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H0034........................................................by MR. SPEAKER
Requested by: Department of Finance
FINANCIAL HOLDING COMPANIES - Amends existing law to define "financial
holding companies"; to require a financial holding company to apply to the
Department of Finance for approval to commence activity or acquire a
company; and to provide that the director of the Department of Finance may
assess costs of examination against bank holding companies.
01/08 House intro - 1st rdg - to printing
Rpt prt - to Bus
02/16 Rpt out - rec d/p - to 2nd rdg
02/19 2nd rdg - to 3rd rdg
02/21 3rd rdg - PASSED - 60-0-10
AYES -- Barraclough, Barrett, Bedke, Bell, Bieter, Black, Boe, Bolz,
Bradford, Bruneel, Callister, Campbell, Chase, Clark, Crow, Cuddy,
Deal, Denney, Ellis, Ellsworth, Eskridge, Field(13), Field(20),
Gagner, Gould, Hadley, Hammond, Harwood, Henbest, Higgins, Jaquet,
Jones, Kellogg, Kendell, Kunz, Langford, Loertscher, Marley, McKague,
Meyer, Montgomery, Mortensen, Moss, Moyle, Pearce, Pischner, Pomeroy,
Raybould, Robison, Sali, Schaefer, Sellman, Shepherd, Smith, Smylie,
Stone, Swan, Tilman, Trail, Young
NAYS -- None
Absent and excused -- Collins, Hornbeck, Lake, Mader, Ridinger,
Roberts, Stevenson, Wheeler, Wood, Mr. Speaker
Floor Sponsor -- Deal
Title apvd - to Senate
02/22 Senate intro - 1st rdg - to Com/HuRes
03/14 Rpt out - rec d/p - to 2nd rdg
03/15 2nd rdg - to 3rd rdg
03/20 3rd rdg - PASSED - 35-0-0
AYES -- Andreason, Branch, Boatright, Brandt, Bunderson, Burtenshaw,
Cameron, Danielson, Darrington, Davis, Deide, Dunklin, Frasure,
Geddes, Goedde, Hawkins, Ingram, Ipsen, Keough, King-Barrutia, Lee,
Lodge, Noh, Richardson, Risch, Sandy, Schroeder, Sims, Sorensen,
Stegner, Stennett, Thorne, Wheeler, Whitworth, Williams,
NAYS -- None
Absent and excused -- None
Floor Sponsor -- Bunderson
Title apvd - to House
03/21 To enrol
03/22 Rpt enrol - Sp signed - Pres signed - to Gov
03/23 Governor signed
Session Law Chapter 137
Effective: 07/01/01
|||| LEGISLATURE OF THE STATE OF IDAHO |||| Fifty-sixth Legislature First Regular Session - 2001IN THE HOUSE OF REPRESENTATIVES HOUSE BILL NO. 34 BY MR. SPEAKER Requested by: Department of Finance 1 AN ACT 2 RELATING TO BANK HOLDING COMPANIES; AMENDING SECTION 26-501, IDAHO CODE, TO 3 DEFINE "FINANCIAL HOLDING COMPANIES" AND TO MAKE TECHNICAL CORRECTIONS; 4 AMENDING SECTION 26-503, IDAHO CODE, TO REQUIRE A FINANCIAL HOLDING COM- 5 PANY TO APPLY TO THE DEPARTMENT OF FINANCE FOR APPROVAL TO COMMENCE ACTIV- 6 ITY OR ACQUIRE A COMPANY; AND AMENDING SECTION 26-505, IDAHO CODE, TO PRO- 7 VIDE THAT THE DIRECTOR OF FINANCE MAY ASSESS COSTS OF EXAMINATIONS AGAINST 8 BANK HOLDING COMPANIES AND TO MAKE TECHNICAL CORRECTIONS. 9 Be It Enacted by the Legislature of the State of Idaho: 10 SECTION 1. That Section 26-501, Idaho Code, be, and the same is hereby 11 amended to read as follows: 12 26-501. DEFINITIONS. As used in this chapter, unless the context other- 13 wise requires: 14 (1) "Bank" shall mean any bank chartered under this act. 15 (2) "Company" shall mean any corporation, business trust, association, or 16 similar organization but shall not include: 17 (a)aAn individual; or 18 (b)aAny corporation the majority of shares of which are owned by the 19 United States or any state;. 20 (3) "Business trust" shall mean a business organization wherein a busi- 21 ness or other property is conveyed to trustees who manage the business or 22 other property for the benefit of the certificate or shareholders of the 23 trust. Business trust shall not include a voting trust. 24 (4) "Bank holding company" shall mean any company: 25 (a) Which directly or indirectly owns or controls twenty-four percent 26 (24%) or more of the voting shares of a bank; 27 (b) Which controls in any manner the election of the majority of the 28 directors of a bank; or 29 (c) For the benefit of whose shareholders or members twenty-four percent 30 (24%) or more of the voting shares of a bank is held by trustees; 31 For the purposes of any proceeding under subsection (4)(b) of this sec- 32 tion, there is a presumption that any company which directly or indirectly 33 owns, controls or has power to vote less than five percent (5%) of the voting 34 shares of a bank does not have control over that bank; and 35 (5) Notwithstanding the foregoing;: 36 (a) No estate, trust, guardianship, or conservatorship or fiduciary 37 thereof shall be a bank holding company by virtue of its ownership or con- 38 trol of shares of stock of a bank unless such trust is a business trust or 39 a voting trust which by its terms or by law does not expire within ten 40 (10) years from the effective date of the voting trust; 41 (b) No company shall be a bank holding company by virtue of its ownership 42 or control of shares acquired by it in connection with its underwriting of 43 bank shares and which are held only for such period of time as will permit 2 1 the sale thereof on a reasonable basis; and 2 (c) No company shall be a bank holding company by virtue of its ownership 3 or control of shares acquired and held in the ordinary course of securing 4 or collecting a debt previously contracted in good faith and which are 5 held only for such period of time as will permit the sale thereof on a 6 reasonable basis. 7 (6) "Financial holding company" shall mean a bank holding company that, 8 notwithstanding subsection (4) of this section, may engage in any activity, 9 and may acquire and retain the shares of any company engaged in any activity, 10 that the director determines, by rule or order: 11 (a) To be financial in nature or incidental to such financial activity; 12 or 13 (b) Is complementary to a financial activity and does not pose a substan- 14 tial risk to the safety or soundness of depository institutions or the 15 financial system in general. 16 SECTION 2. That Section 26-503, Idaho Code, be, and the same is hereby 17 amended to read as follows: 18 26-503. APPROVAL TO ACQUIRE A BANK -- REQUIREMENTS -- APPROVAL TO COM- 19 MENCE ACTION OR ACQUIRE A COMPANY. (1) A bank holding company shall apply to 20 the department of finance and receive the approval of the department of 21 finance prior to acquiring a bank. The application shall include such infor- 22 mation with respect to the financial condition and operations, management and 23 intercompany relationships of the bank to be acquired and the holding company 24 as the director may deem necessary or appropriate. In considering an applica- 25 tion to acquire a bank, the director shall consider at least: 26 (1a) The financial condition of the bank holding company and any banks 27 already owned by the holding company; 28 (2b) The probable effect of the acquisition on the holding company, any 29 banks already owned by the holding company and the bank which is to be 30 acquired; and 31 (3c) The effect of the acquisition on competition in the providing of 32 banking services. 33 (2) A financial holding company shall apply to the department of finance 34 and receive the approval of the department of finance prior to commencing any 35 activity or acquiring any company as described in section 26-501(6), Idaho 36 Code. 37 SECTION 3. That Section 26-505, Idaho Code, be, and the same is hereby 38 amended to read as follows: 39 26-505. DIRECTOR OF FINANCE -- REPORTS -- REQUIREMENTS. The director may 40 require reports made under oath to be filed in the department of finance to 41 keep it informed as to the operation of any bank holding company. The director 42 may make examinations of each bank holding company and each subsidiary thereof 43 under the provisions of section 26-1102, Idaho Code, the actual cost of which 44shallmay be assessed against and paid by such holding company. The director 45 may accept reports ofexaminationexaminations made by theFfederalRreserve 46Bboard, theCcomptroller of theCcurrency, or theFfederalDdepositIinsurance 47Ccorporation in lieu of making an examination by the department.
STATEMENT OF PURPOSE
RS 10524
Federal legislation, which became law in 1999, provided
for the modernization of the banking, insurance and
securities industries. That legislation is known as
the Gramm-Leach-Bliley Act of 1999. The act created
"financial holding companies", a specific type of bank
holding company which has greater powers than a typical
bank holding company. The purpose of this legislation is
to amend the Idaho Bank Act to allow for financial holding
companies at the state level.
This legislation will also make discretionary the imposition
of examination costs against a bank holding company. Examinations
of bank holding companies are typically performed as part of a
bank examination, for which the bank is assessed a fee. It would
be difficult in those situations to apportion the amount of time
spent on the holding company apart from the bank. The legislation
will eliminate that burden on the Department's staff and the
necessity of requiring two payments from the same bank.
FISCAL IMPACT
No fiscal impact.
CONTACT
Name: Kelly P. Robison
Agency: Department of Finance
Phone: 332-8032
Statement of Purpose/Fiscal Impact Bill No. H34