USA Statutes : nevada
Title : Title 55 - BANKS AND RELATED ORGANIZATIONS
Chapter : CHAPTER 669 - TRUST COMPANIES
The Legislature
finds as facts and determines that:
1. There exists in this state a need, for the protection of the
public interest, to regulate companies which are engaged in the trust
company business.
2. Such trust companies should be licensed and regulated in such
manner as to promote the public advantage and convenience.
3. It is the purpose of this chapter to bring under public
supervision those persons who are engaged in or who desire to engage in
the business of a trust company, not in connection with banking business,
and to insure that there is established in this state an adequate,
efficient and competitive trust company service.
(Added to NRS by 1969, 1184)
As used in this chapter, unless the
context otherwise requires, the words and terms defined in NRS 669.029
to 669.070 , inclusive, have the meanings ascribed to them
in those sections.
(Added to NRS by 1969, 1184; A 1999, 842 )
“Business of a trust company” or “trust company
business” means the holding out by a person, by advertising, solicitation
or other means, that it is available to act as a fiduciary in this state
and undertaking to act as a fiduciary in the regular course of its
business.
(Added to NRS by 1999, 841 )
“Court trust” means a
fiduciary relationship created by an appointment, order or decree of any
court.
(Added to NRS by 1969, 1184; A 1999, 842 )
“Fiduciary” means a trustee,
executor, administrator, guardian of an estate, conservator, assignee for
the benefit of creditors, receiver, depositary or person that receives on
deposit money or property from a public administrator under any provision
of this chapter or from another fiduciary.
(Added to NRS by 1999, 841 )
“Private trust” means a
fiduciary relationship other than a court trust.
(Added to NRS by 1969, 1184; A 1999, 843 )
“Trust company” means a
corporation or limited-liability company licensed as provided in this
chapter and engaged in a trust company business.
(Added to NRS by 1969, 1184; A 1999, 843 )
1. This chapter does not apply to a person who:
(a) Does business under the laws of this state, the United States
or another state relating to banks, savings banks, savings and loan
associations or thrift companies, but if the business conducted in this
state is not subject to supervision by a regulatory authority of another
jurisdiction, the person must be licensed pursuant to this chapter;
(b) Is appointed as a fiduciary pursuant to NRS 662.245 ;
(c) Is acting in the performance of his duties as an attorney at
law;
(d) Acts as a trustee under a deed of trust;
(e) Acts as a resident agent for a domestic or foreign corporation,
limited-liability company, limited partnership or limited-liability
partnership;
(f) Acts as a trustee of a trust holding real property for the
primary purpose of facilitating any transaction with respect to real
estate if he is not regularly engaged in the business of acting as a
trustee for such trusts;
(g) Engages in the business of a collection agency pursuant to
chapter 649 of NRS;
(h) Engages in the business of an escrow agency, escrow agent or
escrow officer pursuant to the provisions of chapter 645A or 692A of NRS;
(i) Acts as a trustee of a trust created for charitable or
nonprofit purposes if he is not regularly engaged in the business of
acting as trustee for such trusts;
(j) Receives money or other property as a real estate broker
licensed under chapter 645 of NRS on behalf
of a principal;
(k) Engages in transactions as a broker-dealer or sales
representative pursuant to chapter 90 of NRS;
(l) Acts as a fiduciary under a court trust;
(m) Does business as an insurer authorized to issue policies of
life insurance and annuities or endowment contracts in this state and is
subject to regulation and control of the Commissioner of Insurance; or
(n) Acts as a fiduciary if:
(1) The fiduciary relationship is not one of his principal
occupations; or
(2) He serves as a fiduciary for a relative by blood or
marriage.
2. A bank, savings bank, savings and loan association or thrift
company claiming an exemption from this chapter pursuant to paragraph (a)
of subsection 1 must notify the Commissioner of Financial Institutions of
its intention to engage in the business of a trust company in this state
and present proof satisfactory to the Commissioner of Financial
Institutions that its fiduciary activities in this state will be subject
to regulation by another jurisdiction.
(Added to NRS by 1969, 1184; A 1981, 339; 1999, 843 )
ORGANIZATION AND LICENSING
It is unlawful for any person to engage in the business
of a trust company without complying with the provisions of this chapter
and having a license issued by the Commissioner.
(Added to NRS by 1969, 1184; A 1983, 1758; 1987, 1942)
1. Except as otherwise provided in subsection 2, no person or
organization formed and doing business under the laws of this state or
any other state may:
(a) Use the word “trust” or any direct derivative of that word as a
part of its name.
(b) Advertise or use any sign with the word “trust” used as a part
of its name.
2. The provisions of subsection 1 do not apply to a person or
organization which:
(a) Is supervised by the Commissioner of Financial Institutions
pursuant to this chapter or chapters 657 to
668 , inclusive, 673 or 677 of NRS;
(b) Is doing business under the laws of the United States or
another state relating to banks, savings banks, savings and loan
associations or thrift companies;
(c) Is acting under an appointment pursuant to NRS 662.245 ; or
(d) Is supervised by the Commissioner of Insurance.
(Added to NRS by 1983, 466; A 1985, 357; 1987, 1942; 1999, 844
)
No trust company may be organized or operated with a
stockholders’ equity of less than $300,000, or in such greater amount as
may be required by the Commissioner. The full amount of the initial
stockholders’ equity must be paid in cash, exclusive of all organization
expenses, before the trust company is authorized to commence business.
(Added to NRS by 1969, 1185; A 1983, 1758; 1987, 1943; 1997, 1007)
An applicant for a license to conduct the
business of a trust company under this chapter must be organized as a
corporation or limited-liability company under the laws of this State or
authorized to do business in this State as a foreign corporation or
foreign limited-liability company.
(Added to NRS by 1969, 1185; A 1999, 844 )
1. If a corporation or limited-liability company that is engaged
in trust company business is organized under the laws of this state, the
articles of incorporation or articles of organization must contain:
(a) The name adopted by the trust company, which must be such as to
distinguish it from any other trust company formed or incorporated in
this state, or engaged in the business of a trust company in this state;
and
(b) The purpose for which it is formed.
2. The provisions of subsection 1 do not apply to a corporation or
limited-liability company engaged in trust company business that is
organized under the laws of another state, but it must use a name that
distinguishes it from any other trust company organized as or conducting
the business of a trust company in this state.
(Added to NRS by 1969, 1185; A 1983, 1759; 1987, 774, 1943; 1997,
1007; 1999, 844 )
A trust company shall not
transact business, except business that is incidental to its
organization, until it is authorized by the Commissioner to commence the
business of a trust company as provided in this chapter.
(Added to NRS by 1969, 1185; A 1983, 1759; 1987, 1944; 1997, 1007;
1999, 845 )
1. An applicant must file an application for a license to transact
trust company business with the Commissioner on forms prescribed by the
Commissioner, which must contain or be accompanied by such information as
the Commissioner requires.
2. A nonrefundable fee of not more than $2,000 must accompany the
application. The applicant must also pay such reasonable additional
expenses incurred in the process of investigation as the Commissioner
deems necessary. In addition, a fee of not less than $200 or more than
$500, prorated on the basis of the licensing year as provided by the
Commissioner, must be paid at the time of making the application.
3. A trust company may maintain offices in this and other states.
For every branch location of a trust company organized under the laws of
this State, and every branch location in this State of a foreign trust
company authorized to do business in this State, a request for approval
and licensing must be filed with the Commissioner on such forms as he
prescribes. A nonrefundable fee of not more than $500 must accompany each
request. In addition, a fee of not more than $200, prorated on the basis
of the licensing year as provided by the Commissioner, must be paid at
the time of making the request.
4. The Commissioner shall adopt regulations establishing the
amount of the fees required pursuant to this section. All money received
by the Commissioner pursuant to this section must be placed in the
Investigative Account created by NRS 232.545 .
5. The Commissioner shall consider an application to be withdrawn
if the Commissioner has not received all information and fees required to
complete the application within 12 months after the date the application
is first submitted to the Commissioner or within such later period as the
Commissioner determines in accordance with any existing policies of joint
regulatory partners. If an application is deemed to be withdrawn pursuant
to this subsection or if an applicant otherwise withdraws an application,
the Commissioner may not issue a license to the applicant unless the
applicant submits a new application and pays any required fees.
(Added to NRS by 1969, 1186; A 1983, 1317, 1760; 1987, 1944; 1991,
1809; 1999, 845 ; 2005, 1849 )
1. Within 60 days after the application for a license is filed,
the Commissioner shall investigate the facts of the application and the
other requirements of this chapter to determine:
(a) That the persons who will serve as directors or officers of the
corporation, or the managers or members acting in a managerial capacity
of the limited-liability company, as applicable:
(1) Have a good reputation for honesty, trustworthiness and
integrity and display competence to transact the business of a trust
company in a manner which safeguards the interests of the general public.
The applicant must submit satisfactory proof of these qualifications to
the Commissioner.
(2) Have not been convicted of, or entered a plea of nolo
contendere to, a felony or any crime involving fraud, misrepresentation
or moral turpitude.
(3) Have not made a false statement of material fact on the
application.
(4) Have not had a license that was issued pursuant to the
provisions of this chapter suspended or revoked within the 10 years
immediately preceding the date of the application.
(5) Have not had a license as a trust company which was
issued in any other state, district or territory of the United States or
any foreign country suspended or revoked within the 10 years immediately
preceding the date of the application.
(6) Have not violated any of the provisions of this chapter
or any regulation adopted pursuant to the provisions of this chapter.
(b) That the financial status of the directors and officers of the
corporation or the managers or members acting in a managerial capacity of
the limited-liability company is consistent with their responsibilities
and duties.
(c) That the name of the proposed company complies with the
provisions of NRS 657.200 .
(d) That the initial stockholders’ equity is not less than the
required minimum.
2. Notice of the entry of an order refusing a license to a trust
company must be given in writing, served personally or sent by certified
mail or by telegram to the company affected. The company, upon
application, is entitled to a hearing before a hearing officer appointed
by the Director of the Department of Business and Industry, but if no
such application is made within 30 days after the entry of an order
refusing a license to any company, the Commissioner shall enter a final
order.
3. If the hearing officer affirms the order of the Commissioner
refusing the license, the applicant may file a petition for judicial
review pursuant to NRS 233B.130 .
(Added to NRS by 1969, 1186; A 1983, 1760; 1987, 1945; 1997, 1008;
1999, 846 ; 2003, 985 ; 2005, 1850 )
1. The initial fee to be paid for a trust company license must be
in proportion to the initial stockholders’ equity of the trust company as
follows:
(a) A trust company with an initial stockholders’ equity of not
less than $300,000 but not more than $500,000 must pay a license fee of
not more than $1,000.
(b) A trust company with an initial stockholders’ equity of more
than $500,000 but not more than $1,000,000 must pay a license fee of not
more than not more than $1,500.
(c) A trust company with an initial stockholders’ equity of more
than $1,000,000 must pay a license fee of not more than $2,000.
2. In addition, every trust company must pay an initial license
fee of not more than $200 for each branch office that is authorized by
the Commissioner.
3. Thereafter, every trust company must pay annually on or before
April 1 of each year a license fee which must be in proportion to its
existing stockholders’ equity as follows:
(a) A trust company with an existing stockholders’ equity of not
less than $300,000 but not more than $500,000 must pay a license fee of
not more than $1,000.
(b) A trust company with an existing stockholders’ equity of more
than $500,000 but not more than $1,000,000 must pay a license fee of not
more than $1,500.
(c) A trust company with an existing stockholders’ equity of more
than $1,000,000 must pay a license fee of not more than $2,000.
4. The Commissioner shall adopt regulations establishing the
amount of the fees required pursuant to this section. All money collected
under the provisions of this section must be deposited in the State
Treasury pursuant to the provisions of NRS 658.091 .
(Added to NRS by 1969, 1187; A 1983, 1317, 1761; 1987, 1945; 1997,
1008; 2003, 3227 ; 2005, 1851 )
If a proposed trust company fails to open for business
within 6 months after the date the license was issued, or within an
additional 6-month extension granted by the Commissioner upon written
application and for good cause shown, the Commissioner shall issue an
order cancelling the trust company’s license.
(Added to NRS by 1969, 1187; A 1983, 1761; 1987, 1946)
POWERS AND MISCELLANEOUS PROVISIONS
1. Each licensed trust company may:
(a) Act as trustee under any mortgage or bond of any person or of
any municipality or body politic.
(b) Accept and execute any municipal or corporate or individual
trust not inconsistent with the laws of this State.
(c) Act under the order or appointment of any court as guardian,
administrator, receiver or trustee.
(d) Act as executor or trustee under any will.
(e) Act as fiscal or transfer agent of any state, municipality,
body politic or corporation, and in such capacity receive and disburse
money and register, transfer and countersign certificates of stock, bonds
and other evidences of indebtedness.
(f) Act as local or resident agent of foreign corporations.
(g) Accept and execute any trust business permitted by any law.
(h) Acquire the fiduciary rights, powers, duties and liabilities of
a bank, savings and loan association, thrift company, trust company or
credit union licensed pursuant to titles 55 and 56 of NRS, and upon the
effective date of such an acquisition, the fiduciary rights, powers,
duties and liabilities of the bank, savings and loan association, thrift
company, trust company or credit union vest in and must be performed by
the acquiring trust company.
(i) Do and perform all acts necessary to exercise the powers
enumerated in this subsection and authorized by this chapter and any
other applicable laws of this State.
2. A trust company may not engage in any banking business by
accepting deposits or making loans.
(Added to NRS by 1969, 1187; A 1989, 2033)
1. A trust company:
(a) Shall keep all trust funds and investments separate from the
assets of the trust company, and all investments made by the trust
company as a fiduciary must be designated so that the trust or estate to
which the investments belong may be clearly identified.
(b) When it holds trust funds awaiting investment or distribution,
may deposit or leave those funds on deposit with a state or national bank
or credit union. The funds must not be deposited or left with the same
corporation depositing them or leaving them on deposit, or with a
corporation or association holding or owning a majority of the stock of
the trust company making or leaving the deposit, unless that corporation
or association first pledges, as security for the deposit, securities
eligible for investment by state banks or credit unions which have a
market value equal to that of the deposited funds. No security is
required with respect to any portion of the deposits that is insured
under the provisions of NRS 678.755 or
a law of the United States.
(c) When it acts in any capacity under a court trust or private
trust, unless the instrument creating the trust provides otherwise, may
cause any securities held by it in its representative capacity to be
registered in the name of a nominee or nominees of the trust company.
(d) When acting as depositary or custodian for the personal
representative of a court trust or private trust, unless the instrument
creating the trust provides otherwise, may with the consent of the
personal representative of the trust, cause any securities held by it to
be registered in the name of a nominee or nominees of the trust company.
2. A trust company is liable for any loss occasioned by the acts
of its nominees with respect to securities registered under this section.
3. No corporation or the registrar or transfer agent of the
corporation is liable for registering or causing to be registered on the
books of the corporation any securities in the name of any nominee of a
trust company or for transferring or causing to be transferred on the
books of the corporation any securities registered by the corporation in
the name of any nominee of a trust company when the transfer is made on
the authorization of the nominee.
4. Except as otherwise provided in subsection 5, the assets
forming the capital of a trust company must:
(a) Be governmental obligations or insured deposits that mature
within 3 years after acquisition.
(b) Have an aggregate market value that equals or exceeds 60
percent of the company’s current stockholders’ equity or 60 percent of
the company’s initial stockholders’ equity, whichever is greater.
5. A trust company may purchase or rent land and equipment for use
in the daily activities of the trust company.
(Added to NRS by 1969, 1187; A 1983, 299; 1997, 1009; 1999, 847
, 1544 )
1. In addition to the powers of investment granted to the trust
company by the instrument creating the relationship of fiduciary or
agent, a trust company which is acting as a fiduciary or agent may, in
its discretion or at the direction of another person who is authorized to
direct the investment of money held by the trust company as a fiduciary
or agent, invest in the securities of an investment trust or investment
company if:
(a) The investment trust or investment company is registered
pursuant to the Investment Company Act of 1940, as amended, 15 U.S.C. §§
80a-1 et seq.; and
(b) The portfolio of the investment trust or investment company
consists substantially of investments which are not prohibited by the
instrument creating the fiduciary or agency relationship.
2. A trust company or an affiliate of the trust company may
provide services to the investment trust or investment company,
including, without limitation, acting as an investment adviser,
custodian, transfer agent, registrar, sponsor, distributor or manager and
may receive reasonable compensation for the services. The manner in which
the compensation is calculated must be disclosed to the person who is
currently receiving the benefits of the relationship of a fiduciary or
agent with the trust company. The disclosure may be made by a prospectus,
a statement of account or otherwise.
3. A trust company may deposit money held by the trust company as
a fiduciary or agent with an affiliate before investing or making other
disposition of the money.
(Added to NRS by 1991, 822; A 1999, 848 )
Whenever any trust company
desires to discontinue its trust business, it shall furnish to the
Commissioner satisfactory evidence of its release and discharge from all
the obligations and trusts which it has assumed or which have been
imposed by law. Thereafter, the Commissioner shall enter an order
cancelling the trust company’s license.
(Added to NRS by 1969, 1188; A 1983, 1761; 1987, 1946)
1. The directors or managers of a trust company shall require good
and sufficient fidelity bonds in the amount of $25,000 or more on all
active officers, managers, members acting in a managerial capacity and
employees, whether or not they receive a salary or other compensation
from the trust company, to indemnify the trust company against loss
because of any dishonest, fraudulent or criminal act or omission by any
of the persons bonded acting alone or in combination with any other
person. The bonds may be in any form and may be paid for by the trust
company.
2. The trust company shall obtain suitable insurance against
burglary, robbery, theft and other hazards to which it may be exposed in
the operation of its business.
3. The trust company shall at least annually prescribe the amount
or penal sum of the bonds or policies and designate the sureties and
underwriters thereof, after giving due and careful consideration to all
known elements and factors constituting a risk or hazard. The action must
be recorded in the minutes of the trust company and reported to the
Commissioner.
(Added to NRS by 1969, 1188; A 1983, 300, 1762; 1987, 1946; 1999,
848 )
EXAMINATION; REGULATION
1. For each examination of a trust company’s books and records
required or authorized under this chapter, the Commissioner shall charge
and collect from the trust company a fee for conducting the examination
and in preparing and typing the report of the examination at the rate
established pursuant to NRS 658.101 .
2. All money collected under this section must be deposited in the
State Treasury pursuant to the provisions of NRS 658.091 .
3. The Commissioner shall examine a licensee as often as he deems
necessary.
(Added to NRS by 1969, 1188; A 1983, 1318, 1762; 1987, 1946, 2223;
2003, 3228 )
In
addition to other provisions of this title which are applicable to this
title as a whole or specifically made applicable to trust companies, the
Commissioner may by regulation make applicable to trust companies any
regulatory provision contained in chapters 657 to 667, inclusive, which
can be reasonably applied and which are not inconsistent with the
provisions of this chapter.
(Added to NRS by 1969, 1189; A 1983, 1762; 1987, 1947)
The Commissioner may
adopt such regulations as may be necessary to carry out the purposes and
provisions of this chapter.
(Added to NRS by 1969, 1189; A 1983, 1762; 1987, 1947)
DISCIPLINARY ACTION AND REMEDIAL ACTION
1. The violation of any of the provisions of this chapter by the
officers or directors, or the managers or members acting in a managerial
capacity, of any trust company is sufficient cause for the Commissioner
to close the trust company, liquidate its business and revoke its license.
2. If a trust company or any person authorized to act on the
behalf of the trust company refuses to allow the Commissioner or his
deputies to inspect all books, records, papers and effects of the
business of the trust company, the Commissioner may revoke its license
and proceed to wind up the affairs of the trust company.
(Added to NRS by 1969, 1189; A 1983, 1762; 1987, 1947; 1999, 849
)
1. If the Commissioner ascertains by examination or otherwise that
the capital or assets of a trust company are impaired or that the affairs
of a trust company are in an unsafe condition which may result in danger
to the public, he may immediately take possession of all the property,
business and assets of the company which are located in this state and
retain possession of them pending further proceedings as provided in this
chapter.
2. If the directors or officers of a corporation or the managers
or members acting in a managerial capacity of a limited-liability company
refuse to allow the Commissioner to take possession of the property of
the company, the Commissioner shall communicate that fact to the Attorney
General. Upon notification from the Commissioner, the Attorney General
shall immediately institute such proceedings as may be necessary to place
the Commissioner in immediate possession of the property of the company.
Upon possession of the property, the Commissioner shall make or have made
an inventory of the assets and known liabilities of the company.
3. The Commissioner shall file one copy of the inventory in his
office and one copy in the office of the clerk of the district court of
the county in which the principal office of the trust company is located
and shall mail one copy to each director or officer of the corporation,
or the manager or member acting in a managerial capacity of the
limited-liability company, at his last known address.
4. The clerk of the court with which the copy of the inventory is
filed shall file it as any other case or proceeding pending in the court
and shall give it a docket number.
(Added to NRS by 1999, 841 )
1. The directors or officers of a corporation or the managers or
members acting in a managerial capacity of a limited-liability company
licensed as a trust company may, within 60 days after the date the
Commissioner takes possession of the property, business and assets of the
corporation or limited-liability company licensed as a trust company,
make good any deficit that exists or remedy the unsafe condition of the
affairs of the corporation or limited-liability company licensed as a
trust company.
2. At the expiration of the 60-day period set forth in subsection
1, if the deficiency in assets or capital has not been made good or the
unsafe condition remedied, the Commissioner may apply to the court to be
appointed receiver and proceed to liquidate the assets of the company
that are located in this state in the same manner as now provided by law
for liquidation of a private corporation in receivership.
3. Another person may not be appointed receiver by any court
unless he first gives the Commissioner ample notice of his application.
4. The inventory made by the Commissioner pursuant to NRS 669.282
and all claims filed by creditors are
open at all reasonable times for inspection, and any action taken by the
receiver upon any of the claims is subject to the approval of the court
before which the cause is pending.
5. The expenses of the receiver and compensation of counsel, as
well as all expenditures required in the liquidation proceedings, must be
fixed by the Commissioner subject to the approval of the court and, upon
certification of the Commissioner, must be paid out of the money in his
hands as the receiver.
(Added to NRS by 1999, 842 )
UNLAWFUL ACTS; PENALTIES
1. If a trust company fails to submit any report required pursuant
to this chapter or any regulation adopted pursuant thereto within the
prescribed period, the Commissioner may impose and collect a fee of not
more than $10 for each day the report is overdue.
2. The Commissioner shall adopt regulations establishing the
amount of the fee that may be imposed pursuant to this section.
(Added to NRS by 2005, 1849 )
Each officer, director, manager, member, employee or
agent of a trust company who knowingly or willfully neglects to perform
any duty required by this chapter or other applicable law, or who
knowingly or willfully fails to conform to any material lawful
requirement made by the Commissioner, is subject to removal upon order of
the Commissioner, and is guilty of a category D felony and shall be
punished as provided in NRS 193.130 .
(Added to NRS by 1969, 1189; A 1983, 1763; 1987, 1947; 1995, 1317;
1999, 849 )
In addition to any other remedy
or penalty, the Commissioner may impose an administrative fine of not
more than $10,000 upon a person who:
1. Without a license, conducts any business or activity for which
a license is required pursuant to the provisions of this chapter; or
2. Violates any provision of this chapter or any regulation
adopted pursuant thereto.
(Added to NRS by 2005, 1849 )
Where no other punishment is otherwise
provided by law, any person violating any provision of this chapter is
guilty of a gross misdemeanor.
(Added to NRS by 1969, 1189)
