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| Home > Statutes > Usa Arizona |
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USA Statutes : arizona
Title : Banks and Financial Institutions
Chapter : FINANCIAL INSTITUTION HOLDING COMPANIES
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6-1101 Definitions
In this chapter, unless the context otherwise requires:
1. "Acquisition of control" means a transaction by which a person obtains, directly
or indirectly, control of a financial institution.
2. "Application" means an application which is made pursuant to this article for
approval of the superintendent to become a financial institution holding company.
3. "Control" means direct or indirect ownership or power to vote twenty-five per
cent or more of the outstanding voting securities of a financial institution or
controlling person or to control in any manner the election of a majority of the
directors of a financial institution or controlling person. For the purposes of
determining the percentage of voting securities owned, controlled or held by a person,
there shall be aggregated with the voting securities attributed to the person the voting
securities of any other person directly or indirectly controlling, controlled by or under
common control with the other person, by any officer, partner, employee or agent of the
person or by any spouse, parent or child of the person.
4. "Controlling person" means a person who is directly or indirectly in control of
a financial institution.
5. "Financial institution" means banks, trust companies, savings and loan
associations, international banking facilities, and holding companies of banks, trust
companies, savings and loan associations and international banking facilities under the
jurisdiction of the department.
6. "Financial institution holding company" means a corporation, trust, association,
partnership or similar organization which directly or indirectly, acting through one or
more persons, controls a financial institution or a controlling person.
7. "Voting security" means any security presently entitling the owner or holder of
the security to vote for the election of directors of a financial institution or
controlling person, excluding, in the case of a savings and loan association, votes
attributable to savings accounts. A specified percentage of outstanding voting
securities is the amount of the outstanding voting securities that entitles the holder or
holders of the securities to cast that specified percentage of the aggregate votes which
the holders of all outstanding voting securities are entitled to cast.
6-1102 Prohibitions
A person shall not directly or indirectly take any action that causes or results in
a company becoming a financial institution holding company, except with the approval of
the superintendent pursuant to this article or as otherwise permitted by this article.
6-1103 Exempt persons and transactions
A. This article does not apply to the following persons or transactions of the type
specified:
1. A registered dealer who acts as an underwriter or member of a selling group in a
public offering of the voting securities of a financial institution or controlling
person.
2. A person who acts as proxy for the sole purpose of voting at a designated
meeting of the security holders of a financial institution or controlling person.
3. A person who acquires control of a financial institution or controlling person
by devise or descent, except that the person shall divest himself of such control not
more than two years after the date of the acquisition unless the acquisition of control
is approved by the superintendent pursuant to this article.
4. A person who acquires control of a financial institution or controlling person
as a personal representative, custodian, guardian or conservator appointed by a court or
as a trustee, a receiver or other officer appointed by a court.
5. A pledgee of a voting security of a financial institution or controlling person
who does not have the right, as pledgee, to vote the voting security.
6. A person who acquires control of a financial institution or controlling person
through the collection of a debt previously contracted in good faith, except that the
person shall divest himself of such control not more than two years after the date of the
acquisition unless the acquisition of control is approved by the superintendent pursuant
to this article.
B. A person or transaction that the superintendent by rule or order exempts as not
being necessary or appropriate in the public interest or for the protection of a
financial institution or the depositors, beneficiaries, creditors or shareholders of the
financial institution is exempt from this article.
C. A person, before filing an application for approval pursuant to this article,
may request in writing a determination from the superintendent as to whether the person,
on consummation of a proposed transaction, will be in control. On such a request, the
superintendent may enter an order that the person will not be in control, in which event
the proposed transaction is an exempt transaction under this article.
D. This article does not supersede, rescind or modify any provision, requirement or
condition of this title which would otherwise be applicable to any acquisition of a
financial institution by a financial institution holding company. This article does not
supersede, rescind or modify any provision, requirement or condition which would
otherwise be applicable to any merger of financial institutions or the acquisition or
sale of all or substantially all of the assets of the financial institution, except that
an approval obtained pursuant to this article satisfies the requirements of chapter 1,
article 4 of this title.
6-1104 Acquisition of control; approval by superintendent
A. A person shall not, directly or indirectly, make a tender offer for, request or
invite a tender offer for, offer to exchange securities for or acquire in the open market
or otherwise any voting security or any security convertible into a voting security of a
financial institution or controlling person if the transaction would result in the person
becoming a financial institution holding company unless the superintendent has approved
the acquisition of control pursuant to this article. This section does not prohibit a
person from negotiating or entering into agreements subject to the condition that the
acquisition of control is not effective until approval of the superintendent pursuant to
this article is obtained.
B. A person who has been approved pursuant to this article is not required to make
a subsequent application pursuant to this article to acquire additional control or
fractions of control of the financial institution or controlling person for which it was
approved if the person has remained in continuous control of the financial institution or
controlling person.
6-1105 Application for approval
A. An application shall be in writing, in such form as the superintendent may
prescribe and accompanied by the information, data and records the superintendent
requires. The superintendent shall prescribe by rule or order the form of the
application and the information, data or records which may be required.
B. The superintendent shall cause copies of an initial application and any
amendment or supplement to the application to be given to the financial institution
concerned and the controlling person, if any, within three business days.
6-1106 Material change of fact; filing amended statements
If any material change occurs in the facts set forth in the application, or if for
any other reason the acquiring party desires to amend the application, the person shall
file with the superintendent an amendment setting forth the change, together with copies
of all documents and other material relevant to the change.
6-1107 Denial of application; grounds
A. The superintendent may deny an application if the superintendent finds any of
the following:
1. The financial condition of the financial institution holding company that would
acquire control will jeopardize the financial stability of the financial institution or
controlling person or prejudice the interests of the depositors, beneficiaries, creditors
and shareholders of the financial institution or controlling person.
2. A plan or proposal to liquidate or consolidate the financial institution or
controlling person or to make any other major change in the business, corporate structure
or management of the financial institution or controlling person is not fair and
reasonable to the depositors, beneficiaries, creditors and shareholders of the financial
institution or controlling person.
3. The overall moral character or integrity of any person who would acquire control
indicates that it would not be in the interest of the depositors, beneficiaries,
creditors and shareholders of the financial institution or controlling person, and in the
interest of the public, to permit the person to control the financial institution or
controlling person.
4. The applicant has neglected, failed or refused to furnish to the superintendent
any required information.
5. It is contrary to law.
6. The acquisition would result in a monopoly or would be in furtherance of any
combination or any conspiracy to monopolize or to attempt to monopolize the business of
financial institutions and financial institution holding companies.
7. The effect of the proposed acquisition will be to substantially lessen
competition, tend to create a monopoly or in any other manner be a restraint of trade,
unless the superintendent finds that the effects of the proposed acquisition are clearly
outweighed by its probable effect in meeting the convenience and needs of the community
to be served and by the public interest.
8. The applicant has made a material false statement on the application.
B. The superintendent shall give the applicant written notification of the granting
or denial of an application together with a statement in support of the decision. If the
superintendent, based on the information available at the time, plans to deny the
application and no hearing has been held in accordance with title 41, chapter 6, article
10, the superintendent shall send the applicant a written statement which shall specify
the reasons for such tentative denial. The applicant shall have fifteen days following
the date of this statement within which to file a written request to amend its
application. Upon the filing of such request the applicant shall be given thirty days in
which to amend its application.
C. The superintendent may approve an application subject to conditions he considers
necessary and appropriate to protect the public interest and carry out the purposes of
this title. The superintendent shall give the applicant written notification of the
approval of an application which is subject to conditions together with a statement in
support of the decision.
6-1108 Failure to act on application as approval
An application which is not denied or approved by the superintendent within sixty
days after the application is filed with the superintendent is deemed to be approved by
the superintendent as of the first day after the period. The superintendent and the
applicant may extend the sixty day period by agreement. If the superintendent gives
notice of a hearing, the sixty day period is extended to the date fixed by order of the
superintendent. For the purposes of this section, an application is not deemed filed
until all amendments, supplements and additional information required by the
superintendent have been received.
6-1109 Determination of control of one person by another; hearing; notice
Before determining whether a person controls another person or before denying or
approving an application for approval to become a financial institution holding company
the superintendent may hold a hearing. The superintendent shall give notice of the
hearing to the applicant, the financial institution or controlling person concerned and
to such other persons as the superintendent determines appropriate. The date for
commencement of the hearing shall be not later than thirty days after the date of the
notice, unless the applicant consents to an extension of the period.
6-1110 Appointment of superintendent as agent for service of process; forwarding of process; consent to jurisdiction
A person who is not a resident of this state, domiciled in this state or authorized
to do business in this state and who files an application is deemed to have:
1. Consented to the jurisdiction of the courts of this state for all actions
arising under this article.
2. Appointed the superintendent as his lawful agent for the purpose of accepting
service of process in any action, suit or proceeding that may arise under this
article. The superintendent shall transmit copies of all such lawful process accepted by
the superintendent as an agent by certified mail to the person at his last known address.
6-1112 Acquisition of voting securities in violation of article; limitation on rights as shareholder; injunction
A. With respect to any voting security acquired in violation of this article or any
rule or order of the superintendent, a person is not entitled to vote or give a written
proxy or consent for a period of five years after the acquisition except with the written
consent of the superintendent. If a voting security of a financial institution or
controlling person is acquired in violation of this article or any rule or order, any
shareholder of the financial institution or controlling person or the superintendent may
apply to the superior court for injunctive or other equitable relief, including costs and
reasonable attorney fees, to enjoin prospectively any person from voting or giving any
written proxy or consent with respect to the voting security for a period of five years
after the acquisition except with the written consent of the superintendent. The
superintendent may apply to the superior court for injunctive or other relief, including
costs, to void any vote or any giving of a written proxy or consent with respect to the
security which has occurred since the acquisition, except that the court may not void the
vote if the court finds that to void the vote would not be in the interest of the
depositors, beneficiaries, creditors or shareholders of the financial institution or
controlling person or in the public interest.
B. A person may file an application for consent of the superintendent with the
superintendent and the superintendent shall grant or deny the application within thirty
days. In giving consent, the superintendent may require those conditions that the
superintendent deems reasonable, necessary or otherwise in the public interest. Except as
provided in section 41-1092.08, subsection H, the final action of the superintendent is
subject to judicial review pursuant to title 12, chapter 7, article 6 if the complaint
seeking review is filed with the superior court in Maricopa county.
C. No civil action may be brought to void any vote pursuant to subsection A of this
section unless commenced within one year after the transaction which constituted a
violation of this article or any rule or order of the superintendent.
6-1113 Reports; examination; costs
A. The superintendent may require reports from and examine financial institution
holding companies and each subsidiary of the holding companies. The superintendent shall
accept the examination and financial reports of the appropriate federal or state holding
company regulatory authority in lieu of any examination or financial report authorized or
required by this chapter. The reports so accepted are considered for all purposes as
official reports of the department.
B. Notwithstanding subsection A of this section, the superintendent may require
reports from and examine financial institution holding companies and their subsidiaries
if it appears to the superintendent that any of these entities has engaged, is engaging
or is about to engage in any act, practice or transaction which constitutes an unsafe or
unsound practice or a violation of this title or any rule or order of the
superintendent. This section does not prohibit the department from participating with
federal regulators in the examinations to aid in enforcing this title.
C. The cost of any examination shall be assessed against and paid by each financial
institution holding company pursuant to section 6-125.
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