Ohio Adm.Code 1301:1 | Ohio Administrative Code 1301:1 — Department of Commerce | Division of Financial Institutions: Banks

Chapter 1301:1-1 Notice of Meetings of the Banking Board

Ohio Adm.Code 1301:1-1-02 Open public meetings of the banking commission.

(A) This rule is adopted in compliance with, and under the authority of division (F) of section 121.22 of the Revised Code, as amended.

(B) Any person may determine the time and place of all regularly scheduled meetings and the time, place, and purpose of all special meetings of the banking commission by:

(1) Writing to the following address: "deputy superintendent for banks, 77 South High Street, Columbus, Ohio 43215-6120";

(2) Calling the following telephone number during normal business hours: 614-728-8400; or

(3) Emailing at: web.dfi@com.ohio.gov.

(C) Any representative of the news media or any person may obtain notice of all special meetings by requesting in writing that the notice be provided. A request for notification shall be addressed to: "deputy superintendent for banks, 77 South High Street, Columbus, Ohio 43215-6120." The request shall provide the name of the individual or media representative to be contacted, the mailing address and a maximum of two telephone numbers where the person can be reached. The deputy superintendent shall maintain a list of all persons and representatives of the news media who have requested notice of special meetings pursuant to this rule. The deputy superintendent may periodically remove names from the list.

(1) In the event of a special meeting not of an emergency nature, the deputy superintendent shall notify each person or media representative on the list of the meeting by doing at least one of the following:

(a) Sending written notice, which may be mailed no later than four calendar days prior to the date of the special meeting;

(b) Giving notice by telephone no later than twenty-four hours prior to the special meeting; telephone notice shall be complete if a message has been left for the representative, or if, after reasonable effort, the deputy superintendent has been unable to provide telephone notice;

(2) In the event of a special meeting of an emergency nature, the deputy superintendent shall notify all persons and media representatives on the list of the meeting by any of the means described above, or by notifying the clerk of the state house press room. In such event, however, the notice need not be given twenty-four hours prior to the meeting, but shall be given as soon as possible.

Last updated May 19, 2025 at 8:07 AM

History

Effective: May 19, 2025
Promulgated Under: 119.03

Ohio Adm.Code 1301:1-1-03 Personal service.

(A) Any service required or authorized to be made under section 1121.37 of the Revised Code may, in accordance with that section, be made by personal service by the superintendent of financial institutions or the superintendent's designee.

(B) When service is made by personal service pursuant to this rule, the service shall be evidenced by a written receipt signed and dated at the time of the service by the person upon whom service is made. When service is made by personal service upon a person who is not a natural person, the service shall be made by delivery to the president or secretary or treasurer or cashier or chairman of the board or a vice president of the person and the president, secretary, treasurer, cashier, chairman of the board, or vice president shall sign and date the receipt of service in the officer's official capacity.

Last updated September 22, 2025 at 11:50 AM

History

Effective: December 15, 2000
Promulgated Under: 119.03

Ohio Adm.Code 1301:1-1-04 Designations and names that include "bank," "banker," "banking," or "trust".

(A) The prohibitions in section 1101.15 of the Revised Code apply to all names and designations under which business is done in this state, including legal names, fictitious names, trade names, trade marks, and service marks, and to all business forms, including corporations, partnerships, limited liability companies, and sole proprietorships.

(B) The prohibitions in section 1101.15 of the Revised Code apply to all names or designations that include "bank," "banker," "banking," "savings association," "savings and loan," "building and loan," "savings bank," or "trust" whether as standalone words, compound words, fanciful words, words with prefixes or suffixes, or words with extensions, such as ".com" or ".org."

(C)

(1) A designation or name that includes "bank," "banker," "banking," "savings association," "savings and loan," "building and loan," or "savings bank" is likely to mislead the public if, in the opinion of the superintendent of financial institutions, the listener or reader would reasonably understand the designation or name as the designation or name of a bank, without regard to whether there is, has been, or may be a bank by the designation or name being used.

(2) The superintendent may determine a name that includes "bank," "banker," "banking," "savings association," "savings and loan," "building and loan," or "savings bank" is not likely to mislead the public, i.e., the listener or reader would not reasonably understand the designation or name as the designation or name of a bank, in any of the following circumstances:

(a) If, in the opinion of the superintendent, the designation or name, on its face, clearly identifies the user as something other than a bank;

(b) If, in the opinion of the superintendent, the use of "bank," "banker," "banking," "savings association," "savings and loan," "building and loan," or "savings bank" in the designation or name merely indicates an association or affiliation with one or more banks or bankers, a geographic reference, or the proper name of a natural person;

(c) If, in the opinion of the superintendent, the designation or name, on its face, is one that is commonly understood not to involve financial services or activities, such as "food bank," "blood bank," or "eye bank";

(d) If, in the case of a company that controls one or more banks, the designation or name, on its face, includes the designation or name of a bank the company controls at the time the company uses the designation or name that includes "bank," "banker," or "banking" and something more that distinguishes the designation or name of the company from the designation or name of the bank.

(3) In determining whether a designation or name that includes "bank," "banker," "banking," "savings association," "savings and loan," "building and loan," or "savings bank" is not likely to mislead the public, it is not relevant whether the user of the designation or name is operating for profit or not.

(D)

(1) A designation or name that includes "trust" is likely to mislead the public if, in the opinion of the superintendent of financial institutions, the listener or reader would reasonably understand the designation or name as the designation or name of either a person engaged in trust business or a bona fide trust, without regard to whether there is, has been, or may be a person engaged in trust business or a bona fide trust by the designation or name being used.

(2) The superintendent may determine a name that includes "trust" is not likely to mislead the public, i.e., the listener or reader would not reasonably understand the designation or name as the designation or name of a either a person engaged in trust business or a bona fide trust, in any of the following circumstances:

(a) If, in the opinion of the superintendent, the designation or name, on its face, clearly identifies the user as something other than a person engaged in trust business or a bona fide trust;

(b) If, in the opinion of the superintendent, the use of "trust" in the designation or name merely indicates an association or affiliation with one or more persons engaged in trust business or bona fide trusts, a geographic reference, or the proper name of a natural person;

(c) If, in the case of a company that controls one or more persons engaged in trust business or bona fide trusts, the designation or name, on its face, includes the designation or name of a person authorized to engage in trust business or a bona fide trust the company controls at the time the company uses the designation or name that includes "trust" and something more that distinguishes the designation or name of the company from the designation or name of the person authorized engage in trust business or bona fide trust;

(d) If, in the opinion of the superintendent, use of "trust" in the designation or name, on its face, is one that is commonly understood not to involve fiduciary activities, trust business, or bona fide trusts.

(3) It may not be likely to mislead the public for a bank, savings association, or savings bank that engages in trust business through a subsidiary, rather than directly, to use a designation or name that includes "trust," if the subsidiary is a person authorized to engage in trust business.

(4) In determining whether a designation or name that includes "trust" is not likely to mislead the public, it is not relevant whether the user of the designation or name is operating for profit or not.

(E) A determination by the superintendent under section 1101.15 of the Revised Code that a designation or name is not likely to mislead the public:

(1) Is merely a determination for the purposes of section 1101.15 of the Revised Code, i.e., to protect the public from misunderstanding the designation or name is that of a bank, someone engaged in trust business, or a bona fide trust when it is not;

(2) Is not a determination of any of the following:

(a) The designation or name is not misleading for any other purpose;

(b) The person using the name or designation is not misrepresenting itself as a bank, person authorized to engage in trust business, or a trust;

(c) The person using the designation or name is not subject to other licensing requirements before engaging in its business in this state;

(3) Is not an opinion on the availability of the name or designation, an authorization to use the name or designation, or protection for the user against any lawful claims of persons or entities having superior rights in the same or a similar name or designation.

(F) A determination by the superintendent under section 1101.15 of the Revised Code that a designation or name is not likely to mislead the public does not extend to any other variation on the designation or name.

Last updated July 10, 2025 at 12:13 PM

History

Effective: November 22, 2019
Promulgated Under: 119.03

Ohio Adm.Code 1301:1-1-05 Reimbursement to banks and trust companies for assembling or providing financial records.

This rule is issued by the superintendent of financial institutions pursuant to division (C) of section 9.02 of the Revised Code. It establishes the rates and conditions for reimbursement of actual and necessary costs directly incurred by banks and trust companies in assembling or providing customer financial records to any party.

(A) Except as provided in this rule or in section 9.02 of the Revised Code, any party, including a governmental authority, that requires or requests a bank or trust company to assemble or provide a customer's financial records shall pay the bank or trust company for all actual and necessary costs directly incurred in searching for, reproducing, or transporting these records according to the following schedule:

(1) Search and processing costs. Reimbursement of search and processing costs shall be the total amount of personnel direct time incurred in locating and retrieving, reproducing, packaging, and preparing financial records for shipment. The rate for search and processing costs is twenty-seven dollars per hour per person for clerical or technical personnel, computed on the basis of six dollars and seventy-five cents per quarter hour or fraction thereof, and thirty-seven dollars per hour per person for managerial or supervisory personnel, computed on the basis of nine dollars and twenty-five cents per quarter hour or fraction thereof, and is limited to the total amount of personnel time spent in locating and retrieving documents or information or reproducing or packaging and preparing documents for shipment where required or requested by a party. Specific salaries of such persons shall not be included in search costs. In addition, search and processing costs do not include salaries, fees, or similar costs for analysis of material or for managerial or legal advice, expertise, research, or time spent for any of these activities. If itemized separately, search and processing costs may include the actual cost of extracting information stored by computer in the format in which it is normally produced, based on computer time and necessary supplies; however, personnel time for computer search may be paid for only at the rate specified in this paragraph.

(2) Reproduction costs. Reimbursements for reproduction costs shall be for costs incurred in making copies of documents required or requested. The rate for reproduction costs for making copies of required or requested documents is as follows:

(a) Twenty-five cents per page for photocopies;

(b) Twenty-five cents per page for paper copies of microfiche;

(d) Actual cost for each computer diskette or compact disk, or other storage media.

(3) Transportation costs. Reimbursement for transportation costs shall be for necessary costs, directly incurred, to transport personnel to locate and retrieve the information required or requested; and necessary costs, directly incurred solely by the need to convey the required or requested material to the place of examination.

(B) A bank or trust company is not entitled to reimbursement under this rule for costs incurred in assembling or providing the following records or information:

(1) Security interest, bankruptcy claims, debt collection. Any financial records provided as an incident to perfecting a security interest, proving a claim in bankruptcy, or otherwise collecting on a debt owing either to the bank or trust company itself or in its role as a fiduciary.

(2) Nonidentifiable information. Financial records that are not identified with or identifiable as being derived from the financial records of a particular customer.

(3) Financial institution regulatory authorities. Financial records disclosed to a financial institution regulatory authority in the exercise of its supervisory or regulatory functions with respect to a financial institution.

(C) Payment shall be limited to material required or requested. Payment shall be made only for costs that are directly incurred, actual, and necessary. No payment must be made until the bank or trust company satisfactorily complies with the request or requirement, except that in the case where the request or requirement is withdrawn or revoked, the bank or trust company shall be reimbursed for the actual and necessary costs directly incurred in assembling financial records required or requested to be produced prior to the time the party notifies the bank or trust company that the request or requirement is withdrawn or revoked. No payment must be made unless the bank or trust company submits an itemized bill or invoice showing specific details concerning search and processing, reproduction, and transportation costs.

(D) For the purposes of this rule, the term "costs directly incurred" means costs incurred solely and necessarily as a consequence of searching for, reproducing or transporting books, papers, records, or other data, in order to comply with a request or requirement to produce a customer's financial records. The term does not include any allocation of fixed costs (overhead, equipment, depreciation, etc.). If a bank or trust company has financial records that are stored at an independent storage facility that charges a fee to search for, reproduce, or transport particular records requested, these costs are considered to be directly incurred by the bank or trust company.

(E) Where terms used in this rule are defined in section 9.02 of the Revised Code, they shall have the meaning set forth in that section.

Last updated May 19, 2025 at 8:07 AM

History

Effective: May 19, 2025
Promulgated Under: 119.03

Chapter 1301:1-2 Computation of Capital

Ohio Adm.Code 1301:1-2-01 Computation of capital.

"Capital," as defined in division (F) of section 1101.01 of the Revised Code, is calculated as set forth in 12 C.F.R. 32.2, as in effect on August 13, 2024.

Last updated May 19, 2025 at 8:07 AM

History

Effective: May 19, 2025
Promulgated Under: 119.03

Ohio Adm.Code 1301:1-2-02 Trust company capital.

(A) In evaluating the adequacy of a trust company's capital, the superintendent of financial institutions shall consider all of the following:

(1) The nature and volume of the trust company's business, including whether the trust company is primarily engaged in trust business or primarily engaged in banking business;

(2) The amount, nature, quality, and liquidity of the trust company's assets;

(3) The amount and nature of the trust company's liabilities, including those that are not presently due or are contingent;

(4) The amount and nature of the trust company's fixed costs;

(5) The history of and prospects for the trust company to earn and retain income;

(6) The quality of the trust company's operations;

(7) The quality of the trust company's management;

(8) The nature and quality of the trust company's ownership;

(9) The nature, terms, and extent of the trust company's insurance coverage, including deductibles, limitations, and exclusions;

(10) If the trust company is a corporation organized under the laws of another state or country and authorized to accept and execute trusts in that state or country, the assessment of the trust regulatory authority of that state or country, if any, of the adequacy of the trust company's capital;

(11) Any other factor the superintendent finds to be relevant under the circumstances.

(B)

(1) Except as provided in paragraph (B)(2) of this rule, if a trust company is engaged only in trust business, all of the following apply:

(a)

(i) The trust company shall maintain capital in the amount the superintendent determines after considering the factors listed in paragraph (A) of this rule and, except as provided in paragraph (B)(1)(a)(ii) of this rule, the amount shall be not less than $3,000,000 not including the trust company's fixed assets or any assets the trust company has pledged to any person other than the treasurer of state of the state of Ohio pursuant to section 1111.04 of the Revised Code.

(ii) Only a trust company that demonstrates extraordinary circumstances to the superintendent warranting the conclusion its capital is adequate may maintain capital of less than $3,000,000, not including the trust company's fixed assets or any assets the trust company has pledged to any person other than the treasurer of state of the state of Ohio pursuant to section 1111.04 of the Revised Code. A conclusion by the superintendent under this provision that a trust company's capital is adequate does not preclude the superintendent subsequently concluding the trust company's capital is no longer adequate and requiring the trust company to maintain a higher level of capital.

(b) If a trust company is newly organized, the trust company's minimum capital shall include an amount the superintendent finds likely to be sufficient to absorb the trust company's operating losses until the trust company can reasonably be expected to have income sufficient to cover its operating costs.

(i) Bonds, bills, notes, or other debt securities of the United States or for which the full faith and credit of the United States is pledged for payment of principal and interest;

(ii) Bonds, notes, or other debt securities issued by this state, or any other state of the United States, that are the direct obligation of the issuer and for which the full faith and credit of the issuer is pledged to provide payment of the principal and interest;

(iii) Bonds, notes, or other debt securities of any county, municipal corporation, township, school district, improvement district, sewer district, or other subdivision of this state or any other state of the United States that are the direct obligation of the county or the subdivision issuing them and for which the full faith and credit of the issuing county or subdivision is pledged to provide payment of principal and interest;

(iv) Bonds or other debt obligations issued or guaranteed by agencies or instrumentalities of the United States, regardless of the guarantee of payment of principal and interest by the United States;

(v) Subject to conditions and restrictions the superintendent may prescribe, bonds, debentures, and other debt securities issued by any country or multinational organization that are the direct obligation of the issuing country or multinational organization and for which the full faith and credit of the issuing country or multinational organization is pledged to provide payment of principal and interest;

(vi) Bankers' acceptances of the kinds described in divisions (B) and (C) of section 1109.17 of the Revised Code;

(vii) Subject to conditions and restrictions the superintendent may prescribe, bonds, debentures, and other debt securities and obligations of any state or political subdivision of a state, a public corporation, or governmental agency that are payable solely out of anticipated revenues, commonly referred to as revenue bonds;

(viii) As defined and restricted by the superintendent, marketable obligations evidencing the indebtedness of any corporation in the form of bonds, notes, debentures, or equipment trust certificates, commonly referred to as investment securities;

(ix) Other bonds, debentures, and debt securities that are permissible investments for national banks that the superintendent may approve for investments by banks;

(x) Deposits insured by the federal deposit insurance corporation;

(xi) Registered investment companies whose investments consist solely of investments listed in paragraphs (B)(1)(c)(i) to (B)(1)(c)(x) of this rule;

(xii) In the case of a newly organized trust company, to the extent authorized by the superintendent, transaction account deposits in federally insured depository institutions in excess of the federal deposit insurance limit.

(2) If the trust company is a corporation organized under the laws of another state or country and authorized to accept and execute trusts in that state or country and the trust company's trust business is regulated by an authority of that state or country, the superintendent may determine the trust company's capital is adequate even if the trust company's capital is less than otherwise allowed by paragraph (B)(1)(a) of this rule and is invested other than otherwise required by paragraph (B)(1)(c) of this rule.

(C) If a trust company is engaged primarily in the banking business, the superintendent shall determine the adequacy of the trust company's capital principally with regard to the trust company's banking business giving additional consideration to the risk posed by the trust company's trust business.

(D) If a trust company is not engaged primarily in the banking business and is not engaged only in the trust business, the superintendent may apply to the trust company's capital any of the restrictions and requirements applicable to the capital of a trust company engaged only in trust business by paragraph (B) of this rule.

Last updated September 22, 2025 at 11:50 AM

History

Effective: December 15, 2000
Promulgated Under: 119.03

Chapter 1301:1-3 Lending Limits and Standards

Ohio Adm.Code 1301:1-3-01 Lending limits.

(A) As used in this rule:

(1) "Borrower" means a person who is named as a borrower or debtor in a loan or extension of credit, or any other person, including a drawer, endorser, or guarantor, who is deemed to be a borrower under the "direct benefit" or the "common enterprise" tests set forth in paragraph (D) of this rule.

(2) "Capital" has the same meaning as in rule 1301:1-2-01 of the Administrative Code.

(3) "Close of business" means the time at which a state bank closes its accounting records for the business day.

(4) "Consumer" means the user of any products, commodities, goods or services, whether leased or purchased, but does not include any person who purchases products or commodities for resale or fabrication into goods for sale.

(5) "Consumer paper" means paper relating to automobiles, mobile homes, residences, office equipment, household items, tuition fees, insurance premium fees, and similar consumer items. Consumer paper also includes paper covering the lease, where the state bank is not the owner or lessor, or purchase of equipment for use in manufacturing, farming, construction, or excavation.

(6)

(a) "Contractual commitment to advance funds" includes a state bank's obligation to do any of the following:

(i) A bank's obligation to make payment, directly or indirectly, to a third person contingent upon default by a customer of the state bank in performing an obligation in keeping with the agreed upon terms of the customer's contract with the third person, or to make payments upon some other stated condition;

(ii) A state bank's obligation to guarantee or act as surety for the benefit of a person;

(iii) A state bank's obligation to advance funds under a qualifying commitment to lend, as defined in paragraph (A)(12) of this rule;

(iv) A state bank's obligation to advance funds under a standby letter of credit as defined in paragraph (A)(16) of this rule, a put, or other similar arrangement.

(b) "Contractual commitment to advance funds" does not include commercial letters of credit and similar instruments where the issuing bank expects the beneficiary to draw on the issuer, that do not guarantee payment, and that do not provide for payment in the event of a default by a third party.

(7) "Control" is presumed to exist when, directly or indirectly or acting through or together with one or more persons, any of the following occurs:

(a) A person owns, controls, or has the power to vote twenty-five per cent or more of any class of voting securities of another person;

(b) A person controls, in any manner, the election of a majority of the directors, trustees, or other persons exercising similar functions of another person;

(8) "Current market value" means the bid or closing price listed for an item in a regularly published listing or an electronic reporting service.

(9) "Financial instrument" means stocks, notes, bonds, and debentures traded on a national securities exchange, over-the-counter margin stocks as defined in 12 C.F.R. 221, as in effect on December 11, 2024, commercial paper, negotiable certificates of deposit, bankers' acceptances, and shares in money market and mutual funds of the type that issue shares in which banks may perfect a security interest. Financial instruments may be denominated in foreign currencies that are freely convertible to United States dollars. The term "financial instrument" does not include mortgages.

(10) "Loans and extensions of credit" means a state bank's direct or indirect advance of funds to or on behalf of a borrower based on an obligation of the borrower to repay the funds or repayable from specific property pledged by or on behalf of the borrower.

(a) Loans or extensions of credit for purposes of section 1109.22 of the Revised Code and this rule include any of the following:

(i) A contractual commitment to advance funds, as defined in paragraph (A)(6) of this rule;

(ii) A maker's or endorser's obligation arising from a state bank's discount of commercial paper;

(iii) A state bank's purchase of securities subject to an agreement that the seller will repurchase the securities at the end of a stated period, but not including a state bank's purchase of securities that are both of the following:

(a) Securities that are any of the following:

(i) Securities a state bank may invest in pursuant to divisions (A)(1) to (A)(4) of section 1109.32 of the Revised Code;

(ii) Securities a state bank may underwrite and deal in pursuant to section 1109.36 of the Revised Code;

(iii) Other securities the superintendent of financial institutions determines to be eligible;

(b) Subject to a repurchase agreement, where the purchasing bank has assured control over or has established its rights to the securities as collateral;

(iv) A state bank's purchase of third-party paper subject to an agreement that the seller will repurchase the paper upon default or at the end of a stated period. The amount of the state bank's loan is the total unpaid balance of the paper owned by the bank less any applicable dealer reserves retained by the state bank and held by the state bank as collateral security. Where the seller's obligation to repurchase is limited, the state bank's loan is measured by the total amount of the paper the seller may ultimately be obligated to repurchase. A state bank's purchase of third party paper without direct or indirect recourse to the seller is not a loan or extension of credit to the seller;

(v) An overdraft, whether or not pre-arranged, but not an intra-day overdraft for which payment is received before the close of business of the state bank that makes the funds available;

(vi) The sale of federal funds with a maturity of more than one business day, but not federal funds with a maturity of one day or less or federal funds sold under a continuing contract;

(vii) Loans or extensions of credit that have been charged off on the books of the state bank in whole or in part, unless the loan or extension of credit is any of the following:

(a) Is unenforceable by reason of discharge in bankruptcy;

(b) Is no longer legally enforceable because of expiration of the statute of limitations or a judicial decision;

(c) Is no longer legally enforceable for other reasons, provided that the state bank maintains sufficient records to demonstrate that the loan is unenforceable.

(b) The following items do not constitute loans or extensions of credit for purposes of section 1109.22 of the Revised Code and this rule:

(i) Additional funds advanced for the benefit of a borrower by a state bank for payment of taxes, insurance, utilities, security, and maintenance and operating expenses necessary to preserve the value of real or personal property securing the loan, consistent with safe and sound banking practices, but only if the advance is for the protection of the state bank's interest in the collateral, and provided that the amounts advanced must be treated as an extension of credit if a new loan or extension of credit is made to the borrower;

(ii) Accrued and discounted interest on an existing loan or extension of credit, including interest that has been capitalized from prior notes and interest that has been advanced under terms and conditions of a loan agreement;

(iii) Financed sales of a state bank's own assets, including other real estate owned, if the financing does not put the state bank in a worse position than when the state bank held title to the assets;

(iv) A renewal or restructuring of a loan as a new loan or extension of credit, following the exercise by a state bank of reasonable efforts, consistent with safe and sound banking practices, to bring the loan into conformance with the lending limit, unless any of the following apply:

(a) New funds are advanced by the state bank to the borrower, except as permitted by paragraph (B)(2)(e) of this rule;

(b) A new borrower replaced the original borrower;

(c) The superintendent determines that a renewal or restructuring was undertaken as a means to evade the state bank's lending limit;

(v) Amounts paid against uncollected funds in the normal process of collection;

(vi)

(a) That portion of a loan or extension of credit sold as a participation by a state bank on a non-recourse basis, provided that the participation results in a pro rata sharing of credit risk proportionate to the respective interests of the originating and participating lenders. Where a participation agreement provides that repayment must be applied first to the portions sold, a pro rata sharing will be deemed to exist only if the agreement also provides that, in the event of a default or comparable event defined in the agreement, participants must share in all subsequent repayments and collections in proportion to their percentage participation at the time of the occurrence of the event.

(b) When an originating state bank funds the entire loan, it must receive funding from the participants before the close of business of its next business day. If the participating portions are not received within that period, then the portions funded will be treated as a loan by the originating state bank to the borrower. If the portions so attributed to the borrower exceed the originating state bank's lending limit, the loan may be treated as nonconforming subject to paragraph (E) of this rule, rather than a violation, if all of the following apply:

(i) The originating state bank had a valid and unconditional participation agreement with a participating bank or banks that was sufficient to reduce the loan to within the originating state bank's lending limit;

(ii) The participating bank reconfirmed its participation and the originating state bank had no knowledge of any information that would permit the participant to withhold its participation;

(iii) The participation was to be funded by close of business of the originating state bank's next business day.

(11) "Person" means an individual; sole proprietorship; partnership; joint venture; association; trust; estate; business trust; corporation; limited liability company; not-for-profit corporation; sovereign government or agency, instrumentality, or political subdivision of a sovereign government; or any similar entity or organization.

(12) "Qualifying commitment to lend" means a legally binding written commitment to lend that, when combined with all other outstanding loans and qualifying commitments to a borrower, was within the state bank's lending limit when entered into, and has not been disqualified.

(a) In determining whether a commitment is within the state bank's lending limit when made, the bank may deduct from the amount of the commitment the amount of any legally binding loan participation commitments that are issued concurrent with the state bank's commitment and that would be excluded from the definition of loan or extension of credit under paragraph (A)(10)(b)(vi) of this rule.

(b) If the state bank subsequently chooses to make an additional loan and that subsequent loan, together with all outstanding loans and qualifying commitments to a borrower, exceeds the state bank's applicable lending limit at that time, the state bank's qualifying commitments to the borrower that exceed the state bank's lending limit at that time are deemed to be permanently disqualified, beginning with the most recent qualifying commitment and proceeding in reverse chronological order. When a commitment is disqualified, the entire commitment is disqualified and the disqualified commitment is no longer considered a loan or extension of credit. Advances of funds under a disqualified or non-qualifying commitment may only be made to the extent that the advance, together with all other outstanding loans to the borrower, do not exceed the state bank's lending limit at the time of the advance, calculated pursuant to paragraph (C) of this rule.

(13) "Readily marketable collateral" means financial instruments and bullion that are salable under ordinary market conditions with reasonable promptness at a fair market value determined by quotations based upon actual transactions on an auction or similarly available daily bid and ask price market.

(14) "Readily marketable staple" means an article of commerce, agriculture, or industry, such as wheat and other grains, cotton, wool, and basic metals such as tin, copper, and lead, in the form of standardized interchangeable units, that is easy to sell in a market with sufficiently frequent price quotations.

(a) An article comes within this definition if both of the following apply:

(i) The exact price is easy to determine;

(ii) The staple itself is easy to sell at any time at a price that would not be considerably less than the amount at which it is valued as collateral.

(b) Whether an article qualifies as a readily marketable staple is determined on the basis of the conditions existing at the time the loan or extension of credit that is secured by the staple is made.

(15) "Sale of federal funds" means any transaction between depository institutions involving the transfer of immediately available funds resulting from credits to deposit balances at federal reserve banks, or from credits to new or existing deposit balances due from a correspondent depository institution.

(16) "Standby letter of credit" means any letter of credit, or similar arrangement, that represents an obligation to the beneficiary on the part of the issuer to do any of the following:

(a) To repay money borrowed by or advanced to or for the account of the account party;

(b) To make payment on account of any indebtedness undertaken by the account party;

(B) Subject to paragraphs (D) and (E) of this rule, the following apply to a state bank's outstanding loans or extensions of credit to any one borrower:

(1) Generally a state bank's total outstanding loans and extensions of credit to one borrower may not exceed fifteen per cent of the state bank's capital, plus an additional ten per cent of the state bank's capital, if the amount that exceeds the state bank's fifteen per cent general limit is fully secured by readily marketable collateral, as defined in paragraph (A)(13) of this rule. This is a state bank's "combined general limit." To qualify for the additional ten per cent limit, the state bank must perfect a security interest in the collateral under applicable law, and the collateral must have a current market value at all times of at least one hundred per cent of the amount of the loan or extension of credit that exceeds the state bank's fifteen per cent general limit.

(2) The following loans or extensions of credit are subject to the special lending limits indicated, and, in the case of loans and extensions of credit that qualify for more than one special lending limit, the special limits are cumulative:

(a) A state bank's loans or extensions of credit to one borrower secured by bills of lading, warehouse receipts, or similar documents transferring or securing title to readily marketable staples, as defined in paragraph (A)(14) of this rule, may not exceed thirty-five per cent of the state bank's capital in addition to the amount allowed under the state bank's combined general limit, and then only if all of the following conditions are met:

(i) The market value of the staples securing the loan must at all times equal at least one hundred fifteen per cent of the amount of the outstanding loan that exceeds the state bank's combined general limit.

(ii) Staples that qualify for this special limit must be nonperishable or, when appropriate, may be refrigerated or frozen, and must be fully covered by any insurance that is customary. Whether a staple is non-perishable must be determined on a case-by-case basis because of differences in handling and storing commodities.

(iii) The loan or extension of credit arises from a single transaction or is secured by the same staples, provided that the duration of the loan or extension of credit is:

(a) Not more than ten months if secured by nonperishable staples;

(b) Not more than six months if secured by refrigerated or frozen staples.

(iv) The holder of the warehouse receipts, order bills of lading, documents qualifying as documents of title under the uniform commercial code, or other similar documents, must have control and be able to obtain immediate possession of the staple so that the state bank is able to sell the underlying staples and promptly transfer title and possession to a purchaser if default should occur on a loan secured by such documents. The existence of a brief notice period, or similar procedural requirements under applicable law, for the disposal of the collateral will not affect the eligibility of the instruments for this special limit.

(a) Field warehouse receipts are an acceptable form of collateral when issued by a duly bonded and licensed grain elevator or warehouse having exclusive possession and control of the staples even though the grain elevator or warehouse is maintained on the premises of the owner of the staples.

(b) Warehouse receipts issued by the borrower-owner that is a grain elevator or warehouse company, duly-bonded and licensed and regularly inspected by state or federal authorities, may be considered eligible collateral under this provision only when the receipts are registered with an independent registrar whose consent is required before the staples may be withdrawn from the warehouse.

(b) A state bank's loans and extensions of credit to one borrower that arise from the discount of negotiable or nonnegotiable installment consumer paper, as defined in paragraph (A)(5) of this rule, that carries a full recourse endorsement or unconditional guarantee by the person selling the paper, may not exceed ten per cent of the state bank's capital in addition to the amount allowed under the state bank's combined general limit and only if consistent with all of the following that apply:

(i) An unconditional guarantee may be in the form of a repurchase agreement or separate guarantee agreement. A condition reasonably within the power of the state bank to perform, such as the repossession of collateral, will not make conditional an otherwise unconditional guarantee.

(ii) Where the seller of the paper offers only partial recourse to the state bank, the lending limits of this rule apply to the obligation of the seller to the state bank, which is measured by the total amount of paper the seller may be obligated to repurchase or has guaranteed.

(iii) Where the state bank is relying primarily on the maker of the paper for payment of the loans or extensions of credit and not on any full or partial recourse endorsement or guarantee by the seller of the paper, the lending limits of this rule apply only to the maker. The state bank must substantiate its reliance on the maker with both of the following:

(a) Records supporting the state bank's independent credit analysis of the maker's ability to repay the loan or extension of credit, maintained by the state bank or by a third party that is contractually obligated to make those records available for examination purposes;

(b) A written certification by an officer of the state bank authorized by the state bank's board of directors or any designee of that officer, that the state bank is relying primarily upon the maker to repay the loan or extension of credit.

(iv) Where paper is purchased in substantial quantities, the records, evaluation, and certification must be in a form appropriate for the class and quality of paper involved. The state bank may use sampling techniques, or other appropriate methods, to independently verify the reliability of the credit information supplied by the seller.

(c) A state bank's loans or extensions of credit to one borrower secured by shipping documents or instruments that transfer or secure title to or give a first lien on livestock may not exceed ten per cent of the state bank's capital in addition to the amount allowed under the state bank's combined general limit, and only if all of the following conditions that apply are met:

(i) The market value of the livestock securing the loan must at all times equal at least one hundred fifteen per cent of the amount of the outstanding loan that exceeds the bank's combined general limit. For purposes of paragraph (B)(2)(c) of this rule, the term livestock includes dairy and beef cattle, hogs, sheep, goats, horses, mules, poultry and fish, whether or not held for resale.

(ii) The state bank must maintain in its files an inspection and valuation for the livestock pledged that is reasonably current, taking into account the nature and frequency of turnover of the livestock to which the documents relate, but in any case not more than twelve months old.

(iii) Under the laws of certain states, persons furnishing pasturage under a grazing contract may have a lien on the livestock for the amount due for pasturage. If a lien that is based on pasturage furnished by the lien or prior to the state bank's loan or extension of credit is assigned to the state bank by a recordable instrument and protected against being defeated by some other lien or claim, by payment to a person other than the state bank, or otherwise, it will qualify under this exception provided the amount of the perfected lien is at least equal to the amount of the loan and the value of the livestock is at no time less than one hundred fifteen per cent of the portion of the loan or extension of credit that exceeds the state bank's combined general limit. When the amount due under the grazing contract is dependent upon future performance, the resulting lien does not meet the requirements of the exception.

(d) A state bank's loans and extensions of credit to one borrower that arise from the discount by dealers in dairy cattle of paper given in payment for the cattle may not exceed ten per cent of the state bank's capital in addition to the amount allowed under the state bank's combined general limit, and only if both of the following conditions are met:

(i) The paper carries the full recourse endorsement or unconditional guarantee of the seller.

(ii) The paper is secured by the cattle being sold, pursuant to liens that allow the state bank to maintain a perfected security interest in the cattle under applicable law.

(e) A state bank may renew a qualifying commitment to lend, as defined in paragraph (A)(12) of this rule, and complete funding under that commitment if all of the following criteria are met:

(i) The completion of funding is consistent with safe and sound banking practices and is made to protect the position of the state bank.

(ii) The completion of funding will enable the borrower to complete the project for which the qualifying commitment to lend was made.

(iii) The amount of the additional funding does not exceed the unfunded portion of the state bank's qualifying commitment to lend.

(3) The following loans or extensions of credit are not subject to the lending limits of section 1109.22 of the Revised Code or this rule:

(a) Loans or extensions of credit arising from the discount of negotiable commercial or business paper that evidences an obligation to the person negotiating the paper, if both of the following conditions are met:

(i) The paper is given in payment of the purchase price of commodities purchased for resale, fabrication of a product, or any other business purpose that may reasonably be expected to provide funds for payment of the paper;

(ii) The paper bears the full recourse endorsement of the owner of the paper, except that paper discounted in connection with export transactions, that is transferred without recourse, or with limited recourse, must be supported by an assignment of appropriate insurance covering the political, credit, and transfer risks applicable to the paper, such as insurance provided by the export-import state bank.

A failure to pay principal or interest on commercial or business paper when due does not result in a loan or extension of credit to the maker or endorser of the paper; however, the amount of the paper thereafter must be counted in determining whether additional loans or extensions of credit to the same borrower may be made within the limits of section 1109.22 of the Revised Code and this rule.

(b) A state bank's acceptance of drafts eligible for rediscount under divisions (B) and (C) of section 1109.17 of the Revised Code, or a state bank's purchase of acceptances created by other banks that are eligible for rediscount under those sections; other than all of the following:

(i) A state bank's acceptance of drafts ineligible for rediscount, which constitutes a loan by the state bank to the customer for whom the acceptance was made, in the amount of the draft;

(ii) A state bank's purchase of ineligible acceptances created by other banks, which constitutes a loan from the state purchasing bank to the accepting bank, in the amount of the purchase price;

(iii) A state bank's purchase of its own acceptances, which constitutes a loan to the state bank's customer for whom the acceptance was made, in the amount of the purchase price.

(c) Loans or extensions of credit, or portions of them, to the extent fully secured by United States obligations if both of the following apply:

(i) The extent of the security is determined by the current market value of the collateral, which may be either of the following:

(a) Bonds, notes, certificates of indebtedness, or treasury bills of the United States or similar obligations fully guaranteed as to principal and interest by the United States;

(b) Loans to the extent guaranteed as to repayment of principal by the full faith and credit of the United States government, as set forth in paragraph (B)(3)(d)(ii) of this rule.

(ii) The state bank perfects a security interest in the collateral under applicable law.

(d) Loans to or guaranteed by a federal agency, which may be either of the following:

(i) Loans or extensions of credit to any department, agency, bureau, board commission, or establishment of the United States or any corporation wholly owned directly or indirectly by the United States;

(ii) Loans or extensions of credit, including portions of them, to the extent secured by unconditional takeout commitments or guarantees of any of the governmental entities listed in paragraph (B)(3)(d)(i) of this rule, subject to both of the following:

(a) The commitment or guarantee is payable in cash or its equivalent within sixty days after demand for payment is made.

(b) The commitment or guarantee is considered unconditional if the protection afforded the state bank is not substantially diminished or impaired if loss should result from factors beyond the state bank's control. Protection against loss is not materially diminished or impaired by procedural requirements, such as an agreement to pay on the obligation only in the event of default, including default over a specific period of time, a requirement that notification of default be given within a specific period after its occurrence, or a requirement of good faith on the part of the state bank.

(e) Loans or extensions of credit to a state or political subdivision that constitute a general obligation of the state or political subdivision, and for which the lending state bank has obtained the opinion of counsel that the loan or extension of credit is a valid and enforceable general obligation of the borrower, and loans or extensions of credit, including portions of them, to the extent guaranteed or secured by a general obligation of a state or political subdivision and for which the lending state bank has obtained the opinion of counsel that the guarantee or collateral is a valid and enforceable general obligation of that public body.

(f) Loans or extensions of credit, including portions of them, to the extent secured by a segregated deposit account in the lending state bank, provided a security interest in the deposit has been perfected under applicable law, and subject to both of the following:

(i) Where the deposit is eligible for withdrawal before the secured loan matures, the state bank must establish internal procedures to prevent release of the security without the lending state bank's prior consent.

(ii) A deposit that is denominated and payable in a currency other than that of the loan or extension of credit that it secured may be eligible for this exception if the currency is freely convertible to United States dollars, subject to both of the following conditions:

(a) This exception applies to only that portion of the loan or extension of credit that is covered by the United States dollar value of the deposit.

(b) The lending bank must establish procedures periodically to revalue foreign currency deposits to ensure that the loan or extension of credit remains fully secured at all times.

(g) Loans or extensions of credit to any financial institution or to any receiver, conservator, superintendent of financial institutions, or other agent in charge of the business and property of a financial institution when an emergency situation exists and a state bank is asked to provide assistance to another financial institution, and the loan is approved by the superintendent. For purposes of this paragraph, "financial institution" means a commercial bank, savings bank, trust company, savings association, or credit union.

(h) Loans or extensions of credit to the student loan marketing association.

(i) A loan or extension of credit to an industrial development authority or similar public entity created to construct and lease a plant facility, including a health care facility, to an industrial occupant is deemed a loan to the lessee, if all of the following conditions are met:

(i) The state bank evaluates the creditworthiness of the industrial occupant before the loan is extended to the authority;

(ii) The authority's liability on the loan is limited solely to whatever interest it has in the particular facility;

(iii) The authority's interest is assigned to the state bank as security for the loan or the industrial occupant issues a promissory note to the state bank that provides a higher order of security than the assignment of a lease;

(iv) The industrial occupant's lease rentals are assigned and paid directly to the state bank.

(j) A loan or extension of credit to a leasing company for the purpose of purchasing equipment for lease is deemed a loan to the lessee, if all of the following conditions are met:

(i) The state bank evaluates the creditworthiness of the lessee before the loan is extended to the leasing corporation;

(ii) The loan is without recourse to the leasing corporation;

(iii) The state bank is given a security interest in the equipment and in the event of default, may proceed directly against the equipment and the lessee for any deficiency resulting from the sale of the equipment;

(iv) The leasing corporation assigns all of its rights under the lease to the state bank;

(v) The lessee's lease payments are assigned and paid to the state bank;

(vi) The lease terms are subject to the same limitations that would apply to a state bank acting as a lessor.

(C)

(1) For purposes of determining compliance with section 1109.22 of the Revised Code and this rule, a state bank shall determine its lending limit as of the most recent of the following dates:

(a) The last day of the preceding calendar quarter;

(b) The date on which there is a change in the state bank's capital category for purposes of 12 U.S.C. 1831.

(2)

(a) A state bank's lending limit calculated in accordance with paragraph (C)(1)(a) of this rule will be effective as of the earlier of the following dates:

(i) The date on which the state bank's consolidated report of condition and income (call report) is submitted;

(ii) The date on which the state bank's call report is required to be submitted.

(b) A state bank's lending limit calculated in accordance with paragraph (C)(1)(b) of this rule will be effective on the date that the limit is to be calculated.

(3) If the superintendent determines for safety and soundness reasons that a state bank should calculate its lending limit more frequently than required by paragraph (C)(1) of this rule, the superintendent may provide written notice to the state bank directing the state bank to calculate its lending limit at a more frequent interval, and the state bank shall thereafter calculate its lending limit at that interval until further notice.

(D)

(1) Loans or extensions of credit to one borrower are attributed to another person and each person is deemed a borrower in either of the following circumstances:

(a) When proceeds of a loan or extension of credit are to be used for the direct benefit of the other person, to the extent of the proceeds so used;

(b) When a common enterprise exists between the persons.

(2) The proceeds of a loan or extension of credit to a borrower are deemed to be used for the direct benefit of another person and are attributed to the other person when the proceeds, or assets purchased with the proceeds, are transferred to another person, other than in a bona fide arm's length transaction where the proceeds are used to acquire property goods or services.

(3) A common enterprise exists and loans to separate borrowers are aggregated in each of the following cases:

(a) When the expected source of repayment for each loan or extension of credit is the same for each borrower and neither borrower has another source of income from which the loan, together with the borrower's other obligations, may be fully repaid. An employee is not treated as a source of repayment under this paragraph because of wages and salaries paid to an employee, unless the standards of paragraph (C)(3)(b) of this rule are met.

(b) When loans or extensions of credit are made to borrowers who are related, directly or indirectly, through common control, including where one borrower is directly or indirectly controlled by another borrower, and substantial financial interdependence exists between or among the borrowers. Substantial financial interdependence exists when fifty per cent or more of one borrower's gross receipts or gross expenditures, on an annual basis, are derived from transactions with the other borrower. Gross receipts and expenditures include gross revenues and expenses, intercompany loans, dividends, capital contributions, and similar receipts or payments.

(c) When separate persons borrow from a state bank to acquire a business enterprise of which those borrowers will own more than fifty per cent of the voting securities or voting interests, in which case a common enterprise exists between the borrowers for purposes of combining the acquisition loans.

(d) When the superintendent determines, based upon an evaluation of the facts and circumstances or particular transactions, that a common enterprise exists.

(4)

(a) Loans or extensions of credit by a state bank to a corporate group may not exceed fifty per cent of the state bank's capital. This limitation applies only to loans subject to the combined general limit and not otherwise excepted by the superintendent. A corporate group includes a person and all of its subsidiaries. For purposes of this paragraph a corporation or a limited liability company is a subsidiary of a person if the person owns or beneficially owns, directly or indirectly, more than fifty per cent of the voting securities or voting interests of the corporation or company.

(b) Except as provided in paragraph (D)(4)(a) of this rule, loans or extensions of credit to a person and its subsidiary, or to different subsidiaries of a person, are not combined unless either the direct benefit or the common enterprise test is met.

(5) In the case of loans to partnerships, joint ventures, and associations, the following requirements apply:

(a) Loans and extensions of credit to a partnership, joint venture, or association are deemed to be loans or extensions of credit to each member of the partnership, joint venture, or association. This requirement does not apply to limited partners in limited partnerships or to members of joint ventures or associations if the partners or members, by the terms of the partnership or membership agreement, are not held generally liable for the debts or actions of the partnership, joint venture, or association, and those provisions are valid under applicable law.

(b)

(i) Loans or extensions of credit to members of a partnership, joint venture, or association are not attributed to the partnership, joint venture, or association unless either the direct benefit or the common enterprise tests are met. Both the direct benefit and common enterprise tests are met between a member of a partnership, joint venture or association and the partnership, joint venture or association, when loans or extensions of credit are made to the member to purchase an interest in the partnership, joint venture or association.

(ii) Loans or extensions of credit to members of a partnership, joint venture, or association are not attributed to other members of the partnership, joint venture, or association unless either the direct benefit or common enterprise test is met.

(6)

(a) Loans and extensions of credit to foreign governments, their agencies, and instrumentalities are aggregated with one another only if the loans or extensions of credit fail to meet either the means test or the purpose test at the time the loan or extension of credit is made.

(i) The means test is satisfied if the borrower has resources or revenue of its own sufficient to service its debt obligations. If the government's support, excluding guarantees by a central government of the borrower's debt, exceeds the borrower's annual revenues from other sources, it is presumed that the means test is not satisfied.

(ii) The purpose test is satisfied if the purpose of the loan or extension of credit is consistent with the purposes of the borrower's general business.

(b) In order to show that the means and purpose tests have been satisfied, a bank shall, at a minimum, retain in its files all of the following items:

(i) A statement, accompanied by supporting documentation, describing the legal status and the degree of financial and operational autonomy of the borrowing entity;

(ii) Financial statements for the borrowing entity for a minimum of three years prior to the date the loan or extension of credit was made or for each year that the borrowing entity has been in existence, if less than three;

(iii) Financial statements for each year the loan or extension of credit is outstanding;

(iv) The bank's assessment of the borrower's means of servicing the loan or extension of credit, including specific reasons in support of that assessment, including an analysis of the borrower's financial history, its present and projected economic and financial performance, and the significance of any financial support provided to the borrower by third parties, including the borrower's central government;

(v) A loan agreement or other written statement from the borrower that clearly describes the purpose of the loan or extension of credit. The written representation ordinarily constitutes sufficient evidence that the purpose test has been satisfied. However, when, the time the funds are disbursed, the state bank knows or has reason to know of other information suggesting that the borrower will use the proceeds in a manner inconsistent with the written representation, it may not, without further inquiry, accept the representation.

(c) Notwithstanding paragraphs (D)(1) to (D)(5) of this rule, when previously outstanding loans and other extensions of credit to a foreign government, its agencies, and instrumentalities, public-sector obligors that qualified for a separate lending limit under paragraph (D)(6)(a) of this rule are consolidated under a central obligor in a qualifying restructuring, the loans are not aggregated and attributed to the central obligor. This includes any substitution in named obligors, solely because of the restructuring. The loans, other than loans originally attributed to the central obligor in their own right, are not considered obligations of the central obligor and continue to be attributed to the original public-sector obligor for purposes of the lending limit.

(i) Loans and other extensions of credit to a foreign government, its agencies, and instrumentalities will qualify for the non-combination process under paragraph (D)(6)(c)(i) of this rule only if they are restructured in a sovereign debt restructuring approved by the superintendent, upon request by a state bank for application of the noncombination rule. The factors that the superintendent will use in making the determination include, but are not limited to, the following:

(a) Whether the restructuring involves a substantial portion of the total commercial bank loans outstanding to the foreign government, its agencies, and instrumentalities;

(b) Whether the restructuring involves a substantial number of the foreign country's external commercial bank creditors;

(c) Whether the restructuring and consolidation under a central obligor is being done primarily to facilitate external debt management;

(d) Whether the restructuring includes features of debt or debt-service reduction.

(ii) With respect to any case in which the non-combination process under paragraph (D)(6)(c)(i) of this rule applies, a state bank's loans and other extensions of credit to a foreign government, its agencies and instrumentalities, including restructured debt, shall not exceed, in the aggregate, fifty per cent of the state bank's capital.

(E)

(1) A loan, within a state bank's legal lending limit when made, will not be deemed a violation but will be treated as nonconforming if the loan is no longer in conformity with the state bank's lending limit because of either of the following:

(a) The state bank's capital has declined, borrowers have subsequently merged or formed a common enterprise, lenders have merged, the lending limit or capital rules have changed;

(b) Collateral securing the loan to satisfy the requirements of a lending limit exception has declined in value.

(2) A state bank shall use reasonable efforts to bring a loan that is nonconforming as a result of paragraph (E)(1)(a) of this rule into conformity with the bank's lending limit unless to do so would be inconsistent with safe and sound banking practices.

(3) A state bank shall bring a loan that is nonconforming as a result of circumstances described in paragraph (E)(1)(b) of this rule into conformity with the state bank's lending limit within thirty calendar days, except when judicial proceedings, regulatory actions or other extraordinary circumstances beyond the state bank's control prevent the state bank from taking action.

Last updated May 19, 2025 at 8:08 AM

History

Effective: May 19, 2025
Promulgated Under: 119.03

Ohio Adm.Code 1301:1-2-01

"Capital," as defined in division (F) of section 1101.01 of the Revised Code, is calculated as set forth in 12 C.F.R. 32.2, as in effect on August 13, 2024.

Last updated May 19, 2025 at 8:07 AM

History

Effective: May 19, 2025
Promulgated Under: 119.03

Ohio Adm.Code 1301:1-3-01.1 Derivative transactions.

(A) As used in division (A)(1) of section 1109.22 of the Revised Code, "loans and extensions of credit" must also include any credit exposure to a person arising from a derivative transaction between the person and the state bank.

(B) As used in this rule, "derivative transaction" includes any transaction that is a contract, agreement, swap, warrant, note, or option that is based, in whole or in part, on the value of, any interest in, or any quantitative measure or the occurrence of any event relating to, one or more commodities, securities, currencies, interest or other rates, indices, or other assets.

Last updated May 9, 2025 at 1:51 PM

History

Effective: November 22, 2019
Promulgated Under: 119.03

Ohio Adm.Code 1301:1-3-02 Real estate lending standards.

(A) Each state bank shall adopt and maintain written policies that establish appropriate limits and standards for extensions of credit that are secured by liens on or interests in real estate, or that are made for the purpose of financing permanent improvements to real estate.

(B)

(1) Real estate lending policies adopted pursuant to this rule shall be all of the following:

(a) Consistent with safe and sound banking practices;

(b) Appropriate to the size of the institution and the nature and scope of its operations;

(2) Real estate lending policies shall establish all of the following:

(a) Loan portfolio diversification standards;

(b) Prudent underwriting standards, including loan-to-value limits, that are clear and measurable;

(d) Documentation, approval, and reporting requirements to monitor compliance with the state bank's real estate lending policies.

(C) Each state bank shall monitor conditions in the real estate market in its lending area to ensure that its real estate lending policies continue to be appropriate for current market conditions.

(D) The real estate lending policies adopted pursuant to this rule should reflect consideration of any administrative guidelines for real estate lending policies the superintendent may adopt pursuant to division (B) of section 1121.03 of the Revised Code.

Last updated April 4, 2025 at 10:04 AM

History

Effective: November 22, 2019
Promulgated Under: 119.03

Ohio Adm.Code 1301:1-3-03 Letters of credit.

A state bank may issue letters of credit permissible under Chapter 1305. of the Revised Code, provided that all letters of credit are issued in conformity with all of the following:

(A) Each letter of credit shall conspicuously state that it is a letter of credit or be conspicuously entitled as such;

(B) The state bank's undertaking shall contain a specified expiration date or be for a definite term;

(D) The state bank's obligation to pay shall arise only upon presentation of a draft or other documents specified in the letter of credit, and the bank shall not be called upon to determine questions of fact or law at issue between the bank's customer and the beneficiary;

(E) The state bank's customer shall have an unqualified obligation to reimburse the bank for payments made under the letter of credit.

All items listed in paragraphs (A) to (E) of this rule shall be evidenced in writing.

Last updated April 4, 2025 at 10:04 AM

History

Effective: November 22, 2019
Promulgated Under: 119.03

Ohio Adm.Code 1301:1-3-04 Insider loans.

Except as provided by 12 C.F.R. Part 215, as in effect on May 6, 2024, and subject to the same limitations and reporting requirements identified therein, no state bank may extend credit in any manner to any of its executive officers, directors, or principal shareholders, or to any of their related interests.

Last updated May 19, 2025 at 8:08 AM

History

Effective: May 19, 2025
Promulgated Under: 119.03

Ohio Adm.Code 1301:1-3-06 Revenue bonds.

(A) Within the meaning of division (A)(7) of section 1109.32 of the Revised Code, revenue bonds that qualify as "investment grade" as that term is defined in 12 C.F.R. 16.2 , as in effect on April 25, 2024, at the time of acquisition are eligible state bank investments.

(B) In addition to the requirements prescribed in paragraph (A) of this rule, in order to qualify as an eligible investment, the revenue bond must conform to the following requirements:

(1) The obligation must be current as to payment of principal and interest at the time of purchase, and the issue of which the obligation is a part in either original or refunded form, shall not have been in default as to the payment of either principal or interest for a period more than ninety days in the five years immediately preceding the date of purchase.

(2) When the obligation is issued under a trust agreement, the trustee must be a properly qualified trust company or bank doing a trust business.

Last updated May 19, 2025 at 8:08 AM

History

Effective: May 19, 2025
Promulgated Under: 119.03

Ohio Adm.Code 1301:1-3-10 Operating subsidiaries.

(A) A state bank may exercise all powers, other than deposit taking, that the state bank may exercise pursuant to section 1109.02 of the Revised Code by means of an operating subsidiary. An operating subsidiary in which a state bank may invest includes a corporation, limited liability company, limited partnership, or similar entity. In order to qualify as an operating subsidiary, the parent bank must have the ability to control the management and operations of the subsidiary; the parent bank must own more than fifty per cent of the voting stock, or an equivalent equity interest with limited liability, of the entity; and the operating subsidiary must be consolidated with the state bank under generally accepted accounting principles.

An operating subsidiary is not a bank subsidiary corporation as described in division (C)(1) of section 1109.44 of the Revised Code, and the acquisition, establishment, or performance of new activities in an operating subsidiary is not an investment in a bank subsidiary corporation pursuant to division (A) of section 1109.44 of the Revised Code. Investments in and extensions of credit to operating subsidiaries shall not be subject to section 1109.22, 1109.47, 1109.54, or 1109.55 of the Revised Code, but shall continue to be subject to other provisions of law applicable to loans and investments in stocks, bonds, debentures, and other obligations by state banks.

(B) A state bank that intends to acquire, establish, or perform new activities in an operating subsidiary shall submit a letter of notification to the superintendent of financial institutions. The letter must:

(1) Provide details of the transaction in which the state bank intends to acquire, establish, or perform new activities in an operating subsidiary;

(2) State the name and location of the operating subsidiary, and whether any activity of the operating subsidiary will be conducted at some location other than a previously approved banking office of the state bank;

(3) Describe the proposed activities in which the operating subsidiary will engage, and cite the legal authority for the permissibility of the proposed activities of the operating subsidiary;

(4) Provide evidence that the parent state bank will have the ability to control the management and operations of the operating subsidiary;

(5) Provide evidence that the parent state bank will own more than fifty per cent of the voting stock, or an equivalent equity interest with limited liability, of the operating subsidiary; and

(6) State that the operating subsidiary will be consolidated with the state bank under generally accepted accounting principles.

(C) The state bank may establish, acquire, or perform new activities in an operating subsidiary after thirty days from the date the superintendent acknowledges receipt of the bank's letter of notification, unless notified to the contrary, or in less than thirty days if so notified by the superintendent. The superintendent will utilize the thirty-day period to review the state bank's proposal to determine if the proposed activities are legally permissible for an operating subsidiary, to ensure that the proposal is consistent with safe and sound banking practices, and to determine whether the state bank's proposal is consistent with prudent banking principles and the policies of the division of financial institutions and does not endanger the safety or soundness of the parent bank. The thirty-day period may be extended upon notice to the state bank if the state bank's letter raises issues that require additional information from the state bank or time for analysis by the superintendent. If the thirty-day period is extended, the state bank may establish, acquire, or perform new activities in the operating subsidiary only upon written notification by the superintendent.

The superintendent reserves the right to grant written approval of a state bank's proposal to establish, acquire, or perform new activities in an operating subsidiary subject to conditions when there are legal or supervisory concerns.

(D) A state bank may establish or acquire an operating subsidiary without notifying the superintendent, provided:

(1) The activities of the new operating subsidiary are limited to those activities previously reported by the state bank pursuant to this rule in connection with the establishment or acquisition of a prior operating subsidiary;

(2) The establishment or acquisition of the prior operating subsidiary was considered permissible by the superintendent;

(3) The activities in which the new operating subsidiary will engage continue to be considered legally permissible by the superintendent; and

(4) The activities will be conducted in accordance with any conditions imposed by the superintendent in approving the conduct of these activities for any prior operating subsidiary of the state bank.

(E) Unless otherwise provided by statute or rule, all provisions of state banking statutes and rules applicable to the operations of the parent state bank shall be equally applicable to the operations of its operating subsidiaries.

(F) Unless otherwise provided by statute or rule, pertinent book figures of the parent state bank and its operating subsidiaries shall be consolidated for the purpose of applying applicable statutory limitations, such as sections 1109.22, 1109.23, 1109.24, 1109.31, 1109.32, 1109.39, 1109.40, and 1109.44 of the Revised Code.

(G) Each operating subsidiary shall be subject to examination and supervision by the superintendent in the same manner and to the same extent as the parent state bank. If, upon examination, the superintendent ascertains that the operating subsidiary was created or is being operated in violation of a law or rule, that the manner of operation is unsafe or unsound or that the operating subsidiary otherwise threatens the safety or soundness of the state bank, the superintendent shall direct the state bank to take appropriate remedial action, which may include discontinuing specified activities or disposing of all or part of the operating subsidiary.

Last updated April 4, 2025 at 10:04 AM

History

Effective: November 22, 2019
Promulgated Under: 119.03

Ohio Adm.Code 1301:1-3-11 Bank subsidiary corporations and bank service corporations.

(A) A state bank that intends to invest in, that is to acquire, establish, or perform new activities in, a bank subsidiary corporation or a bank service corporation shall submit a letter of notification to the superintendent of financial institutions requesting the approval of the superintendent. The letter must:

(1) State the name and location of the bank subsidiary corporation or bank service corporation;

(2) Describe the activities in which the bank subsidiary corporation or bank service corporation will engage;

(3) Demonstrate that the investment proposed will not exceed the limitation on investments in the securities of a single issuer;

(4) Demonstrate that any and all anticipated loans to the bank subsidiary corporation or bank service corporation will not exceed the limitation on loans to a single borrower;

(5) Identify the investment authority to be used for the proposed investment and demonstrate that the proposed investment together with other loans and/or investments made pursuant to such authority will not exceed the aggregate limitation of such authority;

(6) List any other investors in the bank subsidiary corporation or bank service corporation together with the location of each such investor's principal place of business and the proportionate interest each will hold in the bank subsidiary corporation or bank service corporation; and

(7) Cite the authority for the permissibility of the proposed activities of the bank subsidiary corporation or bank service corporation or provide support for the superintendent to determine that the activities are a part of the business of banking or incidental thereto.

In addition to the information required by this paragraph, a state bank may include any other information in support of its request. The superintendent may also require any additional information the superintendent considers relevant to the consideration of the request.

(B) The superintendent shall render a decision on a proposed investment in a bank subsidiary corporation or a bank service corporation within thirty days from the date the superintendent acknowledges receipt of a technically complete notification letter, unless notified to the contrary, or in less than thirty days if so notified by the superintendent. A technically complete letter will include all information required under paragraph (A) of this rule. If the superintendent fails to render a decision within thirty days after acknowledging receipt of a technically complete letter, the investment may be deemed to have the superintendent's consent. The superintendent may extend the thirty-day period upon notice to the state bank if the state bank's letter raises issues that require additional information from the state bank or time for analysis by the superintendent. If the superintendent extends the thirty-day period, the state bank may invest in, acquire, establish, or perform new activities in a bank subsidiary corporation or a bank service corporation only upon written notification by the superintendent.

The superintendent reserves the right to grant written approval of a state bank's proposal to invest in, acquire, establish, or perform new activities in a bank subsidiary corporation or a bank service corporation subject to conditions when there are legal or supervisory concerns.

(C) In determining whether or not to consent to a proposed investment in a bank subsidiary corporation or bank service corporation, the superintendent shall consider:

(1) Whether the activities are legally permissible;

(2) Whether the activities will be performed at permissible locations;

(3) Whether the proposed investment is within all applicable legal limitations;

(4) Whether all of the investors are permissible investors for a bank subsidiary corporation or a bank service corporation;

(5) The financial and managerial resources and future prospects of the bank and the bank subsidiary corporation or bank service corporation involved, including the financial capability of the bank to make the proposed investment; and

(6) Any possible adverse effects of the investment, such as undue concentration of resources, unfair or decreased competition, conflicts of interest, or unsafe and unsound banking practices.

(D) A bank's equity interest in a bank subsidiary corporation or bank service corporation must be voting stock, or an equivalent equity interest with limited liability.

Last updated April 4, 2025 at 10:04 AM

History

Effective: November 22, 2019
Promulgated Under: 119.03

Ohio Adm.Code 1301:1-3-12 Mutual funds.

The limitation on investment in the securities of a single issuer imposed in division (A) of section 1109.47 of the Revised Code, which, in accordance with division (B)(1) of section 1109.47 the Revised Code, does not apply to a state bank's direct investment in the securities enumerated in divisions (A)(1) to (6) of section 1109.32 of the Revised Code, shall also not apply to a state bank's equity investment in an investment company or mutual fund the portfolio of which consists solely of securities enumerated in divisions (A)(1) to (6) of section 1109.32 of the Revised Code.

Last updated April 4, 2025 at 10:05 AM

History

Effective: November 22, 2019
Promulgated Under: 119.03

Chapter 1301:1-4 Miscellaneous Provisions

Ohio Adm.Code 1301:1-4-01 Definition of an emergency under section 1115.15 of the Revised Code.

An emergency warranting the immediate transfer of assets and liabilities from one bank to another pursuant to section 1115.15 of the Revised Code exists when, in the opinion of the superintendent such transfer is necessary to prevent the probable failure of one of the banks involved. Factors to be considered by the superintendent in making this determination are: the financial and managerial resources of the banks involved, the future prospects of the banks involved, and the convenience and needs of the public to be served.

Last updated April 4, 2025 at 10:05 AM

History

Effective: August 6, 2015
Promulgated Under: 119.03

Ohio Adm.Code 1301:1-4-04 Bank's purchase of its own shares.

No stock state bank that wants to purchase shares of its own stock pursuant to authority in its articles of incorporation shall make a purchase without prior written approval from the superintendent of financial institutions. To request the superintendent's approval, a stock state bank shall submit to the superintendent the following:

(A) A written plan proposing the purchase that shall address all of the following:

(1) The circumstances surrounding the transaction;

(2) How the stock state bank proposes to finance the share purchase;

(3) How and when the stock state bank will dispose of the shares; and

(4) Any other information the superintendent requires.

(B) Both of the following supporting documents:

(1) Certified board resolution evidencing the directors' decision to purchase the shares; and

(2) Pro forma financial statements.

As part of the written plan provided for in paragraph (A) of this rule, a stock state bank may request that the superintendent waive the obligation to provide pro forma financial statements.

Last updated May 19, 2025 at 8:09 AM

History

Effective: May 19, 2025
Promulgated Under: 119.03

Ohio Adm.Code 1301:1-4-06 Change in bank control.

(A) As used in this rule:

(1) "Acquisition" means a purchase, assignment, transfer, pledge or other disposition of voting shares, or an increase in percentage ownership of a state bank resulting from a redemption of voting shares.

(2) "Acting in concert" means knowing participation in a joint activity or parallel action towards a common goal of acquiring control of a state bank, whether or not pursuant to an express agreement.

(3) "Person" means an individual, corporation, partnership, trust, association, joint venture, pool, syndicate, sole proprietorship, unincorporated organization, and any other form of entity; and a voting trust, voting agreement, and any group of persons acting in concert.

(4) "Securities" means all equity interests in a bank and includes rights, interests, and powers with respect thereto.

(B) For the purpose of section 1115.06 of the Revised Code, it is presumed, subject to rebuttal, that a person acquiring ownership, control of, or the power to vote ten per cent or more of any class of voting securities of a state bank constitutes the power to direct that bank's management or policies requiring prior notice to the superintendent if either of the following apply:

(1) The state bank has registered securities under section 12 of the Securities Exchange Act of 1934 (15 U.S.C. 78l); or

(2) No other person will own, control, or hold the power to vote a greater percentage of that class of voting securities immediately after the transaction. If two or more persons, not acting in concert, each propose to acquire simultaneously equal percentages of ten per cent or more of a class of voting securities of a state bank, each such person shall file prior notice with the superintendent.

Transactions other than those set forth in this paragraph resulting in a person's control of less than twenty-five per cent of a class of voting securities of a state bank are deemed not to constitute control requiring prior notice. A person may request an opportunity to rebut any presumption established by this paragraph with respect to a proposed transaction. In the event of such a request, the superintendent shall afford the person the opportunity to present the person's views in writing or where appropriate, orally before the superintendent or the superintendent's designated representatives either at informal conference discussions or at informal presentations of evidence.

(1) The identity, personal history, and business background and experience of each person by whom or on whose behalf the acquisition is to be made, including each person's material business activities and affiliations during the past five years; a description of any material pending legal or administrative proceedings in which each person is a party; and any criminal indictment or conviction of each person by a state or federal court;

(2) A statement of the assets and liabilities of each person by whom or on whose behalf the acquisition is to be made, as of the end of the fiscal year for each of the five years immediately preceding the date of the notice, together with related statements of income and source and application of funds for each of the fiscal years then concluded, all prepared in accordance with generally accepted accounting principles consistently applied; and an interim statement of the assets and liabilities for each person, together with related statements of income and source and application of funds, as of a date not more than ninety days prior to the date of the filing of the notice;

(3) The terms and conditions of the proposed acquisition and the manner in which the acquisition is to be made;

(4) The identity, source, and amount of the funds or other consideration used or to be used in making the acquisition and, if any part of these funds or other consideration has been or is to be borrowed or otherwise obtained for the purpose of making the acquisition, a description of the transaction, the names of the parties, and any arrangements, agreements, or understandings with the parties;

(5) Any plans or proposals any acquiring person may have to liquidate the state bank, to sell its assets or merge it with any company, or to make any other major change in its business or corporate structure or management;

(6) The identification of any person employed, retained, or to be compensated by an acquiring person, or by any person on an acquiring person's behalf, to make solicitations or recommendations to shareholders for the purpose of assisting in the acquisition, and a brief description of the terms of the employment, retainer, or arrangement for compensation;

(7) Copies of all invitations or tenders or advertisements making a tender offer to stockholders for purchase of their stock to be used in connection with the proposed acquisition; and

(8) Any additional information in the form the superintendent may require by specific request in connection with any particular notice.

(D) To request the written consent of the superintendent to a proposed acquisition of control of a state bank:

(1) A person who is also required to file a notice or application with the federal deposit insurance corporation the federal reserve system in regard to the proposed transaction, pursuant to the Change of Bank Control Act (12 U.S.C. 1817(j)) or section 3 of the Bank Holding Company Act (12 U.S.C. 1842), shall file with the superintendent an originally executed copy of the notice or application.

(2) A person who is not required to file a notice or application with the federal deposit insurance corporation or the federal reserve system in regard to the proposed transaction shall notify the superintendent by letter of the proposed transaction, which letter shall include a summary of the proposed transaction and the reason the person is not required to file a notice or application in regard to the proposed transaction with the federal deposit insurance corporation or the federal reserve system. A person filing notice under this section shall submit the information set forth in division (C) of section 1115.06 of the Revised Code and any other information the superintendent requires.

(E) The sixty-day notice period specified in division (B) of section 1115.06 of the Revised Code shall not commence until the superintendent has accepted the notice required in paragraph (D)(1) or (D)(2) of this rule for processing.

(F) Any person filing notice under this rule shall be required to publish, within ten days from receipt of the superintendent's acceptance for processing of information required to be filed under this rule, an announcement on the proposed acquisition in a newspaper of general circulation in the county in which the state bank has its principal place of business. In the case of information filed with the superintendent in contemplation of a tender offer, publication of the announcement required by this paragraph may be delayed until thirty days after the superintendent's acceptance of the information for processing. Whenever a person required to publish an announcement pursuant to this paragraph is also required by federal law or regulation to publish an announcement regarding the same transaction, the announcement published pursuant to federal law or regulation shall satisfy the publication requirement of this paragraph if the announcement includes all of the information required by this paragraph. The newspaper announcement shall include:

(1) The name of the state bank and the name of each person identified in the information as a proposed acquiror and the proposed date of the acquisition of the securities;

(2) A statement that interested persons may submit comments on the proposed acquisition to the superintendent at the superintendent's place of business for a period of twenty days from the date of publication of the announcement, along with the superintendent's address; and

(3) A statement that the superintendent will consider all public comments received in writing within the twenty days following the required publication.

(G) The superintendent may do either of the following with respect to the newspaper publication requirement:

(1) Permit delay of the publication if the superintendent determines, for good cause, that it is in the public interest to grant a delay; or

(2) Shorten the public comment period, waive the public comment, waive the newspaper publication, or act on a notice before the expiration of a public comment period, if the superintendent determines that either an emergency exists or disclosure of a proposed acquisition, solicitation of public comment, or delay of its action until expiration of the public comment period would seriously threaten the safety or soundness of a state bank.

(H) Any person who is required to file information with the superintendent pursuant to paragraph (E)(1) of this rule shall also file with the superintendent any additional information filed with the federal deposit insurance corporation or the federal reserve system in connection with a notice regarding the same proposed transaction together with a copy of any request from the federal deposit insurance corporation or federal reserve system in response to which such information was filed.

(I) A person acquiring control of a state bank is not required to provide prior notice to the superintendent, but is required to notify the superintendent within ninety days after control is acquired and to provide to the superintendent with any information requested, if the person has acquired control by any of the following means:

(1) Through testate or intestate succession;

(2) Through a bona fide gift;

(3) In satisfaction of a debt previously contracted in good faith, except that the acquiror of a defaulted loan secured by a controlling amount of bank voting shares shall file a notice before the loan is acquired:

(4) Redemption of voting shares by the issuing bank; or

(5) Sale of shares by any shareholder that is not within the control of the person resulting in that person becoming the largest shareholder.

(J) The following transactions do not require notice to the superintendent:

(1) A customary one-time proxy solicitation; and

(2) The receipt of voting securities through a pro rata stock dividend.

Last updated May 19, 2025 at 8:09 AM

History

Effective: May 19, 2025
Promulgated Under: 119.03

Ohio Adm.Code 1301:1-4-11 Procedures for relocating a banking office.

(A) A bank that intends to relocate a banking office within a one-mile radius of the banking office's current location shall, not less than thirty days prior to the effective date of relocation, give the superintendent of financial institutions written notice that includes:

(1) The present and new address of the office to be relocated;

(2) The date the office will open for business in the new location;

(3) How the bank will publicize the relocation; and

(B) If federal law requires a bank to give written notice to its federal regulator that meets or exceeds any of the requirements of paragraph (A) of this rule, then the bank may satisfy the requirements of paragraph (A) of this rule by submitting the same notice to the superintendent that the bank submitted to its federal regulator.

(C) For purposes of this rule, the relocation of a banking office includes the consolidation of that office with one or more banking offices within the present service area.

(D) If the date of the relocation stated in the written notice as required by paragraph (A) of this rule changes, the bank shall notify the superintendent in writing of the new date.

(E) In addition to the specific requirements of this rule, the superintendent may at any time require of the bank any other information or actions the superintendent deems necessary or relevant under the circumstances of the relocation.

(F) In emergency circumstances, the superintendent may establish an alternate time period for any time period stated within this rule.

Last updated May 19, 2025 at 8:10 AM

History

Effective: May 19, 2025
Promulgated Under: 119.03

Ohio Adm.Code 1301:1-4-12 Procedures for closing a banking office.

(A) Definitions

(1) Temporary closure is a closure planned to last two business days or less.

(2) Long term closure is a closure planned to last three or more business days.

(B) A bank that intends temporary closure of a banking office shall do all of the following:

(1) Notify the superintendent of financial institutions of temporary closures not less than seven days prior to the effective date of the closing, and

(2) Post a notice of the closing in a conspicuous manner on the premises of the banking office and on any money transmission device such as an automated teller machine.

(1) Not less than ninety days prior to the effective date of the banking office closing:

(a) Give written notice to each person who is either a depositor or a holder of a safety deposit box at the banking office. The notice shall state the address of the closing office, the effective date of the closing and the locations of the bank's closest offices. The bank may send one notice to a person who is both a depositor and safety deposit box holder. The notice required by this paragraph may be sent by ordinary mail or may be included with any regularly mailed statement of account activity.

(b) File a written notice of the banking office closing with the superintendent of financial institutions that indicates the location of the closing banking office and effective date of the closing.

(2) Not less than thirty days prior to the effective date of the closing, the bank shall post a notice of the closing in a conspicuous manner on the premises of and on any money transmission device, such as an automated teller machine, at the banking office to be closed stating the effective date of the closing and the locations of the bank's closest offices. The notice shall remain posted continuously until the banking office is closed. If the bank will maintain a money transmission device at the same location after the banking office closing, the bank may include that fact in the notice posted and in the notices required by paragraph (A)(1) of this rule.

(D)

(1) If federal law requires a bank to take actions regarding written notices that meet or exceed the requirements of paragraphs (A)(1)(a) and (A)(2) of this rule, then taking actions required under federal law will satisfy the requirements of paragraphs (A)(1)(a) and (A)(2) of this rule.

(2) If federal law requires a bank to give written notice to its federal regulator that meets or exceeds the requirements of paragraph (A)(1)(b) of this rule, then the bank may satisfy the requirements of paragraph (A)(1)(b) of this rule by submitting the same notice to the superintendent that the bank submitted to its federal regulator.

(E) For purposes of paragraph (A)(1) of this rule, a person is a depositor of the banking office to be relocated if the records of the bank show that person's account as having been opened at, or transferred to, the banking office. "Depositor" does not include a person whose account was closed or transferred prior to the time written notice is required to be sent under this rule.

(F) The bank shall notify the superintendent in writing if the effective date of the closing stated in the notice required by paragraph (A)(1)(b) of this rule changes. When a banking office is officially closed, it cannot be reopened. If at some later date the bank proposes to establish a banking office at the same location, the bank shall submit a new application pursuant to section 1117.02 of the Revised Code.

(G) In addition to the specific requirements of this rule, the superintendent may at any time require of the bank any other information or actions the superintendent deems necessary or relevant under the circumstances of the closing.

(H) In emergency circumstances, the superintendent may modify or waive any requirements of this rule.

Last updated May 19, 2025 at 8:10 AM

History

Effective: May 19, 2025
Promulgated Under: 119.03

Ohio Adm.Code 1301:1-4-13 Agency agreement between bank and affiliate and unaffiliated depository institutions.

(A) Subject to paragraphs (C), (D), (E) and (F) of this rule, a bank may contract to receive deposits, renew time deposits, close loans, service loans, and receive payment on loans and other obligations for its customers through an affiliate depository institution, at any and all offices of the affiliate depository institution, without being required to obtain the prior written approval of the superintendent of financial institutions.

(B) A bank that wants to contract to provide services other than those listed in paragraph (A) of this rule or to provide services to its customers through an unaffiliated depository institution must individually seek prior approval from the superintendent in accordance with section 1117.05 of the Revised Code.

(C) A bank may not contract to establish new deposit accounts, extend credit, or create new banking relationships through offices of agent depository institutions.

(D) A bank may not, as agent or as principal through its agent, conduct any activity which the bank is prohibited from conducting under applicable federal or state law.

(E) All agreements to act as agent pursuant to this rule shall be in writing and address the nature of the services to be provided and the rights and responsibilities of each party.

(F) Any agency relationship shall be on terms that are consistent with safe and sound practices.

(G) The banking office of the depository institution acting as agent pursuant to this rule and section 1117.05 of the Revised Code is not considered to be a branch of the contracting depository institution.

Last updated September 22, 2025 at 11:51 AM

History

Effective: July 28, 2001
Promulgated Under: 119.03

Ohio Adm.Code 1301:1-4-14 Retention of "Federal" in name of converted Federal savings association.

Any federal savings association converting to a state bank may retain the term "Federal" in the name of such institution.

Last updated April 4, 2025 at 10:05 AM

History

Effective: August 6, 2015
Promulgated Under: 119.03

Ohio Adm.Code 1301:1-4-15 Converting into a state bank.

(A) This rule describes the procedures and standards governing the superintendent's review and approval of an application by a national bank, bank doing business under authority granted by the bank regulatory authority of another state, a savings association or savings bank doing business under authority of another state, a federal savings association, or a state or federally chartered credit union to convert to a state bank charter.

(B) As used in this rule, the terms "applicant" and "converting institution" refer to a national bank, bank doing business under authority granted by the bank regulatory authority of another state, a savings association or savings bank doing business under authority of another state, a federal savings association, or a state or federally chartered credit union seeking to convert to a state bank charter.

(C) A converting institution shall submit to the superintendent an application for the superintendent's approval of the conversion that includes all of the following:

(1) A plan of conversion;

(2) The proposed articles of incorporation and code of regulations of the proposed state bank;

(3) An officers' certification that the directors and members or shareholders of the applicant have approved the plan of conversion and the proposed articles of incorporation and code of regulations in accordance with the applicable state or federal law and with the applicant's articles of association or incorporation and code of regulations or bylaws;

(4) Any other information the superintendent requires.

(D) Within ten business days after receiving an application required under paragraph C of this rule, the superintendent shall decide whether to accept the application. Within ninety days after accepting an application required under paragraph C of this rule, the superintendent shall approve or deny the application. In determining whether to approve the converting institution's conversion into a state bank, the superintendent shall consider all of the following:

(1) The adequacy of capital and paid in capital of the proposed state bank;

(2) Whether the competence, experience, and integrity of each director, executive officer, and controlling shareholder of the proposed state bank meet the criteria for acquiring control of a state bank as provided in section 1115.06 of the Revised Code;

(3) Whether the proposed state bank affords reasonable promise of successful operation;

(4) Whether the proposed state bank meets the requirements of Chapters 1101. to 1127. of the Revised Code.

The superintendent may extend the time during which the superintendent may approve or deny the application if any of the following applies: the superintendent determines that the applicant has not furnished all information required under paragraph (C) of this rule; in the superintendent's judgment any material information is substantially inaccurate; the superintendent has been unable to complete an investigation of a person described in paragraph (D)(2) of this rule because of any delay caused by, or the inadequate cooperation of, that person; or in the superintendent's discretion.

(E) The superintendent may condition an approval of the conversion of a converting institution into a state bank in any manner the superintendent considers appropriate.

(F) If the superintendent approves a conversion, the superintendent shall forward a certificate of the approval of the conversion and the state bank's articles of incorporation to the secretary of state, and shall issue to the new state bank a certificate of authority to commence business as a state bank. In the case of a state bank resulting from the conversion of a state chartered credit union organized under Chapter 1733 of the Revised Code, the secretary of state shall file the certificate of the superintendent's approval of the conversion and the state bank's articles of incorporation in a manner reflecting the company is no longer doing business under Chapter 1733. of the Revised Code. In the case of a state bank resulting from the conversion of a national bank, bank doing business under authority granted by the bank regulatory authority of another state, savings association or savings bank doing business under authority of another state, a federal savings association, or a federally chartered credit union, the secretary of state shall file the certificate of the superintendent's approval of the conversion and the state bank's articles of incorporation in a manner reflecting the state bank is newly authorized to do business under the laws of this state.

(G) The conversion shall be effective on the date indicated in the superintendent's approval. Without further act or deed, the state bank resulting from the conversion shall have all property, rights, interests, and powers of its predecessor institution within the limits of the charter of the resulting state bank, and all duties, trusts, obligations, and liabilities of the predecessor institution shall continue in the state bank resulting from the conversion.

Last updated April 4, 2025 at 10:05 AM

History

Effective: November 22, 2019
Promulgated Under: 119.03

Ohio Adm.Code 1301:1-4-16 Definition of institution-affiliated party under section 1105.11 of the Revised Code.

The term "institution-affiliated party" shall have the same meaning as in Section 3 of the Federal Deposit Insurance Act, 64 Stat. 873 (1950), 12 U.S.C. 1813, as in effect on April 24, 2024.

Last updated May 19, 2025 at 8:10 AM

History

Effective: May 19, 2025
Promulgated Under: 119.03

Chapter 1301:1-5 Management Duties Regarding Shareholder Meetings

Ohio Adm.Code 1301:1-5-01 Management duties regarding shareholder meetings.

(A) For purposes of this rule, "management" means any or all of the directors and officers of a state bank.

(B) If management of a stock state bank, other than a bank that is subject to the registration requirements of section 12 of the Securities Exchange Act of 1934, 15 U.S.C. 78l, as amended, provides a proxy form for a meeting of the bank's shareholders, or otherwise solicits proxies for such a meeting:

(1) Management shall provide a proxy form that:

(a) Identifies the form as management's and the meeting to which it applies;

(b) Identifies management's designated proxy committee;

(d) Indicates management's recommendation on each proposal on which there will be a shareholder vote at the meeting;

(e) Provides the opportunity for a shareholder giving the proxy to direct that the proxyholder vote the shares for or against or abstain from voting on each proposal on which there will be a shareholder vote at the meeting;

(f) If the meeting is an annual meeting, or is otherwise a meeting at which directors will be elected:

(i) Identifies the persons management recommends be elected as directors; and

(ii) Provides the opportunity for the shareholder giving the proxy to direct the proxyholder to vote for all of the persons management recommends, against all of the persons management recommends, or for some and not for others;

(g) States that the shareholder giving the proxy may revoke the proxy at any time before the completion of the meeting for which the proxy is given and any adjournments thereof by:

(i) Attending the meeting or any adjournment thereof and advising the secretary of the bank of the shareholder's intent to vote the shares;

(ii) By giving notice in writing to the secretary of the bank of the revocation of the proxy; or

(iii) By giving a subsequent proxy;

(h) Provides that the proxyholder has the authority to vote the shares for which the proxy is given at the meeting as scheduled and at any adjournment thereof unless the shareholder giving it revokes the proxy;

(i) Requires each holder of the shares for which the proxy is given to sign and date the form and, if signing in a representative capacity, to designate the capacity in which signing; and

(j) Requires that the holder(s) of the shares for which the proxy is given indicate the number of shares for which the proxy is given.

(2) The proxy form may:

(a) Indicate that for any matter or election for which the shareholder has not directed how the proxyholder is to vote the shares, the proxy holder is authorized to vote the shares in accordance with management's recommendation; and

(b) Indicate that the proxyholder is authorized, in the proxyholder's discretion, to vote the shares on any other matter that may properly come before the meeting.

(3) Management must also provide a proxy solicitation statement, and in that statement must:

(a) Identify the meeting to which the statement applies;

(b) Name the officers and directors of the bank and indicate the date each director's term expires;

(d) State each proposal management intends to present to the shareholders at the meeting, state management's position on each proposal, and explain the basis of management's position on each proposal;

(e) State each proposal shareholders have properly presented for presentation at the meeting, identify the shareholders making each shareholder proposal, state management's position on each shareholder proposal, explain the basis of management's position on each shareholder proposal, and, if requested to do so, state the proposing shareholders' reasons for making each shareholder proposal;

(f) Indicate where shareholders choosing to give management their proxies are to send the completed proxy forms; and

(g) If the meeting is an annual meeting, or otherwise a meeting at which directors will be elected, identify each person management recommends be elected at the meeting as a director, the term for which each person would be elected, and management's basis for recommending that each person be elected.

(C) Together with the notice of meeting, and the proxy form and proxy solicitation statement, if any, management may include a less formal letter from the directors or one or more officers of the bank, so long as the letter is not inconsistent with the notice of meeting, proxy form, or proxy solicitation statement, either by contradiction or inclusion of a proposal that was not disclosed in accordance with this rule.

Last updated April 4, 2025 at 10:05 AM

History

Effective: November 22, 2019
Promulgated Under: 119.03

Chapter 1301:1-6 Qualified Trustees

Ohio Adm.Code 1301:1-6-01 Qualified trustees.

(A) A trust company, currently licensed to transact trust activities in Ohio, may apply to become a "qualified trustee" under the provisions of section 135.18 or 135.181 of the Revised Code (Uniform Depository Act) by applying with the division of financial institutions in the following manner:

(1) Submit a letter to the division requesting certification as a "qualified trustee" pursuant to either section 135.18 or 135.181 of the Revised Code.

(2) The division will then conduct an investigation of the applicant's security for safekeeping by any means deemed acceptable to the superintendent. If the applicant is a national bank or a foreign trust company, this investigation may either be on-site at the expense of the applicant or by written request to the applicant's regulating authority to have the authority to certify as to the adequacy and supervision of the institution's security for safekeeping.

(3) Submission to the division of such other information as is necessary to approve the application to become a qualified trustee pursuant to section 135.18 or 135.181 of the Revised Code.

(B) Upon a determination by the division that the above conditions have been met, the division shall issue a certificate of qualification. No such certificate shall be issued unless the applicant has first received authority to exercise trust powers in Ohio.

Last updated April 4, 2025 at 10:06 AM

History

Effective: November 22, 2019
Promulgated Under: 119.03

Ohio Administrative Code 1301:1 — Department of Commerce | Division of Financial Institutions: Banks

Chapter 1301:1-1 Notice of Meetings of the Banking Board

Ohio Adm.Code 1301:1-1-02 Open public meetings of the banking commission.

Ohio Adm.Code 1301:1-1-03 Personal service.

Ohio Adm.Code 1301:1-1-04 Designations and names that include "bank," "banker," "banking," or "trust".

Ohio Adm.Code 1301:1-1-05 Reimbursement to banks and trust companies for assembling or providing financial records.

Chapter 1301:1-2 Computation of Capital

Ohio Adm.Code 1301:1-2-01 Computation of capital.

Ohio Adm.Code 1301:1-2-02 Trust company capital.

Chapter 1301:1-3 Lending Limits and Standards

Ohio Adm.Code 1301:1-3-01 Lending limits.

Ohio Adm.Code 1301:1-2-01

Ohio Adm.Code 1301:1-3-01.1 Derivative transactions.

Ohio Adm.Code 1301:1-3-02 Real estate lending standards.

Ohio Adm.Code 1301:1-3-03 Letters of credit.

Ohio Adm.Code 1301:1-3-04 Insider loans.

Ohio Adm.Code 1301:1-3-06 Revenue bonds.

Ohio Adm.Code 1301:1-3-10 Operating subsidiaries.

Ohio Adm.Code 1301:1-3-11 Bank subsidiary corporations and bank service corporations.

Ohio Adm.Code 1301:1-3-12 Mutual funds.

Chapter 1301:1-4 Miscellaneous Provisions

Ohio Adm.Code 1301:1-4-01 Definition of an emergency under section 1115.15 of the Revised Code.

Ohio Adm.Code 1301:1-4-04 Bank's purchase of its own shares.

Ohio Adm.Code 1301:1-4-06 Change in bank control.

Ohio Adm.Code 1301:1-4-11 Procedures for relocating a banking office.

Ohio Adm.Code 1301:1-4-12 Procedures for closing a banking office.

Ohio Adm.Code 1301:1-4-13 Agency agreement between bank and affiliate and unaffiliated depository institutions.

Ohio Adm.Code 1301:1-4-14 Retention of "Federal" in name of converted Federal savings association.

Ohio Adm.Code 1301:1-4-15 Converting into a state bank.

Ohio Adm.Code 1301:1-4-16 Definition of institution-affiliated party under section 1105.11 of the Revised Code.

Chapter 1301:1-5 Management Duties Regarding Shareholder Meetings

Ohio Adm.Code 1301:1-5-01 Management duties regarding shareholder meetings.

Chapter 1301:1-6 Qualified Trustees

Ohio Adm.Code 1301:1-6-01 Qualified trustees.

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