Current Status Introducing Body:House Bill Number:4566 Ratification Number:592 Act Number:491 Primary Sponsor:Jennings Type of Legislation:GB Subject:Bank Holding Company Act Companion Bill Number:1078 Date Bill Passed both Bodies:19940602 Computer Document Number:GJK/20225SD.94 Governor's Action:S Date of Governor's Action:19940714 Introduced Date:19940119 Date of Last Amendment:19940531 Last History Body:------ Last History Date:19940714 Last History Type:Act No. 491 Scope of Legislation:Statewide All Sponsors:Jennings Askins Baxley Fulmer P. Harris Harrison Hines McAbee Shissias Snow Spearman Tucker J. Wilder Harwell G. Brown Neilson Kinon Beatty Cobb-Hunter Richardson Keyserling H. Brown A. Young Waldrop Huff T.C. Alexander Stuart Sturkie R. Smith Chamblee Moody-Lawrence Corning Harrell Thomas Inabinett Wilkins Boan Type of Legislation:General Bill
Bill Body Date Action Description CMN Leg Involved
---- ------ ------------ ------------------------------ --- ------------
4566 ------ 19940714 Act No. 491
4566 ------ 19940714 Signed by Governor
4566 ------ 19940602 Ratified R 592
4566 House 19940602 Concurred in Senate
amendment, enrolled for
ratification
4566 Senate 19940531 Amended, read third time,
returned to House with
amendments
4566 Senate 19940527 Debate interrupted by
adjournment
4566 Senate 19940526 Made Special Order
4566 Senate 19940519 Read second time, ordered to
third reading with notice of
general amendments
4566 Senate 19940504 Made Special Order
4566 Senate 19940419 Amended
4566 Senate 19940330 Introduced, read first time,
placed on Calendar without
reference
4566 House 19940329 Read third time, sent to
Senate
4566 House 19940324 Amended, read second time
4566 House 19940324 Objection by Representative Cromer
4566 House 19940323 Amended, debate interrupted
4566 House 19940216 Committee Report: Favorable 26
with amendment
4566 House 19940119 Introduced, read first time, 26
referred to Committee
View additional legislative information at the LPITS web site.
(A491, R592, H4566)
AN ACT TO AMEND CHAPTER 24 OF TITLE 34, CODE OF LAWS OF SOUTH CAROLINA, 1976, RELATING TO THE SOUTH CAROLINA BANK HOLDING COMPANY ACT, SO AS TO REVISE AND FURTHER PROVIDE FOR DEFINITIONS AND REGULATORY PROVISIONS AND PROCEDURES IN ORDER TO PERMIT AFTER A SPECIFIED DATE AN OUT-OF-STATE BANK HOLDING COMPANY TO OPERATE AND MAKE ACQUISITIONS IN THIS STATE IN THE SAME MANNER THAT A SOUTHERN REGION BANK HOLDING COMPANY IS PERMITTED TO OPERATE AND MAKE ACQUISITIONS.
Be it enacted by the General Assembly of the State of South Carolina:
Out-of-state bank holding company operating and making acquisitions in this State
SECTION 1. Chapter 24 of Title 34 of the 1976 Code is amended to read:
Section 34-24-10. This chapter may be cited as `The South Carolina Bank Holding Company Act'.
Section 34-24-20. 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' has the meaning set forth in Section 2(c) of the Bank Holding Company Act of 1956, as amended (12 U.S.C. 1841(c)).
(3) `Banking office' means any office at which a bank accepts deposits. The term banking office does not include:
(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
(c) loan production offices, representative offices, or other offices at which deposits are not accepted.
(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 the most recent available 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 were the largest on July 1, 1966, or the date on which the company became a bank holding company, whichever is later.
(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; and
(b) is not controlled by a bank holding company other than a South Carolina bank holding company.
(12) `Out-of-state bank holding company' means a bank holding company that is not a South Carolina bank holding company.
(13) `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.
(14) `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.
(15) `Southern Region bank holding company' means a bank holding company that:
(a) is not a South Carolina bank holding company;
(b) has total deposits of its Southern Region bank subsidiaries and South Carolina bank subsidiaries that exceed a majority 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
(c) is not controlled by a bank holding company other than a Southern Region bank holding company.
(16) `State' means one of the states of the Union and the District of Columbia.
(17) `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. 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 or an out-of-state-bank holding company may acquire a South Carolina bank or a South Carolina bank holding company; and
(6) a Southern Region bank holding company or an out-of-state-bank holding company may acquire a Southern Region bank holding company having a South Carolina bank subsidiary or an out-of-state-bank holding company having a South Carolina bank subsidiary.
Section 34-24-40. Without any prior approval of the board, a Southern Region bank holding company having a South Carolina bank subsidiary or an out-of-state-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 or an out-of-state-bank holding company having a South Carolina bank subsidiary 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. (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 the community to be served; and
(3) which does not meet the requirements set forth in subsection (d) 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. The board in considering an application shall receive and must consider community input through public hearings to be heard concurrently with the hearings held by the Federal Reserve Board.
(b) Before July 1, 1996, 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).
(c) On and after July 1, 1996, an out-of-state bank holding company that does not have a South Carolina bank subsidiary (other than a South Carolina bank subsidiary that was acquired either in a transaction involving the provision of assistance by the Federal Deposit Insurance Corporation or in the regular course of securing or collecting a debt previously contracted in good faith, as provided in Section 3(a) of the Bank Holding Company Act of 1956, as amended, (12 U.S.C. 1842(a)) may acquire a South Carolina bank holding company or a South Carolina bank with the approval of the board if the proposed transaction is approved under subsection (a).
(d) Where a Southern Region bank holding company or an out-of-state bank holding company seeking board approval or an acquisition pursuant to subsection (a) of this section, such application shall be approved by the board only if:
(1) the laws of the state in which the Southern Region bank holding company or the out-of-state 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) 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 or the out-of-state 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 or the out-of-state bank holding company filing the application; and
(3) 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 or the out-of-state 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.
(e) 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.
(f) The applicant is entitled to notice and a hearing contesting the denial by the board of any application.
Section 34-24-60. (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):
(1) a bank having offices in a state other than a Southern Region state, if the acquisition has been consummated in a transaction involving the provision of assistance by the Federal Deposit Insurance Corporation;
(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, a Southern Region bank holding company having a South Carolina bank subsidiary or the out-of-state 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, Southern Region bank holding company or the out-of-state bank holding company qualifies as such under the definitional tests provided in item (11), (12), or (15) of Section 34-24-20; and
(2) the South Carolina bank holding company, Southern Region bank holding company, or out-of-state bank holding company complies with the requirements of Section 34-24-30 or 34-24-40, as appropriate, which sections are expressly applicable to any acquisition.
Section 34-24-70. Except as specifically permitted by this article or federal law, no South Carolina bank holding company, Southern Region bank holding company, or out-of-state bank holding company may acquire a South Carolina bank holding company or a South Carolina bank.
Section 34-24-80. Any Southern Region bank holding company or out-of-state 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. (a) Each South Carolina bank holding company, each out-of-state bank holding company acquiring a South Carolina bank or a South Carolina bank holding company or a Southern Region bank holding company having a South Carolina bank subsidiary or an out-of-state bank holding company having a South Carolina bank subsidiary, 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. (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."
Time effective
SECTION 2. This act takes effect upon approval by the Governor.
Approved the 14th day of July, 1994.