Oklahoma Admin. Code Title 85 | Oklahoma Administrative Code, Title 85 — State Banking Department

Title 625 Oklahoma Savings and Loan Board

Okla. Admin. Code tit. 625, ch. 15 Reserved

History

Codified 12-31-91

Chapter 1 Required Rules

Subchapter 1 General Provisions

Okla. Admin. Code § 85:1-1-1 Purpose

This Chapter provides for organization and operations of the Department and Board, rules of practice and procedure before the Board, and definitions.

History

Amended at 25 Ok Reg 1057, eff 5-25-08

Okla. Admin. Code § 85:1-1-2 Definitions

The following words and terms, when used in this Chapter, shall have the following meaning, unless the context clearly indicates otherwise. Any term used in this Title but not otherwise defined in this Title shall have the meaning provided for such term in the Code, unless the context clearly indicates otherwise.

"Applicant" means a party commencing a proceeding in the form of an application, appeal, or some other request for action or review by the Board or the Commissioner; and includes the terms "plaintiff," ""appellant" and "petitioner."

"Attorney" means a licensed attorney currently admitted to practice before the Supreme Court of Oklahoma, or an attorney currently licensed to practice in another state who is granted permission to appear in a proceeding in this state. No attorney not currently licensed to practice in Oklahoma shall be permitted to appear except in association with an attorney so licensed to practice in Oklahoma, who shall also appear in the proceeding. An attorney licensed to practice in a state permitting attorneys of this state to practice before its state courts without local counsel may appear without association of local counsel.

"Board" means the Oklahoma Banking Board.

"Code" means the Oklahoma Banking Code, found at Title 6 Okla. Stat. section 101 et seq.

"Commissioner" means the Oklahoma Bank Commissioner.

"Complaint" means a notice to the Commissioner regarding an alleged violation of state or federal law committed by an institution, company, or person under the jurisdiction of the Department.

"Department" means the Oklahoma State Banking Department.

"Intervenor" means a party not an applicant or named respondent who obtains permission to enter the proceeding. An intervenor opposing an application will thereafter be deemed a respondent.

"Order" means that which is required or ordered to be done, or not to be done, and shall be generally reserved for the requirement or directive portion of an official order or decisions of a proceeding; or the promulgation of rules, regulations, and requirements in matters in which the Board or Commissioner acts.

"Party" means a party of record, and every other party having an interest in the subject matter, and entitled to appear therein as a party of record. "Party of record" includes any party named a party in a pleading, or who makes formal appearance either in person or by an attorney at any stage of the proceeding whether or not seeking affirmative relief.

"Protestant" means a party who, upon grounds of private or public interest, resists an application or any relief sought thereby. A protestant is governed by the rules applicable to a respondent.

"Record" or "Formal record" of any proceeding shall consist of the following where offered at the hearing, whether or not received:

(A) Preliminary exhibits, including pertinent pleadings, notices and proof of publication.

(B) Transcript of proceedings at all hearings.

(D) Exhibits, together with attachments, appendices and amendments thereto.

(E) Exceptions and motions subsequent to the hearing.

(F) Orders or recommendations of the Board or Commissioner, together with findings of fact and conclusions of law.

(G) Any other instruments or matters relevant to the issues that the Board or Commissioner may order included in the record.

"Respondent" means a party against whom relief is sought in a proceeding, or who appears in opposition to relief sought by the applicant, and includes the term "Defendant". An institution, company, or person named in a complaint shall also be considered a respondent for purposes of the complaint.

History

Amended at 11 Ok Reg 4171, eff 10-1-94; Amended at 15 Ok Reg 2951, eff 7-15-98; Amended at 25 Ok Reg 1057, eff 5-25-08

Okla. Admin. Code § 85:1-1-3 Statutory citations

Citations to statutes in these rules refer to the most recent codification of the statute.

Okla. Admin. Code § 85:1-1-4 Operation and Location of the Board and Department

(a) The principal office of the Oklahoma Banking Board is located at 2900 North Lincoln Boulevard, Oklahoma City, Oklahoma 73105.

(b) Office hours of the Department shall be established by the Commissioner and shall begin no later than 8:30 a.m. and shall end no earlier than 4:30 p.m., except Saturdays, Sundays, holidays, and any day on which state offices are otherwise closed.

(c) The Board, or any official exercising its authority, may meet and exercise its official powers and functions at any location in the State of Oklahoma.

History

Amended at 13 Ok Reg 1899, eff 6-27-96; Amended at 25 Ok Reg 1057, eff 5-25-08

Okla. Admin. Code § 85:1-1-5 Communication with the Board and Commissioner

(a) Every communication in writing to the Board shall be addressed to the Commissioner at the principal office, unless the Board directs otherwise.

(b) Every pleading and other document tendered for official filing shall be deemed received only upon physical or electronic delivery to the Commissioner or the principal office of the Board.

(d) Unless otherwise required by the Commissioner, any provision in this Title requiring written notification or that a document be provided in writing may be satisfied by providing electronic communication and electronic images of a document.

History

Amended at 25 Ok Reg 1057, eff 5-25-08
Amended by Oklahoma Register, Volume 39, Issue 24, September 1, 2022, eff. 9/11/2022

Okla. Admin. Code § 85:1-1-6 Requests for Information

(a) The records of the Department are subject to review only as provided in the Code and the Oklahoma Open Records Act. Requests for information shall be accompanied by a Request for Records form prescribed by the Commissioner, which shall identify the name, address and telephone number of the person requesting the information and the specific information or types of information requested. The person requesting to inspect or receive copies of records shall state whether the records are being viewed or requested for a personal, business or commercial reason.

(b) All requests for information must be submitted to the principal office of the Department. Records of the Department will be available to the public for inspection only during regular office hours.

(c) No original records shall be removed from the Department. A charge for copies may be made in accordance with the Open Records Act and the provisions of this title or the Code.

History

Added at 25 Ok Reg 1057, eff 5-25-08

Subchapter 3 Procedural Rules

Okla. Admin. Code § 85:1-3-1 Records and transcripts

The Commissioner may, in his discretion, cause a record to be made of an individual proceeding before the Board or Commissioner. If the Commissioner chooses not to cause a record to be made, other than audio recording of a proceeding, a record may be made by any party to a proceeding. If a party chooses to cause a record to be made of an individual proceeding, a transcript of proceedings will be made at the request and expense of any party ordering it; however, two copies shall be furnished to the Department at the requesting party's expense in cases in which the Commissioner's or Board's decision is appealed.

History

Amended at 25 Ok Reg 1057, eff 5-25-08

Okla. Admin. Code § 85:1-3-2 Service of pleadings

(a) Service of an initial pleading. Every application in which a party is named a respondent shall be served by the State Banking Department on each respondent named therein by mail or electronic delivery accompanied by a notice of hearing stating the date on which the cause is set for hearing, which shall be no less than ten (10) days after notice is mailed. Service hereunder shall be required in addition to provisions of these rules requiring service by publication.

(b) Service of subsequent pleadings. Every pleading, after the initial pleading, shall be served by the party filing it by regular mail or electronic delivery upon all parties of record. Parties of record shall include the applicant, all named respondents and all persons having theretofore entered an appearance in the cause, in person or by an attorney.

(c) Certificate of service. Every pleading required to be served by regular mail or electronic delivery shall contain a list of the persons served and the certificate of the party or his attorney, that on the date stated a copy of the pleading was mailed, postage prepaid, or delivered, to each person listed. Any pleading required to be served by regular mail or electronic delivery may be served by leaving a copy thereof at the principal office of the party, or of the attorney for the party, or at the email address designated for the party or the attorney for the party.

(d) Service not jurisdictional. Service prescribed by this section shall not be jurisdictional except where so provided by the Constitution or by statute. Failure to comply with the provisions of this section as to mailing and service notice shall not deprive the Board or Commissioner of jurisdiction of the proceeding, but shall be grounds for such appropriate relief as the Commissioner may order.

History

Amended at 25 Ok Reg 1057, eff 5-25-08
Amended by Oklahoma Register, Volume 39, Issue 24, September 1, 2022, eff. 9/11/2022

Okla. Admin. Code § 85:1-3-3 Commencement of a proceeding; intervention; consolidation

(a) Every proceeding shall be commenced by an initial pleading which shall be either:

(1) an application, which shall include any request for authority, approval, determination, permission or other Board action or relief whether or not directed against a named respondent; or

(2) an appeal of a decision of the Commissioner, which decision is entitled to be appealed to the Board, or

(3) an order of the Board or Commissioner commencing a proceeding.

(b) Any interested person may intervene in a proceeding before the Board or Commissioner upon making timely application and showing that he may be aggrieved by the decision. Two or more proceedings or matters may be consolidated if there is no prejudice to any person affected by such consolidation.

History

Amended at 25 Ok Reg 1057, eff 5-25-08

Okla. Admin. Code § 85:1-3-4 Notice of hearing

(a) The Commissioner shall determine the names of all interested persons who might be directly aggrieved by the determination of the Board or the Commissioner at such hearings.

(b) The Commissioner shall give written notice of hearing to such persons at least ten (10) days prior to the hearing.

(c) The Commissioner shall give any additional notice required by law and may give additional notice where he deems it advisable.

Okla. Admin. Code § 85:1-3-5 Continuances

(a) The Commissioner may continue a hearing at any time for any period, with or without notice or motion.

(b) Except for good cause shown, or by agreement of all parties appearing at the hearing, no continuance will be granted upon motion of a party unless notice thereof is given to all interested parties at least three (3) days prior to the date set for hearing. A stipulation for continuance among all parties of record ordinarily will be approved unless the Commissioner determines that the public interest requires otherwise.

Okla. Admin. Code § 85:1-3-6 Depositions

(a) Deposition of a witness may be taken pursuant to a subpoena or by agreement of the parties involved. The deposition of a witness may be taken inside or outside the State of Oklahoma, with the requesting party bearing the cost of the court reporter.

(b) The manner of taking deposition and the use thereof shall otherwise be governed by the laws relating to taking of depositions for use in the District Courts of Oklahoma.

Okla. Admin. Code § 85:1-3-7 Production of documents

(a) Upon application of a party, or upon the Commissioner's own motion, with or without notice, the Commissioner may make an order requiring a party to produce designated documents or tangible objects for inspection by parties to the proceeding, or for copying at the expense of the applicant, or to be offered in evidence. The order shall direct production thereof at the hearing, or at a pre-hearing conference and production shall be at the principal office of the Board, unless some other place is stated in the order. An order hereunder may be directed to a party not yet a party of record, conditioned that if such party appears at the hearing, the order thereupon will be complied with.

(b) The party applying therefor shall mail a copy of the order by regular or electronic mail on each party of record at least seven days prior to the date upon which production is required.

(c) An order pursuant to this section may require production of any document not privileged which constitutes or contains evidence relevant to the subject matter of the proceeding, or may reasonably lead to such evidence. Business records shall not be deemed privileged as such; but confidential business records and information will be protected from disclosure except where directly relevant to the issues in the proceedings.

(d) The order shall identify the document or object to be produced individually or by categories, with sufficient particularity to permit easy identification thereof by the party ordered to make production.

(e) An exact photographic copy of a document may be substituted for the original, at the expense of the person requesting the instrument.

History

Amended at 25 Ok Reg 1057, eff 5-25-08
Amended by Oklahoma Register, Volume 39, Issue 24, September 1, 2022, eff. 9/11/2022

Okla. Admin. Code § 85:1-3-8 Interrogatories

Interrogatories may be submitted to a party in an individual proceeding under the same restrictions and procedures as set forth in the Oklahoma Statutes governing discovery in civil cases.

Okla. Admin. Code § 85:1-3-9 Examiner testimony

(a) Department examiners are prohibited from giving testimony which would disclose information obtained from confidential records as defined in 6 O.S. §§ 208 and 209(D), or information obtained in the process of developing confidential records without the express permission in writing of the Commissioner.

(b) Litigants seeking to subpoena Department examiners for depositions or hearings shall serve one copy of the subpoena upon the examiner and shall timely furnish one copy of each subpoena to the Department.

History

Amended at 25 Ok Reg 1057, eff 5-25-08

Okla. Admin. Code § 85:1-3-10 Examination reports - confidentiality

Examination reports are the property of the regulatory agencies that generate them. Copies are furnished to banks and trust companies for their confidential use. Under no circumstances shall a bank, trust company, or any of its directors, officers or employees disclose or make public in any manner the report or any portion thereof. If a subpoena or other legal process is received calling for production of an examination report, the Department must be notified immediately.

History

Amended at 25 Ok Reg 1057, eff 5-25-08

Okla. Admin. Code § 85:1-3-11 Pre-hearing conference

(a) The Commissioner, with or without request by any party of record, may order the parties or their attorneys to appear at a designated time for a pre-hearing conference to consider:

(1) Simplification of the issues.

(2) Presentation of issues of law, adjudication of which may simplify or eliminate issues of fact.

(3) Admissions and stipulations of fact which will avoid unnecessary evidence and testimony.

(4) Identification of documents to be offered at the hearing.

(5) Identification of and numerical limit upon experts and other witnesses.

(6) Discovery and production of documents, records, data and other information.

(7) Other matters as may aid in trial of the proceedings.

(b) Any objection or amendment to the application, notice of hearing, investigative report, any pleading or order commencing a proceeding shall be made at the pre-hearing conference. No objection or amendment will be allowed after the pre-hearing conference except upon good cause.

(c) Actions taken at the pre-hearing conference may be embodied in a preliminary order, which order shall control subsequent proceedings and shall be binding on all parties, whether or not present, unless modified to prevent manifest injustice.

(d) Notice of the time and place of a pre-hearing conference shall be as prescribed by order of the Commissioner and shall be served by regular or electronic mail upon all parties of record.

History

Amended at 25 Ok Reg 1057, eff 5-25-08
Amended by Oklahoma Register, Volume 39, Issue 24, September 1, 2022, eff. 9/11/2022

Okla. Admin. Code § 85:1-3-12 Witness and subpoenas

(a) Subpoena. Pursuant to 6 O.S. § 206(A), the Commissioner, upon request of a party, or upon his own motion, may issue subpoenas in any pending proceeding requiring attendance of a witness from any place in the state to the place of hearing. Praecipe for subpoena shall be filed with the Commissioner.

(b) Subpoena duces tecum. A subpoena may require the witness to produce at the hearing books, records, accounts, papers and other instruments and tangible objects, which shall be described with reasonable particularity in the subpoena. A subpoena duces tecum directed to a party not an individual may direct that the records be produced by an officer or employee responsible therefor.

(c) Service of subpoena. A subpoena may be served by a law enforcement officer, by an attorney, or by any other person competent to make an oath; and the person serving the same shall attach his affidavit of the person served, and time and manner of service. Service also may be made in any other manner provided by law.

(d) Return. The original subpoena, with affidavit of service thereon, shall be filed with the Commissioner.

(e) Protective orders. The Commissioner may make any orders with respect to subpoena and attendance of witness with or without application or notice, as may be appropriate for the protection of parties and witnesses, including an order excusing attendance, or limiting documents to be produced.

History

Amended at 25 Ok Reg 1057, eff 5-25-08

Okla. Admin. Code § 85:1-3-13 Rules of evidence

At such hearings, the rules of evidence set forth in the Oklahoma Evidence Code shall apply and the hearing shall be conducted in accordance with the Oklahoma Evidence Code relating to hearings therein provided, insofar as may be practicable.

Okla. Admin. Code § 85:1-3-14 Order of proof

The applicant who institutes a proceeding shall open and close the proof. Intervenors shall be heard immediately following principal parties with whom allied in interest. In all other cases, the presiding officer shall designate the order of proof.

History

Amended at 25 Ok Reg 1057, eff 5-25-08

Okla. Admin. Code § 85:1-3-15 Adverse party

A party may call an adverse party or an officer or employee of an adverse party, in which case the witness may be impeached and otherwise cross-examined.

Okla. Admin. Code § 85:1-3-16 Off the record

All testimony will be taken on the record unless the presiding officer designates otherwise.

Okla. Admin. Code § 85:1-3-17 Documents

Documentary evidence may be received in the form of copies or excerpts, if the original is not readily available. Upon request, parties shall be given an opportunity to compare the copy with the original.

Okla. Admin. Code § 85:1-3-18 Examination of witness

The Commissioner shall designate the order of examination and may limit the scope of examination and cross-examination.

Okla. Admin. Code § 85:1-3-19 Complaint procedure

(a) The primary purpose of the complaint procedure is to assist consumers in obtaining a formal response from an institution or company under the jurisdiction of the Department (the respondent). If the undisputed facts indicate that a respondent has violated state or federal law with respect to the complaining party, the Commissioner may notify both the complaining party and the respondent and recommend a resolution to the complaint. The Commissioner may take other action against the respondent if the activity or violation identified in the complaint, and verified by the Commissioner, indicates a threat to the safety and soundness of the respondent or a violation of law enforced by the Department.

(b) All complaints shall be on a form prescribed by the Commissioner. All complaints shall be answered by the Commissioner or the Commissioner's designee, without proceedings before the Board.

(c) Unless determined by the Commissioner to be frivolous or not including facts that may entitle the complaining party to relief under applicable law, the Commissioner shall forward each complaint to the respondent named in the complaint. The respondent shall have 20 days to respond in writing to the complaint, unless such time is extended by the Commissioner for good cause.

(d) The Commissioner shall not have jurisdiction to decide questions of fact raised by the parties to a complaint nor shall the Commissioner have authority to enforce, interpret, or avoid the provisions of a contract between the parties to a complaint. However, the Commissioner may inform the complaining party and respondent that a contract provision is contrary to established law.

(e) Although a complaint may include a request for relief against a named respondent, a complaint will not result in adversary or other proceedings as described in these rules. Decisions of the Commissioner with respect to complaints shall be final as to the administrative process and no appeal or other proceedings shall be held before the Commissioner or Board with respect to complaints. Provided, however, decisions of the Commissioner shall not preclude, endorse or otherwise affect the rights of any person to pursue civil relief in a court of competent jurisdiction with respect to the issues presented in a complaint.

History

Added at 25 Ok Reg 1057, eff 5-25-08

Okla. Admin. Code § 85:1-3-20 Petitions for rulemaking

(a) Any interested person may file a petition requesting the promulgation, amendment, or repeal of a rule in this title. The petition shall:

(1) be in writing;

(2) refer to the statutory section that authorizes the rulemaking action requested;

(3) refer to the need for the rulemaking action requested, including the consequences of not approving the rulemaking action requested;

(4) state the exact language for the rulemaking action requested;

(5) state the purpose of the rule sought;

(6) state a fact situation to which the rule sought will apply; and

(7) list the name and address of the person requesting the rule.

(b) Upon receipt of a petition as described in Subsection (a) of this section, the Commissioner may initiate a study of the requested change through whatever means deemed appropriate. If the Commissioner formally acts upon the petition, the petitioner will be advised of the action in writing as specified by the Commissioner. In accordance with 75 O.S. § 305, if the Department has not initiated rulemaking proceedings within 30 calendar days after the submission of a petition, the petition shall be deemed to have been denied.

History

Added at 25 Ok Reg 1057, eff 5-25-08

Okla. Admin. Code § 85:1-3-21 Declaratory rulings

(a) Any interested person may file a petition for a declaratory ruling as to the applicability of any rule or order of the Department. An official ruling will only be given if it is shown that an actual case, controversy, or issue is in contemplation on the fact situation presented and that unreasonable hardship, loss or delay would result if the matter were not determined in advance.

(b) A petition for a declaratory ruling shall:

(1) be in writing;

(2) refer to the rule or order involved;

(3) state the nature and purpose of the declaratory ruling sought;

(4) state the fact situation with respect to which the declaratory ruling is sought;

(5) provide citations to, and a summary of, authorities (whether controlling or not) relating to the issues presented by the petition; and

(6) list the name and address of the person requesting the ruling.

(c) The Commissioner may require any petitioner to provide additional information. A petition is not considered final until all requested information has been submitted. The failure to provide additional information shall be deemed to be a withdrawal of the petition.

(d) Official declaratory rulings may be made by and at the discretion of the Commissioner as to the applicability of any rule or order. Alternatively, the Commissioner may submit the final petition to the Board for review and declaratory ruling.

(e) A declaratory ruling, or refusal to issue such a ruling, shall be issued by the Commissioner or the Board within 90 days from receipt of the final petition, and shall be subject to review in accordance with the Administrative Procedures Act, Title 75 O.S. section 307. The Commissioner or Board may deny the petition if it is repetitive, concerns a matter that in the Commissioner's or Board's judgment is inappropriate for a declaratory ruling, or concerns a matter beyond the Commissioner or Board's authority.

(f) The Commissioner may provide others with written notice of the request for a declaratory ruling and give them an opportunity to respond in writing.

(g) Nothing in this rule shall not be interpreted as limiting the right of the Commissioner to issue, on his own motion or upon request, interpretive statements as provided for in the Code.

History

Added at 25 Ok Reg 1057, eff 5-25-08

Chapter 10 Supervision, Regulation, and Administration of Banks, Trust Companies, and the Oklahoma Banking Code

Subchapter 1 General Provisions

Okla. Admin. Code § 85:10-1-1 Purpose

This Chapter sets forth the supervisory and regulatory requirments, procedures and standards for a variety of bank and trust company activities, powers and issues, as well as defining and clarifying various terms and provisions of the Oklahoma Banking Code. This Chapter also provides specific and general guidance for the general administration of the Oklahoma Banking Code and in appropriate cases, grants or clarifies bank powers.

Okla. Admin. Code § 85:10-1-2 Definitions

The following words and terms, when used in this Chapter, shall have the following meaning, unless the text clearly indicates otherwise.

"Board" means the Oklahoma Banking Board.

"Code" means the Oklahoma Banking Code, found at Title 6 Okla. Stat. section 101 et seq.

"Commissioner" means the Oklahoma Bank Commissioner.

"Deposits" shall be defined by those definitions used in the Federal Deposit Insurance Act and, specifically for the purpose of computing reserves, demand deposits shall include cashiers checks issued by the bank.

"Department" means the Oklahoma State Banking Department.

"Land" as it applies to Section 1004(A)(2) of the Code shall not include mortgages on land.

"Official Checks" includes cashiers checks, tellers checks, money orders, and other checks drawn on bank or trust company funds to pay for bank or trust company expenses or liabilities.

History

Amended at 15 Ok Reg 2952, eff 7-15-98; Amended at 25 Ok Reg 1064, eff 5-25-08

Subchapter 3 Departmental Requirements

Okla. Admin. Code § 85:10-3-1 Report of condition

Each state-chartered bank and trust company located within this State shall report to the Commissioner its statement of condition, together with other statistical information as may be requested by the Commissioner. Unless otherwise directed by the Commissioner, a bank may comply with this section by supplying its report of condition to the Federal Deposit Insurance Corporation or other federal regulatory agency approved by the Commissioner if such report is electronically available to the Commissioner.

History

Amended at 25 Ok Reg 1064, eff 5-25-08

Okla. Admin. Code § 85:10-3-2 Report of change of controlling interest

(a) When a bank or trust company is required by the Code to report a change of control to the Commissioner, such report shall be given within 60 days after the change of control becomes effective, unless such time period is extended upon request to the Commissioner. Such report shall include:

(1) the number of shares sold and by whom,

(2) the number of shares purchased and by whom,

(3) the cost per share,

(4) whether or not a loan was obtained by the purchaser for the purpose of purchasing the stock; if so, the amount, number of shares pledged, other collateral pledged, rate and terms, and the name of the lender, and

(5) a resume of the past business operation and experience of the purchaser(s), together with financial statements dated within six (6) months. If the president or chief executive officer is unable to furnish the information required, the purchaser of the stock shall make the required report. Biographical and financial information called for by this paragraph may be supplied using a form adopted for such use by the Federal Deposit Insurance Corporation or the Federal Reserve System.

(b) All information supplied under this section shall be confidential and not subject to public inspection for any purpose.

History

Amended at 25 Ok Reg 1064, eff 5-25-08

Okla. Admin. Code § 85:10-3-3 Report of change of chief executive officer or director

(a) When a bank or trust company is required by the Code to report a change of chief executive officer or director, such report shall be given within 60 days after the change becomes effective, unless such time period is extended upon request to the Commissioner. Such report shall include:

(1) a biographical sketch of the individual involved,

(2) a statement of the past and present business affiliations and professional affiliations, and

(3) a financial statement dated within six (6) months.

(b) Biographical and financial information called for by this section may be supplied using a form adopted for such use by the Federal Deposit Insurance Corporation or the Federal Reserve System.

(c) All information supplied under this section shall be confidential and not subject to public inspection for any purpose.

History

Amended at 25 Ok Reg 1064, eff 5-25-08

Okla. Admin. Code § 85:10-3-4 Report of change of director [REVOKED]

History

Revoked at 25 Ok Reg 1064, eff 5-25-08

Okla. Admin. Code § 85:10-3-5 RESERVED

Okla. Admin. Code § 85:10-3-6 RESERVED

Okla. Admin. Code § 85:10-3-7 RESERVED

Okla. Admin. Code § 85:10-3-8 RESERVED

Okla. Admin. Code § 85:10-3-9 RESERVED

Okla. Admin. Code § 85:10-3-10 Increase/decrease in capital stock

(a) In addition to those procedures and requirements specified in Section 405 of the Code, the following procedures shall be followed in connection with an increase or decrease of capital stock.

(b) Pursuant to the voting of the stockholders to increase or decrease the capital stock, the bank or trust company shall advise the Commissioner of the amount of increase or decrease, and by what means, as follows:

(1) The bank or trust company shall complete and return to the Commissioner's office a certificate in a form prescribed by the Commissioner, together with two (2) certified copies of the resolution adopted by a majority of the stockholders and approved by the board of directors, which resolution appears in the minutes of their meetings, in connection with the increase or decrease in capital.

(2) Within 30 days of receiving the properly executed documents from the bank or trust company, the Commissioner shall notify the bank or trust company of his approval or disapproval. The Commissioner may extend the 30-day period called for by this paragraph upon notice to the applicant. If approved, the bank or trust company shall file the amended certificate of incorporation with the Secretary of State, after which it will return a certified copy to the Commissioner, and if a bank, the required number of certified copies to the bank's primary federal regulator.

(3) The increase or decrease shall not be effective until the Commissioner has approved the documents and the Secretary of State has filed the amended certificate of incorporation.

(c) When an increase in capital stock is requested, the stockholders of the bank or trust company shall include in their resolution whether the new stock will be fully paid either in cash or by transfer from undivided profits or authorized unissued stock. If to be paid in cash, the resolution shall declare whether the offering will be a private offering or a public offering. If any offering of capital stock of a bank or trust company is a public offering, the bank or trust company must prepare an offering circular pursuant to the terms and requirements of Board rule 85:10-13-2.

History

Amended at 10 Ok Reg 1969, eff 5-27-93; Amended at 15 Ok Reg 2952, eff 7-15-98; Amended at 25 Ok Reg 1064, eff 5-25-08
Amended by Oklahoma Register, Volume 39, Issue 24, September 1, 2022, eff. 9/11/2022

Okla. Admin. Code § 85:10-3-11 Change in number or par value of shares

In addition to those procedures and requirements specified in Section 406(C) of the Oklahoma Banking Code, the following requirements must be met in connection with a change in the number and par value of shares:

(1) The bank or trust company shall advise the Commissioner, setting forth the desired change in the number of shares or the par value of shares.

(2) The bank or trust company shall complete and return to the Commissioner's office a certificate in a form prescribed by the Commissioner, together with the two (2) certified copies of the resolution adopted by a majority of the stockholders and approved by the board of directors, which resolution appears in the minutes of their meetings, in connection with the change in number or par value of shares.

(3) The bank shall also submit a copy of its proposed amended certificate of incorporation accompanied by a fee as set forth in 85:10-3-21 for approving the documents.

(4) Within 30 days of receiving the properly executed documents from the bank or trust company, the Commissioner shall notify the bank or trust company of his approval or disapproval. The Commissioner may extend the 30-day period called for by this paragraph upon notice to the applicant. If approved, the bank or trust company shall file the documents with the Secretary of State, after which it will return a certified copy to the Commissioner, and if a bank, the required number of certified copies to the bank's primary federal regulator.

(5) The increase or decrease shall not be effective until the Commissioner has approved the documents and the Secretary of State has filed the amended certificate of incorporation.

History

Amended at 10 Ok Reg 1969, eff 5-27-93; Amended at 14 Ok Reg 3559, eff 8-1-97 (emergency); Amended at 15 Ok Reg 2952, eff 7-15-98; Amended at 25 Ok Reg 1064, eff 5-25-08

Okla. Admin. Code § 85:10-3-12 Change in name - procedures and requirements

(a) A bank or trust company desiring to change its name shall furnish the following to the Commissioner:

(1) evidence of an affirmative majority vote of the outstanding voting stock approving the new name;

(2) a resolution by the board of directors approving the new name, which resolution appears in the minutes of their meeting;

(3) proposed amended corporate documents evidencing the new name.

(b) After the bank or trust company has been notified of the Commissioner's approval of its new name, it must file the necessary corporate documents with the Oklahoma Secretary of State and must submit certified copies of such filed documents to the Department and to the bank or trust company's primary federal regulator.

(c) It shall be the bank or trust company's responsibility to review governmental records with respect to the availability for use of the new name as well as whether the new name or mark used in connection with the new name will violate or infringe on some other company's name or mark. Any approval provided by the Commissioner will not be taken to mean that such new name or mark is available or eligible for use in any community nor will it mean that such new name or mark does not infringe on the rights of any other company.

(d) If any new name chosen by a bank or trust company is a "confusingly similar name" as defined in the Code, the bank or trust company must comply with the requirements of rule 85:10-11-19.

History

Amended at 10 Ok Reg 1969, eff 5-27-93; Amended at 25 Ok Reg 1064, eff 5-25-08
Amended by Oklahoma Register, Volume 39, Issue 24, September 1, 2022, eff. 9/11/2022

Okla. Admin. Code § 85:10-3-13 Relocation of a trust company or a main office, branch or detached facility of a bank [REVOKED]

History

Amended at 10 Ok Reg 1969, eff 5-27-93; Revoked at 14 Ok Reg 3559, eff 8-1-97 (emergency); Revoked at 15 Ok Reg 2952, eff 7-15-98

Okla. Admin. Code § 85:10-3-14 Applying for trust powers

In addition to those procedures and requirements specified in Section 407 of the Code, the following procedures shall be followed in connection with applying for trust powers:

(1) The application for a bank to receive approval to exercise trust powers under Section 407 of the Code shall be upon the form prescribed by the Commissioner, and accompanied by the fee prescribed in rule 85:10-3-21.

(2) No application shall be approved except those conditioned upon subsequent approval of the appropriate federal regulatory agency.

(3) All applications shall be approved upon the condition that the applicant bank activate its trust department within six (6) months of federal regulatory approval. In this regard, activating its trust department shall mean satisfying the pledging requirements provided for in Section 1004 of the Code and actually offering trust services to the general public.

(4) Following approval of its application to exercise trust powers by the Commissioner and the appropriate federal regulatory agency the bank shall file an amended Certificate of Incorporation with the Oklahoma Secretary of State indicating its ability to exercise trust powers. The bank shall return a certified copy of the amended certificate of incorporation to the Commissioner and send the required number to the bank's primary federal regulator.

History

Amended at 10 Ok Reg 1969, eff 5-27-93; Amended at 15 Ok Reg 2952, eff 7-15-98; Amended at 25 Ok Reg 1064, eff 5-25-08

Okla. Admin. Code § 85:10-3-15 Abandonment of trust powers

In addition to those procedures and requirements specified in Section 406 and Section 1017 of the Code, when a bank or trust company intends to relinquish its ability to exercise trust powers it shall be necessary for the bank to:

(1) Receive approval of the appropriate federal regulatory agency.

(2) Cease to use the word(s) "Trust" or "Trust Company" in its corporate name, and take the necessary steps to amend its corporate name accordingly. Upon filing its amended certificate of incorporation, the bank or trust company must return a certified copy to the Commissioner and send the required number of copies to the institution's primary federal regulator.

History

Amended at 10 Ok Reg 1969, eff 5-27-93; Amended at 25 Ok Reg 1064, eff 5-25-08

Okla. Admin. Code § 85:10-3-16 Issuance of debentures or capital notes

(a) Section 410 of the Code provides that a bank may issue its convertible or nonconvertible debentures or notes in such amounts and under the terms and conditions as shall be prescribed and approved by the Board. Section 1001 provides that a trust company has the power to issue debentures, notes, or other evidences or debt to the extent of an amount equal to ten (10) times its capital and surplus. Notwithstanding other terms and conditions the Board may require, no approval will be granted unless:

(1) The request for approval is made on the form prescribed by the Commissioner;

(2) The bank shall receive approval of its primary federal regulator;

(3) The amount of the issue shall exceed Twenty-five Thousand Dollars ($25,000.00);

(4) The average maturity of the issue shall be no less than seven (7) years;

(5) The issue by its terms expressly subordinates itself to the prior payment in full of the bank's liability to its depositors; and

(b) When a debenture or capital note issue is authorized by the board of directors of a bank or trust company, their resolution shall state whether the issue is to be offered at a private or public offering. If the issue will be offered through a public offering, the bank or trust company must prepare an offering circular pursuant to the terms and requirements of Board rule 85:10-13-2.

History

Amended at 14 Ok Reg 3559, eff 8-1-97 (emergency); Amended at 15 Ok Reg 2952, eff 7-15-98; Amended at 25 Ok Reg 1064, eff 5-25-08
Amended by Oklahoma Register, Volume 39, Issue 24, September 1, 2022, eff. 9/11/2022

Okla. Admin. Code § 85:10-3-17 Merger/conversion - national bank or savings association to a state charter

(a) Any merger resulting in a state bank shall require the prior approval of the Board. A national bank, trust company or savings association shall obtain prior approval of the Board to convert to a state bank or trust company charter. A state bank or trust company shall give notice to the Department before converting to or merging with and into a national bank or savings association.

(b) The Board shall not approve any request for conversion into a state bank or trust company until the national bank, trust company or savings association has been examined by the Department and the findings of the examiner in charge have been presented to the Board. The examination shall be considered a special examination as authorized by section 211 of the Code, and the national bank, trust company or savings association shall pay for the examination within 10 days of receipt of the invoice for payment. In the event of a merger that will result in a surviving state chartered bank, the Commissioner may require, at the Commissioner's discretion, a special examination of any merging institution or company.

(c) Upon completion of an examination by the Department, only eligible institutions will be considered by the Board for conversion to a state bank or trust company charter. An eligible institution is a national bank, trust company or savings association that:

(1) Has a composite CAMELS rating of 1 or 2 based on the Department's examination conducted in connection with the conversion application;

(2) Is not subject to supervisory action by its primary federal regulator (such as a Memorandum of Understanding, Cease and Desist Order, or Formal Written Agreement) unless waived by the Commissioner;

(3) Meets the standards and requirements of the Board for conversion to a state bank or trust company; and

(4) Meets the requirements of sections 1107 and 1108 of the Code.

(d) Procedures for converting to a state bank or trust company charter - The national bank, trust company or savings association shall:

(1) Submit to the Department a letter indicating its desire to convert to a state bank or trust company and include a copy of the most recent daily statement of condition and income;

(2) Call a meeting of the directors to pass a resolution by a majority (51%) of the directors for conversion to a state bank or trust company. This resolution must be presented to the stockholders;

(3) Call a meeting of the stockholders to pass a resolution by a majority (51%) of the stockholders for conversion to a state bank or trust company. Upon approval by the stockholders, the directors of the bank, trust company or savings association shall then designate a person to have authority to act on the behalf of the national bank, trust company or savings association in all matters pertaining to the conversion; and

(4) Submit to the Department its application to convert to a state bank or trust company. The application must:

(A) Be signed by the president or other duly authorized officer;

(B) Include two (2) certified copies of the resolutions passed at each meeting of the board of directors and the stockholders;

(D) Include current financial statements and biographical reports for all directors and principal stockholders (those holding at least 10% of the stock of the bank, trust company or association). Biographical and financial information called for by this paragraph may be supplied using a form adopted for such use by the Federal Deposit Insurance Corporation or the Federal Reserve System. All information supplied under this paragraph shall be confidential and not subject to public inspection for any purpose;

(E) If a bank, state whether the institution wishes to exercise fiduciary powers after the conversion;

(F) Identify each branch that the resulting bank or trust company expects to operate after conversion;

(G) Identify all subsidiaries that will be retained following the conversion, and provide the information and analysis of the subsidiaries' activities that would be required if the converting institution were a state bank or trust company establishing each subsidiary pursuant to the Code and Board Rules;

(H) Identify any nonconforming assets (including nonconforming subsidiaries) and nonconforming activities that the institution engages in, and describe the plans to retain or divest those assets; and

(I) Submit a copy of the institution's proposed certificate of incorporation.

(e) Post approval procedures - Within 60 days after receiving written notification that the Board has approved the request for conversion, the national bank, trust company or savings association must:

(1) Call an organizational meeting of the stockholders in the name of the new state bank or trust company to elect a board of directors and approve or ratify the certificate of incorporation and bylaws;

(2) Call an organizational meeting of the board of directors of the new state bank or trust company to elect officers, including the designation of the managing officer;

(3) File the certificate of incorporation with the Oklahoma Secretary of State; and

(4) After both organizational meetings, the new state bank or trust company must submit the following documents to the Department:

(A) Two (2) signed copies of the minutes of each organizational meeting;

(B) A certified copy of the filed certificate of incorporation. The institution shall also send the required number of copies to the institution's primary federal regulator; and

(f) The new state bank cannot use "and Trust" or "and Trust Company" in its name unless the bank submits an application and obtains prior approval to exercise fiduciary powers. The Board may consider for approval the application to exercise fiduciary powers concurrently with the conversion application. No application is required where the national bank or savings association had obtained approval from its primary federal regulator to exercise fiduciary powers prior to converting to a state bank.

(g) Approval to convert to a state bank or trust company expires if the conversion has not occurred within six (6) months of the Board's approval of the application.

(h) When the Commissioner determines that the applicant has satisfied all statutory and regulatory requirements, including those set forth herein and in 6 O.S. § 301 et seq ., and any other conditions, the Commissioner will issue a certificate of authority. The certificate provides that the institution is authorized to begin conducting business as a state bank or trust company as of a specified date.

(i) Post conversion documents - At the completion of the conversion, the new state bank or trust company must submit the following to the Commissioner:

(1) Oath of Directors - the original and one (1) copy, to be administered at the organizational meeting of the board of directors;

(2) List of Stockholders - the original and one (1) copy, to be completed at the organizational meeting of the stockholders;

(3) Copy of the original blanket bond with riders, if any; and

(4) Certificate of Annual Examination - the original attached to the most recent audited financial statements, if any.

History

Amended at 10 Ok Reg 1969, eff 5-27-93; Amended at 11 Ok Reg 457, eff 11-10-93 through 7-14-94 (emergency); Amended at 12 Ok Reg 3354, eff 8-25-95; Amended at 18 Ok Reg 1853, eff 6-11-01; Amended at 25 Ok Reg 1064, eff 5-25-08

Okla. Admin. Code § 85:10-3-18 Records and retention

(a) When any law of the state of Oklahoma or federal law requires the retention of a specific record or a specific class, type or category of records for a certain period of time, a bank and trust company shall retain its records falling within such class, type or category for the time period required by such law. If no Oklahoma state law or federal law prescribes a retention period for a specific record or a specific class, type or category of records, a bank or trust company must retain such records for the period of time that would be necessary to prosecute or defend an action for which such records would be required in the prosecution or defense of the action.

(b) The Commissioner may issue rulings from time to time, with the approval of the Board, that require banks and trust companies to retain certain records or a certain class, type or category of records for a period of time that is longer than may be required under subsection (a) of this section.

History

Amended at 19 Ok Reg 1597, eff 6-13-02; Amended at 25 Ok Reg 1064, eff 5-25-08

Okla. Admin. Code § 85:10-3-19 Reserve requirements [REVOKED]

History

Revoked at 25 Ok Reg 1064, eff 5-25-08

Okla. Admin. Code § 85:10-3-20 Registration of bank or trust related activities

(a) Definition of "Bank or Trust-Related Activities. The phrase "bank or trust-related activities" shall be defined as follows:

(1) With respect to activities conducted by banks, bank holding companies or trust companies, or any affiliate thereof, domiciled outside the State of Oklahoma, directed to or offered to residents of Oklahoma in a public manner, "bank or trust-related activities" shall mean:

(A) soliciting or receiving deposits;

(B) offering or making loans;

(D) offering transaction accounts;

(E) holding funds or other property in trust;

(F) acting in a fiduciary capacity;

(G) installation of automated teller and/or cash dispensing machines; or

(H) other activities deemed by the Bank Commissioner to be bank or trust related.

(2) With respect to activities conducted by business organizations which are not banks, bank holding companies or trust companies, or any affiliate thereof, directed to or offered to residents of Oklahoma in a public manner, "bank or trust-related activities" shall mean:

(A) soliciting or receiving deposits;

(B) issuing certificate-type evidences of debt incorporating terminologies utilized by banking and other rate-regulated financial institutions;

(D) holding funds or other property in trust;

(E) acting in a fiduciary capacity;

(F) installation of automated teller and/or cash dispensing machines; or

(G) other activities deemed by the Commissioner to be bank or trust-related.

(b) Registration requirement. Each institution or organization conducting bank or trust-related activities and not holding a certificate of authority to engage in the banking or trust company business in Oklahoma must file with the Commissioner a Registration Statement prior to engaging in bank or trust related activities and annually thereafter. Annual statements shall be filed on or before April 1 of each year.

(d) Fee. Each Registrant shall pay annually a fee in an amount as set forth in rule 85:10-3-21.

(e) Exemption. Open-end investment companies and broker dealers which are registered or have securities registered with the Oklahoma Department of Securities and place on file with the Oklahoma Department of Securities on an annual basis the information required by the Registration Statement are excused from compliance with this Section, provided aggregate data for such entities is made available to the Commissioner on an annual basis.

(f) Definition of "Deposit" and Transaction Account". As used in this section, the terms "deposit" and "transaction account" shall have the same meaning that is given those terms in Title 12 C.F.R. section 204.2.

(g) Definition of "Business Association". As used in section 104 of the Code, the term "business association" shall be interpreted to exclude insured depository institutions, as defined by Section 103 of the Depository Institutions Deregulation and Monetary Control Act of 1980, and uninsured savings and loan associations and credit unions supervised by and reporting to the Department. "Business Association" shall not include entities licensed by the State of Oklahoma which license authorizes such activities to be engaged in by the licensed entity.

History

Amended at 10 Ok Reg 1969, eff 5-27-93; Amended at 13 Ok Reg 1901, eff 6-27-96; Amended at 15 Ok Reg 2952, eff 7-15-98; Amended at 25 Ok Reg 1064, eff 5-25-08

Okla. Admin. Code § 85:10-3-21 Fees

(a) New Charters.

(1) Application fee for authority to organize. In accordance with the provisions of Section 303(C) of the Code with respect to applications for authority to organize a state bank or trust company, an application fee in the amount of $7,500.00 shall be submitted with each application for authority to engage in the banking business.

(2) Application fee for holding company bank charters. Notwithstanding the fee set forth in paragraph (1) of this subsection, in the case of an Application for Authority to Organize pursuant to Section 502(E) and 502.1 of the Code, an application fee in the amount of $2,000.00 shall be submitted with each application for authority to engage in the banking business.

(b) Application fee to change location. In accordance with the provisions of Section 406(B) of the Code with respect to applications to change location, an application fee in the amount of $2,000.00 shall be submitted with each application.

(c) Application fee for operating and financial subsidiaries. An application for approval of an operating or financial subsidiary must be accompanied by a fee in the amount of $2,000.00.

(d) Application fee for branch. An application fee of $2,000.00 shall accompany each application for certificate to maintain and operate a branch.

(e) Other types of applications and fees. The following applications shall be accompanied by fee in an amount as prescribed below:

(1) Application to abandon trust powers - $1,500.00

(2) Application to exercise trust powers - $1,500.00

(f) Fee for merger. In accordance with the provisions of Sections 1103 and 1111 of the Code, with respect to the submission of the merger agreement for review, a fee in the amount of $3,500.00 shall be submitted together with the merger agreement. Such fee shall be in addition to and not in lieu of any branch application fee(s) which may also be required.

(g) Fee for purchase and assumption agreements. In accordance with the provisions of Section 1109 of the Code, with respect to the submission of the agreement of purchase and sale for review, a fee in the amount of $3,500.00 shall be submitted together with the purchase and sale agreement.

(h) Fee for registration statements. In accordance with the provisions of Section 104 of the Code with respect to registration statements, a fee in the amount of $500.00 shall be submitted with each registration statement.

(i) Method of Payment. All fees shall be paid by an instrument made payable to the Oklahoma State Banking Department. However, the Department may develop procedures for receiving electronic payment with respect to any or all fees, and subject to such conditions as may be prescribed by the Commissioner.

History

Amended at 10 Ok Reg 4275, eff 7-27-93 (emergency); Amended at 11 Ok Reg 4173, eff 7-25-94; Amended at 14 Ok Reg 3559, eff 8-1-97 (emergency); Amended at 15 Ok Reg 2952, eff 7-15-98; Amended at 21 Ok Reg 1186, eff 5-27-04; Amended at 25 Ok Reg 1064, eff 5-25-08
Amended by Oklahoma Register, Volume 39, Issue 24, September 1, 2022, eff. 9/11/2022

Okla. Admin. Code § 85:10-3-22 Organizational expenses

(a) For purposes of section 304 of the Code, "organizational expenses" shall include the following:

(1) Expenses incurred and necessary to present the application for authority to engage in the banking business, through and including all appeals. These expenses shall include, but are not limited to, the charter filing fee to the Department, attorney's fees, feasibility study fees, expenses incurred in order to provide the Board with those facts upon which the Board or subsequent courts may base a decision as to the feasibility of granting a charter.

(2) Expenses incurred in obtaining membership in the Federal Reserve System and/or insurance from the Federal Deposit Insurance Corporation.

(3) Expenses incurred up to the issuance of a certificate of authority. Upon the issuance of the certificate of authority, the application has been concluded and subsequently there is in existence a bank, although it may be inoperative and not opened at the time. Thereafter such expenses incurred by the bank are not organizational expense butexpenses of the bank.

(4) If a certificate of authority is issued prior to the actual acceptance of the bank into membership of the Federal Reserve System or obtaining insurance from the Federal Deposit Insurance Corporation, any expenses which might thereafter be incurred in regard to membership in the Federal Reserve System or obtaining insurance from the Federal Deposit Insurance Corporation would be organization expenses rather than expense of the bank.

(5) Amounts paid to future personnel of the bank in organization and fees to consultants may be considered organizational expenses when approved in advance by the Commissioner.

(b) Expenses which are not organizational expenses and which must be charged to the bank without regard to whether the bank is open for business, include but are not limited to salaries paid to bank officers and other personnel after the issuance of the certificate of authority, amounts paid for the purchase of land and fixed assets, including reimbursement of previously paid options for land, amounts paid for the construction of a bank building, expenses for stationery and supplies, signage costs, and fees paid to vendors that are providing or will later provide services to the bank. Questions of whether an expense should be treated as organizational expense or expense of the newly organized bank should be addressed to the Commissioner in writing, and his determination thereof shall be final.

History

Amended at 14 Ok Reg 3559, eff 8-1-97 (emergency); Amended at 15 Ok Reg 2952, eff 7-15-98; Amended at 25 Ok Reg 1064, eff 5-25-08

Okla. Admin. Code § 85:10-3-23 Suspicious activity reports

Whenever a bank or trust company submits a suspicious activity report to any federal regulatory authority pursuant to the requirements of the federal Bank Secrecy Act, the bank or trust company must immediately submit a copy of the suspicious activity report to the Department. Provided, if the Department has electronic access to suspicious activity reports after they are submitted to a federal regulatory authority, the bank or trust company need not submit an additional copy to the Department.

History

Amended at 15 Ok Reg 2952, eff 7-15-98; Amended at 25 Ok Reg 1064, eff 5-25-08

Subchapter 5 Requirements, Standards and Procedures for an Internal Control Program

Okla. Admin. Code § 85:10-5-1 Internal controls

(a) The Board of Directors of every state chartered bank and trust company shall adopt and reduce to writing, and maintain thereafter, standards and procedures for an internal control program, which shall contain as a minimum those standards and procedures as outlined in this Subchapter.

(b) The internal control program shall be made available to the regulatory authorities for review and also the bank's or trust company's bonding company for review.

(c) The board of directors of every state chartered bank and trust company shall elect a control officer or auditor annually to serve at the pleasure of the board. Such a person shall be charged with implementation of the bank's or trust company's internal control program. The control officer or auditor, who shall be someone other than the chief executive officer, shall report a summary of control activities to the board of directors or committee thereof, periodically, as required in rule 85:10-5-3.

(d) The control officer or auditor may, with the approval of the board of directors, outsource the performance of the procedure of the internal control program. Outsourcing occurs when the state chartered bank or trust company engages an independent public accounting firm or other outside professionals as described in rule 85:10-7-1 to perform the procedures required by the internal control program.

History

Amended at 15 Ok Reg 2952, eff 7-15-98; Amended at 25 Ok Reg 1064, eff 5-25-08

Okla. Admin. Code § 85:10-5-2 Internal control program

(a) The internal control program set forth in this subchapter must be administered by the control officer or auditor with a record maintained as to the date upon which each recommended procedure was performed and a notation as to any exceptions disclosed.

(b) The control officer or auditor must be accountable directly to the board of directors or committee thereof.

(c) The adoption of a sound internal control program is a primary responsibility of the bank's board of directors. The board cannot delegate this duty. The board shall appoint a control officer or auditor to administer such a program, but the ultimate accountability for the degree of effectiveness with which the program functions is the board's responsibility. Neither supervisory examination nor insurance, or a combination thereof, can take the place of an internal control program.

(d) In order to obtain the maximum protection economically feasible it is necessary that all concerned be continually aware of the fundamental principles with respect to sound internal checks and controls and internal auditing. An objective in any bank or trust company control program is to discourage fraud, not necessarily to discover its existence. A program of safeguards must be implemented to meet this primary objective.

(e) The internal control program should contain the institution's policy for annual examination by the board of directors and, further, should contain a provision for annual review as to adequacy and compliance.

(f) The failure of a bank or trust company to meet the requirements of this subchapter does not by itself establish or diminish any private right of action otherwise available under other state or federal law against a bank or trust company.

(g) Any bank that complies fully with Title 12 Part 363 of the Code of Federal Regulations will be deemed to have complied with the provisions of this subchapter.

History

Amended at 15 Ok Reg 2952, eff 7-15-98; Amended at 25 Ok Reg 1064, eff 5-25-08
Amended by Oklahoma Register, Volume 37, Issue 24, September 1, 2020, eff. 9/11/2020

Okla. Admin. Code § 85:10-5-3 Minimum control elements for bank internal control program

All internal control programs adopted by banks shall contain as a minimum the following:

(1) A requirement that each officer and employee, when eligible for vacation, be absent from the institution at least five consecutive banking days each calendar year, unless otherwise approved in writing by the bank's bonding company for bank officers and employees generally and then each officer and employee who may be excepted from this requirement must be specifically approved by the bank's board of directors and it shall be recorded in the board of director's minutes, that the officer or the employee may be absent less than the five consecutive banking days. During the absence of an officer or employee, the duties of the absent officer or employee must be performed by other bank officers and employees.

(2) A requirement that periodic reports be made to the board of directors, which must contain at least the minimum information described in 85:10-5-4.

(3) Require the control officer or auditor to periodically, as frequently as necessary but no less often than stated herein, perform or supervise performance of:

(A) Daily - Review all master file changes, by not less than two persons.

(B) Quarterly - on a surprise basis, count tellers' cash, including vault cash, review bait money, and ensure that established procedures are being followed.

(C) Monthly - On a surprise basis, prove to the general ledger and verify validity of all cash items. Also, all cash items held over 30 days that are not being currently worked for collection, must be charged off. The collection effort of these items should be documented in writing.

(D) Monthly - On a surprise basis, balance overdrafts to general ledger, scrutinize for large recurring overdrafts and report to the board of directors those overdrafts which are in excess of the minimum amount established by the board.

(E) Monthly - Review and prove to the general ledger:

(i) All customer deposit accounts, including demand, savings, time certificates and cashier's checks.

(ii) Official checks.

(iii) All loans.

(F) Monthly - Reconcile all correspondent bank accounts. Explain any item outstanding over fifteen (15) days and document resolution efforts.

(G) Monthly - Review teller's over/short.

(H) Quarterly - Review all officer and employee accounts in the institution and report any unexplained items to the board of directors or committee thereof.

(I) Monthly - Reconcile and prove to the general ledger all investment accounts.

(J) Monthly - Verify the unrealized gains or losses on securities account and associated tax account.

(K) Quarterly - Prove to the general ledger those accounts which have been determined by institution policy to be inactive or dormant.. Each time activity occurs in an inactive or dormant account that activity should be reviewed to establish the authenticity of the entry.

(L) Quarterly - Balance and verify all remaining asset and liability accounts which have had activity since last verification.

(M) Monthly - Balance to general ledger and verify all accruals including but not limited to loans, investments, and time deposits.

(4) Establish the maximum cash exposure the institution will have. This should include not only the total but the maximum amounts to be in each teller's unit.

(5) Establish a procedure for security of vault cash and for collateral held by the bank or trust company.

(6) Establish a procedure for dual control for the reserve stocks of all official checks, consigned items, and the reserve stocks of other items in the bank.

(7) All requirements of this section that are met, should be documented in writing, so that evidence exists that will substantiate to an examiner that this Section's requirements are being met.

History

Amended at 10 Ok Reg 735, eff 1-13-93 (emergency); Amended at 15 Ok Reg 1979, eff 5-27-93; Amended at 15 Ok Reg 2952, eff 7-15-98; Amended at 19 Ok Reg 1597, eff 6-13-02; Amended at 20 Ok Reg 1083, eff 5-27-03; Amended at 25 Ok Reg 1064, eff 5-25-08
Amended by Oklahoma Register, Volume 37, Issue 24, September 1, 2020, eff. 9/11/2020

Okla. Admin. Code § 85:10-5-3.1 Internal control program for fiduciary activities of trust departments and trust companies

(a) Where applicable, the following items, at a minimum, shall be performed by all trust departments and all trust companies conducting fiduciary activities to assure the maintenance of sufficient internal audits and reviews, approvals and appointments, and board/committee reporting. Documentation must be maintained to show that each item was completed as required.

(b) The following internal audits and reviews must be completed at the frequency specified:

(1) A daily review of master file changes.

(2) A monthly review of overdrafts and uninvested cash balances that exceed a reasonable minimum established by the institution.

(3) A monthly reconcilement of deposit operating accounts and any suspense accounts.

(4) A semi-annual vault and safe deposit box review for all trust assets held on premises.

(5) A quarterly review of trust accounts (a reasonable sample determined by management) for appropriate administration, asset management, documentation, and compliance with governing instruments, laws, internal policies, and sound fiduciary standards.

(1) A review and approval of trust department policies.

(2) Appointment of individuals or committees with authority to approve discretionary account distributions over a reasonable minimum established by the institution.

(3) Appointment of individuals with authority to approve disbursements, including electronic transfers, checks and dual signature requirements.

(d) The following reports, at a minimum, must be provided to the institution's board, or committee of the board, at the frequency specified:

(1) A quarterly report of all opened and closed accounts.

(2) A quarterly report of the status of all outstanding litigation, efforts taken since the last report to resolve the litigation, and any expected exposure to the institution.

(3) A quarterly report of any new formal complaints directed at the trust company or trust department.

(4) A quarterly report of any new settlements or other amounts paid to settle disputes.

(5) A quarterly report of assets with stale pricing dates that exceed generally accepted fiduciary standards.

(6) A quarterly report of any new audits conducted including management responses to any recommendations.

(7) A quarterly report of "watch list" accounts that warrant increased attention.

(8) A quarterly report of trust department or trust company profitability.

History

Added at 20 Ok Reg 1083, eff 5-27-03; Amended at 25 Ok Reg 1064, eff 5-25-08
Amended by Oklahoma Register, Volume 37, Issue 24, September 1, 2020, eff. 9/11/2020

Okla. Admin. Code § 85:10-5-4 Reports

Bank reports. Reports which the internal control program shall require to be made monthly, except as otherwise provided, to the bank's board of directors or committee thereof shall consist of, at a minimum, the following:

(1) A report showing the board-approved budget compared to actual income and expenses for the calendar year and the current month with explanations for any significant deviation or change.

(2) A report from the control officer or auditor that the internal minimum control elements have been performed with explanations for any differences, outages or shortages.

(3) A quarterly report detailing board-approved liquidity performance measures and explanations for any significant deviations.

(4) A quarterly report of all criticized and classified loans.

(5) A report of all outstanding loans made to officers, employees and directors and their business interests or affiliates.

(6) Investments purchased or sold since the last report.

(7) A quarterly report detailing the bank's analysis of the Allowance for Loan and Lease Losses or Allowance for Credit Losses.

(8) All charge-offs or other losses the bank has sustained since the last report.

(9) All past due loans. A loan or category of loans shall be considered "past due" according to guidelines that may be established by the board of directors.

(10) All overdrafts.

(11) A report showing the aggregate indebtedness of any single borrower that exceeds 25 percent of the bank's capital and reserves. This report shall be made to the bank's entire board of directors.

History

Amended at 15 Ok Reg 2952, eff 7-15-98; Amended at 19 Ok Reg 1597, eff 6-13-02; Amended at 25 Ok Reg 1064, eff 5-25-08
Amended by Oklahoma Register, Volume 37, Issue 24, September 1, 2020, eff. 9/11/2020

Okla. Admin. Code § 85:10-5-5 Review and appointments

Review and Appointments of the following items shall be made by the board of directors at least annually.

(1) A review and approval of the internal control audit program, lending policy and asset/liability management policy and their implementation for the previous year.

(2) A review and approval of the institution's blanket bond and all other insurance coverages.

(3) Elect officers and appoint committees for the coming year as designated by the bylaws.

(4) Designate the officers and/or employees with authority to sign official checks of the bank or trust company, to include any dollar limitations or two signatures required stipulations.

(5) Review the report per Subchapter 7 of this Chapter, "Director's Examination". Follow up on the disposition of any differences or recommendations and submit a copy of the report to the Commissioner within the time prescribed in Subchapter 7 of this Chapter.

History

Amended at 15 Ok Reg 2952, eff 7-15-98; Amended at 25 Ok Reg 1064, eff 5-25-08

Subchapter 7 Director's Examinations

Okla. Admin. Code § 85:10-7-1 Examination procedures

(a) In addition to the requirements set forth in Section 714(C) of the Code, the annual examination must be made in accordance with the minimum examination procedures outlined in this section.

(b) The examination shall be performed by:

(1) qualified directors who are members of the board of directors but not officers or employees of the bank or trust company and who are in fact reasonably independent and have demonstrated his or her capability to perform said examination. A director, to be considered reasonably independent cannot:

(A) be an immediate family member of active officers or employees of the bank or trust company,

(B) have any outstanding loans with the bank or trust company which have been criticized or specially mentioned by one of the examining agencies,

(2) Certified public accountants, an independent examiner who has demonstrated a capacity to perform said examination and who is in fact independent, or persons whose proficiency has been certified by a nationally recognized certification authority, and who:

(A) are not connected with the bank or trust company as an officer, director, attorney or employee, or as a member of the immediate family of an officer, director, attorney or employee of the bank or trust company,

(B) are not beneficial owners, directly or indirectly, of any of the shares of stock of the bank or trust company,

(C) have no proprietary interest in any partnership, corporation, firm or other entity that controls the bank or trust company, directly or indirectly,

(D) do not have any outstanding loans to themselves, their partners, their firms or their families, unless such loans are adequately disclosed in the report to the board of directors, disclosing the name of the borrower, the amount, security pledged and appraisal or market value of the security,

(E) do not make entries or postings on the books of the bank, or perform any other operational functions for the bank, except such functions for which prior approval was requested and obtained in writing from the Commissioner, and except a correspondent bank whose operational functions are subject to supervision by the bank regulatory agencies, and

(F) can and do specifically specify in the report that he/she has met the test of independence as stated above and that he/she is in fact independent. Where a bank or trust company is part of a consolidated company audit done by certified public accountants meeting the criteria of Subsection 2 (A) through (E) of this Section, the internal audit staff of the parent company shall also be acceptable.

History

Amended at 15 Ok Reg 2952, eff 7-15-98; Amended at 25 Ok Reg 1064, eff 5-25-08

Okla. Admin. Code § 85:10-7-2 Scope of examination

(a) Standards of acceptability. An examination of a state bank or trust company, to be acceptable, must be made in accordance with the minimum examination procedures. The Commissioner has the responsibility to determine whether an examination is acceptable. He also has the authority to reject any examination which does not conform in all respects with prescribed requirements. If, at any time, it is found that those performing the audit or examination as set out in 85:10-7-1(a) and (b) have not followed recognized rules, ethics, or conduct, or have not met the minimum standards of the Department, or made any misstatement of facts or circumstances or any misrepresentation of any kind knowingly made, it will not only cause the examination to be rejected but will also form a basis for the temporary or permanent disqualification of the individual(s) from conducting similar examinations.

(b) Reporting. A report shall be prepared and submitted to the board of directors, describing the scope of examination and setting forth the finding and recommendations as a result of the examination. Any open or unreconciled item at the time the report is submitted shall be disclosed and commented upon in the report.

(c) Report content. The report shall include the date of examination; a statement indicating that at least the minimum requirements outlined in this Subchapter were met; a statement that the test of independence specified in 85:10-7-1(b) has been met; a statement that the internal control program adopted by the bank or trust company is being complied with to the best of the individual's(s') knowledge; or set forth in the report any exceptions and any other comments or statements which the individual(s) may wish to make. The report shall also include the management letter summarizing the findings of the directors examination.

(d) Report order and balance. The reports should follow as closely as possible the order contained in this Subchapter and include the balance of the general ledger accounts as of the examination date under the specific account heading.

(e) Definition. Contained in this Subchapter, the words "tests" and "selected" are used without specific definition. For each situation in which such terminology is used, indicate in some appropriate manner the extent and/or basis of the tests.

(f) Employees. Include in the report the extent to, and the purpose for, which employees of the bank under examination were used.

(g) Defalcations. Any defalcations should be reported immediately to the Department.

(h) Deadline to file. The board of directors must file a copy of the report with the Department within one hundred twenty (120) days from the date of completion of the examination.

History

Amended at 15 Ok Reg 2952, eff 7-15-98; Amended at 25 Ok Reg 1064, eff 5-25-08

Okla. Admin. Code § 85:10-7-3 Minimum examination procedures

(a) Generally. Commence examination on a surprise basis. Assume control over the assets and records to be examined until procedures have been completed.

(b) Cash, cash items, clearings and exchanges.

(1) Count cash and reconcile total with the general ledger balance.

(2) Examine cash items; investigate any unusual or noncurrent items; trace disposition of selected amounts.

(3) Confirm totals of clearings and exchanges direct with drawee banks or paying agents; trace disposition of selected return items.

(1) Obtain current statements from correspondents; reconcile and clear selected open items; obtain confirmation of balances at the examination date.

(2) Trace disposition of selected return items recorded by correspondents on examination date and several days thereafter.

(d) Investments.

(1) Obtain trial balance of securities and reconcile totals with applicable general ledger accounts.

(2) Examine all securities on hand and confirm those held by others.

(3) Inspect documents supporting carrying values of selected securities held at examination date and of selected acquisitions and retirements since last examination.

(e) Loans.

Obtain trial balance of loan portfolio and reconcile totals and reconcile totals with applicable general ledger accounts.

(f) Building, furniture and fixtures.

(1) Review transactions in the accounts.

(2) Trace selected additions to supporting documentation.

(g) Other resources (including customers' liabilities under acceptances and confirmed letters of credit).

(1) Accruals. Review accounting procedures and test selected transactions.

(2) Other. Review and test selected transactions to supporting documentation and confirm balances to extent necessary to be satisfied with accuracy of amounts recorded.

(h) Demand deposits.

(1) Obtain trial balance of demand deposits and reconcile totals with general ledger account.

(2) Review overdrafts; trace subsequent disposition of selected items.

(3) Obtain trial balance of outstanding official checks and reconcile totals with general ledger accounts; review selected items paid subsequent to examination date.

(4) Trace disposition of selected unposted items.

(5) Prepare or obtain listing of due-to-bank accounts; confirm selected account balances directly with the correspondent bank.

(i) Time deposits. Obtain trial balance of time deposit accounts and reconcile totals with applicable general ledger accounts; trace disposition of selected unposted items. Examine selected certificates of deposit paid subsequent to examination date to determine proper payment of proceeds.

(j) Other liabilities (including bank's liability under acceptance and confirmed letters of credit).

(1) Accruals. Review accounting procedures and test selected transactions.

(2) Unearned discount and deferred income. Review accounting procedures and test selected transactions, including rebates.

(3) Other. Review and test selected transactions to supporting documentation, and confirm balances to extent necessary to be satisfied with accuracy of amounts recorded.

(4) Obtain statement of treasury tax and loan account, reconcile with general ledger account, and confirm balance.

(k) Capital stock.

(1) Obtain trial balance of stockholders' ledger and open stubs of stock certificate books and reconcile total par value with the general ledger account.

(2) Trace open stubs of stock certificate book to stockholders' ledger on a test basis where practical.

(3) Examine stock transfers for proper assignments, cancellation and recording in the stockholders' register.

(4) For institutions using an outside registrar and/or transfer agent, confirm the number of shares of stock issued and outstanding and reconcile totals with the general ledger account.

(5) Obtain trial balance of capital notes and debentures outstanding and reconcile total with general ledger account; determine that the bank is in compliance with applicable accounting provisions of such instruments; confirm balances with holders on a test basis.

(l) Surplus and reserves. Review transactions in the account and trace selected additions and reductions to supporting documents.

(m) Undivided profits. Review selected transactions in the account. Trace income and expense account balances closed to undivided profits since the last examination.

(n) Income and expense (non-operating). Test selected transactions to supporting documents.

(o) Collection items.

(1) Schedule selected outstanding items at the examination date; inspect items or confirm with holders.

(2) Examine, credit or remittance advices, checks or other evidence of payment applicable to scheduled items paid subsequent to examination date.

(p) Safekeeping department. Review accounting procedures for recording items held in safekeeping for customers; inspect selected items on hand and confirm selected items held in custody by other banks; confirm selected safekeeping accounts by direct communication with customers.

(q) Trust department.

(1) Obtain a trial balance of individual trust accounts and reconcile the totals with the trust department balance sheet.

(2) Verify the existence of assets contained within selected trust accounts. Savings accounts and certificates of deposit should be confirmed on a test basis by reference to the bank records or by direct communication with the bank.

(3) Review selected trust accounts and test transactions to supporting records and data.

(r) Trust Companies. The examination of a trust company must be geared to those particular activities of the specific trust company being examined. The minimum examination procedures required by this rule should be utilized for all trust companies as applicable.

(s) General.

(1) Review minutes of Board of Directors since last examination; determine that formal resolutions of an accounting nature have been followed.

(2) Review accounting procedures for handling nonledger assets, such as charged-off loans, recoveries, etc.

(3) Compare most recent daily statement with general ledger accounts; review examination date transactions reflected in general ledger accounts; investigate any unusual transactions.

(4) Review board authorization on purchases and sales of investments.

(t) Direct confirmation with borrowers and depositors.

(1) Mail negative and/or positive confirmation requests on a test basis for all loan and deposit categories, including participation loans purchased and sold. (Most bonding companies have minimum requirements. This determination should be made prior to examination.)

(2) For participation loans purchased, confirm balances with the selling bank only. For participating loans sold, confirm the balances sold with the purchasing bank and the total balances with the borrower on a test basis.

(3) Mail confirmation requests to a selected number of customers whose loans have been charged off.

(4) Mail confirmation requests to a selected number of deposit customers whose accounts have been closed since last examination.

(5) Any positive confirmation request not acknowledged by a loan customer after two weeks from the date of the original mailing shall be followed by a second confirmation request. A listing of significant positive confirmation requests not acknowledged after the mailing of both a first and second request shall be included in the report.

(u) Others. The examination procedures listed above are the minimum procedures to be performed and deal primarily with the accountability for the bank's recorded assets and liabilities. However, they should not be construed as restrictive. Circumstances relative to individual banks or situations encountered may make it necessary or desirable to expand certain procedures, apply alternative procedures, or extend examination procedures to other areas.

History

Amended at 25 Ok Reg 1064, eff 5-25-08

Okla. Admin. Code § 85:10-7-4 Trust companies [REVOKED]

History

Revoked at 25 Ok Reg 1064, eff 5-25-08

Okla. Admin. Code § 85:10-7-5 Performance of an audit in lieu of examination

Performance of an audit by an independent certified public accountant resulting in an unqualified opinion being rendered constitutes satisfaction of the requirements of this Subchapter. No additional statements or reports are required from the accounting firm. A copy of such audit report, together with an unqualified opinion, must be submitted to the Commissioner within 120 days of completion of the audit.

History

Added at 25 Ok Reg 1057, eff 5-25-08

Subchapter 9 New Banks, Branches, and Other Facilities

Okla. Admin. Code § 85:10-9-1 Application for a new bank or trust company

In addition to those provisions set out in Article III of the Oklahoma Banking Code, the following requirements must be met:

(1) The application shall be on a form prescribed by the Commissioner, including but not limited to that information required in Section 305 of the Code.

(2) If any of the stock of the proposed bank or trust company is offered to other than the organizers (as provided in Sections 303 or 303.1 of the Code), it shall be offered by an offering circular only in accordance with provisions of 85:10-13-2, the contents of which must be accepted by the Commissioner.

(3) No certificate of authority for a bank shall be approved until an application for federal deposit insurance or for membership in the Federal Reserve System has been approved in accordance with the provisions of Section 313(B)(5) of the Code.

History

Amended at 14 Ok Reg 3559, eff 8-1-97 (emergency); Amended at 15 Ok Reg 2952, eff 7-15-98; Amended at 25 Ok Reg 1064, eff 5-25-08

Okla. Admin. Code § 85:10-9-2 Application to establish or relocate a branch

(a) Filing of application.

(1) A bank desiring to establish or relocate a branch pursuant to the Code, shall submit to the Commissioner the original and two copies of an application on a form prescribed by the Commissioner.

(2) The application shall be executed by the applicant's president or vice-president.

(3) An application fee as set forth in 85:10-3-21 shall accompany each application.

(4) Applicants are urged to submit their applications to the Federal Deposit Insurance Corporation (nonmember banks) or the Federal Reserve Board (member banks) at the same time the application is submitted to the Commissioner.

(b) Investigation. The Commissioner may request additional information from the applicant and conduct such investigation as he deems appropriate. No special emphasis will be placed on an appraisal of economic and competitive conditions.

(1) Unless the Applicant requests a hearing before the Board either by having so stated in the Application or by subsequent written request, the Commissioner may consider the Application, grant approval and issue the certificate of authority to establish and operate or to relocate a branch or detached facility without a hearing before the Board. The Commissioner's consideration of the Application for approval shall be conducted pursuant to the same standards and criteria as are applicable to applications before the Board.

(2) Approval may be granted by the Commissioner only in the event applicant's latest completed examination reflects a Uniform Financial Institutions Composite "CAMEL" rating of 1 or 2, and the applicant is not subject to supervisory action by the Department such as a memorandum of understanding, cease and desist order, or similar action.

(3) If the Commissioner determines that the application should not be approved, the application will proceed pursuant to subsection (d) of this section.

(4) The Commissioner shall have the absolute discretion to defer ruling on any application thereby allowing such application to be heard before the Board for consideration and approval/disapproval.

(d) Notice of intent to recommend denial. In the event the Commissioner, based on his investigation, determines not to approve the application, the Commissioner shall send to the applicant by overnight mail or electronic communication a written notice of intent to recommend denial, including the reasons for such negative recommendation and the date, time and place the application will be heard by the Board. Within ten (10) days after receipt of such notice, the applicant shall notify the Commissioner of its intent to withdraw its application or to proceed with a hearing on the application before the Board.

(e) Hearing. In the event a hearing before the Board is set by the Commissioner, such hearing shall be conducted as follows:

(1) Time limit. The applicant shall be limited to 30 minutes to present testimony and arguments at the hearing. Additional time may be granted by the Commissioner upon good cause shown.

(2) Transcript. A transcript may be made of each hearing of an application. The Commissioner or the applicant may arrange for a court reporter to be present to record the proceedings. All expenses of the reporter, including the furnishing of the original and two(2) copies of the transcript to the Commissioner, shall be borne by the applicant.

(3) Procedure. The order of presentation, appearance of witnesses, and presentation of evidence for hearings of applications shall be as directed by the chair of the Board present at the hearing. Ten (10) copies of all documentary evidence shall be furnished to the Commissioner prior to the hearing as directed by the Commissioner.

(4) Decision of the Board. Within twenty (20) days after the conclusion of the hearing of an application, or such additional time as the Board may prescribe, the Board chair shall issue an order approving or disapproving the application, and shall promptly mail a copy of the order to the applicant.

(5) Criteria. No special emphasis will be placed by the Board on an appraisal of economic and competitive conditions. The Board, at its discretion, may consider the following factors in arriving at its decision:

(A) Financial condition and history of the applicant. The current asset and liability condition and history of the applicant, its compliance with applicable laws and regulations, and its investment in fixed assets are primary areas of consideration. The applicant's aggregate fixed asset investment, including lease obligations, must be reasonable in relation to its projected earnings capacity and capital, and must comply with Section 414 of the Code.

(B) Adequacy of capital structure. Capital earnings and retention of earnings should be sufficient to support the applicant's current level of operations as well as the proposed expansion.

(C) Future earnings prospect. The applicant's earnings potential will be evaluated in terms of the ability of overall bank earnings to absorb the anticipated expenses resulting from the establishment and operation of the proposed branch.

(D) Quality of management. The applicant's management must have demonstrated ability to operate the bank in a sound manner, and must display the degree of depth necessary to permit the establishment of the proposed branch.

(E) Legal limitations. Any statutory limitations and requirements regarding the establishment and location of branches.

(F) Insiders. Any financial or other business arrangement, direct or indirect, involving the proposed branch and bank insiders which involve terms and conditions more favorable to insiders than would be available in a comparable transaction with unrelated parties.

(G) Affiliates. The current asset and liability condition and history of any of applicant's affiliates, and other financial information on such affiliates which the Board deems relevant. As used in this paragraph, "affiliate" shall mean any company which the applicant controls, any company which controls the applicant, or any company under control of a company which also controls the applicant. For purposes of this paragraph, "control" shall be presumed to exist when one or more persons acting in concert directly or indirectly own, control, or have power to vote 25 percent or more of any class of voting securities of another person; or one or more persons acting in concert control, in any manner, the election of a majority of the directors, trustees, or other persons exercising similar functions of another person; or any other circumstances exist which indicate that one or more persons acting in concert directly or indirectly exercise a controlling influence over the management or policies of another person.

(f) Conditions. The Board's or Commissioner's approval of an application shall be subject to any condition deemed by the Board or Commissioner to be relevant to the criteria set forth in (e)(5) of this Section.

(g) Commencement of business. The applicant shall commence business at the branch within eighteen (18) months of Board or Commissioner approval. Extensions of time within which to commence business may be granted by the Commissioner only upon good cause shown.

(h) Reapplication. In the event an application is disapproved by the Board, the applicant may submit a new application following a material change of the circumstances which were the basis for the initial disapproval.

(i) Judicial review. The decision of the Board disapprovingan application may be appealed to the Oklahoma Supreme Court. An appeal shall be commenced and conducted in accordance with the provisions of Section 207 of the Code.

(j) Military installation branch. An application to establish a military banking facility or a branch on a military installation pursuant to Section 421 of the Code shall be made in accordance with this Rule 85:10-9-2. Provided, the application shall be accompanied by a letter of approval from the military installation commander.

History

Amended at 10 Ok Reg 1969, eff 5-27-93; Amended at 13 Ok Reg 3233, eff 7-25-96; Amended at 14 Ok Reg 3559, eff 8-1-97 (emergency); Amended at 15 Ok Reg 2952, eff 7-15-98; Amended at 17 Ok Reg 1495, eff 5-25-00; Amended at 25 Ok Reg 1064, eff 5-25-08

Okla. Admin. Code § 85:10-9-3 Military banking facilities [REVOKED]

History

Amended at 14 Ok Reg 3559, eff 8-1-97 (emergency); Amended at 15 Ok Reg 2952, eff 7-15-98; Revoked at 25 Ok Reg 1064, eff 5-25-08

Okla. Admin. Code § 85:10-9-4 Consumer banking electronic facility [REVOKED]

History

Amended at 14 Ok Reg 3559, eff 8-1-97 (emergency); Amended at 15 Ok Reg 2952, eff 7-15-98; Revoked at 25 Ok Reg 1064, eff 5-25-08

Okla. Admin. Code § 85:10-9-5 Loan production office [REVOKED]

History

Revoked at 14 Ok Reg 3559, eff 8-1-97 (emergency); Revoked at 15 Ok Reg 2952, eff 7-15-98

Okla. Admin. Code § 85:10-9-6 Branch closing

(a) A bank may discontinue a branch office with the approval of the Commissioner. In order to gain approval, the bank must:

(1) submit to the Commissioner a resolution of its board of directors authorizing the closing;

(2) post a notice of the closing at both the branch location and the main office of the bank for thirty (30) days prior to the closing. Said notice shall state the effective date of the closing and indicate the location of the bank's closest office;

(3) submit to the Commissioner an affidavit stating that the notice posting requirement has been met;

(4) either publish notice of the closing once a week for two (2) weeks in a legal newspaper in general circulation in the community where the branch is located or furnish written notice to depositors and safe deposit box holders at the branch to be closed; and

(5) submit to the Commissioner a copy of the notices required by subsections (a)(2) and (a)(4) of this Section.

(b) The Commissioner shall approve the branch closing absent compelling reasons for denial.

(1) the bank posts notice of the closing at both the branch location being closed and the main office of the bank for thirty (30) days prior to the closing; and

(2) the bank operates an existing branch location within two miles of the branch being closed.

(3) The notice posted pursuant to this subsection must include the date of the closing and information (including address and operating hours) of the nearest operating branch location of the bank.

(d) The requirements of subsection (a) of this section do not apply when the bank maintains one or more devices at a former branch location by which customers may interact with bank personnel by video and/or audio equipment and conduct core banking functions such as making deposits, cashing checks, or receiving loan proceeds.

History

Amended at 15 Ok Reg 2952, eff 7-15-98; Amended at 25 Ok Reg 1064, eff 5-25-08
Amended by Oklahoma Register, Volume 37, Issue 24, September 1, 2020, eff. 9/11/2020

Okla. Admin. Code § 85:10-9-7 Loan production office/Deposit origination office

For purposes of Section 424 of the Code, "main office" or "branch office" in connection with the loan decision and loan funding, shall be defined to include "back office facility" operations. "Back office facility" is defined as a bank facility that is neither accessible to nor visited by the public. The following activities can be conducted at a back office facility:

(1) Loan origination: Credit information may be assembled and loan applications can be solicited or processed.

(2) Loan approval: Loans that originate at a loan production office or other bank facility may be approved at a back office facility.

(3) Receipt of loan funds: Since back office facilities only refer to bank facilities that are neither accessible to nor visited by the public, there can be no situation in which a customer receives loan funds at the back office facility. A back office facility may credit loan funds (through ACH, wire transfer, or other electronic method) to a deposit account of the borrower at the bank without any in-person contact between the back office facility and the borrower.

History

Added at 15 Ok Reg 2952, eff 7-15-98; Amended at 25 Ok Reg 1064, eff 5-25-08

Okla. Admin. Code § 85:10-9-8 School banking program/School deposit taking activities

Deposits in nominal amounts taken by bank officers or employees at elementary or secondary schools from students pursuant to or as part of a bank program offered to the school by the bank for educational purposes, shall be permissible and shall not be considered a "branch."

History

Amended at 15 Ok Reg 2952, eff 7-15-98

Subchapter 11 Substantive Guidelines and Restrictions

Okla. Admin. Code § 85:10-11-1 Pledging requirements for banks and trust companies

(a) Each bank having trust powers and each trust company operating within this State shall report to the Commissioner annually or more often if requested by the Commissioner, on a form prescribed by him, the amount of cash and securities held in trust by the bank or trust company.

(b) Section 1004(A)(1) of the Code, requiring the pledging of securities to the Commissioner for the faithful performance of its duties, shall be satisfied by the securities being held in safe keeping at any bank approved by the Commissioner, other than the pledging bank, including the Federal Reserve Bank; the holding bank issuing its joint custody receipt therefor and forwarding said joint custody receipt to the Commissioner.

History

Amended at 15 Ok Reg 2952, eff 7-15-98; Amended at 25 Ok Reg 1064, eff 5-25-08

Okla. Admin. Code § 85:10-11-2 Investment securities

(a) Qualifications. In order to be classified as an "investment security," under Section 806(C) of the Code, one or more of the following characteristics must exist with respect to a particular security:

(1) A public distribution of the securities must have been provided for or made in a manner to protect or insure the marketability of the issue; or

(2) Other existing securities of the obligor must have such public distribution as to protect or insure the marketability of the issue under consideration; or

(3) In the case of investment securities for which a public distribution as set forth in (1) or (2) of this subsection cannot be so provided, or so made, and which are issued by established commercial or industrial business or enterprises, that can demonstrate the ability to service such securities, the debt evidenced thereby must mature not later than ten (10) years after the date of issuance of the security and must be of such sound value or so secured as reasonably to assure its payment. Such securities must, by their terms, provide for the amortization of the debt evidenced thereby so that at least seventy-five percent (75%) of the principal will be extinguished by the maturity date by substantially equal periodic payments. Provided that no amortization need be required for the period of the first year after the date of issuance of such securities. Provided, further, that if the investment securities are mortgage bonds or notes that the issuing corporation or the constituent companies comprising it for three (3) years immediately prior to the date of investment has earned, above all fixed charges other than interest on indebtedness, an amount equal to at least double the interest charges which it will be required to pay upon its outstanding obligations or when such mortgage bonds or notes plus all prior encumbrances outstanding are in an amount not in excess of fifty percent (50%) of the actual value of the property of the issuing corporation securing same.

(b) Trust. Where the security is issued under a trust agreement, the agreement must provide for a trustee independent of the obligor, which trustee must be a properly qualified trust company or banking trust business.

(c) Purchasing Restrictions. The purchase of "investment securities" in which the investment characteristics are distinctly and predominantly speculative or the purchase of securities which are in default, as to principal or interest, is prohibited. The purchase of any security convertible into stock at the option of the issuer is prohibited.

(d) Duty. Responsibility for the making of proper investments rests primarily with the bank's board of directors and there is no intention on the part of the Commissioner or Board, in the promulgation of regulations or otherwise, to delegate this responsibility to the rating services or others. Further, this duty should not in any way be considered as being fully performed by merely ascertaining that a particular security falls within a particular rating classification.

(e) Applicability. The requirements, conditions, restrictions and limitations of this regulation do not apply to loans and further, do not apply to securities:

(1) acquired through foreclosure on collateral, or

(2) acquired in good faith by way of compromise of a bad or doubtful claim to prevent loss to the bank in connection with a debt previously contracted.

History

Amended at 15 Ok Reg 2952, eff 7-15-98; Amended at 25 Ok Reg 1064, eff 5-25-08

Okla. Admin. Code § 85:10-11-3 Real estate lending

(a) Definition of "real estate". For the purposes of Section 803 of the Code and this section, the term "real estate" includes, but is not limited to, condominiums, leaseholds, cooperatives, land sale contracts and construction and development projects.

(b) Compliance. In making real estate loans pursuant to Section 803 of the Code and this section, banks must comply with all applicable laws and regulations, including those pertaining to disclosure, reporting, documentation and public protection.

(c) Safety and Soundness. The safety and soundness of a bank's real estate lending activities shall be evaluated, as all other lending activities, with respect to prudence, loan quality, concentrations, policy adherence and other areas of supervisory concern. Real estate loans having excessive risk of nonpayment shall be classified by examiners. Additionally, examiners shall list as technical exceptions those loans having deficiencies in documentation.

History

Amended at 25 Ok Reg 1064, eff 5-25-08

Okla. Admin. Code § 85:10-11-4 Safe deposit boxes

(a) Lease. For purposes of Section 1302 of the Code, the term "receipt" shall mean a copy of the lease contract but does not mean that the lessor must provide a receipt for any or all items deposited in a safe deposit box.

(b) Requirements. Each lessor that provides safe deposit box services for its customers shall:

(1) Maintain a record as to the lessee(s) of each box rented.

(2) Maintain a record as to the person or persons permitted to enter the boxwith minimum data consisting of names of entries into the box and dates of entry.

(3) Establish other precautionary procedures as may be deemed advisable by the institution's board of directors to insure adequate safety to the lessees with a minimum of liability on the lessor.

History

Amended at 25 Ok Reg 1064, eff 5-25-08

Okla. Admin. Code § 85:10-11-5 Interest on deposits

Any state bank is authorized to pay interest on deposits at rates authorized by its board of directors and not otherwise prohibited by the law of this state or by federal law.

History

Amended at 25 Ok Reg 1064, eff 5-25-08

Okla. Admin. Code § 85:10-11-6 Loans and investments in other banks

(a) Application to trust companies. The provisions of this section are made applicable to trust companies in the same manner as to banks and each reference to "bank" or "banks" shall include "trust company" or "trust companies" as if so worded.

(b) Limitation and waiver. The following limitations shall apply to all state chartered banks as they relate to their deposits, loans and investments in other banks (whether state or national), providing, however, that these limitations can be exceeded upon specific authorization in writing from the Commissioner for a specific authorized period of time when in the opinion of the Commissioner conditions warrant due to seasonal influx, extraordinary large items and temporary situations. Request for waiver of the limitation must be made by the selling or depositing bank on an individual basis, stating reasons for request and time of waiver requested. As these rules relate to Federal Funds and Term Federal Funds, the limitation shall not apply if those funds are secured by at least 100% market value of securities which can be legally held by a state chartered bank.

(c) Definitions. The following words and terms, when used in this section shall have the following meaning, unless the text clearly indicates otherwise:

(1) "Buying bank/depository bank" means the bank receiving the funds.

(2) "Certificate of deposit" means those deposits placed in a bank and evidenced by a written instrument or other record providing the funds shall remain on deposit for a given period of time (at least seven days) and draw interest thereon at a given rate of interest.

(3) "Demand balance" means those deposits placed in a bank on which no interest is payable and are withdrawable on demand.

(4) "Federal funds" means a loan from one bank to another on which the buying bank shall pay interest on a daily basis and the funds shall be available to the selling bank any day.

(5) "Selling bank/depositing bank" means bank from which the funds came.

(6) "Term federal funds" means a loan from one bank to another, on which the buying bank shall pay interest on a daily basis, or any other basis, and the funds shall be available to the selling bank at a predetermined future date.

(d) Total deposits. No state chartered bank shall at any time have on deposit at any other bank an amount in excess of the depository bank's capital and surplus accounts (exclusive of debentures, undivided profits and reserve accounts). The permissible amount should then be reduced by those funds covered under other provisions of this section.

(e) Fed funds. No state chartered bank shall at any time have sold in the form of federal funds to any other bank an amount in excess of twice the selling bank's capital, surplus and undivided profits accounts exclusive of debentures and reserves, as reflected on the most recent report of condition. The permissible amount should then be reduced by those funds covered under subsection (f) of this section, if any, but in no event in excess of buying bank's capital and surplus.

(f) Term fed funds and/or certificates of deposit. No state chartered bank shall at any time have sold to any other bank in the form of term federal funds, and/or have deposited in any other bank in the form of a certificate of deposit, or any other interest bearing deposit, an aggregate amount in excess of the selling or depositing bank's capital, surplus and undivided profits accounts, exclusive of debentures and reserves as reflected on the most recent report of condition.

(g) Capital debentures of bank. No state chartered bank shall at any time invest its funds in the capital debenture issue of another bank in an amount of more than its lending limit, and capital debentures so invested in shall be qualified as ""investment securities" as set forth in 85:10-11-2.

(h) Concentration of funds. Compliance with these rules does not preclude the Department from concluding that deposits in a single institution could be considered a concentration of funds and placing these comments in the reports of examination to be called to the attention of an institution's board of directors.

History

Amended at 25 Ok Reg 1064, eff 5-25-08

Okla. Admin. Code § 85:10-11-7 Adjustable rate mortgage loans, graduated payment adjustable mortgage loans and reverse annuity mortgage loans

(a) Definitions. The following words and terms, when used in this section, shall have the following meaning, unless the text clearly indicates otherwise.

(1) "Adjustable rate mortgage loan" means any amortized loan made by a bank or trust company secured by a lien on a one-to-four family dwelling where such loan is made pursuant to an agreement which enables the bank or trust company to make periodic adjustments to the interest rate.

(2) "Graduated payment adjustable mortgage loan" means a specific type of adjustable rate mortgage loan for which the monthly payment amount is insufficient at the beginning of the loan term to fully amortize the loan, but which provides for periodic adjustment of the payment amount to a level sufficient to fully amortize the loan at the then-existing interest rate.

(3) "Reverse annuity mortgage loan" means a debt instrument which provides periodic payments to homeowners secured by the accumulated equity in their home. The loan becomes due either upon a specific date or when a specified event occurs.

(b) Authorization. Banks and trust companies supervised by the Department are hereby authorized to make, purchase or participate in adjustable rate mortgage loans, graduated payment adjustable mortgage loans and reverse annuity mortgage loans. Banks and trust companies are further authorized to apply the principles of interest rate adjustment discussed in this section to reverse annuity mortgage loans.

(c) Disclosure. Each bank or trust company that offers adjustable rate mortgage loans, graduated payment adjustable mortgage loans, or reverse annuity mortgage loans must give borrowers and prospective borrowers written disclosure notices in accordance with the Oklahoma Consumer Credit Code, the Federal Truth-in-Lending Act and Regulation Z of the Federal Reserve Board to the extent such Federal law is applicable to institutions covered by this section.

(d) Index. Adjustments to the interest rate of adjustable rate mortgage loans, graduated payment adjustable mortgage loans and reverse annuity mortgage loans must correspond to the movement of an index specified in the loan documents, subject to such rate adjustment limitations, if any, as agreed by the parties. The documents may specify any interest rate index which is readily verifiable by the borrower and beyond the control of the bank or trust company.

(e) Adjustment options. Adjustment of the interest rate may be implemented through changes in the payment amount and/or through adjustments to the rate of amortization (i.e. the amount, if any, allocated to repayment of principal) and/or the loan term. With respect to adjustable rate mortgage loans, adjustments to the rate of amortization are permissible only if the initial payment amount is sufficient to fully amortize the loan at the beginning of the loan term and if the payment amount is adjusted at least every 5 years to a level sufficient to amortize the outstanding principal at the interest rate then in effect over the remainder of the original loan term. With respect to graduated payment adjustable mortgage loans, within ten (10) years of the closing of the loan and at least every five (5) years thereafter, the monthly payment amount must be adjusted to a level sufficient to amortize the loan balance at the then-existing interest rate over the remaining term of the loan.

(f) Cost or fees. Borrowers may not be charged any costs or fees in connection with adjustments to an interest rate, payment amount, rate of amortization or loan maturity.

(g) Assumption. Banks and trust companies offering, purchasing, or participating in adjustable rate mortgage loans or graduated payment adjustable mortgage loans are not required to allow those loans to be assumed by new purchasers of the mortgaged property or to allow new purchasers to take title to such property subject to the lien of an adjustable rate mortgage loan made pursuant to this section. If a bank or trust company does allow such a loan to be assumed or purchaser to take title to property subject to the lien of an adjustable rate loan or graduated payment adjustable mortgage loan made pursuant to this rule, the interest rate and any other loan terms may be reset as of the date of assumption.

History

Amended at 25 Ok Reg 1064, eff 5-25-08

Okla. Admin. Code § 85:10-11-8 Interest rate futures transactions

(a) The provisions of this Section are made applicable to trust companies in the same manner as to banks and each reference to "bank" or "banks" shall include "trust company" or "trust companies" as if so worded.

(b) Oklahoma state-chartered banks engaging in interest rate futures transactions shall comply with any rules adopted by the federal bank regulatory agencies..

(c) Each bank's board of directors shall have ultimate responsibility to establish prudent policies and carefully monitor compliance with any applicable rules. Such monitoring should be evidenced in the minutes of each meeting of the board of directors.

History

Amended at 25 Ok Reg 1064, eff 5-25-08

Okla. Admin. Code § 85:10-11-9 Operating subsidiaries

(a) A bank or trust company may purchase for its own account not less than 50% of the voting shares or interest in a corporation or other entity to perform functions that the bank is empowered to perform directly, subject to the prior written approval of the Commissioner and subject to the provisions of this section.

(1) The bank must own not less than 50% of the stock of the subsidiary, and the bank must control 50% of the voting regarding the management and activities of the subsidiary.

(2) No officer, director or shareholder of the bank or officer, director or shareholder of the bank's holding company may otherwise have a direct or indirect pecuniary interest in the operating subsidiary.

(3) The subsidiary's operations must be limited to those functions which the parent bank is permitted to perform.

(4) The subsidiary's operations may be performed only at a location at which the bank would be authorized to engage in such operations.

(5) All transactions between the parent bank and the operating subsidiary are subject to any limitations and restrictions applicable under the laws of the State of Oklahoma and the United States.

(6) All provisions of the banking laws, rules and regulations applicable to the operations of the parent bank shall be equally applicable to the operations of the subsidiary.

(7) Unless otherwise provided by statute or regulation, pertinent book figures of the parent bank and its operating subsidiary shall be consolidated for the purpose of applying applicable statutory limitations, including, but not limited to Sections 220, 409, 410, 414, 802, 803, 805 and 806 of the Banking Code.

(8) Each operating subsidiary shall be subject to examination and supervision by the Commissioner in the same manner and to the same extent as the parent bank. If the Commissioner shall ascertain that the subsidiary is created or operated in violation of the Code or Board rules, or that the manner of operation is detrimental to the business of the parent bank and/or its depositors, he may order the bank to dispose of all or any part of such subsidiary upon such terms as the Commissioner may deem proper.

(b) The bank shall request in writing the approval of the Commissioner to own and operate such a subsidiary. The request shall include a brief description of the subsidiary and its operations. The bank shall attach to the request a copy of the proposed certificate of incorporation and bylaws of the subsidiary or other similar organizational documentation in the case of a non corporate entity.

(c) The request with attachments shall be accompanied by a fee in the amount set forth in rule 85:10-3-21. If the Commissioner approves the request and attached documents, the bank shall file the necessary organizational documents with the Oklahoma Secretary of State (if the subsidiary is an Oklahoma organization) and return one certified copy to the Department, and forward necessary copies to the Federal Deposit Insurance Corporation or the Federal Reserve System.

(d) Notwithstanding the restrictions of subsection (a) of this section, minority interests (less than 50%) in corporations, partnerships, limited liability entities, and other business ventures are permitted, if the Commissioner first determines that:

(1) the activities of the entity are part of or incidental to banking,

(2) the bank must be able to prevent the entity from engaging in activities not part of or incidental to banking,

(3) the investment must not subject the bank to open ended liability, and

(4) the investment must be convenient and useful to the bank's business and not a passive investment.

(e) Prior to disposition or dissolution of an operating subsidiary, the parent bank shall notify the Commissioner.

History

Amended at 10 Ok Reg 1969, eff 5-27-93; Amended at 14 Ok Reg 3559, eff 8-1-97 (emergency); Amended at 15 Ok Reg 2952, eff 7-15-98; Amended at 25 Ok Reg 1064, eff 5-25-08

Okla. Admin. Code § 85:10-11-9.1 Financial subsidiaries

(a) A bank may control or hold an interest in a financial subsidiary, subject to the prior written approval of the Commissioner, and the following conditions:

(1) the bank and each depository institution affiliate of the bank must be well capitalized after deducting the aggregate amount of the outstanding equity investment, including retained earnings, of the bank in all its financial subsidiaries. The term "well capitalized" shall have the same meaning given the term in section 38 of the Federal Deposit Insurance Act;

(2) the bank must be well-managed, which shall mean the achievement of a composite CAMELS rating of 1 or 2 on the most recent examination and at least a rating of 2 for management. If the bank has not yet been examined, a bank may be considered well managed if the Commissioner determines that the bank's managerial resources are satisfactory;

(3) the aggregated consolidated total assets of all financial subsidiaries of the bank do not exceed the lesser of 45% of the consolidated total assets of the parent bank or $50 billion;

(4) the bank may not have received at its most recent examination for compliance with the Community Reinvestment Act a rating of less than "satisfactory";

(5) the bank must file an application with the Commissioner which includes:

(A) a description of the activities to be conducted by the financial subsidiary;

(B) a list of each license, permit, or other evidence of approval, if any, which the financial subsidiary, or one of its officers or employees, must hold as a condition for conducting activities;

(D) a description and analysis of the specific legal authority permitting the activity to be conducted by the financial subsidiary; and

(E) such other information as the Commissioner may require.

(b) For purposes of this section, a "financial subsidiary" shall be defined according to section 46 of the Federal Deposit Insurance Act. Activities conducted through a financial subsidiary shall include any activity permitted for a financial subsidiary under section 5136A of the Revised Statutes of the United States (12 U.S.C. § 24 a). Provided, however, a state bank may continue to seek approval for subsidiary activities permissible under the Oklahoma Banking Code and section 24 of the Federal Deposit Insurance Act without complying with the provisions of this section.

(d) The organizational structure of the financial subsidiary must protect the separate corporate identity of the bank and may not subject the bank, its subsidiaries, or its affiliates to unlimited liability. The separate organizational structure of the subsidiary must withstand scrutiny under Oklahoma law, and any other law which the subsidiary was organized, so that the liabilities of the subsidiary are not attributable to the bank.

(e) For purposes of Sections 23A and 23B of the Federal Reserve Act, the financial subsidiary shall be considered an affiliate of the bank and not a subsidiary, and the bank must comply with all provisions of Section 23A and 23B of the Federal Reserve Act.

(f) Each financial subsidiary shall be subject to examination and supervision by the Commissioner in the same manner and to the same extent as the parent bank. If the Commissioner shall determine that the financial subsidiary is created or operated in violation of the Banking Code or Board rules, or that the manner of operation is detrimental to the business of the parent bank and/or its depositors, the Commissioner may order the bank to dispose of all or any part of the financial subsidiary upon such terms as the Commissioner may deem proper.

(g) The bank shall attach to its application a copy of the proposed certificate of incorporation and bylaws of the subsidiary or other similar organizational documentation in the case of a non-corporate entity.

(h) The fee for reviewing an application for a financial subsidiary shall be the same as that for reviewing the application of an operating subsidiary. The application with attachments shall be accompanied by the appropriate fee. If the Commissioner approves the application and attached documents, the bank shall file the organizational documents with the Oklahoma Secretary of State (if the financial subsidiary is an Oklahoma organization), return a certified copy to the Department, and forward necessary copies to the Federal Deposit Insurance Corporation or the Federal Reserve System.

(i) Prior to disposition or dissolution of a financial subsidiary, the parent bank shall notify the Commissioner.

History

Added at 18 Ok Reg 1853, eff 6-11-01; Amended at 25 Ok Reg 1064, eff 5-25-08

Okla. Admin. Code § 85:10-11-10 Lending limits

(a) Definitions. The following words and terms, when used in this Section shall have the following meaning, unless the text clearly indicates otherwise:

(1) "Commercial or business paper" means negotiable paper given in payment of the purchase price of commodities in domestic or export transactions purchased for resale or to be used in connection with the fabrication of a product, or to be used for any other business purpose which may reasonably be expected to provide funds for payment of the paper. Loans or extensions of credit arising from the discount of paper of the kind described in this paragraph must bear full recourse endorsement of the owner. However, loans or extensions of credit arising from the discount of such paper in export transactions may be endorsed by such owner without recourse or with limited recourse, or may be accompanied by a separate agreement for limited recourse; provided, that if transferred without full recourse, the paper must be supported by an assignment of appropriate insurance covering the political, credit, and transfer risks applicable to the paper.

(2) "Contractual commitment to advance funds" means:

(A) an obligation on the part of the bank or trust company to make payments (directly or indirectly) to a designated third party contingent upon a default by the customer of the bank or trust company in the performance of an obligation under the terms of the customer's contract with the third party;

(B) an obligation to guarantee or stand as surety for the benefit of a third party. The term includes, but is not limited to, standby letters of credit (as defined in this Section), guarantees, puts, and other similar arrangements;

(D) commercial letters of credit and similar instruments where the issuing bank expects the beneficiary to draw upon the issuer.

(E) However, not within the meaning of "contractual commitment to advance funds" is the guaranteeing or insuring by trust companies of title to real and personal property to persons interested in such property or in mortgages thereon, against loss, by reason of defective title or other encumbrances of or upon such property and bonds authorized to be issued by banks or trust companies under Sections 1001 and 1015 of the Banking Code.

(3) "Loans and extensions of credit" means

(A) any direct or indirect advance of funds (including obligations of makers and endorsers arising from the discounting of commercial paper) to a person or for the direct benefit of a person made on the basis of any obligation of that person to repay the funds, or repayable from specific property pledged by or on behalf of a person;

(B) any contractual commitment to advance funds; and

(4) "Person" shall have the same meaning as defined in Section 102 of the Code.

(5) "Standby letter of credit" is any letter of credit, or similar arrangement, however named or described, which represents an obligation to the beneficiary on the part of the issuer:

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

(B) to make payment on account of any indebtedness undertaken by the account party; or to make payment on account of any default by the account party in the performance of an obligation.

(b) Combining loans to separate borrowers.

(1) General rule. Loans or extensions of credit to one person will be attributed to other persons, for purposes of Section 802 of the Code and this Section, when

(A) the proceeds of the loans or extensions of credit are to be used for the direct benefit of the other person or persons; or

(B) a "common enterprise" is deemed to exist between the persons.

(2) Common enterprise.

(A) Whether two or more persons are engaged in a "common enterprise" will depend upon a realistic evaluation of the facts and circumstances of particular transactions.

(B) Where the expected source of repayment for each loan or extension of credit is the same for each person, a "common enterprise" will be deemed to exist and the loans or extensions of credit must be combined.

(C) Where loans or extensions of credit are made to persons who are related through common control, including where one person is controlled by another person, a "common enterprise" will be deemed to exist if the persons are engaged in interdependent businesses or there is substantial financial interdependence among them. The businesses will be considered interdependent or substantial financial interdependence will be deemed to exist when 50 percent or more of one person's gross receipts or gross expenditures (on an annual basis) are derived from transactions with one or more persons related through common control. Gross receipts and expenditures include gross revenues/expenses, intercompany loans, compensation, dividends, capital contributions, and similar receipts or repayments. For the purposes of this paragraph, "control" shall be presumed to exist when:

(i) one or more persons acting in concert directly or indirectly own, control, or have power to vote 25 percent or more of any class of voting securities of another person;

(ii) one or more persons acting in concert control, in any manner, the election of a majority of the directors, trustees, or other persons exercising similar functions of another person; or

(iii) any other circumstances exist which indicate that one or more persons acting in concert directly or indirectly exercise a controlling influence over the management or policies of another person.

(D) A "common enterprise" will also be deemed to exist between separate persons when those separate persons borrow from a bank or trust company for the purpose of acquiring a business enterprise of which those persons will collectively own 50 percent or more of the voting interest of such business or enterprise.

(3) Loans to companies and subsidiaries.

(A) For purposes of section 802 of the Code and this Section, a company is a "subsidiary" of any person which owns or beneficially owns 50 percent or more of the voting interest of the company. Such ownership need not be direct. Thus, if A owns 50 percent or more of the voting interest in Company X which, in turn, owns 50 percent or more of the voting interest in Company Y, Company Y would be considered a subsidiary of both A and of Company X.

(B) Loans or extensions of credit to a person and its subsidiary or to subsidiaries of one person need not be combined where the bank or trust company has determined that the person and subsidiaries involved are not engaged in a "common enterprise" as that term is defined in paragraph (2) of this subsection.

(C) Notwithstanding (b)(3)(B) of this Section, loans or extensions of credit to a "corporate group" may not exceed 50 percent of the capital of a bank or trust company. This aggregate limitation applies only to loans made pursuant to Section 802 of the Banking Code. A "corporate group" includes a person and all of its subsidiaries.

(4) Loans to partnerships, joint ventures, and associations.

(A) Loans or extensions of credit to a partnership, joint venture, or association shall, for purposes of section 802 of the Code and this Section, be considered loans or extensions of credit to each member of such partnership, joint venture, or association except as otherwise provided below.

(B) Loans or extensions of credit to members of a partnership, joint venture, or association shall, for purposes of section 802 of the Code and this Section, be attributed to the partnership, joint venture, or association where one or more of the tests set forth in (b)(1) of this section is satisfied with respect to one or more such members. However, loans to members of a partnership, joint venture, or association will not be attributed to other members of the partnership, joint venture, or association unless one or more of the tests set forth in (b)(1) of this Section is satisfied with respect to such other members. The tests set forth in (b)(1) of this section shall be deemed to be satisfied so that loans or extensions of credit to one person will be attributed to other persons when loans or extensions of credit are made to members of a partnership, joint venture, or association for the purpose of purchasing an interest in such a partnership, joint venture, or association, in which case, such loans or extensions of credit made to members shall be attributed both to such members and the applicable partnership, joint venture, or association.

(C) The rule set forth in (b)(4)(A) of this Section is not applicable to limited partners in limited partnerships, participants in joint ventures, or to members of associations, where the terms of the partnership, joint venture, or membership agreement and applicable law state they are not to be held liable for the debts or actions of the partnership, joint venture, or association. However, the rule set forth in (b)(1) of this Section is applicable to such partners or members.

(1) A bank or trust company must ensure that a security interest has been perfected in any segregated deposit account in the lending bank that serves as security pursuant to Section 802(B)(3) of the Code.

(2) Each bank or trust company must institute adequate procedures to ensure that any collateral value fully supports the outstanding loan at all times.

(d) Interpretations.

(1) Obligations of accommodation parties. The liability of a drawer, endorser, or guarantor who does not receive any of the proceeds, or the direct benefit of the proceeds, of the loan or extension of credit is not a loan or extension of credit to such person for purposes of one of the tests set forth in (b) of this Section unless such loan or extension of credit is considered in default.

(2) Federal Funds. "Sale of Federal funds" means, for purposes of this Section, any transaction among 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.

(A) Sales of Federal funds with a maturity of one business day or under a continuing contract are not "loans and extensions of credit" for purposes of Section 802 of the Banking Code. However, sales of Federal funds with a maturity of more than one business day are subject to the lending limits.

(B) A "continuing contract" refers to an agreement that remains in effect for more than one business day but has no specified maturity and requires no advance notice for termination.

(3) Contractual commitments to advance funds. Only those funds that have been advanced under the terms of a contractual commitment to advance funds will be considered a loan or extension of credit for purposes of section 802 of the Code and this section.

(4) Loans charged off in whole or in part. The lending limits apply to all existing loans or extensions of credit to a person by the bank, including loans or extensions of credit which have been charged off on the books of the bank in whole or in part. Loans or extensions of credit which have become unenforceable by reason of discharge in bankruptcy, court order, or are no longer legally enforceable for other reasons are not loans and extensions of credit for purposes of this part.

(5) Sale of loan participations.

(A) When a bank or trust company sells a participation in a loan or extension of credit, including the discount of the institution's own acceptance, that portion of the loan that is sold on a nonrecourse basis will not be applied to the institution's lending limits. In order to remove a loan or extension of credit from an institution's lending limit, a participation must result in a pro rata sharing of credit risk proportionate to the respective interests of the originating and participating lenders regardless of whether the participation agreement provides that repayment must be applied first to the shares sold. In that case, the pro rata sharing may only be accomplished if the agreement also provides that, in case of a default or comparable event defined in the agreement, participants shall share in all subsequent repayments and collections in proportion to the percentage of participation at the time of the occurrence of the event.

(B) The provisions of (d)(5) (A) of this Section apply to all loans and extensions of credit,including contractual commitment(s) to advance funds.

(6) Nonconforming Loans. Notwithstanding anything in this Section to the contrary:

(A) A loan, within a bank's legal lending limit when made, will not be deemed a violation of this section or section 802 of the Code but will be treated as nonconforming if the loan is no longer in conformity with the bank's lending limit because -

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

(ii) a default by the borrower or other event resulting in primary liability of an accommodation party under subsection (d)(1) of this Section; or

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

(B) A bank must use reasonable efforts to bring a loan that is nonconforming as a result of paragraph (A)(i) or (ii) of this Section into conformity with the bank's lending limit unless to do so would be inconsistent with safe and sound banking practices.

(C) A bank must bring a loan that is nonconforming as a result of circumstances described in paragraph (d)(6)(A)(iii) of this Section into conformity with the bank's lending limit within 30 calendar days, except when judicial proceedings, regulatory actions including a Commissioner's exception under section 802 of the Code, or other extraordinary circumstances determined by the Commissioner to be beyond the bank's control prevent the bank from taking action.

(7) In the event a bank has violated any provision of this section or section 802 of the Banking Code, the bank may request permission from the Commissioner to cure the violation by divesting itself of so much of the debt as will bring the offending loan back within the bank's lending limit, or by other methods acceptable to the Commissioner. Provided, the Commissioner may permit the violation to be cured only if the Commissioner finds that the violation was inadvertent. A violation of section 802 of the Code or this section cured pursuant to the approval of the Commissioner shall absolve the bank's board members from exposure to the cured violation with respect to the offending loan or extension of credit.

(8) Loans to a company shall not be considered to be a direct benefit to any owner of the company unless the proceeds of the loan are used for purposes other than company business. However, the limitation for a "corporate group" will still apply to a person and all of the person's subsidiaries.

History

Amended at 14 Ok Reg 3559, eff 8-1-97 (emergency); Amended at 15 Ok Reg 2952, eff 7-15-98; Amended at 18 Ok Reg 1853, eff 6-11-01; Amended at 25 Ok Reg 1064, eff 5-25-08

Okla. Admin. Code § 85:10-11-11 Bank-owned life insurance

A bank may purchase life insurance products in connection with employee compensation, employee benefit plans, and for other uses to the same extent and under the same circumstances allowed under federal law and guidelines.

History

Amended at 25 Ok Reg 1064, eff 5-25-08

Okla. Admin. Code § 85:10-11-12 Letter of credit; contingent liabilities

In order that the books and records of a bank or trust company reflect its contingent liabilities, the bank or trust company shall properly maintain records on all letters of credit issued and outstanding showing the following information:

(1) Controlled registration numbering system;

(2) Name of the account party for whom the letter of credit is established;

(3) the name of the beneficiary;

(4) the amount; and

(5) the expiration date.

History

Amended at 25 Ok Reg 1064, eff 5-25-08

Okla. Admin. Code § 85:10-11-13 Loan participations

(a) The provisions of this Section are made applicable to trust companies in the same manner as to banks and each reference to "bank" or "banks" shall include references to "trust company" or "trust companies" as if so worded.

(b) Both the selling bank and purchasing bank must maintain satisfactory control over risk from loan participations. Each bank must adopt written lending policies and procedures to govern participations and shall keep written documentation of recourse arrangements which outline the rights and obligations of each party. Failure to meet the requirements of this subsection may constitute an unsafe and unsound banking practice.

(d) The purchasing bank shall perform an analysis of the credit quality and documentation for obligations to be purchased, shall analyze the value and lien status of the collateral, and shall maintain current and complete credit information on the obligor during the term of the loan. Failure to comply with this subsection may be cited as a technical exception.

(e) If a loan is classified, either internally or externally, the originating bank shall notify all participants of the classification status within 30 days of classification.

History

Amended at 12 Ok Reg 489, eff 12-5-94 (emergency); Amended at 12 Ok Reg 1603, eff 6-12-95; Amended at 25 Ok Reg 1064, eff 5-25-08

Okla. Admin. Code § 85:10-11-14 Repurchase agreements of banks with security dealers and others

(a) Banks and other financial institutions involved with the purchase of United States Government and Agency Obligations under agreements to resell (reverse repurchase agreements) have sometimes incurred significant losses. The most important factors causing these heavy losses have been inadequate credit risk management and the failure to exercise effective control over securities collateralizing the transactions.

(b) Standards of prudent banking with respect to repurchase agreements (the term as used herein also refers to Reverse Repurchase Agreements) with securities dealers and others are set forth in (c) of this Section.

(c) The following minimum guidelines address the need for managing credit risk exposure under securities repurchase agreements and for controlling the securities in those transactions.

(1) Definitions:

(A) "Repurchase agreement" means an arrangement in which a party that owns securities acquires funds by transferring the securities to another party under an agreement to repurchase the securities at an agreed upon future date.

(B) "Reverse repurchase agreement" means an arrangement in which a party provides funds by acquiring securities pursuant to an agreement to resell them at an agreed upon future date.

(2) All banks or trust companies that engage in securities repurchase agreement transactions should establish written credit policies and procedures governing those activities.

(3) A bank or trust company doing business with an unregulated securities dealer should be certain that the dealer voluntarily complies with the Federal Reserve Bank of New York's minimum capital guidelines. To be certain, the following three forms of certification are required:

(A) A letter of certification from the dealer that the dealer will adhere on a continuous basis to the capital adequacy standard;

(B) Audited financial statements which demonstrate that as of the audit date the dealer was in compliance with the standard and the amount of liquid capital; and

(C) A copy of a letter from the firm's certified public accountant stating that it found no material weakness in the dealer's internal systems and controls incident to adherence to the standard.

(4) Periodic evaluations of counterparty creditworthiness should be conducted by individuals who routinely make credit decisions and who are not involved in the execution of repurchase agreement transactions.

(5) Maximum position and temporary exposure limits for each approved counterparty should be established based upon credit analysis performed. Periodic review and updates of those limits are necessary.

(6) Except with respect to a bank or trust companies secured interest and control of securities held as collateral, a repurchase agreement transaction will be subject to lending limits.

(7) A bank must have a written agreement specific to each repurchase agreement transaction specifying all the terms of the transaction.

(8) Possession or control of the underlying securities must be obtained.

(9) The amount paid by a bank or trust company under the repurchase agreement should be less than the market value of the securities, including the amount of any accrued interest, with the difference representing a predetermined margin. Margin requirements should allow for the anticipated price volatility of the security until the maturity of the repurchase agreement.

(10) Counterparties should not be provided with excessive margin of collateralization. The excess market value of securities sold by a bank or trust company are viewed as an unsecured loan to the counterparty and should be treated accordingly for credit policy and control purposes.

History

Amended at 25 Ok Reg 1064, eff 5-25-08

Okla. Admin. Code § 85:10-11-15 Insurance

The Code grants the power to state banks to engage in any banking activity conferred upon national banks. Federal law provides that national banks may act as agent for any fire, life, or other insurance company in any place the population of which does not exceed 5,000 inhabitants. This provision is hereby made applicable to any office of a state bank when the office is located in a place having a population of less than 5,000, even though the main office of such bank is located in a place whose population exceeds 5,000. If a bank acts as insurance agent in a place that, at the time the insurance agency was established, had a population of less than 5,000 but which has grown in size to exceed 5,000, the bank may continue to maintain the agency in such place without regard to its population. Insurance activities conducted through a financial subsidiary are not subject to the restrictions described in this section.

History

Amended at 15 Ok Reg 2952, eff 7-15-98; Amended at 25 Ok Reg 1064, eff 5-25-08

Okla. Admin. Code § 85:10-11-16 Deposit and safekeeping agreements and fees

(a) Each holding of property by a bank for a customer in deposit or safe keeping creates a debtor-creditor relationship as provided in the agreement between the bank and the customer. Such agreement is a contractual relationship which may be established by any record executed or adopted by the customer under applicable law.

(b) Reasonable fees as determined by policy of the bank's board may be charged by a bank for any account and safe keeping services even if the specific terms of the contract between the bank and the customer are silent with regard to service charges.

(c) Interest on a deposit may or may not be paid on a dormant account as determined by policy of the bank's board even if the specific terms of the contract between the bank and the customer are silent with regard to interest. A bank may determine by policy when an account is considered "dormant" and such policy may determine an account is dormant even though it may not be considered abandoned or unclaimed under applicable law.

(d) No state government agency shall examine any accounts or safe keeping records of any bank without fifteen (15) days prior written notification of the scope of such examination to the Commissioner. No charge may be assessed the bank for any such examination by any such governmental agency and the bank is entitled to be paid costs of producing and copying records pursuant to the Oklahoma Financial Privacy Act.

History

Amended at 25 Ok Reg 1064, eff 5-25-08

Okla. Admin. Code § 85:10-11-17 Unsafe and unsound bank or trust practices

(a) Section 203(2) of the Code provides that in addition to the other powers conferred by the Banking Code, the Board shall have the power to define any term not defined therein.

(b) State-chartered banks and trust companies are prohibited from engaging in unsafe or unsound practices. As used in the Code, unsafe or unsound banking or trust practice shall be defined as any action, or lack of action, that is contrary to generally accepted standards of prudent operation of a bank or trust company which leads to an abnormal risk of loss or damage to a bank or trust company, its shareholders or depositors, or the insurance fund of the FDIC. The seriousness of each action or inaction, and its likely results, must be considered; an imprudent action or inaction is not automatically an unsafe or unsound banking practice.

(c) Whether a particular activity is an unsafe or unsound banking practice must be determined in light of all relevant facts. The Department furnishes the following list as a guideline only. The activities described herein are not irrebuttably presumed to be unsafe or unsound. Conversely, not all practices which might under the circumstances be termed unsafe or unsound are mentioned here:

(1) Operating with management whose policies and practices are detrimental to the bank or trust company and jeopardize the safety of the bank's or trust company's deposit.

(2) Operating with total adjusted capital and reserves that are inadequate in relation to the kind and quality of the assets of the bank or trust company.

(3) Operating in a way that produces a deficit in net operating income.

(4) Operating with a serious lack of liquidity, especially in view of the asset and deposit structure of the bank or trust company.

(5) Engaging in speculative and hazardous investment policies.

(6) Paying excessive cash dividends.

(7) Excessive reliance on purchased deposits.

(8) Excessive reliance on letters of credit either issued by the bank or accepted as collateral to loans advanced.

(9) Excessive amounts of loan participations sold.

(10) Paying interest on participations without advising participating institution that the course of interest was not from the borrower.

(11) Selling participations without disclosing to the purchasers of those participations material, non-public information known to the bank.

(12) Failure to limit, control and document contingent liabilities.

(13) Engaging in hazardous lending and lax collection policies and practices, as evidenced by:

(A) an excessive volume of loans subject to adverse classification,

(B) an excessive volume of loans without adequate documentation, including credit information,

(D) an excessive volume of loans in relation to the total assets and deposits of the bank or trust company,

(E) an excessive volume of weak and self-serving loans to persons connected with the bank or trust company, especially if a significant portion of these loans are adversely classified,

(F) excessive concentrations of credit, especially if a substantial portion of this credit is adversely classified,

(G) indiscriminate participation in weak and undocumented loans originated by other institutions,

(H) failing to adopt written loan policies,

(I) an excessive volume of overdue loans, and

(J) failure to diversify the loan portfolio of the bank.

(14) Permitting officers to engage in lending practices beyond the scope of their position.

(15) Operating the bank with inadequate internal controls.

(16) Operating the bank with excessive volume of out-of-territory loans.

(17) Failure to heed warnings and admonitions of the supervisory authorities of the bank or trust company.

(18) Continued and flagrant violation of any laws, rules, regulations or written agreements between the bank or trust company and the Commissioner or the Board, or order of the Commissioner or Board.

(19) Any action likely to cause insolvency or substantial dissipation of assets or earnings of the bank or trust company or likely to seriously weaken the condition of the bank or trust company or otherwise seriously prejudice the interest of its depositors.

History

Amended at 15 Ok Reg 2952, eff 7-15-98; Amended at 25 Ok Reg 1064, eff 5-25-08

Okla. Admin. Code § 85:10-11-18 Persons qualified to sell title insurance for trust companies

(a) Any person who is employed or appointed by a trust company and who solicits applications for a policy of title insurance or negotiates a policy of title insurance shall comply with the provisions of the Oklahoma Insurance Code.

(b) Trust companies which employ or appoint any such person shall obtain and maintain records from the Oklahoma Insurance Commissioner showing that each such person is duly licensed as an insurance agent for title insurance. Absence of the necessary records shall be prima facie evidence of noncompliance with this subsection.

(c) Failure of the trust company to comply with this section may result in temporary suspension of its title insurance powers by the Commissioner or revocation of such powers by the Board.

History

Added at 10 Ok Reg 2501, eff 5-13-93 through 7-15-94 (emergency); Added at 11 Ok Reg 4173, eff 7-25-94; Amended at 25 Ok Reg 1064, eff 5-25-08

Okla. Admin. Code § 85:10-11-19 Use of confusingly similar names

(a) As for any bank with a confusingly similar name as defined by section 102 of the Code, branches of said banks in a city or town other than where the main bank is located shall be identified as branches in all advertisements and signage, including electronic media, with the words "branch of" or the words "office of" followed by the name of the bank and the city or town where the main bank is located or shall, by the use of the term "home office" either preceded or followed by the city or town where the main bank is located, make clear that the branch location is not the main bank or not a separate charter.

(b) As used in section 1417 of the Code "conspicuously" shall mean that lettering shall be no smaller than twenty-five percent (25%) of the size of the largest print (except for logos) used in the bank's name elsewhere in the advertisement or sign, but in no event smaller than ten (10) point type, and shall be at least as bold and legible as the remainder of the advertisement or signage. In the case of radio or television advertisements, the name of the main bank and its city or town, along with a designation of that entity as the main bank or home office, as described in subsection (a) of this section shall be stated in the advertisement. Novelties, gift items and other small tokens furnished to the public, shall not be considered advertisements subject to this section or the application of section 1417 of the Code.

(c) The advertisement or signage must not obfuscate that the location is a branch or what the name of the main bank is nor the town where the main bank is located.

History

Added at 11 Ok Reg 4173, eff 7-25-94; Amended at 14 Ok Reg 3559, eff 8-1-97 (emergency); Amended at 15 Ok Reg 2952, eff 7-15-98; Amended at 25 Ok Reg 1064, eff 5-25-08

Okla. Admin. Code § 85:10-11-20 Leasing

(a) General provisions.

(1) Authority.

(A) A bank may engage in lease financing transactions under Sections 402(17) and 805(C) of the Banking Code.

(B) On entering into a lease financing transaction in compliance with this Section, a bank must reasonably expect to realize a return of its full investment in the leased property, plus the estimated cost of financing the property over the term of the lease, from -

(i) Rentals;

(ii) Estimated tax benefits; and

(iii) The estimated residual value of the property at the expiration of the term of the lease.

(2) Net lease basis.

(A) A net lease is a lease under which the bank will not, directly or indirectly, provide or be obligated to provide for:

(i) The servicing, repair or maintenance of the leased property during the lease term.

(ii) The purchasing of parts and accessories for the leased property; however, improvements and additions to the leased property may be leased to the lessee upon its request in accordance with any applicable requirements for maximum estimated residual value.

(iii) The loan of replacement or substitute property while the leased property is being serviced.

(iv) The purchasing of insurance for the lessee, except where the lessee has failed in its contractual obligation to purchase or maintain the required insurance.

(v) The renewal of any license or registration for the property unless such action by the bank is necessary to protect its interest as owner or financier of the property.

(B) If, in good faith, a bank believes that there has been an unexpected change in conditions which threatens its financial position by significantly increasing its exposure to loss, the limitations contained in subsection (a)(2)(A) of this Section shall not prevent the bank -

(i) As the owner and lessor under a net lease, from taking reasonable and appropriate action to salvage or protect the value of the property or its interests arising under the lease; or

(ii) As the assignee of a lessor's interest in a lease, from becoming the owner and lessor of the leased property pursuant to its contractual right, or from taking any reasonable and appropriate action to salvage or protect the value of the property or its interests arising under the lease.

(C) The limitations contained in subsection (a)(2)(A) of this Section do not prohibit a bank from including any provisions in a lease, or from making any additional agreements, to protect its financial position or investment in the circumstances set forth in subsection (a)(2)(B) of this Section.

(D) The limitations contained in subsection (a)(2)(A) of this Section do not prohibit a bank from arranging for any of the services enumerated in subsection (a)(2)(A) of this Section to be provided by a third party to a lessee (at the expense of the lessee) with respect to property leased by the lessee.

(3) Investment in personal property.

(A) A bank may acquire specific property to be leased only after the bank has entered into either:

(i) A legally binding written agreement which indemnifies the bank against loss in connection with its acquisition of the property; or

(ii) A legally binding written commitment to lease the property on terms which comply with the provisions of this Section.

(B) At the expiration of the lease (including any renewals or extensions with the same lessee), or in the event of a default on a lease agreement prior to the expiration of the lease term, all of the bank's interest in the property shall either be liquidated or re-leased in conformance with this subsection (a) or subsection (b) of this Section, as soon as practicable, but in no event later than two years from the expiration of the lease. Property which the bank retains in anticipation of re-leasing must be revalued at the lower of current fair market value or book value prior to any subsequent lease.

(C) Notwithstanding the provisions of subsection (a)(3)(B) of this Section, on the return of leased property at the expiration of a conforming lease term, or on the default of a lessee, a short-term bridge or interim lease is permissible if it otherwise conforms with the net lease requirements of subsection (a) of this Section. Such a short-term bridge or interim lease need not comply with the further requirements of subsection (b) of this Section. Short-term bridge or interim leases may be used pending the sale of off-lease property, or its release as a conforming long-term lease financing transaction.

(4) Application of lending limits. Leasing financing trans-actions entered into under this Section are subject to the limitations on loans or extensions of credit under Section 802(A)(1) of the Banking Code. The Commissioner reserves the right to determine that such leases are also subject to the limitations of any other law, regulation or ruling.

(b) Leases.

(1) General rule. A bank may invest in tangible personal property, including, without limitation, vehicles, manufactured homes, machinery, equipment, or furniture for lease financing transactions on a net lease basis, or may become the owner and lessor of such tangible personal property by purchasing the property from another lessor in connection with its purchase of the related lease; provided that the requirements of subsection (a) of this Section and subsection (b) of this Section are met.

(2) Lease term.

(A) Lease financing transactions entered into under subsection (b)(1) of this Section must have an initial term of not less than 90 days.

(B) The minimum lease term provided for in paragraph (2)(A) of this subsection, shall not be applicable to the acquisition of property subject to an existing lease with a remaining maturity of less than 90 days, provided that, at its inception, such lease was in conformance with the requirements of this Section.

History

Added at 14 Ok Reg 3559, eff 8-1-97 (emergency); Added at 15 Ok Reg 2952, eff 7-15-98; Amended at 25 Ok Reg 1064, eff 5-25-08

Subchapter 13 Investor Protection

Okla. Admin. Code § 85:10-13-1 Prohibition against deceptive advertising

State-chartered banks and trust companies are prohibited from engaging in false, deceptive or misleading advertising, and from publishing or representing, by any device whatsoever, statements tending to deceive or mislead the public.

History

Amended at 25 Ok Reg 1064, eff 5-25-08

Okla. Admin. Code § 85:10-13-2 Offering circular

(a) Definitions. When used in this subchapter, the word "security" shall have the following meaning, unless the text clearly indicates otherwise.

"Security" means any note, stock, bond, debenture, evidence of indebtedness, certificate of interest, trust certificate, thrift certificate, subscription, investment contract, voting trust certificate, certificate of deposit and other such instruments as defined in the Oklahoma Securities Act. However, the term security does not mean any deposit in an institution whose deposits are insured by the Federal Deposit Insurance Corporation.

(b) Offering circular requirements.

(1) General prohibition. No bank or trust company shall, directly or indirectly, offer, offer to sell, offer for sale or sell any security of which it is the issuer unless the offer, offer to sell, offer for sale or sale is made through the use of an offering circular which has been filed with the Bank Commissioner and that complies with the provisions of this section. Every sale must contain a statement that the offering circular was disclosed. Thereafter the bank or trust company shall be required to maintain permanent records to substantiate that the offering was made by the offering circular only.

(2) New bank. In the case of banks in organization, no subscriptions shall be taken, nor stock offered for sale, until and after the Commissioner shall have accepted the offering circular and then offering can only be made by divulging to the prospective purchaser of the stock the offering circular and his/her subscription to the offering must contain a signed statement that said offering circular was disclosed. Thereafter, the bank or trust company shall be required to maintain permanent records to substantiate that the offering was made by offering circular only.

(3) When effective-update. The effective date of the offering circular shall be the date on which it is declared effective by the Commissioner. The offering circular shall be effective for a period of six (6) months, which period may be extended for two (2) consecutive ninety (90) day periods upon request to the Commissioner. The offering circular must be updated during the course of the offering period by attaching the most recent Sheet balance sheet and statement of income of the bank or trust company filed with the Commissioner as part of the most recent report of condition.

(4) Noninsured disclosure. The noninsured status of non-equity securities issued and deposits received by institutions under the jurisdiction of the Department must be disclosed to the public clearly, conspicuously, and prominently on the face of any offering circular required and on the face of any written communication acknowledging sale or receipt.

(5) Exception-FDIC. All deposit accounts of trust companies, and other securities of both banks and trust companies, whether representing an equity interest in, or debt of, the institution, are subject to the disclosure requirements of this section unless the individual security or deposit account being advertised, offered for sale, sold or accepted is insured by the Federal Deposit Insurance Corporation.

(6) Effect of circumstances. In no event shall an offering circular be used which is false or misleading in light of the circumstances then existing.

(1) Any nonpublic offering by a bank or trust company..

(2) Any reorganization, merger, consolidation or acquisition of assets by a bank where constituent security holders who will receive securities in the transaction are furnished with a proxy statement or information statement prepared substantially in accordance with the requirements of this section.

(3) Any transaction by a bank or trust company with its existing security holders which involves an exchange of a security pursuant to the exercise of a right of conversion.

(4) Any transaction in which the securities of a bank or trust company are offered to its employees or directors pursuant to a stock purchase, stock option, stock warrant, or stock savings plan.

(5) Any offering by a bank or trust company of its securities solely to its existing equity security holders or where the amount of the securities offered for sale, when aggregated with the amount of all other sales by the bank or trust company of its securities within the twelve (12) months immediately preceding commencement of the subject offering, does not exceed $1,000,000. However, no offer of securities may be made in reliance on this paragraph (5) unless the bank or trust company prepares and distributes to all offerees prior to sale a document describing the bank and the offer. The items of an offering circular should be used merely as a guide. In addition, the offering document and a notice containing the following information shall be filed with the Commissioner not later than twenty (20) days prior to commencement of the offering:

(A) The name of the bank or trust company and location of its principal place of business;

(B) The class of security to be offered;

(D) The class and aggregate offering price of all securities sold within the months prior to the proposed commencement date of the offering; and

(E) The date on which the offering will commence and a brief statement of the bank or trust company's plan as to the use and distribution of the offering document and any other offering materials. The offering document described in this paragraph (5) above shall be filed with the Commissioner. While the offering document will not be declared effective by the Commissioner, the Commissioner has the right to review the document and take such regulatory action as is appropriate against a bank or trust company, its officers, directors or employees if basic disclosure has not been made or the document contains statements which are false or misleading in light of the circumstances.

(6) An offer, offer to sell, offer for sale or sale of securities of a bank or trust company to its parent holding company.

(d) Nonpublic offerings. Transactions by a bank or trust company involving the offer, offer to sell, offer for sale, or sale of securities of a bank or trust company shall be deemed to be transactions not involving any public offering if all of the following conditions are satisfied.

(1) The bank or trust company shall have reasonable grounds to believe the offeree has the knowledge or experience in financial matters capable of evaluating the risk of the prospective investments.

(2) All offerees and sales are negotiated transactions through direct communication.

(3) Each offeree shall have access to all the information generally contained in an offering circular.

(4) The securities are sold to not more than twenty-five (25) persons during any continuous twelve (12) month period.

(5) The minimum denomination of any security shall be $100,000 and each offeree shall sign a statement that the securities are being purchased for investment and not distribution.

(6) Notice is given to the Commissioner at least twenty (20) days prior to any such offering of the facts and the circumstances surrounding such an offer which will justify the exemption.

History

Amended at 25 Ok Reg 1064, eff 5-25-08

Okla. Admin. Code § 85:10-13-3 Advertising

(a) Promotional materials/sales literature. Sales Literature is defined as any promotional materials or displays used in any manner in connection with the offer or sale of any security whether or not the issuer of the security is identified in such materials or displays, including, but not limited to, the following:

(1) offering circulars, amended offering circulars and supplements thereto;

(2) pamphlets, brochures and question and answer sheets;

(3) form letters, circulars and mailers;

(4) press releases, public notices, interviews by the media, newspaper or magazine advertisements, and advertisements on the internet;

(5) audio/visual displays and oral presentations at seminars or lectures;

(6) the text of any radio broadcast;

(7) the audio/video contents of any television broadcast; and

(8) the text of oral presentations by telephone solicitors.

(b) References to the Banking Department. References to the Department in an offering circular may provide that the bank or trust company, or bank or trust company in organization, shall be subject to the jurisdiction of the Department and subject to periodic examination by the Department. However, no references to the Department may be made that would imply that the Department's supervision or examination will afford protection from loss on any investment in the bank or trust company's securities.

(c) Mandatory noninsured disclosure. The security document itself (except when the document is a stock certificate) and all promotional materials or displays listed in (a) of this section which deal with uninsured deposits or investments shall contain on their face, in the case of written material, or clearly, prominently and conspicuously placed within the text, script or display in the case of any radio, television or other advertising media, the following statement or its equivalent: "THIS SECURITY IS NOT INSURED BY AN AGENCY OF THE GOVERNMENT"

(d) Standards. All offering circulars required by this section and all promotional materials shall adhere to the standards of truth in fact and completeness.

History

Amended at 25 Ok Reg 1064, eff 5-25-08

Okla. Admin. Code § 85:10-13-4 Complaint procedure for violations

(a) Possible violations of any portion of this subchapter may be reported to the Commissioner by any interested person. The Commissioner shall investigate alleged violations and may, at his discretion, order an evidentiary hearing.

(b) When a hearing is ordered, the respondent bank or trust company shall have the opportunity to appear before the Commissioner at the hearing and show cause why the activity complained of should be allowed to continue.

(c) Following the hearing, the Commissioner shall enter findings of fact, conclusions of law, and an order. If the Commissioner orders the practice to cease or other appropriate sanction, the bank or trust company, within ten (10) days from the date of the order, may request a hearing before the Board. In those cases in which such a hearing is requested, the Board shall review the Commissioner's findings and conclusions and may enter an order which adopts, modifies, or rejects the Commissioner's findings of fact, conclusions of law and order.

History

Amended at 25 Ok Reg 1064, eff 5-25-08

Chapter 15 Money Service Businesses

Subchapter 1 General Provisions and Definitions

Okla. Admin. Code § 85:15-1-1 Scope and purpose

This Chapter sets forth the supervisory and regulatory requirements, procedures, and standards for licensing of money transmitters under the Oklahoma Financial Transaction Reporting Act (Title 6 O.S. §§ 1511 - 1515). That Act generally requires the registration and licensing of money service businesses and gives the State Banking Board authority to clarify and define by rule the application of the Act. These rules are intended to apply the licensing requirements to money transmitter companies but not their authorized delegates, except as otherwise provided. Furthermore, these rules create standards for approval of such licenses, such as requiring a security bond for the protection of the public. Applicants for a license that have filed an application within 90 days of the effective date of the rules under this Chapter will be deemed to be in compliance with this Chapter until such time as the Commissioner grants or denies the license application.

History

Added at 24 Ok Reg 843, eff 5-11-07

Okla. Admin. Code § 85:15-1-2 Definitions

The following words and terms, when used in this Chapter, shall have the following meanings, unless the context clearly indicates otherwise.

(1) "Act" means the Oklahoma Financial Transaction Reporting Act, Title 6 O.S. § 1511 et seq ., and all rules promulgated under that Act.

(2) "Applicant" means a person that files an application for a license under the Act.

(3) "Authorized delegate" means a person a licensee designates to provide money services on behalf of the licensee.

(4) "Bank" means an institution identified as a "bank" in 31 C.F.R. section 103.11.

(5) "Board" means the Oklahoma State Banking Board.

(6) "Commissioner" means the Oklahoma State Banking Commissioner.

(7) "Control" means:

(A) ownership of, or the power to vote, directly or indirectly, at least 25 percent of a class of voting securities or voting interests of a licensee or person in control of a licensee;

(B) power to elect a majority of executive officers, managers, directors, trustees, or other persons exercising managerial authority of a licensee or person in control of a licensee; or

(C) the power to exercise directly or indirectly, a controlling influence over the management or policies of a licensee or person in control of a licensee.

(8) "Department" means the Oklahoma State Banking Department.

(9) "Executive officer" means a president, chairperson of the executive committee, chief financial officer, responsible individual, or other individual who performs similar functions.

(10) "Licensee" means a person licensed under the Act. A licensee under this chapter is a "supplier" or "money transmitter" under section 2 of the Oklahoma Financial Transaction Reporting Act.

(11) "Material litigation" means litigation that according to generally accepted accounting principles is significant to an applicant's or a licensee's financial health and would be required to be disclosed in the applicant's or licensee's annual audited financial statements, report to shareholders, or similar records.

(12) "Money" means a medium of exchange that is authorized or adopted by the United States or a foreign government. The term includes a monetary unit of account established by an intergovernmental organization or by agreement between two or more governments.

(13) "Money transmission" means receiving money for transmission of the money or the value of the money, by any means through a financial agency or institution, a Federal Reserve Bank or other facility of one or more Federal Reserve Banks, the Board of Governors of the Federal Reserve System or both, or any other electronic network by which money or its value may be transmitted. Money transmission does not include the business of selling or issuing checks that is required to be licensed under the Oklahoma Sale of Checks Act, Title 6 O.S. § 2101 et seq .

(14) "Person" means an individual, corporation, business trust, estate, trust, partnership, limited liability company, association, joint venture, government; governmental subdivision, agency or instrumentality; public corporation; or any other legal or commercial entity.

(15) "Record" means information that is inscribed on a tangible medium or that is stored in an electronic or other medium and is retrievable in perceivable form.

(16) "Responsible individual" means an individual who is employed by a licensee and has principal managerial authority over the provision of money transmission services by the licensee in this State.

(17) "State" means a State of the United States, the District of Columbia, Puerto Rico, the United States Virgin Islands, or any territory or insular possession subject to the jurisdiction of the United States.

(18) "Unsafe or unsound practice" means a practice or conduct by a person licensed to engage in money transmission or an authorized delegate of such a person which creates the likelihood of material loss, insolvency, or dissipation of the licensee's assets, or otherwise materially prejudices the interests of its customers.

History

Added at 24 Ok Reg 843, eff 5-11-07

Okla. Admin. Code § 85:15-1-3 Exclusions

The Act does not apply to:

(1) the United States or a department, agency, or instrumentality thereof;

(2) money transmission by the United States Postal Service or by a contractor on behalf of the United States Postal Service;

(3) a state, county, city, or any other governmental agency or governmental subdivision of a State;

(4) a Bank;

(5) electronic funds transfer of governmental benefits for a federal, state, county, or governmental agency by a contractor on behalf of the United States or a department, agency, or instrumentality thereof, or a State or governmental subdivision, agency, or instrumentality thereof;

(6) a board of trade designated as a contract market under the federal Commodity Exchange Act [7 U.S.C. Section 1 - 25(1994)] or a person that, in the ordinary course of business, provides clearance and settlement services for a board of trade to the extent of its operation as or for such a board;

(7) a registered futures commission merchant under the federal commodities laws to the extent of its operation as such a merchant;

(8) a person that provides clearance or settlement services pursuant to a registration as a clearing agency or an exemption from such registration granted under the federal securities laws to the extent of its operation as such a provider;

(9) an operator of a payment system to the extent that it provides processing, clearing, or settlement services, between or among persons excluded by this section, in connection with wire transfers, credit card transactions, debit card transactions, stored-value transactions, automated clearing house transfers, or similar funds transfers; or

(10) a person registered as a securities broker-dealer under federal or state securities laws to the extent of its operation as such a broker-dealer.

History

Added at 24 Ok Reg 843, eff 5-11-07

Subchapter 3 Money Transmission Licenses

Okla. Admin. Code § 85:15-3-1 License required

(a) A person may not engage in the business of money transmission or advertise, solicit, or hold itself out as providing money transmission unless the person:

(1) is licensed under the Act; or

(2) is an authorized delegate of a person licensed under the Act.

(b) A license under the Act is not transferable or assignable.

History

Added at 24 Ok Reg 843, eff 5-11-07

Okla. Admin. Code § 85:15-3-2 Application for license

(a) A person applying for a license under the Act shall do so in a form and in a medium prescribed by the Commissioner. The application may require the following information:

(1) the legal name and residential and business addresses of the applicant and any fictitious or trade name used by the applicant in conducting its business;

(2) a list of any criminal convictions of the applicant and any material litigation in which the applicant has been involved in the 5-year period next preceding the submission of the application;

(3) a description of all money transmission services currently provided anywhere by the applicant and the money transmission services that the applicant seeks to provide in this State;

(4) a list of the applicant's proposed authorized delegates and the locations in this State where the applicant and its authorized delegates propose to engage in money transmission;

(5) a list of other States in which the applicant is licensed to engage in money transmission and any license revocations, suspensions, or other disciplinary action taken against the applicant in another State during the previous 10-year period;

(6) information concerning any bankruptcy or receivership proceedings affecting the licensee during the previous 10-year period;

(7) a sample form of contract for authorized delegates;

(8) a description of the source of money and credit to be used by the applicant to provide money transmission services; and

(9) any other information the Commissioner reasonably requires with respect to the applicant.

(b) If an applicant is a corporation, limited liability company, partnership, or other entity, the applicant shall also provide:

(1) the date of the applicant's incorporation or formation and State or country of incorporation or formation;

(2) if applicable, a certificate of good standing from the State or country in which the applicant is incorporated or formed;

(3) a brief description of the structure or organization of the applicant, including any parent or subsidiary of the applicant, and whether any parent or subsidiary is publicly traded;

(4) the legal name, any fictitious or trade name, all business and residential addresses, and the employment, in the 5-year period next preceding the submission of the application of each executive officer, manager, director, or person that has control, of the applicant;

(5) a list of any criminal convictions and material litigation in which any executive officer, manager, director, or person in control of, the applicant has been involved in the 10-year period next preceding the submission of the application;

(6) a copy of the applicant's audited financial statements for the most recent fiscal year and, if available, for the two-year period next preceding the submission of the application;

(7) a copy of the applicant's unconsolidated financial statements for the current fiscal year, whether audited or not, and, if available, for the two-year period next preceding the submission of the application;

(8) if the applicant is publicly traded, a copy of the most recent report filed with the United States Securities and Exchange Commission under Section 13 of the federal Securities Exchange Act of 1934 [ 15 U.S.C. Section 78 m (1994 & Supp. V 1999)];

(9) if the applicant is a wholly owned subsidiary of:

(A) a corporation publicly traded in the United States, a copy of audited financial statements for the parent corporation for the most recent fiscal year or a copy of the parent corporation's most recent report filed under Section 13 of the federal Securities Exchange Act of 1934 [ 15 U.S.C. Section 78 m (1994 & Supp. V 1999)]; or

(B) a corporation publicly traded outside the United States, a copy of similar documentation filed with the regulator of the parent corporation's domicile outside the United States;

(10) if the applicant has a registered agent in this State, the name and address of the applicant's registered agent in this State; and

(11) any other information the Commissioner reasonably requires with respect to the applicant.

(c) A nonrefundable application fee of $3,000, a license fee of $2,000, and $50 per authorized delegate must accompany an application for a license under the Act. The license fee and authorized delegate fees will be refunded if the application is denied.

(d) The Commissioner may waive one or more requirements of subsections (a) and (b) or permit an applicant to submit other information in lieu of the required information.

History

Added at 24 Ok Reg 843, eff 5-11-07

Okla. Admin. Code § 85:15-3-3 Security

(a) A surety bond, letter of credit, or other similar security acceptable to the Commissioner in the amount of $50,000 plus $10,000 per location of each authorized delegate, not exceeding a total of $500,000, must accompany an application for a license. The issuer of the security must be authorized to do business in this state and in good standing under Oklahoma law (if applicable) and the law of its state of organization.

(b) Security must be in a form satisfactory to the Commissioner and payable to the Department for the benefit of (1) any claimant against the licensee and/or its authorized delegates to secure the faithful performance of the obligations of the licensee with respect to money transmission; and (2) any costs, expenses, and fees (including attorneys fees) incurred by the Department in connection with enforcement of the Act with respect to the licensee and its authorized delegates.

(c) The aggregate liability on a surety bond may not exceed the principal sum of the bond. A claimant against a licensee may maintain an action on the bond, or the Commissioner may maintain an action on behalf of the claimant and/or the Department.

(d) A surety bond must cover claims for so long as the Commissioner specifies, but for at least five years after the licensee ceases to provide money transmission services in this State. However, the Commissioner may permit the amount of security to be reduced or eliminated before the expiration of that time to the extent the amount of the licensee's obligations outstanding in this State is reduced. The Commissioner may permit a licensee to substitute another form of security acceptable to the Commissioner for the security effective at the time the licensee ceases to provide money services in this State.

(e) The Commissioner may increase the amount of security required to a maximum of $1,000,000 if the financial condition of a licensee so requires, as evidenced by reduction of net worth, financial losses, or other relevant criteria.

History

Added at 24 Ok Reg 843, eff 5-11-07

Okla. Admin. Code § 85:15-3-4 Issuance of license

(a) When an application is filed under the Act, the Commissioner shall investigate the applicant's financial condition and responsibility, financial and business experience, character, and general fitness. The Commissioner may conduct an on-site investigation of the applicant, the cost of which the applicant must pay. The amount charged the applicant shall be the same as charged under subsection B. of section 2113 of Title 6 of the Oklahoma Statutes. The Commissioner shall issue a license to an applicant under the Act if the Commissioner finds that all of the following conditions have been fulfilled:

(1) the applicant has complied with sections 85:15-3-2, 85:15-3-3, and 85:15-3-6 of this subchapter; and

(2) the financial condition and responsibility, financial and business experience, competence, character, and general fitness of the applicant; and the competence, experience, character, and general fitness of the executive officers, managers, directors, and persons in control of, the applicant indicate that it is in the interest of the public to permit the applicant to engage in money transmission;

(b) When an application for an original license under the Act is complete, the Commissioner shall promptly notify the applicant in a record of the date on which the application was determined to be complete and:

(1) the Commissioner shall approve or deny the application within 120 days after that date; or

(2) if the application is not approved or denied within 120 days after that date:

(A) the application is approved; and

(B) the license takes effect as of the first business day after expiration of the 120-day period.

(d) An applicant whose application is denied by the Commissioner under the Act may appeal, within 30 days after receipt of the notice of the denial, from the denial and request a hearing before the Board. A hearing is not required in order for the Commissioner to initially deny a license application.

History

Added at 24 Ok Reg 843, eff 5-11-07

Okla. Admin. Code § 85:15-3-5 Renewal of license

(a) A licensee shall pay an annual renewal fee of $2,000 plus $50 per authorized delegate existing as of December 31 of each year. The fees shall be due no later than January 31 of each year. If a license is first issued to the licensee on or after October 1, the license shall be effective for the year of issuance and the next calendar year without a requirement to pay renewal fees or file a renewal report on the first January after issuance.

(b) A licensee shall submit a renewal report with the renewal fee, in a form and in a medium prescribed by the Commissioner. The renewal report must state or contain:

(1) a copy of the licensee's most recent audited annual financial statement or, if the licensee is a wholly owned subsidiary of another corporation, the most recent audited consolidated annual financial statement of the parent corporation or the licensee's most recent audited consolidated annual financial statement;

(2) a description of each material change in information submitted by the licensee in its original license application which has not been reported to the Commissioner on any required report;

(3) a list of the licensee's permissible investments and a certification that the licensee continues to maintain permissible investments according to the requirements set forth in the Act;

(4) proof that the licensee continues to maintain adequate security as required by this Chapter; and

(5) a list of the locations in this State where the licensee or authorized delegates of the licensee engages in money transmission.

(c) If a licensee does not file a renewal report and pay its renewal fees by the renewal date or any extension of time granted by the Commissioner, the Commissioner shall send the licensee a notice of suspension. Unless the licensee files the report and pays the renewal fees before expiration of 10 days after the notice is sent, the licensee's license is suspended 10 days after the Commissioner sends the notice of suspension. The suspension will be lifted if, within 20 days after its license is suspended, the licensee:

(1) files the report and pays all renewal fees; and

(2) pays $100 for each day after suspension that the Commissioner did not receive the renewal report and the renewal fees.

(d) If the licensee fails to file its renewal report and pay all fees (including the fee imposed under (2) of this subsection), the licensee's license will automatically expire and the person must reapply for a license under the Act and must then pay all applicable fees (including fees imposed under (2) of this subsection). No administrative hearing is required for suspension or expiration of licenses under the provisions of this section.

(e) The Commissioner for good cause may grant an extension of the renewal date.

History

Added at 24 Ok Reg 843, eff 5-11-07

Okla. Admin. Code § 85:15-3-6 Net worth

Each licensee under the Act shall at all times maintain a minimum net worth of at least Two Hundred Seventy-five Thousand Dollars ($275,000.00) in order to engage in money transmission at one (1) to fifty (50) locations, Five Hundred Thousand Dollars ($500,000.00) in order to engage in money transmission at fifty-one (51) to three hundred (300) locations, One Million Five Hundred Thousand Dollars ($1,500,000.00) in order to engage in money transmission at three hundred one (301) to eight hundred (800) locations, or Three Million Dollars ($3,000,000.00) in order to engage in money transmission at over eight hundred (800) locations. Net worth must be demonstrated annually by filing with the Commissioner, at the time of application for a license and at each time of license renewal, the most current annual audited financial statement of the licensee certified by a licensed public accountant holding a permit to practice in this state or by a certified public accountant. For purposes of this section, a financial statement shall be deemed to be current if it is no more than twelve (12) months old. Financial statements may be submitted to the Commissioner at any time in order to maintain a current status. The Commissioner may require, upon request, a more current statement than the last statement submitted by the licensee.

History

Added at 24 Ok Reg 843, eff 5-11-07

Subchapter 5 Authorized Delegates

Okla. Admin. Code § 85:15-5-1 Relationship between licensee and authorized delegate

(a) In this section, "remit" means to make direct payments of money to a licensee or its representative authorized to receive money or to deposit money in a bank in an account specified by the licensee.

(b) A contract between a licensee and an authorized delegate must require the authorized delegate to operate in full compliance with the Act. The licensee shall furnish in a record to each authorized delegate policies and procedures sufficient for compliance with the Act.

(c) An authorized delegate shall remit all money owing to the licensee in accordance with the terms of the contract between the licensee and the authorized delegate.

(d) If a license is suspended or revoked or a licensee does not renew its license, the licensee must notify all authorized delegates of the licensee whose names are in a record filed with the Commissioner of the suspension, revocation, or non-renewal. After notice is sent or publication is made, an authorized delegate shall immediately cease to provide money transmission services as a delegate of the licensee. The former licensee must submit proof to the Commissioner that all authorized delegates have been notified of the suspension, revocation, or non-renewal. If the former licensee fails to provide the required notice, the Commissioner may provide the notice and recover his costs and expenses from the bond or other security posted by the former licensee or may require reimbursement of costs and expenses before the person may obtain a new or reinstated license.

(e) An authorized delegate may not provide money transmission services outside the scope of activity permissible under the contract between the authorized delegate and the licensee, unless the authorized delegate holds its own license under the Act or other money transmission services laws. An authorized delegate of a licensee holds in trust for the benefit of the licensee all money net of fees received from money transmission.

(f) An authorized delegate may not use a subdelegate to conduct money transmission services on behalf of a licensee.

History

Added at 24 Ok Reg 843, eff 5-11-07

Okla. Admin. Code § 85:15-5-2 Unauthorized activities

A person may not provide money transmission on behalf of a person not licensed under the Act and this Chapter. A person that engages in that activity provides money transmission services to the same extent as if the person were a licensee, including penalties for violations of the Act and this Chapter.

History

Added at 24 Ok Reg 843, eff 5-11-07

Subchapter 7 Examinations; Reports; Records

Okla. Admin. Code § 85:15-7-1 Authority to conduct examinations

(a) The Commissioner, or another state agency authorized by the Commissioner, may conduct an examination of a licensee or of any of its authorized delegates upon 10 days' notice in a record to the licensee.

(b) The Commissioner, or another state agency authorized by the Commissioner, may examine a licensee or its authorized delegate, at any time, without notice, if the Commissioner or such other agency has reason to believe that the licensee or authorized delegate is engaging in an unsafe or unsound practice or has violated or is violating any state or federal money laundering or criminal law.

(c) If an on-site examination is necessary under subsections (a) or (b), the licensee shall pay the reasonable cost of the examination. The amount charged shall be the same as charged under subsection B. of section 2113 of Title 6 of the Oklahoma Statutes.

History

Added at 24 Ok Reg 843, eff 5-11-07

Okla. Admin. Code § 85:15-7-2 Cooperation

The Commissioner may consult and cooperate with other state money transmission services regulators in enforcing and administering the Act. They may jointly pursue examinations and take other official action that they are otherwise empowered to take.

History

Added at 24 Ok Reg 843, eff 5-11-07

Okla. Admin. Code § 85:15-7-3 Reports

(a) A licensee shall file with the Commissioner within 15 business days any material changes in information provided in a licensee's application as prescribed by the Commissioner.

(b) A licensee shall file with the Commissioner within 30 days after the end of each calendar quarter a current list of all authorized delegates, and locations in this State where the licensee or an authorized delegate of the licensee provides money transmission. The Commissioner may prescribe the type of information and format by which the information shall be submitted for each location and authorized delegate.

(c) A licensee shall file a report with the Commissioner within two business days after the licensee has reason to know of the occurrence any of the following events:

(1) the filing of a petition by or against the licensee under the United States Bankruptcy Code for bankruptcy or reorganization;

(2) the filing of a petition by or against the licensee for receivership, the commencement of any other judicial or administrative proceeding for its dissolution or reorganization, or the making of a general assignment for the benefit of its creditors;

(3) the commencement of a proceeding to revoke or suspend its license in a State or country in which the licensee engages in business or is licensed;

(4) the cancellation or other impairment of the licensee's bond or other security;

(5) a charge or conviction of the licensee or of an executive officer, manager, director, or person in control, of the licensee for a felony; or

(6) a charge or conviction of an authorized delegate for a felony.

History

Added at 24 Ok Reg 843, eff 5-11-07

Okla. Admin. Code § 85:15-7-4 Change of control

(a) A licensee shall:

(1) give the Commissioner notice in a record of a proposed change of control within 15 days after learning of the proposed change of control;

(2) request approval of the acquisition; and

(3) submit a nonrefundable fee of $3,000 with the notice.

(b) After review of a request for approval under subsection (a), the Commissioner may require the licensee to provide additional information concerning the proposed persons in control of the licensee. The additional information must be limited to the same types required of the licensee or persons in control of the licensee as part of its original license or renewal application.

(c) The Commissioner shall approve a request for change of control under subsection (a) if, after investigation, the Commissioner determines that the person or group of persons requesting approval has the competence, experience, character, and general fitness to operate the licensee or person in control of the licensee in a lawful and proper manner and that the public interest will not be jeopardized by the change of control.

(d) When an application for a change of control under this Chapter is complete, the Commissioner shall notify the licensee in a record of the date on which the request was determined to be complete and:

(1) the Commissioner shall approve or deny the request within 120 days after that date; or

(2) if the request is not approved or denied within 120 days after that date:

(A) the request is deemed approved; and

(B) the Commissioner shall permit the change of control under this section, to take effect as of the first business day after expiration of the period.

(e) The Commissioner may exempt a person from any of the requirements of subsection (a) (2) and (3) if it is in the public interest to do so.

(f) Subsection (a) does not apply to a public offering of securities.

(g) Before filing a request for approval to acquire control of a licensee or person in control of a licensee, a person may request in a record a determination from the Commissioner as to whether the person would be considered a person in control of a licensee upon consummation of a proposed transaction. If the Commissioner determines that the person would not be a person in control of a licensee, the Commissioner shall enter an order to that effect and the proposed person and transaction are not subject to the requirements of subsections (a) through (c).

History

Added at 24 Ok Reg 843, eff 5-11-07

Okla. Admin. Code § 85:15-7-5 Records

(a) A licensee shall maintain the following records for determining its compliance with the Act for at least three years:

(1) a general ledger posted at least monthly containing all asset, liability, capital, income, and expense accounts;

(2) bank statements and bank reconciliation records;

(3) a list of the last known names and addresses of all of the licensee's authorized delegates; and

(4) any other records the Commissioner reasonably requires.

(b) Authorized delegates shall maintain the following records for at least three years:

(1) for each money transmission of $1,000 or more, the records specified in 31 C.F.R. § 103.33(f);

(2) all documents required to be maintained or completed by the federal Bank Secrecy Act; and

(3) any other records the Commissioner reasonably requires.

(d) Records may be maintained outside this State if they are made accessible to the Commissioner on seven business-days' notice that is sent in a record.

(e) All records maintained by the licensee and authorized delegates as required in subsections (a) through (d) are open to inspection by the Commissioner or the Commissioner's authorized representative, including another state agency authorized by the Commissioner.

History

Added at 24 Ok Reg 843, eff 5-11-07

Okla. Admin. Code § 85:15-7-6 Money laundering reports

A licensee and all authorized delegates shall file all reports required by federal currency reporting, record keeping, and suspicious transaction reporting requirements as set forth in 31 U.S.C. Section 5311, 31 C.F.R. Part 103, and other federal and state laws pertaining to money laundering.

History

Added at 24 Ok Reg 843, eff 5-11-07

Subchapter 9 Permissible Investments

Okla. Admin. Code § 85:15-9-1 Maintenance of permissible investments

(a) A licensee shall maintain at all times permissible investments that have a market value computed in accordance with generally accepted accounting principles of not less than the aggregate amount of all of money transmitted from all states by the licensee.

(b) The Commissioner, with respect to any licensees, may limit the extent to which a type of investment within a class of permissible investments may be considered a permissible investment, except for money and certificates of deposit issued by a bank. The Commissioner may allow other types of investments that the Commissioner determines to have a safety substantially equivalent to other permissible investments.

History

Added at 24 Ok Reg 843, eff 5-11-07

Okla. Admin. Code § 85:15-9-2 Types of permissible investments

(a) Except to the extent otherwise limited by the Commissioner pursuant to Section 85:15-9-1, the following investments are permissible under Section 85:15-9-1:

(1) cash, a certificate of deposit, or senior debt obligation of an insured depositary institution, as defined in the Federal Deposit Insurance Act;

(2) banker's acceptance or bill of exchange that is eligible for purchase upon endorsement by a member bank of the Federal Reserve System and is eligible for purchase by a Federal Reserve Bank;

(3) an investment bearing a rating of one of the three highest grades as defined by a nationally recognized organization that rates securities;

(4) an investment security that is an obligation of the United States or a department, agency, or instrumentality thereof; an investment in an obligation that is guaranteed fully as to principal and interest by the United States; or an investment in an obligation of a State or a governmental subdivision, agency, or instrumentality thereof;

(5) receivables that are payable to a licensee from its authorized delegates, in the ordinary course of business, pursuant to contracts which are not past due or doubtful of collection if the aggregate amount of receivables under this paragraph does not exceed 20 percent of the total permissible investments of a licensee and the licensee does not hold at one time receivables under this paragraph in any one person aggregating more than 10 percent of the licensee's total permissible investments; and

(6) a share or a certificate issued by an open-end management investment company that is registered with the United States Securities and Exchange Commission under the Investment Companies Act of 1940, and whose portfolio is restricted by the management company's investment policy to investments specified in paragraphs (1) through (4).

(b) The following investments are permissible under Section 85:15-9-1, but only to the extent specified:

(1) an interest-bearing bill, note, bond, or debenture of a person whose equity shares are traded on a national securities exchange or on a national over-the-counter market, if the aggregate of investments under this paragraph does not exceed 20 percent of the total permissible investments of a licensee and the licensee does not at one time hold investments under this paragraph in any one person aggregating more than 10 percent of the licensee's total permissible investments;

(2) a share of a person traded on a national securities exchange or a national over-the-counter market or a share or a certificate issued by an open-end management investment company that is registered with the United States Securities and Exchange Commission under the Investment Companies Act of 1940, and whose portfolio is restricted by the management company's investment policy to shares of a person traded on a national securities exchange or a national over-the-counter market, if the aggregate of investments under this paragraph does not exceed 20 percent of the total permissible investments of a licensee and the licensee does not at one time hold investments in any one person aggregating more than 10 percent of the licensee's total permissible investments;

(3) a demand-borrowing agreement made to a corporation or a subsidiary of a corporation whose securities are traded on a national securities exchange if the aggregate of the amount of principal and interest outstanding under demand-borrowing agreements under this paragraph does not exceed 20 percent of the total permissible investments of a licensee and the licensee does not at one time hold principal and interest outstanding under demand-borrowing agreements under this paragraph with any one person aggregating more than 10 percent of the licensee's total permissible investments; and

(4) any other investment the Commissioner designates, to the extent specified by the Commissioner.

(c) The aggregate of investments under subsection (b) may not exceed 50 percent of the total permissible investments of a licensee calculated in accordance with Section 85:15-9-1.

History

Added at 24 Ok Reg 843, eff 5-11-07

Subchapter 11 Enforcement

Okla. Admin. Code § 85:15-11-1 Suspension and revocation

(a) The Commissioner may suspend or revoke a license or order a licensee to revoke the designation of an authorized delegate if:

(1) the licensee violates the Act;

(2) the licensee does not cooperate with an examination or investigation by the Commissioner or the Commissioner's designee;

(3) the licensee engages in fraud, intentional misrepresentation, or gross negligence;

(4) an authorized delegate is convicted of a violation of a state or federal anti-money laundering statute, or violates a rule adopted or an order issued under the Act, as a result of the licensee's willful misconduct or willful blindness;

(5) the competence, experience, character, or general fitness of the licensee, authorized delegate, person in control of a licensee, or responsible person of the licensee or authorized delegate indicates that it is not in the public interest to permit the person to provide money services;

(6) the licensee engages in an unsafe or unsound practice;

(7) the licensee is insolvent, suspends payment of its obligations, or makes a general assignment for the benefit of its creditors;

(8) the licensee does not remove an authorized delegate after the Commissioner issues and serves upon the licensee a final order including a finding that the authorized delegate has violated the Act; or

(9) a material misstatement of fact in an initial or renewal application, the loss of license in another jurisdiction (due to fraud or dishonest dealing) and criminal convictions involving fraud or dishonest dealing as grounds for license denial, suspension or non-renewal.

(b) In determining whether a licensee is engaging in an unsafe or unsound practice, the Commissioner may consider the size and condition of the licensee's money transmission, the magnitude of the loss, the gravity of the violation of the Act, and the previous conduct of the person involved.

History

Added at 24 Ok Reg 843, eff 5-11-07

Okla. Admin. Code § 85:15-11-2 Suspension and revocation of authorized delegates

(a) The Commissioner may issue an order suspending or revoking the designation of an authorized delegate, if the Commissioner finds that:

(1) the authorized delegate violated the Act or an order issued under the Act;

(2) the authorized delegate did not cooperate with an examination or investigation by the Commissioner or the Commissioner's designee;

(3) the authorized delegate engaged in fraud, intentional misrepresentation, or gross negligence;

(4) the authorized delegate is charged with a violation of a state or federal anti-money laundering statute or other criminal statutes in connection with its money transmission;

(5) the competence, experience, character, or general fitness of the authorized delegate or a person in control of the authorized delegate indicates that it is not in the public interest to permit the authorized delegate to provide money services; or

(6) the authorized delegate is engaging in an unsafe or unsound practice.

(b) In determining whether an authorized delegate is engaging in an unsafe or unsound practice, the Commissioner may consider the size and condition of the authorized delegate's provision of money services, the magnitude of the loss, the gravity of the violation of the Act, and the previous conduct of the authorized delegate.

(c) An authorized delegate may apply for relief from a suspension or revocation of designation as an authorized delegate according to procedures prescribed by the Commissioner.

History

Added at 24 Ok Reg 843, eff 5-11-07

Okla. Admin. Code § 85:15-11-3 Orders to cease and desist

(a) If the Commissioner determines that a violation of the Act or an order issued under the Act by a licensee or authorized delegate is likely to cause immediate and irreparable harm to the licensee, its customers, or the public as a result of the violation, or cause insolvency or significant dissipation of assets of the licensee, the Commissioner may issue an order requiring the licensee or authorized delegate to cease and desist from the violation. The order becomes effective upon service of it upon the licensee or authorized delegate.

(b) The Commissioner may issue an order against a licensee to cease and desist from providing money services through an authorized delegate that is the subject of a separate order by the Commissioner.

(c) An order to cease and desist remains effective and enforceable pending the completion of an administrative proceeding pursuant to sections 85:15-11-1 or 85:15-11-2.

(d) A licensee or an authorized delegate that is served with an order to cease and desist may petition the Oklahoma County District Court, for a judicial order setting aside, limiting, or suspending the enforcement, operation, or effectiveness of the order pending the completion of an administrative proceeding pursuant to sections 85:15-11-1 or 85:15-11-2.

(e) An order to cease and desist expires unless the Commissioner commences an administrative proceeding pursuant to sections 85:15-11-1 or 85:15-11-2 within 10 days after it is issued.

History

Added at 24 Ok Reg 843, eff 5-11-07

Okla. Admin. Code § 85:15-11-4 Consent orders

The Commissioner may enter into a consent order at any time with a person to resolve a matter arising under the Act or a rule adopted or order issued under the Act. A consent order must be signed by the person to whom it is issued or by the person's authorized representative, and must indicate agreement with the terms contained in the order. A consent order may provide that it does not constitute an admission by a person that the Act or an order issued under the Act has been violated.

History

Added at 24 Ok Reg 843, eff 5-11-07

Okla. Admin. Code § 85:15-11-5 Civil penalties

The Commissioner may assess a civil penalty against a person that violates the Act or an order issued under the Act in an amount not to exceed $100 per day for each day the violation is outstanding, plus the State's costs and expenses for the investigation and prosecution of the matter, including reasonable attorney's fees.

History

Added at 24 Ok Reg 843, eff 5-11-07

Okla. Admin. Code § 85:15-11-6 Hearings

Except as otherwise provided in the Act, the Commissioner may not suspend or revoke a license, suspend or revoke the designation of an authorized delegate, or assess a civil penalty without notice and an opportunity to be heard. The Commissioner shall also hold a hearing when requested to do so by an applicant whose application for a license is denied.

History

Added at 24 Ok Reg 843, eff 5-11-07

Chapter 20 Cemetery Merchandise Rules

Subchapter 1 General Provisions

Okla. Admin. Code § 85:20-1-1 Purpose [1]

This Chapter sets forth the definitions of certain terms, sets forth departmental requirements and states the procedural rules to be followed by Applicants and Permittees in their business with the Department. This Chapter contains the primary substantive rules which interpret and implement the Act for supervision, regulation and administration of Permittees and their compliance with the Act.

History

1See Editor's Note at beginning of this Chapter.

Okla. Admin. Code § 85:20-1-2 Definitions [1]

The following words and terms, when used in this Chapter shall have the following meaning, unless the context indicates otherwise:

"Applicant" means an individual, firm, corporation, or partnership which is applying for a permit;

"Board" means the Oklahoma State Banking Board;

"Department" means the Oklahoma State Banking Department;

"Permittee" means an organization permitted to sell cemetery merchandise on a prepaid basis.

History

1See Editor's Note at beginning of this Chapter.

Okla. Admin. Code § 85:20-1-3 Procedural rules [1]

To the extent applicable, proceedings before the Oklahoma State Banking Board with respect to applications for Cemetery Merchandise Trust Permits, hearings on revocation of such permits or disciplinary actions will be governed by this Chapter.

History

1See Editor's Note at beginning of this Chapter.

Subchapter 3 Departmental Requirements

Okla. Admin. Code § 85:20-3-1 Criteria for permit [1]

(a) Pursuant to the Cemetery Merchandise Trust Act, any organization which shall accept money or anything of value for cemetery merchandise pursuant to a prepaid cemetery merchandise contract must first obtain a permit from the Oklahoma State Banking Board authorizing the transaction of this type of business. In granting permits, the Board shall consider the following criteria:

(1) The applicant cannot have been convicted of a crime involving fraud, dishonesty or moral turpitude.

(2) The applicant must submit information regarding his employment experience during the five year period prior to application for the permit.

(3) The applicant must agree to comply with all provisions of the Cemetery Merchandise Trust Act.

(4) The contract to be used between the cemetery merchandise Permittee and the buyer of cemetery merchandise must be submitted to the State Banking Board, along with a disclosure statement which contains the following information:

(A) A clear description of the merchandise covered by the preneed sale;

(B) A clear explanation of the consequences of defaulting on payments under the contract;

(C) A clear explanation of the customer's rights regarding credit for outside containers if the customer moves to another city or town.

(b) Within one year from the date of issuance of a permit, the disclosures set forth in (A) through (B) above shall be incorporated into each organizations' contract.

History

1See Editor's Note at beginning of this Chapter.

Okla. Admin. Code § 85:20-3-2 Trust fund and trustee [1]

If the Cemetery Merchandise Permittee chooses to place the required funds in trust rather than using a surety bond, the Permittee must keep the Department informed about the identity of the Trustee at all times. The application for Annual Permit shall include information regarding the Trustee to be used by the applicant. Prior to changing Trustees, Permittee must notify the State Banking Board, stating the reason for the proposed change, and the State Banking Board shall have thirty (30) days in which to object to the proposed change; provided, however, that the Board shall not object unless the change would jeopardize the fund.

History

1See Editor's Note at beginning of this Chapter.

Okla. Admin. Code § 85:20-3-3 Surety bond [1]

If the Permittee elects to post a surety bond in lieu of making remittances to a trust fund, the Permittee shall submit Quarterly Reports to the State Banking Board in the same form and in the same manner as the Monthly Report described in 85:20-3-4. If at any time the Quarterly Report shows outstanding liabilities which exceed the amount of the surety bond posed, the Permittee shall be so notified by the Department and shall, within ten (10) days following notification, post an additional or amended bond sufficient in size to satisfy the provisions of 8 O.S. Section 307.

History

1See Editor's Note at beginning of this Chapter.

Okla. Admin. Code § 85:20-3-4 Summary method - monthly reports [1]

The Cemetery Merchandise Trust Act provides that each Permittee must either provide a copy of each contract to its Trustee or may, in lieu thereof, submit a summary of the relevant information from the contracts. If a Permittee chooses to use the summary method, the information shall be submitted on a monthly basis to the Trustee on a form provided by the State Banking Department. The Report shall contain the following information:

(1) Name of cemetery;

(2) Town where cemetery is located;

(3) Period covered by the report;

(4) Account numbers assigned to each contract;

(5) Name of each customer (optional);

(6) Description of merchandise purchased;

(7) Cost breakdown on each piece of merchandise sold which is covered by the Act;

(8) Amount of deposit made on each account;

(9) Beginning and ending balances.

History

1See Editor's Note at beginning of this Chapter.

Okla. Admin. Code § 85:20-3-5 Annual report [1]

On or before March 15 of each year, each Permittee shall file an Annual Report with the Board which shall include the following information:

(1) The name of the cemetery;

(2) Town where cemetery is located;

(3) Name and address of person to contact with questions about the report;

(4) Period covered by the report;

(5) Account numbers;

(6) Merchandise covered by each account;

(7) Amount deposited on each account to the trust fund;

(8) Beginning and ending balance;

(9) Method of determination of wholesale cost.

History

1See Editor's Note at beginning of this Chapter.

Okla. Admin. Code § 85:20-3-6 Wholesale cost [1]

The amount of the purchase price which must be placed in a trust fund is determined, in part, by reference to the wholesale price of the merchandise. In order for the Banking Board and the Trustee to ascertain the wholesale price, each permittee must submit to the Banking Board and the Trustee the following information:

(1) A current original manufacturer's price list from any and all cemetery merchandise suppliers used by the Permittee;

(2) Identification of the vault company the Permittee deals with;

(3) Any other information relevant to the determination of wholesale cost.

History

1See Editor's Note at beginning of this Chapter.

Chapter 25 Savings and Loan Associations

Subchapter 1 Procedural Rules and Definitions

Okla. Admin. Code § 85:25-1-1 Purpose

The rules in this Chapter provide guidelines and procedures for proceedings before the Savings & Loan Board and before other tribunals which involve savings and loan associations or their records, as well as providing definitions for use in this Chapter and in "the Code".

History

Transferred from 625:1-1-1 (see Editor's Note at beginning of this Chapter)

Okla. Admin. Code § 85:25-1-2 Definitions and references to statutes

As used in this Chapter, reference to all definitions set forth in the Code are hereby adopted as definitions applicable to this Chapter. The following words and terms when used in this Chapter shall have the following meaning, except where the context clearly indicates otherwise:

"Administrative Procedures Act" means Title 75, Chapter 8, Section 301 to 325, Oklahoma Statutes Annotated, as the same now exists or may be amended.

"Applicant" means a party commencing a proceeding either in the form of an Application or Complaint; and includes the terms "plaintiff", "complainant" and "petitioner".

"Association" means a savings and loan association and shall be understood to also include savings banks.

"Attorney" means a licensed attorney currently admitted to practice before the Supreme Court of Oklahoma, or an attorney currently licensed to practice in another state who is granted permission to appear in a proceeding in this state. No attorney who is not currently licensed to practice in Oklahoma shall be permitted to appear except in association with an attorney so licensed to practice in Oklahoma who shall also appear in the proceeding. An attorney licensed to practice in a state permitting attorneys of this state to practice before its state courts without local counsel may appear without association of local counsel.

"Board" and "Commissioner" means respectively the Oklahoma State Savings and Loan Board and the Oklahoma Bank Commissioner, who presides as Chairman of the Board.

"The Code" means the Oklahoma Savings and Loan Code of 1970, 18 O.S. § 381.1, et seq. as has been amended or may hereafter be amended.

"Department" means the Oklahoma State Banking Department.

"Intervenor" means a party not an applicant or named respondent who obtains permission to enter the proceeding. An intervenor opposing an application will thereafter be deemed a respondent.

"Order" means that which is required or ordered to be done, or not to be done and shall be generally reserved for the requirement or directive portion of an official order or decisions of a proceeding; or the promulgation of rules, regulations, and requirements in matters in which the Board or Commissioner acts.

"Party" means a party of record and any other party deemed by the Commissioner to have an interest in the subject matter, and entitled to appear therein as a party of record. "Party of record" includes any party named a party in a pleading, or who, after being deemed interested by the Commissioner, makes formal appearance either in person or by an attorney at any stage of the proceeding whether or not seeking affirmative relief.

"Protestant" means a party who, upon grounds of private or public interest, resists an application or any relief sought thereby. A protestant is governed by the rules applicable to a respondent.

"Record" or "Formal record" means any proceeding which shall consist of:

(A) Preliminary exhibits, including pertinent pleadings, notices and proof of publication.

(B) Transcript of proceedings at all hearings.

(D) Exhibits, together with attachments, appendices and amendments thereto.

(E) Exceptions and motions subsequent to the hearing.

(F) Orders or Recommendations of the Board or Commissioner, together with findings of fact and conclusions of law.

(G) The Board or Commissioner may order included in the record any other instruments or matters relevant to issues.

"Respondent" means a party against whom relief is sought in a proceeding, or who appears in opposition to relief sought by the applicant, and includes the term "Defendant".

History

Transferred from 625:1-1-2 (see Editor's Note at beginning of this Chapter)

Okla. Admin. Code § 85:25-1-3 General procedures

(a) The principal office of the Oklahoma Savings and Loan Board shall be located in the office of the Oklahoma State Banking Department.

(b) The Board, or any official exercising its authority, may meet and exercise its official powers and functions at any location in the State of Oklahoma.

(c) Every communication in writing to the Board shall be addressed to the Commissioner at the principal office, unless the Board directs otherwise. Every pleading and other document tendered for official filing shall be deposited with or mailed to the Commissioner at the principal office, and shall be deemed received only upon actual delivery at the office of the Commissioner. Filing of any instrument shall not be complete except upon payment of all applicable fees required. All filings shall consist of five copies.

(d) A representative of a savings & loan seeking affirmative relief must be present at the Board meeting where the Board will hear the request.

History

Transferred from 625:1-1-3 (see Editor's Note at beginning of this Chapter)

Okla. Admin. Code § 85:25-1-4 Record of proceedings

The Commissioner may, in his discretion, or shall at the request of a party, cause a record to be made of an individual proceeding before the Board or Commissioner. A transcript of proceedings will be made at the request and expense of any party ordering it; however, two copies shall be furnished to the Department at Appellant's expense in cases in which the Commissioner's or Board's decision is appealed.

History

Transferred from 625:1-1-4 (see Editor's Note at beginning of this Chapter)

Okla. Admin. Code § 85:25-1-5 Service of pleadings

(a) Service of an initial pleading. Every application in which a party is named a respondent, and every complaint, shall be served by the State Banking Department on each respondent named therein by mail accompanied by a notice of hearing stating the date on which the cause is set for hearing, which shall be no less than ten (10) days after notice is mailed. Service hereunder shall be required in addition to provisions of this Chapter requiring service by publication.

(b) Service of subsequent pleadings. Every pleading after the initial pleading shall be served by the party filing it by regular mail upon all parties of record. Parties of record shall include the applicant, all named respondents, and all persons having theretofore entered an appearance in the cause, in person or by an attorney.

(c) Certificate of service. Every pleading required to be served by regular mail shall contain a list of persons served and the certificate of a party or his attorney, that on the date stated a copy of the pleading was mailed, postage prepaid, or delivered, to each person listed. Any pleading required to be served by regular mail may be served by leaving a copy thereof at the principal office of the party, or of the attorney for the party.

(d) Service not jurisdictional. Service prescribed by this Chapter shall not be jurisdictional except where so prescribed by the Constitution or by Statute. Failure to comply with the provisions of this Chapter as to mailing and service of notice shall not deprive the Board or Commissioner of jurisdiction of the proceeding, but shall be grounds for appropriate relief as the Commissioner may order.

History

Transferred from 625:1-1-5 (see Editor's Note at beginning of this Chapter)

Okla. Admin. Code § 85:25-1-6 Commencement of proceeding; intervention and consolidation

(a) Every proceeding shall be commenced by an initial pleading which shall be either:

(1) an application,

(2) a complaint, or

(3) an order of the Board or Commissioner commencing a proceeding.

(b) An application shall include any request for authority, approval, determination, permission or other Board action or relief whether or not directed against a named respondent. A complaint shall include every form of request for enforcement of an order, rule or regulation of the Board or Commissioner or for relief against a named respondent based upon an alleged violation of law or of a rule, regulation or order of the Board or Commissioner.

(c) Any interested person may intervene in a proceeding before the Board or Commissioner upon making timely application and showing that he may be aggrieved by the decision. Two or more proceedings or matters may be consolidated if there is no prejudice to any person affected by such consolidation.

History

Transferred from 625:1-1-6 (see Editor's Note at beginning of this Chapter)

Okla. Admin. Code § 85:25-1-7 Notice of hearing

(a) The Commissioner shall determine the names of all interested persons who might be directly aggrieved by the determination of the Board or the Commissioner at such hearings.

(b) The Commissioner shall give written notice of hearing to such persons at least ten (10) days prior to the hearing.

(c) The Commissioner shall give any additional notice required by law and may give additional notice where he deems it advisable.

History

Transferred from 625:1-1-7 (see Editor's Note at beginning of this Chapter)

Okla. Admin. Code § 85:25-1-8 Continuances

(a) The Commissioner may continue a hearing at any time for any period, with or without notice or motion.

(b) Except for good cause shown or by agreement of all parties appearing at the hearing, no continuance will be granted upon motion of a party unless notice thereof is given to all interested parties at least three (3) days prior to the date set for hearing. A stipulation for continuance among all parties of record ordinarily will be approved unless the Commissioner determines that the public interest requires otherwise.

History

Transferred from 625:1-1-8 (see Editor's Note at beginning of this Chapter)

Okla. Admin. Code § 85:25-1-9 Depositions and discovery

(a) Depositions.

(1) Deposition of a witness may be taken pursuant to a subpoena or by agreement of the parties involved. The deposition of a witness may be taken inside or outside the State of Oklahoma with the requesting party bearing the cost of the court reporter.

(2) The manner of taking deposition and the use thereof shall otherwise be governed by the laws relating to taking of depositions for use in the District Courts of Oklahoma.

(b) Production of documents.

(1) Upon application of a party, or upon the Commissioner's own motion, with or without notice, the Commissioner may make an Order requiring a party to produce designated documents or tangible objects for inspection by parties to the proceeding, or for copying at the expense of the applicant, or to be offered in evidence. The Order shall direct production thereof at the hearing, or at a prehearing conference and production shall be at the principal office of the Board, unless some other place is stated in the order. An order hereunder may be directed to a party not yet a party of record, conditioned that if such party appears at the hearing, the Order thereupon will be complied with.

(2) The party applying therefore shall mail a copy of the Order by regular mail on each party of record at least seven (7) days prior to the date upon which production is required.

(3) An Order pursuant to this Section may require production of any document not privileged which constitutes or contains evidence relevant to the subject matter of the proceeding, or may reasonably lead to such evidence. Business records shall not be deemed privileged as such; but confidential business records and information will be protected from disclosure except where directly relevant to the issues in the proceedings.

(4) The Order shall identify the document or object to be produced individually or by categories, with sufficient particularity to permit easy identification thereof by the party ordered to make production.

(5) An exact photographic copy of a document may be substituted for the original, at the expense of the person requesting the instrument.

(c) Interrogatories. Interrogatories may be submitted to a party in an individual proceeding under the same restrictions and procedures as set forth in the Oklahoma Statutes governing discovery in civil cases.

History

Transferred from 625:1-1-9 (see Editor's Note at beginning of this Chapter)

Okla. Admin. Code § 85:25-1-10 Examiner testimony

(a) Oklahoma State Banking Department examiners are prohibited from giving testimony which would disclose information obtained from confidential records as defined in 6 O.S. § 208, or information obtained in the process of developing confidential records without the express permission in writing of the Commissioner.

(b) Litigants seeking to subpoena banking department examiners for depositions or hearings shall serve one copy of the subpoena upon the examiner and shall timely furnish one copy of each subpoena to the Department.

History

Transferred from 625:1-1-10 (see Editor's Note at beginning of this Chapter)

Okla. Admin. Code § 85:25-1-11 Examination report confidentiality

Examination reports are the property of the regulatory agencies which generate them. Copies are furnished to savings and loans for their confidential use. Under no circumstances shall the savings and loan or any of its directors, officers or employees disclose or make public in any manner the report or any portion thereof. If a subpoena or other legal process is received calling for production of an examination report, the Department must be notified immediately.

History

Transferred from 625:1-1-11 (see Editor's Note at beginning of this Chapter)

Okla. Admin. Code § 85:25-1-12 Pre-hearing conference

(a) The Commissioner, with or without request by any party of record, may order the parties or their attorneys to appear at a designated time for a pre-hearing conference to consider:

(1) Simplification of the issues.

(2) Presentation of issues of law, adjudication of which may simplify or eliminate issues of fact.

(3) Admissions and stipulations of fact which will avoid unnecessary evidence and testimony.

(4) Identification of documents to be offered at the hearing.

(5) Identification of and numerical limit upon experts and other witnesses.

(6) Discovery and production of documents, records, data and other information.

(7) Other matters as may aid in trial of the proceedings.

(d) Notice of the time and place of a pre-hearing conference shall be as prescribed by order of the Commissioner and shall be served by regular mail upon all parties of record.

History

Transferred from 625:1-1-12 (see Editor's Note at beginning of this Chapter)

Okla. Admin. Code § 85:25-1-13 Witnesses

(a) Subpoena. The Board, upon request of a party, or upon their own motion, may issue subpoenas in any pending proceeding requiring attendance of a witness from any place in the state to the place of hearing. Praecipe for subpoena shall be filed with the Commissioner.

(b) Subpoena duces tecum. A subpoena may require the witness to produce at the hearing books, records, accounts, papers, and other instruments and tangible objects, which shall be described with reasonable particularity in the subpoena. A subpoena duces tecum directed to a party not an individual may direct that the records be produced by an officer or employee responsible therefor.

(d) Return. The original subpoena, with the affidavit of service thereon, shall be filed with the Commissioner.

(e) Protective orders. The Commissioner may make any orders with respect to subpoena and attendance of witness with or without application or notice, as may be appropriate for the protection of parties and witnesses, including an Order excusing attendance, or limiting documents to be produced.

History

Transferred from 625:1-1-13 (see Editor's Note at beginning of this Chapter)

Okla. Admin. Code § 85:25-1-14 Hearings

(a) Rules of evidence. At such hearings, the rules of evidence set forth in the Oklahoma Evidence Code shall apply and the hearing shall be conducted in accordance with the Oklahoma Evidence Code relating to hearings therein provided, insofar as may be practicable.

(b) Order of proof. The applicant or complainant who institutes a proceeding shall open and close the proof. Intervenors shall be heard immediately following principal parties with whom allied in interest. In all other cases, the presiding officer shall designate the order of proof.

(c) Adverse party. A party may call an adverse party or an officer or employee of an adverse party, in which case the witness may be impeached and otherwise cross-examined.

(d) Off the record. All testimony will be taken on the record unless the presiding officer designates otherwise.

(e) Documents. Documentary evidence may be received in the form of copies or excerpts, if the original is not readily available. Upon requests, parties shall be given an opportunity to compare the copy with the original.

(f) Examination of witness. The Commissioner shall designate the order of examination and may limit the scope of examination and cross-examination.

History

Transferred from 625:1-1-14 (see Editor's Note at beginning of this Chapter)

Okla. Admin. Code § 85:25-1-15 Description of Board organization and operations

The Oklahoma Savings and Loan Board exists under the provisions of the Code, and is composed of the Commissioner as ex officio chairman, and four other members, including a lay member, appointed by the Governor with the consent of the State Senate. A secretary to the Board may be appointed by the Commissioner. The Board has general supervision and control over all Oklahoma associations and the activities of foreign associations within the State of Oklahoma, with power to grant or refuse permission to any association to do business in the State, and with authority to prescribe rules and regulations for the conduct and operation of Oklahoma and foreign associations within the State of Oklahoma. Meetings of the Board are held quarterly at the State Banking Department, and special meetings may be called at any time by the Commissioner. Requests for information and all applications, petitions or requests for Board action shall be filed in the office of the Bank Commissioner.

History

Transferred from 625:1-1-15 (see Editor's Note at beginning of this Chapter)

Okla. Admin. Code § 85:25-1-16 Petition for promulgation, amendment or repeal of a rule

(a) Every petition by an interested person or persons requesting the Board to promulgate, amend or repeal a Board Rule shall state in clear language the proposed rule, amendment or repeal desired, and the reasons for such proposal.

(b) All such requests from insured associations shall be accompanied by an opinion of the association's counsel that the action requested is in conformity with the Oklahoma State Statutes, rules and regulations of the Savings and Loan Board, rules and regulations of the Federal Savings and Loan Insurance Corporation, and the rules and regulations of the Federal Home Loan Bank Board.

(d) If the decision of the Board is in favor of the petition, it will, within a reasonable time thereafter, give statutory notice of the proposed rule, amendment or repeal, and will follow the procedure set forth in the Administrative Procedures Act for the adoption, amendment or repeal of a rule.

(e) The Board will summarily reject any petition deemed to have no merit or to be trivial.

History

Transferred from 625:1-1-16 (see Editor's Note at beginning of this Chapter)

Okla. Admin. Code § 85:25-1-17 Hearing on the removal of an officer, director or employee

Any proposed removal by the Commissioner of an officer, director, or employee of a savings and loan association pursuant to Section 381.78 of the Code shall be treated as an individual proceeding subject to the notice and hearing requirements of the Administrative Procedures Act.

History

Transferred from 625:1-1-17 (see Editor's Note at beginning of this Chapter)

Subchapter 3 Supervision, Regulation and Administration

Part 1 CHARTERS, BRANCHES, AGENCIES, LOAN PRODUCTION OFFICES, AND SERVICE CORPORATIONS

Okla. Admin. Code § 85:25-3-1 Purpose

The rules in this Chapter provide guidance and requirements for associations and others seeking Board or Commissioner approval for association activities. This Chapter also sets forth the supervisory and regulatory requirements, procedures and standards for a variety of bank and trust company activities, powers and issues, as well as defining and clarifying various terms and provisions of the Code. This Chapter provides specific and general guidance for the general administration of the Code, and in appropriate cases, grants or clarifies.

History

Transferred from 625:10-1-1 (see Editor's Note at beginning of this Chapter)

Okla. Admin. Code § 85:25-3-2 Definitions

"Administrative Procedures Act" means Title 75, Chapter 8, Section 301 to 325, Oklahoma Statutes Annotated, as the same now exists or may be amended.

"Applicant" means a party commencing a proceeding either in the form of an Application or Complaint; and includes the terms "plaintiff", "complainant" and "petitioner".

"Association" means a savings and loan association and shall be understood to also include savings banks.

"Attorney" means a licensed attorney currently admitted to practice before the Supreme Court of Oklahoma, or an attorney currently licensed to practice in another state who is granted permission to appear in a proceeding in this state. No attorney who is not currently licensed to practice in Oklahoma shall be permitted to appear except in association with an attorney so licensed to practice in Oklahoma who shall also appear in the proceeding. An attorney licensed to practice in a state permitting attorneys of this state to practice before its state courts without local counsel may appear without association of local counsel.

"Board" and "Commissioner" means respectively the Oklahoma State Savings and Loan Board and the Oklahoma Bank Commissioner, who presides as Chairman of the Board.

"The Code" means the Oklahoma Savings and Loan Code of 1970, 18 O.S. § 381.1, et seq. as has been amended or may hereafter be amended.

"Department" means the Oklahoma State Banking Department.

"Intervenor" means a party not an applicant or named respondent who obtains permission to enter the proceeding. An intervenor opposing an application will thereafter be deemed a respondent.

"Protestant" means a party who, upon grounds of private or public interest, resists an application or any relief sought thereby. A protestant is governed by the rules applicable to a respondent.

"Record" or "Formal record" means any proceeding which shall consist of:

(A) Preliminary exhibits, including pertinent pleadings, notices and proof of publication.

(B) Transcript of proceedings at all hearings.

(D) Exhibits, together with attachments, appendices and amendments thereto.

(E) Exceptions and motions subsequent to the hearing.

(F) Orders or Recommendations of the Board or Commissioner, together with findings of fact and conclusions of law.

(G) The Board or Commissioner may order included in the record any other instruments or matters relevant to issues.

"Respondent" means a party against whom relief is sought in a proceeding, or who appears in opposition to relief sought by the applicant, and includes the term "Defendant".

History

Transferred from 625:10-1-2 (see Editor's Note at beginning of this Chapter)

Okla. Admin. Code § 85:25-3-3 Application for new charter

In addition to all of the information required in an application for a new charter under the Code, the application shall contain information showing:

(1) The character, financial responsibility, business experience and standing in the community of the prospective incorporators;

(2) The character, financial responsibility, savings and loan experience, and business qualifications of the proposed managing officer;

(3) That conditions in the community or market area in which the new savings and loan association will transact business afford reasonable promise of a successful operation;

(4) That the incorporators and the proposed managing officer have the capability, both financial and managerial, to establish and maintain this association;

(5) The projected and proposed annual budget for the association during its first three years of operation.

History

Transferred from 625:10-1-3 (see Editor's Note at beginning of this Chapter)

Okla. Admin. Code § 85:25-3-4 Minimum number of members for chartering a mutual association

For chartering purposes, the Board may require such minimum number of members for a proposed mutual association as in their opinion may be necessary to supply adequate diversification.

History

Transferred from 625:10-1-4 (see Editor's Note at beginning of this Chapter)

Okla. Admin. Code § 85:25-3-5 Offering circular use in chartering process

If any stock of the proposed stock savings and loan association is offered to other than the incorporators, it shall be offered by an Offering Circular only, the contents of which must be approved by the Commissioner. Any subscription taken for the stock, other than the incorporators, shall contain a statement that the subscriber has been furnished an Offering Circular.

History

Transferred from 625:10-1-5 (see Editor's Note at beginning of this Chapter)

Okla. Admin. Code § 85:25-3-6 Trusteed stock

Trusteed stock may be reserved for management in an amount as may be permitted by the Board. The Application should disclose and specify the disposition of this stock.

History

Transferred from 625:10-1-6 (see Editor's Note at beginning of this Chapter)

Okla. Admin. Code § 85:25-3-7 Disclosure of contracts with the proposed association

Any contract with management or with the directors or officers of the proposed capital stock institution, including proposed fees to be paid to directors, should be disclosed at the time application for authority to organize is made.

History

Transferred from 625:10-1-7 (see Editor's Note at beginning of this Chapter)

Okla. Admin. Code § 85:25-3-8 Limitation on de novo association ownership

No person or group of persons acting in concert may own more than 10% of the stock of a de novo association per person without prior approval of the Board.

History

Transferred from 625:10-1-8 (see Editor's Note at beginning of this Chapter)

Okla. Admin. Code § 85:25-3-9 Application for establishing or relocating a branch office or detached facility

(a) Generally.

(1) An association desiring to establish or relocate either a branch pursuant to Section 381.24a, or a detached facility pursuant to Section 381.24b, of the Savings and Loan Code, shall submit to the Commissioner the original and two copies of an application for certificate to maintain and operate a branch or detached facility on a form prescribed by the Commissioner.

(2) The application shall be executed by the applicant's president or vice-president, and attested by the applicant's cashier or secretary.

(3) An application fee as set forth in these rules shall accompany each application.

(4) Applicants are urged to submit their applications, as necessary, to the Federal Deposit Insurance Corporation (if an insured association) and/or the Office of Thrift Supervision, if applicable, at the same time the application is submitted to the Commissioner.

(5) The term "application," as used in this section, shall be understood to refer to an application to establish or relocate a branch or detached facility.

(b) Notice of application.

(1) The applicant shall publish a Notice of Application in a newspaper of general circulation in the community in which the applicant proposes to establish or relocate the branch or detached facility.

(2) The Notice shall state that an application has been mailed or delivered on or before the date of the Notice, and the Notice shall contain the name of the applicant and the subject matter of the application.

(3) The application shall be mailed or delivered to the Commissioner on or before the day the Notice is published. A statement containing the date of publication and the name and address of the newspaper in which the notice was published shall be furnished with the application.

(c) Protest period. Within ten (10) days after the notice by publication as described in (b) of this Section, any interested person desiring to protest the approval of the application shall submit to the Commissioner a written protest, which shall include both the specific facts and specific legal authority pursuant to which such protestant requests that the application be disapproved. Failure to include such specifics may result in the protest being returned to the protestant or disregarded for lack of specifics.

(d) Investigation. The Commissioner may request additional information from the applicant and any protestant, and conduct such investigation as the Commissioner deems appropriate. No special emphasis will be placed on an appraisal of economic and competitive conditions.

(e) Effect of protest/nonprotest. At the earlier of receipt by the Commissioner of a written protest requesting a hearing before the Commissioner or the expiration of the Protest Period prescribed by this Section, the Commissioner shall:

(1) Upon receipt of such written protest, notify the Applicant and each protestant of the receipt of the protest and of the date, time and place of the hearing on the Application and protest(s) before the Commissioner; or

(2) Upon receipt of such written protest and if the Applicant's latest completed examination reflects a Uniform Financial Institutions Composite "CAMELS" rating of "1" or "2" and the Applicant is not subject to supervisory action by the Department such as a Memorandum of Understanding, Cease and Desist Order, or similar action, the Commissioner may proceed without a hearing pursuant to subsection (g) of this Section; or

(3) If no such written protest is received, proceed pursuant to subsection (g) of this Section.

(f) Applicant request for hearing. The Applicant may in the application or at any time prior to expiration of the Protest Period prescribed by this Section, request in writing that the Application be submitted to the Commissioner for a hearing for approval/disapproval of the Application. In such event, the Commissioner shall proceed according to subsection (e)(1) of this Section.

(g) Commissioner approval. In the event an Application is not protested in writing within the protest period prescribed by this section, and unless the Applicant requests a hearing either by having so stated in the Application or by subsequent written request, the Commissioner may consider the Application, grant approval and issue the Certificate of Authority to establish and operate or to relocate a branch or detached facility without a hearing.

(h) Notice of intent to recommend denial. In the event the Commissioner, based on his investigation prior to a hearing, determines not to approve the application, the Commissioner shall mail to the applicant by overnight mail or telefacsimile (fax) a written notice of intent to recommend denial, including the reasons for such negative recommendation and the date, time and place of the hearing on the Application. Within ten (10) days after receipt of such notice, the applicant shall notify the Commissioner of its intent to withdraw its application or to proceed with a hearing on the application.

(i) Hearing. In the event a hearing is set by the Commissioner, such hearing shall be conducted as follows:

(1) Time limit. The applicant shall be limited to 30 minutes to present testimony and arguments at the hearing, and the protestants as a group shall be limited to 30 minutes to present testimony and arguments. Additional time may be granted by the Commissioner upon good cause shown.

(2) Transcript. A transcript may be made of each hearing of an application. The Commissioner may arrange for a court reporter to be present to record the proceedings. All expenses of the reporter, including the furnishing of the original and two (2) copies of the transcript to the Commissioner, shall be borne by the protestants or if no protest has occurred, by the applicant.

(3) Procedure. The order of presentation, appearance of witnesses and presentation of evidence for hearings of applications shall be as directed by the Commissioner at the hearing. Three (3) copies of all documentary evidence shall be furnished to the Commissioner prior to the hearing as directed by the Commissioner.

(4) Decision of the Commissioner. Within twenty (20) days after the conclusion of the hearing of an application, the Commissioner shall issue an order approving or disapproving the application, and shall promptly mail a copy of the order to the applicant and to each protestant.

(5) Criteria. No special emphasis will be placed by the Commissioner on an appraisal of economic and competitive conditions. The Commissioner, at his discretion, may consider the following factors in arriving at its decision:

(A) Financial condition and history of the applicant. The current asset condition of the applicant, its compliance with applicable laws and regulations, and its investment in fixed assets are primary areas of consideration. The applicant's aggregate fixed asset investment, including lease obligations, must be reasonable in relation to its projected earnings capacity and capital.

(B) Adequacy of capital structure. Capital earnings and retention of earning should be sufficient to support the applicant's current level of operations as well as the proposed expansion.

(C) Future earnings prospect. The applicant's earnings potential will be evaluated in terms of the ability of overall earnings to absorb the anticipated expenses resulting from the establishment and operation of the proposed branch or facility.

(D) Quality of management. The applicant's management must have demonstrated ability to operate the association in a sound manner, and must display the degree of depth necessary to permit the establishment of the proposed branch or facility.

(E) Legal limitations. Statutory requirements on the establishment of branches and detached facilities.

(F) Insiders. Any financial or other business arrangement, direct or indirect, involving the proposed branch or facility and bank insiders which involve terms and conditions more favorable to insiders than would be available in a comparable transaction with unrelated parties.

(j) Conditions. The Commissioner's approval of an application shall be subject to any condition deemed by the Commissioner to be relevant to the criteria set forth in (i)(5) of this Section.

(k) Commencement of business. The applicant shall commence business at the branch or facility within eighteen (18) months of Commissioner approval. Extensions of time within which to commence business may be granted by the Commissioner only upon good cause shown.

(l) Reapplication. In the event an application is disapproved by the Commissioner, the applicant may submit a new application following a change of the circumstances which were the basis for the initial disapproval.

(m) Judicial review. The decision of the Commissioner approving or disapproving an application may be appealed to the Oklahoma Supreme Court by any party directly affected and showing aggrievement, from other than mere increase in competition, resulting from the Commissioner's decision.

History

Amended at 17 Ok Reg 1707, eff 5-25-00; Transferred from 625:10-1-9 (see Editor's Note at beginning of this Chapter)

Okla. Admin. Code § 85:25-3-10 Branch office operations

All branch offices shall be subject to direction from the home office and there shall be maintained at the home office all general accounting records, including control records of all business transacted at branch offices.

History

Transferred from 625:10-1-10 (see Editor's Note at beginning of this Chapter)

Okla. Admin. Code § 85:25-3-11 Branch office closing

(a) A savings and loan may elect to discontinue a branch office with the approval of the Commissioner. In order to gain approval, the savings and loan must:

(1) submit a resolution of its board of directors authorizing the closing;

(2) post a notice of the closing at both the branch location and the main office of the savings and loan for thirty (30) days prior to the closing. Said notice shall state the effective date of the closing and indicate the location of the savings and loan's closest office;

(3) submit an affidavit stating that the notice posting requirement has been met;

(4) either publish notice of the closing once a week for two weeks in a legal newspaper in general circulation in the community where the branch is located or furnish written notice to depositors and safe deposit box holders at the branch to be closed; and

(5) submit a copy of the proof of publication or written notice.

(b) The Commissioner shall approve the branch closing absent grievous and compelling reasons for denial.

History

Transferred from 625:10-1-11 (see Editor's Note at beginning of this Chapter)

Okla. Admin. Code § 85:25-3-12 Loan production offices

An Oklahoma association may utilize employees or agents of the association to originate loans at locations other than the main office or a branch of the association, provided that the loan decision is made at the main office or a branch office of the association.

History

Transferred from 625:10-1-12 (see Editor's Note at beginning of this Chapter)

Okla. Admin. Code § 85:25-3-13 Agencies

All agents of associations shall be subject to direction from the home office. All loans originated at agencies shall be approved at the home office. Without prior approval of the Board, no service corporation or agency owned by or representing a savings and loan association shall directly or indirectly through brokers or others:

(1) Receive applications for, or deposits to, savings accounts or investment securities of any kind at any place within this State;

(2) Assert or imply directly or indirectly or by means of the mail, television, radio, newspapers, magazines or other media that it is an agent or representative with whom savings accounts and investments may be discussed;

(3) Distribute any of its advertising material concerning savings accounts within this state.

History

Transferred from 625:10-1-13 (see Editor's Note at beginning of this Chapter)

Part 3 DEPARTMENTAL REQUIREMENTS FOR REPORTS, REQUESTS AND APPLICATIONS

Okla. Admin. Code § 85:25-3-20 Report of change of chief executive officer

A report to the Commissioner is required when there is a change in the chief executive officer. Such report shall include:

(1) A biographical sketch of individual involved;

(2) A statement of the past and present business affiliations of the proposed Chief Executive Officer;

(3) A financial statement dated within ninety (90) days. This information shall be confidential.

History

Transferred from 625:10-3-1 (see Editor's Note at beginning of this Chapter)

Okla. Admin. Code § 85:25-3-21 Report of change in controlling interest

A report to the Commissioner is required when control of an association changes. Such report shall include:

(1) Number of shares sold and by whom;

(2) Number of shares purchased and by whom;

(3) Cost per share;

(4) Whether or not a loan was obtained by the purchaser for the purpose of purchasing the stock, and if so, the amount, number of shares pledged, other collateral pledged, rate and terms;

(5) A resume of the past business operation and experience of the purchaser(s), together with financial statements dated within six (6) months.

History

Transferred from 625:10-3-2 (see Editor's Note at beginning of this Chapter)

Okla. Admin. Code § 85:25-3-22 Forms available

Oklahoma associations may obtain from the Department the following forms:

(1) Semi-Annual Report of Condition;

(2) Application for Authority to organize a Savings and Loan Association;

(3) Application to Convert from a mutual to a stock association.

History

Transferred from 625:10-3-3 (see Editor's Note at beginning of this Chapter)

Okla. Admin. Code § 85:25-3-23 Filing of copies of applications, petitions, and requests

In addition to the original of every petition, application or request filed with the Commissioner and requiring Board decision, five copies thereof with all exhibits and schedules shall also be filed for the use of the members of the Board.

History

Transferred from 625:10-3-4 (see Editor's Note at beginning of this Chapter)

Okla. Admin. Code § 85:25-3-24 Approval of amendments to articles of incorporation and by-laws

Prior to action upon or approval of amendments to association By-laws or Articles of Incorporation, the Commissioner may require from the association's counsel an opinion that the proposed amendment conforms to all applicable Federal and State laws and regulations, or where the proposed change is not specifically covered by such Federal and State laws and regulations, an opinion wherein the authority for such proposed change may be implied.

History

Transferred from 625:10-3-5 (see Editor's Note at beginning of this Chapter)

Okla. Admin. Code § 85:25-3-25 Change in nomenclature

An Oklahoma association may amend its Articles of Incorporation to change its name to utilize the nomenclature "savings and loan association", or "savings bank", or "savings association" by amending its Articles of Incorporation.

History

Transferred from 625:10-3-6 (see Editor's Note at beginning of this Chapter)

Okla. Admin. Code § 85:25-3-26 Increase in authorized stock/issuance of preferred stock

Any savings and loan association with the written approval of the Commissioner and by vote of stockholders owning two-thirds (2/3) of the stock of the savings and loan entitled to vote, may by proper amendment to its Articles of Incorporation, authorize the issuance of preferred stock or authorize an increase in the common or preferred stock of the savings and loan in the category of authorized but unissued stock. Such authorized but unissued stock may be issued from time to time to employees of the savings and loan, pursuant to a stock option or stock purchase plan adopted in accordance with the Oklahoma Statutes. Authorized but unissued stock may also be issued from time to time for such other purposes and considerations as may be approved by the Board of Directors of the savings and loan and by the written approval of the Commissioner.

History

Transferred from 625:10-3-7 (see Editor's Note at beginning of this Chapter)

Okla. Admin. Code § 85:25-3-27 Criminal referral

In addition to any reports or action required by any federal agency, an immediate written report shall be made by an appropriate officer of the association to the State Bank Commissioner, of any of the following events:

(1) Any known or suspected theft, embezzlement, check-kiting operation, misappropriation, or other defalcation involving association personnel or association funds in any amount. Where there is reason to suspect any person or persons in connection with the event, the identity of such persons and the reason for suspicion shall be included in the report.

(2) Any state of facts growing out of the affairs of the association known or suspected to involve criminal violation of any other section of the United States Code or state law.

(3) Any mysterious disappearance or unexplained shortage of association funds or other assets of $1,000 or more.

History

Transferred from 625:10-3-8 (see Editor's Note at beginning of this Chapter)

Okla. Admin. Code § 85:25-3-28 Bond waiver guidelines

An association seeking a waiver of the bond requirement pursuant to Section 381.34 of the Code must furnish to the Commissioner a letter setting out in detail the reason for the request along with adequate documentation for the Commissioner to make a determination that bonding is either unavailable, economically infeasible, or an imprudent business decision.

History

Transferred from 625:10-3-9 (see Editor's Note at beginning of this Chapter)

Okla. Admin. Code § 85:25-3-29 Deposit and safekeeping fees/dormant property

Each holding of property by an association for a customer in deposit or safe keeping creates a debtor-creditor relationship as provided in the agreement between the association and the customer. Such agreement is a contractual relationship which may be established by the signature card signed only by the customer.

(1) The signature card of a customer of an association is a contract between the association and the customer.

(2) Reasonable fees as determined by policy of the association's board may be charged by an association for any account and safe keeping services even if the specific terms of the contract between the association and the customer are silent with regard to service charges.

(3) Interest on a deposit may or may not be paid on a dormant account as determined by the policy of the association's board even if the specific terms of the contract between the association and the customer are silent with regard to interest.

(4) No state government agency shall examine any accounts or safe keeping records of any association without fifteen (15) days prior written notification of the scope of such examination to the State Bank Commissioner. No charge may be assessed the association for any examination by any such governmental agency and the association is entitled to be paid costs of producing and copying records pursuant to the Oklahoma Financial Privacy Act.

History

Transferred from 625:10-3-10 (see Editor's Note at beginning of this Chapter)

Okla. Admin. Code § 85:25-3-30 Semiannual report of condition

On or before January 31, and July 31, of each year, each association shall complete and return to the Commissioner a full report of its financial condition. Such report must be submitted on forms supplied by the Commissioner; provided, however, that an insured association may at its option file with the Commissioner a completed, verified copy of its report made to the Federal Home Loan Bank Board, in lieu of the Oklahoma form. The failure of an association to file any report or statement required by the Code or the rules of the Board within the stated time shall be cause for the making of a special examination or special audit by an outside accounting firm approved by the Commissioner at the expense of the association.

History

Transferred from 625:10-3-11 (see Editor's Note at beginning of this Chapter)

Okla. Admin. Code § 85:25-3-31 Fees

(a) Deposit fee for application for authority to organize a new charter. In accordance with the provisions of Section 381.16 of the Savings and Loan Code with respect to applications for authority to organize a state savings association, a deposit in the amount of $2,000.00 shall be submitted to the Commissioner with the Application for Authority to Organize. The amount shall be used as a deposit to defray expenses of an investigation and report of the feasibility of the proposed association and other expenses incidental to the consideration of the application. The total fee for the investigation and report of the feasibility shall be charged at the rate prescribed in section 381.15 of the Savings and Loan Code for special examinations. At the conclusion of the investigation the applicant shall pay any amount not satisfied by the deposit.

(b) Application fee to change location. With respect to applications to change location of an association's main office, branch, or detached facility, an application fee in the amount of $2,000.00 shall be submitted to the Commissioner with each Application to move.

(c) Application fee for detached facility. An Application for a Certificate to Maintain and Operate a Detached Facility shall be accompanied by a fee in the amount of $2,000.00.

(d) Application fee for operating subsidiaries. An Application for Approval of an Operating Subsidiary must be accompanied by a check made payable to the Commissioner in the amount of $1,000.00 and a check, in blank, made payable to the Secretary of State for fees due in connection with filing the Certificate of Incorporation.

(e) Application fee for branch. An application fee of $2,000.00 shall accompany each Application for Certificate to Maintain and Operate a Branch.

(f) Other types of applications and fees. The following applications shall be accompanied by a check made payable to the Commissioner in an amount as prescribed below:

(1) Application to Change Name - $250.00

(2) Application to Abandon Trust Powers - $1,500.00

(3) Application to Change Number or Par Value of Shares - $250.00

(4) Application to Exercise Trust Powers - $1,500.00

(g) Debentures or capital notes. Fee for approval of debentures or capital notes - $1,000.00

(h) Fee for merger. In accordance with the provisions of Sections 381.61 and 381.66c of the Banking Code, with respect to the submission of the merger agreement for review, a fee in the amount of $3,500.00 shall be submitted to the Commissioner together with the merger agreement. Such fee shall be in addition to and not in lieu of any branch application fee(s) which may also be required.

(i) Fee for purchase and assumption agreements. In accordance with the provisions of Section 381.63a of the Savings and Loan Code, with respect to the submission of the agreement of purchase and sale for review, a fee in the amount of $3,500.00 shall be submitted to the Commissioner together with the purchase and sale agreement.

(j) Fee for conversion. In connection with conversions applied for under sections 381.50 and 381.60 of the Savings and Loan Code, the converting institution shall pay for a special examination at the rate prescribed in section 381.15 of the Savings and Loan Code.

History

Added at 17 Ok Reg 1707, eff 5-25-00; Transferred from 625:10-3-12 (see Editor's Note at beginning of this Chapter)

Part 5 SUBSTANTIVE GUIDELINES AND RESTRICTIONS

Okla. Admin. Code § 85:25-3-40 Adjustable rate mortgage loans

Savings and loan associations supervised by the Oklahoma Savings and Loan Board are hereby authorized to make, purchase, participate or otherwise deal in adjustable rate mortgage loans.

History

Transferred from 625:10-5-2 (see Editor's Note at beginning of this Chapter)

Okla. Admin. Code § 85:25-3-41 Graduated payment adjustable rate mortgage loans and reverse annuity mortgage loans

State-chartered savings and loan associations are authorized to make, purchase, participate and otherwise deal in graduated payment adjustable mortgage rate loans and reverse annuity mortagage loans and reverse annuity mortgage loans.

History

Transferred from 625:10-5-3 (see Editor's Note at beginning of this Chapter)

Okla. Admin. Code § 85:25-3-42 Investment in a line of credit to homebuilders

Subject to federal law, an Oklahoma state-chartered savings and loan association is authorized to invest an amount in a line of credit to home builders, not exceeding the greater of the sum of its surplus, undivided profits, and reserves or 5 percentum of its assets, in loans or in interests therein, the principal purpose of which is to provide financing with respect to what is or is expected to become primarily residential real estate within one hundred miles of their home office or within the State in which such office is located, where:

(1) the association relies substantially for repayment on the borrower's general credit standing and forecast of income, with or without other security, or

(2) the association relies on other security as collateral for loans, including but not limited to a guaranty or similar obligation of a third party, and in either case described in (1) or (2) of this subsection, regardless of whether or not the association takes a security interest in real estate (whether or not constituting a first lien) as an additional protection.

History

Transferred from 625:10-5-4 (see Editor's Note at beginning of this Chapter)

Okla. Admin. Code § 85:25-3-43 Participation

Insured associations are hereby authorized to buy, sell and hold participating interests in loans subject to the following restrictions:

(1) Both the selling association and purchasing association must maintain satisfactory control over risk from loan participations. Each association must adopt written lending policies and procedures to govern participations and shall keep written documentation of recourse arrangements which outline the rights and obligations of each party.

(2) The selling association shall disclose complete and current credit information on the obligor during the term of the loan.

(3) The purchasing association shall perform an analysis of the credit quality and documentation for obligations to be purchased, shall analyze the value and lien status of the collateral, and shall maintain current and complete credit information on the obligor during the term of the loan.

(4) Failure to meet the requirements of this Section may constitute an unsafe and unsound practice.

History

Transferred from 625:10-5-5 (see Editor's Note at beginning of this Chapter)

Okla. Admin. Code § 85:25-3-44 Lending on stock prohibited

It shall be unlawful for any savings and loan to loan its funds on its stock as collateral security.

History

Transferred from 625:10-5-6 (see Editor's Note at beginning of this Chapter)

Okla. Admin. Code § 85:25-3-45 Loans on property other than homes

Every association shall so control and limit its lending policies that its percentage of non-residential classes of loans to total loans and to total assets shall at all times be within the limits required by the Federal Revenue Act definition of a building and loan association.

History

Transferred from 625:10-5-7 (see Editor's Note at beginning of this Chapter)

Okla. Admin. Code § 85:25-3-46 Loans to officers, directors and affiliated persons

(a) No insured institution or subsidiary thereof may, either directly or indirectly, make a loan to any affiliated person of such institution or purchase such a loan, except for loans in the ordinary course of business of such an institution or subsidiary which do not involve more than the normal risk of collectibility or present other unfavorable features, and which do not exceed the loan amount which would be available to members of the general public of similar credit status applying for loans, of the following types:

(1) Loans secured by the principal residence of an affiliated person;

(2) Loans secured by savings accounts maintained by the affiliated person at the institution; and

(3) Loans for constructing, adding to, improving, altering, repairing, equipping, or furnishing the principal residence of the affiliated person, loans in the form of overdraft protection for NOW accounts, loans for payment of education expenses, consumer loans, and extensions of consumer credit in connection with credit cards.

(b) A loan described in (a)(1) and (a)(3) of this Section must be approved in advance by a resolution duly adopted after full disclosure by at least a majority (with no director having an interest in the transaction voting) of the entire board of directors of such institution. Full disclosure must include whether the loan is made on substantially the same terms, including interest rate and collateral, as those prevailing at the time for comparable loans to members of the general public.

(c) An institution may make loans described in (a) of this Section at an interest rate not below its current cost of funds, including all savings accounts and borrowings [except that in the case of a loan secured by a savings account, the interest rate shall be at least one percent above the rate of return on the savings account]: Provided, That the resolution required by (b) of this Section must set forth:

(1) The institution's current cost of funds, including the elements of its computation; and

(2) A justification of the more favorable rate, if the loan is to an affiliated person other than a salaried officer or employee of the institution or its subsidiary.

(d) With respect to a loan described by (a) of this Section made to a salaried officer or employee of the institution or its subsidiary, the approval requirement of (b) of this Section will be satisfied if the loan conforms with a blanket-preapproval resolution of the board specifying the terms on which loans may be made to all officers or employees, or a class of such officers or employees, and the loan documents set forth the institution's current cost of funds, including the elements of its computation. An insured institution may not use a blanket-preapproval resolution to make loans described by (a)(3) of this Section to a single affiliated person in excess of $100,000 in the aggregate.

(e) An insured institution may extend credit for commercial purposes to an affiliated person which may in no event exceed an aggregate of $100,000. Any such extension of credit shall not involve more than the normal risk of collectibility or present other unfavorable features, and must be at terms, amount, and interest rate substantially the same as those prevailing at the same time for comparable loans made to members of the general public of similar credit status. An insured institution must comply with the requirements of (b) of this Section with respect to any extensions of commercial credit exceeding an aggregate amount of $10,000. An insured institution shall at the time of approval by the board of directors of such a transaction notify its Supervisory Agent of the transaction and all other outstanding extensions of commercial credit to the affiliated person.

(f) No insured institution or subsidiary thereof may invest, either directly or indirectly, in the stock, bonds, notes, or other securities of any affiliated person of such institution.

(g) No insured institution or subsidiary thereof may, either directly or indirectly, purchase securities under a repurchase agreement from any affiliated person of such institution.

(h) No insured institution or subsidiary thereof may, either directly or indirectly:

(1) Make a loan to, or purchase (other than through a secondary market such as the Federal Home Loan Mortgage Corporation) any loan made to any third party on the security of real property purchased from any affiliated person of such institution, unless the property was a single-family dwelling owned and occupied by the affiliated person as his principal residence;

(2) Make a loan to, or purchase a loan made to, any third party secured by real property with respect to which any affiliated person of such institution holds a security interest;

(3) Accept the stock, bonds, notes, or other securities of any affiliated person of such institution as security for a loan to any third party made or purchased by such institution or subsidiary thereof;

(4) Maintain a compensating balance with respect to a loan made by any third party to any affiliated person of such institution; or

(5) Enter into any guarantee arrangement or make any takeout commitment with respect to a loan made by any third party to any affiliated person of such institution.

History

Transferred from 625:10-5-8 (see Editor's Note at beginning of this Chapter)

Okla. Admin. Code § 85:25-3-47 Mobile home financing

The total investment, exclusive of unearned discount and prepaid insurance of an association in mobile home loans shall not exceed 10% of its assets exclusive of unearned interest account. An investment in mobile home loans to a dealer shall not exceed 100% of the invoice price of each unit and its equipment, excluding freight over $200.00, in the case of a new mobile home, and shall not exceed 90% of the wholesale value of each used unit, as established in the dealer's market. An investment in a mobile home loan other than to a dealer shall not exceed 90% of the reasonable retail value of the unit and equipment; and such investment shall be made only if the mobile home is to be maintained as a residence of the purchaser or a relative of the purchaser. In the case of all mobile home financing, the association shall in timely manner take all steps necessary to perfect its security interest under applicable law; however, in no instance is this Section to be construed to be more restrictive than provided in 12 C.F.R. $545.45.

History

Transferred from 625:10-5-9 (see Editor's Note at beginning of this Chapter)

Okla. Admin. Code § 85:25-3-48 Loss reserve requirements

All associations shall maintain a loss reserve account and a net worth position at not less than amounts required by the Office of Thrift Supervision.

History

Transferred from 625:10-5-10 (see Editor's Note at beginning of this Chapter)

Okla. Admin. Code § 85:25-3-49 Variable and extra rate savings accounts

Equality of earnings payable with respect to classes of savings accounts of associations is not required by the Code, and any association, by adoption of appropriate by-laws and resolutions of its board of directors, may classify its savings accounts according to the character, amount or duration thereof, and to issue special classes of savings accounts, having required minimum amounts and minimum duration periods including ninety (90) day notice accounts, with respect to which the association may pay higher rates of interest than its regular rate and with respect to which interest may or may not be payable on dates other than the association's regular distribution dates. Insured associations must meet the requirements of the Office of Thrift Supervision with respect to extra rate or variable rate plans, and other associations adopting any such plans will be required by the Board to meet requirements equivalent to those applicable to insured associations. An association which is not a deposit association may not issue a fixed term savings account bearing a fixed contract rate.

History

Transferred from 625:10-5-11 (see Editor's Note at beginning of this Chapter)

Okla. Admin. Code § 85:25-3-50 Transfer of shares

Any owner of any of the shares of the capital stock of an association may make disposition of such shares by written assignment endorsed upon the certificates of stock and by delivery of same, but no such assignment shall be effectual to transfer title to such shares of stock until same are transferred upon the stock books of the corporation.

History

Transferred from 625:10-5-12 (see Editor's Note at beginning of this Chapter)

Okla. Admin. Code § 85:25-3-51 Safe deposit boxes

Each association which provides safe deposit box services for its customers shall:

(1) Maintain a record as to the lessee(s) of each box rented.

(2) Maintain a record as to the person or persons permitted to enter the box.

(3) Maintain a record with minimum data consisting of names of entries into the box and dates of entry.

(4) Establish other precautionary procedures as may be deemed advisable by the association's board of directors to insure adequate safety to the lessees with a minimum of liability on the association.

History

Transferred from 625:10-5-13 (see Editor's Note at beginning of this Chapter)

Okla. Admin. Code § 85:25-3-52 Letter of credit

In order that the books and records of an association reflect its contingent liabilities, the association shall properly maintain records on all letters of credit issued and outstanding showing the following information:

(1) Controlled registration numbering system;

(2) Name of the account party for whom the letter of credit is established;

(3) the name of the beneficiary;

(4) the amount;

(5) the expiration date;

(6) the terms under which payment is authorized;

(7) the notes and/or collateral posted by the account party to back the letter of credit.

History

Transferred from 625:10-5-14 (see Editor's Note at beginning of this Chapter)

Part 7 MERGERS AND CONVERSIONS

Okla. Admin. Code § 85:25-3-60 Mergers

(a) Applications for merger between existing associations shall be conducted as an individual proceeding as defined in the Administrative Procedures Act.

(b) Consideration of a proposed merger shall not be given until the Board shall have received an evaluation of the legality of the proposed merger with respect to applicable Federal and State regulations concerning restraint of trade from the associations' counsel. The Board shall require sufficient detailed data as will enable it to evaluate the competitive and economic impact of the proposed merger.

(c) Information shall be submitted in support of the proposed merger which details and evaluates market concentrations, the resultant assets of the merged institution, number and distribution of competitors, actual or potential competition significantly curtailed by the merger, market concentration, overlap of markets, adequacy of the number of institutions meeting or failing to meet population, savings and mortgage requirements, economy of operation and management, service to the public, the convenience and needs of the communities to be served in terms of savings facilities, types of loans available, and the impact, if any, on the operating efficiency of the resulting institution.

(d) Applications for mergers shall be in a form and shall include, but not necessarily be limited to, compliance with those regulations affecting mergers among federally chartered associations.

History

Transferred from 625:10-7-1 (see Editor's Note at beginning of this Chapter)

Okla. Admin. Code § 85:25-3-61 Conversion from mutual to stock savings & loan association

(a) In order to convert from a mutual to a stock association, the association must first file Notice of Intent to Convert with the Commissioner which shall contain the following:

(1) Resolution to convert adopted by two-thirds (2/3) of the board of directors of the applicant and the proposed plan of conversion;

(2) Proposed Articles of Incorporation and by-laws;

(3) Opinion Letter from Counsel representing the filing association that:

(A) the proposed plan of conversion, Resolution, Articles and by-laws are in proper legal form and comply with the Oklahoma Statutes applicable to conversion; and

(B) Opinion Letter from Counsel or Tax Counsel showing the conversion will not be a taxable event under the provisions of the Internal Revenue Code;

(4) Such financial information relative to the association and the directors and officers as required by the Commissioner.

(b) The Commissioner shall, within thirty (30) days of receipt of the material, determine whether or not the Notice of Intent is complete.

(1) If such Notice is incomplete, the Commissioner shall return the Notice to the applicant advising of the deficiencies;

(2) If the Notice is complete, the Commissioner shall notify the applicant of its acceptance, and shall set the matter for hearing.

(c) Within sixty (60) days after the filing of the Notice of Intent to Convert, the Board shall hold a hearing. At the time of the hearing, the applicant shall submit the following documents to the Board:

(1) Plan of Conversion;

(2) Proxy statements and Offering Circular;

(3) The savings account balance of association's directors and officers as of the record date;

(4) The expenses expected to be incurred in the conversion.

(d) The Plan shall provide:

(1) That the proposed institution sell and issue its capital stock at a total price equal to market value and also contain the method to be used in determining this market value in a reasonable manner;

(2) That no person, associate of a person, as defined in Section 381.50 of the Code, alone, or acting in concert with another person or associate of a person, may subscribe for more than 20% of the total amount of the capital stock offering as determined by (1) of this subsection unless expressly permitted by the Board;

(3) That at the expiration of three (3) years, there is no limit on the ownership of the stock;

(4) That the subscription price of the shares of capital stock to be sold shall be at a uniform price and specific arrangements are to be made to assure the sale of all shares not sold in the subscription offering;

(5) That the account holders who opened their account after the record date and prior to the members' meeting held to vote on the Plan of Conversion, have an opportunity to subscribe for any capital stock not sold on the initial offering. Officers and directors would not be eligible for this subscription;

(6) That all shares of capital stock purchased by directors and officers on the original issue in the conversion, either directly or from an underwriter, shall not be sold for a period not less than one (1) year following purchase, except in the event of death of the director or officer;

(7) The converted institution would have legal and federal insurance reserves of not less than 5% of savings deposits.

(8) The Proxy information shall be included.

(e) If the Board determines that the Plan is complete and that same is fair and equitable to all members and that sufficient provisions are made to protect the interests of the depositors of the prospective capital stock association in accordance with 18 O.S. Section 381.50(B), it shall grant conditional approval to applicant.

(f) The applicant shall within sixty (60) days after the conditional approval is given, file with the Commissioner:

(1) A Certificate from the secretary or assistant secretary of the applicant that the Plan of Conversion was adopted in conformity with Section 381.50 of the Code, together with a tally of the votes cast for and against;

(2) Certified copy of Articles of Incorporation (or amended Articles of Incorporation), which have been filed with the Secretary of State;

(3) Certified copy of the by-laws of the Corporation which have been adopted by the shareholders or directors;

(4) Approval of conversion by the Federal Home Loan Bank, and Federal Savings & Loan Insurance Corporation;

(5) A statement of expenses.

(g) Applicant shall certify that all the information included in the Notice of Intent to Convert is still applicable.

(h) The Commissioner shall without further notice, hearing or action by the Board, file the approved Resolution with the Secretary of State and the conversion shall be completed in accordance with Section 381.50 of the Code.

(i) In the event any change has occurred in the Board membership, additional financial information may be required.

(j) Notice of hearings will be given as required by the Administrative Procedures Act and Rule 625:1-1-7.

(k) If a savings and loan association shall fail to commence business within six (6) months after the issuance of the Certificate of Authority, or any additional period allowed by the Board, the Commissioner shall cancel its Certificate of Authority; however, permission is hereby granted to the Commissioner to give additional extensions of time in which the savings and loan shall commence business if the reasons are valid, and in the opinion of the Commissioner, are reasonable, after approval by the Board.

History

Transferred from 625:10-7-2 (see Editor's Note at beginning of this Chapter)

Title 365 Insurance Department

Chapter 25 Other Licensees

Subchapter 23 Cemetery Merchandise Trusts

Okla. Admin. Code § 365:25-23-1 Purpose

The purpose of this subchapter is to set forth rules and procedural requirements which the Commissioner deems necessary to carry out the provisions of the Cemetery Merchandise Trust Act. The information called for by the regulations of this subchapter is hereby declared to be necessary and appropriate in the public interest.

History

Added at 28 Ok Reg 214, eff 10-19-10 (emergency); Added at 28 Ok Reg 1964, eff 7-14-11

Title 625 Oklahoma Savings and Loan Board

Chapter 1 Procedural Rules and Definitions [Transferred]

Okla. Admin. Code § 625:1-1-1 Purpose [TRANSFERRED]

History

Transferred to 85:25-1-1 (see Editor's Note at beginning of this Title)

Okla. Admin. Code § 625:1-1-2 Definitions and references to statutes [TRANSFERRED]

History

Transferred to 85:25-1-2 (see Editor's Note at beginning of this Title)

Okla. Admin. Code § 625:1-1-3 General procedures [TRANSFERRED]

History

Transferred to 85:25-1-3 (see Editor's Note at beginning of this Title)

Okla. Admin. Code § 625:1-1-4 Record of proceedings [TRANSFERRED]

History

Transferred to 85:25-1-4 (see Editor's Note at beginning of this Title)

Okla. Admin. Code § 625:1-1-5 Service of pleadings [TRANSFERRED]

History

Transferred to 85:25-1-5 (see Editor's Note at beginning of this Title)

Okla. Admin. Code § 625:1-1-6 Commencement of proceeding; intervention and consolidation [TRANSFERRED]

History

Transferred to 85:25-1-6 (see Editor's Note at beginning of this Title)

Okla. Admin. Code § 625:1-1-7 Notice of hearing [TRANSFERRED]

History

Transferred to 85:25-1-7 (see Editor's Note at beginning of this Title)

Okla. Admin. Code § 625:1-1-8 Continuances [TRANSFERRED]

History

Transferred to 85:25-1-8 (see Editor's Note at beginning of this Title)

Okla. Admin. Code § 625:1-1-9 Depositions and discovery [TRANSFERRED]

History

Transferred to 85:25-1-9 (see Editor's Note at beginning of this Title)

Okla. Admin. Code § 625:1-1-10 Examiner testimony [TRANSFERRED]

History

Transferred to 85:25-1-10 (see Editor's Note at beginning of this Title)

Okla. Admin. Code § 625:1-1-11 Examination report confidentiality [TRANSFERRED]

History

Transferred to 85:25-1-11 (see Editor's Note at beginning of this Title)

Okla. Admin. Code § 625:1-1-12 Pre-hearing conference [TRANSFERRED]

History

Transferred to 85:25-1-12 (see Editor's Note at beginning of this Title)

Okla. Admin. Code § 625:1-1-13 Witnesses [TRANSFERRED]

History

Transferred to 85:25-1-13 (see Editor's Note at beginning of this Title)

Okla. Admin. Code § 625:1-1-14 Hearings [TRANSFERRED]

History

Transferred to 85:25-1-14 (see Editor's Note at beginning of this Title)

Okla. Admin. Code § 625:1-1-15 Description of Board organization and operations [TRANSFERRED]

History

Transferred to 85:25-1-15 (see Editor's Note at beginning of this Title)

Okla. Admin. Code § 625:1-1-16 Petition for promulgation, amendment or repeal of a rule [TRANSFERRED]

History

Transferred to 85:25-1-16 (see Editor's Note at beginning of this Title)

Okla. Admin. Code § 625:1-1-17 Hearing on the removal of an officer, director or employee [TRANSFERRED]

History

Transferred to 85:25-1-17 (see Editor's Note at beginning of this Title)

Chapter 10 Supervision, Regulation and Administration [Transferred]

Subchapter 1 Charters, Branches, Agencies, Loan Production Offices, and Service Corporations [Transferred]

Okla. Admin. Code § 625:10-1-1 Purpose [TRANSFERRED]

History

Transferred to 85:25-3-1 (see Editor's Note at beginning of this Title)

Okla. Admin. Code § 625:10-1-2 Definitions [TRANSFERRED]

History

Transferred to 85:25-3-2 (see Editor's Note at beginning of this Title)

Okla. Admin. Code § 625:10-1-3 Application for new charter [TRANSFERRED]

History

Transferred to 85:25-3-3 (see Editor's Note at beginning of this Title)

Okla. Admin. Code § 625:10-1-4 Minimum number of members for chartering a mutual association [TRANSFERRED]

History

Transferred to 85:25-3-4 (see Editor's Note at beginning of this Title)

Okla. Admin. Code § 625:10-1-5 Offering circular use in chartering process [TRANSFERRED]

History

Transferred to 85:25-3-5 (see Editor's Note at beginning of this Title)

Okla. Admin. Code § 625:10-1-6 Trusteed stock [TRANSFERRED]

History

Transferred to 85:25-3-6 (see Editor's Note at beginning of this Title)

Okla. Admin. Code § 625:10-1-7 Disclosure of contracts with the proposed association [TRANSFERRED]

History

Transferred to 85:25-3-7 (see Editor's Note at beginning of this Title)

Okla. Admin. Code § 625:10-1-8 Limitation on de novo association ownership [TRANSFERRED]

History

Transferred to 85:25-3-8 (see Editor's Note at beginning of this Title)

Okla. Admin. Code § 625:10-1-9 Application for establishing or relocating a branch office or detached facility [TRANSFERRED]

History

Amended at 17 Ok Reg 1707, eff 5-25-00; Transferred to 85:25-3-9 (see Editor's Note at beginning of this Title)

Okla. Admin. Code § 625:10-1-9.1 Relocation of branch office [REVOKED]

History

Added at 8 Ok Reg 3291, eff 7-1-91 (emergency); Added at 9 Ok Reg 1667, eff 5-11-92; Revoked at 17 Ok Reg 1707, eff 5-25-00

Okla. Admin. Code § 625:10-1-10 Branch office operations [TRANSFERRED]

History

Transferred to 85:25-3-10 (see Editor's Note at beginning of this Title)

Okla. Admin. Code § 625:10-1-11 Branch office closing [TRANSFERRED]

History

Transferred to 85:25-3-11 (see Editor's Note at beginning of this Title)

Okla. Admin. Code § 625:10-1-12 Loan production offices [TRANSFERRED]

History

Transferred to 85:25-3-12 (see Editor's Note at beginning of this Title)

Okla. Admin. Code § 625:10-1-13 Agencies [TRANSFERRED]

History

Transferred to 85:25-3-13 (see Editor's Note at beginning of this Title)

Subchapter 3 Departmental Requirements for Reports, Requests and Applications [Transferred]

Okla. Admin. Code § 625:10-3-1 Report of change of chief executive officer [TRANSFERRED]

History

Transferred to 85:25-3-20 (see Editor's Note at beginning of this Title)

Okla. Admin. Code § 625:10-3-2 Report of change in controlling interest [TRANSFERRED]

History

Transferred to 85:25-3-21 (see Editor's Note at beginning of this Title)

Okla. Admin. Code § 625:10-3-3 Forms available [TRANSFERRED]

History

Transferred to 85:25-3-22 (see Editor's Note at beginning of this Title)

Okla. Admin. Code § 625:10-3-4 Filing of copies of applications, petitions, and requests [TRANSFERRED]

History

Transferred to 85:25-3-23 (see Editor's Note at beginning of this Title)

Okla. Admin. Code § 625:10-3-5 Approval of amendments to articles of incorporation and by-laws [TRANSFERRED]

History

Transferred to 85:25-3-24 (see Editor's Note at beginning of this Title)

Okla. Admin. Code § 625:10-3-6 Change in nomenclature [TRANSFERRED]

History

Transferred to 85:25-3-25 (see Editor's Note at beginning of this Title)

Okla. Admin. Code § 625:10-3-7 Increase in authorized stock/issuance of preferred stock [TRANSFERRED]

History

Transferred to 85:25-3-26 (see Editor's Note at beginning of this Title)

Okla. Admin. Code § 625:10-3-8 Criminal referral [TRANSFERRED]

History

Transferred to 85:25-3-27 (see Editor's Note at beginning of this Title)

Okla. Admin. Code § 625:10-3-9 Bond waiver guidelines [TRANSFERRED]

History

Transferred to 85:25-3-28 (see Editor's Note at beginning of this Title)

Okla. Admin. Code § 625:10-3-10 Deposit and safekeeping fees/dormant property [TRANSFERRED]

History

Transferred to 85:25-3-29 (see Editor's Note at beginning of this Title)

Okla. Admin. Code § 625:10-3-11 Semiannual report of condition [TRANSFERRED]

History

Transferred to 85:25-3-30 (see Editor's Note at beginning of this Title)

Okla. Admin. Code § 625:10-3-12 Fees [TRANSFERRED]

History

Added at 17 Ok Reg 1707, eff 5-25-00; Transferred to 85:25-3-31 (see Editor's Note at beginning of this Title)

Subchapter 5 Substantive Guidelines and Restrictions [Transferred]

Okla. Admin. Code § 625:10-5-1 Powers of federal associations granted to state associations [REVOKED]

History

Revoked at 17 Ok Reg 1707, eff 5-25-00

Okla. Admin. Code § 625:10-5-2 Adjustable rate mortgage loans [TRANSFERRED]

History

Transferred to 85:25-3-40 (see Editor's Note at beginning of this Title)

Okla. Admin. Code § 625:10-5-3 Graduated payment adjustable rate mortgage loans and reverse annuity mortgage loans [TRANSFERRED]

History

Transferred to 85:25-3-41 (see Editor's Note at beginning of this Title)

Okla. Admin. Code § 625:10-5-4 Investment in a line of credit to homebuilders [TRANSFERRED]

History

Transferred to 85:25-3-42 (see Editor's Note at beginning of this Title)

Okla. Admin. Code § 625:10-5-5 Participation [TRANSFERRED]

History

Transferred to 85:25-3-43 (see Editor's Note at beginning of this Title)

Okla. Admin. Code § 625:10-5-6 Lending on stock prohibited [TRANSFERRED]

History

Transferred to 85:25-3-44 (see Editor's Note at beginning of this Title)

Okla. Admin. Code § 625:10-5-7 Loans on property other than homes [TRANSFERRED]

History

Transferred to 85:25-3-45 (see Editor's Note at beginning of this Title)

Okla. Admin. Code § 625:10-5-8 Loans to officers, directors and affiliated persons [TRANSFERRED]

History

Transferred to 85:25-3-46 (see Editor's Note at beginning of this Title)

Okla. Admin. Code § 625:10-5-9 Mobile home financing [TRANSFERRED]

History

Transferred to 85:25-3-47 (see Editor's Note at beginning of this Title)

Okla. Admin. Code § 625:10-5-10 Loss reserve requirements [TRANSFERRED]

History

Transferred to 85:25-3-48 (see Editor's Note at beginning of this Title)

Okla. Admin. Code § 625:10-5-11 Variable and extra rate savings accounts [TRANSFERRED]

History

Transferred to 85:25-3-49 (see Editor's Note at beginning of this Title)

Okla. Admin. Code § 625:10-5-12 Transfer of shares [TRANSFERRED]

History

Transferred to 85:25-3-50 (see Editor's Note at beginning of this Title)

Okla. Admin. Code § 625:10-5-13 Safe deposit boxes [TRANSFERRED]

History

Transferred to 85:25-3-51 (see Editor's Note at beginning of this Title)

Okla. Admin. Code § 625:10-5-14 Letter of credit [TRANSFERRED]

History

Transferred to 85:25-3-52 (see Editor's Note at beginning of this Title)

Subchapter 7 Mergers and Conversions [Transferred]

Okla. Admin. Code § 625:10-7-1 Mergers [TRANSFERRED]

History

Transferred to 85:25-3-60 (see Editor's Note at beginning of this Title)

Okla. Admin. Code § 625:10-7-2 Conversion from mutual to stock savings & loan association [TRANSFERRED]

History

Transferred to 85:25-3-61 (see Editor's Note at beginning of this Title)