§412:5-203  Operating subsidiaries. (a)  "Operating subsidiary" means a corporation other than acorporation referred to in section 412:5-305(g)(2) to (8) of which more thaneighty per cent of the voting securities is held by a bank.

(b)  An operating subsidiary may engage inactivities that are authorized for a bank or that are usual or incidental tothe business of a bank.

(c)  No bank may acquire, establish, or holdthe voting securities of an operating subsidiary without the commissioner'sprior written approval; provided that such approval shall not be required solong as the bank's aggregate net contributions to the capital of the operatingsubsidiary remain less than ten per cent of the bank's capital and surplus;provided further that the bank shall comply with the notification requirementsof subsection (f).  Unless otherwise provided by law or rule, all provisions ofthis chapter applicable to the operations of the parent bank shall apply to theoperations of its operating subsidiary.  Unless otherwise provided by law orrule, pertinent accounts of the parent bank and its operating subsidiariesshall be consolidated for the purpose of applying applicable statutorylimitations such as contained in section 412:5-302.

(d)  The bank shall file an application withthe commissioner in a form approved by the commissioner.  The application shallbe accompanied by a fee the amount of which shall be prescribed by rule.  Theapplication shall contain the following information concerning the proposedoperating subsidiary:

(1)  The name and date for commencement of operations;

(2)  The specific location;

(3)  The activities and nature of business;

(4)  The ownership, amount, and nature of theinvestment; and

(5)  Any other information that the commissioner mayrequire.

(e)  If after appropriate examination andinvestigation, the commissioner is satisfied that the acquisition,establishment, or holding the voting securities of the operating subsidiarywill comply with this section, the commissioner shall approve the applicationin writing, with conditions as the commissioner may deem appropriate.

(f)  The bank shall notify the commissioner inwriting within five days of acquiring or establishing an operating subsidiaryor performing new activities in the operating subsidiary.  The notificationshall provide the information specified in subsection (d).

(g)  The accounts of each operating subsidiaryof a bank shall be maintained independently of the accounts of all of thebank's other operating subsidiaries, and independently of the accounts of thebank itself.  At least at the end of every quarter of its fiscal year the bankshall consolidate or recognize its proportionate share of the profit and lossfrom each operating subsidiary.

(h)  The bank shall notify the commissioner inwriting within five days of closing an operating subsidiary.  The notificationshall provide the date of closing, the reasons for the closure, and the meansby which the assets and liabilities of the operating subsidiary were disposed.[L 1993, c 350, pt of §1; am L 2006, c 228, §31]