§412:5-205  Authority to engage in trustbusiness.  (a)  A bank may not engage in any activity requiring a charteras a trust company under article 8 of this chapter, including withoutlimitation serving as trustee, personal representative, registrar or transferagent for stocks and bonds, guardian, agent, assignee, or receiver, or in anyother fiduciary capacity, unless it has received the approval of thecommissioner under this section.  If approved, the trust business may beconducted through a subsidiary, division or department of the bank.

(b)  The bank shall file an application forsuch approval with the commissioner on a form prescribed by the commissioner,together with an application fee of $5,000, or such greater amount as thecommissioner shall establish, no part of which shall be refundable.  Theapplication shall contain the following information:

(1)  Appropriate board resolutions authorizing theestablishment of a trust company, division or department;

(2)  Employment history, education, managementexperience, and other biographical information for all executive officers,trust officers, and managers of the trust company, division or department;

(3)  Proposed policies concerning common trust funds,overdrafts, disaster recovery plans, dividends, management of assets andliabilities, conflicts of interest, investments, and fee schedules.  Thecommissioner may consider any existing bank policies that will be adapted andutilized for its trust business;

(4)  A business plan and financial projectionsregarding profitability of the proposed trust business;

(5)  Evidence that the bank has or will have thefinancial ability, responsibility, and experience to engage in the trustbusiness; and

(6)  Any other information which the commissioner mayrequire.

(c)  If the proposed trust business will beconducted in a subsidiary of a bank, the application shall contain thefollowing additional information:

(1)  The name of the subsidiary, the location of itsprincipal office, and any lease agreements for such principal office;

(2)  Employment history, education, managementexperience, and other biographical information for all directors of thesubsidiary; and

(3)  A proposed capital plan.

(d)  A bank engaging in the trust businessshall establish and maintain the same amount of capital and surplus required ofa trust company under article 3, in addition to any capital and surplusrequired to engage in the business of a bank under this article.  A bankengaging in the trust business shall also maintain the reserves required of atrust company under section 412:8-202.

(e)  The commissioner's decision shall be inthe form of a written order, and if approved, may contain such conditions andrestrictions as may be in the public interest.  The application shall be approvedonly if the commissioner is satisfied that the proposed trust business will notjeopardize the safety and soundness of the bank; that the applicant hassufficient capital, surplus, and cash reserves; that the proposed management ofthe trust business is financially responsible, honest, and qualified; and thatthe trust business will be carried on in a safe and sound manner.  If thecommissioner grants approval to a bank to carry on its trust business through asubsidiary, the commissioner shall issue a trust charter to such subsidiary.

(f)  Any bank which is authorized to engage inthe trust business through a division or department of the bank shall maintainbooks, records, and accounts for its trust business that are separate from itsbanking business.

(g)  A bank which is authorized to engage inthe trust business through a subsidiary shall not be considered a trust holdingcompany under this chapter.

(h)  Any bank authorized to engage in the trustbusiness under this section with respect to such trust business shall also besubject to all the provisions applicable to trust companies under article 8;provided that if there is any conflict between the provisions of article 8 andthis article with respect to the operation of a trust business, the provisionsof article 8 shall control with respect to such trust business. [L 1993, c 350,pt of §1]

 

Cross References

 

  Modification of fees, see §92‑28.