2014 Connecticut General Statutes
Title 36a - The Banking Law of Connecticut
Chapter 664a - Administration and Enforcement
Section 36a-34 - Findings of commissioner re Community Reinvestment Act compliance, consumer protection law compliance, adequacy of banking services to be provided and anticompetitive effects in connection with certain transaction approvals.

(a) As used in subsection (b) of this section:

(1) “Eligible entity” means any entity that (A) received a composite rating of one or two under the Uniform Financial Institutions Rating System as a result of its most recent safety and soundness examination; (B) received a compliance rating of one or two on its most recent compliance examination; (C) received a satisfactory or better rating on its most recent community reinvestment performance evaluation; (D) is well capitalized in that it (i) has a total risk-based capital ratio of ten per cent or greater; (ii) has a tier one risk-based capital ratio of six per cent or greater; (iii) has a tier one leverage capital ratio of five per cent or greater; and (iv) is not subject to any written agreement, order, capital directive or prompt corrective action directive issued pursuant to Section 8 or 38 of the Federal Deposit Insurance Act, 12 USC 1818 and 12 USC 1831o, respectively, as amended from time to time, the International Lending Supervision Act, 12 USC 3907, as amended from time to time, the Home Owners’ Loan Act, 12 USC 1461, as amended from time to time, or any regulation thereunder, to meet and maintain a specific capital level for any capital measure; (E) is not subject to a cease and desist order, consent order, prompt correction action directive, written agreement, memorandum of understanding or other administrative agreement with its primary state or federal banking regulator; and (F) is not subject to any formal or informal administrative action by its primary state or federal banking regulator.

(2) “Entity” means the applicant or applicants except, in the case of an approval pursuant to section 36a-411, “entity” means the subsidiaries of the applicant holding company.

(3) “Federal CRA” has the same meaning as provided in subsection (a) of section 36a-30.

(4) “Resulting entity” means: (A) In the case of an approval pursuant to section 36a-145 and subdivision (2) of subsection (a) of section 36a-412, the applicant; (B) in the case of an approval pursuant to section 36a-125, the resulting Connecticut bank; (C) in the case of an approval pursuant to section 36a-181, the Connecticut bank; (D) in the case of an approval pursuant to section 36a-411, the bank to be acquired or established; and (E) in the case of an approval pursuant to subdivision (1) of subsection (a) of section 36a-412, the bank to be acquired or the resulting bank.

(b) The commissioner shall not grant any approval under section 36a-125, subsections (b), (c) and (d) of section 36a-145, section 36a-181, section 36a-411 or subdivisions (1) and (2) of subsection (a) of section 36a-412 unless the commissioner finds, in accordance with regulations adopted pursuant to chapter 54, that (1) based on the most recent applicable performance evaluation and any related information required by the commissioner, the entity has a record of compliance with the requirements of federal CRA, sections 36a-30 to 36a-33, inclusive, to the extent applicable, and applicable consumer protection laws; and (2) except as otherwise provided in this subsection, if the entity, and in the case of an approval pursuant to section 36a-411, the bank or any subsidiary bank of the Connecticut holding company, received any overall rating other than an assigned rating of “outstanding” on its most recent applicable community reinvestment performance evaluation, the resulting entity will provide adequate services to meet the banking needs of all community residents, including low-income residents and moderate-income residents to the extent permitted by its charter, in accordance with a plan submitted by the applicant to the commissioner, in such form and containing such information as the commissioner may require, or, if acceptable to the commissioner, in accordance with an approved strategic plan prepared under federal CRA, or the relevant portion thereof, that is submitted by the applicant to the commissioner. Upon receiving any such plan, the commissioner shall make the plan available for public inspection and comment at the Department of Banking and cause notice of its submission and availability for inspection and comment to be published in the department’s weekly bulletin. With the concurrence of the commissioner, the applicant or applicants shall publish, in the form of a legal advertisement in a newspaper having a substantial circulation in the area, notice of such plan’s submission and availability for public inspection and comment. The notice shall state that the inspection and comment period will last for a period of thirty days from the date of publication. The commissioner shall not make such finding until the expiration of such thirty-day period. In making such finding, the commissioner shall, unless clearly inapplicable, consider, among other factors, whether the plan identifies specific unmet credit and consumer banking needs in the local community and specifies how such needs will be satisfied, provides for sufficient distribution of banking services among branches or satellite devices, or both, located in low-income neighborhoods, contains adequate assurances that banking services will be offered on a nondiscriminatory basis and demonstrates a commitment to extend credit for housing, small business and consumer purposes in low-income neighborhoods. The submission of such plan shall not be required in the case of an approval under subsection (d) of section 36a-145, provided, the commissioner may require the filing of such information in lieu of a plan as the commissioner deems appropriate. If the commissioner determines that an applicant is an eligible entity, the commissioner may (A) exempt such applicant from the requirement that such applicant file a plan, or (B) require such information in lieu of a plan as the commissioner deems appropriate. Except with respect to an approval pursuant to section 36a-145 and section 36a-181, the commissioner shall not approve the transaction if the transaction would result in a monopoly, or would be in furtherance of any combination or conspiracy to monopolize or attempt to monopolize the business of banking in this state or if the commissioner determines that the effect of the proposed transaction may be to substantially lessen competition, or would tend to create a monopoly, or would be in restraint of trade, unless the commissioner finds that the anticompetitive effects of the proposed transaction are clearly outweighed in the public interest by the probable effect of the transaction in meeting the convenience and needs of the community to be served.

(c) The commissioner shall not make a determination stating that the commissioner does not disapprove an offer, invitation, request, agreement or acquisition pursuant to section 36a-185 unless the commissioner finds, in accordance with regulations adopted pursuant to chapter 54, that (1) based on the most recent applicable performance evaluation and any related information required by the commissioner, the acquiring person, if such person is a bank or out-of-state bank, and the acquiring person’s subsidiaries, if such person is a holding company, has a record of compliance with the requirements of federal CRA, sections 36a-30 to 36a-33, inclusive, to the extent applicable, and applicable consumer protection laws; and (2) except as otherwise provided in this subsection, if the bank or any banking subsidiary of the holding company referred to in the acquisition statement received any overall rating other than an assigned rating of “outstanding” on its most recent applicable community reinvestment performance evaluation, such bank or banking subsidiary will provide adequate services to meet the banking needs of all community residents, including low-income residents and moderate-income residents to the extent permitted by its charter or their charters. If the acquiring person is not a natural person, or if the acquiring person is a natural person who would be the beneficial owner of twenty-five per cent or more of any class of voting securities of the bank or holding company referred to in the acquisition statement, the finding as to the adequacy of services to be provided shall be based on a plan submitted by the acquiring person to the commissioner, in such form and containing such information as the commissioner may require, or, if acceptable to the commissioner, in accordance with an approved strategic plan prepared under federal CRA, or the relevant portion thereof, that is submitted by the acquiring person to the commissioner. Upon receiving any such plan, the commissioner shall make the plan available for public inspection and comment at the Department of Banking and cause notice of its submission and availability for inspection and comment to be published in the department’s weekly bulletin. With the concurrence of the commissioner, the acquiring person shall publish, in the form of a legal advertisement in a newspaper having a substantial circulation in the area, notice of such plan’s submission and availability for public inspection and comment. The notice shall state that the inspection and comment period will last for a period of thirty days from the date of publication. The commissioner shall not make such finding until the expiration of such thirty-day period. In making such finding, the commissioner shall consider, among other factors, whether the plan identifies specific unmet credit and consumer banking needs in the local community and specifies how such needs will be satisfied, provides for sufficient distribution of banking services among branches or satellite devices, or both, located in low-income neighborhoods, contains adequate assurances that banking services will be offered on a nondiscriminatory basis and demonstrates a commitment to extend credit for housing, small business and consumer purposes in low-income neighborhoods. The commissioner may exempt an acquiring person from the requirement that such acquiring person file a plan if the commissioner determines that the bank or banking subsidiary referred to in the acquisition statement is an eligible entity. If the acquiring person is a natural person who would be the beneficial owner of less than twenty-five per cent of all classes of voting securities of the bank or holding company referred to in the acquisition statement, the commissioner shall make the finding as to adequacy of services to be provided based on the commitment of the acquiring person to use the acquiring person’s best efforts to cause such bank or banking subsidiaries of such holding company to provide such services. The commissioner shall not make a determination stating that the commissioner does not disapprove such offer, invitation, request, agreement or acquisition if such offer, invitation, request, agreement or acquisition would result in a monopoly, or would be in furtherance of any combination or conspiracy to monopolize or attempt to monopolize the business of banking in this state or if the commissioner should determine that the effect of the proposed offer, invitation, request, agreement or acquisition may be to substantially lessen competition, or would tend to create a monopoly, or would be in restraint of trade, unless the commissioner finds that the anticompetitive effects of the proposed transaction are clearly outweighed in the public interest by the probable effect of the transaction in meeting the convenience and needs of the community to be served.

(P.A. 94-122, S. 20, 340; P.A. 95-155, S. 6, 29; P.A. 96-8, S. 5, 6; P.A. 97-33; P.A. 09-100, S. 4; P.A. 14-122, S. 158.)

History: P.A. 94-122 effective January 1, 1995; P.A. 95-155 amended Subsec. (b) to add the references to Sec. 36a-145, and amended Subsec. (b) and (c) to add “and comment”, to impose the requirement of publication on the applicant or acquirer instead of the commissioner, and to reword the provisions re the 30-day inspection and comment period and timing of the commissioner’s finding, effective June 27, 1995; P.A. 96-8 added a new Subdiv. (a)(3) to define “Federal CRA”, and amended Subsecs. (b) and (c) to make technical changes, delete “business” from “thirty business days” and to allow the commissioner to consider strategic plans prepared under federal CRA, effective April 29, 1996; P.A. 97-33 redefined “entity” and “resulting entity” in Subsec. (a), amended Subsec. (b) by adding references to Sec. 36a-145(d) and Sec. 36a-412(a)(1) and (2), by providing that the entity’s compliance record is based on the most recent applicable performance evaluation and related information required by the commissioner and that a plan is required if the entity or its subsidiary banks received any rating other than “outstanding” on their most recent community reinvestment performance evaluation, and by adding exception to plan requirements for approval under Sec. 36a-145(d) and exception to findings re anticompetitive effects for approval pursuant to Sec. 36a-181, and amended Subsec. (c) to provide that the compliance record of the acquiring person or subsidiaries is based on the most recent applicable performance evaluation and related information required by the commissioner and that a plan is required if the bank or subsidiary banks received any rating other than “outstanding” on their most recent community reinvestment performance evaluation; P.A. 09-100 amended Subsec. (a) by defining “eligible entity” in new Subdiv. (1), redesignating existing Subdiv. (1) as Subdiv. (2), and repositioning definition of “resulting entity” from former Subdiv. (2) to new Subdiv. (4), amended Subsec. (b) by adding Subparas. (A) and (B) re eligible entities and making a technical change, and amended Subsec. (c) by making technical changes and authorizing commissioner to exempt acquiring person from filing a plan if commissioner determines that the bank or banking subsidiary referred to in acquisition statement is an eligible entity, effective June 3, 2009; P.A. 14-122 made technical changes in Subsec. (a)(3).