§412:3-206  Grant of preliminary approval toorganize a financial institution.  (a)  Following the expiration of thetime for the submission of written comments or the completion of aninformational and comment proceeding, the commissioner shall issue a writtendecision and order on the application for preliminary approval to organize.  Ifthe commissioner approves the application, the applicant shall become an"applicant in organization", and may take all steps necessary tocomplete organization and file an application for a charter or license.

(b)  An application for preliminary approval toorganize shall be approved only if the commissioner finds that:

(1)  The proposed activities of the financialinstitution will comply with the requirements of this chapter;

(2)  If the financial institution will be a subsidiaryof a holding company, the holding company is or will be properly organized, ingood standing, and financially sound, and is not or will not be engagingdirectly or indirectly through any subsidiary or affiliate in businessprohibited by this chapter;

(3)  The qualifications, character, financialresponsibility, experience, and general fitness of the proposed directors andexecutive officers of the financial institution and any holding company aresuch as will warrant public confidence and a belief that the business of thefinancial institution will be honestly and efficiently conducted.  For purposesof this section, the commissioner may presume that in the absence of credibleevidence to the contrary, a director, officer, or controlling person is of goodcharacter and sound financial standing.  The presumption may be rebutted byevidence to the contrary, including without limitation a finding that thedirector, officer, or controlling person has:

(A)  Been convicted of, or has pleaded nolocontendere to, any crime involving an act of fraud or dishonesty;

(B)  Consented to or suffered a judgment in anycivil action based upon conduct involving an act of fraud or dishonesty;

(C)  Consented to or suffered the suspension orrevocation of any professional, occupational, or vocational license based uponconduct involving an act of fraud or dishonesty;

(D)  Wilfully made or caused to be made in anyapplication or report filed with the commissioner, or in any proceeding beforethe commissioner, any statement that was at the time and in the light of thecircumstances under which it was made false or misleading with respect to anymaterial fact, or has wilfully omitted to state in any application or reportany material fact that was required to be stated therein; or

(E)  Wilfully committed any violation of, orhas wilfully aided, abetted, counseled, commanded, induced, or procured theviolation by any other person of, any provision of this chapter or of any ruleor order issued under this chapter;

(4)  The proposed operations of the financialinstitution will be conducted in a safe and sound manner;

(5)  The articles of incorporation of the financialinstitution comply in all respects with this chapter and chapter 414; and

(6)  The capital stock solicitation submission iscomplete and the solicitation will not affect the safety or soundness of theproposed financial institution or harm the public interest.

(c)  In granting preliminary approval toorganize, the commissioner may impose any conditions and restrictions that arein the public interest, including but not limited to requiring the applicant tofulfill representations contained in its application and agreements made withthe commissioner during the application process.

(d)  Upon the issuance of a written decisionand order granting the application for preliminary approval to organize, thearticles of incorporation may be delivered by the applicant in organization tothe director of commerce and consumer affairs for filing and, if accepted forfiling, the financial institution shall have corporate existence.  Although theproposed financial institution may have corporate existence, it may nottransact any financial institution business until it has received a financialinstitution charter or license under this article; provided that the financialinstitution may conduct any transaction that is incidental and necessary toprepare to do a financial institution business and obtain a charter or license.

(e)  The applicant and the proposed Hawaiifinancial institution shall not solicit subscriptions for the capital stock ofthe Hawaii financial institution until the written decision and order grantingthe application for preliminary approval to organize has been issued and thearticles of incorporation have been accepted for filing by the director ofcommerce and consumer affairs.  The approval shall not constitute adetermination that the applicant has complied with chapter 485A or any otherstate or federal law. [L 1993, c 350, pt of §1; am L 2006, c 228, §19; am L2007, c 9, §16]