1983-1984 Bill 3743: Enact the "South Carolina Bank Holding Act"

South Carolina General Assembly
105th Session, 1983-1984

Bill 3743

                    Current Status

Bill Number:               3743
Ratification Number:       456
Act Number:                395
Introducing Body:          House
Subject:                   Enact the "South Carolina Bank Holding
                           Act"

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(Text matches printed bills. Document has been reformatted to meet World Wide Web specifications.)

(A395, R456, H3743)

AN ACT TO AMEND TITLE 34, CODE OF LAWS OF SOUTH CAROLINA, 1976, RELATING TO BANKING, FINANCIAL INSTITUTIONS, AND MONEY, BY ADDING CHAPTER 24 SO AS TO ENACT THE "SOUTH CAROLINA BANK HOLDING ACT" WHICH PROVIDES A UNIFIED AND ORDERLY METHOD OF PERMITTING LIMITED INTERSTATE BANKING ON A RECIPROCAL REGIONAL BASIS IN THE SOUTHERN REGION; TO AMEND CHAPTER 25 OF TITLE 34, RELATING TO BUILDING AND LOAN OR SAVINGS AND LOAN ASSOCIATIONS, BY ADDING SECTIONS 34-25-400 THROUGH 34-25-490 SO AS TO PROVIDE FOR A UNIFIED AND ORDERLY METHOD OF PERMITTING INTERSTATE ACQUISITIONS INVOLVING SOUTH CAROLINA AND SOUTHERN REGION SAVINGS AND LOAN HOLDING COMPANIES AND SAVINGS AND LOAN ASSOCIATIONS AND OTHER INSTITUTIONS WHOSE DEPOSITS ARE ELIGIBLE TO BE INSURED BY THE FEDERAL SAVINGS AND LOAN INSURANCE CORPORATION ON A RECIPROCAL REGIONAL BASIS IN THE SOUTHERN REGION; TO AMEND CHAPTER 27 OF TITLE 34, RELATING TO COOPERATIVE CREDIT UNIONS, BY ADDING SECTION 34-27-290 SO AS TO AUTHORIZE STATE-CHARTERED CREDIT UNIONS TO OPERATE BRANCHES IN OTHER STATES; TO AMEND SECTION 34-1-20, AS AMENDED, RELATING TO THE STATE BOARD OF FINANCIAL INSTITUTIONS, SO AS TO DELETE THE REQUIREMENT THAT A MEMBER BE AFFILIATED WITH A STATE-CHARTERED ASSOCIATION OR INSTITUTION, EXCEPT FOR CONSUMER REPRESENTATIVES; TO PROVIDE FOR FINES AND PENALTIES; AND TO REPEAL CHAPTER 23 OF TITLE 34, RELATING TO BANK HOLDING COMPANIES, AND ALL LAWS IN CONFLICT WITH THIS ACT, CONDITIONAL UPON THE PROVISIONS OF CHAPTERS 24 AND 25 ADDED BY THIS ACT NOT BEING HELD INVALID OR UNCONSTITUTIONAL BY A NONAPPEALABLE ORDER OF ANY SOUTH CAROLINA COURT OR FEDERAL COURT OF LAST RESORT.

Be it enacted by the General Assembly of the State of South Carolina:

South Carolina Bank Holding Company Act

SECTION 1. Title 34 of the 1976 Code is amended by adding:

"Chapter 24

South Carolina Bank Holding Company Act

Section 34-24-10. [Short title]. This chapter may be cited as 'The South Carolina Bank Holding Company Act'.

Section 34-24-20. [Definitions]. As used in this chapter the term:

(1) 'Acquire', as applied to a bank holding company, means any of the following actions or transactions:

(A) The merger or consolidation of the bank holding company with another bank holding company;

(B) The acquisition of the direct or indirect ownership or control of voting shares of another bank holding company or bank if, after the acquisition, the bank holding company will directly or indirectly own or control more than five percent of any class of voting shares of the bank holding company or bank;

(C) The direct or indirect acquisition of all or substantially all of the assets of another bank holding company or bank; or

(D) The taking of any other action that would result in the direct or indirect control of another bank holding company or bank.

(2) 'Bank' means any insured institution as the term is defined in Section 3(h) of the Federal Deposit Insurance Act, 12 U.S.C. Section 1813(h), or any institution eligible to become an insured institution as the term is defined therein, which, in either event:

(A) Accepts deposits that the depositor has a legal right to withdraw on demand; and

(B) Engages in the business of making commercial loans.

(3) 'Banking office' means any office at which a bank accepts deposits. The term banking office does not include, however, the following:

(A) Unmanned automatic teller machines, point-of-sale terminals, or other similar unmanned electronic banking facilities at which deposits may be accepted;

(B) Offices located outside the United States; or

(4) 'Bank holding company' means any company which is a bank holding company under Section 2(a) of the federal Bank Holding Company Act of 1956, as amended, 12 U.S.C. Section 1841(a).

(5) 'Board' means the State Board of Financial Institutions.

(6) 'Company' means any corporation, partnership, business trust, association, or similar organization or any other trust unless by its terms it shall terminate within twenty-five years or not later than twenty-one years and ten months after the death of individuals living on the effective date of the trust, but does not include any corporation the majority of the shares of which are owned by the United States or by any state.

(7) 'Control' means that which is set forth in Section 2 of the federal Bank Holding Company Act of 1956, as amended, 12 U.S.C. Section 1841.

(8) 'Deposits' means, with respect to a bank, all demand, time, and savings deposits of individuals, partnerships, corporations, the United States government, states and political subdivisions in the United States, and other entities, exclusive of deposits (a) by foreign governments and official institutions, (b) by banks, (c) in foreign banking offices and (d) in its Edge Act bank subsidiaries organized pursuant to Section 25 or Section 25(a) of the Federal Reserve Act, as amended, 12 U.S.C. Section 601 or Sections 611 through 631. Determinations of deposits must be made by reference to regulatory reports of condition or similar reports filed by the bank with state or federal regulatory authorities.

(9) 'Principal place of business' of a bank holding company means the state in which the aggregate deposits of the bank subsidiaries of the bank holding company are the largest.

(10) 'South Carolina bank' means a bank organized under the laws of the State of South Carolina or of the United States and, in either event, having banking offices located only in the State of South Carolina.

(11) 'South Carolina bank holding company' means a bank holding company that:

(A) Has its principal place of business in the State of South Carolina;

(B) Has total deposits of its Southern Region bank subsidiaries and South Carolina bank subsidiaries that exceed eighty percent of the total deposits of all bank subsidiaries of the bank holding company other than those bank subsidiaries held under subsection (a) of Section 34-24-60; and

(12) 'Southern Region states' means the states of Alabama, Arkansas, Florida, Georgia, Kentucky, Louisiana, Maryland, Mississippi, North Carolina, South Carolina, Tennessee, Virginia, West Virginia, and the District of Columbia.

(13) 'Southern Region bank' means a bank other than a South Carolina bank organized under the laws of one of the Southern Region states or of the United States and, in either event, having banking offices only in the Southern Region states.

(14) 'Southern Region bank holding company' means a bank holding company that:

(A) Has its principal place of business in a Southern Region state other than the State of South Carolina;

(15) 'State' means one of the states of the Union and the District of Columbia.

(16) 'Subsidiary' means that which is set forth in Section 2 of the federal Bank Holding Company Act of 1956, as amended, 12 U.S.C. Section 1841.

Section 34-24-30. [Acts requiring prior approval of the Board]. With the prior approval of the Board in accordance with Section 34-24-50 and upon receipt of approval from all other applicable state and federal regulatory authorities having approval authority over the transaction:

(1) A company may become a South Carolina bank holding company;

(2) A South Carolina bank holding company may acquire a South Carolina bank or another South Carolina bank holding company;

(3) A South Carolina bank holding company may acquire a Southern Region bank or a Southern Region bank holding company;

(4) A South Carolina bank holding company may acquire a bank or bank holding company having banking offices which are located outside the Southern Region as authorized under subsection (b) of Section 34-24-60;

(5) A Southern Region bank holding company may acquire a South Carolina bank or a South Carolina bank holding company; and

(6) A Southern Region bank holding company may acquire a Southern Region bank holding company having a South Carolina bank subsidiary.

Section 34-24-40. [Bank holding company acquisitions not requiring prior approval]. Without any prior approval of the Board, a Southern Region bank holding company having a South Carolina bank subsidiary may acquire a Southern Region bank holding company that does not have a South Carolina bank subsidiary, may acquire a Southern Region bank, or to the extent authorized by subsection (b) of Section 34-24-60 may acquire a bank or bank holding company having banking offices which are located outside the Southern Region. The Southern Region bank holding company shall notify the Board at least thirty days prior to the consummation of the proposed transaction. The notification requirements of this section are satisfied by furnishing the Board with a copy of the completed application or applications seeking approval for the proposed transaction which are filed with the federal bank regulatory authority or authorities.

Section 34-24-50. [Applications to the Board for approval]. (a) The Board may not approve any proposed transaction set forth in Section 34-24-30:

(1) Which would result in a monopoly, or which would be in furtherance of any combination or conspiracy to monopolize or to attempt to monopolize the business of banking in this State; or

(2) Whose effect in this State may be substantially to lessen competition, or to tend to create a monopoly, or which in any other manner would be in restraint of trade, unless the Board finds that the anticompetitive effects of the proposed transaction are clearly outweighed in the public interest by the probable effect of the transaction in meeting the convenience and needs of thecommunity to be served; and

(3) Which does not meet the requirements set forth in subsection (b) of this section, if applicable.

In every case, the Board shall take into consideration the financial and managerial resources and future prospects of the company and the banks concerned and the convenience and needs of the communities to be served. Whenever the transaction must be approved by one or more regulatory agencies of the United States Government under criteria substantially similar to the criteria in this subsection, the Board shall delay its determination until after receipt of the ruling by the applicable federal regulatory agencies and if the proposed transaction is approved, then the approval is conclusive on the Board with respect to the criteria unless the Board finds that the determination made by the federal regulatory agency is not supported by evidence that is substantial when viewed in light of the whole record considered by the federal agency. In the event the Board denies the application under this subsection, it shall issue a ruling stating the specific reasons why it disagrees with the approval determination made by the applicable federal regulatory agency.

(b) Whenever an application is filed by a Southern Region bank holding company not having a South Carolina bank subsidiary (other than a South Carolina bank acquired pursuant to Section 34-24-60) to acquire either a South Carolina bank, a South Carolina bank holding company, or a Southern Region bank holding company having a South Carolina bank subsidiary, the Board shall approve the application if the proposed transaction is approved under subsection (a) and if in addition:

(1) the laws of the state in which the Southern Region bank holding company filing the application has its principal place of business permit South Carolina bank holding companies to acquire banks and bank holding companies in that state;

(2) Under the laws of the state where it has its principal place of business, the Southern Region bank holding company filing the application could be acquired by the South Carolina bank holding company, or, assuming solely for the purposes of this paragraph that the South Carolina bank sought to be directly or indirectly acquired in the proposed transaction was a South Carolina bank holding company, the Southern Region bank holding company could be acquired by the South Carolina bank;

(3) any conditions, restrictions, and requirements (other than regulations or requirements relating to the procedural steps necessary for approval of acquisitions) that would apply to the acquisition by a South Carolina bank holding company of a bank or bank holding company in the state where the Southern Region bank holding company has its principal place of business, which would not apply to acquisitions by bank holding companies all of whose banking subsidiaries are located in that state must be applicable to the transaction proposed by the Southern Region bank holding company filing the application; and

(4) each South Carolina bank sought to be acquired directly or indirectly in the proposed transaction has been in existence and continuously operated as a bank for a period of five years or more prior to the date the application for approval of the transaction was filed with the Board. This requirement does not prohibit a Southern Region bank holding company from acquiring all or substantially all of the shares of a South Carolina bank organized solely for the purpose of facilitating the acquisition of a South Carolina bank that has been in existence and continuously operated as a bank for the requisite five-year period.

(c) The Board shall rule on any application requiring approval under this section not later than ninety days following the date of submission of a completed application seeking approval of the proposed transaction. If the Board fails to rule on the application within the requisite ninety-day period, the proposed transaction is approved. Whenever the Board is required to delay its ruling until after a ruling on the approval of the application by one or more federal regulatory agencies pursuant to subsection (a), the Board shall rule on the application within thirty days following the receipt of the federal ruling, and if the Board fails to rule on the application within this thirty-day period, the proposed transaction is approved.

(d) The applicant is entitled to notice and a hearing contesting the denial by the Board of any application.

Section 34-24-60. [Permissible nondisqualifying acquisitions]. (a) A Southern Region Bank, a Southern Region bank holding company, a South Carolina bank, or a South Carolina bank holding company may acquire or control, and does not cease to be a Southern Region bank, Southern Region bank holding company, South Carolina bank, or South Carolina bank holding company, respectively, by virtue of its acquisition or control of the institutions described in items (1) through (3) as follows:

(1) A bank having offices in a state other than a Southern Region state, if the acquisition has been consummated pursuant to the provisions of Section 116 or 123 of the Garn-St. Germain Depository Institutions Act of 1982, 12 U.S.C. Section 1823(f) or 1730a(m);

(2) A bank having banking offices in a state other than a Southern Region state, if the acquisition has been consummated in the regular course of securing or collecting a debt previously contracted in good faith, as provided in Section 3(a) of the federal Bank Holding Company Act of 1956, as amended, 12 U.S.C. Section 1842(a), and if the bank or bank holding company divests the securities or assets acquired within two years of the date of acquisition. A South Carolina bank, a South Carolina bank holding company, or a Southern Region bank holding company controlling a South Carolina bank may retain the interests for up to three additional periods of one year each if the Board determines that the required divestiture would create undue financial difficulties for the bank or bank holding company; or

(3) A bank organized under the laws of the United States or of any state and operating under Section 25 or Section 25(a) of the Federal Reserve Act, as amended, 12 U.S.C. Section 601 or Sections 611 through 631, or a bank or bank holding company organized under the laws of a foreign country that is principally engaged in business outside the United States and which either has no banking office in the United States or has banking offices in the United States that are engaged only in operating under Section 25 or 25(a) of the Federal Reserve Act, as amended, 12 U.S.C. Section 601 or Sections 611 through 631.

(b) A South Carolina bank holding company or a Southern Region bank holding company having a South Carolina bank subsidiary may also acquire a bank or bank holding company other than as expressly permissible under subsection (a) of this section or under Section 34-24-30 or 34-24-40 if:

(1) Immediately following the consummation of the acquisition, the South Carolina bank holding company or Southern Region bank holding company qualifies as such under the definitional tests provided in item (11) or (14) of Section 34-24-20; and

(2) The South Carolina bank holding company or Southern Region bank holding company complies with the requirements of Sections 34-24-30 or 34-24-40, as appropriate, which sections are expressly applicable to any acquisition.

Section 34-24-70. [Prohibited acquisitions]. (a) Except as specifically permitted under Section 34-24-60, no South Carolina bank holding company or Southern Region bank holding company having a South Carolina bank subsidiary may acquire a bank holding company which is not either a South Carolina bank holding company or a Southern Region bank holding company or a bank which is not either a South Carolina bank or a Southern Region bank.

(b) Except as expressly permitted by federal law, no bank holding company which is not either a South Carolina bank holding company or a Southern Region bank holding company may acquire a South Carolina bank holding company, a South Carolina bank, or a Southern Region bank holding company controlling a South Carolina bank.

Section 34-24-80. [Acquiror of a South Carolina bank or South Carolina bank holding company is subject to South Carolina bank laws]. Any Southern Region bank holding company that directly or indirectly acquires a South Carolina bank or South Carolina bank holding company is subject to all the laws of this State relating to the acquisition, ownership, and operation of banks and bank holding companies as are otherwise applicable to South Carolina banks and South Carolina bank holding companies.

Section 34-24-90. [Registration of bank holding companies; reports; regulations]. (a) Each South Carolina bank holding company and each Southern Region bank holding company controlling a South Carolina bank that engages in a transaction which requires approval of the Board pursuant to Section 34-24-30 shall within thirty days after approval of the transaction initially register and file annually with the Board on forms prescribed by the Board which shall include the information with respect to the financial condition and operations, management, and intercompany relationships of the bank holding company and its subsidiaries, and related matters, as the Board may consider necessary or appropriate to carry out the purposes of this chapter.

(b) The Board, from time to time, may require reports under oath to keep it informed as to whether the provisions of this chapter and the regulations and orders issued under this chapter have been complied with and the Board may make examinations of each bank holding company required to be registered pursuant to subsection (a) of this section and to the extent authorized by law each subsidiary thereof, the cost of which must be assessed against and paid by the holding company.

(c) The Board may enter into cooperative and reciprocal agreements with the bank regulatory authorities of any state for the periodic examination of bank holding companies that are required to be registered under this chapter and may accept reports of examination and other records from the authorities in lieu of conducting its own examinations. The Board may enter into joint actions with other regulatory bodies having concurrent jurisdiction or may enter into the actions independently to carry out its responsibilities under this chapter and assure compliance with the laws of this State.

(d) Any bank holding company that has a South Carolina bank subsidiary that is not otherwise organized under the laws of this State or qualified to do business in this State shall advise the Board of the location of the name and address of its resident agent located in South Carolina who is authorized to accept service of process on its behalf and shall promptly advise the Board of any changes in the office and service of process agent it has filed with the Board.

(e) The Board may establish regulations as it considers necessary to carry out the purposes of this chapter.

Section 34-24-100. [Penalties and remedies]. (a) Any company which knowingly violates any provision of this chapter, or any regulation or order issued by the Board pursuant to this chapter, must, upon conviction, be fined not more than one hundred dollars for each day during which the violation continues. Any individual who wilfully participates in a violation of this chapter, or any regulation, or order of the Board issued pursuant to this chapter, must, upon conviction, be fined not more than five thousand dollars. Any officer, director, agent, or employee of a bank holding company or subsidiary thereof who makes any false entry in any book, report, record, or statement of the company or subsidiary with the intent to deceive, or who, with like intent wilfully omits to make a true entry of any material pertaining to the business of the company or subsidiary in any book, report, record, or statement of the company or subsidiary, made or kept by him or under his direction, is guilty of a misdemeanor and, upon conviction, must be fined not more than ten thousand dollars or imprisoned not more than one year, or both.

(b) In the event any bank holding company consummates an acquisition that is prohibited by this chapter, the Commissioner shall require the bank holding company to divest itself within two years of its direct or indirect ownership or control of all South Carolina banks. In addition, the Commissioner has the power to enforce any other requirements or prohibitions in this chapter by requiring divestitures of nonconforming banks, bank holding companies, or assets, or through the exercise of other remedies as are provided in this title or otherwise by law, including but not limited to injunctive or other judicial actions."

Sections added to Chapter 25 of Title 34

SECTION 2. Chapter 25 of Title 34 of the 1976 Code is amended by adding:

"Section 34-25-400. [Definitions]. As used in Sections 34-25-410 through 34-25-490:

(1) 'Acquire', as applied to an association or a savings and loan holding company, means any of the following actions or transactions:

(A) The merger or consolidation of an association with another association or with a savings and loan holding company.

(B) The acquisition of the direct or indirect ownership or control of voting shares of another association or savings and loan holding company if, after the acquisition, the acquiring association or savings and loan holding company will directly or indirectly own or control more than ten percent of any class of voting shares of the acquired association or savings and loan holding company.

(C) The direct or indirect acquisition of all or substantially all of the assets of another association or savings and loan holding company.

(D) The taking of any other action that would result in the direct or indirect control of another association or savings and loan holding company.

(2) 'Association' means a mutual or capital stock savings and loan association, savings association, building and loan association or savings bank chartered under the laws of any one of the states or by the Federal Home Loan Bank Board, pursuant to the 'Homeowner's Loan Act of 1933' 12 U.S.C. Section 1464, as amended, and whose deposits are eligible to be insured by the Federal Savings and Loan Insurance Corporation.

(3) 'Board' means the State Board of Financial Institutions.

(4) 'Branch office' means any office at which an association accepts deposits. The term branch office does not include:

(A) Unmanned automatic teller machines, point-of-sale terminals, or similar unmanned electronic banking facilities at which deposits may be accepted;

(B) Offices located outside the United States; and

(C) Loan production offices, representative offices, service corporation offices, or other offices at which deposits are not accepted.

(5) 'Company' means that which is set forth in the federal Savings and Loan Holding Company Act, 12 U.S.C. Section 1730a(a)(1)(C), as amended.

(6) 'Control' means that which is set forth in the federal Savings and Loan Holding Company Act, 12 U.S.C. Section 1730a(a)(2), as amended.

(7) 'Deposits' means with respect to an association withdrawable or repurchaseable shares, investment certificates, deposits, or other savings accounts in an association held by individuals, partnerships, corporations, the United States Government, states, and political subdivisions in the United States, and other entities, exclusive of deposits (a) by foreign governments and foreign official institutions, and (b) by other associations. Determinations of deposits must be made by reference to regulatory reports of condition or similar reports filed by the association with applicable state or federal regulatory authorities.

(8) 'Federal association' means an association chartered by the Federal Home Loan Bank Board pursuant to the 'Homeowner's Loan Act of 1933', 12 U.S.C. Section 1464, as amended.

(9) 'Principal place of business' of an association means the state in which the aggregate deposits of the association are the largest. For the purposes of this section the principal place of business of a savings and loan holding company is the state where the aggregate deposits of the association subsidiaries of the holding company are the largest.

(10) 'Savings and loan holding company' means that which is set forth in the federal Savings and Loan Holding Company Act, 12 U.S.C. Section 1730a(a)(1)(D), as amended.

(11) 'Service corporation' means any corporation, the majority of the capital stock of which is owned by one or more associations and which engages, directly or indirectly, in any activities similar to activities which may be engaged in by a service corporation in which an association may invest under the laws of one of the states or under the laws of the United States.

(12) 'South Carolina association' means an association organized under the laws of the State of South Carolina or under the laws of the United States and that:

(A) Has its principal place of business in the State of South Carolina;

(B) Which if controlled by an organization, the organization is either a South Carolina association, Southern Region association, South Carolina savings and loan association, or a Southern Region savings and loan association; and

(C) More than eighty percent of its total deposits other than deposits located in branch offices pursuant to Section 34-25-450(1) are in its branch offices located in one or more of the Southern Region states.

(13) 'South Carolina Savings and Loan Holding Company' means a savings and loan holding company that:

(A) Has its principal place of business in the State of South Carolina;

(B) Has total deposits of its Southern Region association subsidiaries and South Carolina association subsidiaries that exceed eighty percent of the total deposits of all association subsidiaries of the savings and loan holding company other than those association subsidiaries held under Section 34-25-450(1).

(14) 'Southern Region association' means an association other than a South Carolina association organized under the laws of one of the Southern Region states or under the laws of the United States and that:

(A) Has its principal place of business only in a Southern Region state other than South Carolina;

(B) Which if controlled by an organization, the organization is either a Southern Region association or a Southern Region savings and loan holding company; and

(15) 'Southern Region savings and loan holding company' means a savings and loan holding company that:

(A) Has its principal place of business in a Southern Region state other than the State of South Carolina;

(16) 'Southern Region states' means the states of Alabama, Arkansas, Florida, Georgia, Kentucky, Louisiana, Maryland, Mississippi, North Carolina, South Carolina, Tennessee, Virginia, West Virginia, and the District of Columbia.

(17) 'State' means one of the states of the Union and the District of Columbia.

(18) 'State association' means an association organized under the laws of one of the states.

(19) 'Subsidiary' means that which is set forth in the federal Savings and Loan Holding Company Act, 12 U.S.C. Section 1730a(a)(1)(H), as amended.

Section 34-25-410. [Acts Requiring Prior Approval of the Board]. With the prior approval of the Board in accordance with Section 34-25-440(a) and (b) and upon receipt of approval from all other applicable state and federal regulatory authorities having approval authority over the transaction:

(1) A company may become a South Carolina savings and loan holding company;

(2) A South Carolina savings and loan holding company may acquire a South Carolina association or another South Carolina savings and loan holding company;

(3) A South Carolina savings and loan holding company may acquire a Southern Region association or a Southern Region savings and loan holding company;

(4) A South Carolina savings and loan holding company may acquire an association and savings and loan holding company having association offices which are located outside of the Southern Region as is authorized under Section 34-25-450(1);

(5) A Southern Region savings and loan holding company may acquire a Southern Region savings and loan holding company having a South Carolina association subsidiary;

(6) A South Carolina state association may acquire a Southern Region association;

(7) A Southern Region association may acquire a South Carolina state association.

Section 34-25-420. [Acts Requiring Prior Approval of Federal Authorities]. With the prior approval of the Federal Home Loan Bank Board and other applicable Federal authorities in accordance with their approval authority over the transaction and without the necessary approval of the Board except for the requirements under Section 34-25-440(b):

(1) A South Carolina federal association may acquire a Southern Region association; and

(2) A Southern Region association may acquire a South Carolina federal association.

Section 34-25-430. [Savings and Loan Holding Company Acquisitions Not Requiring Prior Approval]. Without any prior approval of the Board a Southern Region savings and loan holding company having a South Carolina association subsidiary may acquire a Southern Region savings and loan holding company that does not have a South Carolina association subsidiary, may acquire a Southern Region association that does not have any branch offices in South Carolina, or to the extent authorized by Section 34-25-450(1) may acquire an association or savings and loan holding company having association offices which are located outside the Southern Region. The Southern Region savings and loan holding company shall notify the Board at least thirty days prior to the consummation of the proposed transaction. The notification requirements of this section are satisfied by furnishing the Board with a copy of the completed application seeking approval for the proposed transaction which is filed with the federal savings and loan regulatory authority.

Section 34-25-440. [Applications to the Board for Approval]. (a) The Board may not approve any proposed transactions set forth in Section 34-25-410:

(1) Which would result in a monopoly, or which would be in furtherance of any combination or conspiracy to monopolize or to attempt to monopolize the savings and loan business in this State; or

(2) The effect of which in this State may be substantially to lessen competition, or to tend to create a monopoly, or which in any other manner would be in restraint of trade, unless it finds that the anticompetitive effects of the proposed transaction are clearly outweighed in the public interest by the probable effect of the acquisition in meeting the convenience and needs of the community to be served; and

(3) Which does not meet the requirements set forth in subsection (b) of this section, if applicable. In every case the Board shall take into consideration the financial and managerial resources and future prospects of the savings and loan holding company and the association involved, and the convenience and needs of the communities to be served. Whenever the transaction must be approved by one or more regulatory agencies of the United States Government under criteria substantially similar to the criteria in this subsection, the Board shall delay its determination until after receipt of the ruling by the applicable federal regulatory agencies and if the proposed transaction is approved, then the approval is conclusive on the Board with respect to the criteria unless the Board finds that the determination made by the federal regulatory agency is not supported by evidence that is substantial when viewed in light of the whole record considered by the federal agency. In the event the Board denies the application under this subsection, it shall issue a ruling stating the specific reasons why it disagrees with the approval determination made by the applicable federal regulatory agency.

(b) Whenever an application is filed as is required under Section 34-25-410 or if approval of the Board pursuant to this subsection (b) is required under Section 34-25-420, the Board shall approve the transaction if it is otherwise approved as required by applicable laws and if in addition:

(1) The laws of the State in which the Southern Region association or Southern Region savings and loan holding company, as applicable, filing the application has its principal place of business, permit South Carolina associations and South Carolina savings and loan holding companies, as applicable, to acquire associations and savings and loan holding companies in that state;

(2) Under the laws of the state where it has its principal place of business the Southern Region association or Southern Region savings and loan holding company filing the application could be acquired by the South Carolina association or South Carolina savings and loan holding company, as applicable;

(3) Any conditions, restrictions, and requirements (other than regulations or requirements relating to the procedural steps necessary for approval of acquisitions) that would apply to the acquisition by a South Carolina association or a South Carolina savings and loan holding company of a Southern Region association or Southern Region savings and loan holding company in the state where it has its principal place of business, which would not apply to acquisitions by Southern Region associations or Southern Region savings and loan holding companies of a South Carolina association or a South Carolina savings and loan holding company, as applicable, must be applicable to the transaction proposed by the Southern Region association or Southern Region savings and loan holding company filing the application;

(4) Each South Carolina association sought to be acquired directly or indirectly in the proposed transaction has been in existence and continuously operated as an association for a period of five years or more prior to the date the application for approval of the transaction was filed with the Board. This requirement does not prohibit a Southern Region association or Southern Region savings and loan holding company from acquiring all or substantially all of the ownership of a South Carolina association organized solely for the purpose of facilitating the acquisition of a South Carolina association that has been in existence and continuously operated as an association for the requisite five-year period.

(c) The Board shall rule on any application requiring approval under this section not later than ninety days following the date of submission of a completed application seeking approval of the proposed transaction. If the Board fails to rule on the application within the requisite ninety-day period, the proposed transaction is approved. Whenever the Board is required to delay its ruling until after a ruling on the approval of the application by one or more federal regulatory agencies pursuant to subsection (a), the Board shall rule on the application within thirty days following receipt of the federal ruling, and if the Board fails to rule on the application within this thirty-day period, the proposed transaction is approved.

(d) The applicant is entitled to notice and a hearing contesting the denial by the Board of any application.

Section 34-25-450. [Permissible Nondisqualified Acquisitions]. (a) A Southern Region association, a Southern Region savings and loan holding company, a South Carolina association, or a South Carolina savings and loan holding company may acquire or control, and does not cease to be a Southern Region association, a Southern Region savings and loan holding company, a South Carolina association, or South Carolina savings and loan holding company, respectively, by virtue of its acquisition or control of:

(1) An association having offices in a state other than a Southern Region state, if the acquisition has been consummated pursuant to the provisions of Section 123 of the Garn-St. Germain Depository Institutions Act of 1982, 12 U.S.C. Section 1730a(m); or

(2) An association or savings and loan holding company other than as expressly permissible under subsection (1) of this section or under Sections 34-25-410 and 34-25-420 if:

(A) Immediately following the consummation of the acquisition, the South Carolina association, South Carolina savings and loan holding company, Southern Region association, or Southern Region savings and loan holding company qualifies as such, and

(B) The association or savings and loan holding company making the application complies with the approval and notification requirements in Sections 34-25-410 through 34-25-430.

Section 34-25-460. [Prohibited Acquisitions]. (a) Except as specifically permitted under Section 34-25-450, no South Carolina association, South Carolina savings and loan holding company, Southern Region association, or Southern Region savings and loan holding company having a South Carolina association subsidiary may acquire an association or savings and loan holding company which is not either a South Carolina savings and loan holding company or a Southern Region savings and loan holding company or an Association which is not either a South Carolina association or a Southern Region association.

(b) Except as expressly permitted by federal law, no association which is not either a South Carolina association or a Southern Region association and no savings and loan holding company which is not either a South Carolina savings and loan holding company or a Southern Region savings and loan holding company may acquire a South Carolina association, a South Carolina savings and loan holding company, or a Southern Region savings and loan holding company controlling a South Carolina association.

Section 34-25-470. [Acquiror of a South Carolina Association or South Carolina Savings and Loan Holding Company is Subject to South Carolina Laws]. Any Southern Region association or Southern Region savings and loan holding company that directly or indirectly acquires a South Carolina association or a South Carolina savings and loan holding company is subject to all the laws of this State relating to the acquisition, ownership, expansion, and operation of South Carolina associations and South Carolina savings and loan holding companies.

Section 34-25-480. [Registration of Association; Reports; Regulations]. (a) Each South Carolina association, South Carolina savings and loan holding company, Southern Region association controlling a South Carolina association, and Southern Region savings and loan holding company controlling a South Carolina association that engages in a transaction which requires approval of the Board pursuant to Section 34-25-410, shall within thirty days after approval of the transaction initially register and file annually with the Board on forms prescribed by the Board which shall include information with respect to the financial condition and operations, management, and relations between applicable associations and savings and loan holding companies, and related matters, as the Board may consider necessary or appropriate to carry out the purposes of these sections.

(b) The Board, from time to time, may require reports under oath to keep it informed as to whether the provisions of these sections and the regulations and orders issued under these provisions have been complied with, and the Board may to the extent authorized by law make examinations of each association or savings and loan holding company required to be registered pursuant to subsection (a) of this section and any service corporation of the association, the cost of which must be assessed against and paid by the association.

(c) The Board may enter into cooperative and reciprocal agreements with the association and savings and loan holding company regulatory authorities of any state or of the United States for the periodic examination of associations and savings and loan holding companies that are required to be registered under the provisions of subsection (a) of this section and may accept reports of examinations and other records from the authorities in lieu of conducting its own examinations. The Board may enter into joint actions with other regulatory bodies having concurrent jurisdiction or may enter into the actions independently to carry out its responsibilities under these sections and assure compliance with the laws of this State.

(d) Any association or savings and loan holding company required to be registered under this act that is not qualified to do business in this State shall advise the Board of the name and address of its registered agent located in South Carolina who is authorized to accept service of process on its behalf and shall also promptly advise the Board of any changes in the office and service of process agent it has filed with the Board.

(e) The Board may establish regulations to carry out the purposes of Sections 34-25-410 through 34-25-490.

Section 34-25-490. [Penalties and Remedies]. (a) Any association or savings and loan holding company who knowingly violates any provisions of Sections 34-25-410 through 34-25-490, or any regulation or order issued by the Board pursuant to these sections, must, upon conviction, be fined not more than one hundred dollars for each day during which the violation continues. Any individual who wilfully participates in a violation of these sections, or any regulation or order of the Board issued pursuant to the provisions of these sections, must, upon conviction, be fined not more than five thousand dollars. Any officer, director, agent, or employee of an association, service corporation, or savings and loan holding company who makes any false entry in any book, report, record, or statement of association, service corporation, or savings and loan holding company with the intent to deceive, or who, with like intent wilfully omits to make a true entry of any material pertaining to the business of the association, service corporation, or savings and loan holding company in any book, report, record, or statement of the association, service corporation, or savings and loan holding company made or kept by him or under his direction, is guilty of a misdemeanor and, upon conviction, must be fined not more than ten thousand dollars or imprisoned not more than one year, or both.

(b) In the event any association or savings and loan holding company consummates an acquisition that is prohibited by these sections, the Board shall require the association or savings and loan holding company to divest itself within two years of its direct or indirect ownership or control of all South Carolina associations or South Carolina savings and loan holding companies. In addition, the Board has the power to enforce any other requirements or prohibitions in these sections by requiring divestitures of nonconforming associations and savings and loan holding companies or through the exercise of other remedies as are provided in this title or otherwise by law, including but not limited to injunctive or other judicial actions."

State-chartered credit unions to operate branches in other states

SECTION 3. Chapter 27 of Title 34 of the 1976 Code is amended by adding:

"Section 34-27-290. [Authority for State-Chartered Credit Unions to Operate Branches in Other States]. (1) With the prior approval of the State Board of Financial Institutions, a credit union chartered under the law of another state may, subject to the laws of this State governing state-chartered credit unions, conduct business as a credit union in this State. The Board shall approve an application for approval under this section if:

(a) The laws of the state in which the out-of-state credit union is chartered permit credit unions chartered in South Carolina to establish one or more branches in that state;

(b) Any conditions, restrictions, and requirements (other than regulations or requirements relating to the procedural steps necessary for approval of transactions authorized by this section) that would apply to the approval of authority to transact business in the state where the out-of-state credit union is chartered which would not apply to credit unions organized under the laws of that state are made applicable to the operation of the out-of-state credit union in this State;

(c) The out-of-state credit union is financially solvent, has account insurance comparable to that required for state-chartered credit unions organized under this chapter, and submits evidence that it needs to conduct business in South Carolina in order to adequately serve its members in this State.

(2) The State Board of Financial Institutions may require reports under oath to keep it informed as to whether an out-of-state credit union authorized to conduct business in South Carolina pursuant to this section is in compliance with the provisions of this chapter and regulations and orders issued under this chapter. The Board may make examinations of the credit union, the cost of which is assessed against the credit union.

(3) The State Board of Financial Institutions may enter into cooperative and reciprocal agreements with the credit union regulatory authorities of other states for the periodic examination of out-of-state credit unions authorized to do business in this State pursuant to this section and may accept reports of examinations and other records from the authorities in lieu of conducting its own examinations. The Board may enter into joint actions with other regulatory bodies having concurrent jurisdiction over a state-chartered credit union or may enter into the actions independently to carry out its responsibilities under this chapter and to assure compliance with the laws of this State.

(4) An out-of-state credit union authorized to conduct business in South Carolina pursuant to this section shall advise the State Board of Financial Institutions of the name and address of its resident agent located in South Carolina who is authorized to accept service of process on its behalf and shall promptly advise the Board of any changes in the office and agent it has filed with the Board."

State Board of Financial Institutions

SECTION 4. Section 34-1-20 of the 1976 Code, as last amended by Section 17, Part II, of Act 517 of 1980, is further amended to read:

"Section 34-1-20. [Appointment of Members]. The State Board of Financial Institutions is composed of nine members, one of whom is the State Treasurer as an ex officio member, who must be chairman. The remaining eight members must be appointed by the Governor with the advice and consent of the Senate. Three must be engaged in commercial banking and recommended by the State Bankers Association, two must be engaged in the savings and loan association business and recommended by the State Savings and Loan League, one must be engaged in the licensed consumer finance business and recommended by the Consumer Financial Associations, one must be engaged in the cooperative credit union business and recommended by the State Cooperative Credit Union League, and one must be unaffiliated with any financial organization and shall serve as a representative of the consumer of the State. The terms of the present members are not affected. All shall serve and represent the best interest of the public and no appointed member shall serve more than two consecutive four-year terms. Prior to any vacancy on the board except for consumer representatives, the association which is to provide a member shall submit three names, none of whom shall represent the same institution, from which the Governor shall select one."

Sections repealed, legislative findings, etc.

SECTION 5. (a) Subject to the provisions of subsections (b) and (c) of this section, Chapter 23 of Title 34, of the 1976 Code, and all laws and parts of laws in conflict with this act are repealed as of the effective date specified in Section 7.

(b) It is the intention of the General Assembly in adopting Section 1 of this act to provide a unified and orderly method of permitting limited interstate banking on a regional basis. If any provision of Chapter 24 of Title 34 of the 1976 Code added by this act establishing the regional framework within which interstate banking may occur, providing for approval and supervisory powers of the Board, or limiting expansion into this State to bank holding companies located in states satisfying the requirements of subsection (b) of Section 34-24-50 of the 1976 Code is determined by final, nonappealable order of any South Carolina or federal court of last resort to be invalid or unconstitutional, Section 1 is void from the effective date of the final determination, and in that event Chapter 23 of Title 34 of the 1976 Code, and all laws and parts of laws repealed pursuant to subsection (a) of this section, as they existed prior to the effective date of this act are in effect to the same extent as if they had not been repealed by this act. Any transaction which has been lawfully consummated pursuant to the provisions of this act prior to a final determination of invalidity or unconstitutionality is unaffected by the determination.

(c) It is the intention of the General Assembly in adopting Section 2 of this act to provide a unified and orderly method of permitting limited interstate mergers, acquisitions, and ownerships between associations and savings and loan holding companies on a reciprocal regional basis, subject to authorization by applicable federal authorities. If any provision of Chapter 25 of Title 34 of the 1976 Code, added by Section 2 of this act, is determined by final, nonappealable order of any South Carolina or Federal Court of last resort to be invalid or unconstitutional, Section 2 of this act is void from the effective date of the final determination, and all laws and parts of laws repealed pursuant to subsection (a) of this section as they existed prior to the effective date of this act are in effect to the same extent as if they had not been repealed. Any transaction which has been lawfully consummated pursuant to the provisions of this act prior to a final determination of invalidity or unconstitutionality is unaffected by the determination.

Analysis lines

SECTION 6. The analysis lines following the code sections in this act do not constitute a part of the sections but are only for purposes of identification.

Time effective

SECTION 7. (a) Except as otherwise set forth in subsection (b) of this section, this act becomes effective on July 1, 1986.

(b) Item (2) of Section 34-24-30 and Section 34-24-90, as contained in Section 1 of this act, do not apply to any South Carolina bank holding company that is in existence at the effective date specified in subsection (a) of this section and that was not required to register with the Board pursuant to Chapter 24 of Title 34 of the 1976 Code as it existed prior to the effective date specified in subsection (a) of this section until the time when the South Carolina bank holding company seeks to acquire a Southern Region Bank, a Southern Region bank holding company, or a bank or bank holding company having banking offices which are located outside the Southern Region as authorized by subsection (b) of Section 34-24-60 as added by Section 1 of this act.