2005 Nevada Revised Statutes - Chapter 666 — Major Organizational Changes; Bank Holding Companies; Interstate Banking

CHAPTER 666 - MAJOR ORGANIZATIONAL CHANGES;BANK HOLDING COMPANIES; INTERSTATE BANKING

GENERAL PROVISIONS

NRS 666.001 Definitions.

NRS 666.002 Acquiredefined.

NRS 666.003 Controldefined.

NRS 666.004 Denovo branch defined.

NRS 666.005 Holdingcompany defined.

NRS 666.006 Homestate defined.

NRS 666.007 Hoststate defined.

NRS 666.008 Out-of-statedefined.

MAJOR ORGANIZATIONAL CHANGES; TRANSFER OF ASSETS ANDLIABILITIES

NRS 666.015 Nevada depository institution: Merger or consolidation with or transfer of assets andliabilities to similar institution, out-of-state depository institution orout-of-state holding company; regulations.

NRS 666.020 Powersof Nevada depository institution or its holding company after acquisition of ormerger with out-of-state depository institution; applicable laws; powers ofCommissioner.

NRS 666.025 Effectof consolidation of banks.

NRS 666.035 Consolidation,conversion or merger of state bank with national bank: Minimum vote required;approval by Commissioner; applicable law; determination of value of shares orinterests for dissenting stockholders.

NRS 666.045 Mergeror consolidation of national bank with state bank; incorporation of nationalbank as state bank.

NRS 666.055 Fiduciarypowers and liabilities of banks merging or transferring assets and liabilities.

BANK HOLDING COMPANIES

NRS 666.065 Definitions.

NRS 666.070 Applicability.

NRS 666.075 Rebuttablepresumption against control of bank; certain legal relationships and companiesdeemed not to be bank holding companies.

NRS 666.085 Regulations;reports to determine compliance.

NRS 666.095 Annualregistration reports required of bank holding companies.

NRS 666.105 Examinationsof bank holding companies by Commissioner.

NRS 666.115 Formationof bank holding company: Approval by Commissioner; limitation; application forapproval; acceptance of federal registration.

NRS 666.125 Approvalrequired before acquisition of bank; application; considerations.

NRS 666.135 Approvalof transfer of control required; grounds for disapproval.

NRS 666.145 Orderrequiring removal of director, officer or employee; petition by personaffected; injunction prohibiting participation in affairs of company.

NRS 666.155 Failureto remove person pursuant to order conclusive evidence of negligence.

NRS 666.165 Chargesagainst company: Grounds; notice; hearing.

NRS 666.175 Issuanceof order to cease and desist; corrective action; effectiveness of order.

NRS 666.185 Temporaryorders: Grounds; issuance; effectiveness.

NRS 666.195 Temporaryorders: Application for injunction limiting or setting aside order; applicationfor injunction prohibiting violation.

NRS 666.205 Injunctions;civil penalty; divestiture by holding company in another state.

NRS 666.215 Penalties.

INTERSTATE BANKING

NRS 666.305 Approvalof Commissioner required before taking certain actions affecting depositoryinstitution or holding company whose home state is Nevada; penalty; injunctiverelief.

NRS 666.315 Applicationfor approval required by NRS 666.305;contents; fee and expenses; review of application; issuance of writtendecision; grounds for disapproval; regulations.

NRS 666.325 Examination,supervision and regulation of interstate operations.

NRS 666.355 Authorityof Commissioner to authorize or require acquisition of failing depositoryinstitution or failing holding company which controls depository institution.

NRS 666.365 Rights,powers and privileges of acquired, acquiring or resulting depositoryinstitution or holding company.

NRS 666.375 Conditionsfor authorizing or requiring certain transactions involving out-of-statedepository institution or out-of-state holding company.

NRS 666.390 Authorityand conditions for depository institution to act as agent for affiliateddepository institution.

NRS 666.400 Powersof out-of-state depository institution or its holding company after acquisitionof or merger with Nevada depository institution or its holding company;applicable laws; powers of Commissioner.

NRS 666.405 Acquisitionof Nevada depository institution for conversion to branch of out-of-statedepository institution or out-of-state holding company; restrictions;exceptions.

NRS 666.410 Establishmentor acquisition of Nevada branch by out-of-state depository institution orout-of-state holding company.

NRS 666.415 Waiverof federal limits on concentration of deposits.

NRS 666.420 Reportsby out-of-state depository institution or holding company.

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GENERAL PROVISIONS

NRS 666.001 Definitions. As used in this chapter, the words and terms defined in NRS 666.002 to 666.008, inclusive, have the meaningsascribed to them in those sections.

(Added to NRS by 1985, 2149; A 1985, 2160; 1995,1558)(Substituted in revision for NRS 666.225)

NRS 666.002 Acquiredefined. Acquire means:

1. Acquire control;

2. Acquire all or substantially all assets;

3. Assume all liabilities for deposits; or

4. Establish a new institution.

(Added to NRS by 1985, 2149; A 1985,2160)(Substituted in revision for NRS 666.235)

NRS 666.003 Controldefined. Control means the power, directlyor indirectly, to:

1. Direct or exercise a controlling influence over themanagement or policies of a depository institution or the election of amajority of the directors or trustees of an institution; or

2. Vote:

(a) Twenty percent or more of any class of votingsecurities of a depository institution if exercised by a natural person; or

(b) More than 10 percent of any class of votingsecurities of a depository institution if exercised by a person other than anatural person.

(Added to NRS by 1985, 2149; A 1997, 996)

NRS 666.004 Denovo branch defined. De novo branch means abranch of a depository institution which:

1. Is newly established by the depository institutionas a branch; and

2. Does not become a branch of the depositoryinstitution as a result of:

(a) The acquisition by the depository institution of aninsured depository institution or a branch of an insured depositoryinstitution; or

(b) The conversion, merger or consolidation of any suchinstitution or branch.

(Added to NRS by 1995, 1553)

NRS 666.005 Holdingcompany defined. Holding company means acompany:

1. Which directly or indirectly owns or controls 25percent or more of the voting stock of a depository institution;

2. Which controls the election of a majority of thedirectors of a depository institution; or

3. For the benefit of whose stockholders 25 percent ormore of the voting stock of a depository institution is held by one or moretrustees.

(Added to NRS by 1995, 1553)

NRS 666.006 Homestate defined. Home state means:

1. For a state chartered depository institution, thestate that charters the institution;

2. For a federally chartered institution, the statewhere the institutions main office is located; and

3. For a holding company, the state in which the totaldeposits of all of its subsidiaries are the largest.

(Added to NRS by 1995, 1553)

NRS 666.007 Hoststate defined. Host state means:

1. For a depository institution, a state, other thanthe institutions home state, where the institution maintains or seeks toestablish a branch; and

2. For a holding company, a state, other than theholding companys home state, where the holding company controls or seeks tocontrol a depository institution as a subsidiary.

(Added to NRS by 1995, 1553)

NRS 666.008 Out-of-statedefined. Out-of-state when used to modifythe term bank, depository institution or holding company signifies thatits home state is not Nevada.

(Added to NRS by 1995, 1553)

MAJOR ORGANIZATIONAL CHANGES; TRANSFER OF ASSETS ANDLIABILITIES

NRS 666.015 Nevadadepository institution: Merger or consolidation with or transfer of assets andliabilities to similar institution, out-of-state depository institution orout-of-state holding company; regulations.

1. With the approval of the Commissioner, a Nevadadepository institution may merge or consolidate with, or transfer its assetsand liabilities to, another Nevada depository institution, an out-of-statedepository institution or an out-of-state holding company.

2. An application filed with the Commissioner forapproval of the merger, consolidation or transfer must be on a form prescribedby the Commissioner and must include:

(a) A nonrefundable fee of not more than $6,000 for theapplication. The depository institution must also pay such additional expensesincurred in the process of investigation as the Commissioner deems necessary.All money received by the Commissioner pursuant to this section must be placedin the Investigative Account created by NRS232.545.

(b) Certified copies of the resolutions adopted by thedirectors and stockholders or the managers and members of the depositoryinstitution or the stockholders of the holding company regarding the merger,consolidation or transfer. The minutes of the proceedings conducted by thestockholders or members of each depository institution or the stockholders ofeach holding company and the resolutions adopted by them, if any, must setforth that holders of at least a majority of the stock or members interestsvoted in the affirmative on the proposition of merger, consolidation ortransfer. The resolutions must also contain or have attached thereto a completecopy of the plan of merger.

(c) Information which the Commissioner requires to makethe findings specified in subsection 7.

3. When a completed application has been filed, theCommissioner shall conduct an investigation of each depository institution todetermine:

(a) Whether the interests of the depositors, creditorsand stockholders or members of each depository institution are protected.

(b) That the merger, consolidation or transfer is inthe public interest.

(c) That the merger, consolidation or transfer is madefor legitimate purposes.

(d) Whether each depository institution has a goodrecord of compliance with the Community Reinvestment Act of 1977, 12 U.S.C. 2901 to 2905, inclusive.

4. The Commissioners approval or rejection of themerger, consolidation or transfer must be based upon his investigation. Theexpense of the investigation must be paid by the depository institutions.

5. Notice of the merger, consolidation or transfermust be published once each week for 4 consecutive weeks, before or after themerger, consolidation or transfer is effective at the discretion of theCommissioner, in a newspaper published in a city, town or county in which eachof the depository institutions is located, and a certified copy of the noticemust be filed with the Commissioner.

6. The Commissioner shall issue his written decisionwithin 60 days after receiving a completed application. The Commissioner mayapprove the application subject to any terms and conditions which he considersnecessary to protect the public interest.

7. The Commissioner shall disapprove an application ifhe finds that:

(a) The proposed transaction would be detrimental tothe safety and soundness of the applicant, to any institution which is a partyto the transaction or to a subsidiary or affiliate of any such institution;

(b) The applicant or its executive officers, directors,managers, principal stockholders or members have not established a record ofsound performance, efficient management, financial responsibility and integrityso that it would be against the interest of the depositors, other customers,creditors, stockholders or members of an institution, or the general public toauthorize the proposed transaction;

(c) The financial condition of the applicant or anyother institution which is a participant in the proposed transactions mightjeopardize the financial stability of the applicant or other institution, orprejudice the interests of depositors or other customers of the applicant orother institutions;

(d) The consummation of the proposed transaction willtend to lessen competition substantially, unless the Commissioner finds thatthe anticompetitive effects of the proposed transaction are clearly outweighedby the benefit of accommodating the convenience and needs of the relevantmarket to be served; or

(e) The applicant has not established a record ofmeeting the needs for credit of the communities which it or its subsidiarydepository institution serves.

8. If a merger, consolidation or transfer is approvedpursuant to this section, the property and liabilities of the constituentdepository institutions must be treated in the manner prescribed in NRS 92A.250.

9. A Nevada depository institution authorized pursuantto this section to merge or consolidate with, or transfer its assets andliabilities to, an out-of-state depository institution or an out-of-stateholding company shall comply with the laws of all states in which it isauthorized to operate.

10. The Commissioner shall adopt regulationsestablishing the amount of the application fee required pursuant to thissection.

(Added to NRS by 1971, 998; A 1983, 1750; 1987, 1925;1995, 491, 1556; 1997, 996; 2005, 1845)

NRS 666.020 Powersof Nevada depository institution or its holding company after acquisition of ormerger with out-of-state depository institution; applicable laws; powers ofCommissioner.

1. A Nevada depository institution or its holdingcompany that acquires an out-of-state depository institution, a Nevadadepository institution that is the resulting depository institution aftermerging with an out-of-state depository institution, or a Nevada depositoryinstitution that otherwise establishes or acquires a branch outside of thisstate, may, in accordance with applicable state and federal law:

(a) Continue to operate the out-of-state depositoryinstitution or branch;

(b) Convert any existing main office or branch outsideof this state into a branch of the Nevada depository institution;

(c) Establish or acquire additional branches of theNevada depository institution in any state where the out-of-state institutioncould have done so if it had not been acquired or merged;

(d) Continue or establish its principal office orprincipal place of business outside this state notwithstanding the provisions ofNRS 660.015 and 662.245; and

(e) Subject to the approval of the Commissioner,exercise any power and engage in any activity outside of this state to the sameextent as the out-of-state depository institution could have if it had not beenacquired or merged, even if the Nevada depository institution is not authorizedto exercise those powers or engage in those activities in this state.

2. The Commissioner shall not approve the exercise ofany power or the engagement in any activity pursuant to paragraph (d) or (e) ofsubsection 1 if the Commissioner determines that the exercise of that power orthe engagement in that activity would be inconsistent with safe and soundbanking practices.

3. Except as otherwise provided in paragraph (d) ofsubsection 1, a branch outside this state of a Nevada depository institutionshall comply with, and have all rights and powers prescribed in, the laws ofthis state relating to depository institutions.

4. This section does not affect the authority of theCommissioner to examine, supervise and regulate a Nevada depository institutionoperating or seeking to operate a branch outside this state.

(Added to NRS by 1997, 995)

NRS 666.025 Effectof consolidation of banks.

1. When an agreement of consolidation is made and acertified copy thereof is filed with the Secretary of State, together with acertified copy of the approval of the Commissioner of the consolidation, thebanks which are parties to the consolidation become one bank, possessed of therights, privileges, powers and franchises of the several banks, but subject toall the provisions of law under which it is created.

2. The directors and other officers named in theagreement of consolidation shall serve until the first annual meeting forelection of officers and directors, the date for which must be named in theagreement.

3. On filing such agreement, the property and rightsof every kind of the several banks are thereby transferred and vested in suchnew bank, and are as fully its property as they were of the banks which wereparties to the agreement.

(Added to NRS by 1971, 999; A 1983, 1751; 1987, 1927)

NRS 666.035 Consolidation,conversion or merger of state bank with national bank: Minimum vote required;approval by Commissioner; applicable law; determination of value of shares orinterests for dissenting stockholders.

1. A state bank may, with the approval of theCommissioner, consolidate, convert into or merge with a national bank upon thevote of the holders of not less than two-thirds of each class of voting stockof, or of the members interests in, the state bank.

2. The Commissioner shall not approve anyconsolidation, conversion or merger under this section which would:

(a) Result in a monopoly or which would further anyattempt to monopolize the business of banking in this state; or

(b) Substantially lessen competition or be in restraintof trade, unless the Commissioner finds that the anticompetitive effects of theproposed transaction are clearly outweighed by the probable success of thetransaction in meeting the needs of the community to be served.

In everycase, the Commissioner shall consider the financial and managerial resourcesand the future prospects of the company or companies and the banks concerned,and the convenience and the needs of the community to be served.

3. Except as otherwise provided in subsection 5, therights and liabilities of a state bank which consolidates, converts into ormerges with a national bank, and the rights and liabilities of the stockholdersor members of the state bank, are the same as the rights and liabilitiesprescribed by the law of the United States for national banks and theirstockholders or members at the time of the consolidation, conversion or merger.

4. Upon consolidation, conversion or merger, theresulting national bank becomes the same business as each consolidating,converting or merging bank, with all the property rights, power and duties ofeach consolidating, converting or merging bank, except as affected by the lawof the United States and by the charter and bylaws of the resulting bank. Anyreference to a consolidating, converting or merging bank in any writing,whether executed or which takes effect before or after the consolidation,conversion or merger, is applicable to the resulting bank if not inconsistentwith the other provisions of that writing.

5. The holders of shares of the stock of, or membersinterests in, a state bank which were voted against a consolidation or mergerinto a national bank are entitled to receive their value in cash, if and whenthe consolidation or merger becomes effective, upon written demand made to theresulting national bank at any time within 30 days after the effective date ofthe consolidation or merger, accompanied by the surrender of any stockcertificate or certificates. The value of the shares or interests must bedetermined, as of the date of the meeting of the stockholders or membersapproving the consolidation or merger, by three appraisers to be selected asfollows:

(a) One by the owners of two-thirds of the dissentingshares or interests involved;

(b) One by the board of directors of the resultingnational bank; and

(c) One by the appraisers chosen pursuant to paragraphs(a) and (b).

Thevaluation agreed upon by any two appraisers governs. If the appraisal is notcompleted within 90 days after the consolidation or merger becomes effective,the Comptroller of the Currency shall cause an appraisal to be made.

6. The amount fixed as the value of the shares ofstock of, or members interests in, the consolidating or merging bank at thetime of the meeting of the stockholders or members approving the consolidationor merger, and the amount fixed by the appraisal as provided by subsection 5,where the fixed value is not accepted, constitute a debt of the resultingnational bank.

7. Upon the completion of the consolidation,conversion or merger, the license to operate as a state bank automaticallyterminates.

(Added to NRS by 1971, 999; A 1981, 1430; 1983, 1751;1987, 587, 1927; 1995, 492; 1997, 998)

NRS 666.045 Mergeror consolidation of national bank with state bank; incorporation of nationalbank as state bank.

1. Any national bank doing business in this state may,with the approval of the Commissioner, merge or consolidate with a state bankor incorporate as a state bank as provided in this title for the organizationof banks.

2. The Commissioner shall, when approving or rejectingthe proposed merger or consolidation, base his decision on the considerationsprovided in NRS 666.035.

3. The Commissioner may accept good assets of thenational bank, at their actual cash value, in lieu of cash payments for thestock of the state bank.

(Added to NRS by 1971, 1000; A 1981, 1431; 1983,1752; 1987, 1928)

NRS 666.055 Fiduciarypowers and liabilities of banks merging or transferring assets and liabilities. When any bank organized under the laws of this state orActs of Congress, and doing business in this state, consolidates or merges withor sells to and transfers its assets and liabilities to any other bank doingbusiness in this state, as provided by the laws of this state or Acts ofCongress, all the then existing fiduciary rights, powers, duties andliabilities of such consolidating, merging or transferring bank or banks shall,upon the effective date of such consolidation, merger or sale and transfer,vest in and thereafter be performed by the transferee bank or the consolidatedor merged bank.

(Added to NRS by 1971, 1000)

BANK HOLDING COMPANIES

NRS 666.065 Definitions. As used in NRS 666.065to 666.215, inclusive, unless thecontext otherwise requires:

1. To acquire a bank means to obtain control of anexisting bank or to establish a new bank.

2. Business trust means an organization in which abusiness or property is conveyed to trustees who manage the business orproperty for the benefit of the holders of the beneficial interest in thetrust. The term does not include a voting trust.

3. Company means any corporation, business trust,association or similar entity, but does not include:

(a) A natural person; or

(b) A corporation of which a majority of the stock isowned by the United States or any state.

(Added to NRS by 1983, 928; A 1983, 1838; 1984, 3;1995, 493, 1558)

NRS 666.070 Applicability. The provisions of NRS666.065 to 666.215, inclusive, donot apply to a bank holding company which:

1. Owns only national banks within this state untilthe holding company acquires or applies for approval to acquire a bank licensedby the Commissioner.

2. Does not control a bank which is located in Nevadabut does control a bank in another state until the holding company acquires orapplies for approval to acquire any bank located in Nevada.

(Added to NRS by 1984, 1; A 1987, 1928)

NRS 666.075 Rebuttablepresumption against control of bank; certain legal relationships and companiesdeemed not to be bank holding companies.

1. There is a rebuttable presumption that a companywhich directly or indirectly owns, controls or has the power to vote less than10 percent of the voting stock of, or members interests in, a bank does notcontrol the bank.

2. An estate, trust, guardianship or conservatorshipis not by virtue of its ownership or control of stock of, or members interestsin, a bank, a bank holding company unless it is:

(a) A business trust; or

(b) A voting trust which by its terms or by law doesnot expire within 10 years after the date of its establishment.

3. A company is not a bank holding company by virtueof its ownership or control of stock or a members interest which:

(a) Was acquired in the ordinary course of securing orcollecting a debt which the company previously contracted in good faith; and

(b) Is held only as long as is necessary to sell thestock on a reasonable basis.

(Added to NRS by 1983, 929; A 1983, 1838; 1984, 3;1995, 494; 1997, 999)

NRS 666.085 Regulations;reports to determine compliance.

1. The Commissioner may adopt such regulations as maybe necessary to carry out the provisions of NRS666.065 to 666.215, inclusive.

2. The Commissioner may require bank holding companiesto submit reports under oath to determine whether they have complied with theprovisions of NRS 666.065 to 666.215, inclusive, and any regulationsadopted pursuant to this section.

(Added to NRS by 1983, 929; A 1983, 1839; 1987, 1928)

NRS 666.095 Annualregistration reports required of bank holding companies. Each bank holding company doing business in this state,directly or through a subsidiary bank, shall file an annual registration reportwith the Commissioner within 120 days after the end of its fiscal year. Thereport must contain:

1. A full statement of the general financial conditionof the company; and

2. A description of the operation, management andintercompany relationships of the company.

(Added to NRS by 1981, 1429; A 1983, 932, 1747; 1987,1929)

NRS 666.105 Examinationsof bank holding companies by Commissioner.

1. Each year the Commissioner shall make a thoroughexamination of and into the affairs of every bank holding company and everybanking subsidiary thereof doing business in this state or accept a report ofan examination made by the Comptroller of the Currency, the Federal DepositInsurance Corporation or the Board of Governors of the Federal Reserve System.

2. The Commissioner may make additional examinationsof any bank holding company and its subsidiaries.

3. The expense of any examination made by theCommissioner must be borne by the bank holding company being examined.

(Added to NRS by 1981, 1430; A 1983, 932, 1745; 1987,1929)

NRS 666.115 Formationof bank holding company: Approval by Commissioner; limitation; application forapproval; acceptance of federal registration.

1. Except as otherwise provided in subsection 4, aperson who desires to form a bank holding company after July 1, 1983, must beapproved by the Commissioner before forming the company. A bank holding companymay not be organized as a limited-liability company.

2. The application for approval must include suchinformation with respect to the financial condition, operations, management andintercompany relationships of the applicant and related matters, as theCommissioner may deem necessary or appropriate.

3. The Commissioner shall approve the application ifhe determines that the applicant or its officers, directors and stockholdersare of such character and fitness that any bank acquired by the applicant willbe operated in a safe, prudent and profitable manner.

4. The Commissioner may accept copies of federalregistration in lieu of requiring an application for approval of a bank holdingcompany.

(Added to NRS by 1983, 929; A 1983, 1839; 1987, 1929;1995, 494)

NRS 666.125 Approvalrequired before acquisition of bank; application; considerations.

1. A bank holding company must receive the approval ofthe Commissioner before acquiring a bank.

2. The application for approval must include suchinformation with respect to the financial condition, operations, management andintercompany relationships of the bank which is to be acquired and the bankholding company as the Commissioner may deem necessary or appropriate.

3. In considering the application for approval, theCommissioner shall consider:

(a) The financial condition of the bank holding companyand any banks owned by it;

(b) The probable effect of the acquisition on:

(1) The bank holding company;

(2) Any banks owned by the bank holding company;and

(3) The bank which is to be acquired; and

(c) The effect of the acquisition upon competition inbanking.

(Added to NRS by 1983, 930; A 1983, 1840; 1987, 1929)

NRS 666.135 Approvalof transfer of control required; grounds for disapproval.

1. Any transfer of stock or trust certificates of abank holding company by sale, gift or otherwise, which will result in givingthe person who receives the shares voting control of the bank holding companymust be approved by the Commissioner before the transfer.

2. The Commissioner shall not approve a transfer if hedetermines that the person who will gain control has been removed from aposition as a director, officer or employee of a bank holding company, bank orother financial institution pursuant to an order of a state or federal agency.

3. The Commissioner may disapprove the transfer if inhis opinion the person who will gain control does not meet the requirements foran officer, director or stockholder set forth in subsection 3 of NRS 666.115.

(Added to NRS by 1983, 930; A 1983, 1840; 1987, 1931)

NRS 666.145 Orderrequiring removal of director, officer or employee; petition by personaffected; injunction prohibiting participation in affairs of company.

1. If the Commissioner determines that a director,officer or employee of a bank holding company has been negligent, dishonest,reckless or incompetent in connection with his duties, the Commissioner mayissue a written order requiring the person to be removed from his position.

2. The person affected by the order of theCommissioner may petition the district court for the judicial district in whichthe bank holding company is located to set aside the order. The court mayaffirm, modify or set aside the order.

3. If a director, officer or employee is not removedin accordance with an order of the Commissioner and the Commissioner hasreasonable cause to believe that the continued participation of the person inthe affairs of the bank holding company will place it in an unsafe or unsoundcondition, the Commissioner may apply to the district court for the judicialdistrict in which the bank holding company is located for a temporaryrestraining order and an injunction prohibiting the person from participatingin the affairs of the bank holding company.

(Added to NRS by 1983, 930; A 1983, 1840; 1987, 1931)

NRS 666.155 Failureto remove person pursuant to order conclusive evidence of negligence. If the board of directors of a bank holding companyneglects or refuses to remove a person pursuant to an order of the Commissionerand the company subsequently incurs losses because of that persons activities,the written order of the Commissioner is conclusive evidence, in any actionagainst the directors or a director for recovery of those losses, of thenegligence of the directors in failing to act upon the order.

(Added to NRS by 1983, 930; A 1983, 1841; 1987, 1932)

NRS 666.165 Chargesagainst company: Grounds; notice; hearing.

1. If the Commissioner has reasonable cause to believethat a bank holding company:

(a) Is engaging, has engaged or is about to engage inany unsafe or unsound practice in connection with the bank holding company or abank which it owns or controls; or

(b) Is violating, has violated or is about to violate alaw, regulation or condition imposed in a written agreement between theCommissioner and the bank holding company,

theCommissioner may issue and serve upon the company a notice of the chargesagainst the company.

2. A notice issued pursuant to subsection 1 mustcontain a statement of the facts which constitute the violation or unsafe orunsound practice and must set a time and place for a hearing to determinewhether the Commissioner should issue an order to cease and desist from theactivity. The hearing must be held not less than 20 nor more than 60 days afterservice of the notice unless an earlier or later date is set by the Director ofthe Department of Business and Industry at the request of the bank holdingcompany.

(Added to NRS by 1983, 931; A 1983, 1841; 1987, 1932;1993, 1895)

NRS 666.175 Issuanceof order to cease and desist; corrective action; effectiveness of order.

1. If a representative of the bank holding companydoes not appear at the hearing, the company shall be deemed to have consentedto the issuance of an order to cease and desist.

2. If the bank holding company consents to theissuance of the order or if the Commissioner determines at the hearing that thecompany has engaged in or will engage in the activity charged, the Commissionermay issue and serve upon the company an order to cease and desist from theactivity.

3. The order may, by mandatory or prohibitoryprovisions, require the bank holding company and its directors, officers,employees and agents not to engage in the activity to which the order appliesand to take action to correct conditions resulting from that activity.

4. An order issued pursuant to this section becomeseffective at the time specified in the order and remains effective as providedin it unless it is stayed, modified or set aside by the Commissioner or areviewing court.

(Added to NRS by 1983, 931; A 1983, 1841; 1987, 1932)

NRS 666.185 Temporaryorders: Grounds; issuance; effectiveness.

1. If the Commissioner determines that the existing orthreatened activity specified in a notice of charges is likely to:

(a) Cause insolvency or substantial dissipation of theassets or earnings of a bank which is owned or controlled by the bank holdingcompany; or

(b) Seriously prejudice the interests of the depositorsin the bank,

the Commissionermay issue a temporary order requiring the bank holding company to cease anddesist from the activity.

2. The temporary order becomes effective when servedupon the bank holding company and remains effective until it is set aside bythe Commissioner or a reviewing court or a permanent order is issued againstthe bank.

(Added to NRS by 1983, 931; A 1983, 1842; 1987, 1933)

NRS 666.195 Temporaryorders: Application for injunction limiting or setting aside order; applicationfor injunction prohibiting violation.

1. Within 10 days after a bank holding company hasbeen served with a temporary order to cease and desist, the company may applyto the district court for the judicial district in which the company is locatedfor an injunction limiting or setting aside the order until the hearing is heldpursuant to the notice of charges.

2. If a bank holding company violates or threatens toviolate a temporary order, the Commissioner may apply to the district court forthe judicial district in which the bank holding company is located for aninjunction prohibiting the company from violating the order.

(Added to NRS by 1983, 932; A 1983, 1842; 1987, 1933)

NRS 666.205 Injunctions;civil penalty; divestiture by holding company in another state.

1. The Commissioner may apply to the district courtfor an order compelling compliance with any provision of NRS 666.065 to 666.195, inclusive. The court may award theCommissioner the costs of bringing the action and attorneys fees.

2. The Commissioner may bring an action against aperson who violates a court order or injunction issued pursuant to this sectionor NRS 666.065 to 666.195, inclusive, to recover a civilpenalty of not more than $10,000 for each violation.

3. The Commissioner may bring an action to require aholding company for a depository institution which acquired a depositoryinstitution in Nevada to divest itself of all interest in the acquiredinstitution if the holding company violates:

(a) An order to cease and desist issued pursuant to NRS 666.175; or

(b) A court order or injunction issued pursuant to thissection or NRS 666.065 to 666.195, inclusive.

(Added to NRS by 1983, 932; A 1983, 1843; 1984, 4;1985, 2154; 1987, 1933, 2023)

NRS 666.215 Penalties.

1. A person who willfully violates any provision of NRS 666.145 is guilty of a category Dfelony and shall be punished as provided in NRS193.130.

2. A person who willfully violates any provision of NRS 666.065 to 666.135, inclusive, or 666.155 to 666.205, inclusive, is guilty of a grossmisdemeanor.

(Added to NRS by 1983, 932; A 1984, 4; 1995, 1315)

INTERSTATE BANKING

NRS 666.305 Approvalof Commissioner required before taking certain actions affecting depositoryinstitution or holding company whose home state is Nevada; penalty; injunctiverelief.

1. Unless the Commissioner gives prior writtenapproval, no person may:

(a) Acquire, directly or indirectly, a depositoryinstitution or holding company whose home state is Nevada;

(b) Vote the stock of a depository institution orholding company acquired in violation of paragraph (a);

(c) Acquire, directly or indirectly, the voting ornonvoting securities of a depository institution or a holding company whosehome state is Nevada if the acquisition would result in that persons obtainingmore than 20 percent of the authorized voting securities of the institution orcompany if the nonvoting securities were converted into voting securities; or

(d) Merge or consolidate with a depository institutionor a holding company whose home state is Nevada.

2. Any person who willfully violates any provision ofthis section or any regulation adopted by the Commissioner pursuant to thissection is guilty of a misdemeanor. Each day during which the violationcontinues constitutes a separate offense.

3. The Commissioner may obtain injunctive relief toprevent any change in control or impending violation of this section.

(Added to NRS by 1985, 2150; A 1987, 1934; 1995,1559)

NRS 666.315 Applicationfor approval required by NRS 666.305; contents; fee and expenses;review of application; issuance of written decision; grounds for disapproval;regulations.

1. An application filed with the Commissioner forapproval must be on a form prescribed by the Commissioner and must include:

(a) A nonrefundable fee of not more than $6,000 for theapplication. The depository institution or holding company must also pay suchadditional expenses incurred in the process of investigation as theCommissioner deems necessary. All money received by the Commissioner pursuantto this section must be placed in the Investigative Account created by NRS 232.545.

(b) Information which the Commissioner requires to makethe findings specified in subsection 4.

(c) Unless the applicant is a resident of Nevada, acorporation organized in this State or a foreign corporation admitted to dobusiness in this State, a written consent to service of process on a residentof this State in any action arising out of the applicants activities in thisState.

2. In reviewing the application, the Commissionershall consider the applicants record of compliance with the CommunityReinvestment Act of 1977, 12 U.S.C. 2901 to 2905, inclusive, and whether theproposed transaction will meet the needs of those counties whose populationsare less than 100,000 and whose residents are not being adequately served byexisting financial institutions.

3. The Commissioner shall issue his written decisionwithin 60 days after receiving a completed application. The Commissioner mayapprove the application subject to any terms and conditions which he considersnecessary to protect the public interest.

4. The Commissioner shall disapprove an application ifhe finds:

(a) That the proposed transaction would be detrimentalto the safety and soundness of the applicant, to any institution which is aparty to the transaction, or to a subsidiary or affiliate of that institution;

(b) The applicant or its executive officers, directorsor principal stockholders have not established a record of sound performance,efficient management, financial responsibility and integrity so that it wouldbe against the interest of the depositors, other customers, creditors orstockholders of an institution, or the public to authorize the proposedtransaction;

(c) The financial condition of the applicant or anyother institution which is a participant in the proposed transaction mightjeopardize the financial stability of the applicant or other institution, orprejudice the interests of depositors or other customers of the applicant orother institutions;

(d) The consummation of the proposed transaction willtend to lessen competition substantially, unless the Commissioner finds thatthe anticompetitive effects of the proposed transaction are clearly outweighedby the benefit of meeting the convenience and needs of the relevant market tobe served; or

(e) The applicant has not established a record ofmeeting the needs for credit of the communities which it or its subsidiarydepository institution serves.

5. The Commissioner shall adopt regulationsestablishing the amount of the application fee required pursuant to thissection.

(Added to NRS by 1985, 2151; A 1987, 1935; 1991,1808; 1997, 1000; 2005,1846)

NRS 666.325 Examination,supervision and regulation of interstate operations.

1. The Commissioner may examine and supervise anyout-of-state depository institution or holding company which has beenauthorized to do business in this state. Such institutions and holdingcompanies are subject to regulation in the same manner as institutions andholding companies organized under the laws of this state and must pay the samefees for supervision and examination, except that the Commissioner maycoordinate these activities with any state or federal agency that sharesjurisdiction over the institution.

2. The Commissioner may coordinate the examination,supervision and regulation of any depository institution chartered by thisstate with the examination, supervision and regulation of an affiliateddepository institution or branch operating in another state.

3. The Commissioner may take any reasonable and lawfulaction in furtherance of coordinating the regulation of interstate operationspursuant to this section, including:

(a) Negotiating and entering into cooperativeagreements with an agency of another state or of the Federal Government;

(b) Sharing information and reports with an agency thatshares jurisdiction over the institution;

(c) Accepting as sufficient examination reports and otherinformation compiled or generated by or for an agency that shares jurisdictionover the institution;

(d) Contracting with an agency that shares jurisdictionover the institution to engage the services of its examiners at a reasonablerate of compensation;

(e) Offering the services of the Divisions examinersat a reasonable rate of compensation to an agency that shares jurisdiction overthe institution;

(f) Collecting fees on behalf of, or receiving paymentof fees through, an agency that shares jurisdiction over the institution;

(g) Cooperating in any other way with other supervisoryagencies and professional associations to promote the efficient, safe and soundoperation and regulation of interstate activities of depository institutions,including the formulation of interstate policies and procedures for examinationand the drafting of model laws, rules and agreements; and

(h) Adopting regulations to carry out the provisions ofthis section.

(Added to NRS by 1985, 2152; A 1985, 2160; 1987,1936, 2023; 1995, 1559)

NRS 666.355 Authorityof Commissioner to authorize or require acquisition of failing depositoryinstitution or failing holding company which controls depository institution. If the Commissioner considers it necessary to protect depositors,creditors and other customers of a failing depository institution or a failingholding company which controls a depository institution, he may solicit offersfrom and authorize or require the acquisition of the institution or company byor its merger with another institution or company.

(Added to NRS by 1985, 2153; A 1985, 2161; 1987,1937, 2023; 1995, 1560)

NRS 666.365 Rights,powers and privileges of acquired, acquiring or resulting depositoryinstitution or holding company. Any depositoryinstitution or holding company which is acquired pursuant to NRS 666.355, the institution which acquiredthe depository institution or holding company pursuant to that section or theinstitution which results from a merger pursuant to that section has allrights, powers and privileges of any other depository institution in this statewhich is of the same class.

(Added to NRS by 1985, 2153; A 1985, 2161)

NRS 666.375 Conditionsfor authorizing or requiring certain transactions involving out-of-statedepository institution or out-of-state holding company. The Commissioner may not authorize or require anytransaction pursuant to NRS 666.355involving an out-of-state depository institution or an out-of-state holdingcompany, unless he finds that:

1. The acquiring or merging depository institution orholding company has demonstrated an acceptable record of meeting the needs forcredit of the communities which it serves; and

2. The acquiring or merging depository institution orholding company has a record of sound performance, adequate stockholders ormembers equity, financial capacity and efficient management so the acquisitionor merger will not jeopardize the financial stability of the acquired or mergeddepository institution and will not be detrimental to the interests ofdepositors, creditors or other customers of the depository institution, or tothe public.

(Added to NRS by 1985, 2153; A 1987, 1937; 1995,1560; 1997, 1001)

NRS 666.390 Authorityand conditions for depository institution to act as agent for affiliateddepository institution.

1. A depository institution may, at its main office orat any branch, act as an agent of any other depository institution that is asubsidiary of the same holding company in conducting the activities authorizedby this section. This section applies whether or not the affiliated depositoryinstitutions have the same home state.

2. A depository institution acting as an agent for anaffiliated depository institution may:

(a) Receive deposits;

(b) Renew time deposits;

(c) Close loans;

(d) Service loans; and

(e) Receive payments on loans and other obligations.

3. A depository institution may not do any of thefollowing as an agent on behalf of an affiliated depository institution:

(a) Open or originate deposit, savings or shareaccounts;

(b) Evaluate or approve loans;

(c) Disburse money loaned; or

(d) Conduct any activity as an agent that it isprohibited from conducting as a principal under any applicable law.

4. A depository institution acting as a principal maynot have an affiliated depository institution act as its agent in conductingany activity that:

(a) The principal depository institution is prohibitedfrom conducting; or

(b) The agent depository institution would beprohibited from conducting as a principal.

5. An agency between affiliates under this sectionmust be consistent with safe and sound practices and shall comply with allapplicable laws.

6. A depository institution acting as an agent shallnot be deemed a branch of the affiliate solely because of activities conductedunder this section.

7. A depository institution that proposes to enterinto an agreement for an agency under this section shall file with theCommissioner, at least 30 days before the effective date of the agreement:

(a) A notice of intention to enter into an agreementfor an agency with a depository institution;

(b) A description of the services proposed to beperformed under the agreement; and

(c) A copy of the agreement.

(Added to NRS by 1995, 1553)

NRS 666.400 Powersof out-of-state depository institution or its holding company after acquisitionof or merger with Nevada depository institution or its holding company;applicable laws; powers of Commissioner.

1. Subject to the provisions of NRS 666.410, 666.415 and 666.420, and after approval of theCommissioner pursuant to NRS 666.315, anout-of-state depository institution or its holding company may acquire controlof, acquire all or substantially all of the assets of, or merge with, a Nevadadepository institution or its holding company.

2. An out-of-state depository institution or holdingcompany that acquires a Nevada depository institution, or an out-of-statedepository institution that is the resulting depository institution aftermerging with a Nevada depository institution, or an out-of-state depositoryinstitution that otherwise establishes or acquires a branch in Nevada, may, inaccordance with applicable state and federal law:

(a) Continue to operate the Nevada depositoryinstitution or branch;

(b) Convert any existing main office or branch inNevada into a branch of the out-of-state depository institution;

(c) Establish or acquire additional branches of theout-of-state depository institution in any state where the Nevada depositoryinstitution could have done so had it not been acquired or merged; and

(d) Exercise any power and engage in any activity inthis state to the same extent as a depository institution of the same typewhose home state is Nevada, even if the out-of-state depository institution isnot authorized to exercise those powers or engage in those activities in theout-of-state depository institutions home state.

3. A branch in this state of an out-of-statedepository institution shall comply with:

(a) If the branch is not a federally charteredinstitution, the applicable laws relating to depository institutions of theinstitutions home state, including, without limitation, provisions relating tothe names of depository institutions; or

(b) If the institution is a federally charteredinstitution, the provisions of federal law.

4. If the laws of this state as a host state conflictwith the laws of another state as a home state, the laws of the home stateprevail, except that:

(a) The Commissioner may, by regulation, order thatNevada law prevail over that of the home state if the application of Nevada lawis necessary to preserve the safe and sound operation of the branch orotherwise protect the residents of this state; and

(b) The laws of this state regarding protection ofcustomers, fair lending and intrastate branching apply to a branch in thisstate of an out-of-state depository institution to the same extent as thoselaws apply to a branch in this state of a depository institution chartered bythis state.

5. This section does not affect the authority of theCommissioner to examine, supervise and regulate an out-of-state depository institutionoperating or seeking to operate a branch in this state or to take any action orissue any order with regard to that branch pursuant to NRS 666.325.

(Added to NRS by 1995, 1554; A 1997, 1001)

NRS 666.405 Acquisitionof Nevada depository institution for conversion to branch of out-of-statedepository institution or out-of-state holding company; restrictions;exceptions.

1. Except as otherwise provided in this section, anout-of-state depository institution without a branch in Nevada, or anout-of-state holding company without a depository institution in Nevada, mayacquire a Nevada depository institution and convert the institution to a branchof the out-of-state depository institution or depository institution of theout-of-state holding company. If the Nevada depository institution is charteredafter September 28, 1995, the Nevada depository institution may be so acquiredonly if it has been in existence for at least 5 years.

2. For the purposes of subsection 1:

(a) A depository institution chartered solely for thepurpose of acquiring another depository institution shall be deemed to havebeen in existence for the same period as the depository institution to beacquired, as long as the acquiring depository institution does not open forbusiness at any time before the acquisition.

(b) A bank that was originally chartered as acorporation or limited-liability company other than a depository institutionshall be deemed to have been in existence for the period since a certificate ofamendment of its articles of incorporation or organization was filed pursuantto NRS 659.035 to reorganize thecorporation or limited-liability company as a bank.

(c) A bank that was originally chartered as a Nevadadepository institution other than a bank shall be deemed to have been inexistence for the period since the original articles of incorporation ororganization of the depository institution were filed with the Secretary ofState.

(d) If a Nevada depository institution becomes thesuccessor in interest to the business of an out-of-state depository institutionwithout a branch bank in this state that previously acquired a Nevada depositoryinstitution or to an out-of-state holding company without a branch bank in thisstate that previously acquired a Nevada depository institution, theCommissioner shall include the period of existence of the original Nevadadepository institution when determining the period of existence of thesuccessor Nevada depository institution.

3. If the Commissioner considers it necessary toprotect depositors, creditors and other customers of a failing depositoryinstitution or a failing holding company which controls a depositoryinstitution, he may authorize the acquisition of the institution or company by,or its merger with, another institution or company regardless of the durationof existence of the failing depository institution or failing holding company.

4. The restriction set forth in subsection 1 does notapply to an acquisition of, or merger between, affiliated depositoryinstitutions.

(Added to NRS by 1995, 1555; A 1997, 1002; 1999, 428)

NRS 666.410 Establishmentor acquisition of Nevada branch by out-of-state depository institution orout-of-state holding company. An out-of-statedepository institution without a branch in Nevada or an out-of-state holdingcompany without a depository institution in Nevada may not establish a de novobranch in this State or acquire, through merger or otherwise, a branch of adepository institution in Nevada without acquiring the institution itself orits charter, except that, with the written approval of the Commissioner:

1. An out-of-state depository institution without abranch in Nevada or an out-of-state holding company without a depositoryinstitution in Nevada may establish a branch office or acquire an existingbranch in a county whose population is less than 100,000 without acquiring ormerging with a Nevada depository institution or a Nevada holding company; and

2. An out-of-state depository institution without abranch in Nevada which is owned or controlled by a holding company that isentitled to the exemption set forth in section 4(c)(i) of the Bank HoldingCompany Act of 1956, as amended, 12 U.S.C. 1843(c)(i), may acquire anexisting branch in Nevada without acquiring or merging with a Nevada depositoryinstitution or a Nevada holding company.

(Added to NRS by 1995, 1555; A 2005, 651)

NRS 666.415 Waiverof federal limits on concentration of deposits. Tothe extent authorized by federal law, the Commissioner may waive any applicablefederal limit on concentration of deposits if he finds that the waiver promotesthe availability of financial services or is otherwise in the public interest.The Commissioner may, by regulation, establish standards for granting a waiverpursuant to this section and the procedure for requesting a waiver. In making adecision to waive such a federally imposed limit, the Commissioner shall applya standard that does not discriminate in purpose or effect against out-of-statedepository institutions.

(Added to NRS by 1995, 1555)

NRS 666.420 Reportsby out-of-state depository institution or holding company. The Commissioner may, by regulation, require anout-of-state depository institution or holding company to submit such reportsor permit the submission of such reports prepared pursuant to federal law as,in his discretion, contain sufficient information pertinent to operations inNevada of branches of the institution or of depository institutions of the holdingcompany.

(Added to NRS by 1995, 1556)

 

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