Usa Alabama

USA Statutes : alabama
Title : Title 05 BANKS AND FINANCIAL INSTITUTIONS.
Chapter : Chapter 11A REGULATION OF TRUST BUSINESS OF BANKS AND TRUST COMPANIES.
Section 5-11A-1

Section 5-11A-1
Amenability of trust companies to banking laws; use of word 'trust' in corporate name generally; operation of trust departments, etc., by banks.

All corporations organized and operating as trust companies shall have the word 'trust' as a part of their corporate names, shall be amenable to the general banking laws of the state insofar as said laws are applicable to trust companies and not in conflict with the provisions of this chapter and shall be examined by the superintendent as state banks are examined. The word 'trust' need not be a part of the corporate name of any corporation now or hereafter organized under the laws of this state to do a banking business and all such banks, although the word 'trust' is not a part of their corporate names, shall have the right to operate and conduct a trust department, become trustees for any purpose, be appointed and act as executors, administrators, guardians and receivers and do any business and exercise any powers incident to the business of trust and banking companies doing banking business after the board of directors of the corporation shall have adopted an appropriate resolution and obtained the written approval of the superintendent authorizing the conduct and operation of a trust department, and a copy of such resolution and written approval certified to by the president and cashier of such bank under the corporate seal of such corporation shall have been filed in the office where the certificate of incorporation of the bank has been filed.



(Acts 1980, No. 80-658, §5-11-1.)Section 5-11A-10

Section 5-11A-10
Withdrawal of bonds or securities from deposit with trustees.

All trust companies organized under the laws of this state which are now required by their charters to keep on deposit with trustees any bonds, stocks or other securities to be held subject to the payment of any judgment which may be rendered against said companies may, upon making a deposit of securities in accordance with the provisions of Section 5-11A-5 withdraw from the custody of said trustees said bonds, stocks or other securities so deposited with said trustees and shall not thereafter be required to maintain any such deposit with trustees, any provisions of the charter of said companies to the contrary notwithstanding.



(Acts 1980, No. 80-658, §5-11-10.)Section 5-11A-11

Section 5-11A-11
Interest on bonds or securities deposited with Treasurer payable to trust companies.

The interest falling due from time to time on bonds or other securities on deposit with the State Treasurer in accordance with Section 5-11A-5 shall be payable to the corporation depositing such bonds or other securities, and the Treasurer may send to such corporation a reasonable time before each interest period the coupons or interest note representing the interest to become due at such interest period.



(Acts 1980, No. 80-658, §5-11-11.)Section 5-11A-12

Section 5-11A-12
Trust company authorized to purchase its own securities in fiduciary capacity.

A trust company or other financial institution with fiduciary powers may, in its fiduciary capacity, purchase bonds or other securities underwritten or otherwise distributed by the financial institution or by a syndicate which includes the financial institution or an affiliate of the financial institution, provided such purchase is otherwise prudent and not prohibited by the instrument governing the fiduciary relationship. The provisions of this section shall apply to purchases of bonds or other securities made at the time of the initial offering thereof or at any time thereafter.



(Acts 1987, No. 87-826, p. 1674; Acts 1989, No. 89-520, p. 1067.)Section 5-11A-2

Section 5-11A-2
Written approval of superintendent to conduct trust business.

No bank shall have the right to operate or conduct a trust department or become a trustee or a fiduciary without having received the prior written approval of the superintendent and otherwise complied with Section 5-11A-1, even though the certificate of incorporation of the bank might contain language covering such authority.



(Acts 1980, No. 80-658, §5-11-2.)Section 5-11A-3

Section 5-11A-3
Capital stock requirements for trust companies.

No trust company hereafter organized under the laws of Alabama shall have total initial capital accounts actually paid in of less than $1,000,000.00.



(Acts 1980, No. 80-658, §5-11-3.)Section 5-11A-30

Section 5-11A-30
Transfer between related institutions.

Absent written objection from the Superintendent of the State Banking Department, a bank, trust company or trust department (hereinafter to be known as the 'transferor') may transfer one or more fiduciary accounts administered by such bank, trust company or trust department to another bank, trust company or trust department (hereinafter to be known as the 'transfereeSection 5-11A-31

Section 5-11A-31
Approval of superintendent.

Approval of the superintendent shall be deemed granted in the absence of written objection from the superintendent within 10 days after receipt by the superintendent of written notice from the transferor bank of the proposed transfer.



(Acts 1989, No. 89-539, p. 1127, §2.)Section 5-11A-32

Section 5-11A-32
Notice of transfer.

(a) Within 30 days after the date of the transfer of the fiduciary accounts, the transferor shall send written notice by first class mail to the last known address (as then set forth on the records of the transferor, or if not set forth, as may be determined by the transferor in the exercise of reasonable diligence) of the following persons or entities:

(1) For employee benefit plans, to the plan sponsors.

(2) For individual retirement accounts and retirement accounts for the self-employed, to the account owners.

(3) For agency and escrow accounts, to the principals.

(4) For securities for which a transferor bank serves as trustee, registrar, transfer agent or paying agent, to the issuers.

(5) For revocable trusts under agreement, to the settlors.

(6) For irrevocable trusts under agreement, to any co-fiduciary, to the settlor, to each current income beneficiary who is an adult, and if a current income beneficiary is a minor, to a parent of the minor with whom the minor resides or to the conservator or guardian of the minor. For purposes of this subsection, 'current income beneficiary' means a person currently entitled to income from a trust or a person to whom the trustee, in the trustee's discretion, may currently pay principal or income.

(7) For testamentary trusts, to the persons notified under subsection (6) of this section.

(8) For conservatorships, to any co-fiduciary, to the protected person for whom the conservatorship was created, or if the conservatorship was created for a minor, to a parent of the minor with whom the minor resides or to the guardian of the minor.

(9) For guardianships, to any co-fiduciary, to the minor or legally incapacitated person for whom the guardian was appointed if the ward is at least 14 years of age.

(10) For probate estates, to any co-fiduciary, to the surviving spouse, if any, and to those persons notified pursuant to subsection (7) of this section.

(11) For corporate trust indentures, to the issuer of the securities subject to each indenture; provided, however, that notwithstanding the foregoing, the transferor may, if it deems it appropriate, comply with any notice procedures contained in the trust indenture instrument with respect to succession of trustees.

(12) For fiduciary accounts not listed in above subsections (1) through (11), to such persons as the transferor sent its last report of the status of the account.

(b) For purposes of this article, notice shall be deemed effective when mailed by the transferor. Should the transferor learn after the expiration of 30 days from such transfer that through inadvertence, error, neglect or otherwise, notice was not mailed as herein provided, delayed notice may be given in the manner set forth herein. The recipient of such notice shall then have 30 days to object to the transfer as provided in Section 5-11A-33.



(Acts 1989, No. 89-539, p. 1127, §3.)Section 5-11A-33

Section 5-11A-33
Objection to transfer; hearing on objection; appointment of related institution as agent.

(a) Any person given notice pursuant to Section 5-11A-32 may file a written objection to the fiduciary transfer with the Superintendent of the State Banking Department, stating grounds for objection, within 30 days of receipt of notice of the transfer by the person notified pursuant to Section 5-11A-32. The transferor shall then have 30 days to either:

(1) Abandon the transfer of fiduciary accounts to which objection was given and hold such transfer for nought, or

(2) Apply to the State Banking Department for a hearing on the merits of the objection to transfer. After such hearing, the State Banking Department shall either approve or deny the transfer.

(b) Nothing herein shall preclude the transferor from appointing a related bank, trust company or trust department as its agent for the performance of any and all fiduciary obligations as provided in Section 5-11A-37.



(Acts 1989, No. 89-539, p. 1127, §4.)Section 5-11A-34

Section 5-11A-34
Filing of affidavit in office of judge of probate; filing of notice of abandonment.

(a) Within a reasonable time after the date of a transfer of the fiduciary accounts in accordance with the procedures set forth in Sections 5-11A-32 and 5-11A-33, the transferor shall file an affidavit in the office of the judge of probate of the county in which the main office of the transferor is located; and from time to time, the transferor may file a copy of such affidavit in the office of the judge of probate in such other counties as the transferor may deem appropriate. Such affidavit shall set forth the names and addresses of the transferor and transferee, such identification of the fiduciary accounts transferred as the transferor may deem appropriate, and such other information as the transferor may deem desirable.

(b) In the event that notice of objection to the transfer is received by the transferor after the filing of record of the original affidavit with respect to the transfer; and in the event that pursuant to Section 5-11A-33, such transfer is abandoned, the transferor shall promptly file notice of such abandonment in the office of the appropriate judge of probate.



(Acts 1989, No. 89-539, p. 1127, §5.)Section 5-11A-35

Section 5-11A-35
Substitution of transferee bank, trust company or trust department as fiduciary; effect.

If a bank, trust company or trust department completes a fiduciary transfer, the bank, trust company or trust department to which such fiduciary accounts have been transferred shall be automatically substituted as the fiduciary of all the accounts so transferred without further action and without any order or decree by any court or public officer; and without such transfer being treated or considered as a resignation by the transferor as a fiduciary; and such transferee bank, trust company or trust department shall have all the rights, duties, responsibilities, obligations and liabilities, financial or otherwise, of such transferor bank with respect to such accounts. A bank, trust company or trust department which completes a fiduciary transfer shall be relieved as fiduciary without an accounting and without any order or decree of any court or public officer, and prospectively shall have no continuing duties, responsibilities, obligations or liabilities, financial or otherwise, with respect to the accounts transferred. Such transfer shall not, however, relieve the transferor bank of liability it may have incurred for action or inaction prior to the transfer, nor shall it impose liability on the transferee for action or inaction of the transferor prior to the transfer. No such transfer shall constitute a relinquishment of trust powers by the transferor bank.



(Acts 1989, No. 89-539, p. 1127, §6.)Section 5-11A-36

Section 5-11A-36
'Related' defined.

A transferor bank, trust company or trust department is 'related' to a transferee bank, trust company or trust department if:

(1) Such transferee controls the transferor;

(2) Such transferor controls the transferee;

(3) The same entity controls, directly or indirectly, the transferor and the transferee;

(4) A majority of the directors of the transferor are directors of the transferee; or

(5) A majority of the directors of the transferee are directors of the transferor.

'Control' and 'controls' as used herein shall mean the ownership of a majority of the voting shares of another bank, trust company or of the bank operating such trust department.



(Acts 1989, No. 89-539, p. 1127, §7.)Section 5-11A-37

Section 5-11A-37
Appointment of agent.

Regardless of objection to any fiduciary transfer as provided in Section 5-11A-33 and the outcome thereof, and notwithstanding any procedure under this article, any bank may appoint a related bank, trust company or trust department as its agent for the performance of all acts, obligations and responsibilities of the bank with respect to any fiduciary account. In such an event, the appointing bank shall remain fully responsible and liable with respect to all actions of the related bank, trust company or trust department as if performed by the appointing bank itself. No such agency relationship shall:

(1) Be deemed an impermissible delegation of responsibility or duty by the appointing bank;

(2) Constitute a resignation or disqualification of the appointing bank as fiduciary or relinquishment of trust powers by the appointing bank; or

(3) Require the consent of any person, entity, court or other governmental authority.



(Acts 1989, No. 89-539, p. 1127, §8.)Section 5-11A-4

Section 5-11A-4
Use of word 'trust' in corporate or partnership name.

No corporation which is not organized and operating as a trust company or as a bank or as a combined bank and trust company which has not complied with the requirements of Sections 5-11A-1 and 5-11A-3 shall use the word 'trust' as a part of its corporate name, and no such corporation shall use the word 'trust' in connection with the business of said corporation with intent to give the impression that such corporation is organized and operating as a trust company in accordance with the provisions of Sections 5-11A-1 and 5-11A-3. Any corporation violating any of the provisions of this section shall thereby make void the organization of such corporation, and its stockholders shall thereupon become liable as partners. No limited partnership or other partnership shall use the word 'trust' as part of its name.



(Acts 1980, No. 80-658, §5-11-4.)Section 5-11A-5

Section 5-11A-5
Deposit of security for operation of trust business — Amount required and form; charges against deposit.

Any corporation organized and operating as a trust company or as a bank authorized by law to do a trust business may deposit with the State Treasurer or elsewhere United States bonds, bonds, notes or debentures of any federal agency such as a federal land bank, banks for cooperatives, Farm Home Administration, Federal National Mortgage Association, etc., Alabama bonds, bonds of any city or county in the State of Alabama or mortgages which are first liens on real estate, worth in each case double the face of the mortgage, situated in this state, to an amount not less than $25,000.00, and may increase said deposit from time to time or reduce the same to an amount not less than $25,000.00, or may withdraw the deposit entirely, provided such trust companies or banks have made final settlement and accounted for all assets in their possession and under their control by reason of any appointment under this chapter. Immediately upon the appointment of any bank or trust company to act as guardian, administrator, executor, receiver or trustee or other fiduciary by the judge of any court in this state, under Section 5-11A-9, said judge shall certify such appointment under his seal of office to the State Treasurer, giving the name and amount of assets of the estate or cestui que trusts; and, upon receipt of said certificate, the State Treasurer shall charge against any deposit the liability under said appointment.



(Acts 1980, No. 80-658, §5-11-5.)Section 5-11A-6

Section 5-11A-6
Deposit of security for operation of trust business — State Treasurer to decline certain bonds or securities.

The State Treasurer shall decline to receive bonds or other securities of a market value less than par and may, in his discretion, decline to receive any bonds or other securities that he considers unsafe or unsuitable for the purpose.



(Acts 1980, No. 80-658, §5-11-6.)Section 5-11A-7

Section 5-11A-7
Deposit of security for operation of trust business — Certificate of deposit; purpose.

The State Treasurer shall, from time to time, furnish the company making such deposit with a proper certificate showing the fact of the deposit and containing an exact description of the bonds or other securities deposited. Such deposit is to secure the payment of all liabilities of the company making the deposit as a guardian, administrator, executor, receiver, trustee or other fiduciary under appointment of any court of this state where the company has claimed exemption from giving bond by reason of having this deposit, and all such liabilities shall constitute a first claim on said bonds or other securities deposited as against all other liabilities of said company.



(Acts 1980, No. 80-658, §5-11-7.)Section 5-11A-8

Section 5-11A-8
Sale of bonds or securities for satisfaction of judgment against trust company.

When any person, firm or corporation has established by final court proceedings a claim against said company to secure which said bonds or other securities were deposited and said claim is not paid within 30 days by said company, the State Treasurer shall proceed forthwith to sell a sufficient number of said bonds to pay the judgment against said company and pay said judgment by paying the amount to the proper official of the court wherein said judgment exists.



(Acts 1980, No. 80-658, §5-11-8.)Section 5-11A-9

Section 5-11A-9
Exemption of trust companies, etc., acting as administrators, etc., from bond requirement.

Any trust company or bank which is authorized by law to act as a guardian, administrator, executor, receiver or trustee, except as may be otherwise provided in this code for the administration of the affairs of war veterans, under appointment of any court of this state, and which maintains the deposit provided for in Section 5-11A-5, shall be entitled as a matter of right to exemption from giving bond before receiving authority to act in any of the above capacities, provided its aggregate liabilities, to secure which said bonds or other securities are deposited, do not exceed five times the par value of said securities. When such company desires exemption from giving any such bond, it shall file with the officer who would otherwise require such bonds a sworn statement showing the amount in value of the bonds or other securities on deposit with the State Treasurer, and that the liabilities of the company protected by such deposit do not exceed five times the par value of said bonds or other securities, together with a certificate from the State Treasurer showing the amount of such deposit.



(Acts 1980, No. 80-658, §5-11-9.)

USA Statutes : alabama