There is a newer version of the California Code
2007 California Financial Code Chapter 1. Scope And Definitions
CA Codes (fin:99-151)
FINANCIAL CODESECTION 99-151
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.
Disclaimer: These codes may not be the most recent version. California may have more current or accurate information. We make no warranties or guarantees about the accuracy, completeness, or adequacy of the information contained on this site or the information linked to on the state site. Please check official sources.
This site is protected by reCAPTCHA and the Google
Privacy Policy and
Terms of Service apply.