USA Statutes : nevada
Title : Title 55 - BANKS AND RELATED ORGANIZATIONS
Chapter : CHAPTER 661 - ORGANIZATIONAL REQUIREMENTS
No bank may be:
1. Organized unless its initial stockholders’ or members’ equity
is $300,000 or more, or such greater amount as may be required by the
Commissioner. The full amount of the initial stockholders’ or members’
equity of any bank must be paid in cash, exclusive of all organization
expenses, except as otherwise provided in this title, before it may be
authorized to commence the business of banking.
2. Organized or authorized to do banking or banking and trust
business unless its deposit accounts are insured by the Federal Deposit
Insurance Corporation.
(Added to NRS by 1971, 974; A 1983, 1731; 1987, 1907; 1997, 980)
1. The stockholders’ or members’ equity of any state bank must,
subject to the limitations set forth in NRS 661.015 , be at least 6 percent of the total deposit
liability of the bank as determined by the Commissioner. In determining
the amount of stockholders’ or members’ equity that will be required, the
Commissioner shall give due consideration to the character and liquidity
of the assets of the bank and to the standards regarding equity
requirements established by other state and federal banking supervising
agencies.
2. The Commissioner shall, to determine the requirements for
stockholders’ or members’ equity for any state bank, include undivided
profits, capital notes, debentures and any reserve for losses.
3. The deposit liability for the purposes of this section must be
the average of daily deposit liabilities for the preceding 60 calendar
days.
4. This section does not prohibit the acceptance of deposits by
any bank while it is proceeding expeditiously, as determined by the
Commissioner, to comply with the provisions of this section.
(Added to NRS by 1971, 974; A 1983, 1731; 1987, 1907; 1997, 980)
1. A banking corporation may, with the approval of the
Commissioner, amend its articles of incorporation to authorize an
increase or reduction in its authorized stock.
2. The Commissioner shall not approve an amendment of the articles
of incorporation that reduces the authorized stock of the corporation
unless he finds that the security of the existing creditors of the
corporation will not be impaired.
(Added to NRS by 1971, 974; A 1983, 1732; 1987, 211, 1907; 1995,
478; 1997, 981)
OWNERSHIP AND CONTROL
Persons holding stock
in banking corporations or becoming substituted members of banking
companies as executors, administrators, guardians or trustees are not
personally subject to any liabilities as stockholders or members, but the
estates and funds in their hands are liable in like manner and to the
same extent as the testator, intestate, ward or person interested in the
trust fund would be, if living and competent to hold stock in his own
name.
(Added to NRS by 1971, 975; A 1995, 478)
1. If a stockholder of a banking corporation or member of a
banking company fails to pay any installment on his stock or contribution
when the installment is required by law to be paid, the directors or
managers of the bank shall sell the stock or member’s interest at public
or private sale, as they may deem best, having first given the delinquent
stockholder or member 20 days’ notice, personally or by mail, at his last
known address.
2. If no person can be found who will pay for the stock or
interest the amount due thereon, together with any additional
indebtedness of the stockholder or member to the bank, the amount
previously paid is forfeited to the bank. The stock or interest must be
sold, as the directors may order, within 30 days after the forfeiture
and, if not sold, it must be cancelled and deducted from the capital of
the bank.
3. The other members of a banking company have a joint and several
right of first refusal to buy the interest of the delinquent member. If
this right is not exercised, the buyer becomes a member.
(Added to NRS by 1971, 975; A 1995, 479)
1. If the stockholders’ or members’ equity of any bank has become
impaired, the Commissioner shall notify the officers and directors of the
bank to require the bank to make the impairment good within 3 months
after receiving notice from the Commissioner.
2. The officers and directors of the bank who receive the notice
shall immediately require the bank to make the impairment good.
3. If, within 3 months after the officers and directors of the
bank receive the notice from the Commissioner, the bank fails to make the
impairment good, the Commissioner may forthwith take possession of the
property and business of the bank until its affairs are finally
liquidated as provided by law.
(Added to NRS by 1971, 975; A 1983, 1732; 1987, 587, 1908; 1995,
479; 1997, 981)
1. A banking corporation organized under the laws of this state
may, with the approval of the Commissioner, issue preferred stock of one
or more classes, in such amount and with such par value as is approved by
the Commissioner, unless such an issuance is prohibited by the provisions
of chapter 78 of NRS.
2. Any preferred stock lawfully issued by a banking corporation
organized under the laws of this state must be included in determining
whether the banking corporation has complied with the minimum
requirements for stockholders’ equity provided by this title.
(Added to NRS by 1971, 976; A 1983, 1733; 1987, 1909; 1997, 982)
1. On the fourth Monday in January of each year, a copy of the
list of stockholders required to be maintained pursuant to paragraph (c)
of subsection 1 of NRS 78.105 or the
list of members required to be maintained pursuant to paragraph (a) of
subsection 1 of NRS 86.241 must be
verified by the oath of the president or a manager and must be
transmitted to the Commissioner and filed in his office for the
confidential use of the Commissioner.
2. The list of members required to be maintained pursuant to
paragraph (a) of subsection 1 of NRS 86.241 must, in addition to the requirements set
forth in that section, include the percentage of each member’s interest
in the company.
(Added to NRS by 1971, 977; A 1983, 1734; 1987, 1909; 1995, 480;
1997, 983)
1. As used in this section, “control” means the possession,
directly or indirectly, of the power to direct or cause the direction of
the management and policy of the bank, or a change in the ownership of as
much as 25 percent of the outstanding voting stock of, or participating
members’ interests in, any bank.
2. If there is a change in ownership of 10 percent or more of the
outstanding voting stock of or members’ interests in any bank, the
president or other chief executive officer of the bank shall report the
facts to the Commissioner within 3 business days after obtaining
knowledge of the change.
3. If a loan or loans are made by a bank, and the loan or loans
are, or are to be, secured by 10 percent or more of the voting stock of
or members’ interests in a Nevada bank, the president or other chief
executive officer of the bank which makes the loan or loans shall report
that fact to the Commissioner within 24 hours after obtaining knowledge
of the loan or loans, except when the borrower has been the owner of
record of the stock for 1 year or more or the stock is of a newly
organized bank before its opening.
4. The reports required in subsections 2 and 3 are in addition to
any reports required by any other law and must contain whatever
information is available to inform the Commissioner of the effect of the
transaction upon control of the bank whose stock or members’ interests
are involved, and must contain, when known by the person making the
report:
(a) The number of shares or members’ interests involved;
(b) The identity of the sellers or transferors and purchasers or
transferees of record;
(c) The identity of the beneficial owners of the shares or members’
interests involved;
(d) The purchase price;
(e) The total number of shares or members’ interests owned by the
sellers or transferors and purchasers or transferees of record, both
immediately before and after the transaction being reported;
(f) The total number of shares or members’ interests owned by the
beneficial owners of the shares or members’ interests involved, both
immediately before and after the transaction being reported;
(g) The identity of borrowers;
(h) The name of the bank issuing the stock securing, or whose
members’ interests secure, the loan; and
(i) The number of shares or members’ interests securing the loan
and the amount of the loan or loans.
5. Each bank shall, within 24 hours after there is a change in the
chief executive officer or directors of the bank, report the change to
the Commissioner. The bank shall include in its report a statement of the
past and current business and professional affiliations of new chief
executive officers or directors. A new chief executive officer shall
furnish to the Commissioner a complete financial statement if required to
do so by the Commissioner.
6. An application must be submitted to the Commissioner by the
person who acquires stock or members’ interests resulting in a change of
control of the bank. The application must be submitted on a form
prescribed by the Division of Financial Institutions. Except as otherwise
provided in subsection 8, the Commissioner shall conduct an investigation
to determine whether the character, general fitness and responsibility of
the applicant is such as to command the confidence of the community in
which the bank is located.
7. The bank with which the applicant is affiliated shall pay such
a portion of the cost of the investigation as the Commissioner requires.
All money received by the Commissioner pursuant to this subsection must
be placed in the Investigative Account created by NRS 232.545 . If the Commissioner denies the application,
he may forbid the applicant from participating in the business of the
bank.
8. A bank may submit a written request to the Commissioner to
waive an investigation pursuant to subsection 6. The Commissioner may
grant a waiver if the applicant has undergone a similar investigation by
a state or federal agency in connection with the licensing of, or his
employment with, a financial institution.
9. As used in this section, “chief executive officer” includes a
manager of a limited-liability company.
(Added to NRS by 1971, 977; A 1983, 1734; 1985, 1345; 1987, 1910;
1991, 1807; 1995, 480; 1997, 983)
MANAGEMENT AND PERSONNEL
1. The affairs and business of a banking corporation organized
under the laws of this state must be managed or controlled by a board of
directors of not less than five in number, who must be selected from the
stockholders at the annual meeting of stockholders in such manner as may
be provided by the bylaws of the corporation.
2. The affairs and business of a banking company so organized must
be managed or controlled by no fewer than three managers selected from
the members as provided in the operating agreement.
(Added to NRS by 1971, 978; A 1993, 193; 1995, 482)
1. No person is eligible to serve as a director or manager of any
bank, organized or existing under the laws of this State, unless he:
(a) Is a bona fide owner of stock of the bank or its holding
company;
(b) Holds stock of the bank or its holding company in a revocable
trust; or
(c) Has a member’s interest in the bank.
2. The stock or interest owned or held pursuant to subsection 1
must have a total fair market value of at least $1,000. A determination
of the value of the stock or interest must be based on its value on the
date it was purchased or on its value on the date the owner or holder of
the stock or interest became a director, whichever is greater. The stock
or the member’s contribution must be fully paid and not pledged.
3. For the purposes of this section, “holding company” has the
meaning ascribed to it in NRS 666.005 .
(Added to NRS by 1971, 978; A 1987, 211; 1995, 482, 1549; 1997, 79,
984, 1023)
The board of directors shall meet at least
quarterly in regular meeting. At least quarterly, a thorough examination
of the books, records, funds and securities held by the bank must be
made. The examination may be dispensed with if an annual audit is made of
the books, records, funds and securities.
(Added to NRS by 1971, 978; A 1989, 293; 1997, 985)
1. The active officers, or the managers, and employees of any bank
before entering upon their duties shall give bond to the bank in a surety
company authorized to do business in Nevada, in the amount required by
the directors or the operating agreement and upon such form as may be
approved by the Commissioner, the premium for the bond to be paid by the
bank.
2. The Commissioner or directors of the bank may require an
increase of the amount of the bond whenever they deem it necessary. If
injured by the breach of any bond given under this section, the bank so
injured may commence an action and recover such damages as it may have
sustained.
(Added to NRS by 1971, 978; A 1983, 1735; 1987, 1911; 1995, 482)
Any director, manager, officer or other person who knowingly
and intentionally participates in any violation of the laws of this state
relating to banks is liable for all damage which the bank, its
stockholders, members, depositors or creditors sustain as a result of
that violation.
(Added to NRS by 1971, 979; A 1995, 483; 1997, 985)
ASSETS, DIVIDENDS AND DISTRIBUTIONS
Any overdraft which is outstanding for
more than 90 days may not be considered an asset of the bank unless it is
adequately secured and in the process of being collected.
(Added to NRS by 1971, 979; A 1991, 373)
1. As used in this section, “net profits” means the remainder of
all earnings from operations plus actual recoveries on loans and
investments and other assets, after deducting from the total thereof all
operating expenses, actual losses, transfers to reserve for loan losses,
and all federal and state taxes.
2. Except as otherwise provided in subsection 3, the directors of
any state bank shall not declare a dividend or make a distribution of the
net profits of the bank until:
(a) The surplus fund of the bank equals its initial stockholders’
or members’ equity, not including its initial surplus fund;
(b) There has first been carried to the surplus fund 10 percent of
the previous year’s net profit; and
(c) The bank complies with the requirements set forth in NRS
661.025 .
3. Except as otherwise provided in NRS 661.240 , the directors of a state bank that maintains
the issuance of deposits required pursuant to the provisions of the
Federal Deposit Insurance Act, 12 U.S.C. §§ 1811 et seq., may declare a
dividend or make a distribution of so much of the net profits of the bank
as they determine is expedient.
(Added to NRS by 1971, 979; A 1995, 483; 1997, 985)
1. No distribution may be made by a bank if the distribution would
reduce its stockholders’ or members’ equity below its initial
stockholders’ or members’ equity.
2. As used in this section, “distribution” means a direct or
indirect transfer of money or property other than its own shares or
interests or the incurrence of indebtedness by a corporation or
limited-liability company to or for the benefit of its stockholders or
members with respect to any of its shares or interests. A distribution
may be in the form of a declaration or payment of a dividend, a purchase,
redemption or other acquisition of shares or interests or a distribution
of indebtedness, or in any other form.
(Added to NRS by 1997, 980)
