1750. (a) No foreign (other nation) bank shall transact business in
this state except at an agency or branch office that it is licensed
to maintain and at which it is permitted by this chapter to transact
the business transacted.
(b) Subdivision (a) shall not be deemed to prohibit:
(1) Any foreign (other nation) bank that maintains a federal
agency or federal branch in this state from transacting at the
federal agency or federal branch any business that it may be
authorized to transact under applicable federal laws and regulations;
(2) Any foreign (other nation) bank from carrying on the
activities described in subdivision (d) of Section 191 of the
Corporations Code;
(3) Any foreign (other nation) bank that does not maintain an
agency or branch office from making in this state loans secured by
liens on real property located in this state; or
(4) Any foreign (other nation) bank that does not maintain an
agency or branch office from transacting trust business as permitted
under Section 1503.
(c) For purposes of subdivision (a), no foreign (other nation)
bank shall be deemed to be transacting business in this state merely
because a majority-owned subsidiary transacts business in this state.
1751. No foreign (other nation) bank shall be licensed to maintain
any agency or branch office unless it is qualified to transact
intrastate business in this state under Chapter 21 (commencing with
Section 2100) of Division 1 of Title 1 of the Corporations Code.
1752. No foreign (other nation) bank shall be licensed to maintain
a retail branch office unless the deposits in such office are insured
by the Federal Deposit Insurance Corporation in accordance with the
provisions of the Federal Deposit Insurance Act.
1753. (a) (1) No foreign (other nation) bank shall establish or
maintain an agency or branch office unless the commissioner shall
have first approved the establishment of that office and issued a
license authorizing the bank to maintain the office.
(2) Paragraph (1) shall not be deemed to prohibit a foreign (other
nation) bank from establishing or maintaining a federal agency or
federal branch in this state.
(b) If the commissioner finds the following with respect to an
application by a foreign (other nation) bank for approval to
establish an agency or branch office, the commissioner shall approve
the application:
(1) That the bank, any controlling person of the bank, the
directors and executive officers of the bank or of any controlling
person of the bank, and the proposed management of the office are
each of good character and sound financial standing.
(2) That the financial history and condition of the bank are
satisfactory.
(3) That the management of the bank and the proposed management of
the office are adequate.
(4) That it is reasonable to believe that, if licensed to maintain
the office, the bank will operate the office in a safe and sound
manner and in compliance with all applicable laws, regulations, and
orders.
(5) That the bank's plan to establish and to maintain the office
affords reasonable promise of successful operation.
(6) That the bank's establishment and maintenance of the office
will promote the public convenience and advantage.
(7) In case the office is to be a branch office, that the foreign
nation where the bank is domiciled permits banks organized under the
laws of this state and national banks headquartered in this state to
establish and maintain in those foreign nation offices substantially
equivalent to agencies, offices substantially equivalent to branch
offices, or wholly (except for directors' qualifying shares) owned
banks organized under the laws of the foreign nation.
If the commissioner finds otherwise, the commissioner shall deny
the application.
(c) Whenever an application by a foreign (other nation) bank for
approval to establish an agency or branch office has been approved
and all conditions precedent to the issuance of a license authorizing
the bank to maintain the office have been fulfilled, the
commissioner shall issue the license.
1754. (a) No foreign (other nation) bank which is licensed to
maintain an agency or branch office shall relocate such office unless
the commissioner shall have first approved such relocation and
issued a license authorizing such bank to maintain the office at the
new site.
(b) If the commissioner finds the following with respect to an
application by a foreign (other nation) bank for approval to relocate
any agency or branch office, the commissioner shall approve such
application:
(1) In case the new site of the office is in the same vicinity as
the old site:
(A) That it will not be unsafe or unsound for the bank to relocate
the office; and
(B) That the relocation of the office will not be substantially
detrimental to the public convenience and advantage, or that the
relocation is necessary in the interests of the safety and soundness
of the bank; or
(2) In case the new site of the office is not in the same vicinity
as the old site:
(A) That the bank's plan to relocate the office and to maintain
the office at the new site affords reasonable promise of successful
operation;
(B) That the relocation of the office from the old site will not
be substantially detrimental to the public convenience and advantage
in the area which is primarily served by the office at the old site,
or that the relocation is necessary in the interests of the safety
and soundness of the bank; and
(C) That the relocation of the office to the new site will promote
the public convenience and advantage.
If the commissioner finds otherwise, the commissioner shall deny
the application.
(c) Whenever an application by a foreign (other nation) bank for
approval to relocate an agency or branch office has been approved and
all conditions precedent to the issuance of a license authorizing
such bank to maintain such office at the new site have been
fulfilled, the commissioner shall issue such license.
(d) Promptly after a foreign (other nation) bank which is licensed
to maintain an agency or branch office relocates such office, such
bank shall surrender to the commissioner the license which authorized
it to maintain such office at the old site.
1755. (a) A foreign (other nation) bank that is licensed to
maintain an agency or branch office may transact commercial banking
business at the office, subject to the following:
(1) In case the office is a nondepositary agency, the bank shall
not transact the business of accepting deposits.
(2) In case the office is a depositary agency, the bank shall not
transact the business of accepting any deposits other than deposits
of (A) a foreign nation, (B) an agency or instrumentality of a
foreign nation, or (C) a person which resides, is domiciled, and
maintains its principal place of business in a foreign nation. For
purposes of this paragraph, "person" means any individual,
proprietorship, joint venture, partnership, trust, business trust,
syndicate, association, joint stock company, corporation, limited
liability company, or any other organization or any branch or
division thereof.
(3) In case the office is a limited branch office, the bank shall
not transact the business of accepting any deposits other than (A)
deposits of the kind described in paragraph (2), or (B) deposits that
a corporation organized under Section 25A of the Federal Reserve Act
is permitted to accept.
(4) In case the office is a wholesale branch office, the bank
shall not transact the business of accepting any deposits other than
(A) deposits of the kind described in paragraph (2), (B) deposits of
one hundred thousand dollars ($100,000) or more, or (C) deposits the
acceptance of which the commissioner determines by regulation or
order do not constitute engaging in domestic retail deposit
activities requiring deposit insurance protection.
(5) In case the office is an agency, limited branch office, or
wholesale branch office, the bank may, subject to any regulations
that the commissioner may prescribe, maintain credit balances.
(6) In any case, the bank shall not transact any business that it
is not authorized to transact or is prohibited from transacting under
the law of its domicile or that commercial banks organized under the
laws of this state are not authorized to transact or are prohibited
from transacting.
(b) No foreign (other nation) bank that is licensed to maintain an
agency or branch office shall transact any trust business at the
office except as permitted under Section 1503.
1756. (a) In addition to other provisions of this division that are
otherwise applicable to or with respect to foreign (other nation)
banks licensed to maintain nondepositary agencies, the following
provisions of this division shall apply to or with respect to each
foreign (other nation) bank licensed to maintain a nondepositary
agency with respect to its business in this state as if the bank were
a commercial bank organized under the laws of this state:
(1) Article 5 (commencing with Section 270) of Chapter 2.
(2) Chapter 13 (commencing with Section 1650).
(3) Article 3 (commencing with Section 1951) of Chapter 15.
(4) Articles 3 (commencing with Section 3160), 4 (commencing with
Section 3180), and 7 (commencing with Section 3240) of Chapter 17.
(5) Article 1 (commencing with Section 3350) of Chapter 18.
(6) Chapter 20 (commencing with Section 3600).
(7) Chapter 22 (commencing with Section 3800).
(b) In addition to other provisions of this division which are
otherwise applicable to or with respect to foreign (other nation)
banks licensed to maintain depositary agencies or branch offices, the
following provisions of this division shall apply to or with respect
to each foreign (other nation) bank licensed to maintain a
depositary agency or branch office with respect to its business in
this state as if the bank were a commercial bank organized under the
laws of this state:
(1) Article 5 (commencing with Section 270) of Chapter 2.
(2) Chapter 6 (commencing with Section 750).
(3) Chapter 7 (commencing with Section 850).
(4) Chapter 8 (commencing with Section 952).
(5) Chapter 10 (commencing with Section 1200).
(6) Chapter 13 (commencing with Section 1650).
(7) Article 3 (commencing with Section 1951) of Chapter 15.
(8) Article 3 (commencing with Section 3160), Article 4
(commencing with Section 3180), and Article 7 (commencing with
Section 3240) of Chapter 17.
(9) Article 1 (commencing with Section 3350) of Chapter 18.
(10) Section 3513 and Articles 2 (commencing with Section 3560), 3
(commencing with Section 3570), and 4 (commencing with Section 3580)
of Chapter 19.
(11) Chapter 20 (commencing with Section 3600).
(12) Chapter 22 (commencing with Section 3800).
(c) Whenever any provision of this chapter or of any regulation or
order issued under this chapter that is applicable to or with
respect to foreign (other nation) banks licensed to transact business
in this state is inconsistent with any provision of any other
chapter of this division that is applicable to or with respect to
foreign (other nation) banks licensed to transact business in this
state, the former provision shall apply, and the latter provision
shall not apply.
(d) (1) Whenever any provision of this division (other than the
provisions of this chapter) is applicable to or with respect to
foreign (other nation) banks licensed to transact business in this
state, the provision shall be applied with any changes in points of
detail as may be necessary or appropriate.
(2) Without limiting the provisions of paragraph (1), for purposes
of any provision of this division (other than the provisions of this
chapter) that is applicable to or with respect to a foreign (other
nation) bank licensed to transact business in this state:
(A) "Approved by (or approval of) the board" means approved or
ratified by the board of the bank, by a committee of the board
authorized to exercise the powers of the board with respect to the
particular matter, or by an officer of the bank who is assigned to
the head office of the bank and who has authority over the bank's
business in this state, including authority to approve or ratify the
particular matter.
(B) "Head office" means the primary office of the bank.
(C) "Shareholders' equity" means the shareholders' equity of the
bank or, if the bank has no shareholders' equity, the closest
equivalent account or accounts.
(e) Whenever any provision of this division (other than the
provisions of this chapter) that is applicable to or with respect to
a foreign (other nation) bank licensed to transact business in this
state limits the amount of any assets or liabilities of the bank
(including, by way of example, the amount of borrowings of,
obligations to, or investments of the bank), for purposes of
calculating the amount of the assets or liabilities, only the assets
or liabilities of the agencies or branch offices of the bank shall be
included, and the assets and liabilities of offices of the bank
outside this state shall be excluded.
1757. (a) Whenever the commissioner calls for a report under
Section 283 from commercial banks organized under the laws of this
state, the commissioner shall call for a report from each foreign
(other nation) bank that is licensed to transact business in this
state.
(b) (1) A foreign (other nation) bank that is licensed to transact
business in this state shall prominently display in the lobby of
each agency and branch office, except an automated teller machine
branch office (as defined in Section 550), a notice that any person
may obtain a financial report from the bank. The notice shall include
the address and telephone number of the person or office to be
contacted for a financial report. The bank shall, promptly after
receiving a request for a financial report, mail or otherwise furnish
the financial report to the requester. The first financial report
shall be provided without charge.
(2) The financial report called for in this subdivision shall
contain either (A) the information that the commissioner may require
by regulation or (B) in the absence of a regulation, the last balance
sheet and income statement, each without any schedules, that the
bank filed with the commissioner pursuant to Section 283.
1758. Each foreign (other nation) bank which is licensed to
maintain a depositary agency, limited branch office, or wholesale
branch office shall, in accordance with such regulations as the
commissioner may prescribe, give notice that deposits in such office
are not insured by the Federal Deposit Insurance Corporation.
1759. (a) In case a foreign (other nation) bank is licensed to
maintain a depositary agency or branch office and such office is not
subject to the regulations of the Depository Institutions
Deregulation Committee, Regulation Q of the Board of Governors of the
Federal Reserve System, or Part 329 of the regulations of the
Federal Deposit Insurance Corporation, such bank shall, with respect
to deposits accepted at the office, comply with such regulations
regarding maximum interest rates on deposits, prepayment of time
deposits, and related matters as the commissioner may prescribe as
being necessary and appropriate to maintain competitive equality
between foreign (other nation) banks and banks organized under the
laws of this state which are subject to the regulations of the
Depository Institutions Deregulation Committee, Regulation Q of the
Board of Governors of the Federal Reserve System, or Part 329 of the
regulations of the Federal Deposit Insurance Corporation.
(b) For purposes of, and notwithstanding any contrary provisions
of, Chapter 3.5 (commencing with Section 11340), Part 1 of Division 3
of Title 2 of the Government Code, whenever the commissioner adopts
a regulation or order of repeal of a regulation under subdivision
(a), the commissioner may, without describing specific facts showing
the need for immediate action, find that adoption of such regulation
or order of repeal is necessary for the immediate preservation of the
public peace, health and safety, or general welfare, and such
regulation or order of repeal shall be deemed to be necessary for the
immediate preservation of the public peace, health and safety, or
general welfare.
1760. (a) Each foreign (other nation) bank which is licensed to
transact business in this state shall keep the assets of such
business separate and apart from the assets of its business outside
this state.
(b) The creditors of the business in this state of a foreign
(other nation) bank which is licensed to transact business in this
state shall be entitled to priority over other creditors with respect
to the assets of such bank's business in this state.
1761. (a) In this section:
(1) "Adjusted liabilities," when used with respect to a foreign
(other nation) bank, means the liabilities of such bank's business in
this state, excluding (A) accrued expenses, (B) any liability to an
office (whether in or outside of this state) or majority-owned
subsidiary of the bank, and (C) such other liabilities as the
commissioner may by regulation or order exclude.
(2) "Applicable minimum," when used with respect to eligible
assets deposited or to be deposited with an approved depository by a
foreign (other nation) bank, means such amount as the commissioner
may from time to time by regulation or order determine to be
necessary for the maintenance of sound financial condition, for the
protection of the interests of creditors of the bank's business in
this state, or for the protection of the public interest. However, in
the case of a foreign (other nation) bank which is licensed to
maintain a branch office, the applicable minimum shall in no event be
less than 1 percent of the adjusted liabilities of such bank.
(3) "Approved depository," when used with respect to a foreign
(other nation) bank, means a bank organized under the laws of this
state or a national bank headquartered in this state which has been
selected by such foreign (other nation) bank and approved by the
commissioner for the purpose of acting as the approved depository of
the foreign (other nation) bank and which has filed with the
commissioner, in such form as the commissioner may by regulation or
order prescribe, an agreement to comply with all applicable
provisions of this section and of any regulation or order issued
under this section.
(4) "Eligible assets" when used with respect to a foreign (other
nation) bank, means any of the following:
(A) Cash.
(B) Any security of the type described in Section 1542.
(C) Any negotiable certificate of deposit which (i) has a maturity
of not more than one year, (ii) is payable in the United States, and
(iii) is issued by a bank organized under the laws of a state of the
United States, by a national bank, or by a branch office of a
foreign (other nation) bank which is located in the United States.
(D) Any commercial paper which is payable in the United States and
which is rated P-1 or its equivalent by a nationally recognized
rating service; provided, however, that any conflict in rating shall
be resolved in favor of the lower rating.
(E) Any banker's acceptance which is payable in the United States
and which is eligible for discount with a Federal Reserve bank.
(F) Any other asset which the commissioner by regulation or order
determines to be eligible.
Notwithstanding the foregoing provisions of this paragraph,
"eligible asset," when used with respect to a foreign (other nation)
bank, does not include any instrument the issuer of which (i) is, or
is affiliated with, such foreign (other nation) bank, (ii) is
domiciled in, or controlled by a bank or other person domiciled in,
the same foreign nation as the foreign (other nation) bank, or (iii)
is, or is controlled by, such foreign nation. For purposes of the
foregoing provision, to be "affiliated" means to control, to be
controlled by, or to be under common control with; and to "control"
has the meaning set forth in subdivision (b) of Section 700.
(b) For purposes of this section:
(1) The amount of adjusted liabilities of a foreign (other nation)
bank's business in this state shall be computed for such period, in
such manner, and on such basis as the commissioner may by regulation
or order prescribe.
(2) Any eligible asset shall be valued at the lesser of market or
par.
(c) (1) Before any foreign (other nation) bank is licensed to
transact business in this state, such bank shall deposit, and each
foreign (other nation) bank which is licensed to transact business in
this state shall maintain on deposit, with an approved depository
eligible assets having a value in an amount not less than the
applicable minimum.
(2) Whenever a foreign (other nation) bank which is licensed to
transact business in this state ceases to be so licensed, such bank
shall thereafter maintain on deposit with an approved depository
eligible assets having a value in an amount not less than the
applicable minimum for such period of time as the commissioner may
determine to be necessary for the protection of creditors of the bank'
s business in this state or for the protection of the public
interest.
(d) (1) No foreign (other nation) bank which maintains eligible
assets on deposit with an approved depository pursuant to this
section shall withdraw any such eligible assets except with the prior
approval of the commissioner.
(2) No approved depository which holds eligible assets on deposit
from a foreign (other nation) bank pursuant to this section shall
release any such eligible assets except with the prior approval of
the commissioner or as otherwise provided in subdivision (h).
(e) Any foreign (other nation) bank which maintains eligible
assets on deposit with an approved depository pursuant to this
section shall, unless the commissioner shall have suspended or
revoked its license to transact business in this state or taken
possession of its property and business in this state, be entitled to
receive any income paid on such eligible assets.
(f) (1) Whenever a foreign (other nation) bank deposits eligible
assets with, or withdraws eligible assets from, an approved
depository pursuant to this section, such bank shall do so in
accordance with such procedures and requirements as the commissioner
may by regulation or order prescribe.
(2) Whenever an approved depository receives, holds, or releases
eligible assets pursuant to this section, such approved depository
shall do so in accordance with such procedures and requirements as
the commissioner may by regulation or order prescribe and shall file
with the commissioner such reports as and when the commissioner may
by regulation or order require.
(g) Whenever a foreign (other nation) bank maintains eligible
assets on deposit with an approved depository pursuant to this
section:
(1) The eligible assets shall be deemed to be pledged to the
commissioner for the benefit of the creditors of the bank's business
in this state; and, notwithstanding any provision of the Uniform
Commercial Code to the contrary, the commissioner, for the benefit of
such creditors, shall be deemed to have a security interest in such
eligible assets.
(2) The eligible assets shall be free from any lien, charge, right
of setoff, credit, or preference in connection with any claim of the
approved depository against the bank.
(h) (1) In case the commissioner takes possession of the property
and business of a foreign (other nation) bank which maintains
eligible assets on deposit with an approved depository pursuant to
this section, such approved depository shall, upon order of the
commissioner, release such eligible assets to the commissioner, as
liquidator of the property and business of such bank.
(2) In case a foreign (other nation) bank which maintains eligible
assets on deposit with an approved depository pursuant to this
section fails to pay any judgment creditor of its business in this
state and the commissioner has not taken possession of the property
and business of such bank, such approved depository shall release
such eligible assets to the commissioner, and the commissioner shall
make such disposition of the eligible assets, as a court of competent
jurisdiction of this state or of the United States may order for the
benefit of such judgment creditor. For purposes of this paragraph,
"judgment creditor of its business in this state" means a person to
whom the bank is required to pay money under a judgment which (A)
arose out of the bank's business in this state, (B) has been entered
by a court of this state or of the United States, (C) has become
final, in that all possibility of direct attack on such judgment by
way of appeal, motion for new trial, motion to vacate, or petition
for extraordinary writ has been exhausted, and (D) has remained
unpaid for a period of not less than 60 days after becoming final.
1762. (a) In this section:
(1) "Adjusted liabilities," when used with respect to a foreign
(other nation) bank which is licensed to maintain a branch office in
this state, means the liabilities of such bank's business in this
state, excluding (A) accrued expenses, (B) any liability to an office
(whether in or outside of this state) or majority-owned subsidiary
of the bank, and (C) such other liabilities as the commissioner may
by regulation or order exclude.
(2) "Eligible assets" means any asset which the commissioner by
regulation or order determines to be eligible for purposes of this
section. However, "eligible asset," when used with respect to a
foreign (other nation) bank which is licensed to maintain a branch
office, includes (A) any asset which such bank maintains on deposit
pursuant to Section 1761 and (B) any reserves which the bank
maintains with respect to its business in this state in accordance
with requirements prescribed by the Board of Governors of the Federal
Reserve System.
(b) For purposes of this section, the amount of eligible assets
and the amount of adjusted liabilities of a foreign (other nation)
bank which is licensed to maintain a branch office in this state
shall each be computed for such period, in such manner, and on such
basis as the commissioner may by regulation or order prescribe.
(c) A foreign (other nation) bank licensed to maintain a branch
office in this state shall hold at its branch offices in this state
or at such other places as the commissioner may approve, eligible
assets in such amount, if any, as the commissioner may from time to
time by regulation or order determine to be necessary for the
maintenance of sound financial condition, for the protection of the
interests of creditors of the bank's business in this state, or for
the protection of the public interest. However, in no event shall
such amount exceed 108 percent of the adjusted liabilities of the
bank's business in this state.
(d) If the commissioner finds, with respect to a foreign (other
nation) bank licensed to maintain a branch office in this state, that
such action is necessary for the maintenance of sound financial
condition, for the protection of the interests of creditors of such
bank's business in this state, or for the protection of the public
interest, the commissioner may order the bank to place all or part of
the eligible assets which the bank is required to hold under
subdivision (c) in the custody of such bank organized under the laws
of this state or such national bank headquartered in this state as
the commissioner may designate.
1763. (a) (1) No foreign (other nation) bank which is licensed to
maintain an agency or branch office shall close such office unless
the commissioner shall have first approved such closing.
(2) Paragraph (1) shall not be deemed to prohibit a foreign (other
nation) bank which is licensed to maintain an agency or branch
office from closing such office in accordance with Article 4
(commencing with Section 1775).
(b) If the commissioner finds the following with respect to an
application by a foreign (other nation) bank for approval to close an
agency or branch office, the commissioner shall approve such
application:
(1) That it will not be unsafe or unsound for the bank to close
the office; and
(2) That the closing of the office will not be substantially
detrimental to the public convenience and advantage or that the
closing of the office is necessary in the interests of the safety and
soundness of the bank.
If the commissioner finds otherwise, the commissioner shall deny
the application.
(c) Whenever an application by a foreign (other nation) bank for
approval to close an agency or branch office has been approved and
all conditions precedent to such closing have been fulfilled, such
bank may close such office and shall promptly thereafter surrender to
the commissioner the license which authorized it to maintain the
office.
1750. (a) No foreign (other nation) bank shall transact business in
this state except at an agency or branch office that it is licensed
to maintain and at which it is permitted by this chapter to transact
the business transacted.
(b) Subdivision (a) shall not be deemed to prohibit:
(1) Any foreign (other nation) bank that maintains a federal
agency or federal branch in this state from transacting at the
federal agency or federal branch any business that it may be
authorized to transact under applicable federal laws and regulations;
(2) Any foreign (other nation) bank from carrying on the
activities described in subdivision (d) of Section 191 of the
Corporations Code;
(3) Any foreign (other nation) bank that does not maintain an
agency or branch office from making in this state loans secured by
liens on real property located in this state; or
(4) Any foreign (other nation) bank that does not maintain an
agency or branch office from transacting trust business as permitted
under Section 1503.
(c) For purposes of subdivision (a), no foreign (other nation)
bank shall be deemed to be transacting business in this state merely
because a majority-owned subsidiary transacts business in this state.
1751. No foreign (other nation) bank shall be licensed to maintain
any agency or branch office unless it is qualified to transact
intrastate business in this state under Chapter 21 (commencing with
Section 2100) of Division 1 of Title 1 of the Corporations Code.
1752. No foreign (other nation) bank shall be licensed to maintain
a retail branch office unless the deposits in such office are insured
by the Federal Deposit Insurance Corporation in accordance with the
provisions of the Federal Deposit Insurance Act.
1753. (a) (1) No foreign (other nation) bank shall establish or
maintain an agency or branch office unless the commissioner shall
have first approved the establishment of that office and issued a
license authorizing the bank to maintain the office.
(2) Paragraph (1) shall not be deemed to prohibit a foreign (other
nation) bank from establishing or maintaining a federal agency or
federal branch in this state.
(b) If the commissioner finds the following with respect to an
application by a foreign (other nation) bank for approval to
establish an agency or branch office, the commissioner shall approve
the application:
(1) That the bank, any controlling person of the bank, the
directors and executive officers of the bank or of any controlling
person of the bank, and the proposed management of the office are
each of good character and sound financial standing.
(2) That the financial history and condition of the bank are
satisfactory.
(3) That the management of the bank and the proposed management of
the office are adequate.
(4) That it is reasonable to believe that, if licensed to maintain
the office, the bank will operate the office in a safe and sound
manner and in compliance with all applicable laws, regulations, and
orders.
(5) That the bank's plan to establish and to maintain the office
affords reasonable promise of successful operation.
(6) That the bank's establishment and maintenance of the office
will promote the public convenience and advantage.
(7) In case the office is to be a branch office, that the foreign
nation where the bank is domiciled permits banks organized under the
laws of this state and national banks headquartered in this state to
establish and maintain in those foreign nation offices substantially
equivalent to agencies, offices substantially equivalent to branch
offices, or wholly (except for directors' qualifying shares) owned
banks organized under the laws of the foreign nation.
If the commissioner finds otherwise, the commissioner shall deny
the application.
(c) Whenever an application by a foreign (other nation) bank for
approval to establish an agency or branch office has been approved
and all conditions precedent to the issuance of a license authorizing
the bank to maintain the office have been fulfilled, the
commissioner shall issue the license.
1754. (a) No foreign (other nation) bank which is licensed to
maintain an agency or branch office shall relocate such office unless
the commissioner shall have first approved such relocation and
issued a license authorizing such bank to maintain the office at the
new site.
(b) If the commissioner finds the following with respect to an
application by a foreign (other nation) bank for approval to relocate
any agency or branch office, the commissioner shall approve such
application:
(1) In case the new site of the office is in the same vicinity as
the old site:
(A) That it will not be unsafe or unsound for the bank to relocate
the office; and
(B) That the relocation of the office will not be substantially
detrimental to the public convenience and advantage, or that the
relocation is necessary in the interests of the safety and soundness
of the bank; or
(2) In case the new site of the office is not in the same vicinity
as the old site:
(A) That the bank's plan to relocate the office and to maintain
the office at the new site affords reasonable promise of successful
operation;
(B) That the relocation of the office from the old site will not
be substantially detrimental to the public convenience and advantage
in the area which is primarily served by the office at the old site,
or that the relocation is necessary in the interests of the safety
and soundness of the bank; and
(C) That the relocation of the office to the new site will promote
the public convenience and advantage.
If the commissioner finds otherwise, the commissioner shall deny
the application.
(c) Whenever an application by a foreign (other nation) bank for
approval to relocate an agency or branch office has been approved and
all conditions precedent to the issuance of a license authorizing
such bank to maintain such office at the new site have been
fulfilled, the commissioner shall issue such license.
(d) Promptly after a foreign (other nation) bank which is licensed
to maintain an agency or branch office relocates such office, such
bank shall surrender to the commissioner the license which authorized
it to maintain such office at the old site.
1755. (a) A foreign (other nation) bank that is licensed to
maintain an agency or branch office may transact commercial banking
business at the office, subject to the following:
(1) In case the office is a nondepositary agency, the bank shall
not transact the business of accepting deposits.
(2) In case the office is a depositary agency, the bank shall not
transact the business of accepting any deposits other than deposits
of (A) a foreign nation, (B) an agency or instrumentality of a
foreign nation, or (C) a person which resides, is domiciled, and
maintains its principal place of business in a foreign nation. For
purposes of this paragraph, "person" means any individual,
proprietorship, joint venture, partnership, trust, business trust,
syndicate, association, joint stock company, corporation, limited
liability company, or any other organization or any branch or
division thereof.
(3) In case the office is a limited branch office, the bank shall
not transact the business of accepting any deposits other than (A)
deposits of the kind described in paragraph (2), or (B) deposits that
a corporation organized under Section 25A of the Federal Reserve Act
is permitted to accept.
(4) In case the office is a wholesale branch office, the bank
shall not transact the business of accepting any deposits other than
(A) deposits of the kind described in paragraph (2), (B) deposits of
one hundred thousand dollars ($100,000) or more, or (C) deposits the
acceptance of which the commissioner determines by regulation or
order do not constitute engaging in domestic retail deposit
activities requiring deposit insurance protection.
(5) In case the office is an agency, limited branch office, or
wholesale branch office, the bank may, subject to any regulations
that the commissioner may prescribe, maintain credit balances.
(6) In any case, the bank shall not transact any business that it
is not authorized to transact or is prohibited from transacting under
the law of its domicile or that commercial banks organized under the
laws of this state are not authorized to transact or are prohibited
from transacting.
(b) No foreign (other nation) bank that is licensed to maintain an
agency or branch office shall transact any trust business at the
office except as permitted under Section 1503.
1756. (a) In addition to other provisions of this division that are
otherwise applicable to or with respect to foreign (other nation)
banks licensed to maintain nondepositary agencies, the following
provisions of this division shall apply to or with respect to each
foreign (other nation) bank licensed to maintain a nondepositary
agency with respect to its business in this state as if the bank were
a commercial bank organized under the laws of this state:
(1) Article 5 (commencing with Section 270) of Chapter 2.
(2) Chapter 13 (commencing with Section 1650).
(3) Article 3 (commencing with Section 1951) of Chapter 15.
(4) Articles 3 (commencing with Section 3160), 4 (commencing with
Section 3180), and 7 (commencing with Section 3240) of Chapter 17.
(5) Article 1 (commencing with Section 3350) of Chapter 18.
(6) Chapter 20 (commencing with Section 3600).
(7) Chapter 22 (commencing with Section 3800).
(b) In addition to other provisions of this division which are
otherwise applicable to or with respect to foreign (other nation)
banks licensed to maintain depositary agencies or branch offices, the
following provisions of this division shall apply to or with respect
to each foreign (other nation) bank licensed to maintain a
depositary agency or branch office with respect to its business in
this state as if the bank were a commercial bank organized under the
laws of this state:
(1) Article 5 (commencing with Section 270) of Chapter 2.
(2) Chapter 6 (commencing with Section 750).
(3) Chapter 7 (commencing with Section 850).
(4) Chapter 8 (commencing with Section 952).
(5) Chapter 10 (commencing with Section 1200).
(6) Chapter 13 (commencing with Section 1650).
(7) Article 3 (commencing with Section 1951) of Chapter 15.
(8) Article 3 (commencing with Section 3160), Article 4
(commencing with Section 3180), and Article 7 (commencing with
Section 3240) of Chapter 17.
(9) Article 1 (commencing with Section 3350) of Chapter 18.
(10) Section 3513 and Articles 2 (commencing with Section 3560), 3
(commencing with Section 3570), and 4 (commencing with Section 3580)
of Chapter 19.
(11) Chapter 20 (commencing with Section 3600).
(12) Chapter 22 (commencing with Section 3800).
(c) Whenever any provision of this chapter or of any regulation or
order issued under this chapter that is applicable to or with
respect to foreign (other nation) banks licensed to transact business
in this state is inconsistent with any provision of any other
chapter of this division that is applicable to or with respect to
foreign (other nation) banks licensed to transact business in this
state, the former provision shall apply, and the latter provision
shall not apply.
(d) (1) Whenever any provision of this division (other than the
provisions of this chapter) is applicable to or with respect to
foreign (other nation) banks licensed to transact business in this
state, the provision shall be applied with any changes in points of
detail as may be necessary or appropriate.
(2) Without limiting the provisions of paragraph (1), for purposes
of any provision of this division (other than the provisions of this
chapter) that is applicable to or with respect to a foreign (other
nation) bank licensed to transact business in this state:
(A) "Approved by (or approval of) the board" means approved or
ratified by the board of the bank, by a committee of the board
authorized to exercise the powers of the board with respect to the
particular matter, or by an officer of the bank who is assigned to
the head office of the bank and who has authority over the bank's
business in this state, including authority to approve or ratify the
particular matter.
(B) "Head office" means the primary office of the bank.
(C) "Shareholders' equity" means the shareholders' equity of the
bank or, if the bank has no shareholders' equity, the closest
equivalent account or accounts.
(e) Whenever any provision of this division (other than the
provisions of this chapter) that is applicable to or with respect to
a foreign (other nation) bank licensed to transact business in this
state limits the amount of any assets or liabilities of the bank
(including, by way of example, the amount of borrowings of,
obligations to, or investments of the bank), for purposes of
calculating the amount of the assets or liabilities, only the assets
or liabilities of the agencies or branch offices of the bank shall be
included, and the assets and liabilities of offices of the bank
outside this state shall be excluded.
1757. (a) Whenever the commissioner calls for a report under
Section 283 from commercial banks organized under the laws of this
state, the commissioner shall call for a report from each foreign
(other nation) bank that is licensed to transact business in this
state.
(b) (1) A foreign (other nation) bank that is licensed to transact
business in this state shall prominently display in the lobby of
each agency and branch office, except an automated teller machine
branch office (as defined in Section 550), a notice that any person
may obtain a financial report from the bank. The notice shall include
the address and telephone number of the person or office to be
contacted for a financial report. The bank shall, promptly after
receiving a request for a financial report, mail or otherwise furnish
the financial report to the requester. The first financial report
shall be provided without charge.
(2) The financial report called for in this subdivision shall
contain either (A) the information that the commissioner may require
by regulation or (B) in the absence of a regulation, the last balance
sheet and income statement, each without any schedules, that the
bank filed with the commissioner pursuant to Section 283.
1758. Each foreign (other nation) bank which is licensed to
maintain a depositary agency, limited branch office, or wholesale
branch office shall, in accordance with such regulations as the
commissioner may prescribe, give notice that deposits in such office
are not insured by the Federal Deposit Insurance Corporation.
1759. (a) In case a foreign (other nation) bank is licensed to
maintain a depositary agency or branch office and such office is not
subject to the regulations of the Depository Institutions
Deregulation Committee, Regulation Q of the Board of Governors of the
Federal Reserve System, or Part 329 of the regulations of the
Federal Deposit Insurance Corporation, such bank shall, with respect
to deposits accepted at the office, comply with such regulations
regarding maximum interest rates on deposits, prepayment of time
deposits, and related matters as the commissioner may prescribe as
being necessary and appropriate to maintain competitive equality
between foreign (other nation) banks and banks organized under the
laws of this state which are subject to the regulations of the
Depository Institutions Deregulation Committee, Regulation Q of the
Board of Governors of the Federal Reserve System, or Part 329 of the
regulations of the Federal Deposit Insurance Corporation.
(b) For purposes of, and notwithstanding any contrary provisions
of, Chapter 3.5 (commencing with Section 11340), Part 1 of Division 3
of Title 2 of the Government Code, whenever the commissioner adopts
a regulation or order of repeal of a regulation under subdivision
(a), the commissioner may, without describing specific facts showing
the need for immediate action, find that adoption of such regulation
or order of repeal is necessary for the immediate preservation of the
public peace, health and safety, or general welfare, and such
regulation or order of repeal shall be deemed to be necessary for the
immediate preservation of the public peace, health and safety, or
general welfare.
1760. (a) Each foreign (other nation) bank which is licensed to
transact business in this state shall keep the assets of such
business separate and apart from the assets of its business outside
this state.
(b) The creditors of the business in this state of a foreign
(other nation) bank which is licensed to transact business in this
state shall be entitled to priority over other creditors with respect
to the assets of such bank's business in this state.
1761. (a) In this section:
(1) "Adjusted liabilities," when used with respect to a foreign
(other nation) bank, means the liabilities of such bank's business in
this state, excluding (A) accrued expenses, (B) any liability to an
office (whether in or outside of this state) or majority-owned
subsidiary of the bank, and (C) such other liabilities as the
commissioner may by regulation or order exclude.
(2) "Applicable minimum," when used with respect to eligible
assets deposited or to be deposited with an approved depository by a
foreign (other nation) bank, means such amount as the commissioner
may from time to time by regulation or order determine to be
necessary for the maintenance of sound financial condition, for the
protection of the interests of creditors of the bank's business in
this state, or for the protection of the public interest. However, in
the case of a foreign (other nation) bank which is licensed to
maintain a branch office, the applicable minimum shall in no event be
less than 1 percent of the adjusted liabilities of such bank.
(3) "Approved depository," when used with respect to a foreign
(other nation) bank, means a bank organized under the laws of this
state or a national bank headquartered in this state which has been
selected by such foreign (other nation) bank and approved by the
commissioner for the purpose of acting as the approved depository of
the foreign (other nation) bank and which has filed with the
commissioner, in such form as the commissioner may by regulation or
order prescribe, an agreement to comply with all applicable
provisions of this section and of any regulation or order issued
under this section.
(4) "Eligible assets" when used with respect to a foreign (other
nation) bank, means any of the following:
(A) Cash.
(B) Any security of the type described in Section 1542.
(C) Any negotiable certificate of deposit which (i) has a maturity
of not more than one year, (ii) is payable in the United States, and
(iii) is issued by a bank organized under the laws of a state of the
United States, by a national bank, or by a branch office of a
foreign (other nation) bank which is located in the United States.
(D) Any commercial paper which is payable in the United States and
which is rated P-1 or its equivalent by a nationally recognized
rating service; provided, however, that any conflict in rating shall
be resolved in favor of the lower rating.
(E) Any banker's acceptance which is payable in the United States
and which is eligible for discount with a Federal Reserve bank.
(F) Any other asset which the commissioner by regulation or order
determines to be eligible.
Notwithstanding the foregoing provisions of this paragraph,
"eligible asset," when used with respect to a foreign (other nation)
bank, does not include any instrument the issuer of which (i) is, or
is affiliated with, such foreign (other nation) bank, (ii) is
domiciled in, or controlled by a bank or other person domiciled in,
the same foreign nation as the foreign (other nation) bank, or (iii)
is, or is controlled by, such foreign nation. For purposes of the
foregoing provision, to be "affiliated" means to control, to be
controlled by, or to be under common control with; and to "control"
has the meaning set forth in subdivision (b) of Section 700.
(b) For purposes of this section:
(1) The amount of adjusted liabilities of a foreign (other nation)
bank's business in this state shall be computed for such period, in
such manner, and on such basis as the commissioner may by regulation
or order prescribe.
(2) Any eligible asset shall be valued at the lesser of market or
par.
(c) (1) Before any foreign (other nation) bank is licensed to
transact business in this state, such bank shall deposit, and each
foreign (other nation) bank which is licensed to transact business in
this state shall maintain on deposit, with an approved depository
eligible assets having a value in an amount not less than the
applicable minimum.
(2) Whenever a foreign (other nation) bank which is licensed to
transact business in this state ceases to be so licensed, such bank
shall thereafter maintain on deposit with an approved depository
eligible assets having a value in an amount not less than the
applicable minimum for such period of time as the commissioner may
determine to be necessary for the protection of creditors of the bank'
s business in this state or for the protection of the public
interest.
(d) (1) No foreign (other nation) bank which maintains eligible
assets on deposit with an approved depository pursuant to this
section shall withdraw any such eligible assets except with the prior
approval of the commissioner.
(2) No approved depository which holds eligible assets on deposit
from a foreign (other nation) bank pursuant to this section shall
release any such eligible assets except with the prior approval of
the commissioner or as otherwise provided in subdivision (h).
(e) Any foreign (other nation) bank which maintains eligible
assets on deposit with an approved depository pursuant to this
section shall, unless the commissioner shall have suspended or
revoked its license to transact business in this state or taken
possession of its property and business in this state, be entitled to
receive any income paid on such eligible assets.
(f) (1) Whenever a foreign (other nation) bank deposits eligible
assets with, or withdraws eligible assets from, an approved
depository pursuant to this section, such bank shall do so in
accordance with such procedures and requirements as the commissioner
may by regulation or order prescribe.
(2) Whenever an approved depository receives, holds, or releases
eligible assets pursuant to this section, such approved depository
shall do so in accordance with such procedures and requirements as
the commissioner may by regulation or order prescribe and shall file
with the commissioner such reports as and when the commissioner may
by regulation or order require.
(g) Whenever a foreign (other nation) bank maintains eligible
assets on deposit with an approved depository pursuant to this
section:
(1) The eligible assets shall be deemed to be pledged to the
commissioner for the benefit of the creditors of the bank's business
in this state; and, notwithstanding any provision of the Uniform
Commercial Code to the contrary, the commissioner, for the benefit of
such creditors, shall be deemed to have a security interest in such
eligible assets.
(2) The eligible assets shall be free from any lien, charge, right
of setoff, credit, or preference in connection with any claim of the
approved depository against the bank.
(h) (1) In case the commissioner takes possession of the property
and business of a foreign (other nation) bank which maintains
eligible assets on deposit with an approved depository pursuant to
this section, such approved depository shall, upon order of the
commissioner, release such eligible assets to the commissioner, as
liquidator of the property and business of such bank.
(2) In case a foreign (other nation) bank which maintains eligible
assets on deposit with an approved depository pursuant to this
section fails to pay any judgment creditor of its business in this
state and the commissioner has not taken possession of the property
and business of such bank, such approved depository shall release
such eligible assets to the commissioner, and the commissioner shall
make such disposition of the eligible assets, as a court of competent
jurisdiction of this state or of the United States may order for the
benefit of such judgment creditor. For purposes of this paragraph,
"judgment creditor of its business in this state" means a person to
whom the bank is required to pay money under a judgment which (A)
arose out of the bank's business in this state, (B) has been entered
by a court of this state or of the United States, (C) has become
final, in that all possibility of direct attack on such judgment by
way of appeal, motion for new trial, motion to vacate, or petition
for extraordinary writ has been exhausted, and (D) has remained
unpaid for a period of not less than 60 days after becoming final.
1762. (a) In this section:
(1) "Adjusted liabilities," when used with respect to a foreign
(other nation) bank which is licensed to maintain a branch office in
this state, means the liabilities of such bank's business in this
state, excluding (A) accrued expenses, (B) any liability to an office
(whether in or outside of this state) or majority-owned subsidiary
of the bank, and (C) such other liabilities as the commissioner may
by regulation or order exclude.
(2) "Eligible assets" means any asset which the commissioner by
regulation or order determines to be eligible for purposes of this
section. However, "eligible asset," when used with respect to a
foreign (other nation) bank which is licensed to maintain a branch
office, includes (A) any asset which such bank maintains on deposit
pursuant to Section 1761 and (B) any reserves which the bank
maintains with respect to its business in this state in accordance
with requirements prescribed by the Board of Governors of the Federal
Reserve System.
(b) For purposes of this section, the amount of eligible assets
and the amount of adjusted liabilities of a foreign (other nation)
bank which is licensed to maintain a branch office in this state
shall each be computed for such period, in such manner, and on such
basis as the commissioner may by regulation or order prescribe.
(c) A foreign (other nation) bank licensed to maintain a branch
office in this state shall hold at its branch offices in this state
or at such other places as the commissioner may approve, eligible
assets in such amount, if any, as the commissioner may from time to
time by regulation or order determine to be necessary for the
maintenance of sound financial condition, for the protection of the
interests of creditors of the bank's business in this state, or for
the protection of the public interest. However, in no event shall
such amount exceed 108 percent of the adjusted liabilities of the
bank's business in this state.
(d) If the commissioner finds, with respect to a foreign (other
nation) bank licensed to maintain a branch office in this state, that
such action is necessary for the maintenance of sound financial
condition, for the protection of the interests of creditors of such
bank's business in this state, or for the protection of the public
interest, the commissioner may order the bank to place all or part of
the eligible assets which the bank is required to hold under
subdivision (c) in the custody of such bank organized under the laws
of this state or such national bank headquartered in this state as
the commissioner may designate.
1763. (a) (1) No foreign (other nation) bank which is licensed to
maintain an agency or branch office shall close such office unless
the commissioner shall have first approved such closing.
(2) Paragraph (1) shall not be deemed to prohibit a foreign (other
nation) bank which is licensed to maintain an agency or branch
office from closing such office in accordance with Article 4
(commencing with Section 1775).
(b) If the commissioner finds the following with respect to an
application by a foreign (other nation) bank for approval to close an
agency or branch office, the commissioner shall approve such
application:
(1) That it will not be unsafe or unsound for the bank to close
the office; and
(2) That the closing of the office will not be substantially
detrimental to the public convenience and advantage or that the
closing of the office is necessary in the interests of the safety and
soundness of the bank.
If the commissioner finds otherwise, the commissioner shall deny
the application.
(c) Whenever an application by a foreign (other nation) bank for
approval to close an agency or branch office has been approved and
all conditions precedent to such closing have been fulfilled, such
bank may close such office and shall promptly thereafter surrender to
the commissioner the license which authorized it to maintain the
office.
1750. (a) No foreign (other nation) bank shall transact business in
this state except at an agency or branch office that it is licensed
to maintain and at which it is permitted by this chapter to transact
the business transacted.
(b) Subdivision (a) shall not be deemed to prohibit:
(1) Any foreign (other nation) bank that maintains a federal
agency or federal branch in this state from transacting at the
federal agency or federal branch any business that it may be
authorized to transact under applicable federal laws and regulations;
(2) Any foreign (other nation) bank from carrying on the
activities described in subdivision (d) of Section 191 of the
Corporations Code;
(3) Any foreign (other nation) bank that does not maintain an
agency or branch office from making in this state loans secured by
liens on real property located in this state; or
(4) Any foreign (other nation) bank that does not maintain an
agency or branch office from transacting trust business as permitted
under Section 1503.
(c) For purposes of subdivision (a), no foreign (other nation)
bank shall be deemed to be transacting business in this state merely
because a majority-owned subsidiary transacts business in this state.
1751. No foreign (other nation) bank shall be licensed to maintain
any agency or branch office unless it is qualified to transact
intrastate business in this state under Chapter 21 (commencing with
Section 2100) of Division 1 of Title 1 of the Corporations Code.
1752. No foreign (other nation) bank shall be licensed to maintain
a retail branch office unless the deposits in such office are insured
by the Federal Deposit Insurance Corporation in accordance with the
provisions of the Federal Deposit Insurance Act.
1753. (a) (1) No foreign (other nation) bank shall establish or
maintain an agency or branch office unless the commissioner shall
have first approved the establishment of that office and issued a
license authorizing the bank to maintain the office.
(2) Paragraph (1) shall not be deemed to prohibit a foreign (other
nation) bank from establishing or maintaining a federal agency or
federal branch in this state.
(b) If the commissioner finds the following with respect to an
application by a foreign (other nation) bank for approval to
establish an agency or branch office, the commissioner shall approve
the application:
(1) That the bank, any controlling person of the bank, the
directors and executive officers of the bank or of any controlling
person of the bank, and the proposed management of the office are
each of good character and sound financial standing.
(2) That the financial history and condition of the bank are
satisfactory.
(3) That the management of the bank and the proposed management of
the office are adequate.
(4) That it is reasonable to believe that, if licensed to maintain
the office, the bank will operate the office in a safe and sound
manner and in compliance with all applicable laws, regulations, and
orders.
(5) That the bank's plan to establish and to maintain the office
affords reasonable promise of successful operation.
(6) That the bank's establishment and maintenance of the office
will promote the public convenience and advantage.
(7) In case the office is to be a branch office, that the foreign
nation where the bank is domiciled permits banks organized under the
laws of this state and national banks headquartered in this state to
establish and maintain in those foreign nation offices substantially
equivalent to agencies, offices substantially equivalent to branch
offices, or wholly (except for directors' qualifying shares) owned
banks organized under the laws of the foreign nation.
If the commissioner finds otherwise, the commissioner shall deny
the application.
(c) Whenever an application by a foreign (other nation) bank for
approval to establish an agency or branch office has been approved
and all conditions precedent to the issuance of a license authorizing
the bank to maintain the office have been fulfilled, the
commissioner shall issue the license.
1754. (a) No foreign (other nation) bank which is licensed to
maintain an agency or branch office shall relocate such office unless
the commissioner shall have first approved such relocation and
issued a license authorizing such bank to maintain the office at the
new site.
(b) If the commissioner finds the following with respect to an
application by a foreign (other nation) bank for approval to relocate
any agency or branch office, the commissioner shall approve such
application:
(1) In case the new site of the office is in the same vicinity as
the old site:
(A) That it will not be unsafe or unsound for the bank to relocate
the office; and
(B) That the relocation of the office will not be substantially
detrimental to the public convenience and advantage, or that the
relocation is necessary in the interests of the safety and soundness
of the bank; or
(2) In case the new site of the office is not in the same vicinity
as the old site:
(A) That the bank's plan to relocate the office and to maintain
the office at the new site affords reasonable promise of successful
operation;
(B) That the relocation of the office from the old site will not
be substantially detrimental to the public convenience and advantage
in the area which is primarily served by the office at the old site,
or that the relocation is necessary in the interests of the safety
and soundness of the bank; and
(C) That the relocation of the office to the new site will promote
the public convenience and advantage.
If the commissioner finds otherwise, the commissioner shall deny
the application.
(c) Whenever an application by a foreign (other nation) bank for
approval to relocate an agency or branch office has been approved and
all conditions precedent to the issuance of a license authorizing
such bank to maintain such office at the new site have been
fulfilled, the commissioner shall issue such license.
(d) Promptly after a foreign (other nation) bank which is licensed
to maintain an agency or branch office relocates such office, such
bank shall surrender to the commissioner the license which authorized
it to maintain such office at the old site.
1755. (a) A foreign (other nation) bank that is licensed to
maintain an agency or branch office may transact commercial banking
business at the office, subject to the following:
(1) In case the office is a nondepositary agency, the bank shall
not transact the business of accepting deposits.
(2) In case the office is a depositary agency, the bank shall not
transact the business of accepting any deposits other than deposits
of (A) a foreign nation, (B) an agency or instrumentality of a
foreign nation, or (C) a person which resides, is domiciled, and
maintains its principal place of business in a foreign nation. For
purposes of this paragraph, "person" means any individual,
proprietorship, joint venture, partnership, trust, business trust,
syndicate, association, joint stock company, corporation, limited
liability company, or any other organization or any branch or
division thereof.
(3) In case the office is a limited branch office, the bank shall
not transact the business of accepting any deposits other than (A)
deposits of the kind described in paragraph (2), or (B) deposits that
a corporation organized under Section 25A of the Federal Reserve Act
is permitted to accept.
(4) In case the office is a wholesale branch office, the bank
shall not transact the business of accepting any deposits other than
(A) deposits of the kind described in paragraph (2), (B) deposits of
one hundred thousand dollars ($100,000) or more, or (C) deposits the
acceptance of which the commissioner determines by regulation or
order do not constitute engaging in domestic retail deposit
activities requiring deposit insurance protection.
(5) In case the office is an agency, limited branch office, or
wholesale branch office, the bank may, subject to any regulations
that the commissioner may prescribe, maintain credit balances.
(6) In any case, the bank shall not transact any business that it
is not authorized to transact or is prohibited from transacting under
the law of its domicile or that commercial banks organized under the
laws of this state are not authorized to transact or are prohibited
from transacting.
(b) No foreign (other nation) bank that is licensed to maintain an
agency or branch office shall transact any trust business at the
office except as permitted under Section 1503.
1756. (a) In addition to other provisions of this division that are
otherwise applicable to or with respect to foreign (other nation)
banks licensed to maintain nondepositary agencies, the following
provisions of this division shall apply to or with respect to each
foreign (other nation) bank licensed to maintain a nondepositary
agency with respect to its business in this state as if the bank were
a commercial bank organized under the laws of this state:
(1) Article 5 (commencing with Section 270) of Chapter 2.
(2) Chapter 13 (commencing with Section 1650).
(3) Article 3 (commencing with Section 1951) of Chapter 15.
(4) Articles 3 (commencing with Section 3160), 4 (commencing with
Section 3180), and 7 (commencing with Section 3240) of Chapter 17.
(5) Article 1 (commencing with Section 3350) of Chapter 18.
(6) Chapter 20 (commencing with Section 3600).
(7) Chapter 22 (commencing with Section 3800).
(b) In addition to other provisions of this division which are
otherwise applicable to or with respect to foreign (other nation)
banks licensed to maintain depositary agencies or branch offices, the
following provisions of this division shall apply to or with respect
to each foreign (other nation) bank licensed to maintain a
depositary agency or branch office with respect to its business in
this state as if the bank were a commercial bank organized under the
laws of this state:
(1) Article 5 (commencing with Section 270) of Chapter 2.
(2) Chapter 6 (commencing with Section 750).
(3) Chapter 7 (commencing with Section 850).
(4) Chapter 8 (commencing with Section 952).
(5) Chapter 10 (commencing with Section 1200).
(6) Chapter 13 (commencing with Section 1650).
(7) Article 3 (commencing with Section 1951) of Chapter 15.
(8) Article 3 (commencing with Section 3160), Article 4
(commencing with Section 3180), and Article 7 (commencing with
Section 3240) of Chapter 17.
(9) Article 1 (commencing with Section 3350) of Chapter 18.
(10) Section 3513 and Articles 2 (commencing with Section 3560), 3
(commencing with Section 3570), and 4 (commencing with Section 3580)
of Chapter 19.
(11) Chapter 20 (commencing with Section 3600).
(12) Chapter 22 (commencing with Section 3800).
(c) Whenever any provision of this chapter or of any regulation or
order issued under this chapter that is applicable to or with
respect to foreign (other nation) banks licensed to transact business
in this state is inconsistent with any provision of any other
chapter of this division that is applicable to or with respect to
foreign (other nation) banks licensed to transact business in this
state, the former provision shall apply, and the latter provision
shall not apply.
(d) (1) Whenever any provision of this division (other than the
provisions of this chapter) is applicable to or with respect to
foreign (other nation) banks licensed to transact business in this
state, the provision shall be applied with any changes in points of
detail as may be necessary or appropriate.
(2) Without limiting the provisions of paragraph (1), for purposes
of any provision of this division (other than the provisions of this
chapter) that is applicable to or with respect to a foreign (other
nation) bank licensed to transact business in this state:
(A) "Approved by (or approval of) the board" means approved or
ratified by the board of the bank, by a committee of the board
authorized to exercise the powers of the board with respect to the
particular matter, or by an officer of the bank who is assigned to
the head office of the bank and who has authority over the bank's
business in this state, including authority to approve or ratify the
particular matter.
(B) "Head office" means the primary office of the bank.
(C) "Shareholders' equity" means the shareholders' equity of the
bank or, if the bank has no shareholders' equity, the closest
equivalent account or accounts.
(e) Whenever any provision of this division (other than the
provisions of this chapter) that is applicable to or with respect to
a foreign (other nation) bank licensed to transact business in this
state limits the amount of any assets or liabilities of the bank
(including, by way of example, the amount of borrowings of,
obligations to, or investments of the bank), for purposes of
calculating the amount of the assets or liabilities, only the assets
or liabilities of the agencies or branch offices of the bank shall be
included, and the assets and liabilities of offices of the bank
outside this state shall be excluded.
1757. (a) Whenever the commissioner calls for a report under
Section 283 from commercial banks organized under the laws of this
state, the commissioner shall call for a report from each foreign
(other nation) bank that is licensed to transact business in this
state.
(b) (1) A foreign (other nation) bank that is licensed to transact
business in this state shall prominently display in the lobby of
each agency and branch office, except an automated teller machine
branch office (as defined in Section 550), a notice that any person
may obtain a financial report from the bank. The notice shall include
the address and telephone number of the person or office to be
contacted for a financial report. The bank shall, promptly after
receiving a request for a financial report, mail or otherwise furnish
the financial report to the requester. The first financial report
shall be provided without charge.
(2) The financial report called for in this subdivision shall
contain either (A) the information that the commissioner may require
by regulation or (B) in the absence of a regulation, the last balance
sheet and income statement, each without any schedules, that the
bank filed with the commissioner pursuant to Section 283.
1758. Each foreign (other nation) bank which is licensed to
maintain a depositary agency, limited branch office, or wholesale
branch office shall, in accordance with such regulations as the
commissioner may prescribe, give notice that deposits in such office
are not insured by the Federal Deposit Insurance Corporation.
1759. (a) In case a foreign (other nation) bank is licensed to
maintain a depositary agency or branch office and such office is not
subject to the regulations of the Depository Institutions
Deregulation Committee, Regulation Q of the Board of Governors of the
Federal Reserve System, or Part 329 of the regulations of the
Federal Deposit Insurance Corporation, such bank shall, with respect
to deposits accepted at the office, comply with such regulations
regarding maximum interest rates on deposits, prepayment of time
deposits, and related matters as the commissioner may prescribe as
being necessary and appropriate to maintain competitive equality
between foreign (other nation) banks and banks organized under the
laws of this state which are subject to the regulations of the
Depository Institutions Deregulation Committee, Regulation Q of the
Board of Governors of the Federal Reserve System, or Part 329 of the
regulations of the Federal Deposit Insurance Corporation.
(b) For purposes of, and notwithstanding any contrary provisions
of, Chapter 3.5 (commencing with Section 11340), Part 1 of Division 3
of Title 2 of the Government Code, whenever the commissioner adopts
a regulation or order of repeal of a regulation under subdivision
(a), the commissioner may, without describing specific facts showing
the need for immediate action, find that adoption of such regulation
or order of repeal is necessary for the immediate preservation of the
public peace, health and safety, or general welfare, and such
regulation or order of repeal shall be deemed to be necessary for the
immediate preservation of the public peace, health and safety, or
general welfare.
1760. (a) Each foreign (other nation) bank which is licensed to
transact business in this state shall keep the assets of such
business separate and apart from the assets of its business outside
this state.
(b) The creditors of the business in this state of a foreign
(other nation) bank which is licensed to transact business in this
state shall be entitled to priority over other creditors with respect
to the assets of such bank's business in this state.
1761. (a) In this section:
(1) "Adjusted liabilities," when used with respect to a foreign
(other nation) bank, means the liabilities of such bank's business in
this state, excluding (A) accrued expenses, (B) any liability to an
office (whether in or outside of this state) or majority-owned
subsidiary of the bank, and (C) such other liabilities as the
commissioner may by regulation or order exclude.
(2) "Applicable minimum," when used with respect to eligible
assets deposited or to be deposited with an approved depository by a
foreign (other nation) bank, means such amount as the commissioner
may from time to time by regulation or order determine to be
necessary for the maintenance of sound financial condition, for the
protection of the interests of creditors of the bank's business in
this state, or for the protection of the public interest. However, in
the case of a foreign (other nation) bank which is licensed to
maintain a branch office, the applicable minimum shall in no event be
less than 1 percent of the adjusted liabilities of such bank.
(3) "Approved depository," when used with respect to a foreign
(other nation) bank, means a bank organized under the laws of this
state or a national bank headquartered in this state which has been
selected by such foreign (other nation) bank and approved by the
commissioner for the purpose of acting as the approved depository of
the foreign (other nation) bank and which has filed with the
commissioner, in such form as the commissioner may by regulation or
order prescribe, an agreement to comply with all applicable
provisions of this section and of any regulation or order issued
under this section.
(4) "Eligible assets" when used with respect to a foreign (other
nation) bank, means any of the following:
(A) Cash.
(B) Any security of the type described in Section 1542.
(C) Any negotiable certificate of deposit which (i) has a maturity
of not more than one year, (ii) is payable in the United States, and
(iii) is issued by a bank organized under the laws of a state of the
United States, by a national bank, or by a branch office of a
foreign (other nation) bank which is located in the United States.
(D) Any commercial paper which is payable in the United States and
which is rated P-1 or its equivalent by a nationally recognized
rating service; provided, however, that any conflict in rating shall
be resolved in favor of the lower rating.
(E) Any banker's acceptance which is payable in the United States
and which is eligible for discount with a Federal Reserve bank.
(F) Any other asset which the commissioner by regulation or order
determines to be eligible.
Notwithstanding the foregoing provisions of this paragraph,
"eligible asset," when used with respect to a foreign (other nation)
bank, does not include any instrument the issuer of which (i) is, or
is affiliated with, such foreign (other nation) bank, (ii) is
domiciled in, or controlled by a bank or other person domiciled in,
the same foreign nation as the foreign (other nation) bank, or (iii)
is, or is controlled by, such foreign nation. For purposes of the
foregoing provision, to be "affiliated" means to control, to be
controlled by, or to be under common control with; and to "control"
has the meaning set forth in subdivision (b) of Section 700.
(b) For purposes of this section:
(1) The amount of adjusted liabilities of a foreign (other nation)
bank's business in this state shall be computed for such period, in
such manner, and on such basis as the commissioner may by regulation
or order prescribe.
(2) Any eligible asset shall be valued at the lesser of market or
par.
(c) (1) Before any foreign (other nation) bank is licensed to
transact business in this state, such bank shall deposit, and each
foreign (other nation) bank which is licensed to transact business in
this state shall maintain on deposit, with an approved depository
eligible assets having a value in an amount not less than the
applicable minimum.
(2) Whenever a foreign (other nation) bank which is licensed to
transact business in this state ceases to be so licensed, such bank
shall thereafter maintain on deposit with an approved depository
eligible assets having a value in an amount not less than the
applicable minimum for such period of time as the commissioner may
determine to be necessary for the protection of creditors of the bank'
s business in this state or for the protection of the public
interest.
(d) (1) No foreign (other nation) bank which maintains eligible
assets on deposit with an approved depository pursuant to this
section shall withdraw any such eligible assets except with the prior
approval of the commissioner.
(2) No approved depository which holds eligible assets on deposit
from a foreign (other nation) bank pursuant to this section shall
release any such eligible assets except with the prior approval of
the commissioner or as otherwise provided in subdivision (h).
(e) Any foreign (other nation) bank which maintains eligible
assets on deposit with an approved depository pursuant to this
section shall, unless the commissioner shall have suspended or
revoked its license to transact business in this state or taken
possession of its property and business in this state, be entitled to
receive any income paid on such eligible assets.
(f) (1) Whenever a foreign (other nation) bank deposits eligible
assets with, or withdraws eligible assets from, an approved
depository pursuant to this section, such bank shall do so in
accordance with such procedures and requirements as the commissioner
may by regulation or order prescribe.
(2) Whenever an approved depository receives, holds, or releases
eligible assets pursuant to this section, such approved depository
shall do so in accordance with such procedures and requirements as
the commissioner may by regulation or order prescribe and shall file
with the commissioner such reports as and when the commissioner may
by regulation or order require.
(g) Whenever a foreign (other nation) bank maintains eligible
assets on deposit with an approved depository pursuant to this
section:
(1) The eligible assets shall be deemed to be pledged to the
commissioner for the benefit of the creditors of the bank's business
in this state; and, notwithstanding any provision of the Uniform
Commercial Code to the contrary, the commissioner, for the benefit of
such creditors, shall be deemed to have a security interest in such
eligible assets.
(2) The eligible assets shall be free from any lien, charge, right
of setoff, credit, or preference in connection with any claim of the
approved depository against the bank.
(h) (1) In case the commissioner takes possession of the property
and business of a foreign (other nation) bank which maintains
eligible assets on deposit with an approved depository pursuant to
this section, such approved depository shall, upon order of the
commissioner, release such eligible assets to the commissioner, as
liquidator of the property and business of such bank.
(2) In case a foreign (other nation) bank which maintains eligible
assets on deposit with an approved depository pursuant to this
section fails to pay any judgment creditor of its business in this
state and the commissioner has not taken possession of the property
and business of such bank, such approved depository shall release
such eligible assets to the commissioner, and the commissioner shall
make such disposition of the eligible assets, as a court of competent
jurisdiction of this state or of the United States may order for the
benefit of such judgment creditor. For purposes of this paragraph,
"judgment creditor of its business in this state" means a person to
whom the bank is required to pay money under a judgment which (A)
arose out of the bank's business in this state, (B) has been entered
by a court of this state or of the United States, (C) has become
final, in that all possibility of direct attack on such judgment by
way of appeal, motion for new trial, motion to vacate, or petition
for extraordinary writ has been exhausted, and (D) has remained
unpaid for a period of not less than 60 days after becoming final.
1762. (a) In this section:
(1) "Adjusted liabilities," when used with respect to a foreign
(other nation) bank which is licensed to maintain a branch office in
this state, means the liabilities of such bank's business in this
state, excluding (A) accrued expenses, (B) any liability to an office
(whether in or outside of this state) or majority-owned subsidiary
of the bank, and (C) such other liabilities as the commissioner may
by regulation or order exclude.
(2) "Eligible assets" means any asset which the commissioner by
regulation or order determines to be eligible for purposes of this
section. However, "eligible asset," when used with respect to a
foreign (other nation) bank which is licensed to maintain a branch
office, includes (A) any asset which such bank maintains on deposit
pursuant to Section 1761 and (B) any reserves which the bank
maintains with respect to its business in this state in accordance
with requirements prescribed by the Board of Governors of the Federal
Reserve System.
(b) For purposes of this section, the amount of eligible assets
and the amount of adjusted liabilities of a foreign (other nation)
bank which is licensed to maintain a branch office in this state
shall each be computed for such period, in such manner, and on such
basis as the commissioner may by regulation or order prescribe.
(c) A foreign (other nation) bank licensed to maintain a branch
office in this state shall hold at its branch offices in this state
or at such other places as the commissioner may approve, eligible
assets in such amount, if any, as the commissioner may from time to
time by regulation or order determine to be necessary for the
maintenance of sound financial condition, for the protection of the
interests of creditors of the bank's business in this state, or for
the protection of the public interest. However, in no event shall
such amount exceed 108 percent of the adjusted liabilities of the
bank's business in this state.
(d) If the commissioner finds, with respect to a foreign (other
nation) bank licensed to maintain a branch office in this state, that
such action is necessary for the maintenance of sound financial
condition, for the protection of the interests of creditors of such
bank's business in this state, or for the protection of the public
interest, the commissioner may order the bank to place all or part of
the eligible assets which the bank is required to hold under
subdivision (c) in the custody of such bank organized under the laws
of this state or such national bank headquartered in this state as
the commissioner may designate.
1763. (a) (1) No foreign (other nation) bank which is licensed to
maintain an agency or branch office shall close such office unless
the commissioner shall have first approved such closing.
(2) Paragraph (1) shall not be deemed to prohibit a foreign (other
nation) bank which is licensed to maintain an agency or branch
office from closing such office in accordance with Article 4
(commencing with Section 1775).
(b) If the commissioner finds the following with respect to an
application by a foreign (other nation) bank for approval to close an
agency or branch office, the commissioner shall approve such
application:
(1) That it will not be unsafe or unsound for the bank to close
the office; and
(2) That the closing of the office will not be substantially
detrimental to the public convenience and advantage or that the
closing of the office is necessary in the interests of the safety and
soundness of the bank.
If the commissioner finds otherwise, the commissioner shall deny
the application.
(c) Whenever an application by a foreign (other nation) bank for
approval to close an agency or branch office has been approved and
all conditions precedent to such closing have been fulfilled, such
bank may close such office and shall promptly thereafter surrender to
the commissioner the license which authorized it to maintain the
office.
