2013 Rhode Island General Laws
Title 19 - Financial institutions
Chapter 19-7 - Interstate Banking, Interstate Branching and Bank Holding Company Mergers and Acquisitions
Section 19-7-4 - Interstate mergers of mutual financial institutions.

§ 19-7-4 Interstate mergers of mutual financial institutions. – (a) Any financial institution organized without capital stock may, subject to the approval of the director or the director's designee, merge or consolidate with one or more institutions, if:

(1) Each institution is organized without capital stock and is either a financial institution or an out-of-state bank; and

(2) At least one institution is an out-of-state bank, pursuant to a plan of merger or consolidation complying with the provisions of this section; provided, however, the following conditions shall apply prior to June 1, 1997 to the extent consistent with and not preempted by federal law:

(i) That the law of the state in which each these out-of-state banks has its principal office expressly permits this type of merger or consolidation and

(ii) The law of the state in which each of these out-of-state banks has its principal office expressly authorizes, under conditions not substantially more restrictive than those imposed by the laws of this state, as determined by the director or the director's designee, a financial institution organized without capital stock under the laws of this state to be the successor bank of this merger or consolidation.

(b) The plan of merger or consolidation shall conform to the relevant provisions of § 7-1.2-1001, and to the other requirements that may be imposed by the laws applicable to each bank not organized under the laws of this state.

(c) The plan of merger or consolidation shall require approval as follows:

(1) With respect to a mutual savings bank, by a two thirds (2/3) vote of the board of trustees and majority vote of the depositors of the mutual savings bank present in person or by proxy, at a meeting called by the board of trustees; and

(2) With respect to each bank not organized under the laws of this state, in accordance with the applicable provisions imposed by the laws under which it is organized. Thereafter, articles of merger or articles of consolidation complying with the applicable provisions of § 7-1.2-1003 and the applicable provisions of the laws under which each bank not organized under the laws of this state is organized shall be executed in accordance with these provisions and presented to the director or the director's designee for approval by filing three (3) originals with the director or the director's designee.

(d) Upon receipt of the articles of merger or consolidation, the director or the director's designee shall furnish the applicant a form of notice specifying the names of the constituent banks and assigning a date and place for public hearing on the plan of merger or consolidation. The applicant shall publish the notice at least once a week for three (3) successive weeks, in one or more newspapers designated by the director or the director's designee. Upon a finding that the public interest so requires, the director or the director's designee may lessen the period and the manner prescribed for giving notice. In determining whether to approve a proposed merger or consolidation, the director or the director's designee shall consider whether the merger or consolidation is consistent with the safety and soundness of, and the convenience and advantage of the communities served by, each of these institutions. The procedures for conducting hearings by the director or the director's designee and the rights of appeal from decisions of the director or the director's designee shall be governed by the applicable provisions of this title.

(e) If the director or the director's designee approves the merger or consolidation in accordance with subsection (d), he or she shall endorse his or her approval upon each original of the articles of merger or articles of consolidation and shall deliver the articles to the applicant. One original of the articles of merger or articles of consolidation bearing the approval in writing shall be filed with the director or the director's designee. Two (2) originals shall be filed with the secretary of state, who shall upon payment to him or her of twenty-five dollars ($25.00) issue a certificate of merger or certificate of consolidation pursuant [to] § 7-1.2-1003. Upon the issuance of the certificate or upon a later date, not more than thirty (30) days after the filing with the secretary of state of the articles of merger or articles of consolidation, that may be set forth in the plan, the merger or consolidation shall be effected pursuant to the provisions of this chapter with the effects set forth therein. At any time prior to the filing of the articles of merger or articles of consolidation with the secretary of state, the merger or consolidation may be abandoned pursuant to the provisions therefor, if any, set forth in the plan of merger or consolidation.

(f) A merger or consolidation may be approved and effected pursuant to the provisions of this section, notwithstanding that the capital to liabilities ratio of the constituent banks exceeds the percentage of any of the other constituent banks, and no constituent bank having such excess of percentage shall be required to pay an extra dividend or make any distribution to its shareholders or depositors, nor shall any shareholder or depositor have any appraisal or dissenting right with respect to the merger or consolidation.

(g) If the successor bank of a merger or consolidation is to be organized under laws other than the laws of this state, it shall file the following with the director or the director's designee contemporaneously with the application for approval of the merger or consolidation:

(1) An agreement that it may be served with process in this state in any proceeding for the enforcement of any obligation arising out of its business transacted in this state and any of its predecessor financial institutions; and

(2) An irrevocable appointment of the director as its agent to accept service of process in any proceeding in the courts of this state or the courts of the United States situated in this state.

History of Section.
(P.L. 1995, ch. 82, § 45; P.L. 1997, ch. 98, § 6; P.L. 2005, ch. 36, § 17; P.L. 2005, ch. 72, § 17.)