion of the commissioner that the bank has major and serious problems or unsafe and unsound conditions which are not being satisfactorily addressed or resolved.

(3) It is the conclusion of the commissioner that the bank has a high potential for failure, although failure is not necessarily imminent.

D. Upon an acquisition of a failing bank as authorized by this Section, the acquiring or surviving entity may do any of the following:

(1) Retain and operate as a branch bank any existing office of the acquired bank.

(2) Be authorized to apply for additional branches in the parish of domicile of the acquired bank.

(3) Merge the acquired bank with a bank subsidiary of the acquirer or itself, if it is a bank at any time following the acquisition. After such a merger, the surviving bank may utilize Paragraphs (1) and (2) of this Subsection.

E. Nothing contained herein shall be construed to alter, amend, or repeal the provisions of R.S. 6:351 et seq., or of R.S. 6:517, or of Part I of Chapter 6 of this Title, R.S. 6:501, et seq.

Acts 1986, No. 975, §1, eff. July 14, 1986; Acts 1986, No. 197, §1.

§ 6:975 §§975, 976 Repealed by Acts 1972, No. 454, §3, eff. Jan. 1, 1973.

§§975, 976 Repealed by Acts 1972, No. 454, §3, eff. Jan. 1, 1973.

CHAPTER 12 CURRENCY EXCHANGE SERVICES

§ 6:1001 Title

This Chapter shall be known and may be cited as the "Louisiana Check-Cashing Law".

Acts 1999, No. 1208, §1, eff. July 9, 1999.

§ 6:1002 Definitions

For the purposes of this Chapter:

(1)(a) "Check-casher" means an individual, partnership, unincorporated association, or corporation that, for compensation, engages, in whole or in part, in the business of cashing checks, drafts, money orders, or other commercial paper serving the same purpose.

(b) "Check-casher" does not mean either one of the following:

(i) An individual, partnership, unincorporated association, or corporation that charges no fee to the presenter or payor for the cashing of a check, draft, money order, or traveler's check.

(ii) An individual, partnership, unincorporated association, or corporation that cashes a check, draft, money order, or traveler's check, or other commercial paper if the fee charged does not exceed two dollars and the currency exchange is incidental to the person's primary business.

(2) "Commissioner" means the commissioner of financial institutions.

(3) "Currency exchange" means the cashing of checks, drafts, money orders, or traveler's checks, or other commercial paper serving the same purpose by a check-casher.

(4) "Licensee" means a check-casher licensed by the commissioner to engage in business in accordance with this Chapter.

Acts 1999, No. 1208, §1, eff. July 9, 1999; Acts 2000, 1st Ex. Sess., No. 31, §1.

§ 6:1003 License; certificates

Beginning January 1, 2000, a person engaging in currency exchange shall obtain a license from the commissioner. A person may engage in such business at more than one location with one license. The commissioner shall issue a certificate for each currency exchange location in addition to the license.

Acts 1999, No. 1208, §1, eff. July 9, 1999.

§ 6:1004 Application for license and change of control

A. An application for a license under this Chapter shall be made under oath and on a form prescribed by the commissioner.

B. The application form shall provide space for and require disclosure of the following information:

(1)(a) If the applicant is an individual, the full name and address of the individual's residence and principal place of business.

(b) If the applicant is a partnership or association, the full name and address of every member's residence and of the principal place of business of the partnership or association.

(c) If the applicant is a corporation, the corporation's full name and business address of the corporation's principal place of business and the full name and residential address of each of the officers of the corporation.

(2) The name of the currency exchange operation.

(3) The street address of each currency exchange location operated by the applicant.

(4) The applicant's occupations or professions for the ten years preceding the date of application.

(5) The applicant's present and previous activities in currency exchange services in Louisiana or any other state.

(6) A criminal history disclosure on the applicant.

(7) The nature of business conducted at any location to be issued a certificate.

C. If the applicant is a partnership, association, or corporation, the information required by Paragraphs (4), (5), and (6) of Subsection B of this Section shall be supplied for each partner, officer, and director, as appropriate.

D.(1) No person shall acquire or control a license through the acquisition or control of more than fifty percent of the ownership interest in a licensee without first having obtained written approval from the commissioner, pursuant to an application for a change of control in ownership of the licensee, filed in the manner and on a form prescribed by the commissioner and accompanied by a fee of three hundred dollars. Any person who acquires controlling interest in a licensee without first having filed an application for change of control with the commissioner shall be deemed to be operating without proper authority and subject to the penalties of this Part.

(2) For the purposes of this Section, a person acquires or controls the licensee when at least one of the following conditions exists:

(a) The person, directly or acting through one or more other persons, owns, controls, or has the power to vote more than fifty percent of any class of stock of the corporation.

(b) The person controls in any manner the election of a majority of the directors of the corporation.

(c) The commissioner determines, after notice and an opportunity for hearing, that the person directly or indirectly exercises a controlling influence over the management or the policies of the licensee.

(3) When the licensee is a limited liability company or a limited liability partnership, the licensee is acquired or controlled if one of the following occurs:

(a) There is a change of members or general partners.

(b) An existing member or general partner acquires or controls the licensee as provided in Paragraph (2) of this Subsection.

(c) The commissioner determines that there has been a significant change in the membership or partnership interests, including but not limited to a change in ownership or control, directly or indirectly affecting twenty-five percent or more of the total interest of the licensee.

(4) A corporation that is a licensee shall notify the commissioner within sixty days of a stockholder becoming a principal stockholder, which is defined for purposes of this Section as owning ten percent or greater of the outstanding stock of the corporation.

E. Any person required to be licensed pursuant to this Chapter shall, prior to application for licensure, be duly registered with the secretary of state and be in possession of a certificate of authority to transact business in this state pursuant to the provisions of R.S. 9:3422, R.S. 12:304, or R.S. 12:1345, as applicable.

Acts 1999, No. 1208, §1, eff. July 9, 1999; Acts 2006, No. 767, §1; Acts 2014, No. 125, §1, eff. May 16, 2014.

§ 6:1004.1 License fees; online renewal

A. The applicant shall pay to the commissioner a nonrefundable application fee of three hundred fifty dollars with the initial application, plus an additional fee of fifty dollars for each currency exchange location in this state, not to exceed three thousand dollars.

B.(1) The licensee shall pay an annual license renewal fee on or before the first day of December of each year for a license to engage in currency exchange during the following calendar year of two hundred fifty dollars, plus an additional fee of fifty dollars for each currency exchange location in this state, not to exceed three thousand dollars.

(2) If the commissioner has not received the annual renewal fee from a licensee by the sixteenth day of January, as determined by the postmarked date, he shall notify the licensee by United States mail and assess a late fee of one hundred dollars.

(3) If the commissioner has not received the annual renewal fee and late fee by March thirty-first, the license to engage in currency exchange and all certificates issued for currency exchange locations shall lapse without a hearing or notification, and the license and certificates shall not be reinstated. However, the person whose license and certificates have lapsed may apply for a new license and certificates.

(4) After the date the licensing system provided for in Subsection C of this Section is available for use, any filing or notification required by the commissioner shall be made through the online-licensing system. Thereafter, the provisions of this Subsection shall expire and no longer have any effect.

C.(1) Beginning January 1, 2015, and thereafter, a licensee may submit through the Nationwide Mortgage Licensing System and Registry his renewal application on or before December thirty-first of each year in a manner and form prescribed by the commissioner.

(2) The renewal application shall be accompanied by a renewal fee of two hundred fifty dollars plus an additional fee of fifty dollars for each currency exchange location in this state, not to exceed three thousand dollars, payable on or before December thirty-first of each year. A renewal application submitted through the Nationwide Mortgage Licensing System and Registry after December thirty-first and before March first of the following year shall be charged a late fee of one hundred dollars.

(3) If the renewal application is submitted timely on or before December thirty-first, the license shall remain in force and effect until the renewal application is either approved or denied by the commissioner. Nothing in this Paragraph shall preclude the commissioner from implementing any administrative or enforcement actions authorized by this Title for violations of this Chapter or for any material misrepresentation that may have occurred prior to the renewal date of a license.

(4) If the commissioner has not received the renewal fee and late fee before March first, the license to engage in currency exchange shall lapse without hearing or notification, and the license shall not be reinstated. However, the person whose license has lapsed may apply for a new license.

Acts 1999, No. 1124, §1; Acts 2006, No. 767, §1; Acts 2014, No. 125, §1, eff. May 16, 2014.

§ 6:1004.2 Enforcement powers of the commissioner

A. The commissioner may, in his discretion, conduct such investigations as he deems necessary to ascertain possible violations of this Chapter or any rule, regulation, or order promulgated or issued in connection therewith. Any person who is engaged in or is engaging in or is about to engage in any act or practice which is prohibited by this Chapter or any rule, regulation, or order promulgated or issued in connection therewith, or any person who has failed to act or is failing to act or is about to fail to act under any affirmative duty imposed by this Chapter or any rule, regulation, or order promulgated or issued in connection therewith, shall be subject to appropriate action by the commissioner. Such action shall include but shall not be limited to the issuance of orders to cease and desist or to assess civil money penalties, entering into compliance agreements, seeking injunctive relief from a court of competent jurisdiction, or any combination thereof.

B. The commissioner, in addition to or in place of suspension or revocation of a license, may fine up to five hundred dollars for each violation any person who violates any provision of this Chapter.

C. The commissioner may maintain a civil action in a court of competent jurisdiction to recover such fines, together with any costs and attorney fees incident to such action.

Acts 1999, No. 1124, §1; Acts 2006, No. 767, §1.

§ 6:1005 Qualifications

The commissioner shall evaluate the financial responsibility, financial condition, business experience, and the character and general fitness of the applicant. The commissioner may investigate and consider the qualifications of officers and directors of an applicant to determine whether this qualification has been met.

Acts 1999, No. 1208, §1, eff. July 9, 1999; Acts 2000, 1st Ex. Sess., No. 31, §1.

§ 6:1006 Approval or denial of application

A. No later than the sixtieth day after the date a complete application has been received, the commissioner shall approve or deny the application and so notify the applicant.

B.(1) The commissioner shall issue a license to the applicant and a certificate for each currency exchange location if the application has been approved, the qualifications have been met, and the requisite fees have been paid.

(2) If the commissioner denies the application, the commissioner shall notify the applicant in writing of the reasons for denial.

(3) An applicant may appeal the decision of the commissioner pursuant to the Administrative Procedure Act.

C.(1) Any person whose application or renewal application for licensure under this Chapter has been denied for any reason may not reapply for a license under this Chapter until after at least three years from the date of the order of denial unless the commissioner, in his sole discretion, prescribes an earlier or later date.

(2) For purposes of this Subsection:

(a) The term "order" shall mean the date of the commissioner's notification of denial of the person's application.

(b) The term "person" shall include the applicant, its owners, and its members if the applicant is a limited liability company, its partners if the applicant is a partnership, its officers and directors if the applicant is a corporation, and any other person determined by the commissioner, in his sole discretion, to be closely related to the person.

Acts 1999, No. 1208, §1, eff. July 9, 1999; Acts 2006, No. 767, §1.

§ 6:1007 Change of name or location

A. In the event that a licensee wishes to change its name, trade name, or assumed name and such change is not due to a change in ownership or legal entity, the licensee shall notify the commissioner in writing thirty days prior to such change and submit a fee of fifty dollars per certificate not to exceed three thousand dollars. If the licensee fails to notify the commissioner or remit the required fee within the required thirty days, the commissioner may assess the licensee an amount not to exceed one hundred dollars as a penalty.

B. If a licensee adds a new location or changes the location of a currency exchange, the licensee shall notify the commissioner thirty days prior to such change and submit a fee of fifty dollars per certificate not to exceed three thousand dollars. If the licensee fails to notify the commissioner or remit the required fee within the required thirty days, the commissioner may assess the licensee an amount not to exceed one hundred dollars as a penalty.

C. If the application is approved, the commissioner shall issue a certificate for the new location or locations.

Acts 1999, No. 1208, §1, eff. July 9, 1999; Acts 2006, No. 767, §1.

§ 6:1008 Suspension or revocation of license; hearing; surrender of license; administrative fines

A. The commissioner may suspend or revoke any license if the commissioner determines any one or more of the following has occurred:

(1) The licensee or any officer or director of a corporate licensee has violated any provision of this Chapter.

(2) The licensee or any officer or director of a corporate licensee has violated any provision of law which would indicate that the person is untrustworthy or is not qualified to operate a currency exchange, such as acts of fraud, misrepresentation, and other similar acts.

(3) The commissioner discovers facts that existed when the initial or renewal application for the license was made which would have warranted denial of the license.

(4) The licensee has failed to pay a fine assessed pursuant to this Chapter.

B.(1) A license shall not be suspended or revoked or a fine assessed until after a hearing.

(2) The commissioner shall give the licensee not less than twenty days from the mailing of written notice by certified mail, addressed to the principal place of business of the licensee, of the time and place of hearing.

(3) Any order of the commissioner suspending or revoking a license or assessing a fine shall state the grounds upon which the suspension, revocation, or fine is based and shall state an effective date for the suspension or revocation, or a date by which the fine shall be paid.

C.(1) A suspended or revoked license shall be surrendered by the licensee along with all location certificates to the commissioner in person or by first class mail within seven calendar days of the effective date of the suspension or revocation.

(2) The surrender shall not affect the licensee's civil or criminal liability for acts committed before the surrender, nor shall the surrender affect the liability on the bond required by this Chapter.

(3) The licensee shall not be entitled to a refund of license fees paid.

D. Each transaction in violation of a provision or requirement of this Chapter shall constitute a separate violation.

Acts 1999, No. 1208, §1, eff. July 9, 1999.

§ 6:1009 Regulation of fees; unreasonable fees; display of fees

A. Notwithstanding any other provision of law to the contrary, no check-casher licensed or regulated under this Chapter shall directly or indirectly charge or collect fees or other consideration for rendering currency exchange services in excess of the following:

(1) Two percent of the total amount of the check presented for cashing or five dollars, whichever is greater, for checks issued by or drawn upon the account of a public welfare or public assistance agency of the United States, the state of Louisiana, or any political subdivision of the state.

(2) Ten percent of the total amount of the check presented for cashing or five dollars, whichever is greater, for all other checks or for money orders.

B. All fees charged by a licensee for rendering currency exchange services shall be prominently displayed on the premises of the currency exchange location in such manner as the commissioner requires.

Acts 1999, No. 1208, §1, eff. July 9, 1999; Acts 2000, 1st Ex. Sess., No. 31, §1; Acts 2004, No. 775, §1.

§ 6:1010 Repealed by Acts 2004, No. 370, §1.

Repealed by Acts 2004, No. 370, §1.

§ 6:1011 Powers; limitations; prohibitions

A licensee shall not accept money or currency for deposit or act as bailee or agent for any person to hold money or currency in escrow for others for any purpose. However, a licensee may act as agent for a person licensed under the Sale of Checks and Money Transmission Act, Chapter 13 of this Title.

Acts 1999, No. 1208, §1, eff. July 9, 1999; Acts 2001, No. 586, §1, eff. June 22, 2001.

§ 6:1012 Violations; criminal penalties; civil liability

A. A violation of any provision or requirement of this Chapter is a misdemeanor and shall be punishable by a fine of not less than two hundred and fifty dollars but not more than five hundred dollars, imprisonment for a term of not more than six months, or both. Each transaction in violation of any provision or requirement of this Chapter shall constitute a separate offense.

B. The commissioner, through an administrative action or the district attorney of any judicial district, may maintain an action to enjoin violations of this Chapter.

C. Costs and reasonable attorney fees shall be awarded to the commissioner or a district attorney in all injunctive actions when the commissioner or district attorney successfully enforces this Chapter.

Acts 1999, No. 1208, §1, eff. July 9, 1999.

§ 6:1013 Books of account; examinations

A. The licensee shall maintain sufficient books, accounts, and records that will enable the commissioner to determine if the licensee is complying with the provisions of this Chapter and with the rules adopted by the commissioner.

B. A licensee shall preserve the books, accounts, and records for at least two years after making the final entry.

C.(1) The commissioner, through his employees, may examine the records of a licensee at any time during normal business hours without prior notice.

(2) If the licensee's records are located outside this state, the licensee, at the commissioner's option, shall make them available to the commissioner at a location within this state convenient to the commissioner, or pay the reasonable and necessary expenses for the commissioner or his representatives to examine them at the place where they are maintained. The commissioner may designate representatives, including comparable officials of the state in which the records are located, to inspect them on his behalf.

Acts 1999, No. 1208, §1, eff. July 9, 1999.

§ 6:1013.1 Cashing federal and state treasury checks; records retention

A. No licensee shall cash a United States Treasury tax refund check or state tax refund check in an amount of one thousand dollars or greater unless the person requesting that the check be cashed submits any one of the following:

(1) A valid current Louisiana driver's license that contains a photograph of the person presenting the driver's license.

(2) A valid current driver's license of another state that contains a photograph and the date of birth of the person submitting the driver's license.

(3) A valid current special identification card issued by the state of Louisiana pursuant to R.S. 40:1321 containing a photograph of the person submitting the identification card.

(4) A valid current passport or visa issued by the federal government or another country or nation, that contains a permanently attached photograph and the date of birth of the person submitting the passport or visa.

(5) A valid current military or federal identification card issued by the federal government containing a photograph and the date of birth of the person submitting the identification card.

B.(1) No form of identification required by Subsection A of this Section shall be accepted as proof of identification if it is expired, defaced, mutilated, or altered. If the state identification card or lawful identification submitted is a duplicate, the person shall submit additional identification that contains the name, date of birth, and photograph of the person. A duplicate driver's license shall be considered lawful identification for the purposes of this Section, and a person shall not be required to submit additional information containing the name, date of birth, and picture of the person.

(2) An educational institution identification card, check cashing identification card, or employee identification card shall not be considered as lawful identification for the purposes of this Section.

C. Each licensee shall maintain the following records and information for each United States Treasury tax refund check or state tax refund check in an amount of one thousand dollars or greater cashed by the licensee:

(1) The date on which the check is cashed.

(2) The number of the check and the face amount of the check.

(3) The name of the drawer of the check that is cashed.

(4) The name, home address, and date of birth of the person for whom the check is cashed and a copy of the photo identification presented as required in this Section.

(5) A copy of the front and back of the check that is cashed.

D. Notwithstanding the provisions of R.S. 6:1013(B), each licensee shall maintain the records and information required by this Section for at least three years from the date on which the check is cashed.

Acts 2013, No. 315, §1, eff. Nov. 1, 2013.

§ 6:1014 Rules and regulations

The commissioner shall promulgate such rules and regulations as he deems necessary to administer and enforce this Chapter, pursuant to the Administrative Procedure Act.

Acts 1999, No. 1208, §1, eff. July 9, 1999.

§ 6:1015 False advertising

A. A licensee may not advertise, print, display, publish, distribute, or broadcast any statement or representation that is false, misleading, or deceptive or that omits material information.

B. A licensee shall post accurate information concerning the check-cashing fees or percentages charged in a prominent location on the premises.

Acts 1999, No. 1208, §1, eff. July 9, 1999.

§ 6:1016 Applicability

This Chapter shall not apply to any bank, trust company, savings bank, savings and loan association, or credit union.

Acts 1999, No. 1208, §1, eff. July 9, 1999.

CHAPTER 13 SALE OF CHECKS AND MONEY TRANSMISSION

§ 6:1031 Citation

This Chapter may be cited as "The Sale of Checks and Money Transmission Act".

Acts 1966, No. 476, §1; Acts 2001, No. 586, §1, eff. June 22, 2001.

§ 6:1032 Definitions

For the purposes of this Chapter:

(1) "Agent" means a person designated by the licensee under the provisions of this Chapter to sell or issue payment instruments or engage in the business of money transmission on behalf of a licensee.

(2) "Applicant" means a person that files an application for a license under this Chapter.

(3) "Check" means any check, draft, money order, personal money order, or other instrument for the transmission or payment of money.

(4) "Commissioner" means the commissioner of financial institutions.

(5) "Control" means ownership of or the power to directly or indirectly vote twenty-five percent or more of the outstanding voting interests of a licensee or applicant and includes an individual whose ownership is through one or more legal entities.

(6) "Currency" means the coin and paper money of the United States or another country that is designated as legal tender and circulates and is customarily used and accepted as a medium of exchange in the country of issuance.

(7) "Deliver" means to deliver a check to the first person who, in payment for same, makes or purports to make a remittance of or against the face amount thereof, whether or not the deliverer also charges a fee in addition to the face amount, and whether or not the deliverer signs the check.

(8) "Electronic instrument" means a card or other tangible object for the transmission, transfer, or payment of money or monetary value that contains an electronic chip or strip for the storage of information or that provides access to information.

(9) "Executive officer" means a president, a presiding officer of the executive committee, a treasurer or chief financial officer, or any other individual who performs similar functions.

(10) "Licensee" means a person duly licensed by the commissioner of financial institutions pursuant to this Chapter.

(11) "Location" means a place at which activity regulated by this Chapter occurs.

(12) "Money" or "monetary value" means currency or a claim that can be converted into currency through a financial institution, electronic payments network, or other formal or informal payment system.

(13) "Money transmission" means to engage in the business of the sale or issuance of payment instruments or of receiving money or monetary value for transmission to a location within or outside the United States by any and all means, including but not limited to wire, facsimile, or electronic transfer. The term includes:

(a) Selling or issuing stored value or payment instruments including checks, money orders, and traveler's checks.

(b) Receiving money or monetary value for transmission including by payment instrument, wire, facsimile, electronic transfer, or Automated Clearing House (ACH) debit.

(c) Providing third-party bill paying services.

(14) "Outstanding" means:

(a) With respect to a payment instrument or stored value, a payment instrument or stored value, issued and sold in the United States directly by the licensee or sold by an agent of the licensee in the United States and reported to the licensee, that has not yet been paid by or for the licensee.

(b) With respect to a transmission, a money transmission for which the licensee, directly or through an agent of the licensee, has received money or monetary value from the customer for transmission but has not yet completed the money transmission by delivering the money or monetary value to the person designated by the customer or refunded the money or monetary value to the customer.

(15) "Payment instrument" means any electronic or written check, draft, money order, traveler's check, or other electronic or written instrument or order for the transmission or payment of money or monetary value, sold or issued to one or more persons, whether or not such instrument is negotiable. The term "payment instrument" does not include any credit card voucher, any letter of credit, or any instrument which is redeemable by the issuer of goods or services.

(16) "Person" means an individual or legal entity.

(17) "Personal money order" means any instrument for the transmission or payment of money in relation to which the purchaser or remitter appoints or purports to appoint the seller thereof as his agent for the receipt, transmission, or handling of money, whether such instrument is signed by the seller or by the purchaser or remitter or some other person.

(18) "Principal" means:

(a) With respect to a sole proprietorship, an owner.

(b) With respect to a legal entity other than a sole proprietorship, an executive officer, director, general partner, trustee, or manager, as applicable.

(19) "Sell" means to sell, to issue, or to deliver a check.

(20) "Stored value" means monetary value evidenced by an electronic record that is prefunded and for which value is reduced on each use. The term does not include an electronic record that is:

(a) Loaded with points, miles, or other nonmonetary value.

(b) Not sold to the public but distributed as a reward or charitable donation.

Acts 1966, No. 476, §2. Amended by Acts 1972, No. 324, §1; Acts 1974, No. 117, §1; Acts 1991, No. 812, §1, eff. July 22, 1991; Acts 2001, No. 586, §1, eff. June 22, 2001; Acts 2008, No. 26, §1.

§ 6:1033 License required

A. No person, except those specified in R.S. 6:1034, shall engage in the business of money transmission or selling checks as a service or for a fee or other consideration without having first obtained a license pursuant to this Chapter.

B. The license granted shall be for the period commencing on January first and ending on December thirty-first of the year of initial licensure or renewal of a previously issued license, as the case may be. The license fee for the year of initial licensure shall not be prorated based on the number of months the license will be in effect; however, each person whose license is renewed for the licensing period of April, 2012, to April, 2013, shall on or before December 31, 2012, submit all required data for license renewal for the period of April, 2013, to December 31, 2013, and pay a licensing renewal fee equal to eight-twelfths of the total licensing fee paid for the licensing period of April, 2012, to April, 2013.

C. The office of financial institutions shall deposit the license fee check within two business days after it is received, anything to the contrary in R.S. 49:308 or 950 et seq. notwithstanding, whether or not the application is accompanied by all supporting documents required by law to be furnished as a prerequisite to licensure. However, the act of depositing the license fee shall not be construed as the granting of a license if the commissioner determines that the applicant has not met the requirements of this Chapter.

D. Any person required to be licensed by this Chapter shall pay all applicable fees to utilize any electronic database licensing system as described in R.S. 6:121.8.

Acts 1966, No. 476, §3. Amended by Acts 1972, No. 324, §1; Acts 1988, No. 792, §1; Acts 1992, No. 65, §1, eff. June 4, 1992; Acts 2001, No. 586, §1, eff. June 22, 2001; Acts 2012, No. 220, §1, eff. May 22, 2012.

§ 6:1034 Exemption from licensing

The following persons shall not be required to be licensed under this Chapter:

(1) The United States or an instrumentality of the United States government, including the United States Postal Service or a contractor acting on behalf of the United States Postal Service.

(2) A state or an agency, political subdivision, or other instrumentality of a state.

(3) A federally insured depository financial institution that is organized under the laws of this state, another state, or the United States.

(4) A wholly owned subsidiary of a federally insured depository institution that is organized under the laws of this state, another state, or the United States.

(5) A foreign bank branch or agency in the United States established under the federal International Banking Act of 1978, 12 U.S.C. 3101 et seq.

(6) A person acting as an agent for an entity excluded under Paragraphs (3) and (4) of this Section, to the extent of the person's actions in that capacity provided that:

(a) The entity is liable for satisfying the money services obligation owed to the purchaser on the person's receipt of the purchaser's money.

(b) The entity and person enter into a written contract that appoints the person as the entity's agent and the person acts only within the scope of authority conferred by the contract.

(7) A person that, on behalf of the United States or a department, agency or instrumentality of the United States, or a state, parish, city, or any other governmental agency or political subdivision of this state, provides electronic funds transfer services of governmental benefits for a federal, state, parish, or local governmental agency.

(8) A person that acts as an intermediary on behalf of and at the discretion of a licensee in the process by which the licensee, after receiving money or monetary value from a purchaser, either directly or through an agent, transmits the money or monetary value to the purchaser's designated recipient, provided that the licensee is liable for satisfying the obligation owed to the purchaser.

(9) An attorney or title company that in connection with an immovable property transaction receives and disburses domestic currency or issues an escrow or trust fund check only on behalf of a party to the transaction.

(10) A person engaged in the business of currency transportation who is both a registered motor carrier and a licensed armored car company or courier company, provided that the person does not engage in the money transmission business without a license under this Chapter.

(11) A licensed lender using stored value cards or debit cards or electronic cash for loan disbursement under the Louisiana Consumer Credit Law.

(12) Any other person approved by the commissioner on a finding that the licensing of the person is not necessary to achieve the purposes of this Chapter.

Acts 1966, No. 476, §4. Amended by Acts 1972, No. 160, §1; Acts 1991, No. 812, §1, eff. July 22, 1991; Acts 2001, No. 586, §1, eff. June 22, 2001; Acts 2008, No. 26, §1.

§ 6:1035 Qualifications

To qualify for a license hereunder, an applicant shall meet the following requirements:

(1) If application is made for a new license, the applicant shall submit a business plan which includes, at a minimum, anticipated volume for the calendar year, as well as the anticipated number of transmission or selling locations. The commissioner shall determine the required bond for each new licensee, based on the information provided by the applicant; however, in no event shall the bond be less than twenty-five thousand dollars.

(2) To qualify for a new license to transmit money or sell checks or for renewal of a previously issued license, an applicant shall also have a net worth of at least one hundred thousand dollars, computed according to generally accepted accounting principles.

(3) The financial responsibility, financial condition, business experience, character, and general fitness of the applicant shall be such as to reasonably warrant the commissioner to believe that the applicant's business will be conducted honestly, carefully, and efficiently. To the extent that the commissioner deems advisable, he may investigate and consider the qualifications of officers and directors of an applicant in determining whether the applicant qualifies.

Acts 1966, No. 476, §5. Amended by Acts 1972, No. 324, §1; Acts 1989, No. 401, §1, eff. June 30, 1989; Acts 1991, No. 812, §1, eff. July 22, 1991; Acts 2001, No. 586, §1, eff. June 22, 2001.

§ 6:1036 Applications

Each application for a license to transmit money or sell checks shall be made under oath on a form supplied by the commissioner. The application shall state the full name and street address of:

(1) The proprietor, if the applicant is an individual.

(2) Every member, if the applicant is a partnership or association.

(3) The corporation and each officer and director of a corporate applicant.

Acts 1966, No. 476, §6; Amended by Acts 1972, No. 324, §1; Acts 1991, No. 812, §1, eff. July 22, 1991; Acts 2001, No. 586, §1, eff. June 22, 2001.

§ 6:1037 Accompanying fee; statement and bonds

A. Each application for license to transmit money or sell checks shall be accompanied by:

(1) An investigation fee of eight hundred dollars plus an additional fee of twenty-five dollars for each location in the state from which the applicant intends to transmit money or sell checks, up to a maximum of six thousand dollars, which shall not be subject to refund but which, if the license is granted, shall constitute the license fee for the first license year or part thereof.

(2) Financial statements certified to as correct by an owner, principal, officer, or director of the applicant for the preceding three calendar or fiscal years and the year in which the application is submitted.

(3) A surety bond by a bonding company or insurance company authorized to do business in Louisiana in the minimum amount of twenty-five thousand dollars, or a higher amount deemed appropriate by the commissioner, based on the applicant's business plan, for the initial year of licensure.

B. The bond required by licensees whose license is being renewed shall be one-half of the checks outstanding, or one percent of annual volume of money transmitted rounded to the nearest thousand, as shown on the annual report of the licensee. However, in no event shall the bond be less than twenty-five thousand dollars or exceed five hundred thousand dollars, except the commissioner may require an additional amount over the five hundred thousand dollars, up to a total maximum amount of one million dollars, after a hearing, based on the licensee's financial condition. The bond for the second and subsequent years of licensing shall be furnished within thirty days from the date the annual report is due.

C. The bond shall be in a form satisfactory to the commissioner and shall run to the office of financial institutions, for the use and benefit of the office of financial institutions and creditors of the licensee or agent for any liability incurred on any money transferred or check issued by the licensee or agent. Persons who have claims against the licensee or his agents may bring suit directly on the bond. The attorney general may bring suit on the bond on behalf of claimants, either in one action or successive actions. The surety shall have the right to cancel the bond upon giving thirty days notice, in writing, to the commissioner. The surety on the bond shall be relieved of liability for any breach of conditions occurring after the cancellation.

D. In lieu of such corporate surety bond or of any portion required by this Section, the applicant may deposit with the commissioner, or in escrow with a federally insured Louisiana depository institution, either state or federally chartered, as such applicant may designate and the commissioner may approve, cash or securities of not less than the amount of the required corporate surety bond, or any portion of it, based upon the principal amount or market value, whichever is lower, consisting of one or more of the following exclusively enumerated unencumbered items:

(1) Cash.

(2) Certificates of deposit.

(3) Interest bearing stocks and bonds acceptable to the commissioner.

(4) Notes, debentures, or other obligations of the United States or any agency or instrumentality thereof, guaranteed by either the United States, the state of Louisiana, a city, parish, town, village, school district, or other political subdivision of this state which has been authorized by the constitution, statute, or ordinance to levy and collect taxes.

E. The cash or securities authorized by Subsection D shall be placed in escrow in a federally insured Louisiana depository institution, either state or federally chartered, as provided for in Subsection D, to secure the same obligations as would the corporate surety bond. The licensee shall be entitled to receive all interest and dividends on the cash or securities placed in escrow. In addition, the depositor shall have the right, subject to the approval of the commissioner, to substitute other securities of the kind or type enumerated in Subsection D for those previously deposited.

F. The depositor shall be required to substitute other or additional cash or securities of the kind or type enumerated in Subsection D when required to do so by written order of the commissioner for good cause shown.

G.(1) In addition to the bonding requirements of this Section, the licensee shall at all times own and have on hand permissible investments in an amount equal to the aggregate face amount of all outstanding checks sold in the United States or amount of money held over twenty-four hours prior to transmission, for which the licensee is liable for payment.

(2) In this Subsection, "permissible investments" means:

(a) Cash.

(b) Notes, debentures, or other obligations of the United States or an agency or instrumentality thereof, guaranteed by either the United States, any state, any city, parish, county, town, village, school district, or other political subdivision of any state, which has been authorized by the constitution, statute, or ordinance to levy and collect taxes.

(c) Any other investments approved by the commissioner.

(3) To prevent unsafe and unsound practices with respect to the required permissible investments, the commissioner may adopt and enforce reasonable rules to implement this Subsection.

Acts 1966, No. 476, §7. Amended by Acts 1972, No. 324, §1; Acts 1988, No. 792, §1; Acts 1989, No. 401, §§1 and 3, eff. June 30, 1989; Acts 1991, No. 812, §1, eff. July 22, 1991; Acts 1992, No. 65, §1, eff. June 4, 1992; Acts 2001, No. 586, §1, eff. June 22, 2001; Acts 2015, No. 319, §1.

§ 6:1038 Investigation; granting of license

A. The commissioner shall provide a detailed form which each applicant shall mail, by certified mail, to the commissioner. The commissioner shall, upon receiving the official, completed application which is accompanied by the fee and documents required by R.S. 6:1031 et seq., investigate to ascertain whether the applicant meets the qualifications established by R.S. 6:1031 et seq., for persons to engage in the business of money transmission or selling checks in this state.

B. If the commissioner determines that the applicant meets the requirements of this Chapter, he shall issue the applicant a license to engage in the business of money transmission or selling checks in this state.

Acts 1966, No. 476, §8; Amended by Acts 1972, No. 324, §1; Acts 1991, No. 812, §1, eff. July 22, 1991; Acts 2001, No. 586, §1, eff. June 22, 2001.

§ 6:1038.1 Temporary license; expiration; extension

A. The commissioner may issue a temporary license to a person that is engaging in money transmission, but has not obtained a license under this Chapter, if the person:

(1) Certifies in writing that the person qualifies for the license and will submit a completed license application not later than the thirtieth day after the date the temporary license is issued.

(2) Submits a current financial statement acceptable to the commissioner that reflects the minimum net worth required under R.S. 6:1035.

(3) Provides security that meets the requirements of R.S. 6:1037.

(4) Agrees in writing that, until a permanent license is issued, the person will engage only in activities being conducted at existing locations.

(5) Pays the application fee and a nonrefundable temporary license fee in the amount established by regulation.

B. The effective period for a temporary license shall not exceed ninety days from the date the license is issued; however, the commissioner may extend the period for not more than an additional thirty days if necessary to complete the processing of a timely filed application for which approval is likely. Upon the expiration of the temporary license, including an extension provided for in this Subsection, the temporary licensee shall immediately cease money transmission services. No appeal, either administrative or judicial, shall be available to the temporary licensee to extend the term of the temporary license when the term, including an extension, has expired.

Acts 2008, No. 26, §1.

§ 6:1039 Maintenance of bond

After a license is granted, the licensee shall maintain its bond in the amount prescribed by R.S. 6:1037. If the commissioner determines at any time that the bond is insecure or deficient in amount, he shall by written order require the filing of a new or supplemental bond; however, such determination and bond requirement shall not be unreasonable, arbitrary, or capricious. If the order is not complied with within thirty days following service by certified mail upon the licensee, the commissioner shall suspend the authority of the licensee to transmit money or sell checks in Louisiana and shall commence proceedings to revoke the license.

Acts 1966, No. 476, §9. Amended by Acts 1972, No. 324, §1; Acts 1989, No. 401, §1, eff. June 30, 1989; Acts 2001, No. 586, §1, eff. June 22, 2001.

§ 6:1040 Annual renewal fee; delinquency charge

A. Each licensee shall pay, as directed by the commissioner, on or before December thirty-first of each year, a renewal license fee of six hundred dollars, plus an additional fee of twenty-five dollars for each licensed transmission or selling location in this state; however, the total renewal fee for any license shall not exceed six thousand dollars, regardless of the number of locations.

B.(1) If the renewal fee is received after December thirty-first, a late penalty equal to one-half of the renewal fee, including the fee for each transmission or selling location, shall be paid as a prerequisite for renewal even though the six thousand dollar maximum is exceeded.

(2) If the commissioner has not received the annual renewal fee and late fee before March first of the following year, the license shall lapse without a hearing or notification and the license shall not be reinstated; however, the person whose license has lapsed may apply for a new license.

C. If payment is made by mail, proof of payment before the delinquency date may be established by sending the renewal fee by certified mail, return receipt requested. A postmark of no later than December thirty-first shall be conclusive proof that timely payment was made.

D. The office of financial institutions shall deposit the license fee check within two business days after it is received, anything to the contrary in R.S. 49:308 or 950 et seq. notwithstanding, whether or not the application is accompanied by all supporting documents required by law to be furnished as a prerequisite to renewal of the license. However, the act of depositing the license fee shall not be construed as granting of a renewal of the license previously issued if the commissioner determines that the applicant has not met the requirements of this Chapter.

Acts 1966, No. 476, §10; Amended by Acts 1972, No. 324, §1; Acts 1985, No. 334, §1, eff. July 9, 1985; Acts 1986, No. 380, §1; Acts 1988, No. 792, §1; Acts 1991, No. 812, §1, eff. July 22, 1991; Acts 1992, No. 65, §1, eff. June 4, 1992; Acts 2001, No. 586, §1, eff. June 22, 2001; Acts 2012, No. 220, §1, eff. May 22, 2012; Acts 2015, No. 319, §1.

§ 6:1041 Agents and subagents

A. A licensee may conduct his business at one or more locations within this state, as follows:

(1) The business may be conducted through or by means of such agents and subagents as the licensee may from time to time designate or appoint.

(2) No license under this Chapter shall be required of any agent or subagent of a licensee.

B. No licensee shall be required to obtain more than one license under this Chapter regardless of the number of locations within the state at which money is transmitted or checks are sold.

Acts 1966, No. 476, §11; Acts 1986, No. 380, §1; Acts 2001, No. 586, §1, eff. June 22, 2001.

§ 6:1042 Liability of licensees

Each licensee shall be liable for the payment of all checks which he sells or money he is obligated to transmit, in whatever form and whether directly or through an agent, as the maker or drawer thereof according to the negotiable instrument laws of this state; and a licensee who sells a check or transmits money, whether directly or through an agent, upon which he is not designated as maker or drawer shall nevertheless have the same liabilities with respect thereto as if he had signed same as the drawer thereof.

Acts 1966, No. 476, §12; Acts 2001, No. 586, §1, eff. June 22, 2001.

§ 6:1043 Disclosure of responsibility

Every check sold by a licensee, directly or through an agent, shall bear the name of the licensee clearly imprinted thereon.

Acts 1966, No. 476, §13.

§ 6:1044 Visitation and examination; revocation of license

A. The commissioner either in person or through an employee appointed by him, shall visit and examine each licensee or agent on a recurring schedule or at any time whenever, in his judgment, an examination is necessary and expedient. The commissioner may accept an annual report and audit of the affairs of a licensee or agent under this Chapter if it is made by a commissioner of financial institutions or comparable officer of another state, the District of Columbia, or a territory of the United States.

B. The commissioner shall revoke or suspend a license on any ground on which he may refuse to grant a license or for a violation of any provisions of this Chapter.

Acts 1966, No. 476, §14; Amended by Acts 1972, No. 324, §1; Acts 1991, No. 812, §1, eff. July 22, 1991.

§ 6:1045 Hearings

No license shall be denied or revoked except after a hearing thereon. The commissioner shall give the applicant or licensee at least twenty days' written notice of the time and place of such hearing. The notice shall be by registered or certified mail addressed to the principal place of business of such applicant or licensee. Any order of the commissioner denying or revoking such license shall state the grounds upon which it is based and shall not be effective until twenty days after written notice thereof has been sent by registered or certified mail to the applicant or licensee at such principal place of business.

Acts 1966, No. 476, §15. Amended by Acts 1972, No. 324, §1.

§ 6:1046 Penalties

A. Any person who directly or through another violates or attempts to violate any provision of this Chapter shall be guilty of a misdemeanor, and shall be fined not less than two hundred and fifty dollars but not more than five hundred dollars, or imprisoned in the parish jail for not more than six months, or both. Each transaction in violation of this Chapter and each day that a violation continues shall be a separate offense.

B. A conviction or plea of guilty, or a finding of guilt after a plea of nolo contendere, shall automatically constitute a revocation of the primary license and all location licenses.

Acts 1966, No. 476, §16; Acts 1988, No. 792, §1.

§ 6:1047 Reports

Each licensee shall file an annual report with the commissioner by March thirty-first for the previous year of money transmission or check-selling operations. The report shall contain:

(1) A complete disclosure of all business activity which it conducted during the previous year in this state.

(2) A financial statement certified by an owner, principal, director, or officer of the licensee.

(3) A list of each location in this state at which money was transmitted or checks were sold by the licensee and its agents during the preceding calendar year.

Added by Acts 1974, No. 212, §1; Acts 1986, No. 380, §1; Acts 1991, No. 812, §1, eff. July 22, 1991; Acts 2001, No. 586, §1, eff. June 22, 2001.

§ 6:1048 Trust imposed on sales or transmission proceeds

Agents of licensees shall hold in trust from the moment of receipt the proceeds of a sale or delivery of the licensees' checks or money collected for transmittal. An agent may not commingle the proceeds with his own property or funds, except to use the funds in the ordinary course of its business for the purpose of making change. If any agent of a licensee commingles any proceeds received from the sale of checks issued or money transmitted by the licensee with any other funds or property owned or controlled by the agent, all commingled proceeds and other property shall be considered held in trust in favor of the licensee in an amount equal to the amount of the proceeds due the licensee from the sale of checks or money transmitted less the amount due the agent from the sale or transmission. In the event that a licensee's license is revoked by the commissioner pursuant to R.S. 6:1039, all proceeds then held in trust by agents of that licensee shall be deemed to have been assigned to the commissioner.

Acts 1989, No. 401, §2, eff. June 30, 1989; Acts 2001, No. 586, §1, eff. June 22, 2001.

§ 6:1049 List of financial institutions

When a license is suspended and revoked, the licensee shall supply the commissioner with a list of the financial institutions where he has transacted such business as is governed by the provisions of this Chapter.

Acts 1990, No. 827, §1.

§ 6:1050 Retention of surety bond

The commissioner shall retain the surety bond required by this Chapter until the list required by R.S. 6:1049 has been supplied and thirty days have passed since the financial institution or institutions have been notified in accordance with R.S. 6:1051.

Acts 1990, No. 827, §1.

§ 6:1051 Notification of financial institutions; violations; penalties

A. When a license is suspended and revoked, the commissioner shall notify the financial institution or institutions of the former licensee that the person is no longer authorized to transmit money or sell checks under the provisions of this Chapter.

B. After such notification, no financial institution shall participate in a transaction with a former or suspended licensee in contravention of the provisions of this Chapter; however, a financial institution may accept deposits of funds into an account of a former or suspended licensee if such account does not have adequate funds to honor all outstanding checks as the term "check" is defined by R.S. 6:1032(1).

C. The commissioner may assess and collect a civil money penalty against a financial institution in an amount not exceeding two hundred and fifty dollars for each transaction in violation of the provisions of this Section.

D. Nothing in this Section shall prevent a financial institution from engaging in a transaction with a former licensee who applies for, receives, and retains a new license in accordance with the provisions of this Chapter.

Acts 1990, No. 827, §1; Acts 2001, No. 586, §1, eff. June 22, 2001.

§ 6:1052 Account; verification of license; cancellation; overdrafts

A. Before any financial institution opens an account for a seller of checks or person who transmits money, which is intended to cover demands made by receivers of checks or money transmitted, it shall require the licensee seeking to open the account to present the license required by R.S. 6:1033, provided that the financial institution has actual knowledge that the person opening the account intends to engage in the sale of checks or money transmission. After being presented the license and before opening such account, the financial institution shall, within seventy-two hours, verify with the commissioner that the license is valid.

B. If the licensee closes any such account, the financial institution shall, within seventy-two hours, notify the commissioner of such closure.

C. If the licensee incurs overdrafts of at least one thousand dollars for a period of five consecutive days, and there is no agreed line of credit with the financial institution to cover these overdrafts, the financial institution shall, within seventy-two hours, notify the commissioner of the amount of such overdrafts.

Acts 1990, No. 807, §1; Acts 2001, No. 586, §1, eff. June 22, 2001.

§ 6:1053 Significant developments; licensee's duty to report to commissioner

A. It shall be the duty of a licensee to report to the commissioner, by certified mail, the following significant developments within fifteen days of the occurrence:

(1) Filing a petition under either Chapter 7 or Chapter 11 of the United States Bankruptcy Code.

(2) The commencement of any license suspension or revocation proceeding, either administrative or judicial, by any state, the District of Columbia, or any United States territory in which the licensee has been issued a license to transmit money or sell checks.

(3) The indictment of an individual licensee, a partner if the licensee is a partnership, association, or, if the licensee is a corporation, the indictment of an officer or director.

(4) The conviction, guilty plea, or plea of nolo contendere, if the court adjudicates the nolo contendere pleader guilty, of an individual licensee, a partner if the licensee is a partnership, association, or, if the licensee is a corporation, the conviction, guilty plea, or adjudication of guilt of an officer or director.

B. Failure of the licensee to report any significant development enumerated in this Section shall constitute grounds for revocation of the license.

Acts 1991, No. 812, §1, eff. July 22, 1991; Acts 2001, No. 586, §1, eff. June 22, 2001.

§ 6:1054 Change of control; notice; application; advisory opinion

A. The provisions of this Section apply to any change of control of a licensee.

B. A person shall not directly or indirectly acquire control of a licensee or a person in control of a licensee without the prior written approval of the commissioner, except as provided by this Section.

C. A licensee or proposed person in control shall:

(1) Give the commissioner written notice of a proposed change of control at least forty-five days before the date the proposed transaction is to be consummated.

(2) Request approval of the proposed change of control.

(3) Submit a nonrefundable fee in an amount established by the commissioner's regulation.

D. A proposed person in control is subject to the same standards and qualifications that apply to a principal of an applicant for a new license under this Chapter. The commissioner may require the licensee or proposed person in control to provide the same type of information, documentation, and certifications and may conduct the same type of investigation the commissioner requires and conducts in connection with a new license application.

E. The commissioner shall approve a proposed change of control if he determines that the proposed person in control has the financial responsibility, financial condition, business experience, competence, character, and general fitness to warrant the belief that the business of the licensee will be conducted in compliance with this Chapter, regulations adopted under this Chapter, and other applicable state and federal law and that the change of control will not jeopardize the public interest.

F. If the commissioner determines that the proposed person in control fails to meet the qualifications, standards, and requirements of this Chapter, he shall inform the licensee and the proposed person in control in writing that the request is denied and state the reasons for the denial. Such denial may be grounds for revocation of the license under R.S. 6:1044. The licensee or the proposed person in control may appeal the denial by filing a written request for a hearing with the commissioner not later than the thirtieth day after the date the notice is mailed. A hearing on the denial must be held not later than the forty-fifth day after the date the commissioner receives the written request.

G. The provisions of Subsections B and C of this Section shall not apply to the following:

(1) A person that acts as proxy for the sole purpose of voting at a designated meeting of the security holders or holders of voting interests of a licensee or controlling person.

(2) A person that acquires control as a personal representative, custodian, curator, tutor, guardian, conservator, or trustee or as an officer appointed by a court or by operation of law.

(3) A person exempted in the public interest by the commissioner's regulation or order.

(4) Repealed by Acts 2016, No. 75, §1.

H. A person that acquires control of a licensee by inheritance or bequest or through a purchase of securities through a public offering is exempt from the prior notice requirements of Paragraph (C)(1) of this Section, but the licensee must notify the commissioner not later than the fifteenth day after the effective date of a change of control under either of these circumstances. The licensee shall meet all requirements enumerated in Subsections C through F of this Section.

I. Before filing an application for approval of a proposed change of control, a licensee may submit a written request for an advisory opinion from the commissioner to determine whether a person would be considered a proposed person in control of the licensee and whether the requirements of this Section apply to the proposed transaction. The request shall correctly and fully represent the facts relevant to the person and the proposed transaction. If the commissioner determines that the person would not be a person in control of the licensee for purposes of this Section, he shall render a written advisory opinion that this Section does not apply to the proposed person in control or transaction.

Acts 2008, No. 26, §1; Acts 2016, No. 75, §1.

§ 6:1055 Money transmitters; delivery of funds requirements; exceptions

A. Every money transmitter licensee and its agents shall transmit the monetary equivalent of all money or equivalent value received from a consumer for transmission, net of any fees, or issue instructions committing the money or its monetary equivalent, to the person designated by the consumer, or return such amount to the consumer, within ten business days after receiving the money or equivalent value, unless otherwise ordered by the consumer, accepted under the terms of a contract for stored value or when the transmission is for the payment of goods or services, or unless the licensee or its agent has reasonable cause to believe that a violation of law has occurred, is occurring, or will occur in connection with transmitting the money.

B. For purposes of this Section, money is considered to have been transmitted when it is mailed, released to the relevant payment system for delivery, or is otherwise available to the person designated by the consumer and, where possible, a reasonable effort has been made to inform the designated person that the money is available.

C.(1) Any provision in a money transmitter licensee user policy or user agreement which provides a financial penalty or stipulated damages against a consumer or charitable organization as defined by R.S. 51:1901 for executing a lawful and valid transaction under federal and state law is contrary to public policy and shall be null and void.

(2) A money transmitter licensee shall provide notice to a consumer of any transaction that the money transmitter finds to be or is suspected of being in violation of the user policy or user agreement and for which the licensee seizes the transaction funds, unless such notice is prohibited by law. Any funds seized by the money transmitter prior to providing such notice, unless such notice is prohibited by law, and found to be from a lawful and valid transaction under federal and state law shall be processed by the licensee in accordance with Subsection A of this Section.

D. The enforcement of any choice-of-law provision in a money transmitter licensee user policy or user agreement that would result in a contravention of the public policy of this state as expressed by Subsection C of this Section shall be null and void to the extent of such contravention.

E. A money transmitter licensee that seizes or holds funds pursuant to a user policy or user agreement provision that is subject to nullification as provided by this Section shall return to the consumer any funds held or seized as a result of such violation, including any financial penalty or stipulated damages assessed, and such money transmitter licensee may cancel the service contract.

F. The commissioner of the Office of Financial Institutions shall have the authority to enjoin a violation of this Section, and any such violation shall be considered an unfair trade practice and shall subject violators to the provisions of R.S. 51:1401 et seq. Entities covered by this Section shall be subject to the enforcement powers of the commissioner of the Office of Financial Institutions as provided in R.S. 6:121.1. For purposes of this Section, the provisions of R.S. 51:1406 shall not apply to a money transmitter licensee.

G.(1) The provisions of this Section shall not apply to any federally insured financial institution, its subsidiaries, and affiliates.

(2) The provisions of this Section shall not apply to an operator of a payment system or its subsidiaries and affiliates which are exempt from licensing under The Sale of Checks and Money Transmission Act, R.S. 6:1031 et seq., to the extent that the operator of a payment system provides processing, clearing, or settlement services, between or among persons, in connection with wire transfers, credit card transactions, debit card transactions, stored value transactions, automated clearing house transfers, or similar funds transfers.

Acts 2022, No. 580, §1.

CHAPTER 14 RESIDENTIAL MORTGAGE BROKERS AND LENDERS

PART I GENERAL PROVISIONS

§ 6:1081 Short title

This Chapter shall be known and may be cited as the "Louisiana Secure and Fair Enforcement of Mortgage Licensing Act of 2009" or the "Louisiana S.A.F.E. Residential Mortgage Lending Act".

Acts 1999, No. 1098, §1, eff. July 9, 1999; Acts 2009, No. 522, §1, eff. July 31, 2009.

§ 6:1082 Purpose

The Legislature of Louisiana does hereby declare that it is in the best interest of the citizens of the state to protect consumers in the most important financial investment most will make, the purchase of a home, by requiring the licensing and regulation of residential mortgage lenders, brokers, originators, and servicers. The purpose of this Chapter is to promote the safety and welfare of the people of the state by providing for regulatory oversight and by establishing educational requirements in a professional field in which unqualified individuals may injure or mislead the public.

Acts 1999, No. 1098, §1, eff. July 9, 1999; Acts 2009, No. 522, §1, eff. July 31, 2009; Acts 2014, No. 260, §1, eff. June 30, 2014.

§ 6:1083 Definitions

As used in this Chapter:

(1) "Commissioner" means the commissioner of the office of financial institutions.

(2) "Consumer" means a natural person who enters into or seeks to enter into a residential loan transaction for a personal, family, or household purpose.

(3) "Conventional reverse mortgage loan" means a reverse mortgage loan other than a program reverse mortgage loan.

(4) "Depository institution" means the same as defined in Section 3 of the Federal Deposit Insurance Act, and includes any credit union.

(5) "Federal banking agencies" means the Board of Governors of the Federal Reserve System, the Office of the Comptroller of the Currency, the Office of Thrift Supervision, the National Credit Union Administration, and the Federal Deposit Insurance Corporation.

(6) "Federally related mortgage loan" means an extension of credit to a consumer secured by a first mortgage on residential immovable property located in this state, including a factory-built home that will be immobilized pursuant to R.S. 9:1149.6 and is designed principally for the occupancy of from one to four families, and that is one of the following:

(a) An extension of credit made in whole or in part by any lender the deposits or accounts of which are insured by any agency of the federal government, or is made in whole or in part by any lender which is regulated by any agency of the federal government.

(b) An extension of credit made in whole or in part, or insured, guaranteed, supplemented, or assisted in any way, by the federal Department of Housing and Urban Development, or any other agency of the federal government or under or in connection with a housing or urban development program administered by the Department of Housing and Urban Development or a housing or related program administered by any other such agency.

(c) An extension of credit intended to be sold by the originating lender to the Federal National Mortgage Association, the Government National Mortgage Association, the Federal Home Loan Mortgage Corporation, or a financial institution from which it is to be purchased by the Federal Home Loan Mortgage Corporation.

(d) An extension of credit made in whole or in part by any creditor, as defined in Section 103(f) of the federal Consumer Credit Protection Act (15 U.S.C. §1602(f)), who makes or invests in consumer real estate loans aggregating more than one million dollars per year.

(7) "Immediate family member" means a spouse, child, sibling, parent, grandparent, grandchild, including stepparent, stepchild, stepsibling, and adoptive relationships.

(8) "Mortgage broker" or "residential mortgage broker" means any person who, directly or indirectly, for compensation or the expectation of compensation, negotiates, places, or finds, or offers to negotiate, place, or find a residential mortgage loan for another person. "Mortgage broker" also shall include:

(a) An approved Federal Housing Administration loan correspondent.

(b) A residential mortgage lender who closes a residential mortgage loan in his own name but for whom the funding for the loan is provided by a third party lender in a process known as table funding.

(9) "Mortgage lender" or "residential mortgage lender" means any person who, directly or indirectly, originates or makes, or offers to originate or make, a residential mortgage loan for another person.

(10) "Mortgage loan originator" means an individual who for compensation or gain or with the expectation of compensation or gain takes a residential mortgage loan application or offers or negotiates terms of a residential mortgage loan.

(11) "Mortgage servicer loss mitigation specialist" means a person who on behalf of the holder or mortgagee of a residential mortgage loan assists a borrower to modify or refinance either temporarily or permanently the borrower's obligations in order to avoid default or foreclosure of the residential mortgage loan.

(12) "Mortgage servicing" means collecting or remitting payment for another, or the right to collect or remit payments for another, of any of the following: principal, interest, tax, insurance, or other payment under a mortgage loan.

(13) "Nationwide Mortgage Licensing System and Registry", "licensing system", or "NMLS&R" means a mortgage licensing system developed and maintained by the Conference of State Bank Supervisors and the American Association of Residential Mortgage Regulators or successors thereof, for the state licensing and registration of state-licensed mortgage loan originators and the registration of registered loan originators as provided in P.L. 110-289, Title V, as amended, which licensing system includes but not limited to an online database which receives, collects, and stores application, license, enforcement action, and related information on a multi-state basis.

(14) "Person" means any individual, firm, corporation, partnership, association, trust, or legal or commercial entity, or other group of individuals however organized.

(15) "Principal stockholder" means any person owning ten percent or more of the outstanding stock of a corporate mortgage broker or mortgage lender.

(16) "Program reverse mortgage loan" means a reverse mortgage loan offered under or intended to be insured by the Federal Housing Administration pursuant to Section 255 of the National Housing Act, 12 U.S.C. 1715z-20, as amended, and regulations and guidance issued thereunder by the secretary of the United States Department of Housing and Urban Development or the commissioner of the Federal Housing Administration.

(17) "Real estate brokerage activity" means any activity that involves offering or providing real estate brokerage services to the public, including any of the following:

(a) Acting as a real estate agent or real estate broker for a buyer, seller, lessor, or lessee of immovable property.

(b) Bringing together parties interested in the sale, purchase, lease, rental, or exchange of immovable property.

(c) Negotiating, on behalf of any party, any portion of a contract relating to the sale, purchase, lease, rental, or exchange of immovable property, other than in connection with providing financing with respect to any such transaction.

(d) Engaging in any activity for which a person engaged in the activity is required to be registered or licensed as a real estate agent or real estate broker under any applicable law.

(18) "Registered mortgage loan originator" means any individual who meets the definition of mortgage loan originator and is an employee of a depository institution or a subsidiary that is either owned and controlled by a depository institution and regulated by a federal banking agency or an institution regulated by the Farm Credit Administration and is registered with, and maintains a unique identifier through, the Nationwide Mortgage Licensing System and Registry.

(19) "Regularly engaged" means either of the following:

(a) Engaged in residential mortgage lending activity, during the previous or current calendar year, as a mortgage loan originator in connection with more than ten residential mortgage loans or in connection with any residential mortgage loan having a principal amount exceeding twenty-five thousand dollars, or employed by an employer who meets the thresholds set forth in Subparagraph (b) of this Paragraph.

(b) Engaged in residential mortgage lending activity, during the previous or current calendar year, as a mortgage loan broker, lender, or both, separately or combined, in connection with residential mortgage loans for which the combined original principal balance exceeds two hundred fifty thousand dollars or in connection with any residential mortgage loan having a principal amount exceeding twenty-five thousand dollars.

(20) "Residential immovable property" means any immovable property located in this state upon which is constructed or intended to be constructed a dwelling.

(21) "Residential loan transaction" means any agreement by a consumer with a mortgage broker, mortgage loan originator, mortgage loan servicer, or mortgage lender in connection with a residential mortgage loan.

(22) "Residential mortgage lender" means a person who engages in a residential mortgage lending activity as a mortgage broker or mortgage lender, or both.

(23) "Residential mortgage lending activity" means an activity, including electronic activity, engaged in for compensation or with the expectation of compensation in connection with a residential loan transaction, including the origination or funding of a residential mortgage loan and the negotiation and placement, or offering to negotiate, place, or fund a residential mortgage loan for another person, or servicing a mortgage loan.

(24) "Residential mortgage loan" means any loan primarily for personal, family, or household use that is secured by a mortgage, deed of trust, or other equivalent consensual security interest on a dwelling as defined in 15 U.S.C. 1602(v) or residential immovable property upon which is constructed or intended to be constructed a dwelling as defined in 15 U.S.C. 1602(v).

(25) "Reverse mortgage loan" means a nonrecourse loan secured by immovable property that meets all of the following criteria:

(a) The loan provides purchase money proceeds for the acquisition by a borrower of a domicile to be inhabited by the borrower as his principal domicile or cash advances to a borrower based on the equity or the value in a borrower's inhabited principal domicile.

(b) The loan requires no payment of principal or interest until the entire loan becomes due and payable.

(26) "State" means any state of the United States, the District of Columbia, or any territory of the United States including Puerto Rico, Guam, American Samoa, the Trust Territory of the Pacific Islands, the Virgin Islands, and the Northern Mariana Islands.

(27) "Unique identifier" means a number or other identifier assigned by protocols established by the Nationwide Mortgage Licensing System and Registry.

Acts 1999, No. 1098, §1, eff. July 9, 1999; Acts 2000, 1st Ex. Sess., No. 34, §1, eff. April 14, 2000; Acts 2001, No. 617, §§1 and 3, eff. June 22, 2001; Acts 2003, No. 875, §1; Acts 2007, No. 36, §1, eff. June 18, 2007; Acts 2009, No. 522, §1, eff. July 31, 2009; Acts 2010, No. 418, §1; Acts 2010, No. 743, §22B, eff. July 1, 2010; Acts 2011, No. 110, §1, eff. June 20, 2011; Acts 2012, No. 199, §1, eff. May 22, 2012; Acts 2014, No. 260, §1, eff. June 30, 2014; Acts 2024, No. 287, §1.

§ 6:1084 Prohibition

No person, directly or indirectly, shall engage in a residential mortgage lending activity in this state without complying with the provisions of this Chapter or the rules or regulations promulgated pursuant to this Chapter.

Acts 1999, No. 1098, §1, eff. July 9, 1999.

§ 6:1085 Rules and regulations

The commissioner shall promulgate rules and regulations in accordance with the Administrative Procedure Act as may be necessary to effectuate the purposes, administration, and enforcement of the provisions of this Chapter.

Acts 1999, No. 1098, §1, eff. July 9, 1999.

§ 6:1085.1 Authority of the commissioner to impose continuing education

In addition to any other authority conferred upon the commissioner by this Chapter, the commissioner may impose a requirement of additional continuing education classes, not to exceed eight hours, on any residential mortgage originator or broker based on a finding by the commissioner that such originator or broker failed to adhere to reasonable standards of professional conduct while engaging in a residential mortgage lending activity that negatively impacted a consumer.

Acts 2022, No. 655, §1.

PART II LICENSURE, REGISTRATION, AND CERTIFICATION

§ 6:1086 Licensure requirement

A. Except as otherwise provided in Subsection B of this Section, beginning on July 31, 2009, and unless otherwise exempt pursuant to this Chapter, no person shall engage in any residential mortgage lending activity in this state without first obtaining and maintaining annually the following:

(1) A license and registration as a mortgage loan originator, or a license as a mortgage lender, mortgage broker, or mortgage servicer.

(2) A unique identifier.

B. Until July 31, 2010, the provisions of Subsection A of this Section shall not apply to the following:

(1) A person whose residential mortgage lending activities were not subject to the licensing requirements pursuant to this Chapter on July 30, 2009.

(2) A person engaged in residential mortgage lending activities pursuant to an exemption provided by this Chapter on July 30, 2009.

C. Beginning July 31, 2009, all persons to whom a license was issued and in effect pursuant to this Chapter on July 30, 2009, shall be required to meet all the requirements of this Chapter in order to obtain a renewal of a license issued pursuant to this Chapter.

D. For purposes of Subsection A of this Section, a person shall not be considered to be engaged in residential mortgage lending activity in this state unless that person is regularly engaged in residential mortgage lending activity. This Subsection shall have no effect if the federal Consumer Financial Protection Bureau determines that the provisions of the Secure and Fair Enforcement for Mortgage Licensing Act of 2008 (P.L. 110-289) do not allow an exception from coverage for those not so regularly engaged.

Acts 1999, No. 1098, §1, eff. July 9, 1999; Acts 2003, No. 875, §1; Acts 2009, No. 522, §1, eff. July 31, 2009; Acts 2012, No. 199, §1, eff. May 22, 2012; Acts 2014, No. 260, §1, eff. June 30, 2014.

§ 6:1087 Exemptions; annual registration statement; fees

A. Any person authorized to engage in business as a credit union under the laws of the United States, any state or territory of the United States, or the District of Columbia, and any subsidiary of such person, and the employees of such person, shall be exempt from the provisions of this Chapter.

B. The following employers and their employees shall be exempt from the provisions of this Part:

(1) Any person authorized to engage in business as a bank, savings bank, or savings and loan association under the laws of the United States, any state or territory of the United States, or the District of Columbia, and any direct or indirect subsidiaries of such entities, who are subject to general supervision and regulation, or audit or examination, by a regulatory body or agency of the United States, any state or territory of the United States, or the District of Columbia, and the employees of such persons, including those acting as originators and their exclusive agents under written agreement.

(2) Any attorney licensed to practice law when such attorney is not actively engaged in the business of making or brokering residential mortgage loans and the residential mortgage lending activity is incidental to providing legal services.

(3) Any nonprofit corporation exempt from federal taxation under Section 501(c) of the Internal Revenue Code making residential mortgage loans to promote home ownership or home improvements for the disadvantaged.

(4) Any agency of the federal government, or a state or municipal government, or any quasi governmental agency making residential mortgage loans under the specific authority of the laws of any state or the United States.

(5) Any person acting as a fiduciary with respect to any employee pension benefit plan qualified under the Internal Revenue Code who makes residential mortgage loans solely to plan participants from plan assets.

(6) Any real estate investment trust.

(7) Any person acting in a fiduciary capacity conferred by the authority of any court.

(8) Any person licensed as a small business investment company by the United States Small Business Administration.

(9) Any mortgagee in a residential loan transaction in which the mortgagee is the former owner of the residential immovable property.

(10) Repealed by Acts 2005, No. 235, §2.

(11) Any insurance company authorized by the insurance commissioner of this state or any other state and any resident or nonresident insurance agent who holds an unexpired agent license under Title 22 of the Louisiana Revised Statutes of 1950 who brokers loans exclusively to an insurer.

(12) Any person authorized to engage in business as a licensed lender under the provisions of the Louisiana Consumer Credit Law, R.S. 9:3510 et seq., whose gross revenue from loans subject to the Louisiana Consumer Credit Law exceeds fifty percent of the licensee's gross revenue; however, such persons shall remain subject to the examination and enforcement provisions of R.S. 6:1091 and 1092 for those loans subject to R.S. 6:1081 et seq.

C.(1) Employees and the exclusive agents under written agreement of any person licensed pursuant to this Part which is a direct or indirect subsidiary of a financial or bank holding company, savings bank holding company, or thrift holding company, shall be exempt from the licensure and continuing education provisions of this Part.

(2) Any person exempt from licensure under Subsection B shall engage in residential mortgage lending activities only through natural persons who are licensed as a mortgage broker, mortgage lender, or originator, or who are registered according to the provisions of this Chapter, or who are exempt from the provisions of this Part.

D. Persons engaged in residential mortgage transactions subject to an exemption provided for in Subsection A, B, or C of this Section on or before July 30, 2009, may continue to be so engaged until July 30, 2010. Thereafter, the exemptions provided in Subsection A, B, or C of this Section shall expire and no longer have any effect. Effective July 31, 2010, no person previously exempt pursuant to Subsection A, B, or C of this Section may engage in residential mortgage lending activity without a license and a unique identifier issued pursuant to this Chapter, unless such person is exempt under an exemption provided for in this Chapter on or after July 31, 2009.

E. The following shall be exempt from the provisions of this Part applicable to persons engaged in residential mortgage lending activities as a residential mortgage loan originator:

(1) Registered mortgage loan originators, when acting for a depository institution described in R.S. 6:1083.

(2) Any individual who offers or negotiates terms of a residential mortgage loan with or on behalf of an immediate family member of the individual.

(3) Any individual who offers or negotiates terms of a residential mortgage loan secured by a dwelling that is owned by and serves as the individual's residence.

(4) A licensed attorney who negotiates the terms of a residential mortgage loan on behalf of a client as an ancillary matter to the attorney's representation of the client, unless the attorney is compensated by a lender, a mortgage broker, or other mortgage loan originator, or by any agent of such lender, mortgage broker, or other mortgage loan originator.

(5) Any individual who performs only real estate brokerage activities and is licensed or registered in accordance with applicable state law, unless the person or entity is compensated by a lender, a mortgage broker, or other mortgage loan originator, or by any agent of such lender, mortgage broker, or other mortgage loan originator.

(6) Any individual solely involved in extensions of credit relating to timeshare plans, as that term is defined in 11 U.S.C. 101(53D).

(7) An individual engaging solely in loan processor or underwriter activities, who does not represent to the public, through advertising or other means of communicating or providing information, including the use of business cards, stationery, brochures, signs, rate lists, or other promotional items, that such individual can or will perform any of the activities of a mortgage loan originator. For the purposes of this Paragraph, the term "loan processor or underwriter" means an individual who performs clerical or support duties as an employee at the direction of and subject to the supervision and instruction of a person licensed, or exempt from licensing under this Chapter. For purposes of this Paragraph, the term "clerical or support duties" may include subsequent to the receipt of an application:

(a) The receipt, collection, distribution, and analysis of information common for the processing or underwriting of a residential mortgage loan.

(b) Communicating with a consumer to obtain the information necessary for the processing or underwriting of a loan, to the extent that such communication does not include offering or negotiating loan rates or terms, or counseling consumers about residential mortgage loan rates or terms; provided however that an independent contractor may not engage in residential mortgage loan origination activities as a loan processor or underwriter unless such independent contractor obtains and maintains a license under this Part. Each independent contractor loan processor or underwriter licensed as a mortgage loan originator shall have and maintain a valid unique identifier issued by the NMLS&R.

(8) Individuals who are employees of a retailer of manufactured or modular homes as defined in R.S. 51:911.21 et. seq., if the employees are performing only administrative or clerical tasks in connection with the sale or lease of a manufactured or modular home and provided such individuals receive no compensation or other gain from a residential mortgage lender or a residential mortgage broker for the performance of the administrative or clerical tasks.

(9) Any individual who meets all of the following requirements:

(a) In any calendar year, originates five or fewer residential mortgage loans exclusively for a single federally chartered depository institution, and the loans are closed.

(b) Is contractually prohibited from soliciting, processing, negotiating, or placing a residential mortgage loan with a person other than the single federally chartered depository institution.

(c) Enrolls with the Office of Financial Institutions as an individual who originates exclusively with a single federal depository institution until the time any registration with the Nationwide Mortgage Licensing System and Registry (NMLS&R) is required for the individual by federal law or regulation and a suitable category is created for that registration with NMLS&R. Enrollment pursuant to this Subparagraph must be renewed annually with the Office of Financial Institutions.

(d) Is not barred from licensure pursuant to R.S. 6:1088(E)(2), (3), or (4), as determined by the commissioner of financial institutions.

(e) Is sponsored by a life insurance company or an affiliate of the company which is authorized to engage in business in this state and which is a licensed mortgage loan broker or originator, and which sponsorship shall include all of the following:

(i) Providing an undertaking of accountability supported by a surety bond equal to one million dollars, to meet the requirement of R.S. 6:1088(G)(1) and to cover all of the persons who are exempt pursuant to this Paragraph, which undertaking includes full and direct financial responsibility for the loan origination activities of each such exempt person.

(ii) Paying an annual fee on behalf of the individual exempted pursuant to this Paragraph in the amount of one-half the license fee for a mortgage loan originator pursuant to R.S. 6:1088.2(A)(4) to the Office of Financial Institutions.

(10) Individuals employed by nonprofit corporations exempt under R.S. 6:1087(F)(11).

(11) Mortgage servicer loss mitigation specialists, if the commissioner determines that an exemption of a mortgage servicer loss mitigation specialist is compliant with the minimum standards set forth in P.L. 110-289, Title V.

F. The following employers and their employees shall be exempt from the provisions of this Part applicable to residential mortgage lenders, residential mortgage brokers, and mortgage servicers:

(1) Any attorney licensed to practice law when such attorney is not actively engaged in the business of making or brokering residential mortgage loans and the residential mortgage lending activity is incidental to providing legal services.

(2) Any nonprofit corporation exempt from federal taxation under Section 501(c) of the Internal Revenue Code making residential mortgage loans to promote home ownership or home improvements for the disadvantaged.

(3) Any agency of the federal government, or a state or municipal government, or any quasi governmental agency making residential mortgage loans under the specific authority of the laws of any state or the United States.

(4) Any person acting as a fiduciary with respect to any employee pension benefit plan qualified under the Internal Revenue Code who makes residential mortgage loans solely to plan participants from plan assets.

(5) Any real estate investment trust.

(6) Any person acting in a fiduciary capacity conferred by the authority of any court.

(7) Any person licensed as a small business investment company by the United States Small Business Administration.

(8) Any insurance company authorized by the insurance commissioner of this state or any other state and any resident or nonresident insurance producer who holds an unexpired producer license under Title 22 of the Louisiana Revised Statutes of 1950 who brokers loans exclusively to an insurer.

(9) Any depository institution or direct or indirect subsidiary thereof regulated by a federal banking agency.

(10) Any mortgagee in a residential loan transaction in which the mortgagee is the owner of the dwelling or residential immovable property.

(11) Any nonprofit corporation that is providing financial education and counseling to consumers, is exempt from federal taxation under Section 501(c) of the Internal Revenue Code, is approved by the United States Department of Housing and Urban Development (HUD) to provide housing counseling, and does not originate residential mortgage loans.

G. Any person exempt from licensure pursuant to Subsection F of this Section shall engage in residential mortgage lending activities only through natural persons who are licensed or registered as a mortgage broker, mortgage lender, or mortgage loan originator according to the provisions of this Chapter, or who are exempt from the provisions of this Part.

Acts 1999, No. 1098, §1, eff. July 9, 1999; Acts 2000, 1st Ex. Sess., No. 34, §1, eff. April 14, 2000; Acts 2001, No. 617, §§1 and 3, eff. June 22, 2001; Acts 2003, No. 875, §§1, 2; Acts 2004, No. 151, §1; Acts 2005, No. 235, §2; Acts 2009, No. 522, §1, eff. July 31, 2009; Acts 2011, No. 110, §1, eff. June 20, 2011; Acts 2014, No. 260, §1, eff. June 30, 2014.

§ 6:1088 Application for licensure; surety bond

A. An application for a license under this Chapter shall be made under oath and on a form prescribed by the commissioner. The commissioner may grant restricted or conditional licenses. Each license shall expire on December thirty-first of the year in which the license was issued.

B. In addition to any other duties imposed upon the commissioner by law, the commissioner shall require mortgage loan originators, mortgage lenders, and mortgage brokers to be licensed and registered through the NMLS&R and for this purpose the commissioner may establish such application information requirements and any other information as he deems necessary to participate in the NMLS&R. For the purposes of participating in the NMLS&R, the commissioner may waive or modify in whole or in part by rule, any requirements set forth in this Chapter and set forth such new requirements as he deems reasonably necessary to participate in the NMLS&R. In order to facilitate an orderly transition to the licensing requirements of this Chapter and to ensure timely receipt and consideration, the commissioner may direct that certain information, documents, or other items required pursuant to this Chapter be furnished to the commissioner or to the NMLS&R, and may be furnished periodically and separately from an application.

C. In addition to any other application information requirements of the commissioner, an applicant for licensure pursuant to this Chapter shall, in connection with an application for licensing, furnish to the commissioner, or if application procedures permit, to the Nationwide Mortgage Licensing System and Registry, each of the following:

(1) Fingerprints for submission to the Federal Bureau of Investigation, and any governmental agency or entity authorized to receive such information for a state, national, or international criminal history background check; provided however, that any person licensed on July 30, 2009, may satisfy this requirement by complying with the provisions of R.S.6:121.2, until the earlier of being directed otherwise by the commissioner, or until December 31, 2010. For purposes of this Paragraph and Paragraph (3) of this Subsection, the commission may use the NMLS&R as a channeling agent for requesting and distributing information to and from any source as directed by the commissioner.

(2) Personal history and experience in a form prescribed by the NMLS&R, and when available through the NMLS&R.

(3) Authorization for the NMLS&R and the commissioner to obtain:

(a) An independent credit report obtained from a consumer reporting agency described in the Fair Credit Reporting Act, 15 U.S.C. 1681 et seq.

(b) Information related to any administrative, civil, or criminal findings by any governmental jurisdiction; provided however, that persons licensed on July 30, 2009, need not furnish such authorization until directed to do so by the commissioner, but in any event no later than December 31, 2010.

D. To comply with the requirements of this Section, an applicant for a mortgage lender, mortgage broker, or mortgage servicer license shall furnish the required information as to each owner and member if the applicant is a partnership or limited liability company, each officer, director, and direct or indirect owner of ten percent or more of applicant's outstanding shares if the applicant is a corporation, and each settlor, trustee, and beneficiary if the applicant is a trust.

E. Notwithstanding any other law to the contrary, the commissioner may not issue a mortgage loan originator license, unless the commissioner finds that the applicant has the following minimum requirements:

(1) Paid all fees due to the office of financial institutions.

(2) Never had a mortgage loan originator license, mortgage lender license, or mortgage broker license revoked in any governmental jurisdiction unless such revocation is subsequently formally vacated.

(3) Has not been convicted of, pleaded guilty, or nolo contendere to a felony in a domestic, foreign, or military court during the seven-year period preceding the date of application for licensing and registration or at any time preceding such date of application if such felony involved an act of fraud, dishonesty, or a breach of trust, or money laundering; provided however that any conviction for which an individual has received a pardon, the effect of which, according to the law of the jurisdiction granting the pardon, is to void the fact of the conviction, shall not be deemed a conviction for the purposes of this Subsection.

(4) Demonstrates financial responsibility, character, and general fitness such as to command the confidence of the community and to warrant a determination that the mortgage loan originator, mortgage lender, or mortgage broker will operate honestly, fairly, and efficiently within the purposes of this Chapter.

(5) Has completed the pre-licensing education requirement described in this Chapter.

(6) Has passed a written test that meets the test requirement described in this Chapter.

(7) Has obtained and maintains a surety bond in the amount required by this Section.

F. Notwithstanding any other law to the contrary, the commissioner may not issue a mortgage lender license, mortgage broker license, or mortgage servicer license unless the commissioner makes the minimum findings provided in Paragraphs (E)(1), (2), (3), and (4) of this Section, and as to each owner, partner, and member if the applicant is a partnership or a limited liability company, each officer, director, and direct or indirect owner of ten percent or more of the outstanding shares if the applicant is a corporation, and each settlor, trustee, and beneficiary if the applicant is a trust.

G.(1) Each applicant for any license governed by this Chapter shall, at the time of application for licensure or any renewal of a license, provide evidence of obtaining and maintaining a surety bond as provided for in this Section. Notwithstanding any other law to the contrary, or any other provision of this Chapter, a person who was licensed and met the financial responsibility requirements in whatever manner permitted by this Chapter on July 30, 2009, and who thereafter continuously meets those requirements in a manner permitted by this Chapter on July 30, 2009, shall be deemed in compliance with the requirements of this Subsection until December 31, 2009.

(2) The applicant shall furnish a surety bond authorized by a surety insurer licensed to do business in this state. The surety bond shall name the office of financial institutions and shall be submitted as prescribed by the commissioner in connection with the application or renewal application.

(3) The required amount of the surety bond shall be determined by information in a report submitted by an applicant or licensee as prescribed by the commissioner. The total dollar amount of the original outstanding principal balance of all residential mortgage loans serviced or originated by the applicant secured by immovable property located in this state, including all such loans originated by mortgage loan originators employed by the applicant during the previous calendar year and reported pursuant to this Subsection shall be used to determine the amount of the bond. The required amount of the bond shall be determined by information in a report of total loan volume submitted by the applicant as prescribed by the commissioner. Total loan volume of the applicant shall be calculated by adding all of the following:

(a) The total dollar volume of loans which were originated by an applicant or licensee and funded by a mortgage lender.

(b) Total dollar volume of loans originated and funded by same applicant or licensee.

(c) The total dollar volume of loans funded by an applicant which were originated by a mortgage broker.

(d) The total outstanding principal balance as of the end of the previous calendar year for all residential mortgage loans serviced.

(4) The total dollar loan volume reported for the previous year shall be used to determine the amount of the surety bond required in accordance with the following:

Dollar Amount of Total Loan

Required Amount of Surety Bond

Volume in Previous Calendar Years

Lenders, Brokers, and Originators

$0 - $99,999,999

$25,000

$100,000,000 or greater

$50,000

H. All persons licensed by the commissioner pursuant to this Part shall maintain a surety bond, according to the provisions of this Section, at all times during licensure and at all times that they are required to be licensed, as determined by the commissioner.

I. Notwithstanding any other law to the contrary, in lieu of obtaining a surety bond, all applicants may meet the requirements of this Section by depositing in a federally insured depository institution located in Louisiana, designated by the applicant and approved by the commissioner, an amount equal to the amount of the surety bond otherwise required by the provisions of this Section, provided that the title of any such deposit account must include the words "for the benefit of" or "f/b/o the Louisiana Office of Financial Institutions", and require such other evidence of and information regarding such account as he may deem appropriate, provided that interest earned on such account shall be payable to person or entity making the deposit.

J. An applicant for a mortgage originator license who is employed by, or is an exclusive agent for, a juridical person engaging in residential mortgage lending activities as a licensed mortgage broker, mortgage lender, or mortgage servicer may satisfy the requirement of furnishing a surety bond by submitting evidence in a form and manner satisfactory to the commissioner that his employer or principal has obtained a surety bond which satisfies the requirements of this Section. Notwithstanding any provision of law to the contrary, a mortgage originator whose license remains in a status of inactive or any other status which would not allow them to originate mortgage loans shall not be required to maintain the surety bond as required by this Section until such time as their license is returned to a status which allows them to originate mortgage loans.

Acts 1999, No. 1098, §1, eff. July 9, 1999; Acts 2000, 1st Ex. Sess., No. 34, §1, eff. April 14, 2000; Acts 2001, No. 617, §§1 and 3, eff. June 22, 2001; Acts 2003, No. 875, §1; Acts 2006, No. 237, §1; Acts 2007, No. 36, §1, eff. June 18, 2007; Acts 2008, No. 225, §1, eff. June 15, 2008; Acts 2009, No. 522, §1, eff. July 31, 2009; Acts 2010, No. 36, §1; Acts 2014, No. 260, §1, eff. June 30, 2104.

§ 6:1088.1 Licensing system; authorization; fees; required use

A. Consistent with both the public interest and the purposes of this Chapter, the commissioner shall have the authority to take all action regarding the licensing system, in his discretion as he deems necessary and appropriate, including but not limited to all of the following:

(1) Facilitating and participating in the establishment and implementation of the licensing system.

(2) Entering into agreements and contracts including information-sharing agreements.

(3) Contracting with third parties to process, maintain, and store information collected by the licensing system.

(4) Authorizing the licensing system to collect fingerprints on the commissioner's behalf in order to receive criminal history records from the Federal Bureau of Investigation. For purposes of this Section, the commissioner may use the NMLS&R as a channeling agent for requesting information from and distributing information to the Department of Justice or any other governmental agency.

(5) Requiring persons engaged in activities that require licensure by the commissioner to utilize the licensing system and to pay through the licensing system, in addition to those fees provided for in this Section for utilizing the licensing system, all other fees provided for by this Chapter.

(6) Providing information to the licensing system.

(7) Authorizing a third party to collect any fees associated with licensure on behalf of the commissioner.

(8) Notwithstanding any other provision of law to the contrary, sharing any information or material which has been disclosed to the licensing system with any state or federal regulatory agencies having authority over residential mortgage lending activities.

(9) Providing a process whereby a mortgage loan originator may challenge information entered into the NMLS&R regarding that mortgage loan originator.

B. Persons engaged in activities that require licensure pursuant to this Chapter shall be required to pay all applicable fees to utilize the licensing system.

C. After the date the licensing system is available for use, any filing or notification required by the commissioner shall be made through the online licensing system.

D. Notwithstanding any other provision of law to the contrary, the licensing system is not intended to and does not replace or affect the commissioner's authority to grant or deny licenses.

E. Before the end of each fiscal year, the commissioner shall submit the most recent annual report of the NMLS&R's proprietor, the State Regulatory Registry LLC or its successors, to the House Committee on Commerce, the Senate Committee on Commerce, Consumer Protections, and International Affairs, and the division of administration.

Acts 2007, No. 36, §1, eff. June 18, 2007; Acts 2008, No. 225, §1, eff. June 15, 2008; Acts 2008, No. 929, §1, eff. July 15, 2008; Acts 2009, No. 522, §1, eff. July 31, 2009; Acts 2012, No. 220, §1, eff. May 22, 2012.

§ 6:1088.2 Application for licensure; application and renewal fees

A. The application shall be accompanied by the following nonrefundable fees as determined by and paid as directed by the commissioner:

(1) In the case of an application for a license to act as a mortgage lender, mortgage broker, mortgage servicer, or combination of any, a license fee in an amount not to exceed five hundred dollars.

(2) In the case of an application for a license to act as an originator, a license fee in an amount not to exceed two hundred dollars.

(3) An annual license renewal fee for each person licensed as a mortgage broker, mortgage lender, or mortgage servicer in an amount not to exceed four hundred dollars.

(4) An annual license renewal fee for each originator in an amount not to exceed two hundred dollars.

B. If the applicant has multiple office locations, all such locations may be covered by a single license by including in the license application the address of each office operated by the applicant and the name and license number of the individual licensees engaging in residential mortgage lending activities at that location.

Acts 2009, No. 522, §1, eff. July 31, 2009; Acts 2014, No. 260, §1, eff. June 30, 2014; Acts 2015, No. 324, §1.

§ 6:1088.3 Application for renewal of license; restriction; late renewal fees

A.(1) Each person licensed as a mortgage broker, mortgage lender, or mortgage servicer shall submit an annual license renewal application on or before December thirty-first of each year in a manner and form prescribed by the commissioner.

(2) Each mortgage loan originator who obtains a license and unique identifier, who renewed a license and obtained a unique identifier to act as a mortgage loan originator in 2009 pursuant to this Chapter, shall thereafter submit an annual license renewal application on or before December thirty-first of each year in a manner and form prescribed by the commissioner.

(3) An annual renewal application shall be accompanied by the required annual license renewal fee pursuant to R.S. 6:1088.1. An annual license renewal application submitted after December thirty-first and before March first of the following year shall be charged an annual license renewal late fee of two hundred dollars for residential mortgage lenders, brokers, and servicers, and fifty dollars for mortgage loan originators, in addition to the annual license renewal fee.

B.(1) An annual license renewal application which is timely submitted on or before the December thirty-first license expiration date shall remain in force and effect until such application is approved or rejected by the commissioner. Nothing in this Section shall preclude the commissioner from implementing any administrative or enforcement action authorized by this Title for violations of this Chapter or for material misrepresentation which may have occurred prior to the renewal date of a license.

(2) Licenses for which renewal applications are submitted to the NMLS&R after December thirty-first shall be deemed to have expired effective January first, unless the licensee after December thirty-first and before March first of the following year, satisfies all of the following:

(a) Submits a request for a late filing of the annual license renewal application.

(b) Pays the annual license renewal application fee and the annual license renewal late fee provided for in Subsection A of this Section.

(c) Meets the requirements for license renewal provided for in Paragraph (C)(1) or (C)(2) of this Section, as applicable.

C.(1) The commissioner shall not renew a residential mortgage originator license for which an application for license renewal is submitted for the year 2010, and shall not renew any residential mortgage originator license for which an application for license renewal is submitted for any year thereafter, unless the commissioner finds at a minimum:

(a) The applicant for renewal of a residential mortgage loan originator license continues to meet all requirements to obtain a license, including all requirements of R.S. 6:1088.

(b) The applicant for renewal of a residential mortgage loan originator license satisfies:

(i) The annual continuing education requirements of this Part.

(ii) The applicant is in compliance with all final or uncontested orders of, or consent agreements with the commissioner including, but not limited to, the payment of fees, penalties, or refunds.

(2) The commissioner shall not renew a residential mortgage broker, lender, or servicer license for which an application for license renewal is submitted for the year 2010, and shall not renew any residential mortgage lender or broker license for which an application for license renewal is submitted for any year thereafter, unless the commissioner finds at a minimum:

(a) The applicant for renewal of a residential mortgage lender or broker license continues to meet all requirements to obtain a license, including all requirements of R.S. 6:1088.

(b) The applicant for renewal of a residential mortgage lender, broker, or servicer license is in compliance with all final or uncontested orders of, and consent agreements with the commissioner, including but not limited to the payment of all fees, penalties, or refunds.

D.(1) The license of a mortgage loan originator failing to satisfy the minimum standards for annual license renewal in Paragraph (C)(1) of this Section shall expire on December thirty-first.

(2) The license of a mortgage loan broker, lender, or servicer failing to satisfy the minimum standards for annual license renewal in Paragraph (C)(2) of this Section shall expire on December thirty-first.

Acts 2009, No. 522, §1, eff. July 31, 2009; Acts 2014, No. 260, §1, eff. June 30, 2014.

§ 6:1088.4 Information reporting

Notwithstanding any other provision of law to the contrary, except for R.S. 6:103(B)(16), R.S. 6:103(J), and R.S. 6:1088.1, the commissioner shall furnish to the NMLS&R the following:

(1) Information as required by the P.L. 110-289, as amended, including but not limited to, the employment history of and publicly adjudicated disciplinary and enforcement actions and consumer complaints against mortgage loan originators.

(2) Information regarding publicly adjudicated disciplinary and enforcement actions and consumer complaints against mortgage loan brokers or mortgage lenders engaging in activities subject to this Chapter.

(3) Regularly report violations of this Chapter, as well as enforcement actions, and other relevant information to the NMLS&R.

Acts 2009, No. 522, §1, eff. July 31, 2009.

§ 6:1089 Name or location changes and closures; fees

A.(1) No residential mortgage lender, originator, or servicer shall conduct the residential mortgage lending activities provided for in this Chapter under any name other than the one stated in its current record of information in the licensing system.

(2) A residential mortgage lender or servicer shall notify the commissioner of a change in the location or name of the business or the addition of offices by submitting such information to the licensing system prior to the change. A notice of change of location or name or addition of offices shall be accompanied by a filing fee of one hundred dollars.

(3) A residential mortgage lender or servicer shall notify the commissioner of the closing of any office by submitting such information to the licensing system and within thirty days of such closure.

B.(1) Whenever the employment of an originator changes, whether by the originator's action or otherwise, the originator shall give notice of the change of employment to the commissioner by submitting such information to the licensing system within thirty days of such change. The notice shall be accompanied by a filing fee of fifty dollars.

(2) Whenever the employment of an originator employed by a mortgage broker or mortgage lender changes, whether by the originator's change of employment or otherwise, the employer, unless exempted from the provisions of this Part, shall give notice of the change in employment to the commissioner by submitting such information to the licensing system within thirty days of the change.

(3) Failure to notify the commissioner through the NMLS&R within the prescribed time as required by this Section shall result in a one hundred dollar late notification fee.

Acts 1999, No. 1098, §1, eff. July 9, 1999; Acts 2000, 1st Ex. Sess., No. 34, §1, eff. April 14, 2000; Acts 2001, No. 617, §1, eff. June 22, 2001; Acts 2003, No. 875, §1; Acts 2009, No. 522, §1, eff. July 31, 2009; Acts 2014, No. 260, §1, eff. June 30, 2014.

§ 6:1090 Restrictions

A. No license issued pursuant to this Chapter shall be sold or otherwise transferred.

B.(1) No person shall acquire or control a license to make, service, or broker residential mortgage loans through the acquisition or control of fifty-one percent or more of the ownership interest in a licensee without first having obtained written approval from the commissioner, pursuant to an application for a change of control in ownership of the licensee, filed in the manner and on a form prescribed by the commissioner and accompanied by a fee of three hundred dollars. Any person who acquires controlling interest in a licensee without first having filed an application for change of control with the commissioner shall be deemed to be operating without proper authority under this Chapter and is subject to the penalties of R.S. 6:1092(C).

(2) For the purposes of this Section, a person acquires or controls the licensee when at least one of the following conditions exists:

(a) The person, directly or acting through one or more other persons, owns, controls, or has the power to vote any class of stock of the corporation.

(b) The person controls in any manner the election of a majority of the directors of the corporation.

(c) The commissioner determines, after notice and an opportunity for hearing, that the person directly or indirectly exercises a controlling influence over the management or the policies of the licensee.

(3) When the licensee is a limited liability company or a limited liability partnership, the licensee is acquired or controlled if one of the following occurs:

(a) There is a change of managers or general partners.

(b) An existing manager or general partner acquires or controls the licensee as provided in Paragraph (2) of this Subsection.

(c) The commissioner determines that there has been a significant change in the membership or partnership interests, including but not limited to a change in ownership or control, directly or indirectly affecting twenty-five percent or more of the total interest of the licensee.

(4) A corporation that is a licensee shall notify the commissioner within sixty days of a stockholder becoming a principal stockholder.

C. No person may act as an originator in a residential loan transaction unless such person is employed by a licensed mortgage broker or mortgage lender, or by a person exempt from the provisions of this Part.

D. A mortgage broker shall broker a residential mortgage loan only to a mortgage lender licensed pursuant to this Chapter, or to a mortgage lender exempt from the provisions of this Part.

E. Any person licensed under this Chapter shall engage in residential mortgage lending activities only through a natural person who is licensed as a mortgage loan originator or who is exempt from the provisions of this Part.

F. A licensed residential mortgage lender or broker shall enter into a residential mortgage lending transaction only with a person who is in compliance with the licensing provisions of this Chapter as a mortgage broker, mortgage lender, or mortgage loan originator.

G. No residential mortgage lender is permitted to operate a "Net Branch" in this state except as permitted by rules promulgated by the commissioner.

H. No person who has been denied a license or had a license revoked and has failed to request an administrative hearing pursuant to R.S. 6:1092(A), or whose revocation was affirmed in an administrative hearing, may be employed as a loan processor of residential mortgage loans or hold a position which is responsible for the operation of the principal place of business or a branch of any residential mortgage lender licensed under this Chapter.

I. No person licensed pursuant to this Chapter shall engage in or be financially compensated for any loan transaction in which such person, for a fee, commission, or other valuable consideration, is acting as a licensee under the Louisiana Real Estate License Law, R.S. 37:1430 et seq., in connection with the same residential loan transaction.

Acts 1999, No. 1098, §1, eff. July 9, 1999; Acts 2001, No. 617, §1, eff. June 22, 2001; Acts 2003, No. 875, §1; Acts 2006, No. 237, §1; Acts 2007, No. 39, §1; Acts 2009, No. 522, §1, eff. July 31, 2009; Acts 2014, No. 260, §1, eff. June 30, 2014.

§ 6:1091 Recordkeeping and retention; examinations; investigation of complaints; reports of conditions

A.(1) Each person required to be licensed under this Chapter shall maintain in its offices such books, records, and accounts of its residential mortgage lending activities as the commissioner may reasonably require in order to determine whether such person is complying with the provisions of this Chapter and the rules and regulations promulgated under the provisions of this Chapter. Required records may be maintained in any electronic format consistent with the person's ordinary business practices unless the person receives specific written instructions from the commissioner to the contrary. Such books, records, and accounts shall be maintained separate and apart from any other business in which the person is involved and shall be kept at the location in the state at which the residential mortgage lending activity occurred or at the person's principal office unless otherwise permitted in writing by the commissioner. Records must be made available for review or examination at a nonresidential location approved by the commissioner.

(2) The commissioner either in person or through an employee appointed by him shall examine the books, records, and accounts of all licensed residential mortgage lenders at least once every three years on an examination schedule which focuses on appropriate risk management and concentrations of consumer complaints and is consonant with the resources of the office and in accordance with good examination practices. The commissioner shall include the dates of each licensed residential mortgage lender's last two examinations beginning with examinations conducted after January 1, 2008, which information shall be updated quarterly, with the licensee's identifying information on the list of active residential mortgage lenders maintained by the office of financial institutions and accessible by the general public. The commissioner may also examine any formerly licensed person who is engaged in the collection or enforcement of mortgage loans or brokerage agreements. Nothing in this Subsection shall limit the authority of the commissioner to examine any licensed or formerly licensed person as frequently as he deems necessary to protect the public interest.

(3) If the books and records of any person described in this Subsection are located outside of the state, he shall make them available to the commissioner at a location within this state convenient to the commissioner or pay the reasonable and necessary expenses for the commissioner or his representative to examine them at the place where they are maintained. The commissioner may designate representatives, including comparable officials of the state in which the records are located, to inspect the records on his behalf.

(4) The commissioner shall assess an examination fee in an amount not to exceed four hundred dollars per location examined. If the examination fee is not paid within thirty days of its assessment, the person examined shall be subject to an administrative penalty of not more than fifty dollars for each day it is delinquent.

B. If the commissioner receives a written complaint pertaining to the residential mortgage activities of a person exempt from the provisions of this Part or this Chapter, or exempt from licensure pursuant to the provisions of R.S. 6:1087, the commissioner may refer the complaint to the exempted person for comment or response or to the appropriate federal or state regulatory, licensing, supervisory, or auditing agency or body.

C. In addition to any authority allowed under this Title, the commissioner shall have the authority to conduct investigations and examinations as follows:

(1) For purposes of initial licensing, license renewal, license suspension, license conditioning, license revocation or termination, or general or specific inquiry or investigation to determine compliance with this Chapter, the commissioner shall have the authority to access, receive, and use any books, accounts, records, files, documents, information, or evidence, including but not limited to:

(a) Criminal, civil, and administrative history information.

(b) Personal history and experience information including independent credit reports obtained from a consumer reporting agency described in the Fair Credit Reporting Act, 15 U.S.C. 1681 et seq.

(c) Any other documents, information, or evidence the commissioner deems relevant to the inquiry or investigation regardless of the location, possession, control, or custody of such documents, information, or evidence.

(2) For the purposes of investigating violations or complaints arising under this Chapter, or for the purposes of examination, the commissioner may review, investigate, or examine any licensee, individual, or person subject to this Chapter, as often as necessary in order to carry out the purposes of this Chapter. The commissioner may direct, subpoena, or order the attendance of and examine under oath all persons whose testimony may be required about the loans or the business or subject matter of any such examination or investigation, and may direct, subpoena, or order such person to produce books, accounts, records, files, and any other documents the commissioner deems relevant to the inquiry.

(3) Each person subject to this Chapter shall make available to the commissioner upon request the books and records relating to the operations of such licensee, individual, or person subject to this Chapter. The commissioner shall have access to such books and records and interview the officers, principals, mortgage loan originators, employees, independent contractors, agents, and customers of the licensee, individual, or person subject to this Chapter concerning their business.

(4) Each person subject to this Chapter shall make or compile reports or prepare other information as directed by the commissioner in order to carry out the purposes of this Section, including but not limited to information lists and data concerning loan transactions in a format prescribed by the commissioner.

(5) In making any examination or investigation authorized by this Chapter, the commissioner may control access to any documents and records of the person under examination or investigation. The commissioner may take possession of the documents and records or place a person in exclusive charge of the documents and records in the place where they are usually kept. During the period of control, no person shall remove or attempt to remove any of the documents and records except pursuant to a court order or with the consent of the commissioner. Unless the commissioner has reasonable grounds to believe the documents or records of the person have been, or are at risk of being altered or destroyed for purposes of concealing a violation of this Chapter, the person who is the owner of the documents and records shall have access to the documents or records as necessary to conduct its ordinary business affairs.

(6) In order to carry out the purposes of this Section, the commissioner may:

(a) Retain attorneys, accountants, or other professionals and specialists as examiners, auditors, or investigators to conduct or assist in the conduct of examinations or investigations.

(b) Enter into agreements or relationships with other government officials or regulatory associations by sharing resources, standardized or uniform methods or procedures, and documents, records, information, or evidence obtained under this Section.

(c) Use, hire, contract, or employ public or privately available analytical systems, methods, or software to examine or investigate each person subject to this Chapter.

(d) Accept and rely on examination or investigation reports made by other government officials, within or outside this state.

(7) The authority of this Section shall remain in effect, whether such person subject to this Chapter acts or claims to act under any licensing or registration law of this state, or claims to act without such authority.

(8) No licensee, individual, or person subject to investigation or examination under this Section shall knowingly withhold, abstract, remove, mutilate, destroy, or secrete any books, records, computer records, or other information.

D. Each licensee shall submit to the NMLS&R reports of condition which shall be in such form and contain such information as the NMLS&R may require.

Acts 1999, No. 1098, §1, eff. July 9, 1999; Acts 2001, No. 617, §1, eff. June 22, 2001; Acts 2003, No. 875, §1; Acts 2008, No. 531, §1, eff. June 30, 2008; Acts 2009, No. 522, §1, eff. July 31, 2009.

§ 6:1092 Suspension and revocation of licensure; commissioner's interpretations; prohibitions

A. After notice and an opportunity to be heard as provided in the Administrative Procedure Act, the commissioner may suspend or revoke the license of any person licensed pursuant to this Chapter who:

(1) Violates any of the provisions of this Chapter or any rule or regulation promulgated or any order, including but not limited to a cease and desist order or subpoena, issued pursuant to this Chapter.

(2) Violates any provision of a voluntary consent or compliance agreement which has been entered into with the commissioner.

(3) Has knowingly provided or caused to be provided to the commissioner any false or fraudulent misrepresentation of material fact or any false or fraudulent financial statement, or has suppressed or withheld from the commissioner any information which if submitted by him would have resulted in denial of the license application.

(4) Refuses to permit an examination by the commissioner of his books and affairs, or has refused or failed within a reasonable time to furnish any information or make any report that may be required by the commissioner under the provisions of this Chapter.

(5) Fails to maintain records as required by the commissioner after being given written notice to the last address of record and thirty days within which to correct the failure. The commissioner may grant, on good cause shown, up to two thirty-day extensions within which to correct the recordkeeping violations.

(6) Continues in office any individual with power to direct the management or policies of a person regulated by this Chapter, including but not limited to any officer, director, or manager, if such individual is convicted of, pleads guilty to, or is found guilty after a plea of nolo contendere of any felony and has been adjudicated guilty in any state, federal, foreign, or military court.

(7) Violates any provision of a regulatory or prohibitory statute and has been found to have violated such statute by the governmental agency responsible for determining such violations.

(8) Misrepresents material facts or makes false promises likely to influence, persuade, or induce an applicant into making a residential mortgage loan or a mortgagor into taking a mortgage loan, or pursues a course of misrepresentation through agents or otherwise.

(9) Misrepresents or conceals material facts, terms, or conditions of a transaction to which he is a party, pertinent to an applicant for a mortgage loan or a mortgagor.

(10) Knowingly engages in any transaction, practice, or course of business which perpetrates a fraud upon any person in connection with the making, purchasing, sale, or brokering of any mortgage loan.

(11) Fails to account for or deliver to any person any personal property obtained in connection with a residential mortgage loan, including but not limited to money, funds, deposits, checks, drafts, mortgages, or other documents or things of value, which has come into his hands and which is not his property, or which he is not entitled by law to retain.

(12) Fails to disburse, without just cause, any funds in accordance with any agreement connected with a residential mortgage loan.

(13) Fails to pay any fee or assessment imposed by this Chapter or by any rule or regulation promulgated in accordance with this Chapter.

(14) Violates the written restrictions or conditions under which the license was issued.

(15) Fails, after notice and without lawful excuse, to obey any order or subpoena issued by the commissioner.

(16) The commissioner discovers any fact or condition currently exists which, if it had existed at the time of the original application for licensure, would have warranted the denial of the application.

(17) Repealed by Acts 2009, No. 522, §3, eff. July 31, 2009.

B.(1) Notwithstanding any other law to the contrary, and in addition to any other authority conferred upon the commissioner by any other provision of law, the commissioner may upon discovery order an immediate suspension of the license of any person licensed pursuant to this Chapter who:

(a) Fails to maintain a surety bond in any manner as provided for by this Chapter.

(b) Commits serious violations of this Chapter such that, in the opinion of the commissioner, the public safety and welfare demand that emergency action be taken.

(c) Submits a payment of any fee for any application, notification, examination, investigation, late fee, or penalty which is returned, declined, denied, or otherwise not paid in full for any reason.

(d) Is convicted of a felony that would have prohibited the issuance or renewal of the license.

(e) Has his license to act as a residential mortgage broker, residential mortgage lender, mortgage servicer, or residential mortgage loan originator suspended or revoked in this or another jurisdiction.

(2) A person whose license is suspended under this Subsection shall have thirty days from the date of the order to request a hearing in accordance with the Administrative Procedure Act. Failure to timely request a hearing shall constitute a waiver of all hearing rights regarding the suspension.

C. In addition to any other authority conferred upon the commissioner by this Chapter or this Title, the commissioner may issue cease and desist orders, order refunds of any unauthorized portion of any fee, or charge any person collects in violation of this Chapter, and may impose a civil money penalty not exceeding one thousand dollars upon any person who is found in an administrative proceeding to have violated any of the provisions of this Chapter or any rule or regulation promulgated in accordance with this Chapter. Each separate violation shall subject such person to such civil money penalty and each day such person acts without complying with the provisions of this Chapter, or the rules or regulations promulgated in accordance with this Chapter, shall constitute a separate violation.

D. The violations listed in this Subsection are nonexclusive, and are in addition to and exist independent of, any other violations set forth in other provisions of this Chapter. Failure to comply with any provisions set forth herein may serve as a basis for any enforcement or other action accorded the commissioner under this Title. It shall be a violation of this Chapter for a person or individual engaged in residential mortgage lending activity subject to this Chapter to:

(1) Directly or indirectly employ any scheme, device, or artifice to defraud or mislead borrowers, lenders, or any person, when such person or individual knew or should have known that such scheme, device, or artifice was defrauding or misleading.

(2) Engage in any unfair or deceptive practice toward any person.

(3) Obtain property by fraud or misrepresentation.

(4) With the intent to defraud, solicit or enter into a contract with a consumer providing for payment of an unlawful fee or commission to a person subject to this Chapter even though no loan is actually obtained for the consumer.

(5) Solicit, advertise, or enter into a contract for specific interest rates, points, or other financing terms when the person or individual knew or should have known that such terms are not actually available at the time of soliciting, advertising, or contracting.

(6) Conduct any business covered by this Chapter without holding a valid license as required under this Chapter, or knowingly assist or aid and abet any person in the conduct of business under this Chapter without a valid license as required under this Chapter.

(7) As determined by the commissioner, structure a residential loan transaction in such a manner as to circumvent the provisions of this Chapter.

(8) Fail to comply with this Chapter or rules or regulations promulgated under this Chapter, or fail to comply with any other state or federal law, including the rules and regulations issued thereunder, applicable to any residential mortgage lending activity.

(9) Make, in any manner, any false or deceptive statement or representation with regard to the rates, points, or other financing terms or conditions for a residential mortgage loan when such person or individual knew or should have known that such statement or representation was false or deceptive, or engage in bait and switch advertising.

(10) Negligently make any false statement, or knowingly and willfully make any omission of material fact, in connection with any information or reports filed with a governmental agency or the NMLS&R, or in connection with any investigation conducted by the commissioner or any other governmental agency.

(11) Make any payment, threat, or promise, directly or indirectly, to any person for the purposes of influencing the independent judgment of the person in connection with a residential mortgage loan, or make any payment, threat, or promise, directly or indirectly, to any appraiser of a property, for the purposes of influencing the independent judgment of the appraiser with respect to the value of the property.

(12) Collect, charge, attempt to collect or charge, or use or propose any agreement purporting to collect or charge any fee prohibited by this Chapter.

(13) Engage in loan processing or underwriting activities as an independent contractor without obtaining a license to act as a residential mortgage loan originator.

(14) Fail to truthfully account for monies belonging to a party to a residential mortgage loan transaction.

(15) Represent to the public through advertising or other means of communicating or providing information including the use of business cards, stationary brochures, signs, rate lists, or other promotional items, that such an individual can or will perform any activities of a mortgage loan originator, while such individual engages in activities solely as a loan processor or underwriter.

E. The commissioner may report violations to other state and federal regulators of mortgage lending activities, the NMLS&R, federal law enforcement agencies, the attorney general, or to the district attorney of the appropriate parish, who may institute such proceedings as they deem appropriate.

F. No act done or omitted in conformity with any advisory opinion or interpretation issued by the office of financial institutions at the time of the act or omission or subsequent to the act or omission shall constitute a violation of this Chapter, notwithstanding that after such act or omission has occurred, such advisory opinion or interpretation is amended, rescinded, or determined by judicial or other authority to be invalid for any reason. Advisory opinions and interpretations of the office of financial institutions shall not be considered rules requiring compliance with the rulemaking process of the Louisiana Administrative Procedure Act. The commissioner and the employees of the office of financial institutions shall have no liability to any person with respect to an advisory opinion or interpretation issued in connection with this Chapter.

G. Any person who acts as a mortgage broker, mortgage lender, mortgage servicer, or mortgage loan originator without complying with the licensing provisions of this Chapter shall be subject to forfeiture of the compensation attributable to and received by the mortgage broker, mortgage lender, mortgage servicer, or mortgage loan originator in connection with residential mortgage lending activity occurring on or after August 15, 2001; provided that the forfeiture of such compensation by the mortgage broker, mortgage lender, mortgage servicer, or mortgage loan originator shall not impair the validity of the note and mortgage.

H. All of the grounds for license suspension or revocation listed in Subsection A of this Section are violations of this Chapter and may serve as the basis for any other enforcement action provided to the commissioner by this Title.

I. The commissioner may share information about any person who is licensed or required to be licensed pursuant to this Chapter with any state or federal agency having concurrent jurisdiction over such person with the Office of Financial Institutions.

J. Repealed by Acts 2007, No. 36, §2, eff. June 18, 2007 and Acts 2007, No. 376, §2, eff. July 10, 2007.

K. Any residential mortgage lender, broker, or servicer whose license under this Chapter has been revoked for any reason may not reapply for a license until at least five years have elapsed from the date of the order of revocation, unless the commissioner, in his sole discretion, prescribes an earlier or later date. For purposes of this Subsection, the order shall be considered to be the commissioner's notification of revocation of the license. For the purposes of this Subsection, mortgage lender, mortgage broker, or mortgage servicer shall include the licensee, owners of ten percent or more, and its members if the licensee is a limited liability company, its partners if the licensee is a partnership, its officers and directors, if the licensee is a corporation, and any other person determined by the commissioner, in his sole discretion, to be closely related to the mortgage lender, broker, or servicer.

Acts 1999, No. 1098, §1, eff. July 9, 1999; Acts 2000, 1st Ex. Sess., No. 34, §1, eff. April 14, 2000; Acts 2001, No. 617, §1, eff. June 22, 2001; Acts 2003, No. 875, §§1 and 2; Acts 2006, No. 237, §1; Acts 2007, No. 36, §2, eff. June 18, 2007; Acts 2007, No. 376, §2, eff. July 10, 2007; Acts 2009, No. 522, §1, eff. July 31, 2009; Acts 2014, No. 260, §1, eff. June 30, 2014.

§ 6:1092.1 Costs of appeal

Subject to the provisions of R.S. 13:4521 and 4581, all estimated costs of appeal, including those involved in the preparation of the administrative record of appeal, taken by a person in connection with an adverse ruling of an administrative law judge in connection with a hearing held pursuant to this Chapter and the Administrative Procedure Act, shall be paid by that person within sixty days of the filing of the petition for appeal in the district court. Failure to pay such estimated costs within the time prescribed shall result in the appeal being dismissed with prejudice and without the necessity of any further action being taken by any party.

Acts 2006, No. 237, §1.

§ 6:1092.2 Validity of judgment; execution

Any final and definitive decision of an administrative law judge or, in the case such decision is appealed, a final judgment of an appellate court, issued in connection with any hearing held pursuant to this Chapter and the Administrative Procedure Act shall be considered a valid and final judgment that may be made executory in accordance with the Code of Civil Procedure.

Acts 2006, No. 237, §1; Acts 2009, No. 522, §1, eff. July 31, 2009.

§ 6:1093 Repealed by Acts 2010, No. 743, §22B, eff. July 1, 2010.

Repealed by Acts 2010, No. 743, §22B, eff. July 1, 2010.

§ 6:1094 Professional education required for licensure; continuing education

A.(1) In order to meet the pre-licensing education requirements pursuant to R.S. 6:1088, a person shall complete at least twenty hours of education approved in accordance with this Section, which shall include all of the following minimum requirements:

(a) Three hours of federal law and regulations.

(b) Three hours of ethics, which shall include instruction on fraud, consumer protection, and fair lending issues.

(c) Two hours of training related to lending standards for the non-traditional mortgage marketplace.

(d) Repealed by Acts 2010, No. 36, §2.

(2) For purposes of Paragraph (1) of this Subsection, pre-licensing education courses shall be reviewed and approved by the NMLS&R, and shall include review and approval of course providers; provided however, that until such time as the commissioner determines that the pre-licensing education courses and course providers referred to in this Paragraph are available to satisfy the requirements of Paragraph (1) of this Subsection, the requirements may be met by the completion prior to December 31, 2010, of any pre-licensing education courses or continuing education courses approved by the commissioner in accordance with this Part prior to that date. Such courses approved by the commissioner shall be eligible for inclusion in the total number of hours of pre-licensing education any person is required to complete in order to obtain, or to renew a mortgage loan originator license for any license year beginning on, or prior, to January 1, 2011.

(3) Nothing in this Section shall preclude any pre-licensing education course, as approved by the NMLS&R, that is provided by the employer of an applicant or an entity which is affiliated with the employer by an agency contract, or by any subsidiary or affiliate of such employer or entity.

(4) Pre-licensing education may be offered by any means approved by the NMLS&R.

(5) Unless otherwise provided by a rule issued by the commissioner, a person having successfully completed the pre-licensing education courses approved by the NMLS&R for any other state shall be accepted as credit towards completion of pre-licensing education course requirements in this state.

(6) The pre-licensing education requirements shall apply to all applications for a mortgage loan originator license submitted after July 31, 2009, and to all applications for renewal of a mortgage loan originator license submitted for the 2010 licensing year; provided however that, and notwithstanding any other law to the contrary, any person licensed as a mortgage loan originator on July 30, 2009, shall not be required to meet the minimum requirement of twenty hours of pre-licensing education provided for in this Part, until such person timely submits an application to renew a mortgage loan originator license for the year 2011.

B.(1) In order to meet the annual continuing education requirements pursuant to R.S. 6:1088.3, a licensed mortgage loan originator shall complete at least eight hours of continuing education approved in accordance with Paragraph (2) of this Subsection, which shall include all of the following minimum requirements:

(a) Three hours of federal laws and regulations.

(b) Two hours of ethics, which shall include instruction on fraud, consumer protection, and fair lending issues.

(c) Two hours of training related to lending standards for the nontraditional mortgage product marketplace.

(d) Repealed by Acts 2010, No. 36, §2.

(2) For purposes of Paragraph (1) of this Subsection, continuing education courses shall be reviewed, and approved by the NMLS&R and shall include review and approval of the course provider; provided however, until such time as the commissioner determines that the continuing education courses and course providers referred to in this Paragraph are available to satisfy the requirements of Paragraph (1) of this Subsection, the requirements may be met by completion of any continuing education courses approved by the commissioner in accordance with this Part. Such courses approved by the commissioner shall be eligible for inclusion in the total number of hours of continuing education any person is required to complete in order to renew a mortgage loan originator license for any license year beginning on or prior to January 1, 2011.

(3) Nothing in this Section shall preclude any education course, as approved by the NMLS&R, that is provided by the employer of the mortgage loan originator or an entity which is affiliated with the mortgage loan originator by an agency contract, or any subsidiary or affiliate of such employer or entity.

(4) Continuing education may be provided by any other means approved by the NMLS&R.

(5) Except as provided in Paragraph (6) of this Subsection, a licensed mortgage loan originator:

(a) May only receive credit for a continuing education course in the year in which the course is taken.

(b) May not take the same approved course in the same or successive years to meet the annual requirements for continuing education.

(c) May receive credit for being an instructor of an approved continuing education course, at the rate of two hours of credit for every one hour of instruction, towards the licensed mortgage loan originator's own annual continuing education requirements for the next licensing year after providing such instruction.

(6) The provisions of Subparagraphs (5)(a) and (b) of this Subsection shall not apply to:

(a) Courses approved by the commissioner for inclusion in the total number of hours of pre-licensing education courses required to satisfy the pre-licensing education requirements for any person required to meet the minimum pre-licensing education requirements to obtain a mortgage originator license, or to obtain renewal of a mortgage loan originator license for any license year beginning prior to January 1, 2011.

(b) Courses approved by the commissioner for inclusion in the total number of hours of continuing education courses required to satisfy the continuing education requirements for any person required to meet the minimum continuing education requirements to obtain renewal of a mortgage loan originator license for any license year beginning after the effective date of this Act and prior to January 1, 2011.

(7) A person having successfully completed the continuing education requirements approved by the NMLS&R in this Subsection for any other state shall be accepted as credit towards completion of the continuing education requirements of this Chapter.

(8) A licensed mortgage loan originator who subsequently becomes unlicensed must complete the continuing education requirements for the last year in which the license was held prior to issuance of a new or renewed license.

C - E. Repealed by Acts 2010, No. 36, §2.

F. No person shall hold himself out as being or advertise as a certified mortgage broker, mortgage lender, or originator unless such person has completed the educational requirements established in this Section.

G. Repealed by Acts 2010, No. 36, §2.

Acts 1999, No. 1098, §1, eff. July 9, 1999; Acts 2000, 1st Ex. Sess., No. 34, §1, eff. April 14, 2000; Acts 2003, No. 875, §§1 and 2; Acts 2005, No. 235, §1; Acts 2007, No. 34, §1; Acts 2008, No. 531, §1, eff. June 30, 2008; Acts 2009, No. 522, §1, eff. July 31, 2009; Acts 2010, No. 36, §§1, 2; Acts 2010, No. 743, §22A, eff. July 1, 2010.

§ 6:1094.1 Testing of loan originators

A. In order to meet the written test requirement pursuant to R.S. 6:1088, an individual shall pass, in accordance with the standards established under this Section, a qualified written test developed by the Nationwide Mortgage Licensing System and Registry and administered by a test provider approved by the NMLS&R.

B. A written test shall not be treated as a qualified written test for purposes of this Section unless the test adequately measures the applicant’s knowledge and comprehension in appropriate subject areas, including all of the following:

(1) Ethics.

(2) Federal law and regulations pertaining to mortgage origination.

(3) Louisiana law and regulations pertaining to mortgage origination.

(4) Federal and Louisiana law and regulations, including instruction on fraud, consumer protection, the non-traditional mortgage marketplace, and fair lending issues.

C. Nothing in this Section shall prohibit a test provider approved by the NMLS&R from providing a test at the location of the employer of the applicant or any subsidiary or affiliate of the employer of the applicant, or any entity with which the applicant holds an exclusive arrangement to conduct the business of a mortgage loan originator.

D.(1) An individual shall not be considered to have passed a qualified written test unless the individual achieves a test score of not less than seventy-five percent correct answers to questions.

(2) An individual may retake a test three consecutive times with each consecutive taking occurring at least thirty days after the preceding test.

(3) After failing three consecutive tests, an individual shall wait at least six months before taking the test again.

(4) A licensed mortgage loan originator who fails to maintain a valid license for a period of five years or longer shall retake the test, not taking into account any time during which such individual is a registered mortgage loan originator.

Acts 2009, No. 522, §1, eff. July 31, 2009.

PART III RESIDENTIAL MORTGAGE LOANS

§ 6:1095 Scope

A.(1) The provisions of this Part shall govern and control the rates, fees, charges, and disclosures applicable to residential mortgage loans.

(2) Repealed by Acts 2001, No. 617, §3, eff. June 22, 2001.

B. All fees and charges authorized under this Part, whether or not such fees and charges constitute or are considered to be loan finance charges, shall be deemed to be material to the determination of the interest rate for purposes of exportation to borrowers residing in other states under the most favored lender doctrine of federal law.

C. As a general rule of construction, comparable rules, definitions, and principles under the Federal Real Estate Settlement Procedures Act and Regulation X of the office of the secretary of the Department of Housing and Urban Development, the Federal Truth in Lending Act, and Regulation Z of the Board of Governors of the Federal Reserve System may be looked to for guidance in further interpreting terms and concepts that are not otherwise defined or specified in the provisions of this Part. Fees and charges that are not classified as or considered as finance charges under the Federal Truth in Lending Act and Regulation Z are not considered to be loan finance charges for the purposes of this Part.

D. This Part shall not prohibit the imposition of fees and charges which are otherwise permissible under R.S. 6:548.

Acts 1999, No. 1098, §1, eff. July 9, 1999; Acts 2000, 1st Ex. Sess., No. 34, §1, eff. April 14, 2000; Acts 2001, No. 617, §3, eff. June 22, 2001.

§ 6:1096 Residential mortgage loans

A. Any consumer who has contracted for a federally related mortgage loan may agree to pay fees and interest in excess of the maximum amounts authorized by the laws of this state and as such shall be prohibited from asserting a claim or defense of usury or of the taking of interest in excess of the maximum rate of conventional interest. Any person signing as a co-maker, guarantor, or endorser for such consumer shall also be prohibited from asserting any such claim or defense.

B. The parties to a residential mortgage loan, other than a federally related mortgage loan, may agree to the payment of broker and other fees and interest in connection with a closed-end credit transaction, or finance charges calculated as a monthly periodic rate over the course of a year in connection with an open-end credit transaction otherwise subject to the Louisiana Consumer Credit Law, but made contractually subject to the provisions of this Chapter, as those terms are defined in federal Regulation Z, 12 CFR Section 226.1 et seq., up to an annual percentage rate as computed pursuant to 12 CFR Section 226.22 for closed-end credit and 12 CFR Section 226.14 (c) for open-end credit in an amount not to exceed the greater of either twenty-one percent or fifteen percentage points above the Federal Reserve Board of Governors approved "Discount Rate" published semi-annually in the Wall Street Journal on the first business day in January and July in the year the loan was originated, consummated, or renewed.

C. Unless otherwise provided by federal law, variable rate or adjustable rate mortgage loans shall be governed by the provisions of R.S. 9:3504(D).

D. The general prohibition against interest upon accrued interest shall not apply to residential mortgage loans governed by this Part.

E.(1) In the absence of federal law or rules and regulations of federal agencies, a consumer may prepay in full the unpaid balance of his residential mortgage loan at any time.

(2) A mortgage lender may contract for and receive a prepayment penalty in an amount not to exceed:

(a) Five percent of the unpaid principal balance if the loan is prepaid in full during the first year of its term.

(b) Four percent of the unpaid principal balance if the loan is prepaid in full during the second year of its term.

(c) Three percent of the unpaid principal balance if the loan is prepaid in full during the third year of its term.

(d) Two percent of the unpaid principal balance if the loan is prepaid in full during the fourth year of its term.

(e) One percent of the unpaid principal balance if the loan is prepaid in full during the fifth year of its term.

(3) Notwithstanding any other provision of law to the contrary, no prepayment penalty or similar fee or charge shall be due, assessed, charged, collected, paid, held in escrow, or contracted to be paid if all or part of a prepayment of all or part of an outstanding loan balance is made from proceeds paid in full or partial satisfaction of a claim or claims made under a policy or policies of insurance insuring against casualty, flood, or other loss or damage to property securing the loan being prepaid in connection with a gubernatorially declared disaster.

F. Agreements to compensate mortgage brokers through yield spread premiums for goods, facilities, and services actually provided in connection with a residential loan transaction shall be valid and enforceable.

G.(1) No mortgage broker shall assess, contract for, or receive any type of fee, interest, or other charge in advance, except for expense deposits from a potential borrower for the procurement of a loan. An advance expense deposit shall not exceed the good faith estimate of the actual cost of any appraisal, title search, credit reports performed by an independent person and required by the originating lender for the evaluation of the potential borrower's loan application, or the actual cost of any charge of no more than twenty-five dollars assessed to a mortgage broker by Fannie Mae for "Desktop Underwriter" or Freddie Mac for "Loan Prospector". Any portion of an advance expense deposit which exceeds the actual cost of any appraisal, title search, credit reports, or charge assessed to a mortgage broker by Fannie Mae for "Desktop Underwriter" or Freddie Mac for "Loan Prospector" shall be refunded to the borrower or credited to the borrower's account at the time of the closing of the loan.

(2) No mortgage lender shall assess, contract for, or receive any advance expense deposit for third party settlement services in advance that exceeds the good faith estimate of the actual cost of the settlement service. Any portion of an advance expense deposit which exceeds the actual cost of a third party settlement service shall be refunded to the borrower or credited to the borrower's account at the time of the closing of the loan.

(3)(a) No mortgage lender shall finance or include in the original principal balance of a residential mortgage loan of more than fifty thousand dollars the premium amount for any single premium credit life, dismemberment, health and accident, mortgage life and disability, involuntary unemployment, or debt cancellation insurance sold in connection with a residential mortgage loan transaction unless that portion of original principal balance attributable to such insurance premium is scheduled to be fully amortized no later than the coverage expiration date of such insurance product. Nothing in this Paragraph shall prohibit a lender from the financing of private mortgage insurance paid on a single premium basis in connection with a residential mortgage loan transaction.

(b)(i) Notwithstanding Subparagraph (a) of this Paragraph, it shall not be a violation of this Paragraph for a mortgage lender to finance or include in the original principal balance of a residential mortgage loan the premium amount for any single premium credit life, dismemberment, health and accident, mortgage life and disability, involuntary unemployment, or debt cancellation insurance sold in connection with a residential mortgage loan transaction, provided such premium amount was financed or included in the original principal balance of a residential mortgage loan during the period beginning on August 15, 2006, and ending on August 14, 2007.

(ii) Notwithstanding Subparagraph (a) of this Paragraph, no residential mortgage loan executed during the period beginning on August 15, 2006, and ending on August 14, 2007, shall be deemed invalid or unenforceable due to the inclusion of a premium amount for any single premium credit life, dismemberment, health and accident, mortgage life and disability, involuntary unemployment, collateral protection, or debt cancellation insurance financed in connection with and made a part of the principal balance of such residential mortgage loan.

H.(1) A residential mortgage lender shall provide the consumer, within five days of the date a written request is received from the consumer, with the amount necessary to prepay the account in full, and if the amount disclosed includes an amount which is required to be refunded, the amount of such refund.

(2) A consumer shall be entitled to receive one such disclosure of information statement each year without charge. Thereafter, the extender of credit may impose a reasonable fee to cover the cost of providing an additional disclosure statement; however, the charge imposed must be disclosed to the consumer before furnishing such disclosure statement.

I.(1) The person acting as originator in a residential loan transaction shall sign the original mortgage loan application and if applicable, shall include in the original mortgage loan application the unique identifier assigned to that person.

(2) An originator may only originate residential mortgage loans for one employer.

J.(1) It is the purpose of this Subsection to provide for parity among persons engaging in residential mortgage loan transactions in this state by permitting persons licensed pursuant to this Chapter to charge a reasonable application fee in connection with a residential loan transaction if, prior to collecting the fee, the licensee provides the consumer a written disclosure stating the amount of the fee and informing the consumer that the application fee shall be refundable at any time prior to the licensee ordering any service required by the lender to evaluate the potential borrower's loan application. In the event that the lender is unable to approve the loan, after all requested documentation has been provided by the borrower to the lender, the application fee shall be refunded to the borrower.

(2) Notwithstanding the provisions of this Section or any other law to the contrary, persons licensed to engage in residential mortgage loan transactions pursuant to this Chapter may charge a reasonable application fee, not to exceed five hundred dollars, in connection with a residential mortgage loan. The application fee may be charged only once in connection with a single loan to one borrower. The application fee shall not be considered as an advance expense deposit as provided for herein, or as interest or loan finance charge, nor shall it be included in the calculation of interest.

Acts 1999, No. 1098, §1, eff. July 9, 1999; Acts 2000, 1st Ex. Sess., No. 34, §1, eff. April 14, 2000; Acts 2001, No. 617, §1, eff. June 22, 2001; Acts 2003, No. 875, §1; Acts 2003, No. 924, §1; Acts 2006, No. 188, §1; Acts 2006, No. 237, §1; Acts 2006, 2nd Ex. Sess., No. 3, §1, eff. Dec. 21, 2006; Acts 2007, No. 12, §1, eff. June 18, 2007; Acts 2009, No. 522, §1, eff. July 31, 2009.

§ 6:1097 Residential mortgage loan fees and charges; applicability of the Louisiana Consumer Credit Law

A. Notwithstanding any other law to the contrary, including but not limited to R.S. 9:3500, in addition to those fees, charges, costs, and expenses not considered interest or defined as finance charges under federal Regulation Z, the parties to a federally related mortgage loan may agree to the payment of any fees, charges, costs, and expenses, and the amounts thereof, including but not limited to the types of fees, charges, costs, and expenses listed in Subsection B of this Section, if the fees, charges, costs, and expenses, and the amounts thereof, or the methods for fixing such, are provided in a writing signed by the consumer.

B. The parties to a consumer loan, secured by a mortgage on residential immovable property, which is made contractually subject to the provisions of this Chapter, may agree to pay the following fees, charges, costs, and expenses:

(1) Charges for the prepayment of the loan or any installment or part of the loan prior to the time fixed for payment.

(2) Charges, in the amount of five percent of the unpaid amount, assessed for nonpayment of the loan or any installment or part of the loan after the loan or installment of principal or interest has become delinquent and is not timely paid.

(3) Costs of collection and reasonable attorney fees not in excess of twenty-five percent of the unpaid debt after default, when the debt has been referred to an attorney for collection.

(4) Fees, taxes, charges, and other expenses incurred in making the loan which are collected from or paid by or on behalf of the borrower, if such fees, taxes, charges, or other expenses are actually paid to or payable to persons other than the lender or the person making the loan or any employee of such lender or person.

(5) Charges or premiums for credit life insurance actually written on the life of the borrower or endorser in an amount not to exceed the total sum payable under the residential mortgage loan, including all interest, fees, costs, and charges.

(6) N.S.F. check charges in an amount not to exceed the greater of five percent of the amount of the check or electronic payment, or twenty-five dollars, assessed if the payment is returned or otherwise dishonored. For the purposes of this Section and any contract entered into pursuant to this Section, the phrases "due to insufficient credit or funds" or "N.S.F. check charges" means a check or electronic payment returned unpaid for any reason.

(7) Other fees, charges, costs, and expenses not defined as finance charges under federal Regulation Z, if the fees, charges, costs, and expenses, or the methods for fixing such, are provided in a writing signed by the consumer.

C. Consumer loans otherwise subject to the provisions of this Chapter may be made contractually subject to the Louisiana Consumer Credit Law, R.S. 9:3510 et seq., by specifically stating that the loan is subject to the Louisiana Consumer Credit Law, R.S. 9:3510 et seq.

Acts 1999, No. 1098, §1, eff. July 9, 1999; Acts 2000, 1st Ex. Sess., No. 34, §1, eff. April 14, 2000; Acts 2003, No. 875, §1; Acts 2004, No. 743, §3, eff. Jan. 1, 2005; Acts 2008, No. 476, §1; Acts 2009, No. 522, §1, eff. July 31, 2009.

§ 6:1098 Residential mortgage loan brokerage contracts

A. Each residential mortgage loan brokerage contract shall be in writing and signed by all contracting parties. The mortgage broker shall retain a signed copy of the residential mortgage loan brokerage contract in the customer's file.

B. The mortgage broker must provide the prospective borrower with a written "Mortgage Loan Origination Agreement" no later than three days after the initial loan application date. The written agreement shall describe the nature of the mortgage broker's relationship with the borrower and the manner in which the mortgage broker is compensated for his services. Such disclosures may be incorporated into the brokerage contract or provided in a separate document.

C. The written disclosures provided to the borrower shall also contain the following information as applicable:

(1) The name, address, telephone number, and if applicable, the unique identifier of the originator.

(2) The name, address, telephone number, and if applicable, the unique identifier of the residential mortgage lender by whom the originator is employed.

D. Failure of the mortgage broker to provide the disclosures required by this Section shall not invalidate any residential mortgage loan entered into by a consumer through the efforts of the mortgage broker, but shall subject the mortgage broker to a refund of any brokerage fees obtained in connection with such residential mortgage loan.

Acts 1999, No. 1098, §1, eff. July 9, 1999; Acts 2001, No. 617, §1, eff. June 22, 2001; Acts 2009, No. 522, §1, eff. July 31, 2009.

§ 6:1099 Criminal penalties

A. The commissioner may report the violations of the following provisions to the attorney general or to the district attorney of the appropriate parish, who may institute the proper proceedings.

B. It shall be a misdemeanor for a mortgage broker or lender to knowingly collect advance fees in excess of those provided for in R.S. 6:1096(G), and upon conviction he shall be subject to a fine not less than five hundred dollars and not more than one thousand dollars, or to imprisonment not exceeding one year, or both.

C. Any person who knowingly provides false or misleading information to the commissioner on an application and such information is material to approval of the application shall be guilty of a misdemeanor and upon conviction shall be subject to a fine not less than five hundred dollars and not more than one thousand dollars, or to imprisonment not exceeding one year, or both.

D. Any licensee or exempt registrant who fails to account for or deliver to any person any money, funds, deposits, checks, drafts, mortgages, or other documents, or things of value to the borrower in violation of the provisions of this Chapter shall be guilty of a misdemeanor and upon conviction shall be subject to a fine not less than five hundred dollars and not more than one thousand dollars, or to imprisonment not exceeding one year, or both.

E. Any licensee who fails to disburse, without just cause, any funds belonging to the borrower shall be guilty of a misdemeanor and upon conviction shall be subject to a fine not less than five hundred dollars and not more than one thousand dollars, or to imprisonment not exceeding one year, or both.

F. A lender, broker, originator, or servicer who knowingly operates without a license or while not exempt from the provisions of this Chapter shall be guilty of a misdemeanor and upon conviction shall be subject to a fine not less than five hundred dollars and not more than one thousand dollars, or to imprisonment not exceeding one year, or both.

Acts 2001, No. 617, §1, eff. June 22, 2001; Acts 2003, No. 875, §1; Acts 2009, No. 522, §1, eff. July 31, 2009; Acts 2014, No. 260, §1, eff. June 30, 2014.

PART IV REVERSE MORTGAGE LOANS

§ 6:1101 Reverse mortgages; requirements

A. A reverse mortgage loan shall comply with all of the following requirements:

(1) Prepayment, in whole or in part, shall be permitted without penalty at any time during the term of the reverse mortgage loan. For the purposes of this Section, "penalty" shall not include any fees, payments, or other charges that would have otherwise been due upon the reverse mortgage being due and payable.

(2) A reverse mortgage loan may provide for a fixed or adjustable interest rate or combination thereof, including compound interest, and may also provide for interest that is contingent on the value of the property upon execution of the loan or at maturity, or on changes in value between closing and maturity.

(3) A reverse mortgage may include costs and fees that are charged by the reverse mortgage lender, or the reverse mortgage lender's designee, originator, or servicer, including costs and fees charged upon execution of the loan, on a periodic basis, or upon maturity.

(4) If a reverse mortgage loan provides for periodic advances to a borrower, these advances shall not be reduced in amount or number based on any adjustment in the interest rate.

B. A reverse mortgage loan may become due and payable upon one of the following occurrences:

(1) The property securing the loan is sold or title to the home is otherwise transferred.

(2) Any fixed maturity date agreed to by the lender and the borrower occurs.

(3) An event of default specified in the loan documents occurs.

C. Repayment of the reverse mortgage loan shall be subject to the following conditions:

(1) Temporary absences from the home not exceeding sixty consecutive days shall not cause the mortgage to become due and payable.

(2) Extended absences from the home exceeding sixty consecutive days, but less than one year, shall not cause the mortgage to become due and payable if the borrower has taken prior action which secures and protects the home in a manner satisfactory to the lender, as specified in the loan documents.

(3) A reverse mortgage lender shall prominently disclose in the loan agreement any interest rate or other fees to be charged during the period that commences on the date that the reverse mortgage loan becomes due and payable, and that ends when repayment in full is made.

D. The first page of any mortgage securing a reverse mortgage loan shall contain the following statement in ten-point boldface type: "This mortgage secures a reverse mortgage loan."

E.(1) A reverse mortgage lender shall not:

(a) Enter into any agreement that would obligate the borrower to purchase an annuity, an investment, or long-term care insurance before the closing of the reverse mortgage or before the expiration of the borrower's right to rescind the reverse mortgage agreement, if a rescission period applies.

(b) Refer the borrower to anyone for the purchase of an annuity before the closing of the reverse mortgage or before the expiration of the borrower's right to rescind the reverse mortgage agreement, if a rescission period applies.

(2) This Section shall not prevent a lender from offering or referring borrowers for title insurance, hazard, flood, or other peril insurance, or other similar products that are customary and normal to a reverse mortgage loan.

Acts 2010, No. 418, §1.

§ 6:1102 Counseling

A.(1) Prior to accepting a final and complete application for a conventional reverse mortgage loan or assessing any fees, a reverse mortgage lender shall provide the prospective borrower with a list of at least five nonprofit counseling agencies that have been approved by the United States Department of Housing and Urban Development for counseling and that offer counseling to residents of the state. The counseling agencies shall meet the standards and requirements established by the United States Department of Housing and Urban Development for reverse mortgage counseling.

(2) In connection with a conventional reverse mortgage loan, a mortgage lender shall not pay any counseling service fees without first informing the prospective borrower in writing that this may create a conflict of interest. A reverse mortgage lender shall disclose to the prospective borrower in writing any other payment arrangements or business affiliations between the lender and a counseling agency.

B. A reverse mortgage lender shall not accept a final and complete application for a conventional reverse mortgage loan from a prospective applicant or assess any fees upon a prospective applicant without first receiving a certification from the applicant or the applicant's authorized representative that the applicant has received counseling from an agency described in Subsection A of this Section. The certification shall be signed by the borrower and the agency counselor, and shall include the date of the counseling and the name, address, and telephone number of both the borrower and the counselor. An electronic facsimile copy of the housing counseling certification shall satisfy the requirements of this Section.

Acts 2010, No. 418, §1.

§ 6:1103 Commitment and cooling off period

In connection with a conventional reverse mortgage loan, at least seven calendar days prior to closing a reverse mortgage loan, a reverse mortgage lender shall provide the borrower with a loan term sheet or commitment letter outlining the proposed terms of the loan and informing the borrower that the borrower is not obligated to proceed with the loan transaction.

Acts 2010, No. 418, §1.

§ 6:1104 Reverse mortgage lender; duties to elders

A. In addition to any other obligation under law, any reverse mortgage lender who offers, sells, or arranges the sale of a reverse mortgage to an elder, shall provide the elder with a notice that the elder should discuss the items outlined in this Section with a loan counselor. For the purposes of this Section, "elder" means any person sixty years of age or older.

B. The reverse mortgage counselor shall discuss the following items with a prospective reverse mortgage borrower:

(1) How unexpected medical or other events causing the borrower to move out of the borrower's home earlier than anticipated will impact the total annual cost of the reverse mortgage loan.

(2) The extent to which the borrower's financial needs would be better met by options other than a reverse mortgage loan, including less costly home equity lines of credit, property tax deferral programs, or governmental aid programs.

(3) Whether the borrower intends to use the proceeds of the reverse mortgage loan to purchase an annuity or other financial or insurance product and the consequences of doing so.

(4) The effect of repayment of the reverse mortgage loan on other residents of the domicile that is securing the reverse mortgage loan after all borrowers are deceased or permanently abandon the domicile.

(5) The borrower's ability to finance routine or catastrophic home repairs, especially if the maintenance is a factor that may determine when the reverse mortgage loan becomes payable.

(6) The impact that the reverse mortgage loan may have on the borrower's tax obligations and eligibility for government assistance programs, and the effect that losing equity in the domicile securing the reverse mortgage loan will have on the borrower's estate and heirs.

(7) The ability of the borrower to refinance alternative living accommodations, such as assisted living or long-term care, after the borrower's equity is depleted.

C. If the prospective reverse mortgage borrower meets with a loan counselor prior to meeting with or discussing a reverse mortgage loan with a lender, the loan counselor shall review the items discussed in Subsection B of this Section with the prospective reverse mortgage borrower and also meet the notice requirement in Subsection A of this Section.

Acts 2010, No. 418, §1.

CHAPTER 15 APPROVAL OF RULES AND REGULATIONS

§ 6:1111 Approval by commissioner of rules and regulations affecting financial institutions

A rule, regulation, order, or administrative directive issued by a state or federal official, agency, or entity which is intended to be applicable to banks, banking associations, bank holding companies, savings banks, and savings institutions, homestead and savings and loan associations, credit unions, persons or companies engaged in the small loan business, extenders of consumer credit, or any other company or financial institution under the supervision of the commissioner of financial institutions and required to report to the commissioner or subject to rules and regulations issued by the commissioner, shall be effective as to any such company or financial institution only after the rule, regulation, order or other directive has been approved in writing by the commissioner of financial institutions.

Added by Acts 1978, No. 487, §1.

CHAPTER 16 CREDIT AGREEMENTS -- WRITING REQUIREMENTS

§ 6:1121 Definitions

For purposes of this Chapter, the following terms shall have the following meanings:

(1) "Credit agreement" means an agreement to lend or forbear repayment of money or goods or to otherwise extend credit, or make any other financial accommodation.

(2) "Creditor" means a financial institution or any other type of creditor that extends credit or extends a financial accommodation under a credit agreement with a debtor.

(3) "Debtor" means a person or entity that obtains credit or seeks a credit agreement with a creditor or who owes money to a creditor.

(4) "Financial institution" means a bank, savings and loan association, savings banks, or credit union authorized to transact business in this state.

Acts 1989, No. 531, §1.

§ 6:1122 Credit agreements to be in writing

A debtor shall not maintain an action on a credit agreement unless the agreement is in writing, expresses consideration, sets forth the relevant terms and conditions, and is signed by the creditor and the debtor.

Acts 1989, No. 531, §1.

§ 6:1122.1 Defenses to written credit agreements

A.(1) In an action by a creditor, the debtor shall not assert a defense based on the terms and conditions of a credit agreement, unless the agreement is in writing, expresses conditions, sets forth the relevant terms and conditions, and is signed by the creditor and the debtor.

(2) This Subsection shall not apply to unsecured revolving loan accounts, including those accessed by credit cards, or to any other unsecured consumer loans.

B. Nothing in this Section shall limit the debtor's ability to assert a defense of forgery, identity theft, mistaken identity, lack of authorization, lack of contractual capacity, or payment of the debt.

C. As used in this Section, the terms "consumer loan", "credit card", and "revolving loan account" shall have the meanings ascribed to them in the Louisiana Consumer Credit Law, R.S. 9:3510, et seq.

Acts 2013, No. 356, §1, eff. June 17, 2013.

§ 6:1123 Actions not considered agreements

A. The following actions shall not give rise to a claim that a new credit agreement is created, unless the agreement satisfies the requirements of R.S. 6:1122:

(1) The rendering of financial or other advice by a creditor to a debtor.

(2) The consultation by a creditor with a debtor.

(3) The agreement of a creditor to take or not to take certain actions, such as entering into a new credit agreement, forbearing from exercising remedies under a prior credit agreement, or extending installments due under a prior credit agreement.

B. A credit agreement shall not be implied from the relationship, fiduciary, or otherwise, of the creditor and the debtor.

Acts 1989, No. 531, §1.

§ 6:1124 No implied fiduciary obligations

No financial institution or officer or employee thereof shall be deemed or implied to be acting as a fiduciary, or have a fiduciary obligation or responsibility to its customers or to third parties other than shareholders of the institution, unless there is a written agency or trust agreement under which the financial institution specifically agrees to act and perform in the capacity of a fiduciary. The fiduciary responsibility and liability of a financial institution or any officer or employee thereof shall be limited solely to performance under such a contract and shall not extend beyond the scope thereof. Any claim for breach of a fiduciary responsibility of a financial institution or any officer or employee thereof may only be asserted within one year of the first occurrence thereof. This Section is not limited to credit agreements and shall apply to all types of relationships to which a financial institution may be a party.

Acts 1991, No. 581, §1.

§ 6:1125 §§1125 to 1127 Repealed by Acts 1981, No. 873, §4, eff. Oct. 1, 1981.

§§1125 to 1127 Repealed by Acts 1981, No. 873, §4, eff. Oct. 1, 1981.

CHAPTER 17 LOUISIANA SAVINGS BANKS

PART I GENERAL PROVISIONS

§ 6:1131 Title

This Chapter shall be known as the "Louisiana Savings Bank Act of 1990".

Acts 1990, No. 816, §1, eff. Sept. 1, 1990.

§ 6:1132 Policy and purposes

A. The purpose of this Chapter is to provide for the chartering, regulation, and supervision of savings banks. The policy of this Chapter is: to encourage growth of the personal savings base of the citizens of Louisiana; to promote and assist their stockholders and members in purchasing, building, improving, and repairing immovable property and removing encumbrances therefrom for the purpose of lending money to their stockholders and members; to provide a healthy savings bank industry with safe and sound methods of investment so that this savings base will be retained in Louisiana for Louisiana's growth; to encourage the retention of capital in Louisiana; and to build a strong new system of financial institutions in Louisiana which will, by their strength, be controlled and owned by Louisiana citizens and corporations and which shall be the nucleus for a geographically expansive industry.

B. To further its purpose and policies, this Chapter shall be liberally construed except for those provisions which relate to safety and soundness of operations, investments, and management. In those areas, the legislature decrees that this Chapter shall be strictly construed and that each savings bank shall apply the prudent person rule. The commissioner of financial institutions shall interpret those provisions of this Chapter in keeping with that standard.

Acts 1990, No. 816, §1, eff. Sept. 1, 1990.

§ 6:1133 Administration

This Chapter shall be administered by the commissioner of financial institutions under the authority granted to him by Chapter 2 of Title 6 of the Louisiana Revised Statutes of 1950.

Acts 1990, No. 816, §1, eff. Sept. 1, 1990.

§ 6:1134 Applicability

This Chapter shall apply to all financial institutions, no matter how named or chartered, if they comply with the provisions of this Chapter and with the rules of the commissioner promulgated pursuant to this Chapter.

Acts 1990, No. 816, §1, eff. Sept. 1, 1990.

§ 6:1135 Federal deposit insurance

Any savings bank chartered under the supervision of this Chapter shall obtain and maintain federal deposit insurance of accounts through an insurance corporation created by an Act of Congress.

Acts 1990, No. 816, §1, eff. Sept. 1, 1990.

§ 6:1136 Powers; parity with other financial institutions

A. Subject to the regulation of the commissioner and in addition to the powers granted by this Chapter, each savings bank operating under this Chapter shall possess all of the powers of a savings and loan association operating under the laws of the state of Louisiana and of a savings and loan association operating under the laws of the United States. Subject to the regulations of the commissioner, a savings bank may also obtain such other powers available to banks operating under the laws of the state of Louisiana as are consistent with the policy and purposes of this Chapter.

B. A savings bank may establish branches or offices at which savings or investments are regularly received or loans approved, as follows:

(1) To the same geographical extent that branch powers and offices are granted to state banks under the Louisiana Banking Law;

(2) To the same geographical extent to which a savings and loan association organized under the laws of this state or the United States and doing business in Louisiana is permitted; and

(3) To the same extent as holding companies and savings and loan associations headquartered outside the state of Louisiana but allowed to operate in Louisiana pursuant to Chapter 9-B of Title 6 of the Louisiana Revised Statutes of 1950.

C. Notwithstanding any other provision of this Chapter, a savings bank which purchases or assumes all or any part of the assets or liabilities of an eligible insured bank, savings bank, or savings and loan association, may retain and maintain the main premises or branches purchased from the eligible insured bank, savings bank, or savings and loan association, as branches of the purchasing savings bank, provided it assumes the deposit liabilities of the eligible insured bank, savings bank, or savings and loan association maintained at such main premises or branches.

Acts 1990, No. 816, §1, eff. Sept. 1, 1990.

§ 6:1137 Definitions

A. "Appraisal" means a professionally derived, written conclusion of value of the present worth of specified interests or rights in a specific piece of real property, which conclusion is supported by stipulated market conditions and explicitly stated assumptions as of a particular point in time and made for a specified party.

B. "Affiliate" means any company that controls, is controlled by, or is under common control with a savings bank operating under this Chapter.

C. "Affiliated person of a savings bank or insured institution" means the following:

(1) A director, officer, or controlling person of a savings bank or insured institution;

(2) A spouse of a director, officer, or controlling person of a savings bank or institution;

(3) A member of the immediate family of a director, officer, or controlling person of a savings bank or insured institution, who has the same home as such person;

(4) A director or officer of any subsidiary of a savings bank or insured institution or of any holding company affiliate of a savings bank or insured institution; or

(5) Any corporation or organization, other than the savings bank or insured institution or a corporation or organization through which the savings bank or insured institution operates, of which a director, officer, or controlling person of such savings bank or insured institution:

(a) Is chief executive officer, chief financial officer, or a person performing similar functions;

(b) Is a general partner;

(c) Is a limited partner who, directly or indirectly, either alone or with his spouse or any other members of his immediate family who are also affiliated persons of the institution, owns an interest of ten percent or more in the partnership, based on the value of his contribution, or who, directly or indirectly with other directors, officers, and controlling persons of such institution and their spouses and other immediate family members who are also affiliated persons of the institution, owns an interest of twenty-five percent or more in the partnership; or

(d) Directly or indirectly, either alone or with his spouse and any other members of his immediate family who are also affiliated persons of the institution, owns or controls ten percent or more of any class of equity securities or owns or controls, with other directors, officers, and controlling persons of such savings bank or insured institution and their spouses and other immediate family members who are also affiliated persons of the savings bank or insured institution, twenty-five percent or more of any class of equity securities.

D. "Branch" or "branch office" means any branch office where deposits are received or checks paid, or any of the savings bank's other business is transacted, but shall not include any place where only records thereof are made, posted, or kept. Such term does not include a place where the savings bank's business is conducted only through an automatic teller machine.

E. "Capital" shall include capital stock, paid-in-surplus, undivided profits, and current year earnings.

F. "Capital stock" means the sum of the par value of the shares outstanding plus any amounts in excess of par value transferred from surplus to capital stock in respect of such shares less any part of such amounts transferred from capital stock to surplus as permitted by this Chapter.

G. "Director" means any director, trustee, or other person performing similar functions with respect to any organization whether incorporated or unincorporated. Such term does not include an advisory director, honorary director, director emeritus, or similar person, unless the person is otherwise performing functions similar to those of a director.

H. "Default", with respect to a bank as defined in the Louisiana Banking Law, means any adjudication or other official determination by any court of competent jurisdiction, an appropriate federal banking agency, or by the Louisiana commissioner of financial institutions, pursuant to which a conservator, receiver, or other legal custodian is appointed for an insured savings bank.

I. "Eligible insured savings bank" means an insured savings bank, having its main banking premises in Louisiana, that is in default or in danger of default as those terms are defined in this Chapter.

J. "Fiduciary" means a trustee, executor, administrator, guardian, agent, receiver, trustee in bankruptcy, assignee for creditors, or any holder of a similar position of trust. It also describes the relationship of a director and officer to an insured savings bank as stipulated in R.S. 6:1190.

K. "Impaired condition" means, with respect to capital, a condition below the minimum level of capital established by the commissioner as stipulated in R.S. 6:1206(A).

L.(1) "In danger of default" means an insured savings bank, as defined in this Chapter, with respect to which either the commissioner of financial institutions has advised the appropriate federal banking agency or, if the federal banking agency is the Federal Deposit Insurance Corporation that the Federal Deposit Insurance Corporation has determined, that:

(a) In the opinion of the commissioner of financial institutions or such other federal banking agency and without the objections of the Federal Deposit Insurance Corporation:

(i) The insured savings bank is not likely to be able to meet its demands for withdrawal of insured accounts or pay its obligations in the normal course of business; and

(ii) There is no reasonable prospect that the insured savings bank will be able to meet such demands or pay such obligations without federal assistance; or

(b) In the opinion of the commissioner of financial institutions or such other federal banking agency and without the objections of the Federal Deposit Insurance Corporation:

(i) That the insured savings bank has incurred or is likely to incur losses that will deplete all or substantially all of its capital; and

(ii) There is no reasonable prospect that the capital of the insured bank will be replenished without federal assistance.

(2) The commissioner may promulgate rules with regard to insured savings banks that are in danger of default and are eligible insured depository institutions and with regard to his findings thereon.

M. "Insurance corporation" means an instrumentality of or a corporation chartered by the United States which is supported by the "full faith and credit of the United States Government" as stated in a Congressional resolution or as created by an Act of Congress.

N. "Insured savings bank" means a savings bank or association the withdrawable accounts of which are insured wholly or in part by an insurance corporation.

O. "Investment" means residential and commercial loans, as well as purchases of corporate debentures, securities, and bonds subject to regulation of the commissioner.

P. "Marketable investment securities" means those securities rated in the four top categories by a national rating firm.

Q. "Person" means an individual, corporation, partnership, joint venture, trust, estate, or unincorporated association.

R. "Published", unless otherwise defined in this Chapter, means the publishing of the notice referred to in a newspaper of general circulation in the community in which the publishing savings bank is located. Publishing shall be at the expense of the savings bank required to publish. Where publishing is required, the savings bank shall submit to the commissioner such evidence of the publication as the commissioner shall deem appropriate.

S. "Service corporation" means any corporation which is fifty-one percent or more owned by one or more savings banks, or by savings banks and other insured depository institutions, whose purposes are reasonably incident to the accomplishment of the express or incidental powers conferred upon savings banks by this Chapter.

T. "Value" means the present worth of all rights to future benefits arising from ownership.

U. "Prudent person rule" means in all activities connected with savings banks operating under this Chapter, all officers, directors, employees, and agents of any kind of a savings bank shall exercise the judgment and care under circumstances then prevailing which persons of prudence, discretion, and intelligence exercise in the management of their own affairs, not in regard to speculation, but in regard to the permanent disposition of their funds, considering the probable income as well as the probable safety of their capital.

Acts 1990, No. 816, §1, eff. Sept. 1, 1990; Acts 2001, No. 633, §1, eff. June 22, 2001.

§ 6:1138 General corporate powers

A. A savings bank may be organized to exercise the powers provided in this Chapter and such other general powers as are appropriate to its purpose.

B. A savings bank shall, without specific mention thereof in its articles of incorporation, have all the powers conferred by this Chapter and the following general corporate powers:

(1) To have and enjoy succession by a corporate name to be selected by it and by that corporate name to contract and to appear as a natural person in all courts of justice and elsewhere.

(2) To receive, hold, purchase, acquire, and convey by and under its corporate name any property including bonds, stocks, and securities of the United States of America, of any of the states, or of any corporation, board, or body, public or private, as may be necessary, proper, or convenient to the objects of the savings bank and to exercise in relation thereto all the direct and incidental rights of ownership. Savings banks may lawfully purchase, acquire, hold, and convey, unless acting as trustee or agent, immovable property only in accordance with the provisions of this Chapter.

(3) To make and use a corporate seal.

(4) To name and appoint such officers and directors to administer the affairs of the savings bank as it thinks necessary and proper, to establish the number and title of the directors or officers, and to fix the compensation of all persons in its employment.

(5) To make bylaws for the proper management of the affairs of the savings bank as may be necessary and proper in conformity with the banking law set out in Title 6 of the Louisiana Revised Statutes of 1950 and the articles of incorporation, and to repeal or amend the bylaws.

(6) To accept and execute trusts or agencies of any description which may be committed or transferred with its consent to it by any person whomsoever or by any court of this state, the United States of America, or of any state, territory, or possession thereof.

(7) To invest the funds of persons of which such savings bank has been appointed tutor or curator in any common trust fund established by such savings bank under the provisions of R.S. 9:2128, such investments to be administered in conformity with that Section.

(8) To act as a fiscal agent for the deposit of public funds for the United States, state of Louisiana, or any department, branch, arm, or agency of the state or any unit of local government in the state, when duly designated for that purpose, and as such agent to perform such reasonable functions as may be required of it.

(9) To act as a depository for the purpose of holding collateral of other financial institutions when this collateral is security for public funds deposits in excess of the insured limit of the Federal Deposit Insurance Corporation.

(10) To become a member of the Federal Reserve Bank or the Federal Home Loan Bank and to purchase stock or securities thereof or deposit money therewith, and to comply with any other conditions of membership or credit.

(11) To adopt and operate reasonable insurance, bonus, profit-sharing, and retirement plans for officers and employees, and to provide for participation by directors who are not officers in such insurance plan.

(12) To reject any application for membership and to retire withdrawable capital by enforced retirement as provided in this Chapter and the bylaws; and to limit the issuance of, or payments on, withdrawable capital, subject however to contractual obligations.

(13) To purchase stock in service corporations and to invest in any form of indebtedness of any service corporation as defined in this Chapter, subject to the regulation of the commissioner of financial institutions.

(14) To exercise all the powers necessary to qualify as a trustee or custodian under the Federal Self-Employed Individuals' Tax Retirement Act of 1962 or any amendments thereto and invest any funds held in such capacity in a savings account of the institution if the trust or custodian retirement plan does not provide such investment.

(15) To obtain and maintain insurance of the withdrawable deposits by an insurance corporation as defined in this Chapter and to comply with the rules and regulations thereof.

Acts 1990, No. 816, §1, eff. Sept. 1, 1990.

§ 6:1139 Specific powers

A. In addition to the general corporate powers conferred in R.S. 6:1138 and the powers conferred by other provisions of the laws of this state, a savings bank shall have the following powers and those incidental to the exercise of these powers:

(1) To receive and pay out deposits, with or without interest, and pay checks.

(2) To lend money at interest on a secured or unsecured basis and, pursuant to regulations issued by the commissioner, to vary from time to time the interest rate charged on loans according to the terms and conditions contained in the promissory note. Such conditions shall not be deemed to rely upon the whim of the obligor so as to render them null nor shall such conditions destroy the negotiability of the promissory note.

(3) To accept for payment at a future date drafts drawn upon it by its customers.

(4) To issue letters of credit, which shall be carried by the insured savings bank as an asset and liability on its daily statement.

(5) To discount and buy and sell promissory notes, bills of exchange, and other evidences of indebtedness, gold and silver, and bonds of the United States, of this state, and of the several levee districts, parishes, school districts, drainage districts, road districts, and municipal corporations of this state, on which bonds there shall have been no default in the payment of interest for the lesser of the last five years or the existence of the bonds.

(6) To maintain and lease safe deposit boxes and to accept property or documents for safekeeping.

(7) To issue shares or capital stock as appropriate to its form of organization; to issue savings and demand accounts; and to assess and collect from members, borrowers, or savers, any of the following: fees, dues, interest, premiums, late charges, and other charges, and the same shall not be held to be usurious; to permit or force members and depositors to withdraw all or part of their shares or savings and demand accounts; and to assess and collect from members, borrowers, or savers collection fees, transfer fees, and such other fees as may be authorized by the board of directors.

(8) To borrow, give security, be surety, and issue notes, bonds, debentures, other obligations, or other securities. Any such borrowing shall constitute a claim against the corporate assets, and shall be payable in advance of, and by preference over, all claims or rights of members or stockholders in any of the assets of the savings bank. The commissioner may, in writing, impose limits on the amount of borrowings of a savings bank if the savings bank is in an impaired condition or in an unsafe and unsound condition.

(9) To sell money orders, travellers checks, and similar instruments drawn by it on its own accounts, or on its accounts at other financial institutions or as agent for any organization empowered to sell such instruments through agents within this state.

(10) To service mortgage loans for others.

(11) To make loans and investments as provided in this Chapter or as authorized by the commissioner.

(12) To purchase, lease, or otherwise obtain a computer or other data processing services from any other organization; to purchase, lease, or otherwise obtain computer or other data processing equipment and machinery; and to render computer, electronic, or other data processing services to others.

Acts 1990, No. 816, §1, eff. Sept. 1, 1990.

§ 6:1140 Status as an IRS qualified savings banks institution

All insured savings banks under the supervision of this Chapter shall qualify for and maintain the sixty percent asset test of the Internal Revenue Code of 1968 and any amendments thereto.

Acts 1990, No. 816, §1, eff. Sept. 1, 1990.

§ 6:1141 Regulatory powers; promulgation of rules and regulations

A. The commissioner of financial institutions shall have the power to enact and promulgate rules and regulations as may be necessary or appropriate to implement the provisions of this Chapter. When making rules and regulations pursuant to this power, the commissioner shall consider among other matters the impact any such rule or regulation will have on a dual-banking system as well as the impact any such rule or regulation will have on the public interest in the business of banking. The commissioner may also consider the regulations of the Comptroller of the Currency, the Federal Reserve Board, and the Federal Home Loan Bank Board to allow financial institutions organized under the laws of this state to offer services consistent with services offered by financial institutions organized under the laws of the United States.

B. All regulations enacted and promulgated under this Section shall be subject to the provisions of R.S. 49:951, 953, 956, and 961, and prior to the promulgation of any such rule or regulation, the commissioner shall give each financial institution organized under this Chapter affected by the rule or regulation written notification of the content of such rule and regulation and the date and time of any public hearing held pursuant to those statutes. The commissioner shall provide notice at least ten days prior to the adoption of such rule or regulation, but the failure of a particular financial institution to receive notice thereof shall not affect the validity of such rule or regulation.

Acts 1990, No. 816, §1, eff. Sept. 1, 1990.

§ 6:1142 Safety deposit boxes and safekeeping

The provisions of R.S. 6:321 through 328 relative to safety deposit boxes and safekeeping shall be applicable to savings banks chartered under the provisions of the Louisiana Savings Bank Act of 1990 in the same manner as they are applicable to state banks.

Acts 2020, No. 236, §1.

PART II HOLDING COMPANIES

§ 6:1151 Definitions

A. "Savings bank holding company" means any stock or mutual company which directly or indirectly or acting in concert with one or more other persons or through one or more subsidiaries, owns, controls, holds with power to vote, or holds proxies representing more than twenty-five percent of the voting shares or rights of any savings bank or savings bank holding company or controls in any manner, whether by holding of proxies or otherwise, the election of a majority of the directors of any savings bank or savings bank holding company. Notwithstanding the foregoing, no company shall be deemed to have control of, or over, a savings bank or holding company:

(1) By virtue of its ownership or control of shares in a fiduciary capacity arising in the ordinary course of its business;

(2) By virtue of its ownership or control of shares acquired by it in connection with its underwriting of securities which are held only for such period of time as will permit the sale thereof upon a reasonable basis;

(3) By virtue of its holding any shares as collateral taken in the ordinary course of securing a debt or other obligation;

(4) By virtue of its ownership or control of shares acquired in the ordinary course of collecting a debt or other obligation previously contracted in good faith, until five years after the date acquired; or

(5) By virtue of its voting rights with respect to shares of any savings bank or holding company acquired in the course of a proxy solicitation in the case of a company formed and operated for the sole purpose of participating in a proxy solicitation.

B. "Louisiana savings bank holding company" means a savings bank holding company whose principal place of business is in Louisiana and which is not controlled, directly or indirectly, by another savings bank holding company whose principal place of business is outside Louisiana.

C. "Out-of-state savings bank holding company" means a savings bank holding company whose principal place of business is in a state other than Louisiana.

D. "Principal place of business" of a savings bank holding company means the state in which the total deposits of all offices of all subsidiaries are the largest as shown by the most recent reports of condition filed with state or federal regulatory authorities.

E. "Subsidiary of an individual or company" means any company which is controlled by such person or by a company which is a subsidiary of such person by virtue of this Section.

Acts 1990, No. 816, §1, eff. Sept. 1, 1990.

§ 6:1152 Implementation

The commissioner of financial institutions shall have the power to enact and promulgate rules and regulations as may be necessary or appropriate to implement the provisions of this Chapter.

Acts 1990, No. 816, §1, eff. Sept. 1, 1990.

§ 6:1153 Oppressed shareholder's remedies

The provisions of R.S. 6:518 shall be applicable to savings and loan holding companies and their subsidiaries insured by the Federal Deposit Insurance Corporation.

Acts 2022, No. 261, §1.

PART III INCORPORATION AND ORGANIZATION

§ 6:1161 Application for permit to organize

A. Savings banks shall be organized and incorporated in the same manner as state banks under the provisions of Chapter 3 of Title 6 of the Louisiana Revised Statutes of 1950.

B. Not less than five natural persons may organize a savings bank under this Chapter.

Acts 1990, No. 816, §1, eff. Sept. 1, 1990.

§ 6:1162 Content of application for permit to organize

The application for a permit to organize shall be on forms required by the commissioner and shall include such information as he shall require, including but not limited to the following:

(1) The name, address, social security number, date of birth, business address, home address, place of birth, and occupation of each organizer.

(2) The name of the proposed savings bank.

(3) The address of the headquarters, main business office, and branch offices and branches, if known, of the proposed savings bank. Such information shall include any real estate interests of the organizers which may be involved with any of these locations.

(4) The anticipated duration of the proposed savings bank which may be perpetual.

(5) The proposed articles of incorporation and bylaws.

(6) The number of shares of capital stock, the number of shares and classes of preferred stock if any, par value of each type of stock which may not be less than one dollar, the number of shares to be sold, and the per share initial asking price of each share.

Acts 1990, No. 816, §1, eff. Sept. 1, 1990.

§ 6:1163 Contents of articles of incorporation

A. The articles of incorporation shall set forth:

(1) The name of the savings bank, which may be called an association;

(2) The initial location of the business office;

(3) The duration of existence, which is perpetual unless otherwise specified;

(4) The initial number of directors which shall be not less than five;

(5) The authorization, if any, to issue withdrawable shares, the aggregate amount of which may be unlimited;

(6) The authorization, if any, to issue stock, the aggregate number thereof, and the par value per share, which shall not be less than one dollar;

(7) The quorum required for action of members if a quorum other than that specified in this Chapter is desired; and

(8) Any other provision, not inconsistent with law, which the subscribers or members may desire for the internal regulation of the affairs of the savings bank.

B. The articles of incorporation need not set forth any of the powers which this Chapter confers.

C. The commissioner of financial institutions may publish one or more standard forms of suggested articles of incorporation conforming to the provisions of this Chapter which may be adopted by savings banks.

Acts 1990, No. 816, §1, eff. Sept. 1, 1990; Acts 2001, No. 633, §1, eff. June 22, 2001.

§ 6:1164 Contents of bylaws

A. The bylaws of the savings bank shall provide for the following matters consistent with any applicable provisions of this Chapter:

(1) The number of directors and the minimum frequency of directors' meetings, which shall be at least monthly;

(2) The titles and duties of the officers;

(3) The officers authorized, or who may be authorized, by the directors to execute instruments;

(4) Repealed by Acts 1995, No. 248, §2, eff. June 14, 1995.

(5) The fiscal year of the savings bank;

(6) The location of the business office; and

(7) The date of the annual meeting of the members which shall be not more than one hundred twenty days after the close of the savings bank's fiscal year.

B. Such bylaws may provide also for any or all of the following matters, among others, consistent with any applicable provisions of this Chapter:

(1) The method of calling special meetings of the members, requirements for giving notice of meetings of members in addition to the notice prescribed by this Chapter, and methods of nominating directors and other voting and election procedures;

(2) The method of determining the record date for voting, dividends, and other purposes;

(3) The procedure for the transfer of ownership of capital and for the enforcement of charges and liens;

(4) The plan or plans under which withdrawable capital is to be issued; the classes into which it may be divided; and the characteristics of each class as to time of issuance, times, and amounts of payments to be made, classification for dividends, purposes, and such other terms as are permitted by this Chapter;

(5) The method by which the directors may enforce retirement of unpledged withdrawable capital;

(6) The frequency with which profits of the savings bank shall be apportioned and the methods of apportionment; and

(7) Provision for establishment of executive, loan, investment and appraisal committees, and such other special or standing committees as may be desirable, and for an overall business plan for the savings bank.

C. The commissioner may publish one or more standard forms of bylaws conforming to the provisions of this Chapter which may be adopted by savings banks.

Acts 1990, No. 816, §1, eff. Sept. 1, 1990; Acts 1995, No. 248, §§1, 2, eff. June 14, 1995.

§ 6:1165 Permit to organize

A. The commissioner of financial institutions may require additional information and conduct whatever investigation he deems necessary to determine whether to issue a permit to organize, including the subpoena of books and records, taking of public testimony, and conduct of hearings. The applicants shall share the expense of such investigations.

B. The commissioner shall find and declare, based on the record of application and his investigation, that:

(1) The proposed management, business plan, and capitalization promise to meet regulatory requirements;

(2) The application information is not in dispute;

(3) The proposed name is not deceptively similar to that of any other financial institution within an area defined by regulation of the commissioner; and

(4) The proposed business plan and capitalization promise to serve the needs of the community and its residents.

C. Insurance of accounts shall be effective prior to issuance of a certificate of complete organization.

Acts 1990, No. 816, §1, eff. Sept. 1, 1990.

§ 6:1166 Temporary organization and capital subscriptions

A. Each applicant shall become a member of the organization committee and shall elect officers and directors of the savings bank in organization.

B. The officers and directors shall secure subscriptions for capital, in the form of pledges to purchase stock.

C. The officers and directors shall prepare articles of incorporation, bylaws, and other items as required by this Chapter.

D. The directors shall apply for insurance of accounts and advise the commissioner of financial institutions of each filing, conference, and all correspondence accompanying and required by such a filing.

E. The officers and directors shall take any other actions necessary to complete organization.

F. The officers and directors shall furnish the commissioner with the names and addresses of all investors who subscribed to purchase stock.

Acts 1990, No. 816, §1, eff. Sept. 1, 1990.

§ 6:1167 Certificate of organization; issuance; refusal

A. The commissioner of financial institutions shall issue a certificate of authority to transact banking business as a savings bank only upon the fulfillment of the requirements of this Chapter.

B. If the commissioner finds that the public interest will not be served by permitting the organization of the proposed savings bank, that there is no need for additional banking facilities in the community where the savings bank is to be located, or that there is a lack of ability within the community to support additional banking facilities, he shall refuse to issue the certificate of authority.

Acts 1990, No. 816, §1, eff. Sept. 1, 1990; Acts 1995, No. 248, §1, eff. June 14, 1995.

§ 6:1168 REPEALED BY ACTS 1993, NO. 278, §1, EFF. JAN. 1, 1994.

REPEALED BY ACTS 1993, NO. 278, §1, EFF. JAN. 1, 1994.

PART IV MEMBERSHIP

§ 6:1181 Members

A. The membership of a mutual savings bank shall consist solely of every depositor or holder of a withdrawable account issued by the savings bank.

B. The members of a stock savings bank shall consist solely of the owners of its capital stock. Jointly owned stock shall constitute one membership.

C. Any savings bank which had legal existence under another statute prior to September 1, 1990, and which, if it was organized on a mutual basis, included borrowers as members or, if its ownership was evidenced by stock, included borrowers and/or depositors as voting or nonvoting members, may retain that membership structure by resolution of its board of directors to be included in its application for a savings bank charter under this Chapter. Otherwise, borrowers may not be members of a savings bank operating under this Chapter and only mutual savings banks may include depositors as members.

D. Joint ownership of an account constitutes one membership.

Acts 1990, No. 816, §1, eff. Sept. 1, 1990.

§ 6:1182 Annual and special meetings

A. Dates of annual meetings of members or stockholders shall be specified in the bylaws. Failure to hold an annual meeting shall not cause a forfeiture or dissolution of the savings bank.

B. Special meetings may be called with not less than twelve hours' written or oral notice, by the board of directors, the holders of not less than twenty-five percent of the outstanding capital stock shares, by such other person as the bylaws may designate or by the commissioner. Every annual or special meeting shall be held at the business office of the savings bank, or by remote communication as provided in R.S. 12:1-709, or if the space is inadequate, in such other place within the same parish as shall be specifically designated in the notice of such meeting.

Acts 1990, No. 816, §1, eff. Sept. 1, 1990; Acts 2021, No. 23, §1, eff. June 1, 2021.

§ 6:1183 Notice of meetings

A. Notice of an annual meeting shall be published once not less than ten days nor more than forty days before the date of the meeting. The notice shall also be displayed in a conspicuous place at the place of business of the savings bank in a manner which will assure that members of the general public will be provided an opportunity to read said notice. The notice shall state the time, place, and purpose of the meeting. If the state savings bank has authorized participation at a stockholders' meeting by means of remote communication as provided in R.S. 12:1-709, notice of the place shall include the means of remote communication to be used and any required access instructions.

B. For any special meeting, or for any annual meeting which is to consider any proposition which requires an affirmative vote of two-thirds of the members or stockholders, the notice shall be by mail, postmarked between ten and forty days before the date of the meeting, and shall also be posted at the savings bank's offices as if for an annual meeting, beginning on the date notice is given. All notices shall state the time, place, and purpose of the meeting.

C. Notwithstanding any other provision of law to the contrary, the articles of incorporation or bylaws of a savings bank may authorize or require delivery of notices of meetings and other communications to members or stockholders by electronic transmission to the same extent and in the same manner as permitted for a Louisiana corporation in accordance with R.S. 12:1-141.

Acts 1990, No. 816, §1, eff. Sept. 1, 1990; Acts 2018, No. 88, §1, Acts 2021, No. 23, §1, eff. June 1, 2021.

§ 6:1184 Quorum of annual or special meetings

The articles of incorporation may specify a quorum requirement, but it shall not be less than one-third of the total number of votes entitled to be voted at such meeting. Any meeting, including one at which a quorum is not present, may be adjourned by majority vote of those present to a specified date without future notice.

Acts 1990, No. 816, §1, eff. Sept. 1, 1990.

§ 6:1185 Voting

A. Voting at a meeting may be either in person, by means of remote communication in accordance with R.S. 12:1-709, or by proxy executed in writing by the member or stockholder or by his duly authorized attorney-in-fact.

B. In the determination of all questions requiring ascertainment as to who is entitled to vote and of the number of outstanding shares, the following rules shall apply:

(1) The date of determination shall be the record date for voting provided in this Chapter.

(2) Except as otherwise provided for in the articles of incorporation or bylaws, each person holding one or more withdrawable accounts in a mutual savings bank shall have the vote of one share for each one hundred dollars of the aggregate withdrawal value of such accounts and shall have the vote of one share for any fraction of one hundred dollars held in each of such accounts based upon the average daily deposits in said account for the thirty days prior to the record date. However, no member shall cast more than five hundred votes.

(3) Each holder of capital stock held shall have one vote for each share held.

(4) Shares owned by the savings bank shall not be counted or voted.

(5) A savings bank authorized to issue stock shall provide in its articles of incorporation that voting rights may be vested exclusively in stockholders.

Acts 1990, No. 816, §1, eff. Sept. 1, 1990; Acts 2007, No. 15, §1, eff. June 18, 2007; Acts 2021, No. 23, §1, eff. June 1, 2021.

§ 6:1186 Record date for voting, dividend, and other purposes

A. For the purposes of determining the holders of stock, capital accounts, and membership entitled to notice of, or to vote at, any meeting of the members, or in order to make a determination of the members, holders, or other persons for any other proper purpose, the bylaws may provide for a record date, not less than ten days nor more than forty days before the meeting or other event or transaction with regard to which the determination is to be made. This determination shall be made as of the close of business on such record date.

B. If the bylaws do not provide for a record date, the board of directors may fix such a date for each such determination within such time. If the board of directors fails to fix such a date, the record date for a meeting shall be the date on which the first notice of meeting is given.

C. Shares of stock or withdrawable accounts withdrawn or retired after such record date shall not be voted or counted in determining the number of shares outstanding. This Part shall be applicable to the dividend payments on capital stock, but dividends on withdrawable accounts shall be governed by R.S. 6:1207.

Acts 1990, No. 816, §1, eff. Sept. 1, 1990.

§ 6:1187 Proxies

A. Voting at a meeting may be either in person, by means of remote communication in accordance with R.S. 12:1-709, or by proxy executed in writing by the member or shareholder or by his duly authorized attorney-in-fact.

B. No proxy shall be valid:

(1) After eleven months from the date of its execution, unless otherwise provided in the proxy.

(2) Unless executed in an instrument separate from other forms or documents relating to the member's accounts.

(3) For any meeting at which the member who gave it is present, provided that notice of his presence is given by the member in writing, prior to the taking of any vote, to an official whom the savings bank shall identify at the meeting as having responsibility for such matter.

(4) Unless the member giving the proxy is told by the person to whom it is given that the proxy is optional and that the voting rights it represents may be exercised by the member himself.

(5) Unless the proxy is filed with the secretary of the savings bank for verification at least forty-eight hours prior to the time of the meeting at which the proxy is to be voted or at such other time as the articles or bylaws of the savings bank may provide.

Acts 1990, No. 816, §1, eff. Sept. 1, 1990; Acts 1997, No. 42, §1; Acts 2021, No. 23, §1, eff. June 1, 2021.

§ 6:1188 Directors

A. The business and affairs of the savings bank shall be exercised by its elected board of directors.

B.(1) The board of directors shall consist of the number of directors fixed by the bylaws, but shall not be less than five nor more than twenty. No more than one-half of the directors shall be salaried employees of the savings bank.

(2) The articles of incorporation of the savings bank may provide that the board of directors shall be divided into three classes of as nearly equal numbers of directors as possible. The term of office of the first class shall expire at the first annual meeting that follows such division; of the second class, at the second such meeting; and of the third class, at the third such meeting. At each annual meeting following such division, directors shall be elected for a full-term of three years to succeed those whose terms expire at such meeting. No director shall be elected for a longer single term than three years.

C. The provisions of R.S. 6:282 and 285 and the rules and regulations promulgated thereunder shall be applicable to savings banks in the same manner as they are applicable to banks.

D. Repealed by Acts 2001, No. 637, §2, eff. June 22, 2001.

E. Immediately following their election, and in every case before assuming the duties of their office, all directors of a stock or mutual savings bank shall take an oath of office to discharge their duties as directors properly and conscientiously, which oath shall be subscribed to by the director making and taking it and entered into the minutes of the next regular or special meeting of the board of directors. The oath shall be retained in the records of the savings bank for examination by the commissioner. These oaths shall be in writing and on a form provided by the commissioner, and shall be renewed as to each director upon the occasion of each reelection to the board. The commissioner may suspend any director who fails to comply with this requirement, and no suspended director shall be reinstated, except for good cause shown after taking the oath.

F. Notwithstanding any other provision of law to the contrary, the articles of incorporation or bylaws of a savings bank may authorize or require delivery of notices of meetings and other communications to directors by electronic transmission to the same extent and in the same manner as permitted for a Louisiana corporation in accordance with R.S. 12:1-141.

Acts 1990, No. 816, §1, eff. Sept. 1, 1990; Acts 1993, No. 276, §1, eff. Oct. 1, 1993; Acts 1997, No. 66, §1;Acts 2001, No. 637, §§1 and 2, eff. June 22, 2001; Acts 2003, No. 72, §1, eff. May 28, 2003; Acts 2007, No. 15, §1, eff. June 18, 2007; Acts 2018, No. 88, §1.

§ 6:1189 Bonds of officers and directors

A.(1) Every person appointed or elected to any position requiring the receipt, payment, management, or use of money belonging to a savings bank, or whose duties permit or require access to or custody of any of the savings bank's money or securities, or whose duties permit the regular making of entries in the books or other records of the savings bank, before assuming any duties shall become bonded in some trust or company authorized to issue bonds in this state, or in a fidelity insurance company licensed to do business in this state.

(2) Each such bond shall be on a form and in an amount to be approved by the commissioner of financial institutions, who may at any time require one or more additional bonds or an increase in the existing bond. Each such bond, payable to the savings bank, shall be an indemnity for any loss the savings bank may sustain in money or other property through any dishonest or criminal act or omission by any person required to be bonded, committed either alone or in concert with others. A true copy of every bond, including all riders and endorsements executed subsequent to the effective date of the bond, shall be filed with the commissioner.

(3) Each bond shall provide that a cancellation thereof either by the surety or by the insured shall not become effective until thirty days after written notice shall have been given to the commissioner, unless he shall have approved such cancellation earlier.

B. Nothing contained herein shall preclude the commissioner from proceeding against an association as provided in this Chapter should he believe that it is being conducted in an unsafe and unsound manner in that the form or amount of bonds so fixed and approved by the board of directors is inadequate to give reasonable protection to the savings bank.

Acts 1990, No. 816, §1, eff. Sept. 1, 1990.

§ 6:1190 Conduct of directors and officers

A.(1) Directors and officers occupy a fiduciary relationship to the savings bank of which they are directors or officers, and a director or officer shall not engage or participate, directly or indirectly, in any business or transaction conducted on behalf of or involving the savings bank which would result in a conflict of their own personal interests with those of the savings bank which they serve, unless:

(a) The business or transactions are conducted in good faith and are honest, fair, and reasonable to the savings bank;

(b) A full disclosure of the business or transaction and the nature of the director's or officer's interest is made to the board of directors; and

(c) The business or transaction is approved in good faith by the board of directors with any interested director abstaining, which approval shall be recorded in the minutes.

(2) Any profits inuring to the officer or director shall not be at the expense of the savings bank. The business or transaction shall not represent a breach of the officer's or director's fiduciary duty and shall not be fraudulent or illegal.

B. Notwithstanding any other provisions of this Part, the commissioner of financial institutions may require the disclosure by directors, officers, and employees of their personal interest, direct or indirect, in any business or transaction on behalf of or involving the savings bank and of their control of or active participation in enterprises having activities related to the business of the savings bank.

C. The following restrictions governing the conduct of directors and officers expressly are specified, but such specification does not excuse such persons from the observance of any other aspect of the general fiduciary duty owed by them to the savings bank which they serve, as follows:

(1) An officer or director of a mutual savings bank shall not hold office or status as a director or officer of another mutual savings bank to which this Chapter applies and which has its domicile in the same parish or in contiguous parishes therewith.

(2) A director shall only receive as remuneration reasonable fees for services as a director or for service as a member of a committee of directors. A director who is also an officer or employee of the savings bank may receive compensation for service as an officer or employee.

(3) A director, savings bank, or officer thereof shall not require, as a condition to the granting of any loan or the extension of any other service by the savings bank or its affiliates, that the borrower or any other person undertake a contract of insurance or any other agreement or understanding with respect to the furnishing of any goods or services, directly or indirectly, with any specific company, agency, or individual.

(4) An officer or director acting as proxy for a member of a mutual savings bank shall not exercise, transfer, or delegate such right in any consideration of a private benefit or advantage, direct or indirect, accruing to himself nor surrender control or pass his office to any other for any consideration of a private benefit or advantage, direct or indirect. The voting rights of members shall not be the subject of sale or similar transaction, either direct or indirect. Any officer or director who violates the provisions of this Subsection shall be held accountable to the savings bank for any increment.

(5) A director or officer shall not solicit, accept, or agree to accept, directly or indirectly, from any person other than the savings bank any gratuity, compensation, or other personal benefit for any action taken by the savings bank or for endeavoring to procure any such action.

(6) Subject to the approval of the commissioner, a savings bank's articles of incorporation may provide for reasonable indemnification to its officers, directors, and employees in connection with faithful performance of their duties for the savings bank. The commissioner may promulgate model indemnification provisions and may consider provisions available under the Louisiana Business Corporation Act, the Louisiana Banking Act, and those available to national banks.

Acts 1990, No. 816, §1, eff. Sept. 1, 1990.

§ 6:1191 Relation and liability of directors and officers

A.(1) Notwithstanding the provisions of R.S. 6:1190, a director or officer of a savings bank shall not be held personally liable to the financial institution or the shareholders thereof for monetary damages unless the director or officer acted in a grossly negligent manner or engaged in conduct that demonstrates a greater disregard of the duty of care than gross negligence, including intentional tortious conduct or intentional breach of the duty of loyalty.

(2) For the purposes of this Section, "gross negligence" means a reckless disregard of, or a carelessness amounting to indifference to, the best interests of the financial institution or the shareholders thereof, and involves a substantial deviation below the standard of care expected to be maintained by a reasonably careful person under like circumstances.

B. A director of a savings bank, in the performance of his duties, shall be fully protected in relying in good faith upon the records of the bank, and upon such information, opinions, reports, or statements presented to him, the bank, the board of directors, or any committee thereof by any of the bank's officers or employees, or by any committee of the board of directors, or by any counsel, appraiser, engineer, or independent or certified public accountant selected with reasonable care by the board of directors or any committee thereof or any officer having the authority to make such selection, or by any other person as to matters the director reasonably believes are within such other person's professional or expert competence and which person is selected with reasonable care by the board of directors or any committee thereof or any officer having the authority to make such selection.

C. The provisions of this Section shall not affect the right of incorporators or shareholders of savings banks to include in articles of incorporation provisions as authorized by R.S. 6:213(B)(3).

D. Notwithstanding any other law to the contrary, the provisions of this Section shall be the sole and exclusive law governing the relation and liability of directors and officers to their financial institution or to the shareholders thereof or to any other person or entity. Any person who unsuccessfully attempts to impose a higher standard of responsibility or liability than that provided by this Section shall be liable for attorney fees incurred in the defense of such attempt and for damages, whether foreseeable or not.

E. No action for damages against any savings bank for breach of the director's or officer's contract with the savings bank in the capacity of director or officer, or for breach of his duty as a director or officer, including, without limitation, actions for gross negligence, but excluding any action covered by the provisions of Subsection F of this Section, shall be brought unless filed in a court of competent jurisdiction and proper venue within one year from the date of the alleged act, omission, or neglect, or within one year from the date that the alleged act, omission, or neglect is discovered or should have been discovered; however, even as to actions filed within one year from the date of such discovery, in all events such actions shall be filed at the latest within three years from the date of the alleged act, omission, or neglect.

F. No action for damages against any savings bank for intentional tortious misconduct, or for an intentional breach of the director's or officer's duty of loyalty, or for acts of omissions in bad faith, or involving fraud or a knowing and intentional violation of law, shall be brought unless filed in a court of competent jurisdiction and proper venue within two years from the date of the alleged act or omission, or within two years from the date the alleged act or omission is discovered or should have been discovered; however, even as to actions filed within two years from the date of such discovery, in all events such actions shall be filed at the latest within four years from the date of the alleged act or omission.

G. The three-year period provided in Subsection E of this Section and the four-year period provided in Subsection F of this Section shall be deemed peremptive periods and shall not be subject to renunciation, interruption, or suspension except by timely suit filed in a court of competent jurisdiction and proper venue.

Acts 1992, No. 586, §1, eff. June 30, 1992; Acts 2015, No. 83, §1.

PART V CAPITAL

§ 6:1201 Minimum capital for incorporation or conversion

The commissioner of financial institutions shall not issue a certificate of authority for a capital stock savings bank unless he shall affirmatively determine that:

(1) The amount of capital stock subscribed is sufficient for the safe and proper operation of the corporation, but in no event shall it be less than five hundred thousand dollars.

(2) The proposed corporation has set aside sufficient permanent capital reserve for the safe and proper operation of the savings bank, but in no event less than twenty percent of its capital stock, and shall be credited to be paid-in surplus and may be used to offset losses from operations, except as the commissioner may waive this requirement for a financial institution converting to a savings bank. Subject to the approval of the commissioner, all of the financial institutions which meet minimum capital requirements as determined by the commissioner prior to the conversion to a state savings bank shall be deemed to meet the requirements of this Part.

Acts 1990, No. 816, §1, eff. Sept. 1, 1990.

§ 6:1202 Types of capital; personal property

A. The capital of a stock savings bank shall be represented by capital stock and noncumulative perpetual preferred stock as authorized by the articles of incorporation, related paid-in surplus, undivided profits, retained earnings, and such other forms of capital deemed to be qualifying capital by the insurance corporation providing insurance of the savings bank's deposits.

B. The capital of a mutual savings bank shall be represented by retained earnings and such other forms of capital deemed to be qualifying capital by the insurance corporation providing insurance of the savings bank's deposits.

C. All shares and capital accounts shall be personal property in the hands of their holders and transferable as provided in this Chapter and the bylaws of the savings bank.

Acts 1990, No. 816, §1, eff. Sept. 1, 1990.

§ 6:1203 Capital stock; nature

Capital stock shall constitute a secondary reserve out of which losses shall be paid after all other available reserves have been exhausted and shall have a par value of one dollar each or such greater amount as the articles of incorporation may prescribe. These shares shall be:

(1) Nonwithdrawable, except as provided in this Part relative to retirement or reduction of capital stock, until all liabilities of the savings bank have been satisfied in full, including payment of the withdrawal value of all deposit accounts;

(2) Entitled to dividends only as provided in this Part concerning dividends; and

(3) Issued only upon cash payment of not less than the par value thereof, or in connection with a merger, sale of all assets, or conversion, or as stock dividends as provided in the provisions of this Part relative to dividends.

Acts 1990, No. 816, §1, eff. Sept. 1, 1990.

§ 6:1204 Capital stock; authorization of issuance

A savings bank may provide for the issuance of capital stock, either by its original articles of incorporation or by an amendment thereto authorized by this Chapter.

Acts 1990, No. 816, §1, eff. Sept. 1, 1990.

§ 6:1205 Who may hold capital

Capital stock of a savings bank may be held:

(1) By any individual in his own right, regardless of age or marital status, or by two or more such individuals;

(2) By a fiduciary when authorized by law;

(3) By a government or governmental instrumentality when authorized by law; and

(4) By any corporation or other person when not prohibited by law.

Acts 1990, No. 816, §1, eff. Sept. 1, 1990.

§ 6:1206 Capital maintenance

A. A savings bank whose overall financial condition is fundamentally sound shall maintain a minimum acceptable capital requirement as determined by the commissioner of financial institutions.

B. When the commissioner determines that the financial condition or history, management, or earning prospects are not adequate, the commissioner may determine that a higher minimum capital level is required for such savings banks.

C. A savings bank shall maintain total capital necessary to ensure the continuation of insurance of its deposit accounts by the insurance corporation.

D. The board of directors shall establish and maintain such special reserves as are appropriate to provide for losses or liabilities; losses shall be charged to such reserves as are appropriate to reflect the true financial condition of the savings bank.

E. Any savings bank not maintaining minimum capital shall be deemed to be operating in an unsafe and unsound condition and is subject to the imposition of such restrictions, sanctions, or penalties as provided for under this Title.

Acts 1990, No. 816, §1, eff. Sept. 1, 1990.

§ 6:1207 Dividends; capital surplus required

A. The board of directors of a savings bank shall not declare or pay any cash dividends for a period of two years from the issuance of its certificate of authority or for such shorter period as the commissioner of financial institutions may prescribe. Thereafter, the board of directors of any savings bank may quarterly, semiannually, or annually declare cash dividends on its stock by complying with the provisions of this Part and the savings bank's articles of incorporation and bylaws.

B.(1) No cash dividends may be declared or paid until a savings bank has surplus equal to twenty percent of the outstanding common stock of the savings bank, provided that surplus shall not be reduced below that twenty percent level by the payment of the cash dividend.

(2) Prior approval of the commissioner shall be required if the total of all cash dividends declared and paid by the savings bank and amounts used to redeem or repurchase its stock during any one year would exceed the total of its net profits of that year combined with the net profits from the immediately preceding year.

C. Each financial institution converting to a savings bank, before a declaration of a cash dividend on its common stock, shall transfer not less than one-half of its net profits of the preceding six months to its paid-in surplus until it shall have paid-in surplus equal to twenty percent of capital stock.

D. For the purposes of this Part, "net profits" is defined as the remainder of all earnings from current operations plus actual recoveries on loans and investments and other assets, after deducting from the total thereof all current operating expenses, actual losses, paid and accrued dividends on preferred stock, if any, all federal and state taxes, and cash dividends on common stock paid or accrued over the calculation period. Negative net profits shall not be rounded to zero in this calculation.

Acts 1990, No. 816, §1, eff. Sept. 1, 1990; Acts 2003, No. 56, §1, eff. May 23, 2003.

§ 6:1208 Loans or discounts on capital stock

Notwithstanding any other provisions of this Chapter, a savings bank shall not make a loan or discount on the security of or be the purchaser or holder of the shares of its own capital stock or preferred stock or of the security of its own debentures or evidences of its debt which are convertible to capital stock or are junior or subordinate in rights of payment to deposit or other liabilities of the savings bank, unless such security or purchase shall be necessary to prevent loss on a debt previously contracted in good faith; and such stock or evidence of indebtedness acquired or purchased shall, within one year from the time of its acquisition, be sold or disposed of at public or private sale.

Acts 1990, No. 816, §1, eff. Sept. 1, 1990.

§ 6:1208.1 Applicability of statute, rules and regulations

The provisions of R.S. 6:416 and the rules and regulations promulgated thereunder shall be applicable to savings banks chartered under the provisions of this Title in the same manner as they are applicable to state banks.

Acts 1997, No. 1003, §1.

PART VI INVESTMENTS

§ 6:1221 Underwriting

A. No savings bank shall make any loan or investment authorized by this Part unless the savings bank first has determined that the type, amount, purpose, and repayment provisions of the loan or investment in relation to the borrower's or issuer's resources and credit standing support the reasonable belief that the loan or investment will be financially sound and will be repaid according to its terms and that the loan or investment is not otherwise unlawful.

B. Each loan or investment that a savings bank makes or purchases, whether wholly or in part, shall be adequately underwritten, reviewed periodically, and reserved against as necessary in accordance with its payment performance, all in accordance with the provisions of this Chapter and the directives of the commissioner of financial institutions.

C. Every appraisal or reappraisal of property which a savings bank is required to make shall be made as follows:

(1) By a qualified appraiser designated by the board of directors.

(2) In the case of an insured or guaranteed loan, by any appraiser approved by any lending, insuring, or guaranteeing agency of the United States or the state of Louisiana which insures or guarantees such loan, wholly or in part.

(3) Each appraisal shall be in writing prepared at the request of the lender for the lender's use, disclose the market value of the security offered, contain sufficient information and data concerning the appraised property to substantiate the market value thereof, be certified and signed by the appraiser or appraisers, and state that such appraiser or appraisers have personally examined the described property, which appraisal shall be filed and preserved by the savings bank.

D. Any violation of this Part shall constitute an unsafe or unsound practice. Anyone who knowingly violates any provision of this Part shall be subject to enforcement action or civil money penalties as provided for in this Title.

Acts 1990, No. 816, §1, eff. Sept. 1, 1990.

§ 6:1222 Investment in loans

A savings bank may loan funds as follows:

(1) On the security of withdrawable accounts, but no such loan shall exceed the withdrawal value of the pledged account;

(2) On the security of real estate:

(a) Of a value, determined in accordance with this Chapter, sufficient to provide good and ample security for the loan;

(b) With the title established by such evidence of title as is consistent with sound lending practices in the locality;

(c) With the security interest in such real estate evidenced by an appropriate written instrument and the loan evidenced by a note, bond, or similar written instrument. A loan on the security of the whole of the beneficial interest in a land trust satisfies the requirements of this Paragraph if the title to the land is held by a corporate trustee and if the real estate held in the land trust meets the other requirements of this Section; and

(d) With a mortgage loan not to exceed thirty years;

(3) For the purpose of repair, improvement, rehabilitation, furnishing, or equipment of real estate;

(4) For the purpose of financing or refinancing an existing ownership interest in certificates of stock, certificates of beneficial interest, or other evidence of an ownership interest in, and a proprietary lease from, a corporation, trust, or partnership formed for the purpose of the cooperative ownership of real estate, secured by the assignment or transfer of such certificates or other evidence of ownership of the borrower;

(5) Through the purchase of loans which at the time of purchase the savings bank could make in accordance with this Part and the bylaws;

(6) Through the purchase of installment contracts for the sale of real estate, and title thereto which is subject to such contracts, but in each instance only if the savings bank at the time of purchase could make a mortgage loan of the same amount and for the same length of time on the security of such real estate;

(7) Through loans guaranteed or insured, wholly or in part by the United States or any of its instrumentalities, and without regard to the limits in amount and terms otherwise imposed by this Part;

(8) Subject to the limitations imposed by existing law, through secured or unsecured loans for business, corporate, commercial, or agricultural purposes;

(9) For the purpose of mobile home financing, subject to the limitations imposed by existing law;

(10) Through loans secured by the cash surrender value of any life insurance policy or any collateral which would be a legal investment if made by such savings bank pursuant to the terms of this Chapter;

(11) Any provision of this Chapter to the contrary notwithstanding, and subject to the commissioner's regulations, any savings bank may make any loan or investment or engage in any activity which it could make or engage in if it were organized under state law as a bank, savings and loan association, or other financial institution, or under the laws of the United States for national banks, federal savings and loan associations, or other financial institutions whose principal offices are located within this state.

(12) A savings bank may issue letters of credit or other similar arrangements only as provided by this Chapter with regard to aggregate amounts permitted, underlying documentation and underwriting, legal limitations on loans of the savings bank, control and subsidiary records, and other procedures deemed necessary by the commissioner;

(13) For the purpose of automobile financing, subject to the limitations imposed by existing law;

(14) For the purpose of financing of primary, secondary, undergraduate, or post-graduate education; and

(15) Through revolving lines of credit on the security of a first or second mortgage on the borrower's personal residence, based primarily on the borrowers equity, the proceeds of which may be used for any purpose; such loans being commonly referred to as home equity loans.

Acts 1990, No. 816, §1, eff. Sept. 1, 1990.

§ 6:1223 Other investments

If the board of directors determines at any time that funds are available in excess of the demands and needs for loans, maturities, and withdrawals, a savings bank may invest such funds as provided in this Part:

(1) In demand, time, or savings deposits or accounts, withdrawable accounts or other insured obligations of any financial institution the accounts of which are insured by a federal agency.

(2) In participating interests in mortgage loans of a type which the savings bank would be authorized to make, but only if the other participants are:

(a) Savings banks organized under this Chapter;

(b) Savings and loan associations, banks, and credit unions organized under the laws of this state;

(c) Associations or corporations insured by an instrumentality of the United States;

(d) Instrumentalities of or corporations owned wholly or in part by the United States or this state; or

(e) Subject to existing laws and regulations, service corporations of a savings bank organized under this Chapter or subsidiaries of a savings and loan association, bank, or credit union organized under the laws of this state or the United States.

(3) In obligations of, or obligations that are fully guaranteed by, the United States; and in stocks or obligations of any Federal Reserve Bank, Federal Home Loan Bank, the Student Loan Market Association, the Government National Mortgage Association, the Federal National Mortgage Association, the Federal Home Loan Mortgage Corporation, the Federal Deposit Insurance Corporation, or any other agency of the United States.

(4) In bonds or other direct obligations of or guaranteed as to principal and interest by this state.

(5) In obligations which by the laws of this state are made legal investments for savings banks.

(6) In bonds or other evidences of indebtedness which are direct general obligations of the state and its agencies, boards, commissions, departments, parishes, municipalities, or other political subdivisions, or in bonds or other evidences of indebtedness which are payable from revenues or earnings specifically pledged therefore of a political subdivision, but in no event shall the total amount of such securities of any one maker or obligor exceed ten percent of the savings bank's capital, nor shall the aggregate amount of investments under this Paragraph exceed ten percent of the savings bank's total assets.

(7) With the prior written consent of the commissioner, a savings and loan association which has converted to a savings bank charter may continue to invest in the below listed activities which were commenced prior to the conversion, for the development of homesites and housing for sale or rental, including but not limited to projects for the reconstruction, rehabilitation, or rebuilding of residential properties to meet the minimum standards of health and occupancy prescribed by appropriate local authorities, and the provision of accommodations for retail stores, shops, and other community services which are reasonably incident to such housing, or in the shares of a corporation which owns one or more of such projects and which is wholly owned by one or more financial institutions whose investments are regulated by the laws of this state or of the United States. In no event shall the total investment in any one project exceed twenty percent of the savings bank's total capital, nor shall the aggregate investment under this Paragraph exceed ten percent of its total assets. No savings bank shall make an investment of this type unless it is in compliance with the capital requirements of this Chapter and with the capital maintenance requirements of its insurer of deposit accounts. The commissioner shall approve the investment only if the savings bank shows:

(a) That the savings bank has adequate assets available for such an investment;

(b) That the proposed investment does not exceed the reasonable market value of the property or interest therein as determined in accordance with the appraisal requirements of this Part;

(c) That all other requirements of this Part have been met; and

(d)(i) A savings bank may petition the commissioner to allow a waiver of the requirements if it has already exceeded the limits established thereby prior to conversion of its charter to a savings bank.

(ii) Nothing contained in this Paragraph prohibits a savings bank from developing or building on land acquired by it under any other provision of this Chapter nor from completing the construction of buildings pursuant to any construction loan contract where the borrower has failed to comply with the terms of such contract.

(8)(a) In marketable investment securities, but in no event shall the total amount of such securities of any one maker or obligor exceed ten percent of the savings bank's total capital, nor shall the aggregate amount of investments under this Paragraph exceed ten percent of such total assets.

(b) As used in this Part, the term "marketable investment securities" does not include stocks but means investment grade marketable obligations evidencing indebtedness of any person in the form of bonds, notes, or debentures commonly known as investment securities, and of a type customarily sold on recognized exchanges or traded over the counter.

(c) As used in this Part, the term "investment grade" means being rated in one of the four highest categories by at least one nationally recognized rating service.

(d) The commissioner may specify, by regulation, procedures for underwriting such investments.

(9) In stocks or obligations of business development corporations chartered by this state or by the United States or an agency thereof, but in no event shall the aggregate amount of stock exceed ten percent of the savings bank's total assets.

(10) In obligations of urban investment corporations chartered under the laws of this state, or the United States, or in certificates of beneficial interest of urban renewal investment trusts, but in no event shall the aggregate amount of such stock, obligations, or beneficial interest certificates of any one maker exceed ten percent of the savings bank's total capital, nor shall the aggregate amount of investments under this Paragraph exceed ten percent of such total assets.

(11) Subject to the regulation of the commissioner, in loans deemed sufficiently secured by the board of directors of the savings bank. However, if the security is stock or equity securities of any kind, other than those of a financial institution, the stock or securities shall be listed on a national exchange or actively traded and quoted on an over the counter market or its value shall be ascertainable in accordance with regulations promulgated by the commissioner.

(12) In commercial paper. As used in this Part, the term "commercial paper" means short-term obligations having a maturity ranging from two to two hundred seventy days issued by banks, corporations, or other borrowers. Investments in commercial paper under this Part shall be in securities rated in one of the four highest categories by a nationally recognized rating service.

(13) Notwithstanding any provision of this Chapter to the contrary, a savings bank may purchase shares of or otherwise acquire equity interests in insurance companies and insurance holding companies organized to provide insurance for savings institutions and corporations and individuals affiliated with savings institutions, provided ownership of equity interests is a prerequisite to obtaining directors and officers' and blanket bond insurance through such company or companies. The commissioner may promulgate regulations concerning the size of each savings bank's investment and manner of holding such investments.

(14) With the prior written consent of the commissioner, a savings bank may invest, in the aggregate, no more than ten percent of its total capital in stock or other equity securities. Of this amount, no more than two percent of the savings bank's total capital may be invested in the equity securities of any one issuer. This limitation shall not apply with respect to equity securities of the government of the United States, its agencies, or instrumentalities. The commissioner may adopt such rules and regulations as are necessary to carry out the provisions of this Paragraph, including but not limited to requirements as to diversification and resource management.

(15) Subject to the prior approval of the commissioner, in equity or debt securities or instruments of a service corporation subsidiary of the savings bank.

(16)(a) Through advances of federal funds to designated depositories, provided that such advances are made on the condition that they be repaid on the next business day following the date on which the advance is made.

(b) For the purposes of this Part, the term "federal funds" shall mean funds which a savings bank has on deposit at a depository which are exchangeable for funds on deposit at a Federal Reserve Bank or a Federal Home Loan Bank; and

(c) The term "business day" shall mean any day on which the savings bank, the depository, the Federal Reserve Bank, and the Federal Home Loan Bank where the funds are on deposit are all open for general business.

Acts 1990, No. 816, §1, eff. Sept. 1, 1990.

§ 6:1224 Calculation of interest; postpayments and prepayments

A. In any contract or loan which is secured by a mortgage, deed of trust, or conveyance in the nature of a mortgage for the purpose of purchase or refinance of residential real estate, the interest which is computed, calculated, charged, or collected pursuant to such contract or loan, or pursuant to any regulation or rule promulgated pursuant to this Chapter, shall not be computed, calculated, charged, or collected for any period of time occurring after the date on which the total indebtedness, with the exception of late payment penalties, is paid in full.

B.(1) For purposes of this Part, a "prepayment" shall mean the payment of the total indebtedness, with the exception of late payment penalties if incurred or charged, on any date before the date specified in the contract or loan agreement on which the total indebtedness shall be paid in full, or before the date on which all payments, if timely made, shall have been made.

(2) In the event of a prepayment of the indebtedness which is made on a date after the date on which interest on the indebtedness was last computed, calculated, charged, or collected, but before the next date on which interest on the indebtedness was calculated, computed, charged, or collected, the lender may calculate, charge, and collect interest on the indebtedness for the period which elapsed between the date on which the prepayment is made and the date on which interest on the indebtedness was last computed, calculated, charged, or collected at a rate equal to 1/360 of the annual rate for each day which so elapsed, which rate shall be applied to the indebtedness outstanding as of the date of prepayment. The lender shall refund to the borrower any interest charged or collected which exceeds that which the lender may charge or collect pursuant to this Section.

C. The provisions of this Section shall apply only to contracts or loans entered into on or after September 1, 1990.

Acts 1990, No. 816, §1, eff. Sept. 1, 1990.

§ 6:1225 General loan contract provisions

Each loan, and any agreement for securing the same, shall be evidenced by one or more written instruments, consistent with sound lending practices in the locality. Whenever recording of such an agreement is necessary to establish priority over the claim of any third party, the agreement shall be recorded.

Acts 1990, No. 816, §1, eff. Sept. 1, 1990.

§ 6:1226 Modification agreements

The savings bank at any time may enter into a written agreement with the borrower to modify, in any manner not inconsistent with the provisions of this Chapter, the terms of a loan as to the amount, time, or method of the payments to be made, the interest rate, and any other provision of the loan contract. The loan contract and the security instrument shall not be prejudiced by the making of any such modification, even if such a modification was not provided for in the loan contract.

Acts 1990, No. 816, §1, eff. Sept. 1, 1990.

§ 6:1227 Sale, assignment, and servicing of loans and contracts

A. Any savings bank may sell any loan or a participating interest in a loan at any time, in the usual and regular course of business. Loans may be sold with or without recourse, except as may otherwise be provided by regulations of the commissioner. The commissioner may, by regulation, adopt limitations upon the sale of loans. The provisions of this Section shall not apply to the sale of loans to agencies of the United States or the state of Louisiana or such other government sponsored agencies as may be approved by the commissioner.

B. A savings bank may contract to service a loan or a participating interest in a loan, but such a contract shall conform to the pertinent regulations which may be prescribed by the commissioner and shall require sufficient compensation to reimburse the savings bank for all expenses incurred under such contract.

C. A savings bank may sell and assign with or without recourse any defaulted loan or defaulted real estate contract to any person eligible to purchase the same, for an amount not less than the fair cash market value thereof.

Acts 1990, No. 816, §1, eff. Sept. 1, 1990.

§ 6:1228 Purchase of real estate at judicial sale

A savings bank may purchase, hold, and convey real estate acquired at any sheriff's sale or other judicial sale, either public or private, upon which the savings bank has any good faith mortgage, lien, or other encumbrance, or in which the savings bank has any other interest. The savings bank thereafter may repair, improve, sell, convey, lease, mortgage, exchange, or otherwise dispose of real estate so acquired, in the best interests of the savings bank, without limitation.

Acts 1990, No. 816, §1, eff. Sept. 1, 1990.

§ 6:1229 Immovable property; dealings

A. A savings bank may hold and convey real estate which it has acquired in satisfaction of debts previously contracted bona fide in the course of its business.

B. A savings bank may, in accordance with regulations adopted by the commissioner, make a loan or other extension of credit which would otherwise exceed the limits prescribed in R.S. 6:1235 when the purpose of the loan is to finance the sale of real estate acquired for a debt previously contracted or for use as bank premises. Such loans may only be made upon prior written approval of the commissioner.

Acts 1990, No. 816, §1, eff. Sept. 1, 1990; Acts 1993, No. 277, §1, eff. June 2, 1993.

§ 6:1229.1 Applicability of rules and regulations

The provisions of R.S. 6:243 and 246, and the rules and regulations promulgated thereunder shall be applicable to savings banks in the same manner as they are applicable to banks.

Acts 1995, No. 248, §1, eff. June 14, 1995; Acts 2019, No. 16, §1.

§ 6:1230 Purchases of real estate for office and rental purposes

A. A savings bank may acquire and hold real estate in full ownership, or leaseholds on which a building or buildings exist or are to be erected, suitable for the transaction of the savings bank's business, and from portions of which, not required for the savings bank's own use, revenue may be derived; or may own all or part of the capital stock, shares, or interest in any corporation, association, or trust engaged solely in holding all or part of such real estate.

B. Unless prior written approval of the commissioner is obtained, no savings bank may purchase, lease, or otherwise acquire a site for an office building or interest in real estate from any officer, director, employee, or stockholder holding more than ten percent of the aggregate capital stock of the savings bank or any firm, corporation, entity, or family in which any officer, director, employee, or stockholder holding more than ten percent of the aggregate capital stock of a savings bank has any direct or indirect interest.

C. An acquisition prohibited by this Part includes the purchase, lease, or acquisition of property in which any of the persons described in this Part held any interest during a period of ten years preceding the purchase, lease, or acquisition, but does not include the acquisition of an option for such a site or real estate where the option is assignable and exercised by the savings bank in its own name and for its own benefit.

Acts 1990, No. 816, §1, eff. Sept. 1, 1990; Acts 2001, No. 544, §1, eff. June 21, 2001.

§ 6:1231 Usury law inapplicable

No interest premium, or interest on such interest premium, or charge which may accrue to a savings bank under the provisions of this Chapter shall be deemed to be usurious, and the same may be collected in the same manner as other debts in accordance with the laws of this state.

Acts 1990, No. 816, §1, eff. Sept. 1, 1990.

§ 6:1232 Prohibited loans

No loan shall be made by any savings bank to any person owning ten percent or more of the capital stock or to any affiliated person, agent, or attorney of that savings bank either for himself or as agent, or as partner of another, except in accordance with laws and regulations to which national banks are subject, applicable to a similar transaction.

Acts 1990, No. 816, §1, eff. Sept. 1, 1990.

§ 6:1233 Effect of unauthorized investments

A. Every loan or other investment made in violation of this Chapter shall be due and payable according to its terms, and the obligation thereof shall not be impaired.

B. Every director or officer of a savings bank who knowingly shall violate, participate in, or assent to, or who knowingly shall permit any of the officers or agents of the savings bank to make investments not authorized by this Chapter, shall be liable individually for all damage which the savings bank may sustain in consequence of such violation, in addition to any criminal penalties prescribed by this Title.

C.(1) The commissioner may require every director or officer of a savings bank who knowingly shall violate, participate in, or assent to, or who to knowingly shall permit any of the officers or agents of the savings bank to make investments not authorized by this Chapter, to deposit with the savings bank an indemnity bond, insurance, or collateral of a kind and amount sufficient to indemnify the savings bank against damages which the savings bank may sustain in consequence of such violation.

(2) The amount considered sufficient to indemnify the savings bank shall, in the case of an unauthorized investment, be the difference between the book value and the market value of the investment at the time the commissioner makes his determination that such investment is unauthorized. The amount considered sufficient to indemnify the savings bank, in the case of an unauthorized loan, shall be the difference between the book value of the loan and the amount that could have been made under the provisions of this Chapter.

(3) Whenever an unauthorized investment has been sold or disposed of without recourse, the commissioner shall release all or such part of the indemnity after deducting any loss. Whenever the balance of an unauthorized loan has been reduced to an amount which would permit such loan to be made under the provisions of this Chapter, the indemnity shall be released, provided that the commissioner in making such determination may require an independent appraisal of the security.

Acts 1990, No. 816, §1, eff. Sept. 1, 1990.

§ 6:1234 Acknowledgments

No acknowledgment of a deed, mortgage, or other instrument shall be invalid because such acknowledgment was taken before an officer authorized by the laws of this state to acknowledge conveyances who is also a member, director, employee, or officer of a savings bank which is a party to such deed, mortgage, or other instrument.

Acts 1990, No. 816, §1, eff. Sept. 1, 1990.

§ 6:1235 Loans to one borrower

A. A state savings bank shall not loan on an unsecured basis to any one person, directly or indirectly, an amount in excess of ten percent of its net worth.

B.(1) A state savings bank shall not loan on a secured basis to any one person, directly or indirectly, an amount in excess of twenty-five percent of its net worth. The cumulative lending to one person, directly or indirectly, on a secured and unsecured basis, shall not exceed twenty-five percent of the savings bank's net worth.

(2) The total direct and indirect loans and extensions of credit by a savings bank to any person outstanding at one time and at least one hundred percent secured by readily marketable collateral having a market value, as determined by reliable and continuously available price quotations, shall not exceed ten percent of the savings bank's net worth. This limitation shall be separate from and in addition to the limitations contained in Subsection A and Paragraph (B)(1) of this Section.

C. For the purposes of this Part, the term "person" shall be deemed to include an individual, firm, corporation, business trust, partnership, trust, estate, association, joint venture, pool, syndicate, sole proprietorship, unincorporated association, or any political subdivisions, or any similar entity or organization.

D. For the purposes of this Part, any loan or extension of credit granted to one person, the proceeds of which are used for the direct benefit of a second person, shall be deemed a loan or extension of credit to the second person, as well as the first person.

E. For the purposes of this Part, the total liabilities of a firm shall include the liabilities of the members of the firm.

F.(1) For the purposes of this Part, the term "readily marketable collateral" shall mean financial instruments or bullion which are salable under ordinary circumstances with reasonable promptness at a fair market value on an auction or a similarly available daily bid and ask price market.

(2) "Financial instruments" include stocks, bonds, notes, and debentures traded on a national exchange or over the counter, commercial paper, negotiable certificates of deposit, bankers' acceptances, and shares in money market or mutual funds.

G. Each savings bank shall institute adequate procedures to ensure that collateral fully secures the outstanding loan or extension of credit at all times.

H. If collateral values fall below one hundred percent of the outstanding loan or extension of credit to the extent that the loan or extension of credit no longer is in conformance with Paragraph (B)(2) of this Section and which exceeds the twenty-five percent limitation of Paragraph (B)(1) of this Section, the loan shall be brought in conformance with this Part within five business days, except where judicial proceedings or other similar extraordinary occurrences prevent the savings bank from taking action. A savings bank may petition the commissioner to grant it an extension of time to bring a nonconforming loan into compliance with the provisions of this Part.

I. This Part shall not apply to loans or extension of credit to the United States of America or its agencies or to this state or its agencies.

J. For the purposes of this Part, the term "net worth" shall mean:

(1) Common stock outstanding and unimpaired;

(2) Noncumulative perpetual preferred stock outstanding and unimpaired;

(3) Unimpaired capital surplus, undivided profits, capital reserves, minus intangible assets;

(4) Purchased mortgage servicing rights; or

(5) Mandatory convertible debt up to twenty percent of the total categories contained in Paragraphs (1), (2), (3), and (4) of this Subsection.

K. A savings bank's net worth for purposes of this Part shall be calculated at any time based upon its last quarterly call report.

Acts 1990, No. 816, §1, eff. Sept. 1, 1990; Acts 2000, 1st Ex. Sess., No. 26, §1, eff. April 14, 2000.

§ 6:1236 Commissioner's regulations

A. The commissioner may make rules and regulations to determine permissible levels of investment and concentrations of assets permissible for savings banks applicable to all lending and investment authority granted by this Part. Such rules and regulations shall give due regard to capital adequacy, operating income, underwriting standards, risk inherent in the investment or loan, and competitive parity with other financial institutions.

B. Violation of any of the provisions of this Part shall constitute an unsafe and unsound practice and may subject the savings bank or its directors, officers, or agents to enforcement actions, civil money penalties, or other sanctions as provided in this Title.

Acts 1990, No. 816, §1, eff. Sept. 1, 1990.

§ 6:1237 Change in control

A. Any person acting directly or indirectly or through or in concert with one or more persons, shall give the commissioner sixty days written notice of intent to acquire control of ten percent or more of a savings bank or savings bank affiliate operating under this Chapter. The commissioner shall promulgate rules to implement this provision, including definitions, application, procedures, and standards for approval or disapproval.

B. The commissioner may examine the books and records of any person giving notice of intent to acquire control of ten percent or more of a savings bank operating under this Chapter.

C. The commissioner may approve or disapprove an application for change of control. In either case, such decision shall issue within thirty days of filing of the initial application.

Acts 1990, No. 816, §1, eff. Sept. 1, 1990.

PART VII WITHDRAWABLE ACCOUNTS

§ 6:1251 Withdrawable accounts; general definitions

Withdrawable accounts may be referred to as shares, share capital, share accounts, share deposits, certificates of deposit, withdrawable shares, withdrawable accounts, withdrawable capital, withdrawable deposits, deposits, capital accounts, savings accounts, demand deposit accounts, checking accounts, or any other term or terms appropriate. Interest paid on withdrawable accounts pursuant to this Chapter may be referred to as dividends, earnings, interest, return, or rate of return. The use of any term permitted by this Part shall not affect any right, duty, privilege, or liability which the savings bank or any depositor would otherwise have.

Acts 1990, No. 816, §1, eff. Sept. 1, 1990.

§ 6:1252 Prohibited activities

A. No savings bank shall participate, directly or indirectly, in the sale or transfer of any equity or debt security or instrument of any affiliate of the savings bank or the parent holding company of the savings bank or its affiliates.

B. No shareholder, director, officer, employee, or agent of the savings bank shall participate, directly or indirectly, in any sale or transfer as described in Subsection A of this Section, nor shall he allow any other person to do so, on the premises of the savings bank, any of its branch or facility offices, agency offices, or any office of the savings bank's subsidiaries or service corporations.

C. Violation of this prohibition shall subject the person committing such violation to assessment of civil money penalties as provided for in this Title.

Acts 1990, No. 816, §1, eff. Sept. 1, 1990.

§ 6:1253 Withdrawable accounts

A. Withdrawable accounts shall be:

(1) Withdrawable and subject to enforced retirement as provided in this Part. Nothing in this Chapter shall prevent the withdrawal of funds from a savings bank by nonnegotiable order;

(2) Entitled to interest as provided in this Part;

(3) Nonassessable for either debts or losses of the savings bank; and

(4) Issued in such series or classes as the bylaws and commissioner's regulations may provide.

B. There shall be no penalty, such as loss of interest thereon, on accounts transferred at interest or dividend payment date from passbook types to certificates of deposit within the same savings bank and not otherwise inconsistent with regulations of the Federal Deposit Insurance Corporation.

Acts 1990, No. 816, §1, eff. Sept. 1, 1990.

§ 6:1254 Issuance, delivery, and transfer of certificates and account books

A. Every withdrawable account shall be evidenced by one or more appropriate certificates or account book; and either such certificates or an account book, or both, shall be delivered to the holder of such account. The wording, type, and form of the certificates and account books issued by a savings bank shall be subject to the prior written approval of the commissioner.

B. The holder of a withdrawable account may transfer his rights therein absolutely or conditionally to any other person eligible to hold the same by written assignment accompanied by delivery of the appropriate certificate or account book. Notwithstanding the effectiveness of such a transfer between the parties thereto, the savings bank may treat the holder of record as the owner of the account for payment, voting, and all other purposes until such assignment and any accompanying certificate or account book have been received by the savings bank with a request for the transfer on the savings bank's records.

C. All withdrawable account certificates and account books, delivered to the holders as prescribed by this Part, shall be subject to attachment and execution as provided by the laws of this state, and the savings bank shall not be subject to garnishment proceedings concerning any account, except with respect to a certificate or account book in the savings bank's possession, and when:

(1) Neither a certificate nor an account book has been delivered to the holder as required by this Part; or

(2) The certificate and account book, or either of them if only one has been delivered, have been returned to the savings bank's possession.

D. If the holder of a withdrawable account, or the personal representative of any such person, shall file with the savings bank an affidavit to the effect that his account book or certificate has been lost or destroyed and that such account book or certificate has not been pledged or assigned either in whole or in part, then such savings bank may issue a substitute account book or certificate in the name of such holder, with a statement therein that such account book or certificate is issued in lieu of the one lost or destroyed. The savings bank shall not be liable thereafter with respect to the original account book or certificate. The board of directors may require a bond in sufficient amount to indemnify the savings bank against any loss which might result from the issuance of such substitute account book or certificate.

Acts 1990, No. 816, §1, eff. Sept. 1, 1990.

§ 6:1255 Joint account; trust account; payment on death account

A. If two or more persons opening or holding a withdrawable account shall execute a written agreement with the savings bank providing that the account shall be payable to any one of them or the survivor of them, the account, and any balance thereof which exists from time to time, shall be held by them as joint owners, and, unless otherwise agreed, any payment by the savings bank to any of such persons shall be a complete discharge of the savings bank's obligation as to the amount so paid. A pledge of such account by any holder or holders including minors authorized to withdraw amounts from such accounts shall, unless otherwise specifically agreed, be a valid pledge and transfer of the account and shall not operate to sever or terminate the joint and survivorship ownership of all or any part of the account.

B. No addition to any account, nor withdrawal, payment, revocation, or change of beneficiary or payee, shall affect the nature of the account as a joint account with right to survivorship, trust account, or payment on death account.

C. Any savings bank may continue to recognize the authority of any mandatary authorized in writing to manage or to make withdrawals either in whole or in part from the withdrawable account of a member until it receives written notice or actual notice of the death or adjudication of the legal interdiction of such member or revocation of the authority of such mandatary. Any payment by the savings bank to a mandatary prior to receipt of such notice shall be a complete discharge of the savings bank's obligation as to the amount so paid.

D. Any savings bank may offer payment on death accounts in accordance with the procedures, requirements, and protections provided in R.S. 6:314 or 766.1.

Acts 1990, No. 816, §1, eff. Sept. 1, 1990; Acts 2009, No. 499, §1.

§ 6:1256 Effect of payment to minor or fiduciary

A. Unless the written agreement provides otherwise, or unless the savings bank has had written notice of the terms under which a fiduciary holds a withdrawable account, the savings bank may make loans on the security of withdrawable accounts or pay the value thereof and interest thereon to any minor who is a holder of such withdrawable account or to such fiduciary who is the holder of such account without becoming liable to any beneficiary for such payment. In each of the foregoing instances, the receipt or acquittance of the person or persons to whom payment is made in accordance with the provisions of this Part shall be a complete discharge of the savings bank's obligation as to the amount so paid.

B. In the case of a minor, the receipt, acquittance, pledge, or other action required by the savings bank to be taken by the minor shall be binding upon such minor with like effect as if such minor were of full age and legal capacity.

Acts 1990, No. 816, §1, eff. Sept. 1, 1990.

§ 6:1257 Payment on legal disability or death of holder in holder's own right of a withdrawable account

A. If the holder of a withdrawable account is adjudicated to be a person under legal interdiction by a court of competent jurisdiction, then the savings bank may pay the value of such withdrawable account and interest thereon to the curator of such holder upon his appointment and qualification, in accordance with R.S. 6:766.

B. Upon the death of a holder of a withdrawable account, the savings bank may pay the value thereof and interest thereon to the representative of such deceased holder if and when qualified, in the manner provided in this Chapter for the voluntary withdrawal of accounts generally, and in accordance with R.S. 6:767.

Acts 1990, No. 816, §1, eff. Sept. 1, 1990.

§ 6:1258 Voluntary withdrawal of accounts

A. A holder of a withdrawable account may make application to withdraw it and the savings bank may pay all or any part of the withdrawal value thereof at any time. However, a savings bank may enter into a contract pursuant to the laws of the United States or this state which may provide, among other things, that no withdrawal may be made except as provided by the law specifically referred to in the contract or the certificate of withdrawable account.

B. If a savings bank does not pay all withdrawals in full, subject to the right of the savings bank to require notice, the payment of withdrawals from withdrawable accounts shall be subject to such rules and procedures as may be prescribed by the savings bank's articles of incorporation and bylaws or by regulations of the commissioner. Any savings bank that fails to make full payment of any withdrawal when due shall be deemed to be in an unsafe or unsound condition.

C. Withdrawable accounts pledged as sole security for a loan shall be subject to the withdrawal provisions of this Part, but amounts available for payment on the application for withdrawal shall be applied first to the repayment of the loan balance.

D. Withdrawable accounts may be accepted by the savings bank in payment or part payment for any real estate or other assets owned by the savings bank. However, if the savings bank has a list of requests for withdrawals and matured certificates, which it cannot find, such sale of assets shall be to the highest bidder, and at least ten days notice of the proposed sale shall be given by mail to all holders of withdrawable or matured accounts whose names appear on the withdrawal or maturity list.

Acts 1990, No. 816, §1, eff. Sept. 1, 1990.

§ 6:1259 Enforced retirement of withdrawable accounts

A. The board of directors, when authorized by the bylaws and in conformity with the provisions of this Part and of the bylaws, may retire any withdrawable accounts which have not been pledged as security for loans by enforcing the retirement thereof.

B. A thirty-day notice of such enforced retirement shall be given to the holder of an account to be retired, and after the expiration of such thirty-day period, the holder shall not be entitled to further interest but shall be paid the full withdrawal value of his account, plus such additional interest as the board of directors may determine to be equitable and within the bearing rate of the savings bank, less any unpaid charges.

Acts 1990, No. 816, §1, eff. Sept. 1, 1990.

§ 6:1260 Authorized charges

A. A savings bank may charge a penalty for nonpayment when due, of installments, interest, or premiums on loans.

B. A savings bank may make such charges or receive reimbursement for any expenses, other than ordinary business expenses, incurred by it or as provided by any contract.

C. All fees, charges, and penalties collected shall be accounted for as a part of the receipts of the savings bank.

Acts 1990, No. 816, §1, eff. Sept. 1, 1990.

§ 6:1261 Withdrawable accounts subject to liens

Every withdrawable account shall be subject to a lien for the payment of such charges as lawfully may accrue thereon under the provisions of this Chapter, and the bylaws may prescribe the manner of enforcing such lien, but no withdrawable account shall be assessable for any losses which the then existing assets of the savings bank shall not be sufficient to satisfy.

Acts 1990, No. 816, §1, eff. Sept. 1, 1990.

§ 6:1262 Demand deposits; checking account

A. A savings bank may offer demand deposit amounts, checking accounts, or any similar account upon which withdrawals may be made by negotiable order, check, or draft.

B. A savings bank may pay interest on demand deposit, checking, or any similar account in accordance with the Part of this Chapter pertaining to payment of interest.

Acts 1990, No. 816, §1, eff. Sept. 1, 1990.

§ 6:1263 Payment of interest

A. The board of directors shall determine the rate and amount of interest to be paid on withdrawable accounts and for that purpose may establish reasonable classifications of withdrawable accounts, based on:

(1) Types of classes of such accounts;

(2) The length of time accounts are continued in effect;

(3) Size of initial payments on accounts;

(4) Minimum balances of accounts required for payment of interest;

(5) Frequency and extent of the activity of accounts; or

(6) Such other classifications as the commissioner may approve.

B. Interest need not be allocated to any withdrawable account which has a withdrawal value of less than ten dollars on the record date with respect to which interest is paid.

C. The board of directors shall determine by resolution the method of calculating the amount of any interest on withdrawable accounts and the date on which the same is to be paid or credited.

Acts 1990, No. 816, §1, eff. Sept. 1, 1990.

§ 6:1264 Holders of withdrawable accounts

Withdrawable accounts of a savings bank may be held:

(1) By any individual in his own right, regardless of his age or marital status, or by two or more of such individuals;

(2) By a fiduciary when authorized by law;

(3) By a government or governmental instrumentality when authorized by law; or

(4) By any corporation or other person when not prohibited by law.

Acts 1990, No. 816, §1, eff. Sept. 1, 1990.

PART VIII VOLUNTARY CORPORATE CHANGES

§ 6:1271 Amendment of articles

A savings bank may amend and restate its articles of incorporation in accordance with the procedure set forth in Part III of Subchapter A of Chapter 3 of this Title.

Acts 1990, No. 816, §1, eff. Sept. 1, 1990; Acts 2003, No. 577, §1, eff. June 27, 2003.

§ 6:1272 Repealed by Acts 2003, No. 577, §2, eff. June 27, 2003.

Repealed by Acts 2003, No. 577, §2, eff. June 27, 2003.

§ 6:1273 Repealed by Acts 2003, No. 577, §2, eff. June 27, 2003.

Repealed by Acts 2003, No. 577, §2, eff. June 27, 2003.

§ 6:1274 Repealed by Acts 2003, No. 577, §2, eff. June 27, 2003.

Repealed by Acts 2003, No. 577, §2, eff. June 27, 2003.

§ 6:1275 Effect upon existing articles and bylaws

Any adopted or amended articles which contain provisions contrary to the savings bank's bylaws, shall serve to repeal the particular bylaws without further action by the board.

Acts 1990, No. 816, §1, eff. Sept. 1, 1990.

§ 6:1276 Merger; adoption of plan

A. Any federally insured institution may merge into a savings bank operating under this Chapter. Approval of the plan of merger shall be by resolution adopted by a majority vote of all members of the board of directors of each merging institution.

B. The plan of merger shall include:

(1) The name of each of the merging institutions, the name of the continuing savings bank, the location of the business office, and the location of the branch offices.

(2) With respect to the resulting savings bank, the amount of capital, surplus, and reserve for operating expenses; the classes and the number of shares to stock and the par value of each share; the charter and bylaws of the resulting savings bank; and a detailed financial statement showing the assets and liabilities after the proposed merger.

(3) Provisions stating the method, terms, and conditions of carrying the merger into effect, including the manner of converting the shares of the merging savings banks into the cash, shares of stock, or other securities or properties stated in the merger agreement to be received by the stockholders of each merging party.

(4) Provisions governing the manner of disposing of any shares of stock of the resulting savings bank which are not taken by the dissenting stockholders of each merging party.

(5) Such other provisions as appear necessary or desirable or as the commissioner may reasonably require to enable him to discharge his duties with respect to the merger.

C. After approval by the board of directors of each of the merging institutions, the merger agreement shall be submitted to the commissioner for approval, together with the certified copies of the authorizing resolutions of each board of directors showing approval by a majority of the entire board of each merging institution. After receipt of the items specified herein, the commissioner may make or cause to be made an examination of the affairs of each of the merging institutions and their affiliates and subsidiaries, the expense of which is to be paid by the merging institutions.

D. The commissioner may then approve or disapprove the proposed merger agreement. The commissioner shall not approve a merger agreement unless he finds that:

(1) The resulting savings bank meets the requirements of this Chapter for the formation of a new savings bank at the proposed main office of the resulting savings bank.

(2) The same conditions exist with respect to the resulting savings bank as would be required under this Chapter for the organization of a new savings bank.

(3) The merger agreement is fair to all persons affected.

(4) The resulting savings bank will be operated in a safe and sound manner.

E. If the commissioner disapproves of the proposed merger, he shall state his objections in writing and give the merging institutions a stated period of time in which to amend the plan of merger to obviate such objections.

Acts 1990, No. 816, §1, eff. Sept. 1, 1990.

§ 6:1277 Merger; vote of approval

The commissioner shall require that the plan of merger be submitted to the stockholders of the savings banks for approval. The commissioner may require that the plan of merger be submitted to members of a mutual savings bank. Each meeting of the members or stockholders of the savings bank operating under this Chapter shall be called and held in accordance with the provisions of this Chapter dealing with annual and special meetings. The plan is approved if it receives the affirmative vote of two-thirds or more of the total votes entitled to be cast.

Acts 1990, No. 816, §1, eff. Sept. 1, 1990.

§ 6:1278 Merger; commissioner's certificate

The executed merger agreement together with copies of the resolutions of the members or stockholders of each merging institution approving it, certified by the managing officer, and attested to by the secretary, shall be filed with the commissioner. The commissioner shall then issue to the continuing savings bank, a certificate of merger, setting forth the name of each merging institution, the name of the continuing savings bank, and the articles of incorporation of the continuing savings bank. The merger shall take effect upon the recording of the certificate in the same manner as the articles of incorporation, and in each parish in which the business office of any of the merging institutions was located and in the parish in which the business office of the continuing savings bank is located. When duly recorded, such certificate shall be conclusive evidence of the merger and of the correctness of the proceedings therefor except against the state.

Acts 1990, No. 816, §1, eff. Sept. 1, 1990.

§ 6:1279 Effect of merger

The continuing savings bank shall be considered the same business and corporate entity as each merging institution, with all the property, rights, duties, and obligations of each merging institution, except as otherwise provided by the articles of incorporation of the continuing savings bank. All liabilities of each of the merging institutions shall be liabilities of the continuing savings bank; and all of the rights, franchises, and interests of each of the merging institutions in and to every kind of property, real, personal, or mixed, shall vest automatically in the continuing savings bank, without any deed or other transfer. Any reference to a merging institution in any writing, whether executed or effective before or after the merger, shall be deemed a reference to the continuing savings bank, if not inconsistent with the other provisions of such writing. No pending action or other judicial proceeding to which any merging institution is a party shall be abated or dismissed by reason of the merger, but shall be prosecuted to final judgment in the same manner as if the merger had not occurred.

Acts 1990, No. 816, §1, eff. Sept. 1, 1990.

§ 6:1280 Merger; commissioner's expenses

The expenses of any examination made by or at the direction of the commissioner of financial institutions in connection with a proposed merger shall be paid for by the merging institutions.

Acts 1990, No. 816, §1, eff. Sept. 1, 1990.

§ 6:1281 Sale of assets

A savings bank, in one transaction not in the usual course of business, may sell all or substantially all of its assets, with or without its name and goodwill, to another savings bank, or to any other financial institution, in consideration of money, capital, or obligations of the purchasing institution. A savings bank may sell any office or facility and equipment in conformity with the regulations of the commissioner.

Acts 1990, No. 816, §1, eff. Sept. 1, 1990.

§ 6:1282 Procedure to effect sale of all assets

A. The procedure to effect a sale authorized by R.S. 6:1279 and 1284 shall be as follows:

(1) The board of directors shall adopt a resolution setting forth the terms of the proposed sale and shall submit the plan to the commissioner for his preliminary approval. Upon receipt of approval by the commissioner, the plan shall be submitted to a vote of the members at a special or annual meeting.

(2) The terms shall be set forth in the notice of the meeting as prescribed in R.S. 6:1183(B).

(3) The proposed sale shall be approved by the members or stockholders upon receiving in the affirmative two-thirds or more of the total number of votes which all members or stockholders of the savings bank are entitled to cast. A proposal for the voluntary liquidation of the savings bank may be submitted to the members or stockholders at the same meeting, or at any later meeting called for such purpose, in accordance with Part IV of this Chapter. A report of proceedings, certified by the president or vice president and attested to by the secretary, and setting forth the terms of the proposed sale, the notice given, and the time of its mailing, the vote on the proposal, and the total number of votes which all members or stockholders of the savings bank are entitled to cast thereon, shall be filed with the commissioner.

B. If the commissioner finds that the proposed sale is fair to all holders of capital, creditors, and other persons concerned, and provision has been made for the disposition of the remaining assets, if any, of the savings bank as provided in this Chapter for voluntary liquidation, he shall issue to the savings bank a certificate of authorization for such sale, with a copy of the filed report of proceedings attached to the certificate.

C. When the commissioner's certificate is recorded in the same manner as the savings bank's articles of incorporation, the savings bank may complete the sale so authorized, except that the savings bank shall also have the approval of the Federal Deposit Insurance Corporation.

D. If the sale includes the name of the savings bank, the purchaser shall have the exclusive right to such name for a period of five years.

Acts 1990, No. 816, §1, eff. Sept. 1, 1990.

§ 6:1283 Authority to form a bridge charter

A. Any savings bank operating in Louisiana under this Chapter may form a phantom or interim subsidiary depository institution charter as a means to effect a corporate restructuring, a voluntary corporate change, or other transformation which does not in reality create an additional new depository institution, but which shall move insured liabilities from one corporate structure to another pursuant to a change in control, change in method of ownership, merger, or other charter change which results in no new net insurable deposits. Such a charter or institution shall be known as a phantom or interim institution, may become or receive the continuing or surviving depository institution, or may be a conduit through which an existing institution's assets, liabilities, fixtures, personnel, rights, and property of every type, are passed in order to effect a desirable corporate change. In connection with the formation of such an institution, an existing institution may amend, modify, or add to its articles of incorporation and bylaws to remove any depository function and to remove any deposits which would require insurance of accounts under R.S. 6:1135.

B. Application to form an entity under authority of this Part shall be made on forms to be prescribed by the commissioner. The commissioner may issue rules and regulations to govern the formation of, and the standards and supervisory consideration to be applied to, such institutions.

C. If a savings bank operating under this Chapter desires to apply for a permit to organize a new institution in order to facilitate or effect a corporate restructuring, to alter or relocate the institution's ownership, to effect a merger, sale, or purchase of assets, or in order to facilitate conversion to another charter, the commissioner shall require the filing of an application to create a transitional charter.

D. The application shall contain the following:

(1) The names and addresses of the organizers, with information as required by Part III of this Chapter.

(2) Any accompanying filings required by other regulatory authorities.

(3) A statement from the applicant's certified public accountant describing and analyzing the method to effect the transaction.

(4) A five-year plan for the resulting institution, and for any corporate remnant of the original institution regarding the disposition, acquisition, or expansion of assets, capital enhancement, disposition of earnings and profits, and geographic or other expansion or contraction.

(5) The purpose of the new entity, with documentation as required by the commissioner.

(6) Whether the core base deposits will be expanded in a manner that would require increased insurance of accounts and details for the appropriate filings.

(7) Ownership structure including any contemplated sales of stock of subsidiaries, affiliates, or parent companies as well as of the savings bank.

(8) Articles of incorporation and bylaws of the original, interim, and resulting institutions.

Acts 1990, No. 816, §1, eff. Sept. 1, 1990.

§ 6:1284 Conversion of an existing financial institution to a savings bank

An existing financial institution may become a Louisiana savings bank by:

(1) Applying to the commissioner of financial institutions for a Louisiana savings bank charter.

(2) Obtaining insurance of accounts from the Federal Deposit Insurance Corporation.

(3) Complying with the provisions of this Chapter and the rules and regulations of the commissioner, except that any requirements of publication, notice, and public hearing are hereby waived.

(4) Paying all outstanding bills for supervisory fees, examination fees, membership fees and other fees, penalties, and assessments associated with its original charter.

(5) Recording a savings bank charter in the parish of its company headquarters.

(6) Giving notice to its original chartering authority and surrendering its charter to its chartering authority upon approval of the commissioner.

Acts 1990, No. 816, §1, eff. Sept. 1, 1990; Acts 2003, No. 17, §1, eff. May 23, 2003; Acts 2003, No. 60, §1, eff. May 23, 2003.

§ 6:1285 Emergency merger

With the prior approval of the commissioner, which approval shall state that the proposed merger is in his opinion necessary for the protection of the depositors and other creditors, any financial institution may, by a vote of a majority of its board of directors and without a vote of its members or stockholders, merge another savings bank, a savings and loan association, a federal savings and loan association, or bank with such other savings bank, savings and loan association, federal association, or bank being the resulting or continuing association, federal association, or bank.

Acts 1990, No. 816, §1, eff. Sept. 1, 1990.

§ 6:1286 Emergency sale of assets

A. With the approval in writing of the commissioner, which approval shall state that the proposed sale is, in his opinion, necessary for the protection of the depositors and other creditors, any savings bank may, by a vote of a majority of its board of directors and without a vote of its members or stockholders, sell all or any part of its assets to another savings bank, savings and loan association, or financial institution as defined in the Louisiana Banking Law, or to the Federal Deposit Insurance Corporation, or to both a state or federally chartered savings bank or savings and loan association or a bank and the Federal Deposit Insurance Corporation, provided that a savings bank, state or federally chartered savings and loan association, or bank assumes in writing all of the liabilities of the selling association.

B. Notwithstanding any other provisions of this Chapter, a savings bank may sell to any savings bank, savings and loan association, or financial institution, as defined in the Louisiana Banking Law, an insubstantial portion of its total deposits which shall have the same meaning as provided in Part 5(d)(2)(D) of the Federal Deposit Insurance Chapter. Such sale of an insubstantial portion of a savings bank's deposits may be by vote of a majority of the board of directors and, with approval of the commissioner, without a vote of its members or stockholders.

Acts 1990, No. 816, §1, eff. Sept. 1, 1990.

PART IX AUTHORITY OF COMMISSIONER

§ 6:1301 Powers of commissioner

The commissioner shall have the following powers and duties:

(1) To exercise the rights, powers, and duties set forth in this Chapter or in any related provision of this Title.

(2) To establish such regulations as may be necessary and appropriate to perform his duties under this Title as well as any power necessary and appropriate to prevent or terminate any condition which he may reasonably deem to create an emergency relative to a particular savings bank.

(3) To cause suit to be filed in his name to enforce any law of this state that applies to savings banks, their service corporations, subsidiaries, affiliates, or holding companies operating under this Chapter, including the enforcement of any obligation of the officers, directors, agents, or employees of any savings bank.

(4) To prescribe a uniform manner in which the books and records of every savings bank are to be maintained.

(5) To establish a reasonable and rationally based fee structure for savings banks and holding companies operating under this Chapter, and for their service corporations and subsidiaries, which fees shall include but not be limited to annual assessment fees, application fees, regular and special examination fees, and other such fees as the commissioner establishes to be directly resultant from the commissioner's responsibilities under this Chapter.

Acts 1990, No. 816, §1, eff. Sept. 1, 1990.

§ 6:1302 Examination

A. The commissioner either in person or through an employee appointed by him shall visit and examine each savings bank on a recurring schedule consonant with the use to the fullest extent possible of the resources of the office in accordance with good examination practice. On every examination, inquiry shall be made as to the quality of the assets and the condition and resources of the savings bank, and may be made into the mode of conducting business and managing its affairs, the action of its directors, the investment and disposition of its funds, the safety and prudence of its management, the compliance with the requirements of its articles of incorporation and this Title in the administration of its affairs, and other matters as the commissioner may determine. In the course of such examination, the commissioner shall also examine in the same manner all entities, companies, and individuals which the commissioner determines may have a relationship with the savings bank or any subsidiary or entity affiliated with it, if the relationship may adversely affect the affairs, activities, and safety and soundness of the savings bank, including:

(1) Companies, controlled by the savings bank;

(2) Entities, including companies controlled by the company or individual or individuals which or who control the savings bank; and

(3) The company or other entity which controls or owns the savings bank.

B. The commissioner may promulgate regulations to implement and administer this Part.

C. The commissioner or the commissioner's examiners or other formally designated agents are authorized to administer oaths and to examine and to take and preserve testimony under oath as to anything in the affairs or ownership of any such bank or institution or affiliate thereof.

Acts 1990, No. 816, §1, eff. Sept. 1, 1990.

§ 6:1303 Examiners

The commissioner shall appoint competent examiners who are not officers or agents of, or in any manner interested in, any savings bank, savings bank holding company, or subsidiaries or affiliates of either, except that they may be depositors therein.

Acts 1990, No. 816, §1, eff. Sept. 1, 1990.

§ 6:1304 Report of examination

Upon completion of each examination the commissioner shall make a report of examination to the board of directors of the savings bank or other entity examined. The report shall be read by each director who shall then execute a signed affidavit affirming that he or she has read the report. The affidavits shall be filed and retained by the savings bank or appropriate entity examined and shall be examined by the commissioner during regular examinations.

Acts 1990, No. 816, §1, eff. Sept. 1, 1990.

§ 6:1305 Failure to comply with commissioner's report of examination; publication of reports

Whenever any savings bank, after written notice of the recommendations of the commissioner based on a report of examination, fails to comply with these recommendations within forty-five days after the notice, the commissioner is authorized to publish the part of such report of examination as relates to any recommendation not complied with, provided that notice of intention to publish is given to the savings bank at least five days before publication is made. The commissioner may, in his discretion, extend the period for compliance for good cause upon written application.

Acts 1990, No. 816, §1, eff. Sept. 1, 1990.

§ 6:1306 Orders of the commissioner

A. If the affairs of the savings bank, savings bank subsidiary or affiliate, or savings bank holding company are not being conducted in accordance with this Chapter, the commissioner shall require the directors, officers, and employees to take any necessary corrective action. If the necessary corrective action is not made, the commissioner may issue a formal order to the directors of the savings bank, subsidiary, affiliate, or holding company, to be delivered either personally or by registered or certified mail, specifying a date, which may be immediate or may be a later date, for the performance by the savings bank, subsidiary, affiliate, or holding company of the corrective action. Such order or any part thereof shall be subject to and in compliance with R.S. 6:122.

B. If the formal order of the commissioner in whole or in part contains a finding that the business of the savings bank or holding company is being conducted in a fraudulent, illegal, unsafe, or unsound manner, or that the violation thereof or the continuance by the savings bank or holding company or the practice to be corrected could cause insolvency or substantial dissipation of assets or earnings or the impairment of its capital, such order or part thereof shall be complied with immediately on or before the effective date thereof until modified or withdrawn by the commissioner or modified or terminated by a court of competent jurisdiction. The commissioner may apply to the district court for the parish in which the savings bank or holding company is located for enforcement of such order requiring prompt compliance.

C. If no hearing has been requested within the time specified by this Chapter, the commissioner may, at any time within ninety days after the effective date of the order, institute suit in the Nineteenth Judicial District or the district court for the parish in which the savings bank or holding company is located, to compel the directors, officers, or employees to take the required corrective action. Such court, after due process of law, shall adjudicate the question, enter the proper order, or orders and enforce them.

D. No provision of this Part shall interfere with the exercise by the commissioner of any provision of Part XI of this Chapter.

Acts 1990, No. 816, §1, eff. Sept. 1, 1990.

§ 6:1307 Recordkeeping and retention of records by a savings bank

A. Each savings bank is required to maintain appropriate books and records as required by the commissioner and in accordance with generally accepted accounting principles and requirements of its insurer of accounts. All books and records shall be current, complete, organized, and readily accessible to the commissioner, the commissioner's agents and examiners, and to the savings bank's auditors and accountants.

B. Each savings bank employing an outside data processing service shall inform the commissioner at the initiation, renewal, or changing of a contract for data processing services with an outside data processing service. Such contract or agreement shall be submitted to the commissioner ninety days prior to its implementation. Any contract with a data processing service or for data processing services shall provide that records maintained shall at all times be available for examination and audit by the commissioner. Each savings bank shall implement internal control and security measures for its data processing activities.

C. The commissioner may further regulate these matters by the promulgation of rules concerning data processing. As used herein, "data processing" shall mean all electronic or automated systems of communication and data processing by computer.

D. The commissioner shall require savings banks operating under this Chapter to retain records in the same manner as banks and savings and loan associations incorporated under the laws of this state. No liability shall accrue against the savings bank or the commissioner or this state for destruction of records according to regulations of the commissioner promulgated under the authority of this Part. In any cause or proceeding in which any such records may be called in question or be demanded by any savings bank, a showing of the expiration of the period so prescribed shall be sufficient excuse for failure to produce them.

Acts 1990, No. 816, §1, eff. Sept. 1, 1990.

§ 6:1308 Disclosure of examination reports and other reports

A. The commissioner may disclose information gathered by examination and through reports from a savings bank in accordance with R.S. 6:103.

B. The commissioner may promulgate regulations to allow disclosure to other than those cited herein but only for the following items:

(1) All fixed orders and opinions made in cases of appeals of the commissioner's actions.

(2) Statements of policy and interpretations adopted by the commissioner's office but not otherwise made public.

(3) Nonconfidential portions of application files, including applications for new charters. The commissioner may specify by rule as to what part of the files are confidential.

(4) Quarterly reports of income, deposits, and financial condition.

Acts 1990, No. 816, §1, eff. Sept. 1, 1990.

§ 6:1309 Examination of data processing centers

The commissioner may examine any data processing center that provides data processing or related services to a savings bank with the same frequency as the savings bank served.

Acts 1990, No. 816, §1, eff. Sept. 1, 1990.

§ 6:1310 Annual directors' examinations

The commissioner shall require at least once in each year that each savings bank cause its books, records, and accounts to be examined in accordance with a regulation promulgated by the commissioner.

Acts 1990, No. 816, §1, eff. Sept. 1, 1990; Acts 2001, No. 530, §1.

NOTE: See Acts 2001, No. 530, §2, relative to effective date.

§ 6:1311 Unsafe and unsound; orders of prohibition and removal

A. The violation of any of the following provisions of this Part is deemed to be an unsafe and unsound practice and creates an unsafe and unsound condition in the savings bank. The savings bank or the institution-affiliated party responsible for such violation may be subject to the assessment of civil money penalties and other enforcement powers of the commissioner as specified in this Title.

B. Continued violation of any such provisions after the commissioner issues formal notice to correct, shall subject the directors of the savings bank at fault to immediate removal from the board and to a permanent order of prohibition from direct or indirect participation in the affairs of any financial institution governed by Title 6 of the Louisiana Revised Statutes of 1950.

C. The commissioner shall promulgate rules and regulations to implement this Part.

Acts 1990, No. 816, §1, eff. Sept. 1, 1990.

§ 6:1312 Cease and desist proceedings

A. If, in the opinion of the commissioner, or in the opinion of any federal banking agency which provides complete and documented evidence to the commissioner, an officer, director, or controlling stockholder of a savings bank operating under this Chapter or a subsidiary or an affiliate of an institution operating under this Chapter, is engaging in, has engaged in, is about to engage in, or is conspiring to engage in one or more unsafe or unsound practices in conducting the institution's business; is, has, or is about to violate an applicable law, regulation, or a directive of the commissioner or of the Federal Deposit Insurance Corporation; or has not complied with a condition imposed in writing by the commissioner or the Federal Deposit Insurance Corporation, or of any court of law, then the commissioner, may, in his discretion, issue to the violator notice of charges resulting from the violation.

B. Such notice of charges shall factually specify the act or violations committed; specify the law, rule, order, decree, directive, or condition violated; specify necessary curative measures and a time within which to cure; and impose any penalties or sanctions mandated by law or regulation.

Acts 1990, No. 816, §1, eff. Sept. 1, 1990.

§ 6:1313 Procedure upon the impairment of capital

A. If the commissioner finds from a report of examination or such other required report of a savings bank that the capital is impaired, he shall, in his discretion, institute whichever of the following procedures is appropriate:

(1) Direct that the board of directors either:

(a) Require the stockholders to contribute an amount at least sufficient to eliminate the impairment; or

(b) Reduce the par value of the capital stock in at least the amount of the impairment and allocate such reduction to undivided profits or reserves to absorb the loss which created the impairment.

(2) Take custody of the savings bank under Part X of this Chapter, establish a conservatorship, and proceed to merge, sell, or otherwise dispose of the savings bank in a manner which will remove the capital impairment, remove operating losses, and restore compliance with all capital requirements.

(3) Declare the stock worthless, and order the directors to cancel the stock or order the directors to sell, merge, or otherwise restructure the savings bank in a manner which will remove the capital impairment, eliminate operating losses, and restore compliance with all capital requirements.

B. The commissioner may promulgate rules to implement this procedure if necessary.

Acts 1990, No. 816, §1, eff. Sept. 1, 1990.

§ 6:1314 Administrative review

Any person affected by a decision of the commissioner may have such decisions reviewed only under and in accordance with the Administrative Procedure Act, and only if such person files with the commissioner, within ten days of receipt or service of a copy of a final decision sought to be reviewed, a written notice of intent to seek review under such law. The provisions of the Administrative Procedure Act shall apply and govern all proceedings for the judicial review of final administrative decisions of the commissioner under this Chapter.

Acts 1990, No. 816, §1, eff. Sept. 1, 1990.

PART X CONSERVATORSHIPS, RECEIVERSHIPS, AND INVOLUNTARY LIQUIDATIONS

§ 6:1321 Conservatorships of savings banks

The commissioner in his sole discretion may take custody of, and appoint a conservator for, the property, liabilities, books, records, business, and assets of every kind and character of any savings bank in accordance with the provisions of R.S. 6:381 et seq.

Acts 1990, No. 816, §1, eff. Sept. 1, 1990.

§ 6:1322 Involuntary liquidation procedures

The commissioner, upon his appointment as conservator, may determine to liquidate a state savings bank and appoint a receiver in accordance with the provisions of R.S. 6:391 et seq.

Acts 1990, No. 816, §1, eff. Sept. 1, 1990.

PART XI ENFORCEMENT POWERS

§ 6:1331 Affirmative action to correct conditions resulting from violations of law, regulations, orders, or from practices

The commissioner is hereby granted authority to issue orders under this Chapter, which orders shall require a savings bank or an institution-affiliated party to take affirmative action to correct any conditions resulting from any violations or practices cited with respect to the order. The order may require the savings bank or the institution-affiliated party to:

(1) Make restitution, provide reimbursement, indemnification, or guarantees for or against losses if:

(a) The savings bank or the institution-affiliated party was unjustly enriched or received direct or indirect personal benefit in connection with such violation or practice, or;

(b) The violation or practice involved a reckless disregard for applicable laws, regulations, or written agreements or written orders of the commissioner or other appropriate regulator.

(2) Restrict the savings bank's growth or institute appropriate operating restrictions.

(3) Dispose of any loan or asset involved.

(4) Rescind agreements or contracts.

(5) Submit candidates for future directors, employees, or officers, to the commissioner for approval.

(6) Take any other actions the commissioner deems necessary.

Acts 1990, No. 816, §1, eff. Sept. 1, 1990.

§ 6:1332 Cease and desist; books and records

A. If the notice of charges and orders referred to in R.S. 6:1331 specifies that the books and records of a savings bank are so incomplete and inaccurate that the commissioner is unable to determine the financial condition of the savings bank, or is unable to determine the nature, details, or purpose of any transaction which may have a material effect on the savings bank's financial condition, then the commissioner shall issue an order which shall be immediately effective requiring:

(1) Specific, affirmative steps to restore, reconstruct, or adjust the books and records to accuracy and compliance.

(2) Rescission or cessation of transactions or activities which led to the incomplete or inaccurate condition of the books and records.

(3) The establishment of reserves for any losses which the commissioner finds were incurred due to the condition of the books and records.

B. This order shall be effective either until the commissioner's examination determines the condition has been corrected or is to be corrected or until the requirements for Part X of this Chapter are met.

Acts 1990, No. 816, §1, eff. Sept. 1, 1990.

§ 6:1333 Removal and prohibition authority

A. In addition to other provisions of this Chapter concerning officers and directors, the commissioner may remove from any savings bank operating under this Chapter any officer, director, employee, or agent of such a savings bank if he finds that:

(1) Such person has directly or indirectly violated any law, regulation, or order including orders, conditions, and agreements between the savings bank and the commissioner or its federal regulators;

(2) Such person has breached his fiduciary or professional responsibilities to the savings bank; or

(3) Such person has similarly behaved toward any other insured depository institution or otherwise regulated entity or that the person or persons are the subject of any final order issued by the federal insurer, the Office of the Comptroller of the Currency, the Federal Reserve Board, a state financial institutions regulator, the Securities and Exchange Commission, or by a state or federal court of law.

B. By reason of the violation or breach described in Paragraphs (1) through (3) of Subsection A of this Section, the commissioner may serve upon any party a written notice of the commissioner's intention to remove or suspend the party from office in the savings bank or to prohibit any further participation by the party, in any manner, in the conduct of the affairs of any insured depository institution if he finds that:

(1)(a) Any savings bank, other insured depository institution, or other regulated entity has or probably will suffer financial loss or other damage;

(b) The interests of the savings bank's depositors or other insured depository institution's depositors have been or could be prejudiced; or

(c) Such party has received financial gain or other benefit by reason of such violation in breach; and

(2) Such violation or breach involves personal dishonesty on the part of such party or demonstrates willful or continuing disregard by such party for the safety and soundness of such savings bank or other insured depository institutions.

Acts 1990, No. 816, §1, eff. Sept. 1, 1990.

§ 6:1334 Industry-wide prohibition

A. In general, except as provided in regulations by the commissioner, any person who has been removed or suspended from office in a savings bank operating under this Chapter or prohibited from participating in the conduct of the affairs of a savings bank operating under this Chapter shall not, while such order is in effect, continue or begin to hold any office in or participate in any manner in the conduct of the affairs of any financial institution regulated by the state of Louisiana.

B. Any violation of Subsection A of this Section by any person who is subject to an order described in that Subsection shall be treated as a violation of the order.

Acts 1990, No. 816, §1, eff. Sept. 1, 1990.

§ 6:1335 Institution-affiliated party

As used in this Chapter, the term "institution-affiliated party" means:

(1) A director, officer, employee, agent, or controlling stockholder of a savings bank operating under this Chapter.

(2) A person who has filed or is required to file a change-in-control notice with the commissioner.

(3) A shareholder of, consultant to, joint venture partner of, or an independent contractor, including accountants, appraisers, and attorneys, for a savings bank.

(4) Any other person who participates in a significant way in the affairs of a savings bank under this Chapter.

Acts 1990, No. 816, §1, eff. Sept. 1, 1990.

§ 6:1336 Civil money penalties

A. The commissioner may assess and the savings bank in question shall pay to the commissioner a civil money penalty of not more than one thousand dollars for each day during which the violation continues, beginning upon the day the violation first occurred, whenever the commissioner finds that a savings bank operating under this Chapter, or an institution-affiliated party has:

(1) Violated any law or regulation;

(2) Violated any final order of the commissioner or of any federal banking regulator;

(3) Violated any condition imposed in writing by the commissioner in connection with the approval of an application or other request by such savings bank; or

(4) Violated any written agreement between the commissioner and the savings bank.

B. The commissioner shall assess and the savings bank or institution-affiliated party shall pay to the commissioner a civil money penalty of no more than five thousand dollars for each day during which the violation, practice, or breach continued, beginning with the first day of occurrence, whenever the commissioner finds that a violation listed in Subsection A of this Section was part of a pattern of misconduct that caused loss or is likely to cause loss to the savings bank or resulted in gain or benefit to the savings bank or institution-affiliated party, and that the violation also was accompanied by behavior which:

(1) Recklessly engaged in any unsafe or unsound practice in conducting the business of the savings bank; or

(2) Involved the breach of any fiduciary duty.

C. Whenever the violation, practice, or breaches of duty described in Subsections A and B of this Section are committed knowingly and whenever such commission knowingly and recklessly causes substantial loss to a savings bank operating under this Chapter or results in substantial pecuniary gain or benefit to the party who committed the practice, breach, or violation, then the commissioner may assess, and the savings bank or institution-affiliated party shall pay to the commissioner, a civil money penalty of:

(1) Ten thousand dollars per day if the payor is an institution-affiliated party; or

(2) The lesser of ten thousand dollars per day or one percent of the savings bank's total assets when the payor is a savings bank.

D. The commissioner shall assess the civil money penalties described in this Section in accordance with R.S. 6:121.1.

E. The commissioner may compromise, modify, or remit any penalty which he may assess or has already assessed. In determining the amounts of penalties to assess, the commissioner shall consider:

(1) The financial resources and good faith of the savings bank or institution-affiliated party.

(2) The gravity of the violation, practice, or breach.

(3) Any history of previous violations.

(4) Other matters as justice and fundamental fairness may require.

Acts 1990, No. 816, §1, eff. Sept. 1, 1990.

§ 6:1337 Effect of termination or resignation of an institution-affiliated party

The resignation, termination of employment, or separation of an institution-affiliated party from the savings bank affected by such party's activities, shall not affect the jurisdiction and authority of this Part and of the commissioner to issue any appropriate notice or to take any appropriate action if the notice is served within five years of the party's ceasing to be an institution-affiliated party of the savings bank in question.

Acts 1990, No. 816, §1, eff. Sept. 1, 1990.

§ 6:1338 Unauthorized participation by convicted individual

A.(1) Any person who has been convicted of any criminal offense involving dishonesty or a breach of trust shall not participate, directly or indirectly, in any manner in the conduct of the affairs of a savings bank, except with the prior written consent of the commissioner.

(2) A savings bank shall not permit such participation, except with the prior written consent of the commissioner.

B. Whoever knowingly violates Subsection A of this Section shall be fined not more than ten thousand dollars for each day that such prohibition is violated or shall be imprisoned for not more than five years, or both.

Acts 1990, No. 816, §1, eff. Sept. 1, 1990.

§ 6:1339 Perjury; false statements

A. Any person who knowingly makes, causes, or allows someone else to cause to be made or to make a false statement, under the oath required by this Chapter, on any report or statement required by the commissioner, or to the commissioner, shall be subject to the provisions of R.S. 6:1336.

B. When financial loss to a savings bank is caused by such statements, the penalties shall be commensurate with that loss.

Acts 1990, No. 816, §1, eff. Sept. 1, 1990.

§ 6:1340 False advertising

A. No savings bank shall issue, publish, or cause or permit to be issued or published, any advertisement which, in part or taken as a whole, is in any way false or misleading.

B. The commissioner may require any association to file a true copy of the text of any advertisement in the office of the commissioner within two days after the issuance, circulation, or publication of such advertisement. All of the powers of this Part shall be available to the commissioner as the result of an association's violation of this Part.

Acts 1990, No. 816, §1, eff. Sept. 1, 1990.

§ 6:1341 Prohibitive practices; additional

In addition to the provisions contained in R.S. 6:1337, 6:1338, 6:1339, and 6:1340, all of the provisions contained in Chapter 4 of this Title shall be applicable to all savings banks chartered under this Chapter as of September 1, 1990.

Acts 1990, No. 816, §1, eff. Sept. 1, 1990.

CHAPTER 18 PROFESSIONAL SERVICES TO FEDERALLY INSURED FINANCIAL INSTITUTIONS

§ 6:1351 Professional responsibility

Unless otherwise agreed in writing, attorneys licensed to practice law in this state and their law firms and licensed certified public accountants and their firms, while acting in the course and scope of providing legal, accounting, auditing, consulting, and other professional services to federally insured financial institutions, shall have no greater duty of professional responsibility to the institution, its shareholders, depositors, customers, creditors, or insurers than that required of attorneys under the Rules of Professional Conduct, Article XVI of the Appendix to Chapter 4 of Title 37 of the Louisiana Revised Statutes of 1950, and with respect to certified public accountants, the duty of professional responsibility shall be that established by generally accepted accounting principles and generally accepted auditing standards.

Acts 1991, No. 602, §1.

§ 6:1352 Professional liability

A. An attorney or licensed certified public accountant providing legal, accounting, auditing, consulting, or other professional services to a federally insured financial institution shall only be liable for actions or inactions based upon traditional concepts of legal or accounting malpractice judged under accepted standards within the locality where such attorney or certified public accountant practices.

B. The Rules of Professional Conduct for attorneys and any rule promulgated by the State Board of Certified Public Accountants of Louisiana pursuant to R.S. 37:75 shall not be viewed as formulated malpractice rules and failure to comply with the requirements of those rules shall not be considered malpractice per se.

Acts 1991, No. 602, §1.

§ 6:1353 Officers and directors

Attorneys or licensed certified public accountants serving as officers or directors, or both, of federally insured financial institutions while acting in that capacity are held to the same standard of fiduciary responsibility and liability as other non-attorney or non-certified public accountant officers and directors of the institution.

Acts 1991, No. 602, §1.

§ 6:1354 Imposition of greater standards; liability

Any person who unsuccessfully attempts to impose a greater standard of responsibility or liability than that provided by this Chapter shall be liable for attorney fees incurred in the defense of such attempt and for damages, whether foreseeable or not.

Acts 1991, No. 602, §1.

CHAPTER 19 AUTOMATED TELLER MACHINES/NIGHT DEPOSITORY CUSTOMER SAFETY ACT

§ 6:1361 Short title

This Chapter shall be known and may be cited as the "Automated Teller Machines/Night Depository Customer Safety Act".

Acts 1995, No. 588, §1, eff. July 1, 1996.

§ 6:1362 Intent; scope; effect

A. It is the intent of the legislature in enacting this Chapter to enhance the safety of persons using automated teller machines and night depositories in Louisiana without discouraging the location of such facilities in places that are convenient to users or placing unreasonable burdens upon operators of such facilities. Since decisions concerning these facilities are inherently subjective and are necessarily influenced by many factors and conditions beyond the control of operators of these facilities, the standards provided in this Chapter are intended to be the only standards of care and duty applicable to such operators.

B. The legislature hereby recognizes the need for uniformity in the establishment of automated teller machine and night depository user safety standards. Therefore, this Chapter shall supersede and preempt any rule, regulation, code, statute, or ordinance of any political subdivision or other unit of local government or any other applicable standard with regard to these facilities.

Acts 1995, No. 588, §1, eff. July 1, 1996.

§ 6:1363 Definitions

As used in this Chapter, the following terms shall have the meanings specified in this Section:

(1) "Access area" means an outdoor area which is in the control of an operator and which is within a fifty-foot radius of an access facility. In the event that an access facility is located within ten feet of the corner of the building and is generally accessible from the adjacent side, the access area shall include the first forty constructed feet of the adjacent side of the building in the control of the operator.

(2) "Access facility" means an automated teller machine or a night depository.

(3) "Account" means a demand, checking, savings, or other deposit account, whether commercial or consumer, held directly by an operator.

(4) "Automated teller machine" means an electronic information processing device located in this state which accepts or dispenses cash in connection with an account or credit card. This term shall not include a device used solely to facilitate check guarantees or check authorizations or a device which is used in connection with the acceptance or dispensing of cash on a person-to-person basis, such as by a store cashier.

(5) "Control" means to have actual authority to direct the circumstances of use of an access area or access facility, including its maintenance, lighting, and landscaping.

(6) "Customer" means a person or other legal entity who owns an account provided by an operator whose access facility is being used.

(7) "Footcandle" means the light incident measured on a horizontal plane thirty-six inches above ground level. One footcandle is equal to one lumen per square foot.

(8) "Hours of darkness" means the period that commences thirty minutes after sunset and ends thirty minutes before sunrise.

(9) "Night depository" means a slot or compartment located in this state and provided by an operator to facilitate the delivery of cash or other negotiable instruments into a customer's account during non-business hours of operation.

(10) "Operator" means a state or national bank, savings association, credit union, industrial loans company, mutual savings bank, or other business entity that controls an access facility or access area.

Acts 1995, No. 588, §1, eff. July 1, 1996.

§ 6:1364 Compliance required

A. Each operator shall substantially comply with the provisions of R.S. 6:1365 through 1367 and shall also adopt procedures for the periodic evaluation of access facilities and access areas in his control. However, compliance shall create no duty to relocate or cause structural modification to existing access facilities.

B. An operator who has initially complied with the provisions of R.S. 6:1365 through 1367 and has adopted and implemented procedures to semiannually verify compliance with such provisions shall not be deemed to be in violation of this Chapter unless both of the following conditions exist:

(1) The operator has actual or constructive knowledge of the violation. For purposes of this Paragraph, constructive knowledge shall mean the existence of facts which infer actual knowledge.

(2) The operator has failed to remedy the violation within thirty days of such knowledge.

C. Substantial compliance with the provisions of this Chapter shall fulfill any duty of an operator to protect against the risk of harm to any user of an access facility or access area covered by this Chapter, and shall be a bar to any claim for damages arising from the use of access facilities and access areas covered by this Chapter, provided that the operator was not grossly negligent or did not act intentionally.

Acts 1995, No. 588, §1, eff. July 1, 1996.

§ 6:1365 Lighting standards

The operator of an access facility shall provide lighting during hours of darkness in an access area in his control by meeting both of the following standards during such hours:

(1) There shall be a minimum of ten footcandles at the face of the access facility and extending in an unobstructed direction outward five feet.

(2) There shall be an average of two footcandles within the access area.

Acts 1995, No. 588, §1, eff. July 1, 1996.

§ 6:1366 Landscape and vegetation standards

The operator of an access facility shall provide in an access area in his control for landscaping which promotes reasonable visibility of persons within such area by meeting each of the following standards:

(1) No bushes or shrubbery exceeding one foot in height shall be planted within a fifteen-foot radius of the access facility.

(2) Bushes and shrubbery outside the fifteen foot radius shall be maintained in a manner which promotes reasonable visibility of persons within the access area.

(3) Trees within the access area shall be trimmed upward to a minimum of six feet.

Acts 1995, No. 588, §1, eff. July 1, 1996.

§ 6:1367 Notice of customer safety information

An operator shall provide to its customers a notice containing information on basic safety precautions to be employed while using access facilities. Such information shall be furnished by personally delivering or by mailing such notice to each customer at the last address to which statements on his account have been sent. Only one notice need be provided for each account. No operator shall be under any duty to provide such notice to a user of an access facility who is not his customer.

Acts 1995, No. 588, §1, eff. July 1, 1996.

CHAPTER 20 PROTECTION OF ELIGIBLE ADULTS FROM FINANCIAL EXPLOITATION

§ 6:1371 Legislative intent

It is the intent of the legislature in enacting this Chapter to allow covered financial institutions the discretion to take actions to assist in detecting and preventing financial exploitation without liability. The legislature recognizes that covered financial institutions are in a unique position by conducting financial transactions on behalf of and at the request of their customers. Covered financial institutions have duties imposed by contract and duties imposed by both federal and state law to conduct financial transactions requested by their customers faithfully and timely in accordance with the customer's instructions. Further, covered financial institutions do not have a duty to contravene the valid instructions of their customers, nor to prevent criminal activity directed at their customers, and nothing in this Chapter creates such a duty.

Acts 2018, No. 434, §1, eff. October 1, 2018.

§ 6:1372 Definitions

As used in this Chapter, the following terms and phrases have the meanings hereinafter ascribed to them:

(1) "Adult protection agency" has the same meaning as defined in R.S. 15:1503.

(2) "Covered agency" means any of the following:

(a) Any federal, state, or local law enforcement agency.

(b) An adult protection agency.

(3) "Covered financial institution" means any bank, credit union, savings bank, savings and loan association, or trust company operating in Louisiana.

(4) "Eligible adult" means any of the following:

(a) Any person sixty years of age or older.

(b) Any person subject to the Adult Protective Services Act as provided in R.S. 15:1501 et seq.

(5) "Financial exploitation" means any of the following:

(a) The wrongful or unauthorized taking, withholding, appropriation, or use of money, assets, beneficial ownership interest, or property of an eligible adult.

(b) Any act or omission committed by a person in a representative capacity through trust, power of attorney, act of procuration, contract of mandate, or letters of curatorship of an eligible adult, or by any other means, for any of the following purposes:

(i) Obtaining control over, or depriving an eligible adult of ownership, use, benefit, or possession of his money, assets, or property by deception, intimidation, or undue influence.

(ii) Converting money, assets, or property of an eligible adult.

(6) "Financial transaction" means any of the following as applicable to services provided by a covered financial institution:

(a) A transfer or request to transfer or disburse funds or assets in an account.

(b) A request to initiate a wire transfer, initiate an automated clearing house (ACH) transfer, or issue a money order, cashier's check, or official check.

(c) A request to negotiate a check or other negotiable instrument.

(d) A request to change the ownership of, or access to, an account.

(e) A request to sell or transfer securities or other assets, or a request to affix a Medallion Stamp or provide any form of guarantee or endorsement in connection with an attempt to sell or transfer securities or other assets, if the person selling or transferring the securities or assets is not required to register pursuant to Louisiana Securities Law as provided in R.S. 51:701 et seq.

(f) A request for a loan, extension of credit, or draw on a line of credit.

(g) A request to encumber any movable or immovable property.

(h) A request to designate or change the designation of beneficiaries to receive any property, benefit, or contract right on the eligible adult's death.

Acts 2018, No. 434, §1, eff. October 1, 2018.

§ 6:1373 Notices

A. A covered financial institution may notify any covered agency if the covered financial institution believes that the financial exploitation of an eligible adult is occurring, has or may have occurred, or is being attempted, or has been, or may have been attempted.

B. A covered financial institution may notify any third party reasonably associated with the eligible adult if the covered financial institution believes that the financial exploitation of an eligible adult is occurring, has or may have occurred, or is being attempted, or has been, or may have been attempted. A third party reasonably associated with the eligible adult includes but is not limited to all of the following:

(1) A parent, spouse, adult child, sibling, or other known family member or close associate of an eligible adult.

(2) An authorized contact provided by the eligible adult to the covered financial institution.

(3) A co-owner, additional authorized signatory, or beneficiary on the eligible adult's account.

C. A covered financial institution may choose not to notify any third party reasonably associated with the eligible adult of suspected financial exploitation of the eligible adult, if the covered financial institution believes such third party is, may be, or may have been engaged in financial exploitation of the eligible adult.

D. A covered financial institution shall make a reasonable effort, at least annually, to notify all employees of the covered financial institution of their ability to report potential financial exploitation of an eligible adult to personnel within the covered financial institution.

Acts 2018, No. 434, §1, eff. October 1, 2018.

§ 6:1374 Delaying financial transactions

A. A covered financial institution may, but is not required to, delay completion or execution of a financial transaction involving an account of an eligible adult, an account on which an eligible adult is a beneficiary, or an account of a person suspected of perpetrating financial exploitation if either of the following conditions apply:

(1) The covered financial institution reasonably believes that the requested financial transaction may result in financial exploitation of an eligible adult.

(2) A covered agency provides information demonstrating to the financial institution that it is reasonable to believe that financial exploitation is occurring, has or may have occurred, or is being attempted, or has been, or may have been attempted.

B. If a covered financial institution determines to delay a financial transaction pursuant to Subsection A of this Section, the covered financial institution shall, no later than two business days after the financial transaction is delayed, send written notification of the delay and the reason for the delay to all parties authorized to transact business on the account for which the covered financial institution has contact information, unless any such party is reasonably believed to have engaged in attempted financial exploitation of the eligible adult. The notification described in this Subsection may be provided by electronic means.

C. If a covered financial institution delays a financial transaction pursuant to Subsection A of this Section, the covered financial institution may provide notification of the delay, the reason for the delay, and any additional information about the financial transaction to any covered agency.

D. Except as ordered by a court, a covered financial institution is not required to delay a financial transaction when provided with information by a covered agency alleging that financial exploitation is occurring, has or may have occurred, or is being attempted, or has been, or may have been attempted, but may use its discretion to determine whether to delay a financial transaction based on the information available to the covered financial institution.

E. Except as provided in Subsection F of this Section, any delay of a financial transaction as authorized pursuant to this Section shall expire or be terminated when the earliest of any of the following circumstances occur:

(1) The covered financial institution reasonably determines that the financial transaction will not result in financial exploitation of the eligible adult.

(2) Fifteen business days pass from the date on which the covered financial institution first initiated the delay of the financial transaction.

F.(1) A covered financial institution may extend the delay provided for in Subsection E of this Section upon receiving a request to extend the delay from any covered agency, in which case the delay shall expire or be terminated no later than twenty-five business days from the date on which the covered financial institution first initiated the delay of the financial transaction.

(2) A court of competent jurisdiction may enter an order extending or shortening a delay, or providing other relief, based on the petition of the covered financial institution, any covered agency, or other interested party.

Acts 2018, No. 434, §1, eff. October 1, 2018.

§ 6:1375 Applicability of other laws

Notwithstanding the provisions of R.S. 6:333 or any other law to the contrary, a covered financial institution may act in accordance with the provisions of this Chapter.

Acts 2018, No. 434, §1, eff. October 1, 2018.

§ 6:1376 Immunity

A.(1) A covered financial institution and its directors, officers, employees, attorneys, accountants, agents, and other representatives shall have no duty to act pursuant to this Chapter or otherwise to protect an eligible adult from financial exploitation by a third person.

(2) A covered financial institution and its directors, officers, employees, attorneys, accountants, agents, and other representatives shall be immune from all criminal, civil, and administrative liability for not taking action pursuant to this Chapter.

(3) A covered financial institution and its directors, officers, employees, attorneys, accountants, agents, or other representatives who choose to act pursuant to the authority granted in this Chapter shall be immune from all criminal, civil, and administrative liability for any act taken pursuant to this Chapter, unless such act of the financial institution or its representatives was grossly negligent and caused pecuniary loss to the eligible adult who was suspected of being a victim of financial exploitation.

B. No claim shall be brought against any covered agency or the state of Louisiana in connection with the receipt of or response to any notice of financial exploitation.

C. The immunity provided for in this Section shall not extend to any individual in a case when such individual is a principal, conspirator, or an accessory after the fact to a criminal offense involving the financial exploitation of an eligible adult.

Acts 2018, No. 434, §1, eff. October 1, 2018.

CHAPTER 21 VIRTUAL CURRENCY BUSINESSES

§ 6:1381 Short title

This Chapter shall be known and may be cited as the "Virtual Currency Businesses Act".

Acts 2020, No. 341, §1.

§ 6:1382 Definitions

As used in this Chapter, unless the context otherwise requires, the following terms shall be defined as follows:

(1) "Acting in concert" means persons who knowingly act together with a common goal of jointly acquiring control of a licensee whether or not pursuant to an express agreement.

(2) "Affiliate" means any person who controls, is controlled by, or is under common control with another person.

(3) "Applicant" means a person who applies for a license pursuant to this Chapter.

(4) "Blockchain" means any ledger of exchange, sale, or transfer of virtual currency which is accessible by computers or operators that are part of any virtual currency network.

(5) "Commissioner" means the commissioner of the office of financial institutions.

(6) "Control", when used in the context described, means the following:

(a) When used in reference to a transaction or relationship involving virtual currency, power to execute unilaterally or prevent indefinitely a virtual currency transaction.

(b) When used in reference to a person, any of the following:

(i) The direct or indirect power to direct the management, operations, or policies of the person through legal or beneficial ownership of voting power in the person or under a contract, arrangement, or understanding.

(ii) The power to vote, directly or indirectly, at least twenty-five percent of outstanding voting shares or voting interests of a licensee or person in control of a licensee, including persons acting in concert in such instances.

(iii) The power to elect or appoint a majority of responsible individuals of a licensee.

(iv) The power to exercise, directly or indirectly, a controlling influence over the management or policies of a licensee or person in control of a licensee.

(v) Any other set of facts and circumstances, as determined by the commissioner in his discretion, that may constitute control.

(7) "Exchange", when used as a verb, means to assume control of virtual currency from, or on behalf of, a resident, at least momentarily, to sell, trade, or convert either of the following:

(a) Virtual currency for legal tender, bank credit, or one or more forms of virtual currency.

(b) Legal tender or bank credit for one or more forms of virtual currency.

(8) "Fiat currency" means a government-issued currency that is backed by the government's authority and not by a physical commodity.

(9) "Insolvent" means any of the following:

(a) Having generally ceased to pay debts in the ordinary course of business other than as a result of a bona fide dispute.

(b) Being unable to pay debts as they become due.

(c) Being insolvent within the meaning of federal bankruptcy law.

(10) "Legal tender" means a medium of exchange or unit of value, including the coin or paper money of the United States, issued by the United States or by another government if the issuance by another government is not virtual currency.

(11) "Licensee" means a person licensed pursuant to this Chapter.

(12) "Mining" means the use of any machine or device to solve any series of complex mathematical equations, problems, or puzzles in binary or nonbinary sequences to add a block to any virtual currency network blockchain which is used to do any of the following:

(a) Validate sales, exchanges, transfers, or ownership of virtual currency.

(b) Secure a blockchain or virtual currency network.

(c) Prevent fraud, theft, or misappropriation of virtual currency.

(13) "Minting" means the use of any machine or device to authenticate data, add any block, or record any information or data on any blockchain by either of the following:

(a) Through any protocol.

(b) Under any terms or conditions of any contract or agreement, or both, to create any virtual currency on a blockchain.

(14) "Nationwide Multistate Licensing System and Registry" or "NMLS" means the multistate system developed by the Conference of State Bank Supervisors and the American Association of Residential Mortgage Regulators and owned and operated by the State Regulatory Registry LLC, or any successor or affiliated entity, for the licensing and registration of persons in financial services industries or any other similar online multistate database.

(15) "Non-fungible token" means any unique digital identifier on any blockchain or virtual currency network used to certify authenticity and ownership rights that cannot be replaced, exchanged, or interchanged with any similar type or category of asset.

(16) "Office" means the office of financial institutions.

(17) "Person" means an individual, general partnership, limited partnership, limited liability company, corporation, trust, association, joint stock corporation, or other legal entity, or any individual or group of individuals, however organized. The term shall not include a public corporation, government, or governmental subdivision, agency, or instrumentality.

(18)(a) "Regulated financial institution" means a federally insured depository institution and its wholly owned subsidiaries chartered pursuant to the laws of this state, another state, or the United States, a Louisiana state-chartered trust company, a trust company chartered by another state, or a federally chartered trust company.

(b) "Regulated financial institution" shall not include either of the following:

(i) An industrial loan company.

(ii) A trust company chartered by a state with which this state does not have reciprocity governing trust-company activities.

(19)(a) "Resident" means any of the following:

(i) A person who is domiciled in this state.

(ii) A person who is physically located in this state for more than one hundred eighty-three days of the previous three hundred sixty-five days.

(iii) A person who has a place of business in this state.

(b) "Resident" shall include a legal representative of a person that meets one of the criteria provided for in Subparagraph (a) of this Paragraph.

(20) "Responsible individual" means any individual who is ultimately responsible for establishing or directing policies and procedures of the licensee, including but not limited to an executive officer, manager, director, or trustee.

(21) "State" means a state of the United States, the District of Columbia, Puerto Rico, the United States Virgin Islands, or any territory or insular possession subject to the jurisdiction of the United States.

(22) "Store", except in the phrase "store of value", means to maintain control of virtual currency on behalf of a resident by a person other than the resident. "Storage" and "storing" have corresponding meanings.

(23) "Tangible net worth" means all business assets minus liabilities and intangible assets, including goodwill and other intangible assets. For the purposes of this Paragraph, an intangible asset may include but is not limited to favorable leasehold rights, trademarks, trade names, internet domain names, and noncompete agreements.

(24) "Transfer" means to assume control of virtual currency from, or on behalf of, a resident and do any of the following:

(a) Credit the virtual currency to the account of another person.

(b) Move the virtual currency from one account of a resident to another account of the same resident.

(c) Relinquish control of virtual currency to another person.

(25) "United States dollar equivalent of virtual currency" means the equivalent value of a particular virtual currency in United States dollars shown on a virtual currency exchange based in the United States for a particular date or period specified in this Chapter.

(26) "Unsafe or unsound act or practice" means and includes but is not limited to a practice or conduct by a person licensed to engage in virtual currency business activity in the state which creates the likelihood of material loss, insolvency, dissipation of the licensee's assets that materially prejudices the interests of residents, and any other set of facts and circumstances, as determined by the commissioner in accordance with this Chapter and applicable law.

(27)(a) "Virtual currency" means a digital representation of value that is used as a medium of exchange, unit of account, or store of value, and that is not legal tender, whether or not denominated in legal tender.

(b) "Virtual currency" shall not include either of the following:

(i) A transaction in which a merchant grants, as part of an affinity or rewards program, value that cannot be taken from or exchanged with the merchant for legal tender, bank credit, or virtual currency.

(ii) A digital representation of value issued by or on behalf of a publisher and used solely within an online game, game platform, or family of games sold by the same publisher or offered on the same game platform.

(28) "Virtual currency administration" means issuing virtual currency with the authority to redeem the currency for legal tender, bank credit, or other virtual currency.

(29) "Virtual currency business activity" means any of the following:

(a) Exchanging, transferring, or storing virtual currency or engaging in virtual currency administration, whether directly or through an agreement with a virtual currency control services vendor.

(b) Holding electronic precious metals or electronic certificates representing interests in precious metals on behalf of another person or issuing shares or electronic certificates representing interests in precious metals.

(c) Exchanging one or more digital representations of value used within one or more online games, game platforms, or family of games for either of the following:

(i) Virtual currency offered by or on behalf of the same publisher from which the original digital representation of value was received.

(ii) Legal tender or bank credit outside of the online game, game platform, or family of games offered by or on behalf of the same publisher from which the original digital representation of value was received.

(d) "Virtual currency business activity" shall not include any of the following:

(i) Mining.

(ii) Minting non-fungible tokens.

(iii) Blockchain activities that do not involve any exchange, holding, sale, storing, or transfer of virtual currency to, for, or on behalf of any resident.

(30) "Virtual currency control services vendor" means a person that has control of virtual currency solely under an agreement with a person that, on behalf of another person, assumes control of virtual currency.

(31) "Virtual currency kiosk" means an electronic terminal acting as a mechanical agent of the owner or operator to enable the owner or operator to facilitate the exchange of virtual currency for fiat currency or other virtual currency, including but not limited to either of the following:

(a) Connecting directly to a separate virtual currency exchanger that performs the actual virtual currency transmission.

(b) Drawing upon the virtual currency in the possession of the owner or operator of the electronic terminal.

(32) "Virtual currency kiosk operator" means a licensee that operates a virtual currency kiosk within this state.

(33) "Virtual currency kiosk transaction" means a transaction conducted or performed, in whole or in part, by electronic means via a virtual currency kiosk. Virtual currency kiosk transaction also means a transaction made at a virtual currency kiosk to purchase currency with fiat currency or to sell virtual currency for fiat currency.

(34) "Virtual currency network" means any computer or operator having access to a ledger of exchange, sale, or transfer of one or more virtual currencies.

Acts 2020, No. 341, §1; Acts 2023, No. 331, §1, eff. June 13, 2023; Acts 2024, No. 159, §1; Acts 2024, No. 700, §2; Acts 2025, No. 369, §1.

NOTE: The provisions of Acts 2023, No. 331, will terminate on July 1, 2027. See Acts 2024, No. 700.

NOTE: The provisions of Acts 2023, No. 331, have no termination date. See Acts 2024, No. 159.

§ 6:1383 Applicability

A. Except as otherwise provided in Subsection B or C of this Section, the provisions of this Chapter govern the virtual currency business activity of a person, wherever located, who engages in or holds itself out as engaging in the activity with, or on behalf of, a resident.

B. This Chapter shall not apply to the exchange, transfer, or storage of virtual currency or to virtual currency administration to the extent the activity is governed by any of the following federal or state laws:

(1) The Electronic Fund Transfer Act of 1978.

(2) The Securities Exchange Act of 1934.

(3) The Commodities Exchange Act of 1936.

(4) The Louisiana Securities Law, R.S. 51:701 et seq.

C. This Chapter shall not apply to activity by any of the following:

(1) The United States, a state, political subdivision of a state, agency, or instrumentality of federal, state, or local government, or a foreign government or a subdivision, department, agency, or instrumentality of a foreign government.

(2) A regulated financial institution.

(3) A person whose participation in a payment system is limited to providing processing, clearing, or performing settlement services solely for transactions between or among persons that are exempt from the licensing or registration requirements of this Chapter.

(4) A person engaged in the business of dealing in foreign exchange to the extent the person's activity meets the definition in 31 CFR 1010.605(f)(1)(iv).

(5) A person who does any of the following:

(a) Contributes only connectivity software or computing power to a decentralized virtual currency or to a protocol governing transfer of the digital representation of value.

(b) Provides only data storage or security services for a business engaged in virtual currency business activity and does not otherwise engage in virtual currency business activity on behalf of another person.

(c) Repealed by Acts 2023, No. 331, §2, eff. June 13, 2023.

(6) A person using virtual currency, including creating, investing, buying or selling, or obtaining virtual currency as payment for the purchase or sale of goods or services, solely on the person's own behalf for personal, family, or household purposes or for academic purposes.

(7) Repealed by Acts 2023, No. 331, §2, eff. June 13, 2023.

(8) An attorney to the extent of providing escrow services to a resident.

(9) A title insurance company to the extent of providing escrow services to a resident.

(10) A securities intermediary, as defined in R.S. 10:8-102(a), or a commodity intermediary, as defined in R.S. 10:9-102(a), that does not engage in the ordinary course of business in virtual currency business activity with, or on behalf of, a resident, in addition to maintaining securities accounts or commodities accounts and is regulated as a securities intermediary or commodity intermediary pursuant to federal law, law of this state other than the provisions of this Chapter, or law of another state, and affords a resident protections comparable to those provided in R.S. 10:8-501 et seq.

(11) A secured creditor pursuant to R.S. 10:9-101 et seq. or a creditor with a judicial lien, or lien arising by operation of law, on collateral that is virtual currency, if the virtual currency business activity of the creditor is limited to enforcement of the security interest in compliance with R.S. 10:9-101 et seq. or lien in compliance with the law applicable to the lien.

(12) A virtual currency control services vendor.

(13) A person who does not receive compensation from a resident for providing virtual currency products or services or for conducting virtual currency business activity, or that is engaged in testing products or services with the person's own funds.

D. Notwithstanding any provision of this Section or any other law to the contrary, any person who owns, operates, solicits, markets, advertises, or facilitates a virtual currency kiosk in this state shall be deemed to be engaged in virtual currency business activity in this state and shall be subject to the provisions of this Chapter, including but not limited to licensure pursuant to R.S. 6:1385.

Acts 2020, No. 341, §1; Acts 2023, No. 331, §2, eff. June 13, 2023; Acts 2024, No. 159, §1; Acts 2024, No. 700, §2; Acts 2025, No. 369, §1.

NOTE: The provisions of Acts 2023, No. 331, will terminate on July 1, 2027. See Acts 2024, No. 700.

NOTE: The provisions of Acts 2023, No. 331, have no termination date. See Acts 2024, No. 159.

§ 6:1384 Licensure; general

A person shall not engage in virtual currency business activity, or hold himself out as being able to engage in virtual currency business activity, with or on behalf of a resident unless the person is one of the following:

(1) Licensed in this state by the office pursuant to R.S. 6:1385.

(2) Exempt from licensure pursuant to R.S. 6:1383.

Acts 2020, No. 341, §1; Acts 2023, No. 331, §1, eff. June 13, 2023; Acts 2024, No. 159, §1; Acts 2024, No. 700, §2.

NOTE: The provisions of Acts 2023, No. 331, will terminate on July 1, 2027. See Acts 2024, No. 700.

NOTE: The provisions of Acts 2023, No. 331, have no termination date. See Acts 2024, No. 159.

§ 6:1385 Requirements

A. An applicant for a license pursuant to the provisions of this Chapter shall submit the application through the Nationwide Multi-State Licensing System (NMLS) and satisfy all of the following:

(1) Provide all of the following information relevant to the applicant's proposed virtual currency business activity:

(a) The legal name of the applicant, each current or proposed business United States Postal Service address of the applicant, and any fictitious or trade name the applicant uses or plans to use in conducting its virtual currency business activity with or on behalf of a resident.

(b) The legal name, any former or fictitious name, and the residential and business United States Postal Service address of each responsible individual of the applicant and each person that has control of the applicant.

(c) A description of the current and former business of the applicant for the five years before the application is submitted or, if the business has operated for less than five years, for the time the business has operated, including its products and services, associated internet website addresses and social media pages, principal place of business, projected user base, and specific marketing targets.

(d) The name, United States Postal Service address, and telephone number of a person that manages each server the applicant expects to use in conducting its virtual currency business activity with, or on behalf of, a resident and a copy of any agreement with that person. A copy of the applicant's business plan, which shall include a three-year financial pro forma, the anticipated volume of virtual currency business activities in this state for the same period, the anticipated number of virtual currency locations in this state, including kiosk machines, and evidence of the surety bond as well as the current and continued maintenance of the tangible net worth required by R.S. 6:1386.

(e) The name, United States Postal Service address, and telephone number of each affiliate of the applicant and a description of the control relationship.

(f) A list of both of the following:

(i) Each money service or money transmitter license the applicant holds in another state and the date the license expires.

(ii) Any license revocation, license suspension, or other disciplinary action taken against the licensee in another state and any license applications rejected by another state.

(g) A list of any criminal conviction, deferred prosecution agreement, or pending criminal proceeding in any jurisdiction against all of the following:

(i) The applicant.

(ii) Each responsible individual of the applicant.

(iii) Each person that has control over the applicant.

(iv) Each person over which the applicant has control.

(h) A list of any litigation, arbitration, or administrative proceeding in any jurisdiction in which the applicant or a responsible individual of the applicant has been a party for the five years before the application is submitted, determined to be material in accordance with generally accepted accounting principles and to the extent the applicant would be required to disclose the litigation, arbitration, or administrative proceeding in the applicant's audited financial statements, reports to equity owners, and similar statements or reports.

(i) A list of any bankruptcy or receivership proceeding in any jurisdiction for the ten years before the application is submitted in which any of the following was a debtor:

(i) The applicant.

(ii) Each responsible individual of the applicant.

(iii) Each person who has control over the applicant.

(iv) Each person over which the applicant has control.

(j) The name and United States Postal Service address of each bank in which the applicant plans to deposit funds obtained by its virtual currency business activity.

(k) The source of funds and credit to be used by the applicant to conduct virtual currency business activity with, or on behalf of, a resident and documentation demonstrating that the applicant has the tangible net worth required pursuant to R.S. 6:1386.

(l) The United States Postal Service address and electronic mail address to which communications from the office may be sent.

(m) The name, United States Postal Service address, and electronic mail address of the registered agent of the applicant in this state.

(n) A copy of the certificate of coverage for each liability, casualty, business interruption, and cybersecurity insurance policy maintained by the applicant for itself or as to any responsible individual, affiliate, agent, or control person of the applicant, with respect to the virtual currency business activities of the applicant.

(o) If applicable, the date on which and the state where the applicant is formed and a copy of a current certificate of good standing issued by that state.

(p) A copy of the applicant's audited financial statement for the prior year.

(q) If a person has control of the applicant and the person's equity interests are publicly traded in the United States, a copy of the audited financial statement of the person for the most recent fiscal year or most recent report of the person filed pursuant to 15 U.S.C. 78.

(r) If a person has control of the applicant and the person's equity interests are publicly traded outside of the United States, a copy of the audited financial statement of the person for the most recent fiscal year of the person or a copy of the most recent documentation similar to that required in Subparagraph (q) of this Paragraph filed with the foreign regulator in the domicile of the person.

(s) If the applicant is a partnership or a member-managed limited liability company, the names and United States Postal Service addresses of all general partners or members.

(t) If the applicant is required to register with the Financial Crimes Enforcement Network of the United States Department of the Treasury as a money service business, evidence of the registration.

(u) A set of fingerprints for each responsible individual and person who has control of the applicant. If the person resided outside of the United States anytime within the past ten years, the person shall also provide an investigative background report prepared by an independent search firm that meets the following requirements:

(i) At a minimum, the search firm shall satisfy both of the following:

(aa) Demonstrate that it has sufficient knowledge and resources and employs accepted and reasonable methodologies to conduct the research of the background report.

(bb) Demonstrate that it does not have an interest in, nor affiliation with, the person who is the subject of the background report.

(ii) At a minimum, the investigative background report shall be written in the English language and shall contain all of the following:

(aa) If available in the person's current jurisdiction of residency, a comprehensive credit report or any equivalent information obtained or generated by the independent search firm to accomplish such report, including a search of the court data in the countries, provinces, states, cities, towns, and contiguous areas where the individual resided and worked.

(bb) Criminal records information for the past ten years, including but not limited to felonies, misdemeanors, or similar convictions.

(cc) Employment history.

(dd) Media history, including an electronic search of national and local publications, wire services, and business applications.

(ee) Financial services-related regulatory history, including but not limited to money transmission, securities, banking, insurance, and mortgage-related industries.

(v) For each responsible individual and person who has control of the applicant, for the five years before the application is submitted, employment history and history of any investigation of the person who has control or the responsible individual or legal proceeding to which the person who has control or responsible individual was a party.

(w) Other information the office reasonably requires by rule.

(2) Provide through and in the manner prescribed by NMLS a nonrefundable fee in an amount provided for by rule for the reasonable regulatory cost of the application and investigation process. Pursuant to this Section, the applicant shall pay the reasonable costs of the investigation incurred by the office that are in excess of the amount of the nonrefundable fee amount in the manner prescribed by the commissioner.

B. An application for a license pursuant to this Section shall not be complete until the office receives all information required by the provisions of this Chapter and completes its investigation pursuant to Subsection C of this Section.

C.(1) On receipt of a completed application, the office shall investigate all of the following:

(a) The financial condition and responsibility of the applicant.

(b) The relevant financial and business experience, character, and general fitness of the applicant.

(c) The competence, experience, character, and general fitness of each responsible individual and any person who has control of the applicant, in order for the commissioner to reasonably determine that the applicant will conduct its virtual currency business activity honestly, carefully, and efficiently and in accordance with the requirements of this Chapter and any other applicable state or federal laws or regulations.

(2) At the option of the office, it may investigate the business premises of an applicant.

D.(1) Not later than sixty days after an application is complete, the office shall send the applicant notice of its decision to approve, conditionally approve, or deny the application.

(2) If the office does not receive notice from the applicant that the applicant accepts conditions specified by the office within thirty-one days after the date of the notice of the conditional approval, the application shall be deemed denied.

E. No license shall be issued pursuant to this Chapter unless all of the following occur:

(1) The applicant provides a surety bond and the commissioner accepts the surety bond required pursuant to R.S. 6:1386.

(2) The applicant provides evidence acceptable to the commissioner of the tangible net worth required pursuant to R.S. 6:1386.

(3) The applicant has paid all costs and fees required pursuant to this Chapter in connection with a license application.

(4) The commissioner has issued notice of the decision to approve or conditionally approve the application in accordance with Subsection D of this Section.

Acts 2020, No. 341, §1; Acts 2023, No. 331, §1, eff. June 13, 2023; Acts 2024, No. 159, §1; Acts 2024, No. 700, §2.

NOTE: The provisions of Acts 2023, No. 331, will terminate on July 1, 2027. See Acts 2024, No. 700.

NOTE: The provisions of Acts 2023, No. 331, have no termination date. See Acts 2024, No. 159.

§ 6:1385.1 Approval of advanced change of control notice

A. Whenever a change of control of a licensee or an applicant is contemplated by any person, or persons acting in concert, the following information shall be provided to the commissioner through the NMLS:

(1) The licensee or applicant shall do all of the following:

(a) File an advanced change of control notice within thirty days after learning of the change of control and at least forty-five days prior to the date that the proposed transaction is to be consummated.

(b) Provide such information as required pursuant to R.S. 6:1385(A).

(2) After review of an advanced change of control notice filed pursuant to Paragraph (1) of this Subsection, the commissioner may require the licensee or applicant to provide additional information concerning the proposed person, or persons acting in concert, to cause a change of control. The additional information shall be limited to the same information required from the licensee or applicant as part of its original application filed pursuant to R.S. 6:1385(A).

B. The commissioner shall approve an advanced change of control notice filed in accordance with Subsection A of this Section if, after investigation, he determines that the person, or persons acting in concert, to cause a change of control shall not adversely affect the ability of the licensee or applicant to conduct its virtual currency business activity honestly, carefully, and efficiently and in accordance with the requirements of this Chapter and any other applicable state and federal laws and regulations.

C. If the commissioner determines that the proposed person, or persons acting in concert, to cause a change of control fails to meet the qualifications, standards, and requirements pursuant to this Chapter, the commissioner shall inform the licensee, applicant, proposed person, or persons acting in concert to cause the change of control in writing that the advanced change of control request is denied and state the reasons for such denial. The licensee, applicant, proposed person, or persons acting in concert to cause the change of control may appeal the denial in accordance with R.S. 6:1387(C).

D. The provisions of Paragraph (A)(1) of this Section shall not apply to a public offering of securities under the laws of the United States.

E. Before filing an advanced change of control notice, any person, or persons acting in concert, may request in writing a determination from the commissioner as to whether the person, or persons acting in concert, would be considered to be in control of a licensee or applicant upon consummation of a proposed transaction. If the commissioner determines that the person, or persons acting in concert, would not be in control of the licensee or applicant, the commissioner shall respond in writing that the proposed transaction is not subject to the requirements of Subsection A of this Section.

Acts 2023, No. 331, §1, eff. June 13, 2023; Acts 2024, No. 159, §1; Acts 2024, No. 700, §2.

NOTE: The provisions of Acts 2023, No. 331, will terminate on July 1, 2027. See Acts 2024, No. 700.

NOTE: The provisions of Acts 2023, No. 331, have no termination date. See Acts 2024, No. 159.

§ 6:1385.2 Approval of advanced change of responsible individual notice

A. Whenever a change is contemplated with respect to a reasonable individual of a licensee or applicant, all of the following information shall be provided to the commissioner through the NMLS:

(1) The legal name, any former or fictitious name, and the residential and business United States Postal Service addresses of the proposed responsible individual.

(2) A list of any criminal conviction, deferred prosecution agreement, or pending criminal proceeding in any jurisdiction against the proposed responsible individual.

(3) A list of any bankruptcy or receivership proceeding in any jurisdiction for the prior ten years involving the proposed responsible individual.

(4) A list of any litigation, arbitration, or administrative proceeding in any jurisdiction in which the proposed responsible individual was a party for the prior five years.

(5) A set of fingerprints of the proposed responsible individual for submission to the Federal Bureau of Investigation and the commissioner for purposes of a national and state criminal background check. If the individual resided outside of the United States at any time in the past ten years, the individual shall also provide an investigative background report prepared by an independent search firm pursuant to the requirements of R.S. 6:1385(A)(1)(u).

(6) The employment history of the proposed responsible individual for the prior five years.

(7) A history of any investigation or legal proceeding to which the proposed responsible individual was a party for the prior five years.

B. After review of an advanced change of responsible individual notice filed pursuant to Subsection A of this Section, the commissioner may require the licensee or applicant to provide additional information concerning the proposed responsible individual. The additional information shall be limited to the same information required from a licensee or an applicant as part of his original application filed pursuant to R.S. 6:1385(A).

C. The commissioner shall approve an advanced change of responsible individual notice filed in accordance with Subsection A of this Section if, after investigation, the commissioner reasonably determines that the proposed responsible individual has the relevant competence, experience, character, and general fitness considered necessary to ensure that the licensee or applicant will continue to conduct its virtual currency business activity honestly, carefully, and efficiently and in accordance with the requirements of this Chapter and other applicable state and federal laws and regulations.

D. If the commissioner determines that the proposed responsible individual fails to meet the qualifications, standards, and requirements of this Chapter, the commissioner shall inform the licensee, applicant, and proposed responsible individual, in writing, that the advanced change of control request is denied and state the reasons for denial. The licensee, applicant, and proposed responsible individual may appeal the denial in accordance with R.S. 6:1387(C).

Acts 2023, No. 331, §1, eff. June 13, 2023; Acts 2024, No. 159, §1; Acts 2024, No. 700, §2.

NOTE: The provisions of Acts 2023, No. 331, will terminate on July 1, 2027. See Acts 2024, No. 700.

NOTE: The provisions of Acts 2023, No. 331, have no termination date. See Acts 2024, No. 159.

§ 6:1386 Required documents; surety bond; tangible net worth

A.(1) Before a license is issued pursuant to the provisions of this Chapter, an applicant shall submit a surety bond in the amount of one hundred thousand dollars to the department that secures the applicant's faithful performance of its duties pursuant to the provisions of this Chapter or in an amount the office specifies based on the nature and extent of risks in the applicant's virtual currency business plan.

(2)(a) The licensee shall maintain or increase the minimum amount of the surety bond to reflect the dollar amount of all licensed virtual currency business activity in this state in the preceding calendar year in accordance with the provisions of this Paragraph.

Dollar Amount of Virtual Currency Business Activity Minimum Surety Bond

Amount Required

$0 to $5,000,000 $ 100,000

$5,000,000.01 to $10,000,000 $ 200,000

$10,000,000.01 to $15,000,000 $ 300,000

$15,000,000.01 to $20,000,000 $ 400,000

$20,000,000.01 to $25,000,000 $ 500,000

$25,000,000.01 to $30,000,000 $ 600,000

$30,000,000.01 to $35,000,000 $ 700,000

$35,000,000.01 to $40,000,000 $ 800,000

$40,000,000.01 to $45,000,000 $ 900,000

Over $45,000,000 $1,000,000

(b) The office may increase the amount of the surety bond required to a maximum of seven million dollars.

(c) The surety bond shall be issued by an entity authorized to sell insurance in this state in a form satisfactory to the commissioner and payable to the office for the benefit of any claimant against the licensee to secure the faithful performance of the obligations and duties of the licensee with respect to virtual currency business activities with, or on behalf of, residents of this state and the payment of required but unpaid fee amounts due to the office and assessed but unpaid civil money penalties.

(d) The aggregate liability on a surety bond shall not exceed the principal sum of the bond. A claimant against a licensee may maintain an action on the bond.

(e) A surety bond shall cover claims for as long as the office specifies but for at least five years after the licensee ceases to engage in virtual currency business activities in this state. However, the commissioner may permit the amount of the surety bond to be reduced or eliminated before the expiration of that time to the extent the amount of the licensee's obligations outstanding in this state is reduced.

B.(1)In addition to the surety bond required pursuant to Subsection A of this Section, a licensee, at the time of the application for a license pursuant to the provisions of this Chapter, shall submit to the office evidence of and maintain at all times a tangible net worth of the greater of one hundred thousand dollars or three percent of total assets for the first one hundred million dollars, two percent of additional assets for one hundred million to one billion dollars, and one-half percent of additional assets for over one billion dollars.

(2) If a licensee materially violates any provision of this Chapter, any rule or regulation promulgated by the office, or any order issued by the commissioner pursuant to this Chapter, the commissioner may, at any time, require a licensee to increase its tangible net worth required to be maintained pursuant to this Section. The licensee shall submit to the commissioner evidence that it has the required additional tangible net worth not later than thirty days after the licensee is notified in writing of the required increase.

(3) In determining the required additional tangible net worth, the commissioner may consider factors including but not limited to the following:

(a) The actual and projected volume of the licensee's virtual currency business activity in this state.

(b) Whether the licensee is currently licensed or regulated by the commissioner in accordance with the Sale of Checks and Money Transmission Act, R.S. 6:1031 et seq., and whether the licensee is in good standing in that capacity.

(c) The amount of leverage employed by the licensee.

(d) The liquidity position of the licensee.

(e) The products or services offered by the licensee.

Acts 2020, No. 341, §1; Acts 2023, No. 331, §1, eff. June 13, 2023; Acts 2024, No. 159, §1; Acts 2024, No. 700, §2.

NOTE: The provisions of Acts 2023, No. 331, will terminate on July 1, 2027. See Acts 2024, No. 700.

NOTE: The provisions of Acts 2023, No. 331, have no termination date. See Acts 2024, No. 159.

§ 6:1386.1 Meeting tangible net worth requirements

A. In satisfying the licensure and renewal requirements provided in this Chapter, tangible net worth shall be clearly evidenced by filing or submitting a current audited financial statement to the commissioner through the NMLS that is prepared in accordance with the general acceptable accounting principles (GAAP) standards or consistent with the Public Company Accounting Oversight Board (PCAOB) standards.

B. All licensing requirements, including renewals, relative to tangible net worth shall be evidenced at the time of initial application for licensure and renewal, maintained at all times during licensure and renewal, and reported annually to the commissioner in compliance with Subsection A of this Section and in accordance with R.S. 6:1388.

Acts 2023, No. 331, §1, eff. June 13, 2023; Acts 2024, No. 159, §1; Acts 2024, No. 700, §2.

NOTE: The provisions of Acts 2023, No. 331, will terminate on July 1, 2027. See Acts 2024, No. 700.

NOTE: The provisions of Acts 2023, No. 331, have no termination date. See Acts 2024, No. 159.

§ 6:1386.2 Protection of resident assets

A. To the extent a licensee stores, holds, or maintains custody or control of virtual currency on behalf of a resident, the licensee shall hold virtual currency of the same type and amount as that which is owed or obligated to the resident.

B. A licensee is prohibited from selling, transferring, assigning, lending, hypothecating, pledging, or otherwise using or encumbering assets, including virtual currency, stored, held, or maintained by or under the custody or control of such licensee on behalf of a resident, except for the sale, transfer, or assignment of such assets at the direction of the resident.

C. A licensee is prohibited from commingling assets belonging to a resident with assets belonging to a licensee, using the resident's assets to secure or guarantee a transaction other than a transaction involving, or on behalf of, the resident's contributing assets, maintaining the resident's assets in such a manner that the resident may be unable to fully withdraw his assets, and investing in such a manner that would not allow for sufficient assets, including virtual currency, to fulfill all outstanding obligations to the resident.

D. In order to ensure compliance with the requirements of Subsection C of this Section, a licensee may include the amount of his assets in the same account with a resident's assets solely for the purpose of facilitating, selling, transferring, assigning, lending, hypothecating, pledging, or using or encumbering assets, including virtual currency, stored, held, maintained by, or under the custody or control of such licensee on behalf of a resident, and operational needs related to such virtual currency business activities, provided that the assets of the licensee shall be deemed resident assets, and the licensee may only withdraw or assert a claim on that amount to the extent that amount exceeds that amount of resident assets held by or for a resident.

Acts 2023, No. 331, §1, eff. June 13, 2023; Acts 2024, No. 159, §1; Acts 2024, No. 700, §2.

NOTE: The provisions of Acts 2023, No. 331, will terminate on July 1, 2027. See Acts 2024, No. 700.

NOTE: The provisions of Acts 2023, No. 331, have no termination date. See Acts 2024, No. 159.

§ 6:1387 Issuance of license; appeal

A. No license shall be issued unless the commissioner has made a determination that the applicant has met the licensing requirements pursuant to this Chapter, including all requirements of R.S. 6:1385 and 1386.

B. An applicant may appeal a denial of its application pursuant to R.S. 6:1385, in accordance with the Administrative Procedure Act, not later than thirty days after the office notifies the applicant of the denial or the application is deemed denied.

C. In the case of a denial of an advanced change of control notice, or denial of an advanced change of responsible individual notice, pursuant to either R.S. 6:1385.1 or 1385.2, in accordance with the Administrative Procedure Act, the applicant or licensee may appeal the denial not later than thirty days after the office notifies the applicant or licensee of the denial of the advanced change of control notice, or the denial of an advanced change of responsible individual notice, or in either case, the change is deemed denied.

Acts 2020, No. 341, §1; Acts 2023, No. 331, §1, eff. June 13, 2023; Acts 2024, No. 159, §1; Acts 2024, No. 700, §2.

NOTE: The provisions of Acts 2023, No. 331, will terminate on July 1, 2027. See Acts 2024, No. 700.

NOTE: The provisions of Acts 2023, No. 331, have no termination date. See Acts 2024, No. 159.

§ 6:1388 Renewal of license; procedure; denial

A. (1) Each person licensed as a virtual currency business activity licensee shall submit an annual license renewal application on or before December thirty-first of each year in a manner and form prescribed by the commissioner and submit to the commissioner a renewal report pursuant to Subsection C of this Section if the person is not issued a new license from November first to December thirty-first of that year. A virtual currency business activity license issued during this time period will expire on December thirty-first of the following calendar year.

(2) An annual renewal application shall be accompanied by the required annual license renewal and investigation fees pursuant to the rules and regulations promulgated by the commissioner, as required pursuant to Subsection F of this Section. An annual license renewal application submitted after December thirty-first and before March first of the following year shall be charged an annual license renewal late fee pursuant to the rules and regulations promulgated by the commissioner, in addition to the annual license renewal and investigation fees.

B.(1) An annual licensee renewal application that is timely submitted on or before the license expiration date shall remain in force and effect until such application is approved or denied by the commissioner. Nothing in this Section shall preclude the commissioner from implementing any administrative or enforcement action authorized by this Title for violations of this Chapter or for material misrepresentation that may have occurred prior to the renewal date of a license.

(2) If the renewal application is submitted timely on or before December thirty-first, the license shall remain in force and effect until the renewal application is either approved or denied by the commissioner. Nothing in this Paragraph shall preclude the commissioner from implementing any administrative or enforcement action authorized by this Title for violations of this Chapter or for any material representation that may have occurred prior to the renewal date of a license.

(3) If the commissioner has not received the renewal fee and late fee before March first, the license to engage in virtual currency business activities shall expire without hearing or notification, and the license shall not be reinstated. However, the person whose license has expired may apply for a new license, subject to all new license application requirements of this Chapter. Prior to such application being complete and eligible for approval consideration, the applicant shall be subject to and pay unlicensed activity civil money penalties in an amount determined by the commissioner.

C.(1) The renewal report required by Subsection A of this Section shall be submitted in a form and medium prescribed by the office.

(2) The report shall contain all of the following:

(a) A copy of the licensee's audited annual financial statement.

(b) If a person other than an individual has control of the licensee, a copy of either of the following:

(i) The person's current annual financial statement.

(ii) The person's current audited consolidated annual financial statement.

(c) A description of any of the following:

(i) Material change in the financial condition of the licensee.

(ii) Material litigation involving the licensee or a responsible individual of the licensee.

(iii) License suspension or revocation proceeding commenced, or other action taken, involving a license to conduct virtual currency business activity issued by another state.

(iv) Federal or state investigation involving the licensee.

(v) Data security breach involving the licensee.

(d) The number of virtual currency business activity transactions with, or on behalf of, residents as of December thirty-first of the preceding calendar year and as of September thirtieth of the current year.

(e)(i) The amount of United States dollar equivalent of virtual currency in the control of the licensee as of December thirty-first of the preceding calendar year and as of September thirtieth of the current year.

(ii) The total number of residents for whom the licensee had control of United States dollar equivalent of virtual currency as of December thirty-first of the preceding calendar year and as of September thirtieth of the current year.

(f) Evidence that the licensee continues to satisfy the requirements provided for in R.S. 6:1386.

(g) A list of each location where the licensee operates its virtual currency business activity.

(h) The name, United States Postal Service address, and telephone number of each person that manages a server used by the licensee in conducting its virtual currency business activity with or on behalf of a resident.

D. In addition to the provisions of Paragraph (B)(3) of this Section, if a licensee does not timely comply with Subsection A of this Section, the office may use any enforcement action provided for in R.S. 6:1392.

E. Expiration of a license pursuant to the provisions of this Section shall not invalidate a transfer or exchange of virtual currency for, or on behalf of, a resident made during such expiration and shall not insulate the licensee from liability pursuant to the provisions of this Chapter, nor from other enforcement action as provided for in Subsection D of this Section.

F. A licensee shall pay the reasonable and necessary costs of the office's investigation in accordance with this Section.

Acts 2020, No. 341, §1; Acts 2023, No. 331, §1, eff. June 13, 2023; Acts 2024, No. 159, §1; Acts 2024, No. 700, §2.

NOTE: The provisions of Acts 2023, No. 331, will terminate on July 1, 2027. See Acts 2024, No. 700.

NOTE: The provisions of Acts 2023, No. 331, have no termination date. See Acts 2024, No. 159.

§ 6:1388.1 Quarterly financial reports

A. A licensee shall submit through the NMLS quarterly financial reports, including transactional information, within forty-five days following the close of each calendar quarter, in the form and containing such information as the commissioner shall prescribe, including both of the following:

(1) A statement of the financial condition of the licensee, including a balance sheet and income sheet, along with transactional information, all in United States currency, relating to virtual currency balances held on behalf of residents, virtual currency balances not held on behalf of residents, and other investments.

(2) A certification of the financial reports by an officer or member of the board of directors, or an equivalent governing body of the licensee, attesting to the truth and correctness of such reports.

B. In addition, each licensee shall submit special reports to the commissioner at such times and in such form as the commissioner may require.

Acts 2023, No. 331, §1, eff. June 13, 2023; Acts 2024, No. 159, §1; Acts 2024, No. 700, §2.

NOTE: The provisions of Acts 2023, No. 331, will terminate on July 1, 2027. See Acts 2024, No. 700.

NOTE: The provisions of Acts 2023, No. 331, have no termination date. See Acts 2024, No. 159.

§ 6:1389 Virtual currency kiosks; maximum daily transaction limit; cancellation and refund

A. There is a maximum daily transaction limit of three thousand dollars for each user of a virtual currency kiosk.

B. The owner or operator of a virtual currency kiosk shall wait seventy-two hours before processing a user's virtual currency kiosk transaction or shall, at such owner's or operator's cost and within seventy-two hours after a virtual currency kiosk transaction, allow the user to cancel and receive a full refund for the virtual currency kiosk transaction.

Acts 2025, No. 369, §1.

§ 6:1390 Transferability

A license issued pursuant to the provisions of this Chapter shall not be transferable or assignable.

Acts 2020, No. 341, §1; Acts 2023, No. 331, §1, eff. June 13, 2023; Acts 2024, No. 159, §1; Acts 2024, No. 700, §2.

NOTE: The provisions of Acts 2023, No. 331, will terminate on July 1, 2027. See Acts 2024, No. 700.

NOTE: The provisions of Acts 2023, No. 331, have no termination date. See Acts 2024, No. 159.

§ 6:1391 Examinations

A. Each person required to be licensed under this Chapter shall maintain in his office the books, records, and accounts of its virtual currency business activities as the commissioner may reasonably require in order to determine whether the person is complying with the provisions of this Chapter and the rules and regulations promulgated under the provisions of this Chapter. Required records may be maintained in any electronic format consistent with the person's ordinary business practices unless the person receives specific written instructions from the commissioner to the contrary. The books, records, and accounts shall be maintained separate and apart from any other business in which the person is involved and shall be kept at the location in the state at which the virtual currency business activities occurred or at the person's principal office unless otherwise permitted in writing by the commissioner. Records shall be made available for review or examination at a nonresidential location approved by the commissioner.

B. If the books and records of any person described in this Section are located outside of the state, he shall make them available to the commissioner at a location within this state convenient to the commissioner or pay the reasonable and necessary expenses for the commissioner or his representative to examine them at the place where they are maintained. The commissioner may designate representatives, including comparable officials of the state in which the records are located, to inspect the records on his behalf.

C. The licensee shall pay the reasonable cost of the examination as the commissioner shall prescribe by rule. If the examination fee is not paid within thirty days of its assessment, the person examined shall be subject to an administrative penalty.

D. The commissioner may do any of the following:

(1) Conduct on-site examination or investigation, participate in a joint or concurrent examination or investigation with another state or federal agency or agencies, or examine or investigate the books, records, and accounts used in the business of every licensee.

(2) Accept and rely upon an examination report or investigative report of any other state or federal agency.

E. Nothing in Subsection D of this Section shall preclude the commissioner from conducting an examination or investigation in accordance with applicable provisions of this Chapter, including but not limited to any of the following:

(1) Participating in a joint examination or investigation.

(2) Participating in a concurrent examination or investigation.

(3) Accepting results of an examination or investigation report conducted by any state or federal agency.

F. A joint report or concurrent report accepted by the commissioner pursuant to this Section may be accepted as an official report of the office for purposes of this Chapter.

G.(1) To efficiently and effectively enforce the provisions of this Chapter and to minimize regulatory burdens, the commissioner may participate in a multistate examination and investigation process for licensees that hold licenses in this state and other states.

(2) As a participant in any mulitistate examination or investigation, the commissioner may, to the extent provided by law, do all of the following:

(a) Cooperate, coordinate, and share information with other state regulators of virtual currency business activities.

(b) Enter into written cooperation, coordination, or information-sharing contracts or agreements with organizations made up of other state governmental regulators of virtual currency business activities.

(c) Cooperate, coordinate, and share information with organizations made up of other state governmental regulators of virtual currency business activities, if the organizations agree in writing to maintain confidentiality and security of shared information.

(3) Nothing in this Section shall constitute a waiver of the commissioner's authority to do any of the following:

(a) Conduct any examination or investigation authorized by law.

(b) Otherwise take any independent action authorized by law or any rule promulgated in accordance with the Administrative Procedure Act.

(c) Enforce compliance of any order issued pursuant to this Chapter.

(4) The following shall not constitute a waiver of any examination fee provided pursuant to this Chapter or any rule promulgated in accordance with the Administrative Procedure Act:

(a) The commissioner's participation in any joint examination or investigation.

(b) The commissioner's acceptance of an examination or investigative report conducted and prepared by other state or federal regulators of virtual currency business activity.

Acts 2020, No. 341, §1; Acts 2023, No. 331, §1, eff. June 13, 2023; Acts 2024, No. 159, §1; Acts 2024, No. 700, §2.

NOTE: The provisions of Acts 2023, No. 331, will terminate on July 1, 2027. See Acts 2024, No. 700.

NOTE: The provisions of Acts 2023, No. 331, have no termination date. See Acts 2024, No. 159.

§ 6:1391.1 Books, records, and accounts

A. Any licensee engaging in virtual currency business activities in this state shall maintain and preserve the books, records, and accounts of its virtual currency business activities, pursuant to R.S. 6:1391, for a period of five years or longer, if required by the commissioner to resolve any examination, investigation, or complaint.

B. The books, records, and accounts to be maintained by each licensee shall include all of the following:

(1) For each transaction:

(a) The amount, date, and precise time of the transaction.

(b) Any payment instructions for the transaction.

(c) The total amount of fees and charges received and paid to, by, or on behalf of the licensee.

(d) The names, account numbers, and physical address of the parties to the transactions, including any customers and account holders of the licensee who are residents.

(2) A general ledger containing all assets, liabilities, ownership equity, income, and expense accounts.

(3) Bank statements and bank reconciliation records.

(4) Any statement and valuation provided to customers and account holders.

(5) Records or minutes of meetings of the board of directors, or an equivalent governing body.

(6) Records demonstrating compliance with applicable state and federal anti-money laundering laws, rules, and regulations, including customer and account holder identification and verification documents, records linking customers and account holders to their respective accounts and balances, and a record of any compliance breaches.

(7) Communications and documentation related to investigations of customer and account holder complaints and transaction error resolutions.

(8) Any other books, records, and accounts as the commissioner may require.

Acts 2023, No. 331, §1, eff. June 13, 2023; Acts 2024, No. 159, §1; Acts 2024, No. 700, §2.

NOTE: The provisions of Acts 2023, No. 331, will terminate on July 1, 2027. See Acts 2024, No. 700.

NOTE: The provisions of Acts 2023, No. 331, have no termination date. See Acts 2024, No. 159.

§ 6:1391.2 Compliance policies and procedures

A. Any licensee engaging in virtual currency business activity in this state shall adopt and implement appropriate compliance policies and procedures, as part of the required books, records, and accounts, as determined by the commissioner by rule or pursuant to this Chapter.

B. The policies and procedures shall be in writing and reviewed and approved by the licensee's board of directors or an equivalent governing body and include, at a minimum, policies and procedures covering anti-fraud, anti-money laundering, cybersecurity, privacy, and information security, and such other policies and procedures as may be required by the commissioner by rule or pursuant to this Chapter.

C. A licensee shall designate a qualified individual or individuals who is responsible for coordinating and monitoring compliance with this Section and all other applicable state and federal laws, rules, and regulations.

Acts 2023, No. 331, §1, eff. June 13, 2023; Acts 2024, No. 159, §1; Acts 2024, No. 700, §2.

NOTE: The provisions of Acts 2023, No. 331, will terminate on July 1, 2027. See Acts 2024, No. 700.

NOTE: The provisions of Acts 2023, No. 331, have no termination date. See Acts 2024, No. 159.

§ 6:1392 Enforcement power of the commissioner

A. For purposes of this Chapter, "enforcement action" means an action or actions by the commissioner to enforce the requirements of this Chapter, including any of the following:

(1) Suspend or revoke a license pursuant to the provisions of this Chapter.

(2) Order a person to cease and desist from doing virtual currency business activity with, or on behalf of, a resident.

(3) Request the court to appoint a receiver for the assets of a person doing virtual currency business activity with, or on behalf of, a resident.

(4) Request the court to issue temporary, preliminary, or permanent injunctive relief against a person doing virtual currency business activity with, or on behalf of, a resident.

(5) Assess civil money penalties.

(6) Recover on the surety bond provided pursuant to R.S. 6:1386 and initiate a plan to distribute the proceeds for the benefit of a resident injured by a violation of any provision of this Chapter.

(7) Impose necessary or appropriate conditions on the conduct of virtual currency business activity with, or on behalf of, a resident.

B. Any enforcement action pursuant to this Section may be supplemented by the exercise of any other enforcement power by the commissioner as may be authorized by this Title or any other Title of the Louisiana Revised Statutes of 1950.

Acts 2020, No. 341, §1; Acts 2023, No. 331, §1, eff. June 13, 2023; Acts 2024, No. 159, §1; Acts 2024, No. 700, §2.

NOTE: The provisions of Acts 2023, No. 331, will terminate on July 1, 2027. See Acts 2024, No. 700.

NOTE: The provisions of Acts 2023, No. 331, have no termination date. See Acts 2024, No. 159.

§ 6:1393 Violations

A. The office may take an enforcement action against a licensee or person who is not a licensee but is engaging in virtual currency business activity with, or on behalf of, a resident in any of the following instances:

(1) The licensee or person violates any of the provisions of this Chapter or any rule or regulation promulgated or any order, including but not limited to a cease and desist order or subpoena, issued pursuant to this Chapter.

(2) The licensee or person violates any provision of a voluntary consent or compliance agreement that has been entered into with the commissioner.

(3) The licensee or person, in the conduct of its virtual currency business activity with, or on behalf of, a resident, engages in any of the following:

(a) An unsafe or unsound act or practice.

(b) An unfair or deceptive act or practice.

(c) Fraud or intentional misrepresentation.

(d) Another dishonest act.

(e) Misappropriation of legal tender, virtual currency, or other value held by a fiduciary.

(4) The licensee or person does not cooperate substantially with an investigation by the office, fails to pay a fee, or fails to submit a report or documentation.

(5) If any of the following occurs:

(a) The licensee or person becomes insolvent.

(b) The licensee or person makes a general assignment for the benefit of its creditors.

(c) The licensee or person becomes the debtor, alleged debtor, respondent, or person in a similar capacity in a case or other proceeding under any bankruptcy, reorganization, arrangement, readjustment, insolvency, receivership, dissolution, liquidation, or similar law and does not obtain from the court, within a reasonable time, confirmation of a plan or dismissal of the case or proceeding.

(d) The licensee or person applies for, or permits the appointment of, a receiver, trustee, or other agent of a court for itself or for a substantial part of its assets.

(6) The licensee or person has knowingly provided or caused to be provided a material misrepresentation to the commissioner, any false or fraudulent material fact, or any false or fraudulent financial statement or has suppressed or withheld from the commissioner any information which if submitted by the licensee would have resulted in a denial of the license application.

(7) The licensee or person refuses to permit an examination by the commissioner of the books and affairs or has refused or failed within a reasonable time to furnish any information or make any report that may be required by the commissioner pursuant to the provisions of this Chapter.

(8) The licensee or person fails to maintain records as required by the commissioner after being given written notice to the last address of record and thirty days within which to correct the failure. The commissioner may grant up to two thirty-day extensions within which to correct the recordkeeping violation.

(9) The licensee or person continues in office any individual with power to direct the management or policies of a person regulated by this Chapter, including but not limited to any officer, director, or manager, if such individual is convicted of, pleads guilty to, or is found guilty after a plea of nolo contendere of any felony and has been adjudicated guilty in any state, federal, foreign, or military court.

(10) The licensee or person violates any provision of a regulatory or prohibitory statute by the government agency responsible for determining such violations.

(11) The licensee or person misrepresents material facts or makes a false promise likely to influence, persuade, or induce a resident to engage in virtual currency business activity.

(12) The licensee or person misrepresents or conceals a material fact, term, or condition of a transaction to which he is a party pertinent to a resident to engage in virtual currency business activity.

(13) The licensee or person knowingly engages in any transaction, practice, or course of business which perpetrates a fraud upon any person in connection with engaging in virtual currency business activity.

(14) The licensee or person fails to exchange, transfer, or store, without just cause, any funds in accordance with any agreement connected with a virtual currency business activity transaction.

(15) The licensee or person fails to account for or deliver to any person any assets obtained in connection with a virtual currency business activity transaction, including but not limited to legal tender, virtual currency, precious metals, and electronic certificates.

(16) The licensee or person fails to pay any fee, civil money penalty, cost, or assessment imposed pursuant to this Chapter or by any rule or regulation promulgated in accordance with this Chapter.

(17) The licensee or person violates the written restrictions or conditions under which the license was issued.

(18) The licensee or person fails, after notice and without lawful excuse, to obey any order or subpoena issued by the commissioner.

(19) The commissioner discovers any fact or condition currently exists that, if it had existed at the time of the original application for licensure, would have warranted the denial of the application.

B.(1) Notwithstanding any other law to the contrary, and in addition to any other authority conferred upon the commissioner by any other provision of law, the commissioner may, upon discovery, order an immediate suspension of the license of any person licensed pursuant to this Chapter who does any of the following:

(a) Fails to maintain a surety bond or fails to meet the tangible net worth requirements in any manner as provided for pursuant to R.S. 6:1386.

(b) Commits material violations pursuant to this Chapter such that, in the opinion of the commissioner, the public safety and welfare demand that emergency action be taken.

(c) Submits a payment of any fee for any application, notification, examination, investigation, late fee, or penalty that is returned, declined, denied, or otherwise not paid in full for any reason.

(d) Is convicted of a felony that would have prohibited the issuance or renewal of the license.

(e) Has his license to engage in virtual currency business activities suspended or revoked in another jurisdiction.

(2) A person whose license is suspended pursuant to this Subsection shall have thirty days from the date of the order to request a hearing in accordance with the Administrative Procedure Act. Failure to timely request a hearing shall constitute a waiver of all hearing rights regarding the suspension.

C. In addition to any other authority conferred upon the commissioner by this Chapter or this Title, the commissioner may issue a cease and desist order, order refunds of any unauthorized portion of any fee, or charge any person who collects in violation of this Chapter and may impose a civil money penalty as determined by the commissioner by rule upon any person who is found to have violated any of the provisions of this Chapter or any rule or regulation promulgated in accordance with this Chapter. Each separate violation shall subject the person to a civil money penalty, and each day the person acts without complying with the provisions of this Chapter, or rules or regulations promulgated in accordance with this Chapter, shall constitute a separate violation.

D. The violations listed in this Subsection are nonexclusive and are in addition to and exist independent of any violations set forth in other provisions of this Chapter. Failure to comply with any provisions set forth in this Chapter may serve as a basis for any enforcement or other action authorized to the commissioner under this Title. It shall be a violation of this Chapter for a person engaged in virtual currency business activity pursuant to this Chapter to do any of the following:

(1) Directly or indirectly employ any scheme, device, or artifice to defraud or mislead any resident, when such person knew or should have known that such scheme, device, or artifice was defrauding or misleading.

(2) Engage in any unfair or deceptive practice toward any resident.

(3) Fail to comply with this Chapter, any rules or regulations promulgated pursuant to this Chapter, the laws of this state, or federal law, including the rules and regulations issued thereunder, applicable to any virtual currency business activity.

(4) Negligently make any false statement, or knowingly and willfully make any omission of material fact, in connection with any information or reports filed with a state or federal government agency or the NMLS or in connection with any investigation conducted by the commissioner or any other state or federal government agency.

(5) Fail to truthfully account for any assets in connection with any virtual currency business activity with, or on behalf of, a resident.

E. The commissioner may report apparent violations to other appropriate state and federal regulators, the NMLS, federal law enforcement agencies, the attorney general, or the district attorney of the appropriate parish, who may institute any proceeding as he considers appropriate.

F. Advisory opinions and interpretations of the office shall not be considered rules requiring compliance with the rulemaking process of the Administrative Procedure Act. The commissioner and the employees of the office shall have no liability to any person with respect to an advisory opinion or interpretation issued in connection with this Chapter.

G. All of the grounds for enforcement action listed in Subsection A of this Section are violations of this Chapter and may serve as the basis for any other enforcement action provided to the commissioner by this Title.

H. The commissioner may share information about any person who is licensed or required to be licensed pursuant to this Chapter with any state or federal agency also having jurisdiction over the virtual currency business activities of that person.

I. Any licensee whose license issued pursuant to this Chapter has been revoked for any reason may not reapply for a license until at least five years have elapsed from the date of the order of revocation, unless the commissioner, in his sole discretion, prescribes an earlier or later date. For purposes of this Subsection, the order is considered to be the commissioner's notification of revocation of the license. For the purpose of this Subsection, the term "licensee" shall include the licensee, owners of ten percent or more, and its members if the licensee is a limited liability company, its partners if the licensee is a partnership, its officers and directors if the licensee is a corporation, and any other person determined by the commissioner, in his sole discretion, to be closely related to the licensee.

Acts 2020, No. 341, §1; Acts 2023, No. 331, §1, eff. June 13, 2023; Acts 2024, No. 159, §1; Acts 2024, No. 700, §2.

NOTE: The provisions of Acts 2023, No. 331, will terminate on July 1, 2027. See Acts 2024, No. 700.

NOTE: The provisions of Acts 2023, No. 331, have no termination date. See Acts 2024, No. 159.

§ 6:1393.1 Required disclosures

A. Any licensee engaging in virtual currency business activity as defined in R.S. 6:1382 in this state shall provide accurate and appropriate disclosures to residents as it relates to the exchanging, transferring, or storing of virtual currency through the licensee. Failure to provide the disclosures required by this Section shall be a violation of this Chapter.

B. Disclosures shall be made separately from any other information provided by the licensee to a resident and shall be clear, conspicuous, and in legible writing in the English language.

C. Without limitation, the commissioner may require additional disclosures by rule or regulation as considered necessary and appropriate.

D. The disclosures shall describe all material risks associated with the licensee's virtual currency products, services, and activities and virtual currency generally, including but not limited to the following:

(1) Virtual currency is not legal tender in the United States, is not backed by the United States government, and accounts and value balances are not subject to Federal Deposit Insurance Corporation or Securities Investor Protection Corporation protections.

(2) Legislative and regulatory changes or actions at the state, federal, or international level may adversely affect the value of virtual currency.

(3) Transaction in virtual currency may be irreversible, and accordingly, losses due to fraudulent or accidental transactions may not be recoverable.

(4) Some virtual currency transactions may be immediately effective when recorded on a public ledger, which is not necessarily the date or time that the resident initiates the transaction.

(5) The value of virtual currency may be derived from the continued willingness of market participants to exchange legal tender for virtual currency, which may result in the potential for permanent and total loss of value of a particular virtual currency if the market for the virtual currency declines or collapses for an extended period of time.

(6) Any surety bond required by this Chapter for the benefit of residents may not be sufficient to cover all losses incurred by the residents.

(7) The residents should perform research before purchasing or investing in virtual currency.

(8) The circumstances under which the licensee will, in the ordinary course of business, disclose the resident's financial and account information to third parties.

E. When opening a new account, and prior to entering into an initial transaction with, for, or on behalf of a resident, each licensee shall disclose in clear, conspicuous, and legible writing in the English language all relevant terms and conditions associated with its virtual currency products, services, and activities and virtual currency generally, including but not limited to the following:

(1) The resident's liability for unauthorized virtual currency transactions.

(2) The resident's right to stop payment of a preauthorized virtual currency transfer and the procedure to initiate the stop-payment order.

(3) Under what circumstances the licensee will, absent a court or government order, disclose information concerning the resident's account to third parties.

(4) The resident's right to receive periodic account statements and valuations from the licensee.

(5) The resident's right to receive a receipt, trade ticket, or other evidence of a transaction.

(6) Any other disclosures as are customarily given in connection with the opening of resident accounts.

F. Prior to each transaction in virtual currency with, for, or on behalf of a resident, each licensee shall furnish to each such customer or account holder a written disclosure in clear, conspicuous, and legible writing in the English language containing the terms and conditions of the transaction, including but not limited to the following:

(1) The amount of the transaction.

(2) Any fees, expenses, and charges borne by the resident, including applicable exchange rates.

(3) The type of the virtual currency transaction.

(4) A notice that once executed, the transaction is not reversible.

G. Each licensee shall ensure that all disclosures required in this Section are acknowledged as received by the resident.

H. Upon completion of any transaction, each licensee shall provide to the resident a receipt containing all of the following information:

(1) The name and contact information of the licensee, to answer questions and register complaints.

(2) The type, value, date, and precise time of the transaction.

(3) The fee charged.

(4) The exchange rate, if applicable.

(5) A statement of the liability of the licensee for nondelivery or delayed delivery.

(6) A statement of the refund policy of the licensee.

(7) Any additional information the commissioner may require by rule.

I. Each licensee shall make available to the office, upon request, the form of the receipts it is required to provide to a resident in accordance with Subsection H of this Section.

J. The owner or operator of a virtual currency kiosk shall post on each kiosk in clear, conspicuous, and legible writing in the English language a notice with at least twenty-point font that reads: "WARNING: No state or government official will ever request that cash be deposited into a Crypto ATM. Call your local sheriff or police department before putting cash into this machine if you believe you might be the victim of fraud or a scam."

Acts 2023, No. 331, §1, eff. June 13, 2023; Acts 2024, No. 159, §1; Acts 2024, No. 700, §2; Acts 2025, No. 369, §1.

NOTE: The provisions of Acts 2023, No. 331, will terminate on July 1, 2027. See Acts 2024, No. 700.

NOTE: The provisions of Acts 2023, No. 331, have no termination date. See Acts 2024, No. 159.

§ 6:1394 Implementation; reporting requirements

A. The commissioner shall adopt rules, in accordance with the Administrative Procedure Act, to implement and enforce the provisions of this Chapter and may issue guidance as appropriate.

B. In addition to any other powers the commissioner may be authorized to exercise pursuant to this Title, the commissioner may adopt and implement emergency rules as the commissioner considers necessary and appropriate to prevent or terminate any condition the commissioner reasonably considers to create an emergency relative to a particular licensee or to licenses in general, including but not limited to suspending the issuance or renewal of licenses or suspending some or all virtual currency business activities in this state.

C. In order to carry out the purposes of this Chapter, the commissioner may do all of the following:

(1) Enter into agreements or relationships with other government officials, federal and state regulatory agencies, and regulatory associations in order to improve efficiencies and reduce regulatory burden by standardizing methods or procedures and sharing records or related information obtained in accordance with this Chapter.

(2) Use, hire, contract, or employ analytical systems, methods, or software in examinations or investigations pursuant to this Chapter.

(3) Consider, accept, and rely upon licensing, examination, or investigative reports prepared by other government agencies or officials within or outside the state.

(4) Consider, accept, and rely upon audit reports prepared by an independent certified public accountant or other qualified third-party auditor for any person subject to the provisions of this Chapter and incorporate all or part of such audit reports in the office's report of examination or investigation.

D.(1) The commissioner shall report all of the following biannually to the House Committee on Commerce and the Senate Committee on Commerce, Consumer Protection and International Affairs:

(a) The number of applications for each type of license.

(b) The number of applicants who currently have a money transmission license.

(c) The number of licenses granted.

(d) The number of applicants who have been denied.

(e) A list of fees that were assessed during application.

(2) The biannual report shall be submitted on the first day of September and March of each calendar year.

Acts 2020, No. 341, §1; Acts 2023, No. 331, §1, eff. June 13, 2023; Acts 2024, No. 159, §1; Acts 2024, No. 700, §2.

NOTE: The provisions of Acts 2023, No. 331, will terminate on July 1, 2027. See Acts 2024, No. 700.

NOTE: The provisions of Acts 2023, No. 331, have no termination date. See Acts 2024, No. 159.

§ 6:1395 Blockchain analytics

All virtual currency kiosk operators shall use blockchain analytics software to assist in the prevention of sending purchased virtual currency from a virtual currency kiosk operator to a digital wallet known to be affiliated with fraudulent activity at the time of a transaction. The commissioner may request evidence from any virtual currency kiosk operator of current use of blockchain analytics.

Acts 2025, No. 369, §1.

§ 6:1396 Anti-fraud policy

A. All virtual currency kiosk operators shall take reasonable steps to detect and prevent fraud, including establishing and maintaining a written anti-fraud policy.

B. The anti-fraud policy shall include but not be limited to all of the following:

(1) The identification and assessment of fraud related risk areas.

(2) Procedures and controls to protect against identified risks.

(3) Allocation of responsibility for monitoring risks.

(4) Procedures for the periodic evaluation and revision of the anti-fraud procedures, controls, and monitoring mechanisms.

Acts 2025, No. 369, §1.

§ 6:1397 Enhanced due diligence policy

A. Each virtual currency kiosk operator shall implement, maintain, and enforce a written Enhanced Due Diligence Policy. Such a policy shall be reviewed and approved by the virtual currency kiosk operator's board of directors or an equivalent governing body of the virtual currency kiosk operator.

B. The Enhanced Due Diligence Policy shall identify at minimum individuals who are at risk of fraud based on age or mental capacity.

Acts 2025, No. 369, §1.

CHAPTER 22 VIRTUAL CURRENCY CUSTODY SERVICES

§ 6:1401 Definitions

As used in this Chapter, the following words have the following meanings:

(1) "Custody services" means the safekeeping or custody of virtual currency or other assets by a financial institution or trust company.

(2) "Financial institution" means a federally insured depository institution chartered pursuant to the laws of this state, another state, or the United States.

(3) "Self-assessment" means either of the following:

(a) A financial institution's or trust company's voluntary, self-initiated internal assessment, audit, or review of the financial institution or trust company and its practices, policies, and procedures.

(b) A financial institution's or trust company's voluntary, self-initiated assessment, audit, or review of the practices, policies, and procedures of a person acting under contract, directly or indirectly, as the financial institution's or trust company's service provider, including mortgage servicers and subservicers, credit and debit card processors, and providers of loan document systems.

(4) "Trust company" means a corporation or a limited liability trust company organized in accordance with this Title, the laws of another state, or pursuant to the laws of the United States, including a trust company organized pursuant to the laws of this state before June 27, 2003, or an entity chartered to act as a fiduciary that is neither a depository institution nor a foreign bank.

(5) "Virtual currency" has the same meaning as provided for in R.S. 6:1382.

Acts 2022, No. 509, §1.

§ 6:1402 Provision of virtual currency custody services

A. A financial institution or trust company may provide its customers with virtual currency custody services if the financial institution or trust company has adequate protocols in place to effectively manage risks and comply with applicable laws. A financial institution or trust company may provide virtual currency custody services through third-party service providers. Prior to a financial institution or trust company offering virtual currency custody services, the financial institution or trust company shall carefully examine the risks involved in offering such services through a methodical self-assessment process. If a financial institution or trust company decides to offer such services, the financial institution or trust company shall do all of the following:

(1) Implement effective risk management systems and controls to measure, monitor, and control relevant risks associated with custody of digital assets such as virtual currency.

(2) Confirm that it has adequate insurance coverage for such services.

(3) Maintain a service provider oversight program to address risks to service provider relationships as a result of engaging in virtual currency custody services.

B.(1) Consistent with authority provided through the entity's charter, a financial institution or trust company may provide virtual currency custody services in either a nonfiduciary or fiduciary capacity.

(2) In providing such services in a nonfiduciary capacity, the financial institution or trust company shall take possession of the customer's asset for safekeeping while legal title remains with the customer. The customer shall retain direct control over the keys associated with his virtual currency.

(3) In providing such services in a fiduciary capacity, a financial institution or trust company is required to possess trust powers as provided for in R.S. 6:241, 575, and 731. Acting in a fiduciary capacity, the financial institution or trust company shall require customers to transfer their virtual currencies to the control of the financial institution or trust company by creating new private keys to be held by the financial institution or trust company. In its fiduciary capacity, a financial institution or trust company shall have authority to manage virtual currency assets as it would any other type of asset held in such capacity.

Acts 2022, No. 509, §1.

CHAPTER 23 STUDENT LOAN SERVICERS

§ 6:1411 Definitions

As used in this Chapter, the following terms have the following meanings:

(1) "Nonconforming payment" means a payment made by a student loan borrower that is more or less than the required payment for a student education loan account.

(2) "Service" or "servicing" means:

(a) Receiving any scheduled periodic payments from a student loan borrower or notification of such payments and applying payments to the student loan borrower's account pursuant to the terms of the student education loan or a governing contract.

(b) Maintaining account records for the loan and communicating with the student loan borrower regarding the loan, on behalf of the loan's holder, during a period when no payment is required on a student education loan.

(c) Interactions with a student loan borrower, including activities to help prevent default on obligations arising from student education loans, conducted to facilitate the activities described in Subparagraphs (a) and (b) of this Paragraph.

(3)(a) "Student education loan" means any of the following:

(i) A loan that is made, insured, or guaranteed under Title IV of the Higher Education Act of 1965, as amended.

(ii) A loan that is extended to an individual with the express expectation that the funds extended shall be used in whole or in part to pay expenses that are included as part of the cost of attendance of a student as defined in 20 U.S.C. 1087, regardless of whether the loan is provided through the educational institution that the student loan borrower attends or directly to the student loan borrower from the lender.

(iii) A loan that is extended in order to refinance or consolidate a consumer's existing student education loan.

(b) The term does not include any of the following, regardless of the purpose for the loan:

(i) A loan under an open-end credit plan as defined in 12 CFR 1026.2.

(ii) A loan secured by real property.

(4) "Student loan borrower" means a resident of this state who meets either of the following criteria:

(a) Has received or agreed to pay a student education loan.

(b) Shares repayment responsibility with a resident described in Subparagraph (a) of this Paragraph.

(5) "Student loan servicer" means a person or entity who is engaged in the business of servicing a student education loan owed by a student loan borrower.

Acts 2022, No. 710, §1.

§ 6:1412 Duties of student loan servicers

A. Except as required by a court order or federal law, a student loan servicer shall not do any of the following:

(1) Employ, directly or indirectly, any scheme, device, or artifice to mislead a student loan borrower.

(2) Engage in any unfair, abusive, or deceptive trade practice toward any person.

(3) Misrepresent information or omit any material information in connection with the servicing of a student education loan, including but not limited to the following:

(a) Any fee owed by a student loan borrower.

(b) Any payment due by a student loan borrower.

(c) The appropriateness or availability of a student loan borrower's repayment options.

(d) The terms and conditions of the student education loan.

(e) The student loan borrower's obligations pursuant to the student education loan.

(4) Obtain property by misrepresentation of fact or omission of material fact.

(5) Allocate a nonconforming payment in a manner other than as directed by the student loan borrower if, in writing or electronically, the student loan borrower does any of the following:

(a) Makes a one-time direction for the allocation of future payments.

(b) Directs an allocation of a payment at the time the payment is made.

(c) Directs an allocation in response to an inquiry by the student loan servicer.

(d) Changes an existing direction for the allocation of future payments.

(6) Misapply or refuse to correct a misapplication of a payment from a student loan borrower.

(7) Provide inaccurate information to a consumer reporting agency or refuse to correct inaccurate information provided to a consumer reporting agency.

(8) If a student loan servicer regularly reports information to a consumer reporting agency, fail to report the favorable history of a student loan borrower to a nationally recognized consumer reporting agency at least once a year.

(9) Refuse to communicate with an authorized representative of a student loan borrower who provides a written authorization signed by the student loan borrower, except as provided for in Subsection B of this Section.

(10) Negligently make a false statement or omit a material fact in connection with any informational report filed with, or any investigation conducted by, a state or local government agency.

B. A student loan servicer may adopt procedures to verify that an authorized representative of a student loan borrower is authorized to act on behalf of the student loan borrower.

Acts 2022, No. 710, §1.

§ 6:1413 Written inquiries and complaints

A. A student loan servicer shall acknowledge receipt of a written inquiry or complaint from a student loan borrower or the authorized representative of a student loan borrower within ten days after receiving the inquiry or complaint.

B. Unless a response to the written inquiry is included in the acknowledgment required pursuant to Subsection A of this Section, a student loan servicer shall provide information responding to a written inquiry or complaint received pursuant to Subsection A of this Section within thirty days after receiving the inquiry or complaint.

C. If a written inquiry or complaint received pursuant to Subsection A of this Section relates to a student loan borrower's account balance, the information provided pursuant to Subsection B of this Section is to include either of the following:

(1) A statement that the student loan servicer has corrected the account balance.

(2) An explanation of why the student loan servicer believes that the student loan borrower's account is correct.

D. If a student loan borrower requests a document concerning the account of the student loan borrower that is in the possession or control of a student loan servicer, the student loan servicer shall provide the document within thirty days after receiving the request.

E. If a student loan servicer receives a nonconforming payment, the student loan servicer shall do all of the following:

(1) Notify the student loan borrower that the payment is a nonconforming payment within ten days after receiving the payment.

(2) Ask the student loan borrower how he would like the student loan servicer to apply the nonconforming payment to the student loan borrower's account.

Acts 2022, No. 710, §1.

CHAPTER 24 PRIVATE STUDENT LOAN REGISTRY

§ 6:1421 Definitions

For purposes of this Chapter, the following words have the following meanings:

(1) "Commissioner" means the commissioner of the Office of Financial Institutions.

(2) "Private education lender" means any person engaged in the business of securing, making, or extending a private education loan, or any holder of a private education loan. "Private education lender" shall not include any person who services a private education loan, to the extent such person does not also secure, make, extend, or own the loan. "Private education lender" shall not include any federally insured financial institution, its subsidiaries, and affiliates.

(3) "Private education loan" means an extension of credit or a debt or obligation owed or incurred by a consumer, contractual or otherwise, contingent or absolute, that meets all of the following criteria:

(a) Is not made, insured, or guaranteed under Title IV of the Higher Education Act of 1965, 20 U.S.C. 1070 et seq.

(b) Is extended to or owed or incurred by a consumer expressly, in whole or in part, for postsecondary education expenses, regardless of whether the extension of credit or debt or obligation owed or incurred is provided by the provider of postsecondary education that the student attends.

(c) Does not include any loan that is secured by immovable property or a dwelling.

(4) "Provider of postsecondary education" means a person engaged in the business of providing postsecondary education, via correspondence, online, or in this state, to a person located in this state.

Acts 2022, No. 715, §1.

§ 6:1422 Private education lender registry

A. No person shall engage in business as a private education lender in this state without first satisfying the requirements set forth in Subsection B of this Section.

B. A private education lender operating in this state shall do all of the following:

(1) Register with the commissioner pursuant to any registration procedures set forth by the commissioner by rule, which may include the payment of a fee set by the commissioner by rule and registration through the Nationwide Multistate Licensing System and Registry. The commissioner may prescribe an alternative registration process and fee structure for a provider of postsecondary education. The registration requirements of this Paragraph shall not apply to a licensed lender pursuant to R.S. 9:3557 or any bank, savings bank, savings and loan association, or credit union operating pursuant to authority granted by the commissioner.

(2) Provide the commissioner with the following documents and information:

(a) A list of all schools at which the private education lender has provided a private education loan to a student residing in this state.

(b) The total number and dollar amount of private education loans made annually to students residing in this state.

(c) The total number and dollar amount of private education loans made annually at each school as identified in Subparagraph (a) of this Paragraph.

(d) The range of starting interest rates and percentage of applicants who receive those rates.

(e) The default rate for borrowers obtaining private education loans from the private education lender, if applicable, including the default rate for private education loans made to students for each school listed pursuant to Subparagraph (a) of this Paragraph.

(f) A copy of the promissory note, agreement, contract, or other instrument used by a private education lender during the previous year to substantiate that a private education loan has been extended to the consumer or that a consumer owes a debt to the private education lender.

(g) The total number and dollar amount of private education loans made with a cosigner annually.

(3) Provide to the commissioner the documents and information enumerated in Paragraph (2) of this Subsection pursuant to any procedures set forth by the commissioner, which may include reporting through the Nationwide Multistate Licensing System and Registry.

C. Not later than one year following enactment of this Chapter, the commissioner shall create a publicly accessible website that includes the following information about private education lenders registered in this state:

(1) The name, address, telephone number, and website for all registered private education lenders.

(2) A summary of the information required by Paragraph (B)(2) of this Section.

(3) Copies of all promissory notes, agreements, contracts, or other instruments provided to the commissioner as required by Subparagraph (B)(2)(f) of this Section.

Acts 2022, No. 715, §1.

§ 6:1423 Violations

The commissioner may enforce the provisions of this Chapter using the commissioner's authority pursuant to R.S. 6:121.1. Each violation of this Chapter, including any order, rule, or regulation made or issued pursuant to this Chapter, shall constitute a separate offense.

Acts 2022, No. 715, §1.

§ 6:1424 Rules

The commissioner shall promulgate rules as are necessary to implement the provisions of this Chapter.

Acts 2022, No. 715, §1.