2005 California Financial Code Sections 99-151 CHAPTER 1. SCOPE AND DEFINITIONS

99.  This division is known and may be cited as the "Banking Law."
100.  This division is applicable to the following:
   (a) All corporations engaging in commercial banking, industrial
banking, or the trust business.
   (b) All national banking associations authorized to transact
business in this state to the extent that the provisions of this
division are not inconsistent with and do not infringe paramount
federal laws governing national banking associations.
   (c) All other corporations as shall subject themselves to the
special provisions and sections of this division.
   (d) All other persons, associations, copartnerships, or
corporations who, by violating any of its provisions, become subject
to the penalties provided for in this division.
100.5.  If and to the extent that any provision of this division is
preempted by federal law, the provision does not apply and shall not
be enforced.
101.  All provisions of law applicable to corporations generally
(including, but not limited to, the General Corporation Law (Division
1 (commencing with Section 100), Title 1 of the Corporations Code))
shall apply to banks.  However, whenever any provision of this
division or of any regulation or order issued under any provision
(other than this section) of this division applicable to banks is
inconsistent with any provision of law applicable to corporations
generally, such provision of this division or of such regulation or
order shall apply and such provision of law applicable to
corporations generally shall not apply.
102.  The word "bank" as used in this division means any
incorporated banking institution that shall have been incorporated to
engage in commercial banking business, industrial banking, or trust
business.
103.  Banks are divided into the following classes:
   (a) Commercial banks.
   (b) Industrial banks.
   (c) Trust companies.
105.  "Commercial bank" means a corporation organized for the
purpose of engaging in the commercial banking business.
105.2.  "Commercial banking business" includes, but is not limited
to, the business of soliciting, receiving, or accepting of money or
its equivalent on deposit as a regular business whether the deposit
is made subject to check or is evidenced by a certificate of deposit,
a passbook, a note, a receipt, or other writing, provided that
nothing herein shall apply to or include money or its equivalent left
in escrow, or left with an agent pending investment in real estate
or securities for, or on account of, his or her principal.  In
addition, "commercial banking business" means to lend money on the
security of real or personal property or without security; to
discount or deal in bills, notes, or other commercial paper; to buy
and sell for the account of customers, and, if eligible for
investment, for its own account, securities, gold and silver bullion,
foreign coins, and bills of exchange; and generally to transact a
commercial banking business.
105.5.  "Industrial bank" means a corporation organized for the
purpose of engaging in the industrial banking business.
105.7.  "Industrial banking business" includes the making of loans
and acceptance of deposits, including deposits evidenced by
investment or thrift certificates, but excluding demand deposits.
106.  "Trust business" means the business of acting as executor,
administrator, guardian or conservator of estates, assignee,
receiver, depositary or trustee under the appointment of any court,
or by authority of any law of this or any other state or of the
United States, or as trustee for any purpose permitted by law.
107.  "Trust company" means a corporation, industrial bank, or a
commercial bank that is authorized to engage in the trust business.
107.5.  It shall be unlawful for any person, corporation, limited
liability company, partnership, firm, or any other form of business
entity allowed by law, to engage in or transact commercial banking
business, industrial banking business, or trust business within this
state except by means of a corporation duly organized for that
purpose.
109.  "Bank" or "banks" includes commercial banks, industrial banks,
and trust companies unless the context otherwise requires.  However,
"bank" does not include a savings association or a credit union.
110.  "Office" includes head office, branch office, and any other
authorized place of business of a bank.
   "Head office" means the principal place of business of a bank.
111.  "Real property" and "personal property" have the meanings
defined in and shall be construed in accordance with Title 1, Part 1,
Division 2, Civil Code of California.
112.  "Commissioner" means the Commissioner of Financial
Institutions and "department" means the Department of Financial
Institutions.
113.  "Person" means an individual, sole proprietorship,
partnership, joint venture, association, trust, estate, business
trust, corporation, limited liability company, sovereign government
or agency, instrumentality, or political subdivision thereof, or any
similar entity or organization.
115.  Unless the provision or the context otherwise requires, the
definitions set forth in this chapter govern the construction of this
division.
116.  No corporation shall hereafter be organized under the laws of
this state to transact the business of a commercial bank, industrial
bank, or trust company except as provided in this division.
117.  Neither the enactment of this code nor the amendment or repeal
thereof nor the repeal of any statute affected thereby shall take
away or impair any liability or cause of action existing or incurred
against any bank or trust company or the shareholders, directors, or
officers thereof.
118.  (a) All references in this division and in Division 1
(commencing with Section 100), Title 1 of the Corporations Code to
financial statements, balance sheets, income statements and
statements of changes in financial position of a bank and all
references to assets, liabilities, earnings, retained earnings,
shareholders' equity, and similar accounting items of a bank mean
such financial statements or such items prepared or determined in
conformity with generally accepted accounting principles then
applicable, fairly presenting in conformity with generally accepted
accounting principles the matters which they purport to present,
subject to any specific accounting treatment required by any
provision of Division 1 (commencing with Section 100), Title 1 of the
Corporations Code, of this division, or of any regulation or order
issued under this division.
   (b) The commissioner may, by regulation or order, require that any
financial statement or accounting item of a bank be prepared or
determined in a manner other than in conformity with generally
accepted accounting principles if the commissioner finds that such
other manner is necessary or appropriate to carry out the purposes or
provisions of this division.
119.  References in this division to the voting of shares shall be
construed in accordance with Section 111 of the Corporations Code.
120.  If the articles of a bank provide for more or less than one
vote for any share on any matter, the references in Sections 123 and
124 to a majority or other proportion of shares means, as to such
matter, a majority or other proportion of the votes entitled to be
cast.  Whenever, under Division 1 (commencing with Section 100),
Title 1 of the Corporations Code or this division, shares are
disqualified from voting on any matter, they shall not be considered
outstanding for the determination of a quorum at any meeting to act
upon, or the required vote to approve action upon, such matter under
any provision of Division 1 (commencing with Section 100), Title 1 of
the Corporations Code, of this division, or of the articles or
bylaws.
121.  Any requirement in this division for a vote of each class of
outstanding shares shall be construed in accordance with Section 117
of the Corporations Code.
122.  "Approved by (or approval of) the board" means approved or
ratified by the vote of the board or by the vote of a committee
authorized to exercise the powers of the board, except as to any
matter not within the competence of the committee under Section 311
of the Corporations Code or any matter for which this division also
requires approval of the shareholders or approval of the outstanding
shares.
123.  "Approved by (or approval of) the outstanding shares" has the
meaning set forth in Section 152 of the Corporations Code and shall
include approval by the affirmative vote of a majority of the
outstanding shares of each class or series entitled, by any provision
of the articles, of this division, or of Division 1 (commencing with
Section 100), Title 1 of the Corporations Code, to vote as a class
or series on the subject matter being voted upon, and shall also
include approval by the affirmative vote of such greater proportion
(including all) of the outstanding shares of any class or series if
such greater proportion is required by the articles, by this
division, or by Division 1 (commencing with Section 100), Title 1 of
the Corporations Code.
124.  "Approved by (or approval of) the shareholders" has the
meaning set forth in Section 153 of the Corporations Code and shall
include approval or ratification by the affirmative vote or written
consent of such proportion (including all) greater than a majority of
the shares of any class or series as may be provided in the
articles, in this division, or in Division 1 (commencing with Section
100), Title 1 of the Corporations Code for all or any specified
shareholder action.
125.  "Articles" has the meaning set forth in Section 154 of the
Corporations Code.
126.  "Board" has the meaning set forth in Section 155 of the
Corporations Code.
126.5.  "California" means:
   (a) When used with respect to a bank, in the case of a state bank,
a bank that is organized under the laws of this state and, in the
case of a national bank, a national bank that maintains its main
office in this state.
   (b) When used with respect to an office of a bank, an office which
is located in this state.
   (c) When used with respect to any corporation other than a bank, a
corporation that is organized under the laws of this state.
127.  "Certificate of correction" means a certificate executed and
filed with the Secretary of State pursuant to Section 109 of the
Corporations Code, subject, however, to the provisions of Section
600.10.
128.  "Certificate of determination" has the meaning set forth in
Section 156 of the Corporations Code, subject, however, to the
provisions of Section 600.8.
129.  "Certificate of revocation" means a certificate executed and
filed with the Secretary of State pursuant to the second and third
sentences of subdivision (c) of Section 110 of the Corporations Code,
subject, however, to the provisions of Section 600.12.
130.  "Common shares" has the meaning set forth in Section 159 of
the Corporations Code.
132.  "Constituent corporation," when used with respect to a
corporation:
   (a) In the case of a merger, has the meaning set forth in Section
161 of the Corporations Code.
   (b) In the case of a consolidation, means a corporation that is
consolidated with one or more other corporations.
134.  "Contributed capital" means all of shareholders' equity other
than retained earnings.  However, nothing in this section shall
prohibit a bank from transferring amounts from time to time from its
retained earnings to its contributed capital, subject to any
applicable statutes, regulations, and generally accepted accounting
principles.
134.5.  "Credit union" means a corporation of the type described in
Section 14002 organized under the laws of this state or a corporation
of similar type organized under the laws of the United States or of
any state of the United States other than this state.
135.  "Directors" has the meaning set forth in Section 164 of the
Corporations Code.
137.  "Disappearing," when used with respect to a corporation, means
a constituent corporation that is not the surviving corporation.
139.  "Distribution to its shareholders" has the meaning set forth
in Section 166 of the Corporations Code.  However, in Division 1
(commencing with Section 100), Title 1 of the Corporations Code and
in this division, "distribution to its shareholders" does not include
any purchase of shares by a bank or by a majority-owned subsidiary
of a bank which is necessary to reduce or avoid loss to such bank or
to such subsidiary on an extension of credit previously made in good
faith.  Also, in this division, "distribution to its shareholders"
includes any distribution made by a bank or by a majority-owned
subsidiary of a bank to the shareholders of any corporation of which
such bank is a majority-owned subsidiary.
139.2.  (a) "Foreign," when used with respect to a bank, an office
of a bank, or any corporation other than a bank, means foreign (other
nation) or foreign (other state).
   (b) "Foreign banking corporation" means a foreign bank.
139.3.  "Foreign nation" means any nation other than the United
States, including, without limitation, any subdivision, territory,
trust territory, dependency, colony, or possession of any nation
other than the United States.  "Foreign nation" includes Puerto Rico,
Guam, American Samoa, the Virgin Islands, and any territory, trust
territory, dependency, or insular possession of the United States.
139.4.  (a) The definition of "state of the United States" in
Section 146.7 does not apply to this section.  In this section,
"state of the United States" means any state of the United States or
the District of Columbia.
   (b) "Foreign (other nation):"
   (1) When used with respect to a bank, means any bank (including,
without limitation, any commercial bank, merchant bank, or other
institution that engages in banking activities that are usual in
connection with the business of banking in the nation in which the
institution is organized or operating) other than (A) a bank that is
organized under the laws of a state of the United States or (B) a
national bank that maintains its main office in a state of the United
States.
   (2) When used with respect to an office of a bank, means an office
that is located in a place other than a state of the United States.
   (3) When used with respect to any corporation other than a bank,
means a corporation that is organized under the laws of a foreign
nation.
139.5.  "Foreign (other state)":
   (a) When used with respect to a bank, means a bank that is
organized under the laws of any state of the United States other than
this state, or a national bank that maintains its main office in any
state of the United States other than this state, and includes any
savings bank, as defined in Section 3(g) of the Federal Deposit
Insurance Act (12 U.S.C. Sec. 1813(g)), that is organized under the
laws of a state other than this state.
   (b) When used with respect to an office of a bank, means an office
that is located in a state other than this state.
   (c) When used with respect to a corporation other than a bank,
means a corporation that is organized under the laws of any state of
the United States other than this state or under the laws of the
United States.
139.7.  "Insured:"
   (a) When used with respect to a bank or an office of a bank, means
a bank or office the deposits of which are insured by the Federal
Deposit Insurance Corporation under the Federal Deposit Insurance Act
(12 U.S.C. Sec.  1811 et seq.).
   (b) When used with respect to a deposit, means a deposit that is
insured by the Federal Deposit Insurance Corporation under the
Federal Deposit Insurance Act (12 U.S.C. Sec. 1811 et seq.).
139.9.  "Law of the domicile" means:
   (a) When used with respect to a national bank, the law of the
United States.
   (b) When used with respect to a state bank, the law of the state
of the United States under which the bank is organized.
   (c) When used with respect to a foreign (other nation) bank, the
law of the foreign nation under which the bank is organized.
140.  "Majority-owned subsidiary" has the meaning set forth for
"subsidiary" in subdivision (a) of Section 189 of the Corporations
Code.
140.3.  (a) "National bank" or "national banking association" means
a national banking association organized under the National Bank Act.
   (b) For purposes of this division, a national bank is deemed to be
a corporation.
140.5.  "Officers' certificate" has the meaning set forth in Section
173 of the Corporations Code.
142.  "Resulting," when used with respect to a corporation, means:
   (a) In the case of a consolidation, the corporation into which the
constituent corporations are consolidated.
   (b) In the case of a conversion, the corporation into which the
converting corporation is converted.
143.  "Savings association" includes a savings association, a
savings and loan association, and a savings bank.  However, "savings
association" does not include any savings bank of the type defined in
Section 3(g) of the Federal Deposit Insurance Act (12 U.S.C. Section
1813(g)).
144.  "Series," when used with respect to shares, has the meaning
set forth in Section 183 of the Corporations Code.
145.  "Shares" has the meaning set forth in Section 184 of the
Corporations Code.
146.  "Shareholder" has the meaning set forth in Section 185 of the
Corporations Code.
146.3.  "State":
   (a) When used with respect to a corporation, means a corporation
that is organized under the laws of a state of the United States.
   (b) When used with respect to an office of a foreign (other
nation) bank, means an office that the bank is authorized to maintain
under the laws of a state of the United States.
146.7.  "State of the United States" means any state of the United
States, the District of Columbia, any territory of the United States,
Puerto Rico, Guam, American Samoa, the Trust Territory of the
Pacific Islands, the Virgin Islands, and the Northern Mariana
Islands.
148.  "Surviving," when used with respect to a corporation, means a
corporation in which one or more other corporations are merged.
150.  "Vote" has the meaning set forth in Section 194 of the
Corporations Code.
151.  "Voting power" has the meaning set forth in Section 194.5 of
the Corporations Code.