USA Statutes : oregon
Title : TITLE 53 FINANCIAL INSTITUTIONS
Chapter : Chapter 709 Regulation of Trust Business
(1) Except as provided in ORS
709.030 (4) or in subsection (4) of this section, no company shall
transact any trust business in this state until the company has obtained
a certificate of authority from the Director of the Department of
Consumer and Business Services under this section, authorizing the
company to transact trust business in this state.

(2) To procure a certificate of authority to transact trust
business in this state, a company to whom this section applies shall file
a written application with the director, which shall contain or be
accompanied by:

(a) The name of the company.

(b) The state or country under the laws of which the company is
organized.

(c) The date of incorporation or other organization of the company.

(d) The period of duration of the company, if the duration is not
perpetual.

(e) A mailing address to which the director may send notices.

(f) The address of the principal office of the company in the state
or country under the laws of which it is organized.

(g) The street address of the proposed registered office of the
company in this state and the name of its proposed registered agent, who
shall be amenable to service of process at that address.

(h) A brief statement setting forth any background and experience
of the company in conducting a trust business in the state or country in
which it is organized, and its qualifications to transact trust business
in this state.

(i) The names and addresses of the chief executive officer and the
secretary of the company.

(j) Any additional information that the director may by rule
require.

(k) The verified signature of the chief executive officer of the
company, certifying that all information contained in the application is
true, accurate and complete.

(L) A certificate of existence, a certificate of good standing, a
status certificate or a document of similar import, current within 60
days of making application under this section and duly authenticated by
the official with custody of the corporate or other records in the state,
province or country under the laws of which the company is organized.

(m) A certificate of authorization for a foreign corporation, or a
copy of the application for authority to transact business in this state
as a foreign corporation as filed with the Secretary of State, current
within 60 days of making application under this section and duly
authenticated by the Secretary of State evidencing the authorization of
the company, or application for authorization, to transact business as a
foreign corporation under ORS chapter 60.

(n) An application fee of $2,500, provided that no application fee
shall be charged under this paragraph:

(A) If the applicant is concurrently applying for a charter under
ORS chapter 707; or

(B) If the director reduces or waives the application fee.

(3) If the director finds that the application conforms to the
requirements of subsection (2) of this section and that the applicant is
qualified by experience to transact trust business in this state, the
director shall direct the applicant to make the security deposit required
under ORS 709.030, and when the deposit is made, the director shall issue
and send to the company a certificate of authority to transact business.

(4) The requirement to procure a certificate of authority under
this section shall not apply to the extent preempted by federal law, or
to any bank lawfully transacting trust business in this state on October
4, 1997. [1997 c.631 §229; 1999 c.107 §3] (1) As an
alternative to being organized as a corporation pursuant to the
provisions of ORS chapter 707 and this chapter, an Oregon trust company
may be organized as a limited liability company.

(2) With respect to any Oregon trust company that is organized as a
limited liability company, as used in the Bank Act:

(a) “Articles of incorporation” means the Oregon trust company’s
articles of organization, as defined in ORS 63.001.

(b) “Bylaws” means the Oregon trust company’s operating agreement,
as defined in ORS 63.001.

(c) “Certificate of incorporation” means a certificate of
organization issued to the Oregon trust company.

(d) “Corporation” means a limited liability company, as defined in
ORS 63.001.

(e) “Director,” “directors” or “board of directors” means the
Oregon trust company’s manager or managers, as defined in ORS 63.001.

(f) “Dividends” means distributions, as defined in ORS 63.001,
declared or paid by the Oregon trust company.

(g) “Incorporator” means the Oregon trust company’s organizer, as
defined in ORS 63.001.

(h) “Share” or “stock” means a membership interest in the Oregon
trust company, as defined in ORS 63.001.

(i) “Stockholder,” “stockholders,” “shareholder” or “shareholders”
means the Oregon trust company’s member or members, as defined in ORS
63.001.

(3) An Oregon trust company organized as a limited liability
company shall be organized under the authority of the Director of the
Department of Consumer and Business Services under this chapter and ORS
chapter 707. Except as set forth in subsection (4) of this section, with
respect to all other aspects of its operation and existence, an Oregon
trust company that is organized as a limited liability company is subject
to the provisions of ORS chapter 63, to the extent that ORS chapter 63
does not conflict with the Bank Act. In the event of any conflict between
the Bank Act and ORS chapter 63, the Bank Act controls.

(4)(a) Notwithstanding any provision of ORS chapter 63, the
articles of organization of an Oregon trust company that is organized as
a limited liability company shall:

(A) State that the existence of the Oregon trust company is
perpetual; and

(B) Provide that the Oregon trust company is to be managed by a
board of not fewer than five managers.

(b) Notwithstanding any provision of ORS chapter 63, an Oregon
trust company that is organized as a limited liability company shall be
managed exclusively by its board of managers in substantially the same
manner as an Oregon trust company that is organized as a corporation is
managed by its board of directors. The board of managers of an Oregon
trust company that is organized as a limited liability company has
substantially the same rights, powers, privileges, duties and
responsibilities as the board of directors of an Oregon trust company
that is organized as a corporation and is subject to the provisions of
ORS chapter 707 and this chapter pertaining to directors.

(c) Notwithstanding any provision of ORS chapter 63, membership
interests in an Oregon trust company that is organized as a limited
liability company are freely transferable, and consent of the Oregon
trust company or its members or managers is not required for a person to
acquire or transfer a membership interest in the Oregon trust company.
Immediately upon the completion of the transfer of the membership
interest to a person, the person becomes a member, and has all the rights
of a member.

(d) ORS 63.621 (2) to (4) do not apply to an Oregon trust company
organized as a limited liability company.

(5) The articles of organization of an Oregon trust company that is
organized as a limited liability company shall require that liquidation
of the Oregon trust company conform with the requirements of the Bank Act.

(6) An Oregon trust company that is organized as a limited
liability company shall have the officers described in ORS 707.700. The
officers shall be elected by the board of managers of the Oregon trust
company and shall be subject to the provisions of this chapter and ORS
chapter 707.

(7) Each Oregon trust company that is organized as a limited
liability company shall have a written operating agreement containing any
provisions for the affairs of the Oregon trust company as may be agreed
upon by its members and that are consistent with the Bank Act.

(8) Any number of persons, not fewer than five, may act as
organizers of an Oregon trust company that is organized as a limited
liability company. [2005 c.134 §4](1) Except as provided in subsection (4) of this section, no person other
than a trust company shall transact a trust business in this state.
Except as provided in subsection (4) of this section, before a person
transacts any trust business in this state, the person shall obtain the
approval of the Director of the Department of Consumer and Business
Services if required under ORS 709.005 and shall deposit with the
director, as security and as a pledge for the faithful conduct of its
trust business:

(a) Cash or interest-bearing securities, which securities shall
have a ready market value;

(b) A surety bond issued by a surety company authorized to transact
business in this state and in a form approved by the director, under
which the principal and surety indemnify the several owners of the fund
held in trust against loss due to the failure of the trust company;

(c) An irrevocable letter of credit issued by an insured
institution, as defined in ORS 706.008; or

(d) Any combination of cash, letters of credit, interest-bearing
securities and surety bond.

(2) If the cash and securities held in trust amount to less than
$1,000,000, the deposit, bond, letters of credit or combination thereof
shall be $50,000. If the cash and securities held in trust amount to
$1,000,000 but do not exceed $1,500,000, the deposit, bond, letters of
credit or combination thereof shall be $100,000. For each $500,000 or
fraction thereof in excess of $1,500,000 held in trust, the deposit,
bond, or letters of credit or combination thereof shall be increased an
additional $25,000; except a trust company shall not be required to
increase the deposit, bond, letters of credit or combination thereof to
an amount in excess of $1,000,000.

(3) The securities shall be deposited with the director and held by
the director as trustee for the beneficiaries of the trust funds held by
the trust company.

(4) A person shall not be required to be a trust company if the
person:

(a) Does not and will not regularly transact trust business in the
ordinary course of the person’s business;

(b) Acts in a manner authorized by law and in the scope of
authority as an agent of a trust company;

(c) Is an attorney rendering a service customarily performed by an
attorney;

(d) Is acting as trustee under a deed of trust;

(e) Is a licensed real estate broker or principal real estate
broker rendering a service customarily performed by a broker;

(f) Is a licensed escrow agent rendering a service customarily
performed by an escrow agent; or

(g) Is exempt from the provisions of subsection (1) of this section
by rule of the director. [Amended by 1957 c.82 §1; 1967 c.139 §1; 1973
c.797 §183a; 1979 c.88 §12; 1981 c.192 §14; 1985 c.800 §1; 1991 c.331
§114; 1997 c.631 §203; 2001 c.300 §81] The securities mentioned
in ORS 709.030 may only be of the following classes:

(1) Interest-bearing bonds, notes or obligations of the United
States including those of its agencies and instrumentalities, or bonds,
notes or obligations for which the faith of the United States is pledged
for the payment of the principal and interest.

(2) Bonds or other obligations of the State of Oregon, any county
of this state or any incorporated city, town or school or port district
of this state having a population of not less than 2,000 as shown by the
last federal census, or bonds of any other state, any county,
incorporated city, town or school or port district therein having a
population of not less than 25,000, as shown by the last federal census,
if:

(a) The bonds or obligations are issued in compliance with the
constitution and laws of the applicable state;

(b) The bonds or obligations are a general obligation of the state,
city, town or school or port district issuing the bonds; and

(c) There has been no default in payment of either principal or
interest on any of the general obligations of the state, county,
incorporated city, town or school or port district for a period of five
years preceding the date of the deposit.

(3) Notes or bonds secured by first liens upon improved real estate
in this state or any other state if the obligation, plus taxes not due
and bonded indebtedness for public improvements not due, do not exceed 50
percent of the reasonable market value of the real estate. The trust
company shall file in support of a real estate obligation, such
appraisal, evidence of merchantable title and insurance as may be
required by the Director of the Department of Consumer and Business
Services. [Amended by 1973 c.797 §184; 1997 c.631 §204]A trust
company authorized to do a trust business in this state which is required
to make any deposit of securities with any public official in order to do
business in this state may deposit:

(1) Notes or bonds secured by mortgages or deeds of trust, payment
of which are guaranteed by policies of mortgage insurance; and

(2) Mortgage participation certificates issued by a mortgage
insurance company authorized to do business in this state in accordance
with ORS 742.282 and 742.284. [Amended by 1967 c.359 §703; 1973 c.797
§185; 1997 c.631 §205] The deposit mentioned in ORS
709.030 is primarily liable for the malfeasance of a trust company as a
fiduciary and is not liable for any debt or other obligation of the
company until such malfeasance liability has been discharged. [Amended by
1973 c.797 §186; 1997 c.631 §206] A person who suffers loss
or damage because of the breach of any trust committed to a trust company
may recover the amount of the loss or damage out of the moneys or
securities deposited under ORS 709.030 with the director by the trust
company. [Amended by 1973 c.797 §187; 1997 c.631 §207] (1)
The Director of the Department of Consumer and Business Services may
charge a reasonable amount for any expenses incurred and services
rendered in connection with deposits of securities.

(2) If a trust company does not, after due notice, pay to the
director any charge assessed against it under this section, the director
may:

(a) Apply in payment of the charges, with interest at the legal
rate, as much as necessary of the interest or other earnings accruing on
any securities deposited with the director; or

(b) Report the facts to the Attorney General, who shall, in the
name of the director, institute appropriate action against the trust
company. [Amended by 1973 c.797 §188; 1997 c.631 §208] All mortgages or
deeds of trust and all insurance policies, abstracts of title,
certificates of title or title insurance policies and appraisements
required by the Director of the Department of Consumer and Business
Services under ORS 709.040 (3) shall be deposited with the notes or
bonds. When less than the whole of a bond issue is deposited, the
director shall not require the deposit of the abstract of title,
certificates of title or title insurance policies and appraisements, but
may require a certificate from the trustee of the mortgage or bond issue
that the documents have been deposited with the trustee. [Amended by 1973
c.797 §189](1) The Director of the Department of Consumer and Business
Services may require the immediate substitution of other securities when
the director has reason to believe that the market value of securities
which have been deposited under ORS 709.030 have depreciated below the
amount required under ORS 709.030. Substitution of securities with the
director at the request of the depositing trust company may be permitted
if approved by the director.

(2) All interest, income or dividends from all securities deposited
with the director belong to the depositing trust company, and if the
trust company is solvent, it may receive and retain the interest, income
or dividends. [Amended by 1973 c.797 §190; 1997 c.631 §209]If the cash and securities
belonging to any single fiduciary account exceed the amount of the trust
company’s stockholders’ equity, the court appointing the trust company to
the position of trust may require an indemnity bond from the trust
company for the amount of cash and securities exceeding stockholders’
equity. [Amended by 1973 c.797 §191; 1999 c.59 §219] The State of Oregon
is liable for the return of any funds or securities deposited in
accordance with ORS 709.030. [Amended by 1973 c.797 §192] The capital of a trust company may
be invested in the securities specified in ORS 709.040. [1973 c.797 §193]GENERAL POWERS A trust company may:

(1) Act as fiscal or transfer agent of the United States or of any
state, county, municipality, political subdivision or corporation, and in
that capacity receive and disburse money; transfer, register and
countersign certificates of stock, bonds or other evidence of
indebtedness; authenticate and certify the bonds and certificates of
indebtedness, and act as attorney-in-fact or agent of a person for any
lawful purpose.

(2) Lease, hold, purchase and convey any real property necessary or
convenient in the transaction of its business.

(3) Receive deposits of moneys, securities and other personal
property in trust from any person and loan trust funds on real or
personal securities.

(4) Act as trustee under any mortgage or bonds and accept and
execute any lawful municipal or corporate trusts.

(5) Be appointed by a court and act as a fiduciary.

(6) Accept and execute any lawful trust.

(7) Rent receptacles for safe deposits of personal property and
receive personal property upon deposit for safekeeping.

(8) Purchase, invest in and sell bills of exchange, bonds and
mortgages, and other evidences of indebtedness.

(9) In the management of trust properties, discount and negotiate
promissory notes, drafts, bills of exchange and other evidences of debt,
and accept for payment at a future date drafts drawn upon it and issue
letters of credit authorizing the holders to draw drafts upon it or its
correspondents at sight or on time, not exceeding one year.

(10) Exercise all other powers given to trust companies under the
Bank Act. [Amended by 1961 c.344 §106; 1973 c.797 §194; 1973 c.823 §141;
1974 c.36 §24; 1997 c.631 §210] (1) A trust
company shall not advertise to furnish or furnish to the public legal
advice or hold itself out as practicing law.

(2) A trust company that violates subsection (1) of this section is
ineligible for one year thereafter to be judicially appointed as a
fiduciary in this state. [Amended by 1973 c.797 §195; 1975 c.544 §28;
1997 c.631 §211](1) “Common trust fund” as used in this section, means
any fund maintained by a trust company exclusively for the collective
investment and reinvestment of moneys contributed thereto by the trust
company or an affiliated trust company as a fiduciary. For the purposes
of this section, two or more trust companies are affiliated if they are
members of the same affiliated group, within the meaning of section 1504
of the Internal Revenue Code.

(2) A trust company may establish common trust funds for the
purpose of furnishing investments to itself as fiduciary, to an
affiliated trust company as fiduciary, or to itself or an affiliated
trust company and others as cofiduciaries. A trust company may, as a
fiduciary or cofiduciary, invest funds that it lawfully holds for
investment, in interests in the common trust fund or a common trust fund
of an affiliated trust company, if the investment is not prohibited by
the instrument, judgment or order creating the fiduciary relationship,
and if, in the case of cofiduciaries, the trust company procures the
consent of its cofiduciary or cofiduciaries to the investment.

(3) The Director of the Department of Consumer and Business
Services, in accordance with ORS chapter 183, may adopt rules necessary
to control the establishment and operation of common trust funds and to
protect the investors. A trust company except a national bank that is
qualified to conduct a trust business pursuant to the laws of the United
States shall, in the operation of the common trust fund, comply with the
rules.

(4) Unless ordered by a court a trust company operating common
trust funds is not required to render a court accounting with respect to
the funds, but it may, upon application to the circuit court of the
county in which it has its principal office in this state, obtain a
settlement of its common trust fund accounts on conditions specified by
the court. When application for the settlement is presented to a circuit
court for approval, the circuit court shall assign a time and place for
hearing and order notice thereof by:

(a) Publication once a week for three successive publications, the
first publication to be not less than 20 days prior to the date of
hearing, of a notice in a newspaper having a general circulation in the
county in which the trust company operating the common trust fund has its
principal office;

(b) Mailing, not less than 14 days prior to the date of the
hearing, a copy of the notice to all beneficiaries of the trusts
participating in the common trust fund whose names are known to the trust
company from the records kept by it in the regular course of business in
the administration of the trust, directed to them at the addresses shown
by the records; and

(c) Such further notice, if any, as the court may order. [Amended
by 1953 c.258 §2; 1959 c.91 §1; 1963 c.56 §1; 1973 c.797 §196; 1973 c.823
§142; 1974 c.36 §25; 1983 c.367 §3; 1985 c.762 §41; 1997 c.631 §212; 2003
c.576 §546] (1)
Except as provided in ORS 709.220, subsection (2) of this section, or as
lawfully authorized by the instrument creating the trust relationship or
by court order, funds held by a trust company as fiduciary shall not be
invested in stock or obligations of, or property acquired from:

(a) The trust company or its directors, officers or employees;

(b) Individuals connected to the trust company or its directors,
officers or employees;

(c) Organizations in which the trust company or its directors,
officers or employees hold an interest;

(d) Affiliates of the trust company or their directors, officers or
employees;

(e) Individuals with whom there exists an interest that might
affect the exercise of the best judgment of the trust company in making
the investment or acquiring the property; or

(f) Organizations in which there exists an interest which might
affect the exercise of the best judgment of the trust company in making
the investment or acquiring the property.

(2) Subsection (1) of this section shall not apply if the trust
company invests funds held by it as fiduciary in any open-end or
closed-end management type investment company or investment trust for
which the trust company, or an affiliate of the trust company, acts as
investment advisor or custodian or provides other services, for which
services the trust company and its affiliates may receive reasonable fees.

(3) For the purposes of this section, companies are affiliated if
they are members of the same affiliated group under Section 1504 of the
Internal Revenue Code. [1989 c.604 §3; 1991 c.353 §1; 1997 c.631 §213](1) Each banking institution and each non-Oregon
institution authorized to transact a trust business in this state shall
establish and maintain in its office a trust department, in which
separate books and accounts shall be maintained. All property of the
trust department shall be segregated from and unmingled with other
property.

(2) The books and accounts of the trust department shall show the
ownership of all moneys, funds, investments and property held by the
trust department. Securities may be kept by the trust department in
either of the following ways:

(a) All certificates representing the securities of an account may
be held separate from those of all other accounts; or

(b) Certificates representing securities of the same class of the
same issuer held for particular accounts may be held in bulk without
certification as to ownership attached and, to the extent feasible,
certificates of small denomination may be merged into one or more
certificates of larger denomination. Upon demand by any person to whom it
has a duty to account, a trust department shall certify in writing the
securities held by it for an account. A trust department, if operating
under the method of safekeeping security certificates described in this
paragraph, is subject to such rules as may be issued by:

(A) In the case of a banking institution, the Director of the
Department of Consumer and Business Services;

(B) In the case of an out-of-state bank, the appropriate state
supervisor;

(C) In the case of an extranational institution, the official
charged with supervising the extranational institution in the country
under the laws of which it was organized; or

(D) In the case of a national bank, the Comptroller of the Currency.

(3) All records shall be kept and retained for such time as to
enable the banking institution or non-Oregon institution to furnish
information or reports with respect to the records that may be required
by the director or other regulator specified in subsection (2)(b) of this
section. The records shall contain full information relative to each
account and nothing contained in this subsection shall require a banking
institution or non-Oregon institution to maintain the records required by
this section in any given manner, provided that the information required
is clearly and accurately reflected and provides an adequate basis for
the audit of the information.

(4) A banking institution transacting trust business in this state
shall retain the records required by this section for a period of three
years from the termination of the relationship to which the records
relate. A non-Oregon institution or federal bank transacting trust
business in this state shall retain such records pertaining to the trust
business transacted by it for such periods of time as may be required by
applicable laws of the jurisdiction under which the non-Oregon
institution or federal bank is organized, or if the applicable laws of
the jurisdiction do not specify a period for retaining the records, the
non-Oregon institution or federal bank shall retain the records required
by this section for a period of three years. The records shall be
available for examination by the director or, in the case of:

(a) Federal banks, the Comptroller of the Currency or other federal
supervisor;

(b) Out-of-state banks and out-of-state trust companies, the
appropriate state supervisor; or

(c) Extranational institutions, the official charged with
supervising the extranational institution in the country under the laws
of which it was organized. [Amended by 1971 c.263 §1; 1973 c.797 §197;
1975 c.544 §29; 1985 c.762 §42; 1991 c.336 §1; 1997 c.631 §214](1) In the acquisition or investment of trust property,
a trust company may take in its own name, or in the name of its nominee,
any assets in which it may be authorized to invest or hold trust property.

(2) Upon the satisfaction, conveyance or investment of trust
property, whether the trust property is held in the name of the trust
company, individually, or in its name as trustee or in a specified
fiduciary capacity or otherwise, the instrument of satisfaction or
transfer may be executed by the trust company in its own name. [Amended
by 1973 c.797 §198; 1997 c.631 §215]In acquiring, holding, satisfying and conveying trust
property, a trust company is not required to disclose that it is acting
in a fiduciary capacity, the terms or conditions of the instrument under
which it acts, the nature or extent of its authority or the application
of the proceeds of the transaction. A person dealing with a trust company
may not inquire into the matters, except to the extent specified in ORS
709.270. [Amended by 1973 c.797 §199](1) Funds placed or held in trust by a trust
company awaiting investment or distribution shall not be held uninvested
or undistributed for a longer period than is reasonable for the proper
management of the account, shall be carried in a separate account and
shall not be used by the trust company, bank or extranational institution
in the conduct of its business or in the conduct of the business of any
of its affiliates, except that such funds may be deposited in the
commercial or savings or other department of the trust company, bank or
extranational institution if the trust company, bank or extranational
institution first obtains and sets aside in its trust department:

(a) Bonds or other securities eligible for the investment of trust
funds;

(b) A surety bond;

(c) An irrevocable letter of credit issued by an insured
institution, as defined in ORS 706.008; or

(d) A combination of the securities, letters of credit and surety
bond.

(2) The surety bond shall be issued by a surety company authorized
to transact business in this state and approved by the Director of the
Department of Consumer and Business Services. The bond or letter of
credit shall provide that the principal and surety or letter of credit
issuer shall indemnify the several owners of the funds held in trust
against loss due to the failure of the trust company, bank or
extranational institution.

(3) Notwithstanding the provisions of ORS 708A.415, the securities,
the surety bond, the letter of credit or the securities, the surety bond
and the letters of credit together shall be in an amount equal to the
portion of the trust funds not insured by the United States Government or
any agency or instrumentality of the United States.

(4) If the trust company, bank or extranational institution fails,
the owners of the funds held in trust for investment or distribution have
a lien on the bonds or other securities set apart, or a right of action
on the surety bond and upon the letter of credit, in addition to their
claim against the estate of the trust company, bank or extranational
institution. [Amended by 1957 c.82 §2; 1973 c.797 §200; 1975 c.544 §29d;
1983 c.296 §5a; 1987 c.216 §5; 1991 c.331 §115; 1997 c.631 §216]An official oath or indemnity bond or other security shall not
be required when a trust company is appointed as fiduciary or during the
administration of the trust except as required by ORS 709.030 and
709.130. [Amended by 1973 c.797 §201; 1973 c.823 §144; 1974 c.36 §26] A trust company
shall, except as otherwise provided in this section, keep inviolate all
communications and writings made to or by the trustees touching the
existence, condition, management and administration of any private trust
confided to it. A creditor or stockholder is not entitled to disclosure
or knowledge of the communication or writing. However, the officers,
manager, trust officer, secretary or attorney of the trust company may
know of the communication or writing. In any suit or proceeding touching
the existence, condition, management or administration of the trust, the
court in which the matter is pending may require disclosure of the
communication or writing. [Amended by 1973 c.797 §202; 1997 c.631 §217] (1)
A trust company shall not make any loan to any director, officer or
employee of the trust company or to any affiliate or any director,
officer or employee of an affiliate from its trust funds, and shall not
permit any director, officer, employee or affiliate to become indebted to
it in any way out of its trust funds, unless specifically authorized to
do so by the terms of the trust.

(2) An officer, director or employee of a trust company shall not
knowingly violate any provision of this section, or aid or abet any other
person in a violation.

(3) This section shall not prevent the maintenance by a trust
company of time or demand deposits of its trust funds in an affiliate
that is a bank or extranational institution, provided that the bank or
extranational institution complies with the requirements of ORS 709.220
pertaining to obtaining and setting aside bonds, surety bonds and other
securities in an amount equal to the portion of the trust funds not
insured by the Federal Deposit Insurance Corporation. [Amended by 1973
c.797 §203; 1975 c.544 §29e; 1983 c.296 §5b; 1997 c.631 §218] If, as a result of an
examination, the Director of the Department of Consumer and Business
Services finds that the closing of any trust by a trust company has been
unreasonably delayed, the director may initiate proceedings in a court of
competent jurisdiction to require the trust company to perform its duties
in closing the trust. [Amended by 1973 c.797 §204] (1) A
national bank authorized to conduct a trust business that has complied
with the applicable provisions of this chapter may transact trust
business in all respects, as provided by applicable laws of the United
States and rules and regulations promulgated pursuant thereto. All acts
provided in the Bank Act to be performed by the State Treasurer, the
Director of the Department of Consumer and Business Services or other
public officials for or in respect to trust companies, shall be performed
for national banks equally with trust companies.

(2) Every national bank that is authorized to transact trust
business and that has qualified by making the deposit of securities
required under ORS 709.030, may:

(a) Act or be appointed by any court to act in any fiduciary
capacity to the same extent as any trust company;

(b) Use the word “trust” in its corporate name; and

(c) Advertise its authority to act in fiduciary capacities.
[Amended by 1963 c.55 §1; 1965 c.170 §1; 1973 c.797 §205; 1997 c.631 §219](1) When a sale or transfer of assets or liabilities
becomes effective, the purchasing corporation shall succeed to all the
rights, obligations and relations of the selling corporation to or in
respect to any person, estate, creditor, depositor, trustee or
beneficiary of any trust and in respect to any fiduciary relation, and
the rights, obligations and relations shall remain unencumbered.

(2) The sale or transfer of assets shall not effect a renunciation
or revocation of any letters of administration, letters testamentary,
letters of guardianship or any other fiduciary relationship.

(3) If any trust requires the approval of the court to a change of
the fiduciary, within 90 days after the change becomes effective the
successor fiduciary shall file notice of the change with the court having
jurisdiction and serve notice of the change upon each beneficiary. The
notice may be served in the manner provided in ORCP 9 or, if the
residence of a beneficiary is not known, notice may be published in the
manner provided for the publication of summons.

(4) A beneficiary or other person interested in the trust or estate
may, within 90 days after the service of the notice, apply to the
appropriate court for a change of fiduciary or such other relief as may
be proper. [Amended by 1973 c.797 §206; 1979 c.284 §195; 1997 c.631 §219a] A trust company may conduct
transactions using digital signatures and issue certificates for the
purpose of verifying digital signatures. [1997 c.631 §234a; 1999 c.718
§3; 2001 c.535 §35; 2005 c.118 §5]TERMINATION OF TRUST BUSINESS A trust
company quitting business shall furnish to the Director of the Department
of Consumer and Business Services satisfactory evidence of its release
and discharge from all obligations and trusts provided for in the Bank
Act. The director shall examine the trust company, and, if the director
is satisfied after the examination that the trust company has discharged
all its obligations and trusts, the director shall revoke its certificate
of authority and deliver up all securities on deposit with the director
under ORS 709.030. [Amended by 1973 c.797 §207](1) If a trust company goes into voluntary or involuntary
liquidation or receivership, the appointment of a successor trustee for
the trust shall be handled by the court hearing the liquidation
proceedings upon petition by the Director of the Department of Consumer
and Business Services, the trust company, any interested person or, in
the case of a federal bank or extranational institution, by its receiver
or liquidating agent.

(2) Upon the filing of the petition, the court shall order all
persons interested in any trust to designate and take all necessary steps
to appoint a successor trustee within a time fixed in the order, or to
show cause why a successor trustee should not be appointed by the court.
The order may be general in its terms and need not designate the trusts
involved or the nature, purpose or extent of the trusts, or give the name
of any of the beneficiaries or interested persons.

(3) In a trust where those interested in the trust fail to cause a
successor trustee to be appointed prior to the time fixed in the order,
the court shall appoint a successor trustee.

(4) The successor trustee shall succeed to all the rights, powers,
and obligations of the trust company in liquidation, except claims or
liabilities arising out of the management of trusts prior to the date of
transfer.

(5) A copy of the order provided for in subsection (2) of this
section shall be published once a week for four successive weeks in a
newspaper of general circulation to be designated by the court and
published in the county in which the liquidation proceedings of the trust
company are carried on. If there is no newspaper published in the county,
or if the court conducting the liquidation proceedings is located outside
this state, publication shall be made in a newspaper of general
circulation in the State of Oregon designated by the court. Proof of
publication shall be made in the same manner as proof of publication of
summons is made.

(6) The filing of the petition and the making and entering of the
order and the publishing of a copy of the order, gives the court full
jurisdiction of the trusts and all parties interested in the trusts. A
court having jurisdiction shall require the director to mail, by
registered mail or by certified mail with return receipt, postage
prepaid, a copy of the order to each living trustor of all private trusts
in which the trust company is trustee or to the then directly
participating beneficiaries of all private trusts in which there is no
living trustor. The notice shall be mailed to the last-known address of
each trustor or participating beneficiary as shown by the records of the
trust company. Proof of mailing shall be in such form as the court may
require. Failure to mail the notice or the nonreceipt of the notice by
any trustor or participating beneficiary shall not affect the
jurisdiction of the court or invalidate any order or judgment made in the
proceedings.

(7) It is unnecessary to require the appearance of minors or other
incompetents by guardians ad litem or otherwise.

(8) The provisions of subsections (2) to (6) of this section shall
apply only to trust companies that are organized under the laws of this
state and to trust companies that are the trust departments of banks
having their principal places of business in this state. If any other
trust company goes into voluntary or involuntary liquidation or
receivership, the proceedings shall be governed by the laws of the state
or country in which the proceedings are initiated. The director and any
other interested person may participate in the proceedings. Any successor
trustee appointed pursuant to the proceedings shall succeed to all the
rights, powers and obligations of the trust company, except claims or
liabilities arising out of the management of trusts prior to the date of
transfer. [Amended by 1973 c.797 §208; 1991 c.249 §64; 1997 c.631 §220;
2003 c.576 §547](1) If a trust company discontinues its
trust business, the Director of the Department of Consumer and Business
Services shall file in the circuit court for the county in which the
principal place of business of the trust company is located a verified
petition:

(a) Stating that the trust company is closing, dissolving or
transferring its trust business or is in process of voluntary or
involuntary liquidation.

(b) Requesting that claims, if any, against the deposit made under
ORS 709.030 by the trust company with the director be determined.

(2) Notwithstanding the provisions of subsection (1) of this
section, if proceedings for the liquidation of the trust company have
been commenced in a court located in a county or state other than the
county in this state in which the trust company has its principal place
of business, the director shall file the verified petition described in
subsection (1) of this section in the court where the proceedings have
been commenced. [Amended by 1957 c.115 §1; 1973 c.797 §209; 1997 c.631
§221](1) Upon the filing of the petition under ORS 709.390, the court
shall make an order requiring all persons having claims against the
deposits to start action in the circuit court hearing the petition of the
Director of the Department of Consumer and Business Services within six
months after the date of the order. Any claim not filed within the
six-month period is barred. The petition or the order need not give the
names of any beneficiary or the nature of the trusts protected by the
deposit.

(2) A copy of the order shall be published in a newspaper
designated by the court, having a general circulation in the county of
the principal place of business of the trust company at least once a week
for as many consecutive weeks as the court orders, but not less than four
weeks nor more than 12 weeks. If a newspaper is not published in the
county, the copy of the order shall be published in a newspaper of
general circulation in the State of Oregon designated by the court. Proof
of publication shall be made in the same manner as proof of publication
of summons is made and the proof shall be filed with the clerk of the
court.

(3) The filing of the petition, under ORS 709.390, and the making
and entering of the order and the publishing of a copy of the order under
this section gives the court exclusive jurisdiction of deposited
securities and of all parties having an interest in or claim upon the
securities.

(4) A court shall require the director to mail, by certified mail
with return receipt, postage prepaid, a copy of the order to each living
trustor of all private trusts in which the trust company is trustee and
which have not been closed or to the directly participating beneficiaries
of all private trusts in which there is no living trustor. The notice
shall be mailed to the last-known address of each trustor or
participating beneficiary as shown by the records of the trust company.
Proof of mailing shall be in the form required by the court. Failure to
mail the notice or the nonreceipt of the notice by any trustor or
participating beneficiary shall not affect the jurisdiction of the court
or invalidate any order or judgment made in the proceedings.

(5) The appearance of minors or other incompetents by guardians ad
litem or otherwise is not necessary.

(6) The provisions of subsections (1) to (4) of this section shall
apply only to trust companies that are organized under the laws of this
state and to trust companies that are the trust departments of banks
having their principal places of business in this state. If a petition is
filed under ORS 709.390 (2), the proceedings shall be governed by the
laws of the state or country in which the petition is filed. A copy of
any court order requiring persons having claims against the deposits made
by the trust company under ORS 709.030 to bring their claims within a
specified period of time shall be published in a newspaper of general
circulation in the State of Oregon. The director shall mail, by certified
mail with return receipt, postage prepaid, a copy of the order to each
trustor living in this state of a private trust in which the trust
company is trustee and which has not been closed, and to the directly
participating beneficiaries who reside in this state of any private trust
in which there is no trustor living in Oregon. The notice shall be mailed
to the last known address of each such trustor or participating
beneficiary as shown by the records of the trust company. Proof of
mailing shall be in the form required by the court. Failure to mail the
notice or the nonreceipt of notice by any trustor or participating
beneficiary shall not affect the jurisdiction of the court or invalidate
any order or judgment made in the proceedings. [Amended by 1973 c.797
§210; 1979 c.284 §196; 1991 c.249 §65; 1997 c.631 §222] The filing by
the Director of the Department of Consumer and Business Services of the
petition provided for in ORS 709.390 terminates the right of the trust
company affected thereby to do a trust business in this state, except as
may be necessary to wind up then existing trusts. [Amended by 1973 c.797
§211; 1997 c.631 §223](1) In all actions to determine claims to the deposits, the
Director of the Department of Consumer and Business Services shall be a
necessary party defendant.

(2) An action shall not be considered to have begun within the time
required by the order unless, in the case of defendants within the state,
summons is actually served within 60 days after the time limited in the
order.

(3) Actions filed to determine claims to the deposits shall have
preference upon the calendar of any Oregon trial or appellate court and
shall be tried by such courts without unnecessary delay. [Amended by 1973
c.797 §212; 1997 c.631 §224](1) If any actions on claims against
the deposit mentioned in ORS 709.390 are begun within the six-month
period, the Director of the Department of Consumer and Business Services
shall not release and the court shall not order the payment of any part
of the deposit until all actions are determined by final judgment.

(2) When all actions on claims against the deposit are finally
determined, so much of the deposit as is necessary shall be paid to the
claimants who have established their claims in the sums allowed by the
court or, if not sufficient, the deposit shall be distributed pro rata
among the claimants establishing their claims.

(3) The court, in the proceeding initiated by the director, shall
enter a judgment providing that the balance of the deposit be paid to the
trust company or if the trust company is in the process of liquidation,
to the official in charge of the liquidation. [Amended by 1973 c.797
§213; 1997 c.631 §225; 2003 c.576 §548] All unpaid
charges owing to the Director of the Department of Consumer and Business
Services for expenses and services rendered under ORS 709.080 in
connection with the deposit mentioned in ORS 709.030, and all expenses
incurred by the director, including services rendered by the director,
attorney fees and necessary court expenses in connection with the
determination of claims against the deposit, are a first and prior lien
on the deposit, and shall be paid before any part of the deposit is
released or paid to any claimant or trust company. [Amended by 1973 c.797
§214; 1997 c.631 §226]The court hearing the proceedings instituted by the Director
of the Department of Consumer and Business Services under ORS 709.390
may, upon terms fixed by the court, order the director to sell and reduce
to cash the deposited securities as necessary to pay:

(1) The unpaid charges and expenses described in ORS 709.440; and

(2) Claims established against the deposit. [Amended by 1973 c.797
§215]
(1) ORS 709.390 to 709.450 do not apply to a merger or consolidation of a
trust company with another trust company authorized to conduct a trust
business whereby the security deposits and the trust business of the
retiring trust company are acquired by the resulting trust company.

(2) Immediately following the completion of a merger or
consolidation described in subsection (1) of this section, the Director
of the Department of Consumer and Business Services, upon written
application of the resulting trust company, shall return to the resulting
trust company that portion of the combined security deposits of the trust
companies involved in the merger or consolidation which exceeds the
deposit required by ORS 709.030 for the combined cash and securities held
in trust by the resulting trust company following the merger or
consolidation. [Amended by 1957 c.115 §2; 1973 c.797 §216; 1997 c.631
§227]CONVERSION, MERGER AND ACQUISITION(1) An Oregon trust company may convert
into an out-of-state trust company subject to the prior approval of the
supervisory authority having jurisdiction over the proposed resulting
trust company. Upon completion of such a conversion, the Oregon charter
shall terminate, except for the purposes specified in ORS 711.190.

(2) An out-of-state trust company that follows the procedures
prescribed by the supervisory authority having jurisdiction over the
converting out-of-state trust company shall be granted a charter as an
Oregon trust company by the Director of the Department of Consumer and
Business Services if the director finds that the converting trust company
meets the standards of the Bank Act for organization as an Oregon trust
company. An out-of-state trust company may apply to convert to an Oregon
trust company and obtain a charter as an Oregon trust company by filing
with the director:

(a) A certificate signed by the chief executive officer of the
converting out-of-state trust company certifying that the board of
directors has taken all necessary corporate action in compliance with the
provisions of the laws of the supervisory authority having jurisdiction
over the converting out-of-state trust company.

(b) The articles of incorporation, approved by a majority of the
stockholders of the converting out-of-state trust company, for the
operation of the out-of-state trust company as an Oregon trust company.
[1997 c.631 §230] An Oregon trust company
may merge with or have its outstanding shares acquired by any other trust
company if the merger or acquisition of shares is permitted by the laws
of the jurisdiction having supervisory authority over the resulting trust
company. An Oregon trust company that merges with or engages in a share
exchange with another trust company shall follow the procedures set forth
in ORS 711.130 to 711.145. [1997 c.631 §231](1) Subject to the provisions of this
section, and subject to the approval of the Director of the Department of
Consumer and Business Services, an Oregon trust company may sell all or
any portion of its assets or transfer all or any portion of its
liabilities to another trust company outside the ordinary course of
business. Any such sale or transfer shall be documented by an acquisition
transaction agreement between or among the parties, which agreement shall
be approved by the board of directors of each party to the transaction.

(2) If an Oregon trust company proposes to transfer all or
substantially all of its assets, liabilities or both outside the ordinary
course of business, it shall send notice of the acquisition transaction
to each of its stockholders within 30 days after its board approves the
acquisition transaction, which notice shall set forth the substantive
provisions of ORS 711.175, 711.180 and 711.185. To be effective, each
Oregon trust company that is a party to the acquisition transaction shall
have the acquisition transaction approved by a two-thirds vote of the
outstanding stock of each class of voting shares at a meeting called to
consider the acquisition transaction.

(3) The director shall approve an acquisition transaction that is
subject to this section if the director finds that the acquisition
transaction:

(a) Conforms with the provisions of the Bank Act;

(b) Will not be detrimental to the safety and soundness of an
Oregon trust company that is a party to the acquisition transaction;

(c) Is not contrary to the public interest; and

(d) If the acquiring trust company is not an Oregon trust company,
the director is satisfied that the acquisition transaction is permitted
by the supervisory authority, if any, having jurisdiction over the
acquiring trust company.

(4) If the director disapproves an acquisition transaction that is
subject to this section, the director shall state any objections in
writing and give the parties to the acquisition transaction an
opportunity to take action to obviate the objections.

(5) Any party to an acquisition transaction agreement may appeal
the decision of the director as provided in ORS 183.415 to 183.500. [1997
c.631 §233]A stockholder of an Oregon trust company
that is a party to a merger, share exchange or acquisition transaction
shall have the rights granted stockholders of Oregon stock banks under
ORS 711.175, 711.180 and 711.185. [1997 c.631 §234]MISCELLANEOUS(1) Trust business
done by corporations created prior to the adoption of the Bank Act
(General Laws 1925, chapter 207) shall be subject to regulation by the
Director of the Department of Consumer and Business Services and such
corporations engaged in trust business are subject to the provisions,
including the filing and fee requirements, of ORS chapters 706 to 716.

(2) If a corporation subject to subsection (1) of this section also
carries on business other than a trust business, the Corporation
Commissioner may retain a copy of the articles of incorporation and other
filings. As provided in ORS 60.957, such corporations also shall continue
to be subject to the provisions, including the filing and fee
requirements, of ORS chapter 60. [Formerly 709.500]PENALTIES(1) Any person who violates ORS 709.270 or
709.280 or any rule adopted under ORS 709.170 (3) shall forfeit a civil
penalty in an amount determined by the director of not more than $2,500
for each offense.

(2) All money forfeited under this section shall be paid to the
State Treasurer to be deposited in the Consumer and Business Services
Fund.

(3) The civil penalty may be recovered as provided in ORS 706.980.
[1975 c.544 §29c]