The new bill specifies that a stock state banking corporation is to be created, organized, and governed, its business is to be conducted, and its directors are to be chosen, in the same manner as is provided under the general corporation law, to the extent it is not inconsistent with the Ohio banking law.
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'Review of The New Bill in Ohio Banking'
Existing law requires any persons proposing to incorporate a stock state bank to submit an application to the Superintendent for approval of the bank. Certain information must be included in the application, including the proposed articles of incorporation, application for reservation of a name, and the location of the proposed initial banking office. The new bill adds that an application must also include the proposed code of regulations and any other information required by the Superintendent.
Existing law sets forth procedures under which the incorporators, before any subscription to shares has been received, may adopt amendments to the bank’s articles of incorporation or amended articles of incorporation. Generally, upon their adoption of an amendment, the incorporators must send to the Superintendent a copy of the resolution adopting the amendment and a statement of the manner of and basis for its adoption. The Superintendent is required to conduct an examination to determine if (1) the amendment and the manner and basis for its adoption comply with the applicable statutory requirements and (2) it will not adversely affect the interests of the bank’s depositors and creditors and the convenience and needs of the public. Within 60 days after receiving the amendment, the Superintendent must approve or disapprove it.
The new bill revises these procedures to require the Superintendent’s prior approval of a proposed amendment by the incorporators. Under the new bill, if the incorporators propose the adoption of an amendment to a stock state bank’s articles of incorporation or amended articles of incorporation, the bank must send the Superintendent a copy of the proposed amendment for review and approval prior to adoption by the incorporators. Upon receiving the proposed amendment, the Superintendent is to conduct an examination to determine if (1) the proposed amendment complies with the applicable statutory requirements and (2) it will not adversely affect the interests of the bank’s depositors and creditors and the convenience and needs of the public. Within 45 days after receiving the proposed amendment, the Superintendent must notify the bank of the Superintendent’s approval or disapproval unless the Superintendent determines additional information is required. In that event, the Superintendent is to request the information in writing within 20 days after the date the proposed amendment was received. The bank has 30 days to submit the information. Within 45 days after the date the additional information is received, the Superintendent must notify the bank of the Superintendent’s approval or disapproval. If the proposed amendment is disapproved, the Superintendent is required to notify the bank of the reasons for the disapproval. If the Superintendent fails to approve or disapprove the amendment within the time period required, the proposed amendment is to be considered approved. The approval of a proposed amendment cannot, however, be construed or represented as an affirmative endorsement of the amendment by the Superintendent.
After the incorporators adopt the approved amendment, they must send the Superintendent a certificate containing a copy of the resolution adopting the amendment and a statement of the manner of and basis for its adoption. The Superintendent must then conduct an examination to determine if the manner of and basis for the adoption comply with the applicable statutory requirements. Within 30 days after receiving the certificate, the Superintendent is to approve or disapprove the amendment. If the amendment is approved, the Superintendent is to send a copy to the Secretary of State for filing. Upon filing, the amendment is considered effective. If the Superintendent fails to approve or disapprove the amendment within that 30-day period, the bank is to forward a copy to the Secretary of State for filing.
Current law requires each bank to have a code of regulations for its governance as a corporation, the conduct of its affairs, and the management of its property. The code of regulations must be consistent with Ohio law and the bank’s articles of incorporation. The new bill repeals provisions that specify:
- How the original code is to be adopted;
- How the shareholders may amend the code or adopt a new one;
- How notice of a shareholders” meeting to adopt an amendment to the code is to be given;
- What provisions may be included in the code;
- The procedures to be followed if the code is to be amended without a shareholders” meeting.
Existing law sets forth the procedures under which the shareholders, after subscriptions to shares have been received by the incorporators, may adopt amendments to the bank’s articles of incorporation or amended articles of incorporation. Generally, upon their adoption of an amendment, the bank must send to the Superintendent a copy of the resolution adopting the amendment and a statement of the manner of its adoption. The Superintendent is required to conduct an examination to determine if (1) the manner of its adoption complies with the applicable statutory requirements and (2) it will not adversely affect the interests of the bank’s depositors and creditors and the convenience and needs of the public. Within 60 days after receiving the amendment, the Superintendent must approve or disapprove it.
The new bill revises these procedures to require the Superintendent’s prior approval of a proposed amendment. Under the new bill, if the shareholders propose the adoption of an amendment to a stock state bank’s articles of incorporation or amended articles of incorporation, the bank must send the Superintendent a copy of the proposed amendment for review and approval prior to adoption by the shareholders.
Upon receiving the proposed amendment, the Superintendent is to conduct an examination to determine if (1) the proposed amendment complies with the applicable statutory requirements and (2) it will not adversely affect the interests of the bank’s depositors and creditors and the convenience and needs of the public. Within 45 days after receiving the proposed amendment, the Superintendent must notify the bank of the Superintendent’s approval or disapproval unless the Superintendent determines additional information is required.
In that event, the Superintendent is to request the information in writing within 20 days after the date the proposed amendment was received. The bank has 30 days to submit the information. Within 45 days after the date the additional information is received, the Superintendent must notify the bank of the Superintendent’s approval or disapproval.
If the proposed amendment is disapproved, the Superintendent is required to notify the bank of the reasons for the disapproval. If the Superintendent fails to approve or disapprove the proposed amendment within the required time period, it is to be considered approved. The approval of a proposed amendment cannot, however, be construed or represented as an affirmative endorsement of the amendment by the Superintendent.
After the shareholders adopt the approved amendment, the bank must send the Superintendent a certificate containing a copy of the resolution adopting the amendment and a statement of the manner of its adoption. The Superintendent must then conduct an examination to determine if the manner of adoption complies with the applicable statutory requirements. Within 30 days after receiving the certificate, the Superintendent is to approve or disapprove the amendment. If the amendment is approved, the Superintendent is to send a copy to the Secretary of State for filing. Upon filing, the amendment is considered effective. If the Superintendent fails to approve or disapprove the amendment within that 30-day period, the bank is to forward a copy to the Secretary of State for filing.
Currently, if the directors proposed the amendment to the bank’s articles of incorporation, the certificate sent to the Superintendent must be signed by “bank officers.” The new bill instead requires that it be signed by “the bank’s authorized representatives.”
The law currently permits the shareholders to adopt an amendment to the bank’s articles of incorporation to permit the bank to have authorized and unissued shares or treasury shares for a specific purpose. The new bill eliminates the requirement that there be a specific purpose for the shares.
Existing law sets forth the procedures under which the board of directors, after subscriptions to shares have been received by the incorporators, may adopt amendments to the bank’s articles of incorporation for certain purposes or adopt amended articles of incorporation. (For purposes of this discussion, they are collectively referred to as “amendments.”) Generally, upon the directors” adoption of an amendment, the bank must send the Superintendent a copy of the resolution adopting the amendment and a statement of the manner of and basis for its adoption. The Superintendent is required to conduct an examination to determine if (1) the amendment and the manner of and basis for its adoption comply with the applicable statutory requirements and (2) it will not adversely affect the interests of the bank’s depositors and creditors and the convenience and needs of the public. Within 60 days after receiving the amendment, the Superintendent must approve or disapprove it.
The new bill revises these procedures to require the Superintendent’s prior approval of a proposed amendment by the directors. Under the new bill, if the directors propose the adoption of an amendment to a stock state bank’s articles of incorporation or amended articles of incorporation, the bank must send the Superintendent a copy of the proposed amendment for review and approval prior to adoption by the directors.
Upon receiving the proposed amendment, the Superintendent is to conduct an examination to determine if (1) the proposed amendment complies with the applicable statutory requirements and (2) it will not adversely affect the interests of the bank’s depositors and creditors. Within 45 days after receiving the proposed amendment, the Superintendent must notify the bank of the Superintendent’s approval or disapproval unless the Superintendent determines additional information is required.
In that event, the Superintendent is to request the information in writing within 20 days after the date the proposed amendment was received. The bank has 30 days to submit the information. Within 45 days after the date the additional information is received, the Superintendent must notify the bank of the Superintendent’s approval or disapproval.
If the proposed amendment is disapproved, the Superintendent is required to notify the bank of the reasons for the disapproval. If the Superintendent fails to approve or disapprove the amendment within the required time period, it is to be considered approved. The approval of a proposed amendment cannot, however, be construed or represented as an affirmative endorsement of the amendment by the Superintendent.
After the directors adopt the approved amendment, the bank must send the Superintendent a certificate containing a copy of the resolution adopting the amendment and a statement of the manner of and basis for its adoption. The Superintendent must then conduct an examination to determine if the manner of and basis for the adoption complies with the applicable statutory requirements. Within 30 days after receiving the certificate, the Superintendent is to approve or disapprove the amendment. If the amendment is approved, the Superintendent is to send a copy to the Secretary of State for filing. Upon filing, the amendment is considered effective. If the Superintendent fails to approve or disapprove the amendment within that 30-day period, the bank is to forward a copy to the Secretary of State for filing.
Currently, upon the directors” adoption of an amendment to the article of incorporation, the certificate sent to the Superintendent must be signed by “bank officers.” The new bill instead requires that it be signed by “the bank’s authorized representatives.”
A bank’s shareholders are currently required to hold an annual meeting for purposes including the election of directors and the presentation of financial statements. The law specifies the manner in which written notice of the meeting is to be provided and the period of time for giving the notice. The new bill eliminates those specific requirements and, instead, provides that the meeting may be called for any of the reasons and in the manner set forth in the general corporation law. Notice of the meeting is also to be provided in accordance with that Law.
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Additionally, the new bill states that the requirements of this provision do not apply with respect to annual or special meetings of shareholders of a stock state bank that is wholly owned, except for directors” qualifying shares, if any, by a bank holding company or savings and loan holding company.
