AR
Arkansas Senate Bill SB230

Arkansas 2025 Regular Session

Arkansas Senate Bill SB230 Compare Versions

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11 Stricken language would be deleted from and underlined language would be added to present law.
2-Act 237 of the Regular Session
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5-State of Arkansas As Engrossed: S2/17/25 1
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3+State of Arkansas 1
64 95th General Assembly A Bill 2
75 Regular Session, 2025 SENATE BILL 230 3
86 4
97 By: Senator J. Boyd 5
108 By: Representative Achor 6
119 7
1210 For An Act To Be Entitled 8
1311 AN ACT TO REPEAL THE ARKANSAS TRUST INSTITUTIONS ACT; 9
1412 TO CREATE THE ARKANSAS TRUST INSTITUTIONS ACT OF 10
1513 2025; AND FOR OTHER PURPOSES. 11
1614 12
1715 13
1816 Subtitle 14
1917 TO REPEAL THE ARKANSAS TRUST 15
2018 INSTITUTIONS ACT; AND TO CREATE THE 16
2119 ARKANSAS TRUST INSTITUTIONS ACT OF 2025. 17
2220 18
2321 BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF ARKANSAS: 19
2422 20
2523 SECTION 1. Arkansas Code Title 23, Chapter 51, is amended to read as 21
2624 follows: 22
2725 23
2826 CHAPTER 51 24
2927 ARKANSAS TRUST INSTITUTIONS ACT 25
3028 26
3129 Subchapter 1 — Arkansas Trust Institutions Act 27
3230 28
3331 23-51-101. Title. 29
3432 This chapter may be cited as the “Arkansas Trust Institutions Act”. 30
3533 31
3634 23-51-102. Certain definitions. 32
3735 (a) For the purposes of this chapter: 33
3836 (1) “Account” means the client relationship established with a 34
3937 trust company involving the transfer of funds or property to the trust 35
40-company, including a relationship in which the trust company acts as trustee, 36 As Engrossed: S2/17/25 SB230
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4541 executor, administrator, guardian, custodian, conservator, bailee, receiver, 1
4642 registrar, or agent, but excluding a relationship in which the trust company 2
4743 acts solely in an advisory capacity; 3
4844 (2) “Act as a fiduciary” or “acting as a fiduciary” means to: 4
4945 (A) Accept or execute trusts, including to: 5
5046 (i) Act as trustee under a written agreement; 6
5147 (ii) Receive money or other property in its capacity 7
5248 as trustee for investment in real or personal property; 8
5349 (iii) Act as trustee and perform the fiduciary 9
5450 duties committed or transferred to it by order of a court of competent 10
5551 jurisdiction; 11
5652 (iv) Act as trustee of the estate of a deceased 12
5753 person; or 13
5854 (v) Act as trustee for a minor or incapacitated 14
5955 person; 15
6056 (B) Administer in any other fiduciary capacity real or 16
6157 tangible personal property; or 17
6258 (C) Act pursuant to an order of a court of competent 18
6359 jurisdiction as executor or administrator of the estate of a deceased person 19
6460 or as a guardian or conservator for a minor or incapacitated person; 20
6561 (3) “Administer” with respect to real or tangible personal 21
6662 property means, as an agent or in another representative capacity, to 22
6763 possess, purchase, sell, lease or insure, safekeep or otherwise manage the 23
6864 property; 24
6965 (4) “Affiliate” means a company that directly or indirectly 25
7066 controls, is controlled by, or is under common control with a trust 26
7167 institution or other company; 27
7268 (5) “Authorized trust institutions” means any state trust 28
7369 company, subsidiary trust company, or trust office of a trust institution 29
7470 located in Arkansas; 30
7571 (6) “Bank” means a state bank, national bank, any bank chartered 31
7672 by any state of the United States or any foreign bank organized under the 32
7773 laws of a territory of the United States, the Commonwealth of Puerto Rico, 33
7874 Guam, American Samoa or the United States Virgin Islands, the deposits of 34
7975 which are insured by the Federal Deposit Insurance Corporation; 35
80- (7) “Bank supervisory agency” means: 36 As Engrossed: S2/17/25 SB230
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76+ (7) “Bank supervisory agency” means: 36 SB230
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8579 (A) Any agency of another state with primary 1
8680 responsibility for chartering and supervising a trust institution; and 2
8781 (B) The United States Office of the Comptroller of the 3
8882 Currency, the Federal Deposit Insurance Corporation, the Board of Governors 4
8983 of the Federal Reserve System, the Office of Thrift Supervision [abolished] 5
9084 and any successor to these agencies; 6
9185 (8) “Branch” with respect to a depository institution has the 7
9286 meaning set forth in § 23 -48-702; 8
9387 (9) “Capital” means: 9
9488 (A) The sum of: 10
9589 (i) The par value of all shares of the state trust 11
9690 company having a par value that have been issued; 12
9791 (ii) The consideration fixed by the board in the 13
9892 manner provided by the Arkansas Business Corporation Act of 1987, § 4 -27-101 14
9993 et seq., for all shares of the state trust company without par value that 15
10094 have been issued, except a part of that consideration that: 16
10195 (a) Has been actually received; 17
10296 (b) Is less than all of that consideration; 18
10397 and 19
10498 (c) The board, by resolution adopted not later 20
10599 than sixty (60) days after the date of issuance of those shares, has 21
106100 allocated to surplus with the prior approval of the commissioner; and 22
107101 (iii) An amount not included in subdivisions 23
108102 (a)(9)(A)(i) and (ii) of this section that has been transferred to capital of 24
109103 the state trust company, on the payment of a share dividend or on adoption by 25
110104 the board of a resolution directing that all or part of surplus be 26
111105 transferred to capital, minus each reduction made as permitted by law; less 27
112106 (B) All amounts otherwise included in subdivisions 28
113107 (a)(9)(A)(i) and (ii) of this section that are attributable to the issuance 29
114108 of securities by the state trust company and that the commissioner 30
115109 determines, after notice and an opportunity for hearing, should be classified 31
116110 as debt rather than equity securities; 32
117111 (10) “Capital base” means the sum of capital, surplus, and 33
118112 undivided profits, plus any additions and less any subtractions which the 34
119113 commissioner may by rule prescribe; 35
120- (11) “Charter” means a charter, license or other authority 36 As Engrossed: S2/17/25 SB230
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123-
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114+ (11) “Charter” means a charter, license or other authority 36 SB230
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125117 issued by the commissioner or a bank supervisory agency authorizing a trust 1
126118 institution to act as a fiduciary in its home state; 2
127119 (12) “Client” means a person to whom a trust institution owes a 3
128120 duty or obligation under a trust or other account administered by the trust 4
129121 institution or as an advisor or agent, regardless of whether the trust 5
130122 institution owes a fiduciary duty to the person. The term includes the non -6
131123 contingent beneficiaries of an account; 7
132124 (13) “Commissioner” means the Bank Commissioner then in office 8
133125 and, where appropriate, all of his or her successors and predecessors in 9
134126 office; 10
135127 (14) “Company” includes a bank, trust company, subsidiary trust 11
136128 company, corporation, limited liability company, partnership, association, 12
137129 business trust, foundation, or another trust; 13
138130 (15) “Control” means: 14
139131 (A) The ownership of or ability or power to vote, 15
140132 directly, acting through one or more other persons, or otherwise indirectly, 16
141133 more than twenty-five percent (25%) of the outstanding shares of a class of 17
142134 voting securities of a state trust company or other company; 18
143135 (B) The ability to control the election of a majority of 19
144136 the board of a state trust company or other company; and 20
145137 (C) The power to exercise, directly or indirectly, a 21
146138 controlling influence over the management or policies of the state trust 22
147139 company or other company as determined by the commissioner after notice and 23
148140 an opportunity for hearing; 24
149141 (16) “Department” means the State Bank Department; 25
150142 (17) “Depository institution” means any company chartered to act 26
151143 as a fiduciary and included for any purpose within any of the definitions of 27
152144 “insured depository institution” as set forth in 12 U.S.C. §§ 1813(c)(2) and 28
153145 (3); 29
154146 (18) “Equity capital” means the amount by which the total assets 30
155147 of a state trust company exceed the total liabilities of the state trust 31
156148 company; 32
157149 (19) “Equity security” means: 33
158150 (A) Stock, other than adjustable rate preferred stock and 34
159151 money market (auction rate) preferred stock; 35
160- (B) A certificate of interest or participation in a 36 As Engrossed: S2/17/25 SB230
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163-
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152+ (B) A certificate of interest or participation in a 36 SB230
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165155 profit-sharing agreement, collateral -trust certificate, preorganization 1
166156 certificate or subscription, transferable share or participation share, 2
167157 investment contract, voting -trust certificate, or partnership interest; 3
168158 (C) A security immediately convertible at the option of 4
169159 the holder without payment of significant additional consideration into a 5
170160 security described by this subdivision (a)(19); 6
171161 (D) A security carrying a warrant or right to subscribe to 7
172162 or purchase a security described by this subdivision (a)(19); and 8
173163 (E) A certificate of interest or participation in, 9
174164 temporary or interim certificate for, or receipt for a security described by 10
175165 this subdivision (a)(19) that evidences an existing or contingent equity 11
176166 ownership interest; 12
177167 (20) “Fiduciary record” means a matter written, transcribed, 13
178168 recorded, received or otherwise in the possession or control of a trust 14
179169 company, whether in physical or electromagnetic form, that is necessary to 15
180170 preserve information concerning an act or event relevant to an account or a 16
181171 client of a trust company; 17
182172 (21) “Hazardous condition” with respect to a trust company 18
183173 means: 19
184174 (A) A refusal by the trust company to permit examination 20
185175 of its books, papers, accounts, records, or affairs by the commissioner; 21
186176 (B) Violation by a trust company of a condition of its 22
187177 chartering or an agreement entered into between the trust company and the 23
188178 commissioner; or 24
189179 (C) A circumstance or condition in which an unreasonable 25
190180 risk of loss is threatened to clients or creditors of a trust company, 26
191181 excluding risk of loss to a client that arises as a result of the client's 27
192182 decisions or actions, but including a circumstance or condition in which a 28
193183 trust company: 29
194184 (i) Is unable or lacks the means to meet its current 30
195185 obligations as they come due in the regular and ordinary course of business, 31
196186 even though the book or fair market value of its assets may exceed its 32
197187 liabilities; 33
198188 (ii) Has equity capital less than the amount of 34
199189 capital the trust company is required to maintain under § 23 -51-110, or the 35
200-adequacy of its equity capital is threatened, as determined under regulatory 36 As Engrossed: S2/17/25 SB230
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190+adequacy of its equity capital is threatened, as determined under regulatory 36 SB230
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205193 accounting principles; 1
206194 (iii) Has concentrated an excessive or unreasonable 2
207195 portion of its assets in a particular type or character of investment; 3
208196 (iv) Violates or refuses to comply with this 4
209197 chapter, another statute or rule applicable to trust companies, or any final 5
210198 and enforceable order of the commissioner; 6
211199 (v) Is in a condition that renders the continuation 7
212200 of a particular business practice hazardous to its clients and creditors; or 8
213201 (vi) Conducts business in an unsafe or unsound 9
214202 manner, which includes, but is not limited to conducting business with: 10
215203 (a) Inexperienced or inattentive management; 11
216204 (b) Potentially dangerous operating practices; 12
217205 (c) Infrequent or inadequate audits; 13
218206 (d) Administration of assets that is notably 14
219207 deficient in relation to the volume and character or responsibility for asset 15
220208 holdings; 16
221209 (e) Failure to adhere to sound administrative 17
222210 practices; 18
223211 (f) Frequent occurrences of violations of 19
224212 laws, rules, or terms of the governing instruments; or 20
225213 (g) Engaging in self -dealing or evidencing a 21
226214 notable degree of potential or actual conflicts of interest; 22
227215 (22) “Insider” means: 23
228216 (A) Each director, officer or principal shareholder of the 24
229217 trust company; 25
230218 (B) Any company controlled by a person described by 26
231219 subdivision (a)(23)(A) of this section; or 27
232220 (C) Any person who participates or has authority to 28
233221 participate, other than in the capacity of a director, in major policy -making 29
234222 functions of the state trust company, whether or not the person has an 30
235223 official title or the officer is serving without salary or compensation; 31
236224 (23) “Insolvent” means a circumstance or condition in which a 32
237225 state trust company: 33
238226 (A) Is unable or lacks the means to meet its current 34
239227 obligations as they come due in the regular and ordinary course of business, 35
240-even if the value of its assets exceeds its liabilities; 36 As Engrossed: S2/17/25 SB230
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243-
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228+even if the value of its assets exceeds its liabilities; 36 SB230
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245231 (B) Has equity capital less than one million dollars 1
246232 ($1,000,000), as determined under regulatory accounting principles; 2
247233 (C) Fails to maintain deposit insurance with the Federal 3
248234 Deposit Insurance Corporation or its successor if the commissioner determines 4
249235 that deposit insurance is necessary for the safe and sound operation of the 5
250236 state trust company, or maintains adequate security for its deposits in 6
251237 accordance with § 23 -51-130; 7
252238 (D) Sells or attempts to sell substantially all of its 8
253239 assets or merges or attempts to merge substantially all of its assets or 9
254240 business with another entity other than as provided by §§ 23 -51-150 — 23-51-10
255241 155; or 11
256242 (E) Attempts to dissolve or liquidate other than as 12
257243 provided by §§ 23-51-156 — 23-51-161; 13
258244 (24) “Investment security” means a marketable obligation 14
259245 evidencing indebtedness of a person in the form of a bond, note, debenture, 15
260246 or other debt instrument not otherwise classified as a loan or extension of 16
261247 credit; 17
262248 (25) “License” means the authority granted by the commissioner 18
263249 pursuant to this chapter to establish, acquire or maintain a trust office; 19
264250 (26) “Loans and extensions of credit” means direct or indirect 20
265251 advances of funds by a state trust company to a person that are conditioned 21
266252 on the obligation of the person to repay the funds or that are repayable from 22
267253 specific property pledged by or on behalf of the person; 23
268254 (27) “New trust office” means a trust office located in a host 24
269255 state which: 25
270256 (A) Is originally established by the trust institution as 26
271257 a trust office; and 27
272258 (B) Does not become a trust office of the trust 28
273259 institution as a result of: 29
274260 (i) The acquisition of another trust institution or 30
275261 trust office of another trust institution; or 31
276262 (ii) A merger, consolidation, or conversion 32
277263 involving any such trust institution or trust office; 33
278264 (28) “Office” with respect to a trust institution means the 34
279265 principal office, a trust office or a representative trust office, but not a 35
280-branch; 36 As Engrossed: S2/17/25 SB230
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285269 (29) “Officer” means the presiding officer of the board, the 1
286270 principal executive officer, or another officer appointed by the board of a 2
287271 state trust company or other company, or a person or group of persons acting 3
288272 in a comparable capacity for the state trust company or other company; 4
289273 (30) “Operating subsidiary” means a company for which a state 5
290274 trust company has the ownership, ability, or power to vote, directly, acting 6
291275 through one or more other persons, or otherwise indirectly, more than fifty 7
292276 percent (50%) of the outstanding shares of each class of voting securities or 8
293277 its equivalent of the company; 9
294278 (31) “Out-of-state bank” means a bank chartered to act as a 10
295279 fiduciary in any state or states other than this state; 11
296280 (32) “Out-of-state trust company” means either a trust company 12
297281 that is not a state trust company or a savings association whose principal 13
298282 office is not located in this state; 14
299283 (33) “Out-of-state trust institution” means a trust institution 15
300284 that is not a state trust institution; 16
301285 (34) “Person” means an individual, a company or any other legal 17
302286 entity; 18
303287 (35) “Principal office” with respect to: 19
304288 (A) A state trust company, means a location registered 20
305289 with the commissioner as the state trust company's home office at which: 21
306290 (i) The state trust company does business; 22
307291 (ii) The state trust company keeps its corporate 23
308292 books and a set of its material records, including material fiduciary 24
309293 records; and 25
310294 (iii) At least one executive officer of the state 26
311295 trust company maintains an office; or 27
312296 (B) A trust institution other than a state trust company, 28
313297 means its principal place of business in the United States; 29
314298 (36) “Principal shareholder” means a person who owns or has the 30
315299 ability or power to vote, directly, acting through one or more other persons, 31
316300 or otherwise indirectly, ten percent (10%) or more of the outstanding shares 32
317301 of any class of voting securities of a state trust company or other company; 33
318302 (37) “Private trust company” means a trust company that does not 34
319303 engage in a trust business with the general public; 35
320- (38) “Receiver” means the commissioner, an agent of the 36 As Engrossed: S2/17/25 SB230
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304+ (38) “Receiver” means the commissioner, an agent of the 36 SB230
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325307 commissioner or any federal or other governmental agency exercising the 1
326308 powers and duties of a receiver pursuant to § 23 -51-164; 2
327309 (39) “Savings association” means a depository institution that 3
328310 is neither a bank nor a foreign bank; 4
329311 (40) “Shareholder” means an owner of a share in a state trust 5
330312 company; 6
331313 (41) “Shares” means the units into which the proprietary 7
332314 interests of a state trust company are divided or subdivided by means of 8
333315 classes, series, relative rights, or preferences; 9
334316 (42) “State” means any state of the United States, the District 10
335317 of Columbia, any territory of the United States, the Commonwealth of Puerto 11
336318 Rico, Guam, American Samoa, the Trust Territory of the Pacific Islands, the 12
337319 United States Virgin Islands, and the Northern Mariana Islands; 13
338320 (43) “State bank” means a bank chartered to act as a fiduciary 14
339321 by this state; 15
340322 (44) “State trust company” means a corporation organized or 16
341323 reorganized under this chapter; 17
342324 (45) “State trust institution” means a trust institution having 18
343325 its principal office in this state; 19
344326 (46) “Subsidiary” means a company that is controlled by another 20
345327 person. The term includes a subsidiary of a subsidiary; 21
346328 (47) “Subsidiary trust company” means a corporation organized 22
347329 under the Arkansas Business Corporation Act of 1987, § 4 -27-101 et seq. and 23
348330 authorized by the commissioner pursuant to § 23 -47-801 et seq. or the Bank 24
349331 Holding Company Subsidiary Trust Company Formation Act of 1989, § 23 -32-1901 25
350332 et seq. [repealed], to conduct trust business and business incidental to 26
351333 trust business in this state, of which more than fifty percent (50%) of the 27
352334 voting stock is owned, directly or indirectly, by a bank holding company 28
353335 which also owns, directly or indirectly, an affiliated bank, as that term is 29
354336 defined in § 23-47-801 et seq.; 30
355337 (48) “Surplus” means the amount by which the assets of a state 31
356338 trust company exceeds its liabilities, capital, and undivided profits; 32
357339 (49) “Trust business” means the holding out by a person to the 33
358340 public by advertising, solicitation or other means that the person is 34
359341 available to perform any service of a fiduciary in this or another state, 35
360-including but not limited to: 36 As Engrossed: S2/17/25 SB230
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363-
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365345 (A) Acting as a fiduciary, or 1
366346 (B) To the extent not acting as a fiduciary, any of the 2
367347 following: 3
368348 (i) Receiving for safekeeping personal property of 4
369349 every description; 5
370350 (ii) Acting as assignee, bailee, conservator, 6
371351 custodian, escrow agent, registrar, receiver or transfer agent; or 7
372352 (iii) Acting as financial advisor, investment 8
373353 advisor or manager, agent or attorney -in-fact in any agreed upon capacity; 9
374354 (50) “Trust company” means a state trust company, subsidiary 10
375355 trust company or any other company chartered to act as a fiduciary that is 11
376356 neither a depository institution nor a foreign bank; 12
377357 (51) “Trust deposits” means the client funds held by a state 13
378358 trust company and authorized to be deposited with itself pending investment, 14
379359 distribution, or payment of debts on behalf of the client; 15
380360 (52) “Trust institution” means a depository institution, state 16
381361 bank or trust company; 17
382362 (53) “Trust office” means an office, other than the principal 18
383363 office, at which a trust institution is licensed by the commissioner to act 19
384364 as a fiduciary; 20
385365 (54)(A) “Unauthorized trust activity” means: 21
386366 (i) A company, other than one identified in § 23 -51-22
387367 165(a), acting as a fiduciary within this state; 23
388368 (ii) A company engaging in a trust business in this 24
389369 state at any office of the company that is not its principal office, if the 25
390370 company is a state trust institution, or that is not a trust office or a 26
391371 representative trust office of the company; or 27
392372 (iii) An out-of-state trust institution engaging in 28
393373 a trust business in this state at any time an order issued by the 29
394374 commissioner under § 23 -51-182 is in effect. 30
395375 (B) “Unauthorized trust activity” does not include a 31
396376 foundation serving as a fiduciary; 32
397377 (55) “Undivided profits” means the part of equity capital of a 33
398378 state trust company equal to the balance of its net profits, income, gains, 34
399379 and losses since the date of its formation, minus subsequent distributions to 35
400-shareholders and transfers to surplus or capital under share dividends or 36 As Engrossed: S2/17/25 SB230
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405383 appropriate board resolutions. The term includes amounts allocated to 1
406384 undivided profits as a result of a merger; and 2
407385 (56) “Voting security” means a share, or other evidence of 3
408386 proprietary interest in a state trust company or other company that has as an 4
409387 attribute the right to vote or participate in the election of the board of 5
410388 the state trust company or other company, regardless of whether the right is 6
411389 limited to the election of fewer than all of the board members. The term 7
412390 includes a security that is convertible or exchangeable into a voting 8
413391 security. 9
414392 (57)(A) “Foundation” means an organization that: 10
415393 (i) Is organized and operated for religious, 11
416394 educational, or charitable purposes, as defined in section 501(c)(3) of the 12
417395 Internal Revenue Code of 1986, 26 U.S.C. § 501(c)(3), as it existed on 13
418396 January 1, 2019; 14
419397 (ii) Has equity capital of at least one million 15
420398 dollars ($1,000,000); 16
421399 (iii) Has fiduciary liability insurance coverage 17
422400 with policy limits of not less than two million dollars ($2,000,000); 18
423401 (iv) Adopts and maintains written fiduciary policies 19
424402 and procedures; 20
425403 (v) Has an annual independent audit that covers 21
426404 fiduciary activities and assets; and 22
427405 (vi)(a) Is serving as a fiduciary for a trust 23
428406 or estate whose assets are less than seven hundred fifty thousand dollars 24
429407 ($750,000). 25
430408 (b) Subdivision (a)(57)(A)(vi)(a) of this 26
431409 section does not apply if: 27
432410 (1) The foundation is the sole remainder 28
433411 beneficiary of the trust or estate; or 29
434412 (2) The remainder beneficiary is an 30
435413 organization that is supported by the foundation. 31
436414 (B) “Foundation” does not include a private foundation as 32
437415 defined in section 509(a) of the Internal Revenue Code of 1986, 26 U.S.C. § 33
438416 509(a). 34
439417 (b) These definitions shall be liberally construed to accomplish 35
440-the purposes of this chapter. The commissioner by rule may adopt other 36 As Engrossed: S2/17/25 SB230
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443-
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418+the purposes of this chapter. The commissioner by rule may adopt other 36 SB230
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445421 definitions to accomplish the purposes of this chapter. 1
446422 2
447423 23-51-103. Rules. 3
448424 The Bank Commissioner may promulgate such rules as he or she determines 4
449425 to be necessary or appropriate in order to implement the provisions of this 5
450426 chapter. 6
451427 7
452428 23-51-104. Organization and powers of state trust company. 8
453429 (a) Subject to the other provisions of this chapter, one or more 9
454430 persons may organize and charter a state trust company. A state trust company 10
455431 may perform any act as a fiduciary or engage in any trust business within or 11
456432 without this state. 12
457433 (b) Subject to § 23 -51-111, a state trust company may exercise the 13
458434 powers of an Arkansas business corporation reasonably necessary or helpful to 14
459435 enable exercise of its specific powers under this chapter. 15
460436 (c) A state trust company may contribute to community funds, or to 16
461437 charitable, philanthropic, or benevolent instrumentalities conducive to 17
462438 public welfare, amounts that its board considers appropriate and in the 18
463439 interests of the state trust company. 19
464440 (d) Subject to § 23 -51-130, a state trust company may deposit trust 20
465441 funds with itself or an affiliate. 21
466442 (e) Subject to obtaining any required insurance from the Federal 22
467443 Deposit Insurance Corporation (FDIC), a state trust company may receive and 23
468444 pay deposits with or without interest, made by agencies of the United States 24
469445 Government or of a state, county, or municipality. 25
470446 26
471447 23-51-105. Articles of association of state trust company. 27
472448 The articles of association of a state trust company must be signed and 28
473449 acknowledged by each organizer and must contain: 29
474450 (1) The name of the state trust company; 30
475451 (2) The period of its duration, which may be perpetual; 31
476452 (3) The powers of the state trust company, which may be stated 32
477453 as: 33
478454 (A) All powers granted to a state trust company in this 34
479455 state; or 35
480- (B) A list of the specific powers that the state trust 36 As Engrossed: S2/17/25 SB230
481-
482- 13 02-17-2025 11:15:03 ANS145
483-
484-
456+ (B) A list of the specific powers that the state trust 36 SB230
457+
458+ 13 02/13/2025 12:57:21 PM ANS145
485459 company chooses and is authorized to exercise; 1
486460 (4) The aggregate number of shares that the state trust company 2
487461 will be authorized to issue, the number of classes of shares, which may be 3
488462 one or more, the number of shares of each class if more than one class, and a 4
489463 statement of the par value of the shares of each class or that the shares are 5
490464 to be without par value; 6
491465 (5) If the shares are to be divided into classes, the 7
492466 designation of each class and statement of the preferences, limitations, and 8
493467 relative rights of the shares of each class; 9
494468 (6) Any provision granting to shareholders the preemptive right 10
495469 to acquire additional shares of the state trust company; 11
496470 (7) Any provision granting the right of shareholders to 12
497471 cumulative voting in the election of directors; 13
498472 (8) The aggregate amount of consideration to be received for all 14
499473 shares initially issued by the state trust company, and a statement signed 15
500474 and verified by the organizers that the capital stock has been fully 16
501475 subscribed and the purchase price therefor has been paid into an escrow 17
502476 account approved by the Bank Commissioner; 18
503477 (9) Any provision consistent with law that the organizers elect 19
504478 to set forth in the articles of association for the regulation of the 20
505479 internal affairs of the state trust company or that is otherwise required by 21
506480 this chapter to be set forth in the articles of association; 22
507481 (10) The street address of the state trust company's principal 23
508482 office required to be maintained under § 23 -51-172; and 24
509483 (11) The number of directors or managers constituting the 25
510484 initial board, which may not be fewer than three (3), and the names and 26
511485 street addresses of the persons who are to serve as directors until the first 27
512486 annual meeting of shareholders or until successor directors have been elected 28
513487 and qualified. 29
514488 30
515489 23-51-106. Application for state trust company charter. 31
516490 (a) An application for a state trust company charter must be made 32
517491 under oath and in the form required by the Bank Commissioner and must be 33
518492 supported by information, data, records, and opinions of counsel that the 34
519493 commissioner requires. The application must be accompanied by a non -35
520-refundable filing fee of not less than three thousand dollars ($3,000) nor 36 As Engrossed: S2/17/25 SB230
521-
522- 14 02-17-2025 11:15:03 ANS145
523-
524-
494+refundable filing fee of not less than three thousand dollars ($3,000) nor 36 SB230
495+
496+ 14 02/13/2025 12:57:21 PM ANS145
525497 more than ten thousand dollars ($10,000) as set by rule of the commissioner 1
526498 and proof of escrow of deposit for the required capital. 2
527499 (b) The commissioner shall grant a state trust company charter only on 3
528500 proof that one or more viable markets exist within or outside of this state 4
529501 that may be served in a profitable manner by the establishment of the 5
530502 proposed state trust company. In making such a determination, the 6
531503 commissioner shall examine the business plan which shall be submitted as part 7
532504 of the application for a state trust company charter and consider: 8
533505 (1) The market or markets to be served; 9
534506 (2) Whether the proposed organizational and capital structure 10
535507 and amount of initial capitalization is adequate for the proposed business 11
536508 and location; 12
537509 (3) Whether the anticipated volume and nature of business 13
538510 indicates a reasonable probability of success and profitability based on the 14
539511 market sought to be served; 15
540512 (4) Whether the proposed officers and directors, as a group, 16
541513 have sufficient fiduciary experience, ability, standing, competence, 17
542514 trustworthiness, and integrity to justify a belief that the proposed state 18
543515 trust company will operate in compliance with law and that success of the 19
544516 proposed state trust company is probable; 20
545517 (5) Whether each principal shareholder has sufficient 21
546518 experience, ability, standing, competence, trustworthiness, and integrity to 22
547519 justify a belief that the proposed state trust company will be free from 23
548520 improper or unlawful influence or interference with respect to the state 24
549521 trust company's operation in compliance with law; and 25
550522 (6) Whether the organizers are acting in good faith. 26
551523 (c) The failure of an applicant to furnish required information, data, 27
552524 opinions of counsel, other material or the required fee is considered an 28
553525 abandonment of the application. 29
554526 30
555527 23-51-107. Notice and investigation of charter application. 31
556528 (a) The Bank Commissioner shall notify the organizers when the 32
557529 application is complete and accepted for filing and all required fees and 33
558530 deposits have been paid. Upon filing of an application with the commissioner, 34
559531 the organizers of the proposed state trust company shall give notice of 35
560-filing through publication by one (1) insertion in a newspaper published in 36 As Engrossed: S2/17/25 SB230
561-
562- 15 02-17-2025 11:15:03 ANS145
563-
564-
532+filing through publication by one (1) insertion in a newspaper published in 36 SB230
533+
534+ 15 02/13/2025 12:57:21 PM ANS145
565535 the City of Little Rock and having a general and substantially statewide 1
566536 circulation and shall give written notice of filing through the United States 2
567537 mail to all trust institutions maintaining a principal office or a trust 3
568538 office in the county wherein the principal office of the proposed state trust 4
569539 company is to be located. 5
570540 (b) At the expense of the organizers, the commissioner shall 6
571541 investigate the application and inquire into the identity and character of 7
572542 each proposed director, officer, and principal shareholder. The commissioner 8
573543 shall prepare a written report of the investigation, and any person may 9
574544 request a copy of the nonconfidential portions of the application and written 10
575545 report as provided by the Freedom of Information Act of 1967, § 25 -19-101 et 11
576546 seq. Rules adopted under this chapter may specify the confidential or 12
577547 nonconfidential character of information obtained by the State Bank 13
578548 Department under this section. Except as provided in rules regarding 14
579549 confidential information, the financial statement of a proposed officer, 15
580550 director, or principal shareholder is confidential and not subject to public 16
581551 disclosure. 17
582552 18
583553 23-51-108. Hearing and decision on charter application. 19
584554 (a) No person shall appear in opposition to the application unless the 20
585555 person shall have filed a written protest to the granting of the application 21
586556 within thirty (30) days of the date of the notice of the filing of the 22
587557 application. The protest must state the grounds for objection and must be 23
588558 accompanied by a filing fee of not less than two thousand dollars ($2,000) 24
589559 nor more than five thousand dollars ($5,000) for each protestant, such amount 25
590560 to be set by rule promulgated by the Bank Commissioner. 26
591561 (b) Once the written report of investigation has been completed, the 27
592562 commissioner shall establish a time for hearing on the charter application. 28
593563 (c) Notice of the time, place, and purpose of the hearing shall be 29
594564 given at least thirty (30) days before the hearing as follows: 30
595565 (1) By letter from the commissioner to the organizers of the 31
596566 proposed state trust company and to each trust institution to which the 32
597567 organizers of the application are required to give written notice pursuant to 33
598568 § 23-51-107(a); 34
599569 (2) By letter from the commissioner to each person who has 35
600-notified the commissioner of an intention to oppose the application, provided 36 As Engrossed: S2/17/25 SB230
601-
602- 16 02-17-2025 11:15:03 ANS145
603-
604-
570+notified the commissioner of an intention to oppose the application, provided 36 SB230
571+
572+ 16 02/13/2025 12:57:21 PM ANS145
605573 that if a group of persons has protested the application, the notice may be 1
606574 given to one (1) member of the group; and 2
607575 (3) By release to news media. 3
608576 (d) If the commissioner sets a hearing, the commissioner shall conduct 4
609577 a public hearing and as many prehearing conferences and opportunities for 5
610578 discovery as the commissioner considers advisable and consistent with 6
611579 applicable law and rules. 7
612580 (e) Based on the record of any hearing conducted pursuant to 8
613581 subsection (d) of this section, the commissioner shall determine whether all 9
614582 of the necessary conditions set forth in § 23 -51-106(b) have been established 10
615583 and shall enter an order granting or denying the charter. The commissioner 11
616584 may make approval of any application conditional and shall include any 12
617585 conditions in the order granting the charter. 13
618586 14
619587 23-51-109. Issuance of charter. 15
620588 (a) A state trust company may not engage in the trust business until 16
621589 it receives its charter from the Bank Commissioner. The commissioner may not 17
622590 deliver the charter until the state trust company has: 18
623591 (1) Elected or qualified the initial officers and directors 19
624592 named in the application for charter or other officers and directors approved 20
625593 by the commissioner; and 21
626594 (2) Complied with all other requirements of this chapter 22
627595 relative to the organization of a state trust company. 23
628596 (b) If a state trust company does not open and engage in the trust 24
629597 business within six (6) months after the date it receives its charter or 25
630598 conditional approval of application for charter, or within such further 26
631599 period as such period may be extended, the commissioner shall revoke the 27
632600 charter or cancel the conditional approval of application for charter without 28
633601 judicial action. 29
634602 30
635603 23-51-110. Required capital. 31
636604 (a) The Bank Commissioner may not issue a charter to a state trust 32
637605 company having required capital of less than one million dollars 33
638606 ($1,000,000), except as provided in subsection (b) of this section. 34
639607 (b) The commissioner may require additional capital for a proposed or 35
640-existing state trust company or, on application in the exercise of discretion 36 As Engrossed: S2/17/25 SB230
641-
642- 17 02-17-2025 11:15:03 ANS145
643-
644-
608+existing state trust company or, on application in the exercise of discretion 36 SB230
609+
610+ 17 02/13/2025 12:57:21 PM ANS145
645611 consistent with protecting safety and soundness, reduce the amount of minimum 1
646612 capital required for a proposed or existing state trust company, if the 2
647613 commissioner finds the condition and operations of an existing state trust 3
648614 company or the proposed scope or type of operations of a proposed state trust 4
649615 company requires additional, or permits reduced, capital consistent with the 5
650616 safety and soundness of the state trust company. The safety and soundness 6
651617 factors to be considered by the commissioner in the exercise of such 7
652618 discretion include but are not limited to, 8
653619 (1) The nature and type of business conducted; 9
654620 (2) The nature and degree of liquidity in assets held in a 10
655621 corporate capacity; 11
656622 (3) The amount of fiduciary assets under management; 12
657623 (4) The type of fiduciary assets held and the depository of the 13
658624 assets; 14
659625 (5) The complexity of fiduciary duties and degree of discretion 15
660626 undertaken; 16
661627 (6) The competence and experience of management; 17
662628 (7) The extent and adequacy of internal controls; 18
663629 (8) The presence or absence of annual unqualified audits by an 19
664630 independent certified public accountant; 20
665631 (9) The reasonableness of business plans for retaining or 21
666632 acquiring additional capital; and 22
667633 (10) The existence and adequacy of insurance obtained or held by 23
668634 the trust company for the purpose of protecting its clients, beneficiaries 24
669635 and grantors. 25
670636 (c) The proposed effective date of an order requiring an existing 26
671637 state trust company to increase its capital must be stated in the order as no 27
672638 sooner than twenty (20) days after the date the proposed order is mailed or 28
673639 delivered. Unless the state trust company requests a hearing before the 29
674640 commissioner in writing before the effective date of the proposed order, the 30
675641 order becomes effective and is final and nonappealable. This subsection does 31
676642 not prohibit an application to reduce capital requirements of a proposed or 32
677643 an existing state trust company under subsection (b) of this section. 33
678644 (d) Subject to subsection (b) of this section and § 23 -51-118, a state 34
679645 trust company to which the commissioner issues a charter shall at all times 35
680-maintain capital in at least the amount required under subsection (a) of this 36 As Engrossed: S2/17/25 SB230
681-
682- 18 02-17-2025 11:15:03 ANS145
683-
684-
646+maintain capital in at least the amount required under subsection (a) of this 36 SB230
647+
648+ 18 02/13/2025 12:57:21 PM ANS145
685649 section, plus any additional amount or less any reduction the commissioner 1
686650 directs under subsection (b) of this section. 2
687651 3
688652 23-51-111. Application of laws relating to general business 4
689653 corporations. 5
690654 (a) The Arkansas Business Corporation Act of 1987, § 4 -27-101 et seq., 6
691655 applies to a trust company to the extent not inconsistent with this chapter 7
692656 or the proper business of a trust company, except that any reference to the 8
693657 Secretary of State means the Bank Commissioner unless the context requires 9
694658 otherwise. 10
695659 (b) Unless expressly authorized by this chapter or a rule of the 11
696660 commissioner, a trust company may not take an action authorized by the 12
697661 Arkansas Business Corporation Act of 1987, § 4 -27-101 et seq., regarding its 13
698662 corporate status, capital structure, or a matter of corporate governance, of 14
699663 the type for which the Arkansas Business Corporation Act of 1987, § 4 -27-101 15
700664 et seq., would require a filing with the Secretary of State if the trust 16
701665 company were a business corporation, without first submitting the filing to 17
702666 the commissioner for the same purposes for which it otherwise would be 18
703667 required to be submitted to the Secretary of State and compliance with the 19
704668 applicable provisions of this chapter. 20
705669 (c) The commissioner may adopt rules to limit or refine the 21
706670 applicability of subsection (a) of this section to a trust company or to 22
707671 alter or supplement the procedures and requirements of the Arkansas Business 23
708672 Corporation Act of 1987, § 4 -27-101 et seq., applicable to an action taken 24
709673 under this chapter. 25
710674 26
711675 23-51-112. Commissioner hearings — Appeals. 27
712676 (a) This section does not grant a right to a hearing to a person that 28
713677 is not otherwise granted by governing law. A hearing before the Bank 29
714678 Commissioner that is required or authorized by law may be conducted by a 30
715679 hearing officer on behalf of the commissioner. A matter made confidential by 31
716680 law must be considered by the commissioner in a closed hearing. 32
717681 (b) The commissioner may convene a hearing to receive evidence and 33
718682 argument regarding any matter before the commissioner for decision or review 34
719683 under this chapter. 35
720- (c) No person shall appear in opposition to the application unless the 36 As Engrossed: S2/17/25 SB230
721-
722- 19 02-17-2025 11:15:03 ANS145
723-
724-
684+ (c) No person shall appear in opposition to the application unless the 36 SB230
685+
686+ 19 02/13/2025 12:57:21 PM ANS145
725687 person shall have filed a written protest pursuant to § 23 -51-108 and paid 1
726688 the applicable fee. 2
727689 (d) At the hearing all organizers of the proposed state trust company 3
728690 and any person making a timely written protest against the application may 4
729691 appear. The attorneys for any such person may appear and be heard. 5
730692 (e) The commissioner may subpoena witnesses on his or her own motion 6
731693 or on the request of any party to the proceedings. 7
732694 (f) The admission of evidence at the hearing shall be controlled by § 8
733695 25-15-213. The parties shall have the right to cross -examine witnesses. 9
734696 Official notice may be taken of judicially cognizable facts and of generally 10
735697 recognized technical or scientific facts within the commissioner's 11
736698 specialized knowledge. The parties may bind themselves by stipulation. 12
737699 (g) The organizers shall be responsible for procuring and paying for a 13
738700 verbatim record of the proceeding. It will be the duty of the organizers to 14
739701 furnish at least one (1) copy of the transcript to the commissioner free of 15
740702 charge. 16
741703 (h) The commissioner shall render his or her decision in writing, at 17
742704 or after a hearing, which decision shall include the commissioner's findings 18
743705 of fact and conclusions of law. 19
744706 (i)(1) The time for filing a petition for judicial review under the 20
745707 Arkansas Administrative Procedure Act, § 25 -15-201 et seq., shall run from 21
746708 the date the final decision of the commissioner is mailed or delivered, in 22
747709 written form, to the parties desiring to appeal. 23
748710 (2) The hearing of such a petition for review will be advanced 24
749711 on the docket of each reviewing court as a matter of public interest. 25
750712 26
751713 23-51-113. Trust companies chartered under prior law. 27
752714 The charter of a corporation which was previously a trust company 28
753715 incorporated under any laws of this state prior to the adoption of the 29
754716 Arkansas Banking Code of 1997 may be converted to a state trust company under 30
755717 this chapter, if the charter, or evidence satisfactory to the Bank 31
756718 Commissioner that the corporation is still in existence and in good standing, 32
757719 is presented to the State Bank Department within six (6) months of enactment 33
758720 of this chapter for substitution of a charter issued under this chapter. 34
759721 35
760- 23-51-114. Amendment of state trust company articles of association. 36 As Engrossed: S2/17/25 SB230
761-
762- 20 02-17-2025 11:15:03 ANS145
763-
764-
722+ 23-51-114. Amendment of state trust company articles of association. 36 SB230
723+
724+ 20 02/13/2025 12:57:21 PM ANS145
765725 (a) A state trust company that has been granted a charter under § 23 -1
766726 51-109 or a predecessor statute may amend or restate its articles of 2
767727 association for any lawful purpose, including the creation of authorized but 3
768728 unissued shares in one or more classes or series. 4
769729 (b) An amendment authorizing the issuance of shares in series must 5
770730 contain: 6
771731 (1) The designation of each series and of any variations in the 7
772732 preferences, limitations, and relative rights among series to the extent that 8
773733 the preferences, limitations, and relative rights are to be established in 9
774734 the articles of association; and 10
775735 (2) A statement of any authority to be vested in the board to 11
776736 establish series and determine the preferences, limitations, and relative 12
777737 rights of each series. 13
778738 (c) Amendment or restatement of the articles of association of a state 14
779739 trust company and approval of the board and shareholders must be made or 15
780740 obtained in accordance with provisions of the Arkansas Business Corporation 16
781741 Act of 1987, § 4-27-101 et seq., for the amendment or restatement of articles 17
782742 of incorporation except as otherwise provided by this chapter or rules 18
783743 adopted under this chapter. The original and one (1) copy of the articles of 19
784744 amendment or restated articles of association must be filed with the Bank 20
785745 Commissioner for approval. Unless the submission presents novel or unusual 21
786746 questions, the commissioner shall approve or reject the amendment or 22
787747 restatement within thirty (30) days after the date the commissioner considers 23
788748 the submission informationally complete and accepted for filing. The 24
789749 commissioner may require the submission of additional information as 25
790750 considered necessary to an informed decision to approve or reject any 26
791751 amendment or restatement or articles of association under this section. 27
792752 (d) If the commissioner finds that the amendment or restatement 28
793753 conforms to law and any conditions imposed by the commissioner, and any 29
794754 required filing fee has been paid, the commissioner shall: 30
795755 (1) Endorse the face of the original and copy with the date of 31
796756 approval and the word “Approved”; 32
797757 (2) File the original in the State Bank Department's records; 33
798758 and 34
799759 (3) Deliver a certified copy to the amendment or restatement to 35
800-the state trust company. 36 As Engrossed: S2/17/25 SB230
801-
802- 21 02-17-2025 11:15:03 ANS145
803-
804-
760+the state trust company. 36 SB230
761+
762+ 21 02/13/2025 12:57:21 PM ANS145
805763 (e) An amendment or restatement, if approved, takes effect on the date 1
806764 of approval, unless the amendment or restatement provides for a different 2
807765 effective date. 3
808766 4
809767 23-51-115. Establishing a series of shares. 5
810768 (a) If the articles of association expressly give the board authority 6
811769 to establish series and determine the preferences, limitations, and relative 7
812770 rights of each series of shares, the board may do so only on compliance with 8
813771 this section and any rules adopted under this chapter. 9
814772 (b) A series of shares may be established in the manner provided by 10
815773 the provisions of the Arkansas Business Corporation Act of 1987, § 4 -27-101 11
816774 et seq., as if the state trust company were a domestic corporation, but the 12
817775 shares of the series may not be issued and sold except upon compliance with 13
818776 this section. The state trust company shall file the original and one copy of 14
819777 the articles of amendment required by the Arkansas Business Corporation Act 15
820778 of 1987, § 4-27-101 et seq., with the Bank Commissioner. Unless the 16
821779 submission presents novel or unusual questions, the commissioner shall 17
822780 approve or reject the series within thirty (30) days after the date the 18
823781 commissioner considers the submission informationally complete and accepted 19
824782 for filing. The commissioner may require the submission of additional 20
825783 information as considered necessary to an informed decision. 21
826784 (c) If the commissioner finds that the interests of the clients and 22
827785 creditors of the state trust company will not be adversely affected by the 23
828786 series, that the series otherwise conforms to law and any conditions imposed 24
829787 by the commissioner, and that any required filing fee has been paid, the 25
830788 commissioner shall: 26
831789 (1) Endorse the face of the original and copy of the statement 27
832790 with the date of approval and the word “Approved”; 28
833791 (2) File the original in the State Bank Department's records; 29
834792 and 30
835793 (3) Deliver a certified copy of the statement to the state trust 31
836794 company. 32
837795 33
838796 23-51-116. Change in outstanding capital and surplus. 34
839797 (a) A state trust company may not reduce or increase its outstanding 35
840-capital through dividend, redemption, issuance of shares or otherwise, 36 As Engrossed: S2/17/25 SB230
841-
842- 22 02-17-2025 11:15:03 ANS145
843-
844-
798+capital through dividend, redemption, issuance of shares or otherwise, 36 SB230
799+
800+ 22 02/13/2025 12:57:21 PM ANS145
845801 without the prior approval of the Bank Commissioner, except as permitted by 1
846802 this section or rules adopted under this chapter. 2
847803 (b) Unless otherwise restricted by rules, prior approval is not 3
848804 required for an increase in capital accomplished through: 4
849805 (1) Issuance of shares of common stock for cash; 5
850806 (2) Declaration and payment of pro rata share dividends as 6
851807 defined in the Arkansas Business Corporation Act of 1987, § 4 -27-101 et seq.; 7
852808 or 8
853809 (3) Adoption by the board of a resolution directing that all or 9
854810 part of undivided profits be transferred to capital. 10
855811 (c) Prior approval is not required for a decrease in surplus caused by 11
856812 incurred losses in excess of undivided profits. 12
857813 13
858814 23-51-117. Capital notes or debentures. 14
859815 (a) With the prior written approval of the Bank Commissioner, any 15
860816 state trust company may, at any time, through action of its board, and 16
861817 without requiring action of its shareholders, issue and sell its capital 17
862818 notes or debentures, which must be subordinate to the claims of depositors 18
863819 and may be subordinate to other claims, including the claims of other 19
864820 creditors or classes of creditors or the shareholders. 20
865821 (b) Capital notes or debentures may be convertible into shares of any 21
866822 class or series. The issuance and sale of convertible capital notes or 22
867823 debentures are subject to satisfaction of preemptive rights, if any, to the 23
868824 extent provided by law. 24
869825 (c) Without the prior written approval of the commissioner, interest 25
870826 due or principal repayable on outstanding capital notes or debentures may not 26
871827 be paid by a state trust company when the state trust company is in hazardous 27
872828 condition or insolvent, as determined by the commissioner, or to the extent 28
873829 that payment will cause the state trust company to be in hazardous condition 29
874830 or insolvent. 30
875831 (d) The amount of any outstanding capital notes or debentures that 31
876832 meet the requirements of this section and are subordinated to unsecured 32
877833 creditors of the state trust company may be included in equity capital of the 33
878834 state trust company for purposes of determining hazardous condition or 34
879835 insolvency, and for such other purposes as may be provided by rules adopted 35
880-under this chapter. 36 As Engrossed: S2/17/25 SB230
881-
882- 23 02-17-2025 11:15:03 ANS145
883-
884-
836+under this chapter. 36 SB230
837+
838+ 23 02/13/2025 12:57:21 PM ANS145
885839 1
886840 23-51-118. Private trust company. 2
887841 (a) A private trust company engaging in the trust business in this 3
888842 state shall comply with each and every provision of this chapter applicable 4
889843 to a trust company unless expressly exempted therefrom in writing by the Bank 5
890844 Commissioner pursuant to this section or by rule adopted by the commissioner. 6
891845 (b) A private trust company or proposed private trust company may 7
892846 request in writing that it be exempted from specified provisions of §§ 23 -51-8
893847 105(11), 23-51-106(b), 23-51-107, 23-51-110(a), 23-51-122, 23-51-126(b), (c), 9
894848 and (d), 23-51-127, and 23-51-128. The commissioner may grant the exemption 10
895849 in whole or in part if the commissioner finds that the private trust company 11
896850 does not and will not transact business with the general public. For purposes 12
897851 of this section: 13
898852 (1) “Transact business with the general public” means any sales, 14
899853 solicitations, arrangements, agreements, or transactions to provide trust or 15
900854 other business services, whether or not for a fee, commission, or any other 16
901855 type of remuneration, with any client that is not a family member or a sole 17
902856 proprietorship, partnership, joint venture, association, trust, estate, 18
903857 business trust, or other company that is not one hundred percent (100%) owned 19
904858 by one or more family members; 20
905859 (2) “Family member” means any individual who is related within 21
906860 the fourth degree of affinity or consanguinity to an individual or 22
907861 individuals who control a private trust company or which is controlled by one 23
908862 (1) or more trusts or charitable organizations established by the individual 24
909863 or individuals; and 25
910864 (3) All individuals who control a private trust company or 26
911865 establish trusts or charitable organizations controlling the private trust 27
912866 company must be related within the second degree of affinity or 28
913867 consanguinity. 29
914868 (c) At the expense of the private trust company, the commissioner may 30
915869 examine or investigate the private trust company in connection with an 31
916870 application for exemption. Unless the application presents novel or unusual 32
917871 questions, the commissioner shall approve the application for exemption or 33
918872 set the application for hearing not later than sixty (60) days after the date 34
919873 the commissioner considers the application complete and accepted for filing. 35
920-The commissioner may require the submission of additional information as 36 As Engrossed: S2/17/25 SB230
921-
922- 24 02-17-2025 11:15:03 ANS145
923-
924-
874+The commissioner may require the submission of additional information as 36 SB230
875+
876+ 24 02/13/2025 12:57:21 PM ANS145
925877 considered necessary to an informed decision. 1
926878 (d) Any exemption granted under this section may be made subject to 2
927879 conditions or limitations imposed by the commissioner consistent with this 3
928880 chapter. 4
929881 (e) The commissioner may adopt rules defining other circumstances that 5
930882 do not constitute transaction of business with the public, specifying the 6
931883 provisions of this chapter that are subject to an exemption request, and 7
932884 establishing procedures and requirements for obtaining, maintaining, or 8
933885 revoking exempt status. 9
934886 10
935887 23-51-119. Requirements for a private trust company. 11
936888 (a) Application. 12
937889 (1) A private trust company requesting an exemption from the 13
938890 provisions of this chapter pursuant to § 23 -51-118 shall file an application 14
939891 with the Bank Commissioner containing the following: 15
940892 (A) A non-refundable application fee on an amount not less 16
941893 than three thousand dollars ($3,000) nor more than five thousand dollars 17
942894 ($5,000), as set by rules issued by the commissioner; 18
943895 (B) A detailed statement under oath showing the private 19
944896 trust company's assets and liabilities as of the end of the month previous to 20
945897 the filing of the application; 21
946898 (C) A statement under oath of the reason for requesting 22
947899 the exemption; 23
948900 (D) A statement under oath that the private trust company 24
949901 is not currently transacting business with the public and that the company 25
950902 will not conduct business with the public without the prior written 26
951903 permission of the commissioner; 27
952904 (E) The current street mailing address and telephone 28
953905 number of the physical location in this state at which the private trust 29
954906 company will maintain its books and records, together with a statement under 30
955907 oath that the address given is true and correct and is not a United States 31
956908 Postal Service post office box or a private mail box, postal box, or mail 32
957909 drop; and 33
958910 (F) Listing of the specific provisions of the chapter for 34
959911 which the request for exemption is made. 35
960- (2) The commissioner shall not approve a private trust company 36 As Engrossed: S2/17/25 SB230
961-
962- 25 02-17-2025 11:15:03 ANS145
963-
964-
912+ (2) The commissioner shall not approve a private trust company 36 SB230
913+
914+ 25 02/13/2025 12:57:21 PM ANS145
965915 exemption unless the application is completed as required in subdivision 1
966916 (a)(1) of this section. 2
967917 (b) Requirements. To maintain status as an exempt private trust 3
968918 company under this chapter, the private trust company shall comply with the 4
969919 following: 5
970920 (1) An exempt private trust company shall not transact business 6
971921 with the public; 7
972922 (2) An exempt private trust company shall file an annual 8
973923 certification that it is maintaining the conditions and limitations of its 9
974924 exempt status. This annual certification shall be filed on a form provided by 10
975925 the commissioner and be accompanied by a fee set by regulations issued by the 11
976926 commissioner. The annual certification shall be filed on or before June 30 of 12
977927 each year. No annual certification shall be valid unless it bears an 13
978928 acknowledgment stamped by the State Bank Department. The department shall 14
979929 have thirty (30) days from the date of receipt to return a copy of the 15
980930 acknowledged annual certification to the private trust company. The burden 16
981931 shall be on the exempt private trust company to notify the department of any 17
982932 failure to return an acknowledged copy of any annual certification within the 18
983933 thirty-day period. The commissioner may examine or investigate the private 19
984934 state trust company periodically as necessary to verify the certification; 20
985935 (3) An exempt private trust company shall comply with the 21
986936 principal office provisions of § 23 -51-172 and with the address and telephone 22
987937 requirements of subdivision (a)(1)(E) of this section; 23
988938 (4) The exempt private trust company shall pay all applicable 24
989939 corporate franchise taxes. 25
990940 (c) Change of Control. Control of an exempt private trust company may 26
991941 not be transferred or sold with exempt status. In any change of control, the 27
992942 acquiring control person must comply with the provisions of this chapter and 28
993943 the exempt status of the private trust company shall automatically terminate 29
994944 upon the effective date of the transfer. A separate application for exempt 30
995945 status must be filed if the acquiring person wishes to obtain or continue an 31
996946 exemption pursuant to this section. 32
997947 (d) Authority to Revoke. The commissioner shall have authority to 33
998948 revoke the exempt status of a private trust company in the following 34
999949 circumstances: 35
1000- (1) The exempt private trust company makes a false statement 36 As Engrossed: S2/17/25 SB230
1001-
1002- 26 02-17-2025 11:15:03 ANS145
1003-
1004-
950+ (1) The exempt private trust company makes a false statement 36 SB230
951+
952+ 26 02/13/2025 12:57:21 PM ANS145
1005953 under oath on any document required to be filed by the chapter or by any 1
1006954 regulation promulgated by the commissioner; 2
1007955 (2) The exempt private trust company fails to submit to an 3
1008956 examination as required by § 23 -51-184; 4
1009957 (3) The exempt private trust company withholds requested 5
1010958 information from the commissioner; or 6
1011959 (4) The exempt private trust company violates any provision of 7
1012960 this section applicable to exempt private trust companies. 8
1013961 (e) Notification of Revocation of Exemption. If the commissioner 9
1014962 determines from examination or other credible evidence that an exempt private 10
1015963 trust company has violated any of the requirements of this section, the 11
1016964 commissioner may by personal delivery or registered or certified mail, return 12
1017965 receipt requested, notify the exempt private trust company in writing that 13
1018966 the private trust company's exempt status has been revoked. The notification 14
1019967 must state grounds for the revocation with reasonable certainty. The notice 15
1020968 must state its effective date, which may not be sooner than five (5) calendar 16
1021969 days after the date the notification is mailed or delivered. The revocation 17
1022970 takes effect for the private trust company if the private trust company does 18
1023971 not request a hearing in writing before the effective date. After taking 19
1024972 effect the revocation is final and nonappealable as to that private trust 20
1025973 company, and the private trust company shall be subject to all of the 21
1026974 requirements and provisions of the chapter applicable to non -exempt state 22
1027975 trust companies. 23
1028976 (f) Compliance Period. A private trust company shall have five (5) 24
1029977 calendar days after the revocation is effective to comply with the provisions 25
1030978 of this chapter from which it was formerly exempt. If, however, the 26
1031979 commissioner determines, at the time of revocation, that the private trust 27
1032980 company has been engaging in or attempting to engage in acts intended or 28
1033981 designed to deceive or defraud the public, the commissioner may shorten or 29
1034982 eliminate, in the commissioner's sole discretion, the five (5) calendar days 30
1035983 compliance period. 31
1036984 (g) Remedies for Failure to Comply. If the private trust company does 32
1037985 not comply with all of the provisions of this chapter, including such 33
1038986 capitalization requirements as have been determined by the commissioner as 34
1039987 necessary to assure the safety and soundness of the private trust company, 35
1040-within the prescribed time period, the commissioner may: 36 As Engrossed: S2/17/25 SB230
1041-
1042- 27 02-17-2025 11:15:03 ANS145
1043-
1044-
988+within the prescribed time period, the commissioner may: 36 SB230
989+
990+ 27 02/13/2025 12:57:21 PM ANS145
1045991 (1) Institute any action or remedy prescribed by this chapter, 1
1046992 or any applicable rule; or 2
1047993 (2) Refer the private trust company to the Attorney General for 3
1048994 institution of a quo warranto proceeding to revoke the charter. 4
1049995 5
1050996 23-51-120. Conversion to public trust company. 6
1051997 (a) A private trust company may terminate its status as a private 7
1052998 trust company and commence transacting business with the general public. A 8
1053999 private trust company desiring to commence transacting business with the 9
10541000 general public shall file a notice on a form prescribed by the Bank 10
10551001 Commissioner, which shall set forth the name of the private trust company and 11
10561002 an acknowledgment that any exemption granted or otherwise applicable to the 12
10571003 private trust company pursuant to § 23 -51-118 shall cease to apply on the 13
10581004 effective date of the notice, furnish a copy of the resolution adopted by the 14
10591005 board authorizing the private trust company to commence transacting business 15
10601006 with the general public, and pay the filing fee, if any, prescribed by the 16
10611007 commissioner. 17
10621008 (b) The notificant may commence transacting business with the general 18
10631009 public thirty (30) days after the date the commissioner receives the notice, 19
10641010 unless the commissioner specifies another date. 20
10651011 (c) The thirty-day period of review may be extended by the 21
10661012 commissioner on determination that the written notice raises issues that 22
10671013 require additional information or additional time for analysis. If the period 23
10681014 for review is extended, the notificant may commence transacting business with 24
10691015 the public only on prior written approval by the commissioner. 25
10701016 (d) The commissioner may deny approval of the notice of the private 26
10711017 trust company to commence transacting business with the general public if the 27
10721018 commissioner finds that the notificant lacks sufficient financial resources 28
10731019 to undertake the proposed expansion without adversely affecting its safety or 29
10741020 soundness or that the proposed transacting of business of the general public 30
10751021 would be contrary to the public interest or if the commissioner determines 31
10761022 that the notificant will not within a reasonable period be in compliance with 32
10771023 any provision of this chapter from which the notificant had been previously 33
10781024 exempted pursuant to § 23 -51-118. 34
10791025 35
1080- 23-51-121. Investment in state trust company facilities — Definition. 36 As Engrossed: S2/17/25 SB230
1081-
1082- 28 02-17-2025 11:15:03 ANS145
1083-
1084-
1026+ 23-51-121. Investment in state trust company facilities — Definition. 36 SB230
1027+
1028+ 28 02/13/2025 12:57:21 PM ANS145
10851029 (a) In this chapter, “state trust company facility” means real estate, 1
10861030 including an improvement, owned, or leased to the extent the lease or the 2
10871031 leasehold improvements are capitalized, by a state trust company for the 3
10881032 purpose of: 4
10891033 (1) Providing space for state trust company employees to perform 5
10901034 their duties and space for parking by state trust company employees and 6
10911035 customers; 7
10921036 (2) Conducting trust business, including meeting the reasonable 8
10931037 needs and convenience of the state trust company's customers, computer 9
10941038 operations, document and other item processing, maintenance and record 10
10951039 retention and storage; 11
10961040 (3) Holding, improving, and occupying as an incident to future 12
10971041 expansion of the state trust company's facilities; or 13
10981042 (4) Conducting another activity authorized by rules adopted 14
10991043 under this chapter. 15
11001044 (b) Without the prior written approval of the Bank Commissioner, a 16
11011045 state trust company may not directly or indirectly invest an amount in excess 17
11021046 of its capital and surplus in state trust company facilities, furniture, 18
11031047 fixtures, and equipment. Except as otherwise provided by rules adopted under 19
11041048 this chapter, in computing this limitation a state trust company: 20
11051049 (1) Shall include: 21
11061050 (A) Its direct investment in state trust company 22
11071051 facilities; 23
11081052 (B) Any investment in equity or investment securities of a 24
11091053 company holding title to a facility used by the state trust company for the 25
11101054 purposes specified by subsection (a) of this section; 26
11111055 (C) Any loan made by the state trust company to or on the 27
11121056 security of equity or investment securities issued by a company holding title 28
11131057 to a facility used by the state trust company; and 29
11141058 (D) Any indebtedness incurred on state trust company 30
11151059 facilities by a company: 31
11161060 (i) That holds title to the facility; 32
11171061 (ii) That is an affiliate of the state trust company; 33
11181062 and 34
11191063 (iii) In which the state trust company is invested in 35
1120-the manner described by subdivision (b)(1)(B) or subdivision (b)(1)(C) of 36 As Engrossed: S2/17/25 SB230
1121-
1122- 29 02-17-2025 11:15:03 ANS145
1123-
1124-
1064+the manner described by subdivision (b)(1)(B) or subdivision (b)(1)(C) of 36 SB230
1065+
1066+ 29 02/13/2025 12:57:21 PM ANS145
11251067 this section; and 1
11261068 (2) May exclude an amount included under subdivisions (b)(1)(B) -2
11271069 (D) of this section to the extent any lease of a facility from the company 3
11281070 holding title to the facility is capitalized on the books of the state trust 4
11291071 company. 5
11301072 (c) Real estate acquired under subdivision (a)(3) of this section and 6
11311073 not improved and occupied by the state trust company ceases to be a state 7
11321074 trust company facility on the third anniversary of the date of its 8
11331075 acquisition, unless the commissioner on application grants written approval 9
11341076 to further delay in the improvement and occupation of the property by the 10
11351077 state trust company. 11
11361078 (d) A state trust company shall comply with generally accepted 12
11371079 accounting principles, consistently applied, in accounting for its investment 13
11381080 in and depreciation of state trust company facilities, furniture, fixtures, 14
11391081 and equipment. 15
11401082 16
11411083 23-51-122. Other real estate. 17
11421084 (a) A state trust company may not acquire real estate except: 18
11431085 (1) As permitted by § 23 -51-121 or as otherwise provided by this 19
11441086 chapter, including rules adopted under this chapter; 20
11451087 (2) If necessary to avoid or minimize a loss on a loan or 21
11461088 investment previously made in good faith; or 22
11471089 (3) With the prior written approval of the Bank Commissioner. 23
11481090 (b) To the extent reasonably necessary to avoid or minimize loss on 24
11491091 real estate acquired as permitted by subsection (a) of this section, a state 25
11501092 trust company may exchange real estate for other real estate or personal 26
11511093 property, invest additional funds in or improve real estate acquired under 27
11521094 this subsection or subsection (a) of this section, or acquire additional real 28
11531095 estate. 29
11541096 (c) A state trust company shall dispose of any real estate subject to 30
11551097 subdivisions (a)(1) and (2) of this section not later than: 31
11561098 (1) The fifth anniversary of the date: 32
11571099 (A) It was acquired, except as otherwise provided by rules 33
11581100 adopted under this chapter; or 34
11591101 (B) It ceases to be used as a state trust company 35
1160-facility; or 36 As Engrossed: S2/17/25 SB230
1161-
1162- 30 02-17-2025 11:15:03 ANS145
1163-
1164-
1102+facility; or 36 SB230
1103+
1104+ 30 02/13/2025 12:57:21 PM ANS145
11651105 (2) The third anniversary of the date it ceases to be a state 1
11661106 trust company facility as provided by § 23 -51-121(c). 2
11671107 (d) The commissioner on application may grant one (1) or more 3
11681108 extensions of time for disposing of real estate if the commissioner 4
11691109 determines that: 5
11701110 (1) The state trust company has made a good faith effort to 6
11711111 dispose of the real estate; or 7
11721112 (2) Disposal of the real estate would be detrimental to the 8
11731113 state trust company. 9
11741114 10
11751115 23-51-123. Securities. 11
11761116 (a) A state trust company may invest its corporate funds in any type 12
11771117 or character of equity or investment securities subject to the limitations 13
11781118 provided by this section. 14
11791119 (b) Unless the Bank Commissioner approves maintenance of a lesser 15
11801120 amount in writing, a state trust company must invest and maintain an amount 16
11811121 equal to not less than forty percent (40%) of the state trust company's 17
11821122 capital under § 23-51-110 in unencumbered cash, cash equivalents, and readily 18
11831123 marketable securities. 19
11841124 (c) Subject to subsection (d) of this section, the total investment in 20
11851125 equity and investment securities of any one issuer, obligor, or maker, held 21
11861126 by the state trust company for its own account, may not exceed an amount 22
11871127 equal to twenty percent (20%) of the state trust company's capital base. The 23
11881128 commissioner may authorize investments in excess of this limitation on 24
11891129 written application if the commissioner concludes that: 25
11901130 (1) The excess investment is not prohibited by other applicable 26
11911131 law; and 27
11921132 (2) The safety and soundness of the requesting state trust 28
11931133 company is not adversely affected. 29
11941134 (d) Notwithstanding subsection (c) of this section, a state trust 30
11951135 company may purchase for its own account, without limitation and subject only 31
11961136 to the exercise of prudent judgment: 32
11971137 (1) Direct obligations of the United States Government; 33
11981138 (2) Obligations of agencies and instrumentalities created by act 34
11991139 of the United States Congress and authorized thereby to issue securities or 35
1200-evidences of indebtedness, regardless of guarantee of repayment by the United 36 As Engrossed: S2/17/25 SB230
1201-
1202- 31 02-17-2025 11:15:03 ANS145
1203-
1204-
1140+evidences of indebtedness, regardless of guarantee of repayment by the United 36 SB230
1141+
1142+ 31 02/13/2025 12:57:21 PM ANS145
12051143 States Government; 1
12061144 (3) Obligations the principal and interest of which are fully 2
12071145 guaranteed by the United States Government or an agency or an instrumentality 3
12081146 created by an act of the United States Congress and authorized thereby to 4
12091147 issue such a guarantee; 5
12101148 (4) Obligations the principal and interest of which are fully 6
12111149 secured, insured, or covered by commitments or agreements to purchase by the 7
12121150 United States Government or an agency or instrumentality created by an act of 8
12131151 the United States Congress and authorized thereby to issue such commitments 9
12141152 or agreements; 10
12151153 (5) General obligations of the states of the United States and 11
12161154 of the political subdivisions, municipalities, commonwealths, territories or 12
12171155 insular possessions thereof; 13
12181156 (6) Obligations issued by the State Board of Education under 14
12191157 authority of the Arkansas Constitution or applicable statutes; 15
12201158 (7) Warrants of political subdivisions of the State of Arkansas 16
12211159 and municipalities thereof having maturities not exceeding one (1) year; 17
12221160 (8) Prerefunded municipal bonds, the principal and interest of 18
12231161 which are fully secured by the principal and interest of a direct obligation 19
12241162 of the United States Government; 20
12251163 (9) The sale of federal funds with a maturity of not more than 21
12261164 one (1) business day; 22
12271165 (10) Demand, savings, or time deposits or accounts of any 23
12281166 depository institution chartered by the United States, any state of the 24
12291167 United States, or the District of Columbia, provided funds invested in such 25
12301168 demand, savings, or time deposits or accounts are fully insured by a federal 26
12311169 deposit insurance agency; 27
12321170 (11) Repurchase agreements that are fully collateralized by 28
12331171 direct obligations of the United States Government, and general obligations 29
12341172 of any state of the United States or any political subdivision thereof, 30
12351173 provided that any such repurchase agreement shall provide for the taking of 31
12361174 delivery of the collateral, either directly or through an authorized 32
12371175 custodian; 33
12381176 (12) Securities of, or other interest in, any open -end type 34
12391177 investment company or investment trust registered under the Investment 35
1240-Company Act of 1940, and which is defined as a “money market fund” under 17 36 As Engrossed: S2/17/25 SB230
1241-
1242- 32 02-17-2025 11:15:03 ANS145
1243-
1244-
1178+Company Act of 1940, and which is defined as a “money market fund” under 17 36 SB230
1179+
1180+ 32 02/13/2025 12:57:21 PM ANS145
12451181 C.F.R. § 270.2a-7, provided that the portfolio of such investment company or 1
12461182 investment trust is limited principally to United States Government 2
12471183 obligations and to repurchase agreements fully collateralized by United 3
12481184 States Government obligations, and provided further that any such investment 4
12491185 company or investment trust shall take delivery of the collateral either 5
12501186 directly or through an authorized custodian. 6
12511187 (e) The commissioner may adopt rules to establish limits, 7
12521188 requirements, or exemptions other than those specified by this section for 8
12531189 particular classes or categories of investment, or limit or expand investment 9
12541190 authority for state trust companies for particular classes or categories of 10
12551191 securities or other property. 11
12561192 12
12571193 23-51-124. Transactions in state trust company shares. 13
12581194 (a) A state trust company may acquire its own shares if: 14
12591195 (1) The amount of its undivided profits is sufficient to fully 15
12601196 absorb the acquisition of the shares under regulatory accounting principles; 16
12611197 and 17
12621198 (2) The state trust company obtains the prior written approval 18
12631199 of the Bank Commissioner. 19
12641200 (b) A state trust company shall not make loans upon the security of 20
12651201 its own shares. 21
12661202 22
12671203 23-51-125. Subsidiaries. 23
12681204 (a) Except as otherwise provided by this chapter or rules adopted 24
12691205 under this chapter, a state trust company may acquire or establish a 25
12701206 subsidiary to conduct any activity that may lawfully be conducted through the 26
12711207 form of organization chosen for the subsidiary. 27
12721208 (b) A state trust company may not invest more than an amount equal to 28
12731209 twenty percent (20%) of its capital base in a single subsidiary and may not 29
12741210 invest an amount in excess of forty percent (40%) of its capital base in all 30
12751211 subsidiaries. The amount of a state trust company's investment in a 31
12761212 subsidiary is the total amount of the state trust company's investment in 32
12771213 equity or investment securities issued by its subsidiary and any loans and 33
12781214 extensions of credit from the state trust company to its subsidiary. The Bank 34
12791215 Commissioner may authorize investments in excess of these limitations on 35
1280-written application if the commissioner concludes that: 36 As Engrossed: S2/17/25 SB230
1281-
1282- 33 02-17-2025 11:15:03 ANS145
1283-
1284-
1216+written application if the commissioner concludes that: 36 SB230
1217+
1218+ 33 02/13/2025 12:57:21 PM ANS145
12851219 (1) The excess investment is not prohibited by other applicable 1
12861220 law; and 2
12871221 (2) The safety and soundness of the requesting state trust 3
12881222 company is not adversely affected. 4
12891223 (c) A state trust company that intends to acquire, establish, or 5
12901224 perform new activities through a subsidiary shall submit a letter to the 6
12911225 commissioner describing in detail the proposed activities of the subsidiary. 7
12921226 (d) The state trust company may acquire or establish a subsidiary or 8
12931227 begin performing new activities in an existing subsidiary thirty (30) days 9
12941228 after the date the commissioner receives the state trust company's letter, 10
12951229 unless the commissioner specifies another date. The commissioner may extend 11
12961230 the thirty-day period of review on a determination that the state trust 12
12971231 company's letter raises issues that require additional information or 13
12981232 additional time for analysis. If the period of review is extended, the state 14
12991233 trust company may acquire or establish the subsidiary, or perform new 15
13001234 activities in an existing subsidiary, only on prior written approval of the 16
13011235 commissioner. 17
13021236 (e) A subsidiary of a state trust company is subject to rule by the 18
13031237 commissioner to the extent provided by this chapter or rules adopted under 19
13041238 this chapter. In the absence of limiting rules, the commissioner may regulate 20
13051239 a subsidiary as if it were a state trust company. 21
13061240 22
13071241 23-51-126. Mutual funds. 23
13081242 (a) A state trust company may invest for its own account in equity 24
13091243 securities of an investment company registered under the Investment Company 25
13101244 Act of 1940, 15 U.S.C. Sec. 80a -1 et seq., and the Securities Act of 1933, 15 26
13111245 U.S.C. Sec. 77a et seq., if the portfolio of the investment company consists 27
13121246 wholly of investments in which the state trust company could invest directly 28
13131247 for its own account. 29
13141248 (b) If the portfolio of an investment company described in subsection 30
13151249 (a) of this section consists wholly of investments in which the state trust 31
13161250 company could invest directly without limitation under § 23 -51-123(d), the 32
13171251 state trust company may invest in the investment company without limitation. 33
13181252 (c) If the portfolio of an investment company described in subsection 34
13191253 (a) of this section contains any investment that is subject to the limits of 35
1320-§ 23-51-123(c), the state trust company may invest in the investment company 36 As Engrossed: S2/17/25 SB230
1321-
1322- 34 02-17-2025 11:15:03 ANS145
1323-
1324-
1254+§ 23-51-123(c), the state trust company may invest in the investment company 36 SB230
1255+
1256+ 34 02/13/2025 12:57:21 PM ANS145
13251257 not more than an amount equal to twenty percent (20%) of the state trust 1
13261258 company's capital base. This provision does not apply to a money market fund. 2
13271259 (d) In evaluating investment limits under this chapter, a state trust 3
13281260 company may not be required to combine: 4
13291261 (1) The state trust company's pro rata share of the securities 5
13301262 of an issuer in the portfolio of an investment company with the state trust 6
13311263 company's pro rata share of the securities of that issuer held by another 7
13321264 investment company in which the state trust company has invested; or 8
13331265 (2) The state trust company's own direct investment in the 9
13341266 securities of an issuer with the state trust company's pro rata share of the 10
13351267 securities of that issuer held by each investment company in which the state 11
13361268 trust company has invested under this section. 12
13371269 13
13381270 23-51-127. Engaging in commerce prohibited. 14
13391271 Except as otherwise provided by this chapter or rules adopted under 15
13401272 this chapter, a state trust company may not invest its funds in trade or 16
13411273 commerce by buying, selling, or otherwise dealing in goods or by owning or 17
13421274 operating a business not part of the state trust business, except as 18
13431275 necessary to fulfil a fiduciary obligation to a client. 19
13441276 20
13451277 23-51-128. Lending limits. 21
13461278 (a) A state trust company's total outstanding loans and extensions of 22
13471279 credit to a person other than an insider may not exceed an amount equal to 23
13481280 twenty percent (20%) of the state trust company's capital base. 24
13491281 (b) The aggregate loans and extensions of credit outstanding at any 25
13501282 time to insiders of the state trust company may not exceed an amount equal to 26
13511283 twenty percent (20%) of the state trust company's capital base. All covered 27
13521284 transactions between an insider and a state trust company must be engaged in 28
13531285 only on terms and under circumstances, including credit standards, that are 29
13541286 substantially the same as those for comparable transactions with a non -30
13551287 insider. 31
13561288 (c) The Bank Commissioner may adopt rules to administer and carry out 32
13571289 this section, including rules to establish limits, requirements, or 33
13581290 exemptions other than those specified by this section for particular classes 34
13591291 or categories of loans or extensions of credit, and establish collective 35
1360-lending and investment limits. 36 As Engrossed: S2/17/25 SB230
1361-
1362- 35 02-17-2025 11:15:03 ANS145
1363-
1364-
1292+lending and investment limits. 36 SB230
1293+
1294+ 35 02/13/2025 12:57:21 PM ANS145
13651295 (d) The commissioner may determine whether a loan or extension of 1
13661296 credit putatively made to a person will be attributed to another person for 2
13671297 purposes of this section. 3
13681298 (e) A state trust company may not lend trust deposits, except that a 4
13691299 trustee may make a loan to a beneficiary of the trust if the loan is 5
13701300 expressly authorized or directed by the instrument or transaction 6
13711301 establishing the trust. 7
13721302 (f) An officer, director, or employee of a state trust company who 8
13731303 approves or participates in the approval of a loan with actual knowledge that 9
13741304 the loan violates this section is jointly and severally liable to the state 10
13751305 trust company for the lesser of the amount by which the loan exceeded 11
13761306 applicable lending limits or the state trust company's actual loss and 12
13771307 remains liable for that amount until the loan and all prior indebtedness of 13
13781308 the borrower to the state trust company have been fully repaid. The state 14
13791309 trust company may initiate a proceeding to collect an amount due under this 15
13801310 subsection at any time before the date the borrower defaults on the subject 16
13811311 loan or any prior indebtedness or before the fourth anniversary of that date. 17
13821312 A person that is liable for and pays amounts to the state trust company under 18
13831313 this subsection is entitled to an assignment of the state trust company's 19
13841314 claim against the borrower to the extent of the payments. For purposes of 20
13851315 this subsection, an officer, director, or employee of a state trust company 21
13861316 is presumed to know the amount of the state trust company's lending limit 22
13871317 under subsection (a) of this section and the amount of the borrower's 23
13881318 aggregate outstanding indebtedness to the state trust company immediately 24
13891319 before a new loan or extension of credit to that borrower. 25
13901320 26
13911321 23-51-129. Lease financing transactions. 27
13921322 (a) Subject to rules adopted under this chapter, a state trust company 28
13931323 may become the owner and lessor of tangible personal property for lease 29
13941324 financing transactions on a net lease basis on the specific request and for 30
13951325 the use of a client. Without the written approval of the Bank Commissioner to 31
13961326 continue holding property acquired for leasing purposes under this 32
13971327 subsection, the state trust company may not hold the property more than six 33
13981328 (6) months after the date of expiration of the original or any extended or 34
13991329 renewed lease period agreed to by the client for whom the property was 35
1400-acquired or by a subsequent lessee. 36 As Engrossed: S2/17/25 SB230
1401-
1402- 36 02-17-2025 11:15:03 ANS145
1403-
1404-
1330+acquired or by a subsequent lessee. 36 SB230
1331+
1332+ 36 02/13/2025 12:57:21 PM ANS145
14051333 (b) Rental payments received by the trust company in a lease financing 1
14061334 transaction under this section are considered to be rent and not interest or 2
14071335 compensation for the use, forbearance, or detention of money. However, a 3
14081336 lease financing transaction is considered to be a loan or extension of credit 4
14091337 for purposes of § 23 -51-128. 5
14101338 6
14111339 23-51-130. Trust deposit. 7
14121340 (a) A state trust company may deposit trust funds with itself as an 8
14131341 investment if authorized by the settlor or the beneficiary, provided: 9
14141342 (1) It maintains as security for the deposits a separate fund of 10
14151343 securities, legal for trust investments, under control of a federal reserve 11
14161344 bank or other entity approved by the Bank Commissioner, either in this state 12
14171345 or elsewhere; 13
14181346 (2) The total market value of the security is at all times at 14
14191347 least equal to the amount of the deposit; 15
14201348 (3) The separate fund is designated as such; and 16
14211349 (4) The separate fund is maintained under the control of another 17
14221350 trust institution, bank or government agency. 18
14231351 (b) A state trust company may make periodic withdrawals from or 19
14241352 additions to the securities fund required by subsection (a) of this section 20
14251353 as long as the required value is maintained. Income from the securities in 21
14261354 the fund belongs to the state trust company. 22
14271355 (c) Security for a deposit under this section is not required for a 23
14281356 deposit under subsection (a) of this section to the extent the deposit is 24
14291357 insured by the Federal Deposit Insurance Corporation or its successor. 25
14301358 26
14311359 23-51-131. Common investment funds. 27
14321360 (a) A state trust company may establish common trust funds to provide 28
14331361 investment to itself as a fiduciary. 29
14341362 (b) The Bank Commissioner may adopt rules to administer and carry out 30
14351363 this section, including but not limited to rules to establish investment and 31
14361364 participation limitations, disclosure of fees, audit requirements, limit or 32
14371365 expand investment authority for particular classes or categories of 33
14381366 securities or other property, advertising, exemptions, and other requirements 34
14391367 that may be necessary to carry out this section. 35
1440- 36 As Engrossed: S2/17/25 SB230
1441-
1442- 37 02-17-2025 11:15:03 ANS145
1443-
1444-
1368+ 36 SB230
1369+
1370+ 37 02/13/2025 12:57:21 PM ANS145
14451371 23-51-132. Borrowing limit. 1
14461372 Except with the prior written approval of the Bank Commissioner, a 2
14471373 state trust company may not have liabilities outstanding exceeding an amount 3
14481374 equal to three times its capital base. 4
14491375 5
14501376 23-51-133. Pledge of assets. 6
14511377 A state trust company may not pledge or create a lien on any of its 7
14521378 assets except to secure the repayment of money borrowed or as specifically 8
14531379 authorized or required by § 23 -51-130, or by rules adopted under this 9
14541380 chapter. An act, deed, conveyance, pledge, or contract in violation of this 10
14551381 section is void. 11
14561382 12
14571383 23-51-134. Acquisition of control. 13
14581384 (a) Except as expressly otherwise permitted, a person may not without 14
14591385 the prior written approval of the Bank Commissioner directly or indirectly 15
14601386 acquire control of a state trust company through a change in a legal or 16
14611387 beneficial interest in voting securities of a state trust company or a 17
14621388 corporation or other entity owning voting securities of a state trust 18
14631389 company. 19
14641390 (b) This chapter does not prohibit a person from negotiating to 20
14651391 acquire, but not acquiring, control of a state trust company or a person that 21
14661392 controls a state trust company. 22
14671393 (c) This section does not apply to: 23
14681394 (1) The acquisition of securities in connection with the 24
14691395 exercise of a security interest or otherwise in full or partial satisfaction 25
14701396 of a debt previously contracted for in good faith if the acquiring person 26
14711397 files written notice of acquisition with the commissioner before the person 27
14721398 votes the securities acquired; 28
14731399 (2) The acquisition of voting securities in any class or series 29
14741400 by a controlling person who has previously complied with and received 30
14751401 approval under this chapter or who was identified as a controlling person in 31
14761402 a prior application filed with and approved by the commissioner; 32
14771403 (3) An acquisition or transfer by operation of law, will, or 33
14781404 intestate succession if the acquiring person files written notice of 34
14791405 acquisition with the commissioner before the person votes the securities 35
1480-acquired; 36 As Engrossed: S2/17/25 SB230
1481-
1482- 38 02-17-2025 11:15:03 ANS145
1483-
1484-
1406+acquired; 36 SB230
1407+
1408+ 38 02/13/2025 12:57:21 PM ANS145
14851409 (4) A transaction exempted by the commissioner by rule or order 1
14861410 because the transaction is not within the purposes of this chapter or the 2
14871411 rule of which is not necessary or appropriate to achieve the objectives of 3
14881412 this chapter. 4
14891413 5
14901414 23-51-135. Application regarding acquisition of control. 6
14911415 (a) The proposed transferee seeking approval to acquire control of a 7
14921416 state trust company or a person that controls a state trust company must file 8
14931417 with the Bank Commissioner: 9
14941418 (1) An application in the form prescribed by the commissioner; 10
14951419 (2) The filing fee in an amount not less than one thousand five 11
14961420 hundred dollars ($1,500) and not more than three thousand dollars ($3,000), 12
14971421 as set by rules issued by the commissioner; and 13
14981422 (3) All information required by rule or that the commissioner 14
14991423 requires in a particular application as necessary to an informed decision to 15
15001424 approve or reject the proposed acquisition. 16
15011425 (b) If the proposed transferee includes any group of individuals or 17
15021426 entities acting in concert, the information required by the commissioner may 18
15031427 be required of each member of the group. 19
15041428 (c) If the proposed transferee is not an Arkansas resident, an 20
15051429 Arkansas company, or an out -of-state company qualified to do business in this 21
15061430 state, a written consent to service of process on a resident of this state in 22
15071431 any action or suit arising out of or connected with the proposed acquisition. 23
15081432 (d) The proposed transferee must give public notice of the 24
15091433 application, its date of filing, and the identity of each participant, in the 25
15101434 form specified by the commissioner, through publication by one (1) insertion 26
15111435 in a newspaper published in the City of Little Rock and having a general and 27
15121436 substantially statewide circulation, promptly after the commissioner accepts 28
15131437 the application as complete. 29
15141438 30
15151439 23-51-136. Hearing and decision on acquisition of control. 31
15161440 (a) Not later than sixty (60) days after the application is officially 32
15171441 filed, the Bank Commissioner may approve the application or set the 33
15181442 application for hearing. If the commissioner sets a hearing, the commissioner 34
15191443 shall conduct a hearing as he or she considers advisable and consistent with 35
1520-governing statutes and rules. 36 As Engrossed: S2/17/25 SB230
1521-
1522- 39 02-17-2025 11:15:03 ANS145
1523-
1524-
1444+governing statutes and rules. 36 SB230
1445+
1446+ 39 02/13/2025 12:57:21 PM ANS145
15251447 (b) Based on the record, the commissioner may issue an order denying 1
15261448 an application if: 2
15271449 (1) The acquisition would substantially lessen competition, be 3
15281450 in restraint of trade, result in a monopoly, or be in furtherance of a 4
15291451 combination or conspiracy to monopolize or attempt to monopolize the trust 5
15301452 industry in any part of this state, unless: 6
15311453 (A) The anticompetitive effects of the proposed 7
15321454 acquisition are clearly outweighed in the public interest by the probable 8
15331455 effect of acquisition in meeting the convenience and needs of the community 9
15341456 to be served; and 10
15351457 (B) The proposed acquisition is not in violation of law of 11
15361458 this state or the United States; 12
15371459 (2) The financial condition of the proposed transferee, or any 13
15381460 member of a group composing the proposed transferee, might jeopardize the 14
15391461 financial stability of the state trust company being acquired; 15
15401462 (3) Plans or proposals to operate, liquidate, or sell the state 16
15411463 trust company or its assets are not in the best interests of the state trust 17
15421464 company; 18
15431465 (4) The experience, ability, standing, competence, 19
15441466 trustworthiness, and integrity of the proposed transferee, or any member of a 20
15451467 group comprising the proposed transferee, are insufficient to justify a 21
15461468 belief that the state trust company will be free from improper or unlawful 22
15471469 influence or interference with respect to the state trust company's operation 23
15481470 in compliance with law; 24
15491471 (5) The state trust company will be insolvent, in a hazardous 25
15501472 condition, not have adequate capitalization, or not be in compliance with the 26
15511473 laws of this state after the acquisition; 27
15521474 (6) The proposed transferee has failed to furnish all 28
15531475 information pertinent to the application reasonably required by the 29
15541476 commissioner; or 30
15551477 (7) The proposed transferee is not acting in good faith. 31
15561478 (c) If an application filed under this section is approved by the 32
15571479 commissioner, the transaction may be consummated. Any written commitment from 33
15581480 the proposed transferee offered to and accepted by the commissioner as a 34
15591481 condition that the application will be approved is enforceable against the 35
1560-state trust company and the transferee and is considered for all purposes an 36 As Engrossed: S2/17/25 SB230
1561-
1562- 40 02-17-2025 11:15:03 ANS145
1563-
1564-
1482+state trust company and the transferee and is considered for all purposes an 36 SB230
1483+
1484+ 40 02/13/2025 12:57:21 PM ANS145
15651485 agreement under this chapter. 1
15661486 2
15671487 23-51-137. Appeal from adverse decision. 3
15681488 (a)(1) If a hearing has been held, the Bank Commissioner has entered 4
15691489 an order denying the application, and the order has become final, the 5
15701490 proposed transferee may appeal the final order by filing a petition for 6
15711491 judicial review under the Arkansas Administrative Procedure Act, § 25 -15-201 7
15721492 et seq. 8
15731493 (2) The time for filing such a petition for judicial review 9
15741494 shall run from the date the final decision of the commissioner is mailed or 10
15751495 delivered, in written form, to the parties desiring to appeal. 11
15761496 (3) The hearing of such a petition for review will be advanced 12
15771497 on the docket of each reviewing court as a matter of public interest. 13
15781498 (b) The filing of an appeal under this section does not stay the order 14
15791499 of the commissioner. 15
15801500 16
15811501 23-51-138. Objection to other transfer. 17
15821502 This chapter may not be construed to prevent the Bank Commissioner from 18
15831503 investigating, commenting on, or seeking to enjoin or set aside a transfer of 19
15841504 voting securities that evidence a direct or indirect interest in a state 20
15851505 trust company, regardless of whether the transfer is included within this 21
15861506 chapter, if the commissioner considers the transfer to be against the public 22
15871507 interest. 23
15881508 24
15891509 23-51-139. Civil enforcement — Criminal penalties. 25
15901510 (a) The Bank Commissioner may bring any appropriate civil action 26
15911511 against any person who the commissioner believes has committed or is about to 27
15921512 commit a violation of this chapter or a rule or order of the commissioner 28
15931513 pertaining to this chapter. 29
15941514 (b) A person who knowingly fails or refuses to file the application 30
15951515 required by § 23-51-135 commits an offense. An offense under this subsection 31
15961516 is a Class A misdemeanor. 32
15971517 33
15981518 23-51-140. Voting securities held by state trust company. 34
15991519 (a) Voting securities of a state trust company held by the state trust 35
1600-company in a fiduciary capacity under a will or trust, whether registered in 36 As Engrossed: S2/17/25 SB230
1601-
1602- 41 02-17-2025 11:15:03 ANS145
1603-
1604-
1520+company in a fiduciary capacity under a will or trust, whether registered in 36 SB230
1521+
1522+ 41 02/13/2025 12:57:21 PM ANS145
16051523 its own name or in the name of its nominee, may not be voted in the election 1
16061524 of directors or managers or on a matter affecting the compensation of 2
16071525 directors, managers, officers, or employees of the state trust company in 3
16081526 that capacity, unless: 4
16091527 (1) Under the terms of the will or trust, the manner in which 5
16101528 the voting securities are to be voted may be determined by a donor or 6
16111529 beneficiary of the will or trust and the donor or beneficiary actually makes 7
16121530 the determination in the matter at issue; 8
16131531 (2) The terms of the will or trust expressly direct the manner 9
16141532 in which the securities must be voted to the extent that no discretion is 10
16151533 vested in the state trust company as fiduciary; or 11
16161534 (3) The securities are voted solely by a co -fiduciary that is 12
16171535 not an affiliate of the state trust company, as if the co -fiduciary were the 13
16181536 sole fiduciary. 14
16191537 (b) Voting securities of a state trust company that cannot be voted 15
16201538 under this section are considered to be authorized but unissued for purposes 16
16211539 of determining the procedures for and results of the affected vote. 17
16221540 18
16231541 23-51-141. Bylaws. 19
16241542 Each state trust company shall adopt bylaws and may amend its bylaws 20
16251543 from time to time for the purposes and in accordance with the procedures set 21
16261544 forth in the Arkansas Business Corporation Act, § 4 -27-101 et seq. 22
16271545 23
16281546 23-51-142. Board of directors. 24
16291547 (a) The board of a state trust company shall be governed by the 25
16301548 provisions of the Arkansas Business Corporation Act, § 4 -27-101 et seq., 26
16311549 provided that the board must consist of not fewer than three directors, the 27
16321550 majority of whom must be residents of this state. 28
16331551 (b) Unless the Bank Commissioner consents otherwise in writing, a 29
16341552 person may not serve as director of a state trust company if: 30
16351553 (1) The state trust company incurs an unreimbursed loss 31
16361554 attributable to a charged -off obligation of or holds a judgment against the 32
16371555 person or an entity that was controlled by the person at the time of funding 33
16381556 and at the time of default on the loan that gave rise to the judgment or 34
16391557 charged-off obligation; 35
1640- (2) The person has been convicted of a felony; or 36 As Engrossed: S2/17/25 SB230
1641-
1642- 42 02-17-2025 11:15:03 ANS145
1643-
1644-
1558+ (2) The person has been convicted of a felony; or 36 SB230
1559+
1560+ 42 02/13/2025 12:57:21 PM ANS145
16451561 (3) The person has violated a provision of this chapter, 1
16461562 relating to loan of trust funds and purchase or sale of trust property by the 2
16471563 trustee, and the violation has not been corrected. 3
16481564 (c) If a state trust company does not elect directors prior to sixty 4
16491565 (60) days after the date of its regular annual meeting, the commissioner may 5
16501566 commence a proceeding to appoint a receiver pursuant to § 23 -51-164 to 6
16511567 operate the state trust company and elect directors or managers, as 7
16521568 appropriate. If the conservator is unable to locate or elect persons willing 8
16531569 and able to serve as directors, the commissioner may close the state trust 9
16541570 company for liquidation. 10
16551571 (d) A vacancy on the board that reduces the number of directors to 11
16561572 fewer than three must be filed not later than ninety (90) days after the date 12
16571573 the vacancy occurs. If the vacancy has not been filled upon the expiration of 13
16581574 ninety (90) days following the date the vacancy occurs, the commissioner may 14
16591575 commence a proceeding to appoint a receiver pursuant to § 23 -51-164 to 15
16601576 operate the state trust company and elect a board of not fewer than three 16
16611577 persons to resolve the vacancy. If the conservator is unable to locate or 17
16621578 elect three persons willing and able to serve as directors, the commissioner 18
16631579 may close the state trust company for liquidation. 19
16641580 (e) Before each term to which a person is elected to serve as a 20
16651581 director of a state trust company, the person shall submit an affidavit for 21
16661582 filing in the minutes of the state trust company stating that the person, to 22
16671583 the extent applicable: 23
16681584 (1) Accepts the position and is not disqualified from serving in 24
16691585 the position; 25
16701586 (2) Will not violate or knowingly permit an officer, director, 26
16711587 or employee of the state trust company to violate any law applicable to the 27
16721588 conduct of business of the state trust company; and 28
16731589 (3) Will diligently perform the duties of the position. 29
16741590 (f) An advisory director is not considered a director if the advisory 30
16751591 director: 31
16761592 (1) Is not elected by the shareholders of the state trust 32
16771593 company; 33
16781594 (2) Does not vote on matters before the board or a committee of 34
16791595 the board and is not counted for purposes of determining a quorum of the 35
1680-board or committee; and 36 As Engrossed: S2/17/25 SB230
1681-
1682- 43 02-17-2025 11:15:03 ANS145
1683-
1684-
1596+board or committee; and 36 SB230
1597+
1598+ 43 02/13/2025 12:57:21 PM ANS145
16851599 (3) Provides solely general policy advice to the board. 1
16861600 2
16871601 23-51-143. Officers. 3
16881602 The board shall annually elect the officers of the state trust company, 4
16891603 who serve at the pleasure of the board. The state trust company must have a 5
16901604 principal executive officer primarily responsible for the execution of board 6
16911605 policies and operation of the state trust company and an officer responsible 7
16921606 for the maintenance and storage of all corporate books and records of the 8
16931607 state trust company and for required attestation of signatures. The board may 9
16941608 appoint other officers of the state trust company as the board considers 10
16951609 necessary. The duties of any two or more officers may be combined by the 11
16961610 board and held by one person. 12
16971611 13
16981612 23-51-144. Certain criminal offenses. 14
16991613 (a) An officer, director, employee or shareholder of a state trust 15
17001614 company commits an offense if the person knowingly: 16
17011615 (1) Conceals information or a fact, or removes, destroys, or 17
17021616 conceals a book or record of the state trust company for the purpose of 18
17031617 concealing information or a fact from the Bank Commissioner or an agent of 19
17041618 the commissioner; or 20
17051619 (2) For the purpose of concealing, removes or destroys any book 21
17061620 or record of the state trust company that is material to a pending or 22
17071621 anticipated legal or administrative proceeding. 23
17081622 (b) An officer, director or employee of a state trust company commits 24
17091623 an offense if the person knowingly makes a false entry in the books or 25
17101624 records or in any report or statement of the state trust company. 26
17111625 (c) An offense under this section is a Class D felony. 27
17121626 28
17131627 23-51-145. Transactions with management and affiliates. 29
17141628 (a) Without the prior approval of a disinterested majority of the 30
17151629 board recorded in the minutes, or if a disinterested majority cannot be 31
17161630 obtained the prior written approval of a majority of the disinterested 32
17171631 directors and the Bank Commissioner, a state trust company may not directly 33
17181632 or indirectly: 34
17191633 (1) Sell or lease an asset of the state trust company to an 35
1720-officer, director, or principal shareholder of the state trust company or an 36 As Engrossed: S2/17/25 SB230
1721-
1722- 44 02-17-2025 11:15:03 ANS145
1723-
1724-
1634+officer, director, or principal shareholder of the state trust company or an 36 SB230
1635+
1636+ 44 02/13/2025 12:57:21 PM ANS145
17251637 affiliate of the state trust company; 1
17261638 (2) Purchase or lease an asset in which an officer, director or 2
17271639 principal shareholder of the state trust company or an affiliate of the state 3
17281640 trust company has an interest; or 4
17291641 (3) Subject to § 23 -51-128, extend credit to an officer, 5
17301642 director, or principal shareholder of the state trust company or an affiliate 6
17311643 of the state trust company. 7
17321644 (b) Notwithstanding subsection (a) of this section, a lease 8
17331645 transaction described in subdivision (a)(2) of this section involving real 9
17341646 property may not be consummated, renewed, or extended without the prior 10
17351647 written approval of the commissioner. For purposes of this subsection only, 11
17361648 an affiliate of the state trust company does not include a subsidiary of the 12
17371649 state trust company. 13
17381650 (c) Subject to § 23 -51-128, a state trust company may not directly or 14
17391651 indirectly extend credit to an employee, officer, director or principal 15
17401652 shareholder of the state trust company or an affiliate of the state trust 16
17411653 company, unless the extension of credit: 17
17421654 (1) Is made on substantially the same terms, including interest 18
17431655 rates and collateral, as those prevailing at the time for comparable 19
17441656 transactions by the state trust company with persons who are not employees, 20
17451657 officers, directors, principal shareholders, or affiliates of the state trust 21
17461658 company; 22
17471659 (2) Does not involve more than the normal risk of repayment or 23
17481660 present other unfavorable features; and 24
17491661 (3) The state trust company follows credit underwriting 25
17501662 procedures that are not less stringent than those applicable to comparable 26
17511663 transactions by the state trust company with persons who are not employees, 27
17521664 officers, directors, principal shareholders or affiliates of the state trust 28
17531665 company. 29
17541666 (d) An officer or director of the state trust company who knowingly 30
17551667 participates in or knowingly permits a violation of this section shall be 31
17561668 guilty of a Class D felony. 32
17571669 (e) The commissioner may adopt rules to administer and carry out this 33
17581670 section, including rules to establish limits, requirements, or exemptions 34
17591671 other than those specified by this section for particular categories of 35
1760-transactions. 36 As Engrossed: S2/17/25 SB230
1761-
1762- 45 02-17-2025 11:15:03 ANS145
1763-
1764-
1672+transactions. 36 SB230
1673+
1674+ 45 02/13/2025 12:57:21 PM ANS145
17651675 1
17661676 23-51-146. Fiduciary responsibility. 2
17671677 The board of a state trust company is responsible for the proper 3
17681678 exercise of fiduciary powers by the state trust company and each matter 4
17691679 pertinent to the exercise of fiduciary powers, including: 5
17701680 (1) The determination of policies; 6
17711681 (2) The investment and disposition of property held in a 7
17721682 fiduciary capacity; and 8
17731683 (3) The direction and review of the actions of each officer, 9
17741684 employee, and committee used by the state trust company in the exercise of 10
17751685 its fiduciary powers. 11
17761686 12
17771687 23-51-147. Recordkeeping. 13
17781688 A state trust company shall keep its fiduciary records separate and 14
17791689 distinct from other records of the state trust company. The fiduciary records 15
17801690 must contain all material information relative to each account as appropriate 16
17811691 under the circumstances. 17
17821692 18
17831693 23-51-148. Bonding requirements. 19
17841694 (a) The board of a state trust company shall require protection and 20
17851695 indemnity for clients in reasonable amounts established by rules adopted 21
17861696 under this chapter, against dishonesty, fraud, defalcation, forgery, theft, 22
17871697 and other similar insurable losses, with corporate insurance or surety 23
17881698 companies: 24
17891699 (1) Authorized to do business in this state; or 25
17901700 (2) Acceptable to the Bank Commissioner and otherwise lawfully 26
17911701 permitted to issue the coverage against those losses in this state. 27
17921702 (b) Except as otherwise provided by rule, coverage required under 28
17931703 subsection (a) of this section must include each director, officer, and 29
17941704 employee of the state trust company without regard to whether the person 30
17951705 receives salary or other compensation. 31
17961706 (c) A state trust company may apply to the commissioner for permission 32
17971707 to eliminate the bonding requirement of this section for a particular 33
17981708 individual. The commissioner shall approve the application if the 34
17991709 commissioner finds that the bonding requirement is unnecessary or burdensome. 35
1800-Unless the application presents novel or unusual questions, the commissioner 36 As Engrossed: S2/17/25 SB230
1801-
1802- 46 02-17-2025 11:15:03 ANS145
1803-
1804-
1710+Unless the application presents novel or unusual questions, the commissioner 36 SB230
1711+
1712+ 46 02/13/2025 12:57:21 PM ANS145
18051713 shall approve the application or set the application for hearing not later 1
18061714 than sixty (60) days after the date the commissioner considers the 2
18071715 application complete and accepted for filing. 3
18081716 23-51-149. Reports of apparent crime. 4
18091717 A trust company that is the victim of a robbery, has a shortage of 5
18101718 corporate or fiduciary funds in excess of five thousand dollars ($5,000), or 6
18111719 is the victim of an apparent or suspected misapplication of its corporate or 7
18121720 fiduciary funds or property in any amount by a director, officer, or employee 8
18131721 shall report the robbery, shortages or apparent or suspected misapplication 9
18141722 to the Bank Commissioner within forty -eight (48) hours after the time it is 10
18151723 discovered. The initial report may be oral if the report is promptly 11
18161724 confirmed in writing. The trust company or a director, officer, employee, or 12
18171725 agent is not subject to liability for defamation or another charge resulting 13
18181726 from information supplied in the report. 14
18191727 15
18201728 23-51-150. Merger authority. 16
18211729 (a) With the prior written approval of the Bank Commissioner, a state 17
18221730 trust company may merge or consolidate with a state bank to the same extent 18
18231731 as a state bank under the Arkansas Banking Code of 1997 or with another 19
18241732 person to the same extent as a business corporation under the Arkansas 20
18251733 Business Corporation Act of 1987, § 4 -27-101 et seq., subject to this 21
18261734 chapter. 22
18271735 (b) Implementation of a plan of merger by a trust company and a state 23
18281736 bank, approval of the board, and shareholders of the parties must be made or 24
18291737 obtained as provided by the Arkansas Banking Code of 1997 as if the state 25
18301738 trust company were a state bank, except as otherwise provided by rules 26
18311739 adopted under this chapter. 27
18321740 (c) Implementation of the plan of merger with a person other than a 28
18331741 state bank, approval of the board and shareholders of the parties must be 29
18341742 made or obtained as provided by the Arkansas Business Corporation Act of 30
18351743 1987, § 4-27-101 et seq., as if the state trust company were a domestic 31
18361744 corporation and all other parties to the merger were foreign corporations and 32
18371745 other entities, except as otherwise provided by rules adopted under this 33
18381746 chapter. 34
18391747 35
1840- 23-51-151. Merger application. 36 As Engrossed: S2/17/25 SB230
1841-
1842- 47 02-17-2025 11:15:03 ANS145
1843-
1844-
1748+ 23-51-151. Merger application. 36 SB230
1749+
1750+ 47 02/13/2025 12:57:21 PM ANS145
18451751 (a) The original articles of merger, a number of copies of the 1
18461752 articles of merger equal to the number of surviving, new, and acquiring 2
18471753 entities, and an application in the form required by the Bank Commissioner 3
18481754 must be filed with the commissioner. The commissioner shall investigate the 4
18491755 condition of the merging parties. The commissioner may require the submission 5
18501756 of additional information as considered necessary to an informed decision. 6
18511757 (b) The commissioner may approve the merger if: 7
18521758 (1) Each resulting state trust company will be solvent and have 8
18531759 adequate capitalization for its business and location; 9
18541760 (2) Each resulting state trust company has in all respects 10
18551761 complied with the statutes and rules relative to the organization of a state 11
18561762 trust company; 12
18571763 (3) All fiduciary obligations and liabilities of each state 13
18581764 trust company that is a party to the merger have been properly discharged or 14
18591765 otherwise lawfully assumed or retained by a state trust company or other 15
18601766 fiduciary; 16
18611767 (4) Each surviving, new, or acquiring person that is not 17
18621768 authorized to engage in the trust business will not engage in the trust 18
18631769 business and has in all respects complied with the laws of this state; and 19
18641770 (5) All conditions imposed by the commissioner have been 20
18651771 satisfied or otherwise resolved. 21
18661772 22
18671773 23-51-152. Approval of commissioner. 23
18681774 (a) If the Bank Commissioner approves the merger and finds that all 24
18691775 required filing fees and investigative costs have been paid, the commissioner 25
18701776 shall: 26
18711777 (1) Endorse the face of the original and each copy with the date 27
18721778 of approval and the word “Approved”; 28
18731779 (2) File the original in the State Bank Department's records; 29
18741780 and 30
18751781 (3) Deliver a certified copy of the articles of merger to each 31
18761782 surviving, new, or acquiring entity. 32
18771783 (b) A merger is effective on the date of approval, unless the merger 33
18781784 agreement provides and the commissioner consents to a different effective 34
18791785 date. 35
1880- 36 As Engrossed: S2/17/25 SB230
1881-
1882- 48 02-17-2025 11:15:03 ANS145
1883-
1884-
1786+ 36 SB230
1787+
1788+ 48 02/13/2025 12:57:21 PM ANS145
18851789 23-51-153. Rights of dissenters to mergers. 1
18861790 A shareholder may dissent from the merger to the extent and by 2
18871791 following the procedure provided by the Arkansas Business Corporation Act of 3
18881792 1987, § 4-27-101 et seq., or rules adopted under this chapter. 4
18891793 5
18901794 23-51-154. Authority to purchase assets of another trust institution. 6
18911795 (a) Subject to the provisions of this section, a state trust company 7
18921796 may purchase assets of another state trust company or trust -related assets of 8
18931797 another trust institution, including the right to control accounts 9
18941798 established with the trust institution. Except as otherwise expressly 10
18951799 provided by this chapter or any other applicable statutes, the purchase of 11
18961800 all or part of the assets of the trust institution does not make the 12
18971801 purchasing state trust company responsible for any liability or obligation of 13
18981802 the selling trust institution that is not expressly assumed by the purchasing 14
18991803 state trust company. Except as otherwise provided by this chapter, this 15
19001804 chapter does not govern or prohibit the purchase by a trust institution of 16
19011805 all or part of the assets of a corporation or other entity that is not a 17
19021806 trust institution. 18
19031807 (b) An application in the form required by the Bank Commissioner must 19
19041808 be filed with the commissioner for any acquisition of all or substantially 20
19051809 all of (i) the assets of a state trust company or (ii) the trust assets of 21
19061810 another trust institution by a state trust company. The commissioner shall 22
19071811 investigate the condition of the purchaser and seller and may require the 23
19081812 submission of additional information as considered necessary to make an 24
19091813 informed decision. The commissioner shall approve the purchase if: 25
19101814 (1) The acquiring state trust company will be solvent, not in a 26
19111815 hazardous condition and have sufficient capitalization for its business and 27
19121816 location; 28
19131817 (2) The acquiring state trust company has complied with all 29
19141818 applicable statutes and rules, including without limitation any applicable 30
19151819 requirements of §§ 23 -51-178 and 23-51-179; 31
19161820 (3) All fiduciary obligations and liabilities of the parties 32
19171821 have been properly discharged or otherwise assumed by the acquiring state 33
19181822 trust company; 34
19191823 (4) All conditions imposed by the commissioner have been 35
1920-satisfied or otherwise resolved; and 36 As Engrossed: S2/17/25 SB230
1921-
1922- 49 02-17-2025 11:15:03 ANS145
1923-
1924-
1824+satisfied or otherwise resolved; and 36 SB230
1825+
1826+ 49 02/13/2025 12:57:21 PM ANS145
19251827 (5) All fees and costs have been paid. 1
19261828 (c) A purchase requiring an application pursuant to subsection (b) of 2
19271829 this section is effective on the date of approval, unless the purchase 3
19281830 agreement provides for, and the commissioner consents to, a different 4
19291831 effective date. 5
19301832 (d) The acquiring state trust company shall succeed by operation of 6
19311833 law to all of the rights, privileges and obligations of the selling trust 7
19321834 institution under each account included in the assets acquired. 8
19331835 9
19341836 23-51-155. Sale of assets. 10
19351837 (a) The board of a state trust company, with the Bank Commissioner's 11
19361838 approval, may cause a state trust company to sell all or substantially all of 12
19371839 its assets, including the right to control accounts established with the 13
19381840 trust company, without shareholder approval if the commissioner finds: 14
19391841 (1) The interests of the state trust company's clients, 15
19401842 depositors, and creditors are jeopardized because of insolvency or imminent 16
19411843 insolvency of the state trust company; 17
19421844 (2) The sale is in the best interest of the state trust 18
19431845 company's clients and creditors; and 19
19441846 (3) The Federal Deposit Insurance Corporation or its successor 20
19451847 approves the transaction unless the deposits of the state trust company are 21
19461848 not insured. 22
19471849 (b) A sale under this section must include an assumption and promise 23
19481850 by the buyer to pay or otherwise discharge: 24
19491851 (1) All of the state trust company's liabilities to clients and 25
19501852 depositors; 26
19511853 (2) All of the state trust company's liabilities for salaries of 27
19521854 the state trust company's employees incurred before the date of the sale; 28
19531855 (3) Obligations incurred by the commissioner arising out of the 29
19541856 supervision or sale of the state trust company; and 30
19551857 (4) Fees and assessments due the State Bank Department. 31
19561858 (c) This section does not limit the incidental power of a state trust 32
19571859 company to buy and sell assets in the ordinary course of business. 33
19581860 (d) This section does not affect the commissioner's right to take 34
19591861 action under any other law. The sale by a trust company of all or 35
1960-substantially all of its assets with shareholder approval is deemed a 36 As Engrossed: S2/17/25 SB230
1961-
1962- 50 02-17-2025 11:15:03 ANS145
1963-
1964-
1862+substantially all of its assets with shareholder approval is deemed a 36 SB230
1863+
1864+ 50 02/13/2025 12:57:21 PM ANS145
19651865 voluntary dissolution and liquidation and shall be governed by § 23 -49-119. 1
19661866 2
19671867 23-51-156. Required vote of shareholders. 3
19681868 A state trust company may go into voluntary liquidation and be closed, 4
19691869 and may surrender its charter and franchise as a corporation of this state by 5
19701870 the affirmative votes of its shareholders owning a majority of its voting 6
19711871 stock. 7
19721872 8
19731873 23-51-157. Corporate procedure. 9
19741874 Shareholder action to liquidate a state trust company shall be taken at 10
19751875 a meeting of the shareholders duly called by resolution of the board of 11
19761876 directors, written notice of which, stating the purpose of the meeting, shall 12
19771877 be mailed to each shareholder, or in case of a shareholder's death, to the 13
19781878 shareholder's legal representative, addressed to the shareholder's last known 14
19791879 residence not less than ten (10) days prior to the date of the meeting. If 15
19801880 stockholders shall, by the required vote, elect to liquidate a trust company, 16
19811881 a certified copy of all proceedings of the meeting at which such an action 17
19821882 shall have been taken, attested by an officer of the trust company, shall be 18
19831883 transmitted to the Bank Commissioner for approval. 19
19841884 20
19851885 23-51-158. Authority to liquidate — Publication. 21
19861886 If the Bank Commissioner shall approve the liquidation, the 22
19871887 commissioner shall issue to the state trust company under the commissioner's 23
19881888 seal, a permit for that purpose. No such permit shall be issued by the 24
19891889 commissioner until the commissioner shall be satisfied that provision has 25
19901890 been made by the state trust company to satisfy and pay off all creditors. If 26
19911891 not so satisfied, the commissioner shall refuse to issue a permit, and shall 27
19921892 be authorized to take possession of the state trust company and its assets 28
19931893 and business, and hold the same and liquidate the state trust company in the 29
19941894 manner provided in this chapter. When the commissioner shall approve the 30
19951895 voluntary liquidation of a state trust company, the directors of said state 31
19961896 trust company shall cause to be published in a newspaper with a substantially 32
19971897 statewide circulation published in the City of Little Rock a notice that the 33
19981898 state trust company is closing down its affairs and going into liquidation, 34
19991899 and notify its creditors to present their claims for payment. The notice 35
2000-shall be published once a week for four consecutive weeks. 36 As Engrossed: S2/17/25 SB230
2001-
2002- 51 02-17-2025 11:15:03 ANS145
2003-
2004-
1900+shall be published once a week for four consecutive weeks. 36 SB230
1901+
1902+ 51 02/13/2025 12:57:21 PM ANS145
20051903 1
20061904 23-51-159. Examination and reports. 2
20071905 When any state trust company shall be in process of voluntary 3
20081906 liquidation, it shall be subject to examination by the Bank Commissioner, and 4
20091907 shall furnish such reports from time to time as may be called for by the 5
20101908 commissioner. 6
20111909 7
20121910 23-51-160. Unclaimed property. 8
20131911 All unclaimed property remaining in the hands of a liquidated state 9
20141912 trust company shall be subject to the provisions of the Uniform Disposition 10
20151913 of Unclaimed Property Act, § 18 -28-201 et seq. 11
20161914 12
20171915 23-51-161. Sale or transfer of property. 13
20181916 Upon the approval of the Bank Commissioner, any state trust company may 14
20191917 sell and transfer to any other trust institution, whether state or federally 15
20201918 chartered, all of its assets of every kind upon such terms as may be agreed 16
20211919 upon and approved by the commissioner and by a majority vote of its board of 17
20221920 directors. A certified copy of the minutes of any meeting at which such an 18
20231921 action is taken, attested by an officer of the trust company, together with a 19
20241922 copy of the contract of sale and transfer, shall be filed with the 20
20251923 commissioner. Whenever voluntary liquidation shall be approved by the 21
20261924 commissioner or the sale and transfer of the assets of any state trust 22
20271925 company shall be approved by the commissioner, the charter of the state trust 23
20281926 company shall be canceled, subject, however, to its continued existence, as 24
20291927 provided by this chapter and the general law relative to corporations. 25
20301928 26
20311929 23-51-162. When commissioner may take charge. 27
20321930 The Bank Commissioner may forthwith take possession of the business and 28
20331931 property of any state trust company to which this chapter is applicable 29
20341932 whenever it shall appear that the state trust company: 30
20351933 (1) Has violated its charter or any laws applicable thereto; 31
20361934 (2) Is conducting its business in an unauthorized or unsafe 32
20371935 manner; 33
20381936 (3) Is in an unsafe or unsound condition to transact its 34
20391937 business; 35
2040- (4) Has an impairment of its capital; 36 As Engrossed: S2/17/25 SB230
2041-
2042- 52 02-17-2025 11:15:03 ANS145
2043-
2044-
1938+ (4) Has an impairment of its capital; 36 SB230
1939+
1940+ 52 02/13/2025 12:57:21 PM ANS145
20451941 (5) Is in a hazardous condition; 1
20461942 (6) Has become otherwise insolvent; 2
20471943 (7) Has neglected or refused to comply with the terms of a duly 3
20481944 issued lawful order of the commissioner; 4
20491945 (8) Has refused, upon proper demand, to submit its records, 5
20501946 affairs, and concerns for inspection and examination of a duly appointed or 6
20511947 authorized examiner of the commissioner; 7
20521948 (9) Is employing officers who have refused to be examined upon 8
20531949 oath regarding its affairs; or 9
20541950 (10) Has made a voluntary assignment of its assets to trustees. 10
20551951 11
20561952 23-51-163. Directors may act. 12
20571953 Any state trust company may place its assets and business under the 13
20581954 control of the Bank Commissioner for liquidation by a resolution of a 14
20591955 majority of its directors or members upon notice to the commissioner, and, 15
20601956 upon taking possession of the state trust company, the commissioner, or duly 16
20611957 appointed agent, shall retain possession thereof until the state trust 17
20621958 company shall be authorized by the commissioner to resume business or until 18
20631959 the affairs of the state trust company shall be fully liquidated as herein 19
20641960 provided. No state trust company shall make any general assignment for the 20
20651961 benefit of its creditors except by surrendering possession of its assets to 21
20661962 the commissioner, as herein provided. Whenever any state trust company for 22
20671963 any reason shall suspend operations for any length of time, the state trust 23
20681964 company shall, immediately upon the suspension of operations, be deemed in 24
20691965 the possession of the commissioner and subject to liquidation hereunder. 25
20701966 26
20711967 23-51-164. Application of Arkansas Banking Code of 1997. 27
20721968 When the Bank Commissioner, or duly appointed agent, shall take 28
20731969 possession of any state trust company under § 23 -51-162 or § 23-51-163, the 29
20741970 commissioner or agent shall proceed with the dissolution and liquidation of 30
20751971 the state trust company under the procedures established for the dissolution 31
20761972 and liquidation of state banks under the Arkansas Banking Code of 1997. 32
20771973 33
20781974 23-51-165. Companies authorized to act as fiduciaries. 34
20791975 (a) A company shall not act as a fiduciary in this state except: 35
2080- (1) A state trust company; 36 As Engrossed: S2/17/25 SB230
2081-
2082- 53 02-17-2025 11:15:03 ANS145
2083-
2084-
1976+ (1) A state trust company; 36 SB230
1977+
1978+ 53 02/13/2025 12:57:21 PM ANS145
20851979 (2) A state bank; 1
20861980 (3) An association organized under the laws of this state and 2
20871981 authorized to act as a fiduciary under § 23 -37-101 et seq.; 3
20881982 (4) A national bank having its principal office in this state 4
20891983 and authorized by the United States Comptroller of the Currency to act as a 5
20901984 fiduciary under 12 U.S.C. § 92a; 6
20911985 (5) A federally chartered savings association having its 7
20921986 principal office in this state and authorized by its federal chartering 8
20931987 authority to act as a fiduciary; 9
20941988 (6) A subsidiary trust company authorized to act as a fiduciary 10
20951989 under § 23-47-801 et seq.; 11
20961990 (7) An out-of-state bank with a branch in this state established 12
20971991 or maintained under the Arkansas Interstate Banking and Branching Act, § 23 -13
20981992 48-901 et seq., or a trust office licensed by the Bank Commissioner under 14
20991993 this chapter; 15
21001994 (8) An out-of-state trust company with a trust office licensed 16
21011995 by the commissioner under this chapter; or 17
21021996 (9) A foundation. 18
21031997 (b) A company shall not engage in an unauthorized trust activity. 19
21041998 20
21051999 23-51-166. Activities not requiring a charter, etc. 21
21062000 Notwithstanding any other provision of this chapter, a company does not 22
21072001 engage in the trust business or in any other business in a manner requiring a 23
21082002 charter or license under this chapter or in an unauthorized trust activity 24
21092003 by: 25
21102004 (1) Acting in a manner authorized by law and in the scope of 26
21112005 authority as an agent of a trust institution with respect to an activity 27
21122006 which is not an unauthorized trust activity; 28
21132007 (2) Rendering a service customarily performed as an attorney or 29
21142008 law firm in a manner approved and authorized by the Supreme Court or the laws 30
21152009 of this state; 31
21162010 (3) Acting as trustee under a deed of trust delivered only as 32
21172011 security for the payment of money or for the performance of another act; 33
21182012 (4) Receiving and distributing rents and proceeds of sale as a 34
21192013 licensed real estate broker on behalf of a principal in a manner authorized 35
2120-by the Real Estate License Law, § 17 -42-101 et seq.; 36 As Engrossed: S2/17/25 SB230
2121-
2122- 54 02-17-2025 11:15:03 ANS145
2123-
2124-
2014+by the Real Estate License Law, § 17 -42-101 et seq.; 36 SB230
2015+
2016+ 54 02/13/2025 12:57:21 PM ANS145
21252017 (5) Engaging in a securities transaction or providing an 1
21262018 investment advisory service as a licensed and registered broker -dealer, 2
21272019 investment advisor or registered representative thereof, provided the 3
21282020 activity is regulated by the State Securities Department or the United States 4
21292021 Securities and Exchange Commission; 5
21302022 (6) Engaging in the sale and administration of an insurance 6
21312023 product by an insurance company or agent licensed by the State Insurance 7
21322024 Department to the extent that the activity is regulated by the State 8
21332025 Insurance Department; 9
21342026 (7) Engaging in the lawful sale of prepaid funeral benefits 10
21352027 under a permit issued by the State Insurance Department under the Arkansas 11
21362028 Prepaid Funeral Benefits Law, § 23 -40-101 et seq., or engaging in the lawful 12
21372029 business of maintaining a perpetual care cemetery trust pursuant to § 20 -17-13
21382030 904 or a permanent maintenance fund for perpetually maintained cemeteries 14
21392031 under the Cemetery Act for Perpetually Maintained Cemeteries, § 20 -17-1001 et 15
21402032 seq.; 16
21412033 (8) Acting as trustee under a voting trust as provided by § 4 -17
21422034 26-706 or § 4-27-730; 18
21432035 (9) Engaging in other activities expressly excluded from the 19
21442036 application of this chapter by rules issued by the Bank Commissioner; 20
21452037 (10) Rendering services customarily performed by a public 21
21462038 accountant or a certified public accountant in a manner authorized by the 22
21472039 Arkansas State Board of Public Accountancy; 23
21482040 (11) Provided the company is a trust institution and is not 24
21492041 barred by order of the commissioner from engaging in a trust business in this 25
21502042 state pursuant to § 23 -51-182(b): 26
21512043 (A) Marketing or soliciting in this state through the 27
21522044 mails, telephone, any electronic means or in person with respect to acting or 28
21532045 proposing to act as a fiduciary outside of this state; 29
21542046 (B) Delivering money or other intangible assets and 30
21552047 receiving the same from a client or other person in this state; or 31
21562048 (C) Accepting or executing outside of this state a trust 32
21572049 of any client or otherwise acting as a fiduciary outside of this state for 33
21582050 any client; or 34
21592051 (12) If the company is a foundation, serving as a fiduciary. 35
2160- 36 As Engrossed: S2/17/25 SB230
2161-
2162- 55 02-17-2025 11:15:03 ANS145
2163-
2164-
2052+ 36 SB230
2053+
2054+ 55 02/13/2025 12:57:21 PM ANS145
21652055 23-51-167. Trust business of state trust institution. 1
21662056 (a) A state trust institution may act as a fiduciary or otherwise 2
21672057 engage in a trust business in this or any other state or foreign country, 3
21682058 subject to complying with applicable laws of the state or foreign country, at 4
21692059 an office established and maintained pursuant to this chapter, at a branch or 5
21702060 at any other authorized location other than an office or branch. 6
21712061 (b) In addition, a state trust institution may conduct any activities 7
21722062 at any office outside this state that are permissible for a trust institution 8
21732063 chartered by the host state where the office is located, except to the extent 9
21742064 such activities are expressly prohibited by the laws of this state or by any 10
21752065 rule or order of the Bank Commissioner applicable to the state trust 11
21762066 institution. Provided, however, that the commissioner may waive any such 12
21772067 prohibition if he or she determines, by order or rule, that the involvement 13
21782068 of out-of-state offices of state trust institutions in particular activities 14
21792069 would not threaten the safety or soundness of the state trust institutions. 15
21802070 16
21812071 23-51-168. Trust business of out -of-state trust institution. 17
21822072 An out-of-state trust institution which establishes or maintains one 18
21832073 (1) or more offices in this state under this chapter may conduct any activity 19
21842074 at each such office which would be authorized under the laws of this state 20
21852075 for a state trust institution to conduct at such an office. 21
21862076 22
21872077 23-51-169. Name of trust institution. 23
21882078 A state trust company or out -of-state trust institution may register 24
21892079 any name with the Bank Commissioner in connection with establishing a 25
21902080 principal office or trust office in this state pursuant to this chapter, 26
21912081 except that the commissioner may determine that a name proposed to be 27
21922082 registered is potentially misleading to the public and require the registrant 28
21932083 to select a name which is not potentially misleading. 29
21942084 30
21952085 23-51-170. Trust business. 31
21962086 A state trust company or a state bank may: 32
21972087 (1) Perform any act as a fiduciary; 33
21982088 (2) Engage in any trust business; 34
21992089 (3) Exercise any incidental power that is reasonably necessary 35
2200-to enable it to fully exercise, according to commonly accepted fiduciary 36 As Engrossed: S2/17/25 SB230
2201-
2202- 56 02-17-2025 11:15:03 ANS145
2203-
2204-
2090+to enable it to fully exercise, according to commonly accepted fiduciary 36 SB230
2091+
2092+ 56 02/13/2025 12:57:21 PM ANS145
22052093 customs and usages, a power conferred in this chapter; and 1
22062094 (4) If a state trust company, exercise any other power 2
22072095 authorized by § 23-51-104. 3
22082096 4
22092097 23-51-171. Branches and offices of state trust institutions. 5
22102098 (a) A state trust institution may act as a fiduciary and engage in a 6
22112099 trust business at each trust office as permitted by this chapter and at a 7
22122100 branch. 8
22132101 (b) Notwithstanding the foregoing subsection (a) of this section, a 9
22142102 state bank or a state trust company may not engage at an out -of-state office 10
22152103 in any trust business not permitted to be conducted at such an office by the 11
22162104 laws of the host state applicable to trust institutions chartered by the host 12
22172105 state. 13
22182106 14
22192107 23-51-172. State trust company principal office. 15
22202108 (a) Each state trust company must have and continuously maintain a 16
22212109 principal office in this state. 17
22222110 (b) Each executive officer at the principal office is an agent of the 18
22232111 state trust company for service of process. 19
22242112 (c) A state trust company may change its principal office to any 20
22252113 location within this state by filing a written notice with the Bank 21
22262114 Commissioner setting forth the name of the state trust company, the street 22
22272115 address of its principal office before the change, the street address to 23
22282116 which the principal office is to be changed, and a copy of the resolution 24
22292117 adopted by the board authorizing the change. 25
22302118 (d) The change of principal office shall take effect thirty (30) days 26
22312119 after the date the commissioner receives the notice pursuant to subsection 27
22322120 (c) of this section, unless the commissioner establishes another date or 28
22332121 unless prior to that day the commissioner notifies the state trust company 29
22342122 that it must establish to the satisfaction of the commissioner that the 30
22352123 relocation is consistent with the original determination made under § 23 -51-31
22362124 106(b) for the establishment of a state trust company at that location, in 32
22372125 which event the change of principal office shall take effect when approved by 33
22382126 the commissioner. 34
22392127 35
2240- 23-51-173. Trust office. 36 As Engrossed: S2/17/25 SB230
2241-
2242- 57 02-17-2025 11:15:03 ANS145
2243-
2244-
2128+ 23-51-173. Trust office. 36 SB230
2129+
2130+ 57 02/13/2025 12:57:21 PM ANS145
22452131 (a) A state trust institution may establish or acquire and maintain 1
22462132 trust offices anywhere in this state. A state trust institution desiring to 2
22472133 establish or acquire and maintain such an office shall file a written notice 3
22482134 with the Bank Commissioner setting forth the name of the state trust 4
22492135 institution, the location of the proposed additional trust office and a 5
22502136 general description of the surrounding area, whether the location will be 6
22512137 owned or leased, furnish a copy of the resolution adopted by the board 7
22522138 authorizing the additional trust office, general description of the 8
22532139 activities to be conducted, an estimate of the cost of the trust office and 9
22542140 pay the filing fee, if any, prescribed by the commissioner. 10
22552141 (b) The notificant may commence business at the additional trust 11
22562142 office thirty (30) days after the date the commissioner receives the notice, 12
22572143 unless the commissioner specifies another date. 13
22582144 (c) The thirty-day period of review may be extended by the 14
22592145 commissioner on a determination that the written notice raises issues that 15
22602146 require additional information or additional time for analysis. If the period 16
22612147 of review is extended, the state trust institution may establish the 17
22622148 additional office only on prior written approval by the commissioner. 18
22632149 (d) The commissioner may deny approval of the additional office if the 19
22642150 commissioner finds that the notificant lacks sufficient financial resources 20
22652151 to undertake the proposed expansion without adversely affecting its safety or 21
22662152 soundness or that the proposed office would be contrary to the public 22
22672153 interest. 23
22682154 24
22692155 23-51-174. Out-of-state offices. 25
22702156 (a) A state bank, a state trust company, or a savings association 26
22712157 chartered under the laws of this state may establish and maintain a new trust 27
22722158 office or acquire and maintain an office in a state other than this state. 28
22732159 Such a trust institution desiring to establish or acquire and maintain an 29
22742160 office in another state under this section shall file a notice on a form 30
22752161 prescribed by the Bank Commissioner, which shall set forth the name of the 31
22762162 trust institution, the location of the proposed office, and a general 32
22772163 description of the surrounding area, whether the location will be owned or 33
22782164 leased, and whether the laws of the jurisdiction where the office will be 34
22792165 located permit the office to be maintained by the trust institution, furnish 35
2280-a copy of the resolution adopted by the board authorizing the out -of-state 36 As Engrossed: S2/17/25 SB230
2281-
2282- 58 02-17-2025 11:15:03 ANS145
2283-
2284-
2166+a copy of the resolution adopted by the board authorizing the out -of-state 36 SB230
2167+
2168+ 58 02/13/2025 12:57:21 PM ANS145
22852169 office, and pay the filing fee, if any, prescribed by the commissioner. 1
22862170 (b) The notificant may commence business at the additional office 2
22872171 thirty (30) days after the date the commissioner receives the notice, unless 3
22882172 the commissioner specifies another date. 4
22892173 (c) The thirty-day period of review may be extended by the 5
22902174 commissioner on a determination that the written notice raises issues that 6
22912175 require additional information or additional time for analysis. If the period 7
22922176 of review is extended, the trust institution may establish the additional 8
22932177 office only on prior written approval by the commissioner. 9
22942178 (d) The commissioner may deny approval of the additional office if the 10
22952179 commissioner finds that the notificant lacks sufficient financial resources 11
22962180 to undertake the proposed expansion without adversely affecting its safety or 12
22972181 soundness or that the proposed office would be contrary to the public 13
22982182 interest. In acting on the notice, the commissioner shall consider the views 14
22992183 of the appropriate bank supervisory agencies. 15
23002184 16
23012185 23-51-175. Trust business at a branch or trust office. 17
23022186 An out-of-state trust institution may act as a fiduciary in this state 18
23032187 or engage in a trust business at an office in this state only if it maintains 19
23042188 a trust office in this state as permitted by this chapter or a branch in this 20
23052189 state. 21
23062190 22
23072191 23-51-176. Establishing an interstate trust office. 23
23082192 (a) An out-of-state trust institution that does not operate a trust 24
23092193 office in this state and that meets the requirements of this chapter may 25
23102194 establish and maintain a new trust office in this state. 26
23112195 (b) An out-of-state trust institution may not establish a new trust 27
23122196 office in this state unless a similar institution chartered under the laws of 28
23132197 this state to act as a fiduciary, is permitted to establish a new trust 29
23142198 office that may engage in activities substantially similar to those permitted 30
23152199 to trust offices of out -of-state trust institutions under § 23 -51-175, in the 31
23162200 state where the out-of-state trust institution has its principal office. 32
23172201 33
23182202 23-51-177. Acquiring an interstate trust office. 34
23192203 (a) An out-of-state trust institution that does not operate a trust 35
2320-office in this state and that meets the requirements of this chapter may 36 As Engrossed: S2/17/25 SB230
2321-
2322- 59 02-17-2025 11:15:03 ANS145
2323-
2324-
2204+office in this state and that meets the requirements of this chapter may 36 SB230
2205+
2206+ 59 02/13/2025 12:57:21 PM ANS145
23252207 acquire and maintain a trust office in this state. 1
23262208 (b) No out-of-state trust institution may maintain a trust office in 2
23272209 this state unless a similar institution chartered under the laws of this 3
23282210 state to act as a fiduciary is permitted to acquire and maintain a trust 4
23292211 office through an acquisition of a trust office in the state where the out -5
23302212 of-state trust institution has its principal office and may engage in 6
23312213 activities substantially similar to those permitted to trust offices of out -7
23322214 of-state trust institutions under § 23 -51-175, in the state where the out -of-8
23332215 state trust institution has its principal office. 9
23342216 10
23352217 23-51-178. Requirement of notice. 11
23362218 An out-of-state trust institution desiring to establish and maintain a 12
23372219 new trust office or acquire and maintain a trust office in this state 13
23382220 pursuant to this chapter shall provide, or cause its home state regulator to 14
23392221 provide, written notice of the proposed transaction to the Bank Commissioner 15
23402222 on or after the date on which the out -of-state trust institution applies to 16
23412223 the home state regulator for approval to establish and maintain or acquire 17
23422224 the trust office. The filing of the notice shall be preceded or accompanied 18
23432225 by a copy of the resolution adopted by the board authorizing the additional 19
23442226 office and the filing fee, if any, prescribed by the commissioner. 20
23452227 21
23462228 23-51-179. Conditions for approval. 22
23472229 (a) No trust office of an out -of-state trust institution may be 23
23482230 acquired or established in this state under this chapter unless: 24
23492231 (1) The out-of-state trust institution shall have confirmed in 25
23502232 writing to the Bank Commissioner that for as long as it maintains a trust 26
23512233 office in this state, it will comply with all applicable laws of this state; 27
23522234 (2) The notificant shall have provided satisfactory evidence to 28
23532235 the commissioner of compliance with any applicable requirements of § 4 -27-29
23542236 1501 et seq. and the applicable requirements of its home state regulator for 30
23552237 acquiring or establishing and maintaining the office; 31
23562238 (3) The commissioner, acting within sixty (60) days after 32
23572239 receiving notice under § 23 -51-178, shall have certified to the home state 33
23582240 regulator that the requirements of this chapter have been met and the notice 34
23592241 has been approved or, if applicable, that any conditions imposed by the 35
2360-commissioner pursuant to subsection (b) of this section have been satisfied. 36 As Engrossed: S2/17/25 SB230
2361-
2362- 60 02-17-2025 11:15:03 ANS145
2363-
2364-
2242+commissioner pursuant to subsection (b) of this section have been satisfied. 36 SB230
2243+
2244+ 60 02/13/2025 12:57:21 PM ANS145
23652245 (b) The out-of-state trust institution may commence business at the 1
23662246 trust office sixty (60) days after the date the commissioner receives the 2
23672247 notice unless the commissioner specifies another date, provided, with respect 3
23682248 to an out-of-state trust institution that is not a depository institution and 4
23692249 for which the commissioner shall have conditioned such approval on the 5
23702250 satisfaction by the notificant of any requirement applicable to a state trust 6
23712251 company pursuant to § 23 -51-106(b) or § 23-51-110, the institution shall have 7
23722252 satisfied such conditions and provided to the commissioner satisfactory 8
23732253 evidence thereof. 9
23742254 (c) The sixty-day period of review may be extended by the commissioner 10
23752255 on a determination that the written notice raises issues that require 11
23762256 additional information or additional time for analysis. If the period of 12
23772257 review is extended, the out -of-state trust institution may establish the 13
23782258 office only on prior written approval by the commissioner. 14
23792259 (d) The commissioner may deny approval of the office if the 15
23802260 commissioner finds that the notificant lacks sufficient financial resources 16
23812261 to undertake the proposed expansion without adversely affecting its safety or 17
23822262 soundness or that the proposed office is contrary to the public interest. In 18
23832263 acting on the notice, the commissioner shall consider the views of the 19
23842264 appropriate bank supervisory agencies. 20
23852265 21
23862266 23-51-180. Additional trust offices. 22
23872267 An out-of-state trust institution that maintains a trust office in this 23
23882268 state under this chapter may establish or acquire additional trust offices or 24
23892269 representative trust offices in this state to the same extent that a state 25
23902270 trust institution may establish or acquire additional offices in this state 26
23912271 pursuant to the procedures for establishing or acquiring such offices set 27
23922272 forth in § 23-51-173. 28
23932273 29
23942274 23-51-181. Examinations — Periodic reports — Cooperative agreements — 30
23952275 Assessment of fees. 31
23962276 (a) To the extent consistent with subsection (c) of this section, the 32
23972277 Bank Commissioner may make such examinations of any office established and 33
23982278 maintained in this state pursuant to this chapter by an out -of-state trust 34
23992279 institution as the commissioner may deem necessary to determine whether the 35
2400-office is being operated in compliance with the laws of this state and in 36 As Engrossed: S2/17/25 SB230
2401-
2402- 61 02-17-2025 11:15:03 ANS145
2403-
2404-
2280+office is being operated in compliance with the laws of this state and in 36 SB230
2281+
2282+ 61 02/13/2025 12:57:21 PM ANS145
24052283 accordance with safe and sound banking practices. The provisions of the 1
24062284 Arkansas Banking Code of 1997 shall apply to such examinations. 2
24072285 (b) The commissioner may require periodic reports regarding any out -3
24082286 of-state trust institution that has established and maintained an office in 4
24092287 this state pursuant to this chapter. The required reports shall be provided 5
24102288 by the trust institution or by the home state regulator. Any reporting 6
24112289 requirements prescribed by the commissioner under this subsection shall be 7
24122290 consistent with the reporting requirements applicable to state trust 8
24132291 companies and appropriate for the purpose of enabling the commissioner to 9
24142292 carry out his or her responsibilities under this chapter. 10
24152293 (c) The commissioner may enter into cooperative, coordinating, and 11
24162294 information-sharing agreements with any other bank supervisory agencies or 12
24172295 any organization affiliated with or representing one (1) or more bank 13
24182296 supervisory agencies with respect to the periodic examination or other 14
24192297 supervision of any office in this state of an out -of-state trust institution, 15
24202298 or any office of a state trust institution in any host state, and the 16
24212299 commissioner may accept such a party's report of examination and report of 17
24222300 investigation in lieu of conducting his or her own examination or 18
24232301 investigation. 19
24242302 (d) The commissioner may enter into contracts with any bank 20
24252303 supervisory agency that has concurrent jurisdiction over a state trust 21
24262304 institution or an out -of-state trust institution maintaining an office in 22
24272305 this state to engage the services of the agency's examiners at a reasonable 23
24282306 rate of compensation, or to provide the services of the commissioner's 24
24292307 examiners to the agency at a reasonable rate of compensation. Any such 25
24302308 contract shall be deemed a sole source contract under § 19 -11-232. 26
24312309 (e) The commissioner may enter into joint examinations or joint 27
24322310 enforcement actions with other bank supervisory agencies having concurrent 28
24332311 jurisdiction over any office established and maintained in this state by an 29
24342312 out-of-state trust institution or any office established and maintained by a 30
24352313 state trust institution in any host state, provided that the commissioner may 31
24362314 at any time take such actions independently if the commissioner deems such 32
24372315 actions to be necessary or appropriate to carry out his or her 33
24382316 responsibilities under this chapter or to ensure compliance with the laws of 34
24392317 this state, but provided further that in the case of an out -of-state trust 35
2440-institution, the commissioner shall recognize the exclusive authority of the 36 As Engrossed: S2/17/25 SB230
2441-
2442- 62 02-17-2025 11:15:03 ANS145
2443-
2444-
2318+institution, the commissioner shall recognize the exclusive authority of the 36 SB230
2319+
2320+ 62 02/13/2025 12:57:21 PM ANS145
24452321 home state regulator over corporate governance matters and the primary 1
24462322 responsibility of the home state regulator with respect to safety and 2
24472323 soundness matters. 3
24482324 (f) Each out-of-state trust institution that maintains one (1) or more 4
24492325 offices in this state may be assessed and, if assessed, shall pay supervisory 5
24502326 and examination fees in accordance with the laws of this state and rules of 6
24512327 the commissioner. The fees may be shared with other bank supervisory agencies 7
24522328 or any organization affiliated with or representing one (1) or more bank 8
24532329 supervisory agencies in accordance with agreements between such parties and 9
24542330 the commissioner. 10
24552331 11
24562332 23-51-182. Enforcement. 12
24572333 (a)(1) Consistent with the Arkansas Administrative Procedure Act, § 13
24582334 25-15-201 et seq., after notice and opportunity for hearing, the Bank 14
24592335 Commissioner may determine: 15
24602336 (A) That an office maintained by an out -of-state trust 16
24612337 institution in this state is being operated in violation of any provision of 17
24622338 the laws of this state or in an unsafe and unsound manner; or 18
24632339 (B) That a company is engaged in an unauthorized trust 19
24642340 activity 20
24652341 (2) In either event, the commissioner shall have the authority 21
24662342 to take all such enforcement actions as he or she would be empowered to take 22
24672343 if the office or the company were a state trust company, including but not 23
24682344 limited to issuing an order temporarily or permanently prohibiting the 24
24692345 company from engaging in a trust business in this state. 25
24702346 (b) In cases involving extraordinary circumstances requiring immediate 26
24712347 action, the commissioner may take any action permitted by subsection (a) of 27
24722348 this section without notice or opportunity for hearing, but shall promptly 28
24732349 afford a subsequent hearing upon an application to rescind the action taken. 29
24742350 The commissioner shall promptly give notice to the home state regulator of 30
24752351 each enforcement action taken against an out -of-state trust institution and, 31
24762352 to the extent practicable, shall consult and cooperate with the home state 32
24772353 regulator in pursuing and resolving the enforcement action. 33
24782354 34
24792355 23-51-183. Notice of subsequent merger, closing, etc. 35
2480- Each out-of-state trust institution that maintains an office in this 36 As Engrossed: S2/17/25 SB230
2481-
2482- 63 02-17-2025 11:15:03 ANS145
2483-
2484-
2356+ Each out-of-state trust institution that maintains an office in this 36 SB230
2357+
2358+ 63 02/13/2025 12:57:21 PM ANS145
24852359 state pursuant to this chapter, or the home state regulator of such a trust 1
24862360 institution, shall give at least thirty (30) days prior written notice or, in 2
24872361 the case of an emergency transaction, such shorter notice as is consistent 3
24882362 with applicable state or federal law, to the Bank Commissioner of: 4
24892363 (1) Any merger, consolidation, or other transaction that would 5
24902364 cause a change of control with respect to the out -of-state trust institution 6
24912365 or any bank holding company that controls the trust institution, with the 7
24922366 result that an application would be required to be filed pursuant to the 8
24932367 Change in Bank Control Act of 1978, as amended, 12 U.S.C. § 1817(j), or the 9
24942368 Bank Holding Company Act of 1956, as amended, 12 U.S.C. § 1841 et seq., or 10
24952369 any successor statutes thereto; 11
24962370 (2) Any transfer of all or substantially all of the trust 12
24972371 accounts or trust assets of the out -of-state trust institution to another 13
24982372 person; or 14
24992373 (3) The closing or disposition of any office in this state. 15
25002374 16
25012375 23-51-184. Commissioner shall supervise and examine authorized trust 17
25022376 institutions. 18
25032377 Every authorized trust institution shall be under the supervision of 19
25042378 the Bank Commissioner. The commissioner shall execute and enforce through the 20
25052379 State Bank Department and such other agents as are now or may hereafter be 21
25062380 created or appointed, all laws which are now or may hereafter be enacted 22
25072381 relating to authorized trust institutions. For the more complete and thorough 23
25082382 enforcement of the provisions of this chapter, the commissioner is hereby 24
25092383 empowered to promulgate such rules not inconsistent with the provisions of 25
25102384 this chapter, as may, in his or her opinion, be necessary to carry out the 26
25112385 provisions of the laws relating to authorized trust institutions and as may 27
25122386 be further necessary to insure safe and conservative management of an 28
25132387 authorized trust institution under his or her supervision taking into 29
25142388 consideration the appropriate interest of the creditors, stockholders, and 30
25152389 the public in their relations with the authorized trust institutions. All 31
25162390 authorized trust institutions doing business under the provisions of this 32
25172391 chapter shall conduct their business in a manner consistent with all laws 33
25182392 relating to authorized trust institutions and all rules and instructions that 34
25192393 may be promulgated or issued by the commissioner. 35
2520- 36 As Engrossed: S2/17/25 SB230
2521-
2522- 64 02-17-2025 11:15:03 ANS145
2523-
2524-
2394+ 36 SB230
2395+
2396+ 64 02/13/2025 12:57:21 PM ANS145
25252397 23-51-185. Examinations — Assessments. 1
25262398 (a) The Bank Commissioner may examine each state trust company every 2
25272399 twenty-four (24) months or more often as he or she determines is necessary to 3
25282400 safeguard the interests of the public and the safety and soundness of the 4
25292401 institution. 5
25302402 (b) Each state-chartered trust company shall pay to the State Bank 6
25312403 Department within ten (10) days after notice from the commissioner in January 7
25322404 and July of each year an assessment fee to defray the costs of examination 8
25332405 and the costs of operations of the department which will be charged in 9
25342406 accordance with an assessment fee schedule approved by the commissioner. 10
25352407 (c) The commissioner may accept examinations of a state trust company 11
25362408 by a federal or other governmental agency in lieu of an examination under 12
25372409 this section or may conduct examinations of a state trust company jointly or 13
25382410 concurrently with a federal or other governmental agency. 14
25392411 15
25402412 23-51-186. Statements of condition and income. 16
25412413 Each state trust company shall periodically file with the Bank 17
25422414 Commissioner a copy of its statement of condition and income. The 18
25432415 commissioner shall have the power to call for these reports whenever deemed 19
25442416 necessary, in order to obtain a full and complete knowledge of the condition 20
25452417 of the trust company. 21
25462418 22
25472419 23-51-187. Confidential records. 23
25482420 (a) The following records of the State Bank Department shall be 24
25492421 confidential and shall not be exhibited or revealed to the public except as 25
25502422 stated in this section or in accordance with department rules: 26
25512423 (1) All examination reports filed with the department; 27
25522424 (2) All records disclosing information obtained from 28
25532425 examinations; 29
25542426 (3) Investigations and reports revealing facts concerning a 30
25552427 state trust company or the customers of the organization; and 31
25562428 (4) All personal financial statements submitted to the 32
25572429 department for any purpose. 33
25582430 (b) Notwithstanding any provision of this section to the contrary, 34
25592431 records deemed confidential in accordance with this section may, in the Bank 35
2560-Commissioner's discretion, be disclosed as follows: 36 As Engrossed: S2/17/25 SB230
2561-
2562- 65 02-17-2025 11:15:03 ANS145
2563-
2564-
2432+Commissioner's discretion, be disclosed as follows: 36 SB230
2433+
2434+ 65 02/13/2025 12:57:21 PM ANS145
25652435 (1) Under a validly issued subpoena and, in the interest of 1
25662436 justice, the commissioner may waive the privilege created herein and produce 2
25672437 examination reports and other related documents under the provisions of a 3
25682438 protective order entered by a court or administrative tribunal of competent 4
25692439 jurisdiction when the order is designed to protect the confidential nature of 5
25702440 the information so disclosed from public dissemination; 6
25712441 (2) Official orders of the department may be disclosed within 7
25722442 the discretion of the commissioner if the commissioner makes a determination 8
25732443 that such a disclosure would not give advantage to a competitor or adversely 9
25742444 affect the safety and soundness of the state trust company; and 10
25752445 (3) To federal financial institutions' regulatory agencies and 11
25762446 financial institutions' regulatory agencies of other states. 12
25772447 (c) The commissioner shall have the power to promulgate rules with 13
25782448 regard to disclosure of confidential information. 14
25792449 15
25802450 23-51-188. Administrative orders — Penalties for violation. 16
25812451 (a) In addition to any other powers conferred by this chapter, the 17
25822452 Bank Commissioner shall have the power to: 18
25832453 (1) Order any authorized trust institution, or subsidiary 19
25842454 thereof, or any director, officer, or employee to cease and desist violating 20
25852455 any provision of this chapter or any lawful rule issued thereunder; 21
25862456 (2) Order any authorized trust institution, or subsidiary 22
25872457 thereof, or any director, officer, or employee to cease and desist from a 23
25882458 course of conduct that is unsafe or unsound and which is likely to cause 24
25892459 insolvency or dissipation of assets or is likely to jeopardize or otherwise 25
25902460 seriously prejudice the interests of the public in their relationship with 26
25912461 the authorized trust institution; 27
25922462 (3) Order any company to cease engaging in an unauthorized trust 28
25932463 activity; and 29
25942464 (4) Enter any order pursuant to § 23 -51-182. 30
25952465 (b) The commissioner may impose a civil money penalty of not more than 31
25962466 one thousand dollars ($1,000) for each violation by any authorized trust 32
25972467 institution, or subsidiary thereof, or any director, officer, or employee of 33
25982468 an order issued under subdivision (a)(1) of this section. Provided further, 34
25992469 the commissioner may impose a civil money penalty of not more than five 35
2600-hundred dollars ($500) per day for each day that an authorized trust 36 As Engrossed: S2/17/25 SB230
2601-
2602- 66 02-17-2025 11:15:03 ANS145
2603-
2604-
2470+hundred dollars ($500) per day for each day that an authorized trust 36 SB230
2471+
2472+ 66 02/13/2025 12:57:21 PM ANS145
26052473 institution, or subsidiary thereof, or any director, officer, or employee 1
26062474 violates a cease and desist order issued under subdivision (a)(2) or 2
26072475 subdivision (a)(3) of this section. 3
26082476 4
26092477 23-51-189. Notice and opportunity for hearing. 5
26102478 Consistent with the Arkansas Administrative Procedure Act, § 25 -15-201 6
26112479 et seq., notice and opportunity for hearing shall be provided before any of 7
26122480 the foregoing actions shall be undertaken by the Bank Commissioner. Provided, 8
26132481 however, in cases involving extraordinary circumstances requiring immediate 9
26142482 action, the commissioner may take such an action, but shall promptly afford a 10
26152483 subsequent hearing upon application to rescind the action taken. 11
26162484 12
26172485 23-51-190. Subpoena power and examination under oath. 13
26182486 The Bank Commissioner shall have the power to subpoena witnesses, 14
26192487 compel their attendance, require the production of evidence, administer 15
26202488 oaths, and examine any person under oath in connection with any subject 16
26212489 related to a duty imposed or a power vested in the commissioner. 17
26222490 18
26232491 23-51-191. Removal of directors, officers, and employees. 19
26242492 Consistent with § 23 -51-189, the Bank Commissioner shall have the 20
26252493 right, and is hereby empowered, to require the immediate removal from office 21
26262494 of any officer, director, or employee of any authorized trust institution who 22
26272495 shall be found to be dishonest, incompetent, or reckless in the management of 23
26282496 the affairs of the authorized trust institution or who persistently violates 24
26292497 the laws of this state or the lawful orders, instructions, and rules issued 25
26302498 by the commissioner. 26
26312499 27
26322500 23-51-192. Delegation and fiduciary responsibility. 28
26332501 (a) Any person acting as a trustee or as any other fiduciary under the 29
26342502 laws of this state may delegate any investment, management, or administrative 30
26352503 function if the person exercises reasonable care, judgment, and caution in: 31
26362504 (1) Selecting the delegate, taking into account the delegate's 32
26372505 financial standing and reputation; 33
26382506 (2) Establishing the scope and other terms of any delegation; 34
26392507 and 35
2640- (3) Reviewing periodically the delegate's actions in order to 36 As Engrossed: S2/17/25 SB230
2641-
2642- 67 02-17-2025 11:15:03 ANS145
2643-
2644-
2508+ (3) Reviewing periodically the delegate's actions in order to 36 SB230
2509+
2510+ 67 02/13/2025 12:57:21 PM ANS145
26452511 monitor overall performance and compliance with the scope and other terms of 1
26462512 the delegation. 2
26472513 (b) Notwithstanding any delegation permitted by subsection (a) of this 3
26482514 section, any person acting as a trustee, except as provided in § 28 -73-807, 4
26492515 or in any other fiduciary capacity under the laws of this state shall retain 5
26502516 responsibility for the due performance of any delegated fiduciary function. 6
26512517 7
26522518 23-51-193. Affiliates. 8
26532519 (a) Any person acting as a trustee or in any other fiduciary capacity 9
26542520 under § 23-51-192 may hire and compensate, as a delegate, an affiliate of the 10
26552521 person if: 11
26562522 (1) Authorized by a trust or fiduciary instrument; 12
26572523 (2) Authorized by court order; 13
26582524 (3) Authorized in writing by each affected client; or 14
26592525 (4) The standards of § 23-51-192 are satisfied. 15
26602526 (b) Fees paid to an affiliate shall be competitive with fees charged 16
26612527 by nonaffiliates that provide substantially similar services. 17
26622528 18
26632529 23-51-194. Fee determination. 19
26642530 The compensation arrangement between a client and any person acting as 20
26652531 a trustee or as any other fiduciary pursuant to this chapter shall be at 21
26662532 arm's length and any compensation pursuant to such an arrangement shall be a 22
26672533 reasonable amount with respect to the services rendered. 23
26682534 24
26692535 23-51-195. Disclosure of potential conflicts of interest. 25
26702536 Any company, proposing to act as a trustee or in any other fiduciary 26
26712537 capacity pursuant to a written agreement to be entered into with a 27
26722538 prospective client after August 1, 1997, which company has any potential or 28
26732539 actual conflict of interest which may reasonably be expected to have an 29
26742540 impact on the independence or judgment of the trustee or fiduciary, shall 30
26752541 disclose appropriate information concerning the actual or potential conflict 31
26762542 of interest prior to entering into any written or oral trust or fiduciary 32
26772543 agreement with the client or prospective client. 33
26782544 34
26792545 23-51-196. Interests in trust institutions prohibited. 35
2680- (a) Neither the Bank Commissioner nor any employee or officer of the 36 As Engrossed: S2/17/25 SB230
2681-
2682- 68 02-17-2025 11:15:03 ANS145
2683-
2684-
2546+ (a) Neither the Bank Commissioner nor any employee or officer of the 36 SB230
2547+
2548+ 68 02/13/2025 12:57:21 PM ANS145
26852549 State Bank Department who participates in the examination of a trust 1
26862550 institution, or who may be called upon to make an official decision or 2
26872551 determination affecting the operation of a trust institution, shall be an 3
26882552 officer, director, attorney, owner, or holder of stock in any state trust 4
26892553 company, or any company which owns or controls a state trust company, or 5
26902554 receive, directly or indirectly, any payment or gratuity from any such 6
26912555 organizations. A person subject to this section may not borrow money from a 7
26922556 state trust company. 8
26932557 (b) A person subject to this section may: 9
26942558 (1) Be a depositor in any trust institution that the department 10
26952559 regulates; and 11
26962560 (2) Purchase trust or fiduciary services, other than credit 12
26972561 services, under rates and terms generally available to other customers of the 13
26982562 trust institution. 14
26992563 15
27002564 23-51-197. Designation of trustee. 16
27012565 Any person residing in this state may designate any trust institution 17
27022566 to act as a fiduciary on behalf of the person. 18
27032567 19
27042568 23-51-198. Choice of law governing trusts. 20
27052569 Any trust institution that maintains a trust office in this state and 21
27062570 its affected clients may designate either this state, a state where affected 22
27072571 clients reside, or the state where the trust institution has its principal 23
27082572 office as the state whose laws shall govern any written agreement between the 24
27092573 trust institution and its client or any instrument under which the trust 25
27102574 institution acts for a client. 26
27112575 27
27122576 23-51-199. Choice of law governing fiduciary investments. 28
27132577 Any trust institution that maintains a trust office in this state and 29
27142578 its affected clients may designate either this state, a state where affected 30
27152579 clients reside, or the state where the trust institution has its principal 31
27162580 office as the state whose laws shall govern with respect to the fiduciary 32
27172581 investment standards applicable to any written agreement between the trust 33
27182582 institution or its client and any other instrument under which the trust 34
27192583 institution acts for a client. 35
2720- 36 As Engrossed: S2/17/25 SB230
2721-
2722- 69 02-17-2025 11:15:03 ANS145
2723-
2724-
2584+ 36 SB230
2585+
2586+ 69 02/13/2025 12:57:21 PM ANS145
27252587 23-51-200 — 23-51-211. [Repealed.] 1
27262588 2
27272589 CHAPTER 51 3
27282590 ARKANSAS TRUST INSTITUTIONS ACT OF 2025 4
27292591 5
27302592 Subchapter 1 — General Provisions 6
27312593 7
27322594 23-51-101. Title. 8
27332595 This chapter shall be known as and may be cited as the "Arkansas Trust 9
27342596 Institutions Act of 2025". 10
27352597 11
27362598 23-51-102. Administration. 12
27372599 (a)(1) This chapter shall be administered by the Bank Commissioner, 13
27382600 and every authorized trust institution shall be under the supervision of the 14
27392601 commissioner. 15
27402602 (2) The commissioner shall execute and enforce through the State 16
27412603 Bank Department or other agents all laws relating to authorized trust 17
27422604 institutions. 18
27432605 (3) The commissioner may promulgate rules as he or she 19
27442606 determines to be necessary or appropriate to implement this chapter. 20
27452607 (b) The commissioner may subpoena witnesses, compel their attendance, 21
27462608 require the production of evidence, administer oaths, and examine a person 22
27472609 under oath in connection with any subject related to a duty imposed or a 23
27482610 power vested in the commissioner. 24
27492611 (c)(1)(A) The commissioner or an employee or officer of the department 25
27502612 who participates in the examination of a trust institution, or who may be 26
27512613 called upon to make an official decision or determination affecting the 27
27522614 operation of a trust institution, shall not be an officer, director, 28
27532615 attorney, owner, or holder of stock in a state trust company, or a company 29
27542616 that owns or controls a state trust company, or receive, directly or 30
27552617 indirectly, a payment or gratuity from a trust institution, state trust 31
27562618 company, or company controlling a trust company. 32
27572619 (B) A person subject to this section shall not borrow 33
27582620 money from a state trust company. 34
27592621 (2) A person subject to this section may: 35
2760- (A) Be a depositor in a trust institution that the 36 As Engrossed: S2/17/25 SB230
2761-
2762- 70 02-17-2025 11:15:03 ANS145
2763-
2764-
2622+ (A) Be a depositor in a trust institution that the 36 SB230
2623+
2624+ 70 02/13/2025 12:57:21 PM ANS145
27652625 department regulates; and 1
27662626 (B) Purchase trust or fiduciary services, other than 2
27672627 credit services, under rates and terms generally available to other customers 3
27682628 of the trust institution. 4
27692629 5
27702630 23-51-103. Definitions. 6
27712631 As used in this chapter: 7
27722632 (1) "Account" means a client relationship established with a 8
27732633 trust company involving the transfer of funds or property to the trust 9
27742634 company, including a relationship in which the trust company acts as trustee, 10
27752635 executor, administrator, guardian, custodian, conservator, bailee, receiver, 11
27762636 registrar, or agent, but excluding a relationship in which the trust company 12
27772637 acts solely in an advisory capacity; 13
27782638 (2) "Act as a fiduciary" means to: 14
27792639 (A) Accept or execute trusts, including to: 15
27802640 (i) Act as trustee under a written agreement; 16
27812641 (ii) Receive money or other property in the 17
27822642 fiduciary's capacity as trustee for investment in real or personal property; 18
27832643 (iii) Act as trustee and perform the fiduciary 19
27842644 duties committed or transferred to the fiduciary by order of a court of 20
27852645 competent jurisdiction; 21
27862646 (iv) Act as trustee of the estate of a deceased 22
27872647 person; 23
27882648 (v) Act as trustee for a minor or incapacitated 24
27892649 person; or 25
27902650 (vi) Conduct trust business as defined in this 26
27912651 section; 27
27922652 (B) Administer in any other fiduciary capacity real or 28
27932653 tangible personal property; or 29
27942654 (C) Act pursuant to an order of a court of competent 30
27952655 jurisdiction as executor or administrator of the estate of a deceased person 31
27962656 or as a guardian or conservator for a minor or incapacitated person; 32
27972657 (3) "Administer" means, with respect to real or tangible 33
27982658 personal property and as an agent or in another representative capacity, to 34
27992659 possess, purchase, sell, lease or insure, safekeep, or otherwise manage the 35
2800-property; 36 As Engrossed: S2/17/25 SB230
2801-
2802- 71 02-17-2025 11:15:03 ANS145
2803-
2804-
2660+property; 36 SB230
2661+
2662+ 71 02/13/2025 12:57:21 PM ANS145
28052663 (4) "Affiliate" means a company that directly or indirectly 1
28062664 controls, is controlled by, or is under common control with a trust 2
28072665 institution or other company; 3
28082666 (5) "Authorized trust institution" means a state trust company, 4
28092667 subsidiary trust company, or trust office or representative trust office of a 5
28102668 trust institution located in Arkansas; 6
28112669 (6) "Bank" means a state bank, national bank, a bank chartered 7
28122670 by any state of the United States, or a foreign bank organized under the laws 8
28132671 of a territory of the United States, the Commonwealth of Puerto Rico, Guam, 9
28142672 American Samoa, or the United States Virgin Islands, the deposits of which 10
28152673 are insured by the Federal Deposit Insurance Corporation; 11
28162674 (7) "Bank supervisory agency" means: 12
28172675 (A) An agency of another state with primary responsibility 13
28182676 for chartering and supervising a trust institution; and 14
28192677 (B) The United States Office of the Comptroller of the 15
28202678 Currency, the Federal Deposit Insurance Corporation, the Board of Governors 16
28212679 of the Federal Reserve System, and any successor to these agencies; 17
28222680 (8) "Branch" means the same as defined in § 23 -48-702 with 18
28232681 respect to a depository institution; 19
28242682 (9) "Capital" means: 20
28252683 (A) The sum of: 21
28262684 (i) The par value of all shares of the state trust 22
28272685 company having a par value that have been issued; 23
28282686 (ii) The consideration fixed by the board in the 24
28292687 manner provided by the Arkansas Business Corporation Act, § 4 -27-101 et seq., 25
28302688 for all shares of the state trust company without par value that have been 26
28312689 issued, except a part of that consideration that: 27
28322690 (a) Has been actually received; 28
28332691 (b) Is less than all of that consideration; 29
28342692 and 30
28352693 (c) The board, by resolution adopted not later 31
28362694 than sixty (60) days after the date of issuance of those shares, has 32
28372695 allocated to surplus with the prior approval of the Bank Commissioner; and 33
28382696 (iii) An amount not included in subdivisions 34
28392697 (a)(9)(A)(i) and (ii) of this section that has been transferred to capital of 35
2840-the state trust company, on the payment of a share dividend or on adoption by 36 As Engrossed: S2/17/25 SB230
2841-
2842- 72 02-17-2025 11:15:03 ANS145
2843-
2844-
2698+the state trust company, on the payment of a share dividend or on adoption by 36 SB230
2699+
2700+ 72 02/13/2025 12:57:21 PM ANS145
28452701 the board of a resolution directing that all or part of surplus be 1
28462702 transferred to capital, minus each reduction made as permitted by law; less 2
28472703 (B) All amounts otherwise included in subdivisions 3
28482704 (a)(9)(A)(i) and (ii) of this section that are attributable to the issuance 4
28492705 of securities by the state trust company and that the commissioner 5
28502706 determines, after notice and an opportunity for hearing, should be classified 6
28512707 as debt rather than equity securities; 7
28522708 (10) "Capital base" means the sum of capital, surplus, and 8
28532709 undivided profits, plus any additions and less any subtractions that the 9
28542710 commissioner may by rule prescribe; 10
28552711 (11) "Charter" means a charter, license, or other authority 11
28562712 issued by the commissioner or a bank supervisory agency authorizing a trust 12
28572713 institution to act as a fiduciary in its home state; 13
28582714 (12)(A) "Client" means a person to whom a trust institution owes 14
28592715 a duty or obligation under a trust or other account administered by the trust 15
28602716 institution or as an advisor or agent, whether or not the trust institution 16
28612717 owes a fiduciary duty to the person. 17
28622718 (B) "Client" includes the noncontingent beneficiaries of 18
28632719 an account; 19
28642720 (13) "Company" means a bank, trust company, subsidiary trust 20
28652721 company, corporation, limited liability company, partnership, association, 21
28662722 business trust, foundation, or another trust; 22
28672723 (14) "Control" means: 23
28682724 (A) The ownership of or ability or power to vote, 24
28692725 directly, acting through one (1) or more other persons, or otherwise 25
28702726 indirectly, more than twenty -five percent (25%) of the outstanding shares of 26
28712727 a class of voting securities of a state trust company or other company; 27
28722728 (B) The ability to control the election of a majority of 28
28732729 the board of a state trust company or other company; and 29
28742730 (C) The power to exercise, directly or indirectly, a 30
28752731 controlling influence over the management or policies of the state trust 31
28762732 company or other company as determined by the commissioner after notice and 32
28772733 an opportunity for hearing; 33
28782734 (15) "Depository institution" means a company chartered to act 34
28792735 as a fiduciary and included for any purpose within any of the definitions of 35
2880-“insured depository institution” as stated in 12 U.S.C. § 1813, as it existed 36 As Engrossed: S2/17/25 SB230
2881-
2882- 73 02-17-2025 11:15:03 ANS145
2883-
2884-
2736+“insured depository institution” as stated in 12 U.S.C. § 1813, as it existed 36 SB230
2737+
2738+ 73 02/13/2025 12:57:21 PM ANS145
28852739 on January 1, 2025; 1
28862740 (16) "Equity capital" means an amount by which the total assets 2
28872741 of a state trust company exceed the total liabilities of the state trust 3
28882742 company; 4
28892743 (17) "Equity security" means: 5
28902744 (A) Stock, other than adjustable rate preferred stock and 6
28912745 money market, including auction rate, preferred stock; 7
28922746 (B) A certificate of interest or participation in a 8
28932747 profit-sharing agreement, collateral -trust certificate, preorganization 9
28942748 certificate or subscription, transferable share or participation share, 10
28952749 investment contract, voting -trust certificate, or partnership interest; 11
28962750 (C) A security immediately convertible at the option of 12
28972751 the holder without payment of significant additional consideration into a 13
28982752 security described by this subdivision (17); 14
28992753 (D) A security carrying a warrant or right to subscribe to 15
29002754 or purchase a security described by this subdivision (17); and 16
29012755 (E) A certificate of interest or participation in, 17
29022756 temporary or interim certificate for, or receipt for a security described by 18
29032757 this subdivision (17) that evidences an existing or contingent equity 19
29042758 ownership interest; 20
29052759 (18) "Fiduciary record" means a matter written, transcribed, 21
29062760 recorded, received, or otherwise in the possession or control of a trust 22
29072761 company, whether in physical or electromagnetic form, that is necessary to 23
29082762 preserve information concerning an act or event relevant to an account or a 24
29092763 client of a trust company; 25
29102764 (19)(A) "Foundation" means an organization that: 26
29112765 (i) Is organized and operated for religious, 27
29122766 educational, or charitable purposes, as defined in 26 U.S.C. § 501(c)(3), as 28
29132767 it existed on January 1, 2025; 29
29142768 (ii) Has equity capital of at least one million 30
29152769 dollars ($1,000,000); 31
29162770 (iii) Has fiduciary liability insurance coverage 32
29172771 with policy limits of not less than two million dollars ($2,000,000); 33
29182772 (iv) Adopts and maintains written fiduciary policies 34
29192773 and procedures; 35
2920- (v) Has an annual independent audit that covers 36 As Engrossed: S2/17/25 SB230
2921-
2922- 74 02-17-2025 11:15:03 ANS145
2923-
2924-
2774+ (v) Has an annual independent audit that covers 36 SB230
2775+
2776+ 74 02/13/2025 12:57:21 PM ANS145
29252777 fiduciary activities and assets; and 1
29262778 (vi)(a) Is serving as a fiduciary for a trust or 2
29272779 estate whose assets are less than seven hundred fifty thousand dollars 3
29282780 ($750,000). 4
29292781 (b) Subdivision (19)(A)(vi)(a) of this section 5
29302782 does not apply if: 6
29312783 (1) The foundation is the sole remainder 7
29322784 beneficiary of the trust or estate; or 8
29332785 (2) The remainder beneficiary is an 9
29342786 organization that is supported by the foundation. 10
29352787 (B) "Foundation" does not include a private foundation as 11
29362788 defined in 26 U.S.C. § 509(a), as it existed on January 1, 2025; 12
29372789 (20) "Hazardous condition" means, with respect to a trust 13
29382790 company: 14
29392791 (A) A refusal by the trust company to permit examination 15
29402792 of its books, papers, accounts, records, or affairs by the commissioner; 16
29412793 (B) Violation by a trust company of a condition of its 17
29422794 chartering or an agreement entered into between the trust company and the 18
29432795 commissioner; or 19
29442796 (C) A circumstance or condition in which an unreasonable 20
29452797 risk of loss is threatened to clients or creditors of a trust company, 21
29462798 excluding risk of loss to a client that arises as a result of the client's 22
29472799 decisions or actions, but including a circumstance or condition in which a 23
29482800 trust company: 24
29492801 (i) Is unable or lacks the means to meet its current 25
29502802 obligations as they come due in the regular and ordinary course of business, 26
29512803 even though the book or fair market value of its assets may exceed its 27
29522804 liabilities; 28
29532805 (ii) Has equity capital less than the amount of 29
29542806 capital the trust company is required to maintain under § 23 -51-403, or the 30
29552807 adequacy of its equity capital is threatened, as determined under regulatory 31
29562808 accounting principles; 32
29572809 (iii) Has concentrated an excessive or unreasonable 33
29582810 portion of its assets in a particular type or character of investment; 34
29592811 (iv) Violates or refuses to comply with this 35
2960-chapter, another statute or rule applicable to trust companies, or a final 36 As Engrossed: S2/17/25 SB230
2961-
2962- 75 02-17-2025 11:15:03 ANS145
2963-
2964-
2812+chapter, another statute or rule applicable to trust companies, or a final 36 SB230
2813+
2814+ 75 02/13/2025 12:57:21 PM ANS145
29652815 and enforceable order of the commissioner; 1
29662816 (v) Is in a condition that renders the continuation 2
29672817 of a particular business practice hazardous to its clients and creditors; or 3
29682818 (vi) Conducts business in an unsafe or unsound 4
29692819 manner, which includes without limitation conducting business with: 5
29702820 (a) Inexperienced or inattentive management; 6
29712821 (b) Potentially dangerous operating practices; 7
29722822 (c) Infrequent or inadequate audits; 8
29732823 (d) Administration of assets that is notably 9
29742824 deficient in relation to the volume and character or responsibility for asset 10
29752825 holdings; 11
29762826 (e) Failure to adhere to sound administrative 12
29772827 practices; 13
29782828 (f) Frequent occurrences of violations of 14
29792829 laws, rules, or terms of the governing instruments; or 15
29802830 (g) Engaging in self -dealing or evidencing a 16
29812831 notable degree of potential or actual conflicts of interest; 17
29822832 (21) "Insider" means: 18
29832833 (A) A director, officer, or principal shareholder of the 19
29842834 trust company; 20
29852835 (B) A company controlled by a person described by 21
29862836 subdivision (21)(A) of this section; or 22
29872837 (C) A person who participates or has authority to 23
29882838 participate, other than in the capacity of a director, in major policy -making 24
29892839 functions of the state trust company, whether or not the person has an 25
29902840 official title or the officer is serving without salary or compensation; 26
29912841 (22) "Insolvent" means a circumstance or condition in which a 27
29922842 state trust company: 28
29932843 (A) Is unable or lacks the means to meet its current 29
29942844 obligations as they come due in the regular and ordinary course of business, 30
29952845 even if the value of its assets exceeds its liabilities; 31
29962846 (B) Has equity capital less than one million dollars 32
29972847 ($1,000,000), as determined under regulatory accounting principles; 33
29982848 (C) Fails to maintain deposit insurance with the Federal 34
29992849 Deposit Insurance Corporation or its successor if the commissioner determines 35
3000-that deposit insurance is necessary for the safe and sound operation of the 36 As Engrossed: S2/17/25 SB230
3001-
3002- 76 02-17-2025 11:15:03 ANS145
3003-
3004-
2850+that deposit insurance is necessary for the safe and sound operation of the 36 SB230
2851+
2852+ 76 02/13/2025 12:57:21 PM ANS145
30052853 state trust company, or fails to maintain adequate security for its deposits 1
30062854 according to § 23-51-508; 2
30072855 (D) Sells or attempts to sell substantially all of its 3
30082856 assets or merges or attempts to merge substantially all of its assets or 4
30092857 business with another entity other than as provided by §§ 23 -51-701 — 23-51-5
30102858 706; or 6
30112859 (E) Attempts to dissolve or liquidate other than as 7
30122860 provided by § 23-51-1001; 8
30132861 (23) "Investment security" means a marketable obligation 9
30142862 evidencing indebtedness of a person in the form of a bond, note, debenture, 10
30152863 or other debt instrument not otherwise classified as a loan or extension of 11
30162864 credit; 12
30172865 (24) "License" means the authority granted by the commissioner 13
30182866 under this chapter to establish, acquire, or maintain a trust office; 14
30192867 (25) "Loans and extensions of credit" means direct or indirect 15
30202868 advances of funds by a state trust company to a person that are conditioned 16
30212869 on the obligation of the person to repay the funds or that are repayable from 17
30222870 specific property pledged by or on behalf of the person; 18
30232871 (26) "New trust office" means a trust office located in a host 19
30242872 state that: 20
30252873 (A) Is originally established by the trust institution as 21
30262874 a trust office; and 22
30272875 (B) Does not become a trust office of the trust 23
30282876 institution as a result of: 24
30292877 (i) The acquisition of another trust institution or 25
30302878 trust office of another trust institution; or 26
30312879 (ii) A merger, consolidation, or conversion 27
30322880 involving any trust institution or trust office; 28
30332881 (27)(A) "Office" means, with respect to a trust institution, a 29
30342882 physical location including the principal office, a trust office, or a 30
30352883 representative trust office. 31
30362884 (B) "Office" does not include a branch; 32
30372885 (28) "Officer" means the presiding officer of a board, a 33
30382886 principal executive officer, or another officer appointed by the board of a 34
30392887 state trust company or other company, or a person or group of persons acting 35
3040-in a comparable capacity for the state trust company or other company; 36 As Engrossed: S2/17/25 SB230
3041-
3042- 77 02-17-2025 11:15:03 ANS145
3043-
3044-
2888+in a comparable capacity for the state trust company or other company; 36 SB230
2889+
2890+ 77 02/13/2025 12:57:21 PM ANS145
30452891 (29) "Out-of-state bank" means a bank chartered to act as a 1
30462892 fiduciary in any state or states other than this state; 2
30472893 (30) "Out-of-state trust company" means either a trust company 3
30482894 that is not a state trust company or a savings association whose principal 4
30492895 office is not located in this state; 5
30502896 (31) "Out-of-state trust institution" means a trust institution 6
30512897 that is not a state trust institution; 7
30522898 (32) "Person" means an individual, a company, or any other legal 8
30532899 entity; 9
30542900 (33) "Principal office" with respect to: 10
30552901 (A) A state trust company, means a location registered 11
30562902 with the commissioner as the state trust company's home office at which: 12
30572903 (i) The state trust company does business; 13
30582904 (ii) The state trust company keeps its corporate 14
30592905 books and a set of its material records, including material fiduciary 15
30602906 records; and 16
30612907 (iii) At least one (1) executive officer of the 17
30622908 state trust company maintains an office; or 18
30632909 (B) A trust institution other than a state trust company, 19
30642910 means its principal place of business in the United States; 20
30652911 (34) "Principal shareholder" means a person who owns or has the 21
30662912 ability or power to vote, directly, acting through one (1) or more other 22
30672913 persons, or otherwise indirectly, ten percent (10%) or more of the 23
30682914 outstanding shares of any class of voting securities of a state trust company 24
30692915 or other company; 25
30702916 (35) "Private trust company" means a trust company that does not 26
30712917 engage in a trust business with the general public; 27
30722918 (36) "Receiver" means the commissioner, an agent of the 28
30732919 commissioner, or any federal or other governmental agency exercising the 29
30742920 powers and duties of a receiver under § 23 -51-1003; 30
30752921 (37) "Representative trust office" means an office at which a 31
30762922 trust institution has been authorized by the commissioner to engage in a 32
30772923 trust business other than acting as a fiduciary; 33
30782924 (38) "Savings association" means a depository institution that 34
30792925 is neither a bank nor a foreign bank; 35
3080- (39) "Shareholder" means an owner of a share in a state trust 36 As Engrossed: S2/17/25 SB230
3081-
3082- 78 02-17-2025 11:15:03 ANS145
3083-
3084-
2926+ (39) "Shareholder" means an owner of a share in a state trust 36 SB230
2927+
2928+ 78 02/13/2025 12:57:21 PM ANS145
30852929 company; 1
30862930 (40) "Shares" means the units into which the proprietary 2
30872931 interests of a state trust company are divided or subdivided by means of 3
30882932 classes, series, relative rights, or preferences; 4
30892933 (41) "State" means any state of the United States, the District 5
30902934 of Columbia, any territory of the United States, the Commonwealth of Puerto 6
30912935 Rico, Guam, American Samoa, the Trust Territory of the Pacific Islands, the 7
30922936 United States Virgin Islands, and the Northern Mariana Islands; 8
30932937 (42) "State bank" means a bank chartered to act as a fiduciary 9
30942938 by this state; 10
30952939 (43) "State trust company" means a corporation organized or 11
30962940 reorganized under this chapter; 12
30972941 (44) "State trust company facility" means real estate, including 13
30982942 an improvement, owned, or leased to the extent the lease or the leasehold 14
30992943 improvements are capitalized, by a state trust company for the purpose of: 15
31002944 (A) Providing space for state trust company employees to 16
31012945 perform their duties and space for parking by state trust company employees 17
31022946 and customers; 18
31032947 (B) Conducting trust business, including meeting the 19
31042948 reasonable needs and convenience of the state trust company's customers, 20
31052949 computer operations, document and other item processing, maintenance and 21
31062950 record retention, and storage; 22
31072951 (C) Holding, improving, and occupying as an incident to 23
31082952 future expansion of the state trust company's facilities; or 24
31092953 (D) Conducting another activity authorized by rules 25
31102954 adopted under this chapter; 26
31112955 (45) "State trust institution" means a trust institution having 27
31122956 its principal office in this state; 28
31132957 (46)(A) "Subsidiary" means a company that is controlled by 29
31142958 another person. 30
31152959 (B) "Subsidiary" includes a subsidiary of a subsidiary; 31
31162960 (47) "Subsidiary trust company" means a corporation organized 32
31172961 under the Arkansas Business Corporation Act, § 4 -27-101 et seq., and 33
31182962 authorized by the commissioner pursuant to § 23 -47-801 et seq., to conduct 34
31192963 trust business and business incidental to trust business in this state, of 35
3120-which more than fifty percent (50%) of the voting stock is owned, directly or 36 As Engrossed: S2/17/25 SB230
3121-
3122- 79 02-17-2025 11:15:03 ANS145
3123-
3124-
2964+which more than fifty percent (50%) of the voting stock is owned, directly or 36 SB230
2965+
2966+ 79 02/13/2025 12:57:21 PM ANS145
31252967 indirectly, by a bank holding company which also owns, directly or 1
31262968 indirectly, an affiliated bank, as that term is defined in § 23 -47-801 et 2
31272969 seq.; 3
31282970 (48) "Surplus" means the amount by which the assets of a state 4
31292971 trust company exceeds its liabilities, capital, and undivided profits; 5
31302972 (49) "Trust business" means the holding out by a person to the 6
31312973 public by advertising, solicitation, or other means that the person is 7
31322974 available to perform any service of a fiduciary in this or another state, 8
31332975 including without limitation: 9
31342976 (A) Acting as a fiduciary; or 10
31352977 (B) To the extent not acting as a fiduciary, any of the 11
31362978 following: 12
31372979 (i) Receiving for safekeeping personal property of 13
31382980 every description; 14
31392981 (ii) Acting as assignee, bailee, conservator, 15
31402982 custodian, escrow agent, registrar, receiver, or transfer agent; or 16
31412983 (iii) Acting as financial advisor, investment 17
31422984 advisor or manager, agent, or attorney -in-fact in any agreed-upon capacity; 18
31432985 (50) "Trust company" means a state trust company, subsidiary 19
31442986 trust company, or any other company chartered to act as a fiduciary that is 20
31452987 neither a depository institution nor a foreign bank; 21
31462988 (51) "Trust deposits" means the client funds held by a state 22
31472989 trust company and authorized to be deposited with itself pending investment, 23
31482990 distribution, or payment of debts on behalf of the client; 24
31492991 (52) "Trust institution" means a depository institution, state 25
31502992 bank, or trust company; 26
31512993 (53) "Trust office" means a physical office, other than the 27
31522994 principal office, at which a trust institution is licensed by the 28
31532995 commissioner to act as a fiduciary; 29
31542996 (54)(A) "Unauthorized trust activity" means: 30
31552997 (i) A company, other than one identified in § 23 -51-31
31562998 103, acting as a fiduciary within this state; 32
31572999 (ii) A company engaging in a trust business in this 33
31583000 state at any office of the company that is not its principal office, if the 34
31593001 company is a state trust institution, or that is not a trust office or a 35
3160-representative trust office of the company; or 36 As Engrossed: S2/17/25 SB230
3161-
3162- 80 02-17-2025 11:15:03 ANS145
3163-
3164-
3002+representative trust office of the company; or 36 SB230
3003+
3004+ 80 02/13/2025 12:57:21 PM ANS145
31653005 (iii) An out-of-state trust institution engaging in 1
31663006 a trust business in this state at any time under an order issued by the 2
31673007 commissioner under § 23 -51-301 is in effect. 3
31683008 (B) "Unauthorized trust activity" does not include a 4
31693009 foundation serving as a fiduciary; 5
31703010 (55)(A) "Undivided profits" means the part of equity capital of 6
31713011 a state trust company equal to the balance of its net profits, income, gains, 7
31723012 and losses since the date of its formation, minus subsequent distributions to 8
31733013 shareholders and transfers to surplus or capital under share dividends or 9
31743014 appropriate board resolutions. 10
31753015 (B) "Undivided profits" includes amounts allocated to 11
31763016 undivided profits as a result of a merger; and 12
31773017 (56)(A) "Voting security" means a share, or other evidence of 13
31783018 proprietary interest in a state trust company or other company that has as an 14
31793019 attribute the right to vote or participate in the election of the board of 15
31803020 the state trust company or other company, whether or not the right is limited 16
31813021 to the election of fewer than all of the board members. 17
31823022 (B) "Voting security" includes a security that is 18
31833023 convertible or exchangeable into a voting security. 19
31843024 20
31853025 23-51-104. Company authorized to act as fiduciary. 21
31863026 (a) A company shall not act as a fiduciary in this state except: 22
31873027 (1) A state trust company; 23
31883028 (2) A state bank; 24
31893029 (3) An association organized under the laws of this state and 25
31903030 authorized to act as a fiduciary under § 23 -37-101 et seq.; 26
31913031 (4) A national bank having its principal office in this state 27
31923032 and authorized by the United States Comptroller of the Currency to act as a 28
31933033 fiduciary under 12 U.S.C. § 92a, as it existed on January 1, 2025; 29
31943034 (5) A federally chartered savings association having its 30
31953035 principal office in this state and authorized by its federal chartering 31
31963036 authority to act as a fiduciary; 32
31973037 (6) A subsidiary trust company authorized to act as a fiduciary 33
31983038 under § 23-47-801 et seq.; 34
31993039 (7) An out-of-state bank with a branch in this state established 35
3200-or maintained under § 23 -48-901 et seq., or a trust office licensed by the 36 As Engrossed: S2/17/25 SB230
3201-
3202- 81 02-17-2025 11:15:03 ANS145
3203-
3204-
3040+or maintained under § 23 -48-901 et seq., or a trust office licensed by the 36 SB230
3041+
3042+ 81 02/13/2025 12:57:21 PM ANS145
32053043 Bank Commissioner under this chapter; 1
32063044 (8) An out-of-state trust company with a trust office or a trust 2
32073045 representative office licensed by the commissioner under this chapter; or 3
32083046 (9) A foundation. 4
32093047 (b) A company shall not engage in an unauthorized trust activity. 5
32103048 6
32113049 23-51-105. Trust business. 7
32123050 A state trust company or a state bank may: 8
32133051 (1) Perform any act as a fiduciary; 9
32143052 (2) Engage in any trust business; 10
32153053 (3) Exercise any incidental power that is reasonably necessary 11
32163054 to enable it to fully exercise, according to commonly accepted fiduciary 12
32173055 customs and usages, a power conferred in this chapter; and 13
32183056 (4) If a state trust company, exercise any other power 14
32193057 authorized by § 23-51-401. 15
32203058 16
32213059 23-51-106. Activities not requiring charter or license. 17
32223060 Notwithstanding any other provision of this chapter, a company does not 18
32233061 engage in the trust business or in any other business in a manner requiring a 19
32243062 charter or license under this chapter or in an unauthorized trust activity 20
32253063 by: 21
32263064 (1) Acting in a manner authorized by law and in the scope of 22
32273065 authority as an agent of a trust institution with respect to an activity that 23
32283066 is not an unauthorized trust activity; 24
32293067 (2) Rendering a service customarily performed as an attorney or 25
32303068 law firm in a manner approved and authorized by the Supreme Court or the laws 26
32313069 of this state; 27
32323070 (3) Acting as trustee under a deed of trust delivered only as 28
32333071 security for the payment of money or for the performance of another act; 29
32343072 (4) Receiving and distributing rents and proceeds of sale as a 30
32353073 licensed real estate broker on behalf of a principal in a manner authorized 31
32363074 by the Real Estate License Law, § 17 -42-101 et seq.; 32
32373075 (5) Engaging in a securities transaction or providing an 33
32383076 investment advisory service as a licensed and registered broker -dealer, 34
32393077 investment advisor or registered representative thereof, provided the 35
3240-activity is regulated by the State Securities Department or the United States 36 As Engrossed: S2/17/25 SB230
3241-
3242- 82 02-17-2025 11:15:03 ANS145
3243-
3244-
3078+activity is regulated by the State Securities Department or the United States 36 SB230
3079+
3080+ 82 02/13/2025 12:57:21 PM ANS145
32453081 Securities and Exchange Commission; 1
32463082 (6) Engaging in the sale and administration of an insurance 2
32473083 product by an insurance company or agent licensed by the State Insurance 3
32483084 Department to the extent that the activity is regulated by the State 4
32493085 Insurance Department; 5
32503086 (7) Engaging in the lawful sale of prepaid funeral benefits 6
32513087 under a permit issued by the State Insurance Department under the Arkansas 7
32523088 Prepaid Funeral Benefits Law, § 23 -40-101 et seq., or engaging in the lawful 8
32533089 business of maintaining a perpetual care cemetery trust pursuant to § 20 -17-9
32543090 904 or a permanent maintenance fund for perpetually maintained cemeteries 10
32553091 under the Cemetery Act for Perpetually Maintained Cemeteries, § 20 -17-1001 et 11
32563092 seq.; 12
32573093 (8) Acting as trustee under a voting trust as provided by § 4 -13
32583094 26-706 or § 4-27-730; 14
32593095 (9) Engaging in other activities expressly excluded from the 15
32603096 application of this chapter by rules issued by the Bank Commissioner; 16
32613097 (10) Rendering services customarily performed by a public 17
32623098 accountant or a certified public accountant in a manner authorized by the 18
32633099 Arkansas State Board of Public Accountancy; 19
32643100 (11) If the company is a trust institution and is not barred by 20
32653101 order of the commissioner from engaging in a trust business in this state 21
32663102 under this chapter: 22
32673103 (A) Marketing or soliciting in this state through the 23
32683104 mails, telephone, any electronic means, or in person with respect to acting 24
32693105 or proposing to act as a fiduciary outside of this state; 25
32703106 (B) Delivering money or other intangible assets and 26
32713107 receiving the same from a client or other person in this state; or 27
32723108 (C) Accepting or executing outside of this state a trust 28
32733109 of a client or otherwise acting as a fiduciary outside of this state for a 29
32743110 client; or 30
32753111 (12) If the company is a foundation, serving as a fiduciary. 31
32763112 32
32773113 23-51-107. Trust business of state trust institution. 33
32783114 (a) A state trust institution may act as a fiduciary or otherwise 34
32793115 engage in a trust business in this or any other state or foreign country, 35
3280-subject to complying with applicable laws of the state or foreign country, 36 As Engrossed: S2/17/25 SB230
3281-
3282- 83 02-17-2025 11:15:03 ANS145
3283-
3284-
3116+subject to complying with applicable laws of the state or foreign country, 36 SB230
3117+
3118+ 83 02/13/2025 12:57:21 PM ANS145
32853119 at: 1
32863120 (1) An office established and maintained under this chapter; 2
32873121 (2) A branch; or 3
32883122 (3) Any other authorized location other than an office or 4
32893123 branch. 5
32903124 (b)(1) Except as provided in subdivision (b)(2) of this section, a 6
32913125 state trust institution may conduct any activities at an office outside this 7
32923126 state that are permissible for a trust institution chartered by the host 8
32933127 state where the office is located, except to the extent the activities are 9
32943128 expressly prohibited by the laws of this state or by any rule or order of the 10
32953129 Bank Commissioner applicable to the state trust institution. 11
32963130 (2) The commissioner may waive any prohibition if he or she 12
32973131 determines, by order or rule, that the involvement of out -of-state offices of 13
32983132 state trust institutions in particular activities would not threaten the 14
32993133 safety or soundness of the state trust institutions. 15
33003134 16
33013135 23-51-108. Trust charters under prior law. 17
33023136 A charter of a corporation that was previously a state trust company 18
33033137 incorporated under any laws of this state before the effective date of this 19
33043138 act shall continue to be effective and shall operate according to this 20
33053139 chapter and other applicable law. 21
33063140 22
33073141 23-51-109. Application of laws relating to general business 23
33083142 corporations. 24
33093143 (a) The Arkansas Business Corporation Act, § 4 -27-101 et seq., applies 25
33103144 to a trust company to the extent not inconsistent with this chapter or the 26
33113145 proper business of a trust company, except that a reference to the Secretary 27
33123146 of State under the Arkansas Business Corporation Act, § 4 -27-101 et seq., 28
33133147 means the Bank Commissioner unless the context requires otherwise. 29
33143148 (b) Unless expressly authorized by this chapter or a rule of the 30
33153149 commissioner, a trust company shall not take an action authorized by the 31
33163150 Arkansas Business Corporation Act, § 4 -27-101 et seq., regarding its 32
33173151 corporate status, capital structure, or a matter of corporate governance, of 33
33183152 the type for which the Arkansas Business Corporation Act, § 4 -27-101 et seq., 34
33193153 would require a filing with the Secretary of State if the trust company were 35
3320-a business corporation, without first submitting the filing to the 36 As Engrossed: S2/17/25 SB230
3321-
3322- 84 02-17-2025 11:15:03 ANS145
3323-
3324-
3154+a business corporation, without first submitting the filing to the 36 SB230
3155+
3156+ 84 02/13/2025 12:57:21 PM ANS145
33253157 commissioner for the same purposes for which it otherwise would be required 1
33263158 to be submitted to the Secretary of State and compliance with this chapter. 2
33273159 (c) The commissioner may adopt rules to limit or refine the 3
33283160 applicability of subsection (a) of this section to a trust company or to 4
33293161 alter or supplement the procedures and requirements of the Arkansas Business 5
33303162 Corporation Act, § 4 -27-101 et seq., applicable to an action taken under this 6
33313163 chapter. 7
33323164 8
33333165 23-51-110. Engaging in commerce prohibited. 9
33343166 Except as otherwise provided by this chapter or rules adopted under 10
33353167 this chapter, a state trust company shall not invest its funds in trade or 11
33363168 commerce by buying, selling, or otherwise dealing in goods or by owning or 12
33373169 operating a business not part of the state trust business, except as 13
33383170 necessary to fulfill a fiduciary obligation to a client. 14
33393171 15
33403172 23-51-111. Name of trust institution. 16
33413173 (a) Except as provided under subsection (b) of this section, a state 17
33423174 trust company or out -of-state trust institution may register a name with the 18
33433175 Bank Commissioner in connection with establishing a principal office, trust 19
33443176 office, or representative trust office in this state under this chapter. 20
33453177 (b) The commissioner may determine that a name proposed to be 21
33463178 registered is potentially misleading to the public and require the registrant 22
33473179 to select a name that is not potentially misleading. 23
33483180 24
33493181 23-51-112. Confidential records. 25
33503182 (a) The following records of the State Bank Department shall be 26
33513183 confidential and shall not be subject to disclosure under the Freedom of 27
33523184 Information Act, § 25 -19-101 et seq. except as stated in this section or 28
33533185 according to department rules: 29
33543186 (1) An examination report filed with the department; 30
33553187 (2) A record disclosing information obtained from an 31
33563188 examination; 32
33573189 (3) Investigations and reports revealing facts concerning a 33
33583190 state trust company or the customers of the organization; and 34
33593191 (4) Any personal financial statements submitted to the 35
3360-department. 36 As Engrossed: S2/17/25 SB230
3361-
3362- 85 02-17-2025 11:15:03 ANS145
3363-
3364-
3192+department. 36 SB230
3193+
3194+ 85 02/13/2025 12:57:21 PM ANS145
33653195 (b) Notwithstanding any provision of this section to the contrary, 1
33663196 records deemed confidential according to this section, in the Bank 2
33673197 Commissioner's discretion, may be disclosed as follows: 3
33683198 (1) Under a validly issued subpoena and, in the interest of 4
33693199 justice, the commissioner may waive the privilege created under this section 5
33703200 and produce examination reports and other related documents under the 6
33713201 provisions of a protective order entered by a court or administrative 7
33723202 tribunal of competent jurisdiction when the order is designed to protect the 8
33733203 confidential nature of the information that is disclosed from public 9
33743204 dissemination; 10
33753205 (2) An official order of the department may be disclosed within 11
33763206 the discretion of the commissioner if the commissioner makes a determination 12
33773207 that the disclosure would not give advantage to a competitor or adversely 13
33783208 affect the safety and soundness of the state trust company; and 14
33793209 (3) To federal financial institutions' regulatory agencies and 15
33803210 financial institutions' regulatory agencies of other states. 16
33813211 (c) The commissioner may promulgate rules about disclosure of 17
33823212 confidential information. 18
33833213 19
33843214 Subchapter 2 — Supervision 20
33853215 21
33863216 23-51-201. Examination of state trust companies. 22
33873217 (a) The Bank Commissioner shall examine a state trust company at least 23
33883218 one (1) time every twenty -four (24) months or more often as the commissioner 24
33893219 determines is necessary to safeguard the interests of the public and the 25
33903220 safety and soundness of the institution. 26
33913221 (b) A state trust company shall pay to the State Bank Department 27
33923222 within ten (10) days after notice from the commissioner in January and July 28
33933223 of each year an assessment fee to defray the costs of examination and the 29
33943224 costs of operations of the department which will be charged according to an 30
33953225 assessment fee schedule approved by the commissioner. 31
33963226 (c) The commissioner may: 32
33973227 (1) Accept examinations of a state trust company by a bank 33
33983228 supervisory agency in lieu of an examination under this section; or 34
33993229 (2) Conduct examinations of a state trust company jointly or 35
3400-concurrently with a bank supervisory agency. 36 As Engrossed: S2/17/25 SB230
3401-
3402- 86 02-17-2025 11:15:03 ANS145
3403-
3404-
3230+concurrently with a bank supervisory agency. 36 SB230
3231+
3232+ 86 02/13/2025 12:57:21 PM ANS145
34053233 (d)(1) A state trust company shall periodically file with the 1
34063234 commissioner a copy of its statement of condition and income. 2
34073235 (2) The commissioner may call for a report under subdivision 3
34083236 (d)(1) of this section whenever deemed necessary, to obtain a full and 4
34093237 complete knowledge of the condition of the state trust company. 5
34103238 6
34113239 23-51-202. Examination of out -of-state trust institutions. 7
34123240 (a)(1) To the extent consistent with § 23 -51-203, the Bank 8
34133241 Commissioner may make an examination of an office established and maintained 9
34143242 in this state under this chapter by an out -of-state trust institution as the 10
34153243 commissioner may deem necessary to determine whether the office is being 11
34163244 operated in compliance with the laws of this state and according to safe and 12
34173245 sound banking practices. 13
34183246 (2) The Arkansas Banking Code of 1997, § 23 -45-101 et seq., 14
34193247 applies to an examination under subdivision (a)(1) of this section. 15
34203248 (b)(1) The commissioner may require a periodic report regarding an 16
34213249 out-of-state trust institution that has established and maintained an office 17
34223250 in this state under this chapter. 18
34233251 (2) The periodic report required under subdivision (b)(1) of 19
34243252 this section shall be provided by the trust institution or by the home state 20
34253253 regulator. 21
34263254 (3) A reporting requirement prescribed by the commissioner under 22
34273255 this subsection shall be consistent with the reporting requirements 23
34283256 applicable to state trust companies and appropriate for the purpose of 24
34293257 enabling the commissioner to carry out his or her responsibilities under this 25
34303258 chapter. 26
34313259 27
34323260 23-51-203. Cooperative agreements. 28
34333261 (a)(1) The Bank Commissioner may enter into cooperative, coordinating, 29
34343262 and information-sharing agreements with any other bank supervisory agencies 30
34353263 or any organization affiliated with or representing one (1) or more bank 31
34363264 supervisory agencies with respect to the periodic examination or other 32
34373265 supervision of an office in this state of an out -of-state trust institution 33
34383266 or an office of a state trust institution in a host state. 34
34393267 (2) The commissioner may accept a party's report of examination 35
3440-and report of investigation in lieu of conducting his or her own examination 36 As Engrossed: S2/17/25 SB230
3441-
3442- 87 02-17-2025 11:15:03 ANS145
3443-
3444-
3268+and report of investigation in lieu of conducting his or her own examination 36 SB230
3269+
3270+ 87 02/13/2025 12:57:21 PM ANS145
34453271 or investigation. 1
34463272 (b)(1) The commissioner may contract with a bank supervisory agency 2
34473273 that has concurrent jurisdiction over a state trust institution or an out -of-3
34483274 state trust institution maintaining an office in this state to engage the 4
34493275 services of the bank supervisory agency's examiners at a reasonable rate of 5
34503276 compensation, or to provide the services of the commissioner's examiners to 6
34513277 the bank supervisory agency at a reasonable rate of compensation. 7
34523278 (2) A contract under subdivision (b)(1) of this section shall be 8
34533279 deemed a sole source contract under § 19 -11-232. 9
34543280 (c) The commissioner may enter into joint examinations or joint 10
34553281 enforcement actions with other bank supervisory agencies having concurrent 11
34563282 jurisdiction over an office established and maintained in this state by an 12
34573283 out-of-state trust institution or an office established and maintained by a 13
34583284 state trust institution in any host state, if: 14
34593285 (1) The commissioner may at any time take action independently 15
34603286 if the commissioner deems the action to be necessary or appropriate to carry 16
34613287 out his or her responsibilities under this chapter or to ensure compliance 17
34623288 with the laws of this state; or 18
34633289 (2) In the case of an out -of-state trust institution, the 19
34643290 commissioner recognizes the exclusive authority of the home state regulator 20
34653291 over corporate governance matters and the primary responsibility of the home 21
34663292 state regulator with respect to safety and soundness matters. 22
34673293 (d)(1) An out-of-state trust institution that maintains at least one 23
34683294 (1) office in this state may be assessed and, if assessed, shall pay 24
34693295 supervisory and examination fees according to the laws of this state and 25
34703296 rules of the commissioner. 26
34713297 (2) The fees may be shared with other bank supervisory agencies 27
34723298 or an organization affiliated with or representing one (1) or more bank 28
34733299 supervisory agencies according to agreements between the parties and the 29
34743300 commissioner. 30
34753301 31
34763302 23-51-204. Reports of apparent crime. 32
34773303 (a)(1) A trust company that is the victim of a robbery, has a shortage 33
34783304 of corporate or fiduciary funds in excess of five thousand dollars ($5,000), 34
34793305 or is the victim of an apparent or suspected misapplication of its corporate 35
3480-or fiduciary funds or property in any amount by a director, officer, or 36 As Engrossed: S2/17/25 SB230
3481-
3482- 88 02-17-2025 11:15:03 ANS145
3483-
3484-
3306+or fiduciary funds or property in any amount by a director, officer, or 36 SB230
3307+
3308+ 88 02/13/2025 12:57:21 PM ANS145
34853309 employee shall report the robbery, shortages, or apparent or suspected 1
34863310 misapplication to the Bank Commissioner within forty -eight (48) hours after 2
34873311 the time it is discovered. 3
34883312 (2) The initial report required under subdivision (a)(1) of this 4
34893313 section may be oral if the report is promptly confirmed in writing. 5
34903314 (b) The trust company or a director, officer, employee, or agent is 6
34913315 not subject to liability for defamation or another charge resulting from 7
34923316 information supplied in a report under subdivision (a)(1) of this section. 8
34933317 9
34943318 Subchapter 3 — Enforcement 10
34953319 11
34963320 23-51-301. Enforcement. 12
34973321 (a)(1) Consistent with the Arkansas Administrative Procedure Act, § 13
34983322 25-15-201 et seq., after notice and opportunity for hearing, the Bank 14
34993323 Commissioner may determine: 15
35003324 (A) That an office maintained by an out -of-state trust 16
35013325 institution in this state is being operated in violation of the laws of this 17
35023326 state or in an unsafe and unsound manner; or 18
35033327 (B) That a company is engaged in an unauthorized trust 19
35043328 activity. 20
35053329 (2) In either event as described in subdivision (a)(1) of this 21
35063330 section, the commissioner may take enforcement action as he or she would be 22
35073331 empowered to take if the office maintained by an out -of-state trust 23
35083332 institution or the company were a state trust company, including without 24
35093333 limitation issuing an order temporarily or permanently prohibiting the 25
35103334 company from engaging in a trust business in this state. 26
35113335 (b)(1) The commissioner may determine by order that an out -of-state 27
35123336 trust institution engaging in or proposing to engage in a trust business in 28
35133337 this state does not meet the requirements for establishing a representative 29
35143338 trust office in this state under § 23 -51-909. 30
35153339 (2) An order under subdivision (b)(1) of this section is 31
35163340 effective on the date of issuance or other date as the commissioner shall 32
35173341 determine. 33
35183342 (c)(1) In cases involving extraordinary circumstances requiring 34
35193343 immediate action, the commissioner may take an action permitted by subsection 35
3520-(a) of this section without notice or opportunity for hearing. 36 As Engrossed: S2/17/25 SB230
3521-
3522- 89 02-17-2025 11:15:03 ANS145
3523-
3524-
3344+(a) of this section without notice or opportunity for hearing. 36 SB230
3345+
3346+ 89 02/13/2025 12:57:21 PM ANS145
35253347 (2) The commissioner shall promptly afford a subsequent hearing 1
35263348 upon an application to rescind the action taken under subdivision (c)(1) of 2
35273349 this section. 3
35283350 (3) The commissioner shall promptly give notice to the home 4
35293351 state regulator of each enforcement action taken against an out -of-state 5
35303352 trust institution and, to the extent practicable, shall consult and cooperate 6
35313353 with the home state regulator in pursuing and resolving the enforcement 7
35323354 action. 8
35333355 9
35343356 23-51-302. Violation of administrative orders. 10
35353357 (a) The Bank Commissioner may: 11
35363358 (1) Order an authorized trust institution, or subsidiary of an 12
35373359 authorized trust institution, or a director, officer, or employee to cease 13
35383360 and desist violating this chapter or any lawful rule issued under this 14
35393361 chapter; 15
35403362 (2) Order an authorized trust institution, or subsidiary of an 16
35413363 authorized trust institution, or a director, officer, or employee to cease 17
35423364 and desist from a course of conduct that is unsafe or unsound and that is 18
35433365 likely to cause insolvency or dissipation of assets or is likely to 19
35443366 jeopardize or otherwise seriously prejudice the interests of the public in 20
35453367 their relationship with the authorized trust institution; 21
35463368 (3) Require the immediate removal from office of an officer, 22
35473369 director, or employee of an authorized trust institution who: 23
35483370 (A) Has been found to be dishonest, incompetent, or 24
35493371 reckless in the management of the affairs of the authorized trust 25
35503372 institution; or 26
35513373 (B) Persistently violates the laws of this state or the 27
35523374 lawful orders, instructions, and rules issued by the commissioner; 28
35533375 (4) Order a company to cease engaging in an unauthorized trust 29
35543376 activity; or 30
35553377 (5) Enter an order under § 23 -51-301. 31
35563378 (b)(1) The commissioner may impose a civil money penalty of not more 32
35573379 than one thousand dollars ($1,000) for each violation by an authorized trust 33
35583380 institution, or subsidiary of an authorized trust institution, or a director, 34
35593381 officer, or employee of an order issued under subdivision (a)(1) of this 35
3560-section. 36 As Engrossed: S2/17/25 SB230
3561-
3562- 90 02-17-2025 11:15:03 ANS145
3563-
3564-
3382+section. 36 SB230
3383+
3384+ 90 02/13/2025 12:57:21 PM ANS145
35653385 (2) The commissioner may impose a civil money penalty of not 1
35663386 more than five hundred dollars ($500) per day for each day that an authorized 2
35673387 trust institution, or subsidiary of an authorized trust institution, or a 3
35683388 director, officer, or employee violates a cease and desist order issued under 4
35693389 subdivision (a)(2) or subdivision (a)(3) of this section. 5
35703390 (c)(1) Notice and opportunity for a hearing shall be: 6
35713391 (A) Provided before any of the actions are taken under 7
35723392 this section by the commissioner; and 8
35733393 (B) Consistent with the Arkansas Administrative Procedure 9
35743394 Act, § 25-15-201 et seq. 10
35753395 (2)(A) In cases involving extraordinary circumstances requiring 11
35763396 immediate action, the commissioner may take an action permitted by subsection 12
35773397 (a) of this section without notice or opportunity for hearing. 13
35783398 (B) The commissioner shall promptly afford a subsequent 14
35793399 hearing upon an application to rescind the action taken under subdivision 15
35803400 (c)(2)(A) of this section. 16
35813401 17
35823402 23-51-303. Civil enforcement. 18
35833403 The Bank Commissioner may bring a civil action against a person who the 19
35843404 commissioner believes has committed or is about to commit a violation of: 20
35853405 (1) This chapter; or 21
35863406 (2) A rule or order of the commissioner pertaining to this 22
35873407 chapter. 23
35883408 24
35893409 23-51-304. Certain criminal offenses. 25
35903410 (a)(1) An officer, director, employee, or shareholder of a state trust 26
35913411 company commits an offense if the officer, director, employee, or shareholder 27
35923412 of a state trust company knowingly: 28
35933413 (A) Conceals information or a fact or removes, destroys, 29
35943414 or conceals a book or record of the state trust company for the purpose of 30
35953415 concealing information or a fact from the Bank Commissioner or an agent of 31
35963416 the commissioner; or 32
35973417 (B) For the purpose of concealing information, removes or 33
35983418 destroys a book or record of the state trust company that is material to a 34
35993419 pending or anticipated legal or administrative proceeding. 35
3600- (2) An officer, director, or employee of a state trust company 36 As Engrossed: S2/17/25 SB230
3601-
3602- 91 02-17-2025 11:15:03 ANS145
3603-
3604-
3420+ (2) An officer, director, or employee of a state trust company 36 SB230
3421+
3422+ 91 02/13/2025 12:57:21 PM ANS145
36053423 commits an offense if the person knowingly makes a false entry in the books 1
36063424 or records or in a report or statement of the state trust company. 2
36073425 (3) An offense under this subsection is a Class D felony. 3
36083426 (b) A person who knowingly fails or refuses to file the application 4
36093427 for acquisition of control of a state trust company as required by § 23 -51-5
36103428 602 commits a Class A misdemeanor. 6
36113429 7
36123430 23-51-305. When commissioner may take possession of state trust 8
36133431 company. 9
36143432 (a) The Bank Commissioner may take possession of the business and 10
36153433 property of a state trust company to which this chapter is applicable 11
36163434 whenever it appears that the state trust company: 12
36173435 (1) Has violated its charter or any laws applicable to the 13
36183436 charter of a state trust company; 14
36193437 (2) Is conducting its business in an unauthorized or unsafe 15
36203438 manner; 16
36213439 (3) Is in an unsafe or unsound condition to transact its 17
36223440 business; 18
36233441 (4) Has an impairment of its capital; 19
36243442 (5) Is in a hazardous condition; 20
36253443 (6) Has become otherwise insolvent; 21
36263444 (7) Has neglected or refused to comply with the terms of an 22
36273445 order issued by the commissioner; 23
36283446 (8) Has refused, upon proper demand, to submit its records, 24
36293447 affairs, and concerns for inspection and examination of an appointed or 25
36303448 authorized examiner of the commissioner; 26
36313449 (9) Is employing officers who have refused to be examined upon 27
36323450 oath regarding its affairs; or 28
36333451 (10) Has made a voluntary assignment of its assets to trustees. 29
36343452 (b) A state trust company that the commissioner takes possession of 30
36353453 under this subchapter shall remain in the commissioner’s possession until the 31
36363454 state trust company is authorized by the commissioner to resume business or 32
36373455 until the state trust company is fully liquidated under subchapter 10 of this 33
36383456 chapter. 34
36393457 35
3640-Subchapter 4 — Organization of a State Trust Company 36 As Engrossed: S2/17/25 SB230
3641-
3642- 92 02-17-2025 11:15:03 ANS145
3643-
3644-
3458+Subchapter 4 — Organization of a State Trust Company 36 SB230
3459+
3460+ 92 02/13/2025 12:57:21 PM ANS145
36453461 1
36463462 23-51-401. Organization and powers of state trust company. 2
36473463 (a)(1) Subject to the other provisions of this chapter, one (1) or 3
36483464 more persons may organize and charter a state trust company. 4
36493465 (2) A state trust company may perform any act as a fiduciary or 5
36503466 engage in any trust business within or without this state. 6
36513467 (b) Subject to § 23 -51-108, a state trust company may exercise the 7
36523468 powers of an Arkansas business corporation reasonably necessary or helpful to 8
36533469 enable exercise of its specific powers under this chapter. 9
36543470 (c) A state trust company may contribute to community funds, or to 10
36553471 charitable, philanthropic, or benevolent instrumentalities conducive to 11
36563472 public welfare, amounts that its board considers appropriate and in the 12
36573473 interests of the state trust company. 13
36583474 (d) Subject to § 23 -51-508, a state trust company may deposit trust 14
36593475 funds with itself or an affiliate. 15
36603476 (e) Subject to obtaining any required insurance from the Federal 16
36613477 Deposit Insurance Corporation, a state trust company may receive and pay 17
36623478 deposits with or without interest, made by agencies of the United States 18
36633479 Government or of a state, county, or municipality. 19
36643480 20
36653481 23-51-402. State trust company principal office. 21
36663482 (a) A state trust company shall have and continuously maintain a 22
36673483 principal office in this state. 23
36683484 (b) An executive officer at the principal office is an agent of the 24
36693485 state trust company for service of process. 25
36703486 (c) A state trust company may change its principal office to any 26
36713487 location within this state by filing a written notice with the Bank 27
36723488 Commissioner stating: 28
36733489 (1) The name of the state trust company; 29
36743490 (2) The street address of its principal office before the 30
36753491 change; 31
36763492 (3) The street address to which the principal office is to be 32
36773493 changed; and 33
36783494 (4) A copy of the resolution adopted by the board of the state 34
36793495 trust company authorizing the change. 35
3680- (d) The change of principal office shall take effect thirty (30) days 36 As Engrossed: S2/17/25 SB230
3681-
3682- 93 02-17-2025 11:15:03 ANS145
3683-
3684-
3496+ (d) The change of principal office shall take effect thirty (30) days 36 SB230
3497+
3498+ 93 02/13/2025 12:57:21 PM ANS145
36853499 after the date the commissioner receives the notice under subsection (c) of 1
36863500 this section, unless the commissioner establishes another date or unless 2
36873501 before that day the commissioner notifies the state trust company that it has 3
36883502 to establish to the satisfaction of the commissioner that the relocation is 4
36893503 consistent with the original determination made under § 23 -51-406 for the 5
36903504 establishment of a state trust company at that location, in which event the 6
36913505 change of principal office shall take effect when approved by the 7
36923506 commissioner. 8
36933507 9
36943508 23-51-403. Required capital. 10
36953509 (a) Except as provided in subsection (b) of this section, the Bank 11
36963510 Commissioner shall not issue a charter to a state trust company having 12
36973511 required capital of less than one million dollars ($1,000,000). 13
36983512 (b)(1) The commissioner may require additional capital for a proposed 14
36993513 or existing state trust company or, on application in the exercise of 15
37003514 discretion consistent with protecting safety and soundness, reduce the amount 16
37013515 of minimum capital required for a proposed or existing state trust company, 17
37023516 if the commissioner finds the condition and operations of an existing state 18
37033517 trust company or the proposed scope or type of operations of a proposed state 19
37043518 trust company requires additional, or permits reduced, capital consistent 20
37053519 with the safety and soundness of the state trust company. 21
37063520 (2) The safety and soundness factors to be considered by the 22
37073521 commissioner in the exercise of his or her discretion under subdivision 23
37083522 (b)(1) of this section include without limitation: 24
37093523 (A) The nature and type of business conducted; 25
37103524 (B) The nature and degree of liquidity in assets held in a 26
37113525 corporate capacity; 27
37123526 (C) The amount of fiduciary assets under management; 28
37133527 (D) The type of fiduciary assets held and the depository 29
37143528 of the assets; 30
37153529 (E) The complexity of fiduciary duties and degree of 31
37163530 discretion undertaken; 32
37173531 (F) The competence and experience of management; 33
37183532 (G) The extent and adequacy of internal controls; 34
37193533 (H) The presence or absence of annual unqualified audits 35
3720-by an independent certified public accountant; 36 As Engrossed: S2/17/25 SB230
3721-
3722- 94 02-17-2025 11:15:03 ANS145
3723-
3724-
3534+by an independent certified public accountant; 36 SB230
3535+
3536+ 94 02/13/2025 12:57:21 PM ANS145
37253537 (I) The reasonableness of business plans for retaining or 1
37263538 acquiring additional capital; and 2
37273539 (J) The existence and adequacy of insurance obtained or 3
37283540 held by the state trust company for the purpose of protecting its clients, 4
37293541 beneficiaries, and grantors. 5
37303542 (c)(1) The proposed effective date of an order requiring an existing 6
37313543 state trust company to increase its capital shall be stated in the order no 7
37323544 sooner than twenty (20) days after the date the proposed order is mailed or 8
37333545 delivered. 9
37343546 (2) Unless the state trust company requests a hearing before the 10
37353547 commissioner in writing before the effective date of the proposed order, the 11
37363548 order becomes effective and is final and nonappealable. 12
37373549 (3) This subsection does not prohibit an application to reduce 13
37383550 capital requirements of a proposed or an existing state trust company under 14
37393551 subsection (b) of this section. 15
37403552 (d) Subject to subsection (b) of this section and subchapter 12 of 16
37413553 this chapter, a state trust company to which the commissioner issues a 17
37423554 charter shall at all times maintain capital in at least the amount required 18
37433555 under subsection (a) of this section, plus any additional amount or less any 19
37443556 reduction the commissioner directs under subsection (b) of this section. 20
37453557 21
37463558 23-51-404. Change in outstanding capital and surplus. 22
37473559 (a) A state trust company shall not reduce or increase its outstanding 23
37483560 capital through dividend, redemption, issuance of shares, or otherwise 24
37493561 without the prior approval of the Bank Commissioner, except as permitted by 25
37503562 this section or rules adopted under this chapter. 26
37513563 (b) Unless otherwise restricted by rules, prior approval is not 27
37523564 required for an increase in capital accomplished through: 28
37533565 (1) Issuance of shares of common stock for cash; 29
37543566 (2) Declaration and payment of pro rata share dividends as 30
37553567 defined in the Arkansas Business Corporation Act, § 4 -27-101 et seq.; or 31
37563568 (3) Adoption by the board of the state trust company of a 32
37573569 resolution directing that all or part of undivided profits be transferred to 33
37583570 capital. 34
37593571 (c) Prior approval is not required for a decrease in surplus caused by 35
3760-incurred losses in excess of undivided profits. 36 As Engrossed: S2/17/25 SB230
3761-
3762- 95 02-17-2025 11:15:03 ANS145
3763-
3764-
3572+incurred losses in excess of undivided profits. 36 SB230
3573+
3574+ 95 02/13/2025 12:57:21 PM ANS145
37653575 1
37663576 23-51-405. Articles of association of state trust company. 2
37673577 (a) The articles of association of a state trust company shall be 3
37683578 signed and acknowledged by each organizer. 4
37693579 (b) The articles of association of a state trust company shall 5
37703580 include: 6
37713581 (1) The name of the state trust company; 7
37723582 (2) The period of the state trust company's duration, which may 8
37733583 be perpetual; 9
37743584 (3) The powers of the state trust company, which may be stated 10
37753585 as: 11
37763586 (A) All powers granted to a state trust company in this 12
37773587 state; or 13
37783588 (B) A list of the specific powers that the state trust 14
37793589 company chooses and is authorized to exercise; 15
37803590 (4) The aggregate number of shares that the state trust company 16
37813591 will be authorized to issue, the number of classes of shares, which may be 17
37823592 one (1) or more, the number of shares of each class if more than one (1) 18
37833593 class, and a statement of the par value of the shares of each class or that 19
37843594 the shares are to be without par value; 20
37853595 (5) If the shares are to be divided into classes, the 21
37863596 designation of each class and statement of the preferences, limitations, and 22
37873597 relative rights of the shares of each class; 23
37883598 (6) Any provision granting to shareholders the preemptive right 24
37893599 to acquire additional shares of the state trust company; 25
37903600 (7) Any provision granting the right of shareholders to 26
37913601 cumulative voting in the election of directors of the state trust company; 27
37923602 (8) The aggregate amount of consideration to be received for all 28
37933603 shares initially issued by the state trust company and a statement signed and 29
37943604 verified by the organizers that the capital stock has been fully subscribed 30
37953605 and the purchase price for the capital stock has been paid into an escrow 31
37963606 account approved by the Bank Commissioner; 32
37973607 (9) Any provision consistent with law that the organizers elect 33
37983608 to state in the articles of association for the regulation of the internal 34
37993609 affairs of the state trust company or that is otherwise required by this 35
3800-chapter to be stated in the articles of association; 36 As Engrossed: S2/17/25 SB230
3801-
3802- 96 02-17-2025 11:15:03 ANS145
3803-
3804-
3610+chapter to be stated in the articles of association; 36 SB230
3611+
3612+ 96 02/13/2025 12:57:21 PM ANS145
38053613 (10) The street address of the state trust company's principal 1
38063614 office required to be maintained under § 23 -51-402; and 2
38073615 (11) The number of directors or managers constituting the 3
38083616 initial board of the state trust company, which shall not be fewer than three 4
38093617 (3), and the names and street addresses of the persons who are to serve as 5
38103618 directors until the first annual meeting of shareholders or until successor 6
38113619 directors have been elected and qualified. 7
38123620 8
38133621 23-51-406. Application for state trust company charter. 9
38143622 (a) An application for a state trust company charter shall be: 10
38153623 (1) Made under oath and in the form required by the Bank 11
38163624 Commissioner; 12
38173625 (2) Supported by information, data, records, and opinions of 13
38183626 counsel that the commissioner requires. 14
38193627 (3) Accompanied by a nonrefundable filing fee of not less than 15
38203628 three thousand dollars ($3,000) nor more than ten thousand dollars ($10,000) 16
38213629 as set by rule of the commissioner; and 17
38223630 (4) Accompanied by proof of escrow of deposit for the required 18
38233631 capital. 19
38243632 (b)(1) The commissioner shall grant a state trust company charter only 20
38253633 on proof that one (1) or more viable markets exist within or outside of this 21
38263634 state that may be served in a profitable manner by the establishment of the 22
38273635 proposed state trust company. 23
38283636 (2) In making such a determination under subdivision (b)(1) of 24
38293637 this section, the commissioner shall: 25
38303638 (A) Examine the business plan which shall be submitted as 26
38313639 part of the application for a state trust company charter; and 27
38323640 (B) Consider the following information: 28
38333641 (i) The market or markets to be served; 29
38343642 (ii) Whether or not the proposed organizational and 30
38353643 capital structure and amount of initial capitalization is adequate for the 31
38363644 proposed business and location; 32
38373645 (iii) Whether or not the anticipated volume and 33
38383646 nature of business indicates a reasonable probability of success and 34
38393647 profitability based on the market sought to be served; 35
3840- (iv) Whether or not the proposed officers and 36 As Engrossed: S2/17/25 SB230
3841-
3842- 97 02-17-2025 11:15:03 ANS145
3843-
3844-
3648+ (iv) Whether or not the proposed officers and 36 SB230
3649+
3650+ 97 02/13/2025 12:57:21 PM ANS145
38453651 directors of the state trust company, as a group, have sufficient fiduciary 1
38463652 experience, ability, standing, competence, trustworthiness, and integrity to 2
38473653 justify a belief that the proposed state trust company will operate in 3
38483654 compliance with law and that success of the proposed state trust company is 4
38493655 probable; 5
38503656 (v) Whether or not each principal shareholder of the 6
38513657 proposed state trust company has sufficient experience, ability, standing, 7
38523658 competence, trustworthiness, and integrity to justify a belief that the 8
38533659 proposed state trust company will be free from improper or unlawful influence 9
38543660 or interference with respect to the state trust company's operation in 10
38553661 compliance with law; and 11
38563662 (vi) Whether or not the organizers of the proposed 12
38573663 state trust company are acting in good faith. 13
38583664 (c) The failure of an applicant for a state trust company charter to 14
38593665 furnish required information, data, opinions of counsel, other material or 15
38603666 the required fee is considered an abandonment of the application. 16
38613667 17
38623668 23-51-407. Notice and investigation of charter application for state 18
38633669 trust company. 19
38643670 (a) The Bank Commissioner shall notify the organizers of the proposed 20
38653671 state trust company when the application is complete and accepted for filing 21
38663672 and all required fees and deposits have been paid. 22
38673673 (b) Upon submission of an application to the commissioner, the 23
38683674 organizers of the proposed state trust company shall provide: 24
38693675 (1) Notice through publication of one (1) notice published in a 25
38703676 newspaper having a general and substantially statewide circulation; and 26
38713677 (2) Written notice of filing through the United States mail to 27
38723678 all trust institutions maintaining a principal office or a trust office in 28
38733679 the county wherein the principal office of the proposed state trust company 29
38743680 is to be located. 30
38753681 (c)(1) The commissioner shall investigate the application for a 31
38763682 charter for a state trust company and inquire into the identity and character 32
38773683 of each proposed director, officer, and principal shareholder of the state 33
38783684 trust company. 34
38793685 (2) The investigation under subdivision (c)(1) of this section 35
3880-may be conducted at the expense of the organizers of the state trust company. 36 As Engrossed: S2/17/25 SB230
3881-
3882- 98 02-17-2025 11:15:03 ANS145
3883-
3884-
3686+may be conducted at the expense of the organizers of the state trust company. 36 SB230
3687+
3688+ 98 02/13/2025 12:57:21 PM ANS145
38853689 (3) The commissioner shall prepare a written report of the 1
38863690 investigation under this subsection, and any person may request a copy of the 2
38873691 nonconfidential portions of the application as provided by the Freedom of 3
38883692 Information Act of 1967, § 25 -19-101 et seq. 4
38893693 (4)(A) Rules adopted under this chapter may specify the 5
38903694 confidential or nonconfidential character of information obtained by the 6
38913695 State Bank Department under this section. 7
38923696 (B) Except as provided in rules regarding confidential 8
38933697 information, the financial statement of a proposed officer, director, or 9
38943698 principal shareholder of the state trust company is confidential and not 10
38953699 subject to public disclosure. 11
38963700 12
38973701 23-51-408. Written protest — Filing fee — Hearing and decision on 13
38983702 charter application. 14
38993703 (a)(1) A person shall not appear in opposition to an application for a 15
39003704 charter for a state trust company unless the person has filed an official 16
39013705 protest to the granting of the application within thirty (30) days of the 17
39023706 date of the notice of the filing of the application. 18
39033707 (2) The protest filed under subdivision (a)(1) of this section 19
39043708 shall: 20
39053709 (A) Be in writing; 21
39063710 (B) State the grounds for objection; and 22
39073711 (C)(i) Be accompanied by a filing fee of not less than two 23
39083712 thousand dollars ($2,000) nor more than five thousand dollars ($5,000) for 24
39093713 each protestant. 25
39103714 (ii) The amount of the filing fee under subdivision 26
39113715 (a)(2)(C)(i) of this section is set by rule promulgated by the Bank 27
39123716 Commissioner. 28
39133717 (b) Once the written report of investigation under § 23 -51-407 has 29
39143718 been completed, the commissioner may establish a time for hearing on the 30
39153719 charter application. 31
39163720 (c) Notice of the time, place, and purpose of the hearing under 32
39173721 subsection (b) of this section shall be given at least thirty (30) days 33
39183722 before the hearing, as follows: 34
39193723 (1) By letter from the commissioner to the organizers of the 35
3920-proposed state trust company and to each trust institution to which the 36 As Engrossed: S2/17/25 SB230
3921-
3922- 99 02-17-2025 11:15:03 ANS145
3923-
3924-
3724+proposed state trust company and to each trust institution to which the 36 SB230
3725+
3726+ 99 02/13/2025 12:57:21 PM ANS145
39253727 organizers of the application are required to give written notice under § 23 -1
39263728 51-407(a); 2
39273729 (2) By letter from the commissioner to each person who has filed 3
39283730 an official protest against the application for a charter for a state trust 4
39293731 company with the commissioner, provided that if a group of persons has 5
39303732 protested the application, the notice may be given to one (1) member of the 6
39313733 group; and 7
39323734 (3) By release to news media. 8
39333735 (d)(1) If the commissioner sets a hearing under subsection (b) of this 9
39343736 section, the commissioner shall conduct a public hearing. 10
39353737 (2) The commissioner may conduct as many prehearing conferences 11
39363738 and opportunities for discovery as the commissioner considers necessary. 12
39373739 (e)(1) Based on the record of a hearing conducted under subsection (d) 13
39383740 of this section, the commissioner shall: 14
39393741 (A) Determine whether or not all of the necessary 15
39403742 conditions stated in § 23 -51-406(b) have been established; and 16
39413743 (B) Enter an order granting or denying the charter for a 17
39423744 state trust company. 18
39433745 (2) The commissioner may make approval of any application 19
39443746 conditional and shall include any conditions in the order granting the 20
39453747 charter. 21
39463748 22
39473749 23-51-409. Issuance of charter. 23
39483750 (a) A state trust company shall not engage in the trust business until 24
39493751 it receives its charter from the Bank Commissioner. 25
39503752 (b) The commissioner shall not deliver the charter for a state trust 26
39513753 company until the state trust company has: 27
39523754 (1) Elected or qualified the initial officers and directors 28
39533755 named in the application for charter or other officers and directors approved 29
39543756 by the commissioner; and 30
39553757 (2) Complied with all other requirements of this chapter 31
39563758 relative to the organization of a state trust company. 32
39573759 (c) If a state trust company does not open and engage in the trust 33
39583760 business within six (6) months after the date it receives its charter or 34
39593761 conditional approval of application for charter, or within the period that 35
3960-may have been extended, the commissioner may revoke the charter or cancel the 36 As Engrossed: S2/17/25 SB230
3961-
3962- 100 02-17-2025 11:15:03 ANS145
3963-
3964-
3762+may have been extended, the commissioner may revoke the charter or cancel the 36 SB230
3763+
3764+ 100 02/13/2025 12:57:21 PM ANS145
39653765 conditional approval of application for charter without judicial action. 1
39663766 2
39673767 23-51-410. Amendment or restatement of state trust company articles of 3
39683768 association. 4
39693769 (a) A state trust company that has been granted a charter under § 23 -5
39703770 51-409 or a predecessor statute may amend or restate its articles of 6
39713771 association for any lawful purpose, including the creation of authorized but 7
39723772 unissued shares in one (1) or more classes or series. 8
39733773 (b) An amendment authorizing the issuance of shares in series shall 9
39743774 contain: 10
39753775 (1) The designation of each series and of any variations in the 11
39763776 preferences, limitations, and relative rights among series to the extent that 12
39773777 the preferences, limitations, and relative rights are to be established in 13
39783778 the articles of association; and 14
39793779 (2) A statement of any authority to be vested in the board of 15
39803780 the state trust company to establish series and determine the preferences, 16
39813781 limitations, and relative rights of each series. 17
39823782 (c)(1) Amendment or restatement of the articles of association of a 18
39833783 state trust company and approval of the board and shareholders of the state 19
39843784 trust company shall be made according to the Arkansas Business Corporation 20
39853785 Act, § 4-27-101 et seq., for the amendment or restatement of articles of 21
39863786 incorporation except as otherwise provided by this chapter or rules adopted 22
39873787 under this chapter. 23
39883788 (2) The original and one (1) copy of the articles of amendment 24
39893789 or restated articles of association shall be filed with the Bank Commissioner 25
39903790 for approval. 26
39913791 (3) Unless the submission presents novel or unusual questions, 27
39923792 the commissioner shall approve or reject the amendment or restatement within 28
39933793 thirty (30) days after the date the commissioner considers the submission 29
39943794 complete and accepted for filing. 30
39953795 (4) The commissioner may require the submission of additional 31
39963796 information as considered necessary to an informed decision to approve or 32
39973797 reject any amendment or restatement of the articles of association under this 33
39983798 section. 34
39993799 (d) If the commissioner finds that the amendment or restatement of the 35
4000-articles of association of a state trust company conforms to law and any 36 As Engrossed: S2/17/25 SB230
4001-
4002- 101 02-17-2025 11:15:03 ANS145
4003-
4004-
3800+articles of association of a state trust company conforms to law and any 36 SB230
3801+
3802+ 101 02/13/2025 12:57:21 PM ANS145
40053803 conditions imposed by the commissioner, and any required filing fee has been 1
40063804 paid, the commissioner shall: 2
40073805 (1) Endorse the face of the original and copy with the date of 3
40083806 approval and the word “Approved”; 4
40093807 (2) File the original in the State Bank Department's records; 5
40103808 and 6
40113809 (3) Deliver a certified copy to the amendment or restatement to 7
40123810 the state trust company. 8
40133811 (e) An amendment or restatement of the articles of association of a 9
40143812 state trust company, if approved, takes effect on the date of approval, 10
40153813 unless the amendment or restatement provides for a different effective date. 11
40163814 12
40173815 23-51-411. Establishing series of shares. 13
40183816 (a) If the articles of association expressly give the board of a state 14
40193817 trust company authority to establish series and determine the preferences, 15
40203818 limitations, and relative rights of each series of shares, the board may do 16
40213819 so only in compliance with this section and any rules adopted under this 17
40223820 chapter. 18
40233821 (b)(1) A series of shares may be established by the board of a state 19
40243822 trust company in the manner provided by the Arkansas Business Corporation 20
40253823 Act, § 4-27-101 et seq., as if the state trust company were a domestic 21
40263824 corporation, but the shares of the series shall not be issued and sold except 22
40273825 upon compliance with this section. 23
40283826 (2) The state trust company shall file the original and one (1) 24
40293827 copy of the articles of amendment required by the Arkansas Business 25
40303828 Corporation Act, § 4 -27-101 et seq., with the Bank Commissioner. 26
40313829 (3) Unless the submission presents novel or unusual questions, 27
40323830 the commissioner shall approve or reject the series of shares within thirty 28
40333831 (30) days after the date the commissioner considers the submission complete 29
40343832 and accepted for filing. 30
40353833 (4) The commissioner may require the submission of additional 31
40363834 information as considered necessary to an informed decision. 32
40373835 (c) If the commissioner finds that the interests of the clients and 33
40383836 creditors of the state trust company will not be adversely affected by the 34
40393837 series, that the series of shares otherwise conforms to law and any 35
4040-conditions imposed by the commissioner, and that any required filing fee has 36 As Engrossed: S2/17/25 SB230
4041-
4042- 102 02-17-2025 11:15:03 ANS145
4043-
4044-
3838+conditions imposed by the commissioner, and that any required filing fee has 36 SB230
3839+
3840+ 102 02/13/2025 12:57:21 PM ANS145
40453841 been paid, the commissioner shall: 1
40463842 (1) Endorse the face of the original and copy of the statement 2
40473843 with the date of approval and the word “Approved”; 3
40483844 (2) File the original in the State Bank Department's records; 4
40493845 and 5
40503846 (3) Deliver a certified copy of the statement to the state trust 6
40513847 company. 7
40523848 8
40533849 23-51-412. Capital notes or debentures. 9
40543850 (a) With the prior written approval of the Bank Commissioner, a state 10
40553851 trust company, at any time, through action of its board, and without 11
40563852 requiring action of its shareholders, may issue and sell its capital notes or 12
40573853 debentures, which shall be subordinate to the claims of depositors and may be 13
40583854 subordinate to other claims, including the claims of other creditors or 14
40593855 classes of creditors or the shareholders. 15
40603856 (b)(1) Capital notes or debentures may be convertible into shares of 16
40613857 any class or series. 17
40623858 (2) The issuance and sale of convertible capital notes or 18
40633859 debentures are subject to satisfaction of preemptive rights, if any, to the 19
40643860 extent provided by law. 20
40653861 (c) Without the prior written approval of the commissioner, interest 21
40663862 due or principal repayable on outstanding capital notes or debentures shall 22
40673863 not be paid by a state trust company when the state trust company is in 23
40683864 hazardous condition or insolvent, as determined by the commissioner, or to 24
40693865 the extent that payment will cause the state trust company to be in hazardous 25
40703866 condition or insolvent. 26
40713867 (d) The amount of any outstanding capital notes or debentures that 27
40723868 meet the requirements of this section and are subordinated to unsecured 28
40733869 creditors of the state trust company may be included in equity capital of the 29
40743870 state trust company for purposes of determining hazardous condition or 30
40753871 insolvency, and for such other purposes as may be provided by rules adopted 31
40763872 under this chapter. 32
40773873 33
40783874 23-51-413. Bylaws. 34
40793875 A state trust company shall adopt bylaws and may amend its bylaws from 35
4080-time to time for the purposes and in accordance with the procedures stated in 36 As Engrossed: S2/17/25 SB230
4081-
4082- 103 02-17-2025 11:15:03 ANS145
4083-
4084-
3876+time to time for the purposes and in accordance with the procedures stated in 36 SB230
3877+
3878+ 103 02/13/2025 12:57:21 PM ANS145
40853879 the Arkansas Business Corporation Act, § 4 -27-101 et seq. 1
40863880 2
40873881 23-51-414. Board of state trust company. 3
40883882 (a) The board of a state trust company shall be governed by the 4
40893883 Arkansas Business Corporation Act, § 4 -27-101 et seq., provided that the 5
40903884 board shall consist of not fewer than three (3) directors, the majority of 6
40913885 whom shall be residents of this state. 7
40923886 (b) Unless the Bank Commissioner consents in writing, a person shall 8
40933887 not serve as director of a state trust company if: 9
40943888 (1) The state trust company incurs an unreimbursed loss 10
40953889 attributable to a charged -off obligation of or holds a judgment against the 11
40963890 person or an entity that was controlled by the person at the time of funding 12
40973891 and at the time of default on the loan that gave rise to the judgment or 13
40983892 charged-off obligation; 14
40993893 (2) The person has been convicted of a felony; or 15
41003894 (3) The person has violated this chapter relating to loan of 16
41013895 trust funds and purchase or sale of trust property by the trustee, and the 17
41023896 violation has not been corrected. 18
41033897 (c)(1) If a state trust company does not elect directors prior to 19
41043898 sixty (60) days after the date of its regular annual meeting, the 20
41053899 commissioner may commence a proceeding to appoint a receiver under § 23 -51-21
41063900 1003 to operate the state trust company and elect directors or managers, as 22
41073901 appropriate. 23
41083902 (2) If the conservator is unable to locate or elect persons 24
41093903 willing and able to serve as directors, the commissioner may close the state 25
41103904 trust company for liquidation. 26
41113905 (d)(1) A vacancy on the board of a state trust company that reduces 27
41123906 the number of directors to fewer than three (3) shall be filed not later than 28
41133907 ninety (90) days after the date the vacancy occurs. 29
41143908 (2) If the vacancy has not been filled upon the expiration of 30
41153909 ninety (90) days following the date the vacancy occurs, the commissioner may 31
41163910 commence a proceeding to appoint a receiver under § 23 -51-1003 to operate the 32
41173911 state trust company and elect a board of not fewer than three (3) persons to 33
41183912 resolve the vacancy. 34
41193913 (3) If the conservator is unable to locate or elect three (3) 35
4120-persons willing and able to serve as directors, the commissioner may close 36 As Engrossed: S2/17/25 SB230
4121-
4122- 104 02-17-2025 11:15:03 ANS145
4123-
4124-
3914+persons willing and able to serve as directors, the commissioner may close 36 SB230
3915+
3916+ 104 02/13/2025 12:57:21 PM ANS145
41253917 the state trust company for liquidation. 1
41263918 (e) Before each term to which a person is elected to serve as a 2
41273919 director of a state trust company, the person shall submit an affidavit for 3
41283920 filing in the minutes of the state trust company stating that the person, to 4
41293921 the extent applicable: 5
41303922 (1) Accepts the position and is not disqualified from serving in 6
41313923 the position; 7
41323924 (2) Will not violate or knowingly permit an officer, director, 8
41333925 or employee of the state trust company to violate any law applicable to the 9
41343926 conduct of business of the state trust company; and 10
41353927 (3) Will diligently perform the duties of the position. 11
41363928 (f) An advisory director is not considered a director if the advisory 12
41373929 director: 13
41383930 (1) Is not elected by the shareholders of the state trust 14
41393931 company; 15
41403932 (2) Does not vote on matters before the board of a state trust 16
41413933 company or a committee of the board and is not counted for purposes of 17
41423934 determining a quorum of the board or committee; and 18
41433935 (3) Provides solely general policy advice to the board of a 19
41443936 state trust company. 20
41453937 21
41463938 23-51-415. Fiduciary responsibility. 22
41473939 The board of a state trust company is responsible for the proper 23
41483940 exercise of fiduciary powers by the state trust company and each matter 24
41493941 pertinent to the exercise of fiduciary powers, including: 25
41503942 (1) The determination of policies; 26
41513943 (2) The investment and disposition of property held in a 27
41523944 fiduciary capacity; and 28
41533945 (3) The direction and review of the actions of an officer, 29
41543946 employee, and committee used by the state trust company in the exercise of 30
41553947 its fiduciary powers. 31
41563948 32
41573949 23-51-416. Officers of a state trust company. 33
41583950 (a) The board of a state trust company shall annually elect the 34
41593951 officers of the state trust company, who serve at the pleasure of the board. 35
4160- (b)(1) The state trust company shall have a principal executive 36 As Engrossed: S2/17/25 SB230
4161-
4162- 105 02-17-2025 11:15:03 ANS145
4163-
4164-
3952+ (b)(1) The state trust company shall have a principal executive 36 SB230
3953+
3954+ 105 02/13/2025 12:57:21 PM ANS145
41653955 officer primarily responsible for the execution of board policies and 1
41663956 operation of the state trust company and an officer responsible for the 2
41673957 maintenance and storage of all corporate books and records of the state trust 3
41683958 company and for required attestation of signatures. 4
41693959 (2) The board may appoint other officers of the state trust 5
41703960 company as the board considers necessary. 6
41713961 (3) The duties of any two (2) or more officers may be combined 7
41723962 by the board and held by one (1) person. 8
41733963 9
41743964 23-51-417. Bonding requirements. 10
41753965 (a) The board of a state trust company shall require protection and 11
41763966 indemnity for clients in reasonable amounts established by rules adopted 12
41773967 under this chapter against dishonesty, fraud, defalcation, forgery, theft, 13
41783968 and other similar insurable losses with corporate insurance or surety 14
41793969 companies: 15
41803970 (1) Authorized to do business in this state; or 16
41813971 (2) Acceptable to the Bank Commissioner and otherwise lawfully 17
41823972 permitted to issue the coverage against those losses in this state. 18
41833973 (b) Except as otherwise provided by rule, coverage required under 19
41843974 subsection (a) of this section shall include each director, officer, and 20
41853975 employee of the state trust company without regard to whether the person 21
41863976 receives salary or other compensation. 22
41873977 (c)(1) A state trust company may apply to the commissioner for 23
41883978 permission to eliminate the bonding requirement of this section for a 24
41893979 particular individual. 25
41903980 (2) The commissioner shall approve the application if the 26
41913981 commissioner finds that the bonding requirement is unnecessary or burdensome. 27
41923982 (3) Unless the application presents novel or unusual questions, 28
41933983 the commissioner shall approve the application or set the application for 29
41943984 hearing not later than sixty (60) days after the date the commissioner 30
41953985 considers the application complete and accepted for filing. 31
41963986 32
41973987 23-51-418. Recordkeeping. 33
41983988 (a) A state trust company shall keep its fiduciary records separate 34
41993989 and distinct from other records of the state trust company. 35
4200- (b) The fiduciary records under subsection (a) of this section shall 36 As Engrossed: S2/17/25 SB230
4201-
4202- 106 02-17-2025 11:15:03 ANS145
4203-
4204-
3990+ (b) The fiduciary records under subsection (a) of this section shall 36 SB230
3991+
3992+ 106 02/13/2025 12:57:21 PM ANS145
42053993 contain all material information relative to each account as appropriate 1
42063994 under the circumstances. 2
42073995 3
42083996 Subchapter 5 — Permissible Activities for a State Trust Company 4
42093997 5
42103998 23-51-501. Lending limits. 6
42113999 (a) A state trust company's total outstanding loans and extensions of 7
42124000 credit to a person other than an insider shall not exceed an amount equal to 8
42134001 twenty percent (20%) of the state trust company's capital base. 9
42144002 (b)(1) The aggregate loans and extensions of credit outstanding at any 10
42154003 time to insiders of the state trust company shall not exceed an amount equal 11
42164004 to twenty percent (20%) of the state trust company's capital base. 12
42174005 (2) A covered transaction between an insider and a state trust 13
42184006 company shall be engaged in only on terms and under circumstances, including 14
42194007 credit standards, that are substantially the same as those for comparable 15
42204008 transactions with a noninsider. 16
42214009 (c)(1) The Bank Commissioner may adopt rules to implement and 17
42224010 administer this section. 18
42234011 (2) The commissioner may include rules: 19
42244012 (A) To establish limits, requirements, or exemptions other 20
42254013 than those specified by this section for particular classes or categories of 21
42264014 loans or extensions of credit; and 22
42274015 (B) Establish collective lending and investment limits. 23
42284016 (d) The commissioner may determine whether a loan or extension of 24
42294017 credit made to a person will be attributed to another person for purposes of 25
42304018 this section. 26
42314019 (e) A state trust company shall not lend trust deposits, except that a 27
42324020 trustee may make a loan to a beneficiary of the trust if the loan is 28
42334021 expressly authorized or directed by the instrument or transaction 29
42344022 establishing the trust. 30
42354023 (f)(1) An officer or director of a state trust company who shall 31
42364024 knowingly make or approve a loan in violation of this section or who shall 32
42374025 knowingly permit such a loan to be made, or who shall fail to exercise his or 33
42384026 her authority to prevent the making of the loan shall be personally liable to 34
42394027 the state trust company, or to the commissioner, for the full amount of the 35
4240-loan. 36 As Engrossed: S2/17/25 SB230
4241-
4242- 107 02-17-2025 11:15:03 ANS145
4243-
4244-
4028+loan. 36 SB230
4029+
4030+ 107 02/13/2025 12:57:21 PM ANS145
42454031 (2) However, written notice of disapproval of the loan, served 1
42464032 on the board of the state trust company and also the commissioner at the time 2
42474033 the making or existence of the loan first comes to his or her knowledge, 3
42484034 shall relieve an officer or director from personal liability. 4
42494035 5
42504036 23-51-502. Investment in state trust company facilities. 6
42514037 (a)(1) Without the prior written approval of the Bank Commissioner, a 7
42524038 state trust company shall not directly or indirectly invest an amount in 8
42534039 excess of its capital and surplus in state trust company facilities, 9
42544040 furniture, fixtures, and equipment. 10
42554041 (2) Except as otherwise provided by rules adopted under this 11
42564042 chapter, in computing this limitation a state trust company shall include: 12
42574043 (A) Its direct investment in state trust company 13
42584044 facilities; 14
42594045 (B) Any investment in equity or investment securities of a 15
42604046 company holding title to a facility used by the state trust company as 16
42614047 specified by subdivision (a)(2)(A) of this section; 17
42624048 (C) Any loan made by the state trust company to or on the 18
42634049 security of equity or investment securities issued by a company holding title 19
42644050 to a facility used by the state trust company; and 20
42654051 (D) Any indebtedness incurred on state trust company 21
42664052 facilities by a company: 22
42674053 (i) That holds title to the facility; 23
42684054 (ii) That is an affiliate of the state trust 24
42694055 company; and 25
42704056 (iii) In which the state trust company is invested 26
42714057 in the manner described by subdivision (a)(2)(B) or subdivision (a)(2)(C) of 27
42724058 this section; and 28
42734059 (E) May exclude an amount included under subdivisions 29
42744060 (a)(2)(B)-(D) of this section to the extent any lease of a facility from the 30
42754061 company holding title to the facility is capitalized on the books of the 31
42764062 state trust company. 32
42774063 (b) Real estate acquired for a state trust facility and not improved 33
42784064 and occupied by the state trust company ceases to be a state trust company 34
42794065 facility on the fifth anniversary of the date of its acquisition, unless the 35
4280-commissioner on application grants written approval to further delay in the 36 As Engrossed: S2/17/25 SB230
4281-
4282- 108 02-17-2025 11:15:03 ANS145
4283-
4284-
4066+commissioner on application grants written approval to further delay in the 36 SB230
4067+
4068+ 108 02/13/2025 12:57:21 PM ANS145
42854069 improvement and occupation of the property by the state trust company. 1
42864070 (c) A state trust company shall comply with generally accepted 2
42874071 accounting principles, consistently applied, in accounting for its investment 3
42884072 in and depreciation of state trust company facilities, furniture, fixtures, 4
42894073 and equipment. 5
42904074 6
42914075 23-51-503. Other real estate. 7
42924076 (a) A state trust company shall not acquire real estate except: 8
42934077 (1) As permitted by § 23 -51-502 or as otherwise provided by this 9
42944078 chapter, including rules adopted under this chapter; 10
42954079 (2) If necessary to avoid or minimize a loss on a loan or 11
42964080 investment previously made in good faith; or 12
42974081 (3) With the prior written approval of the Bank Commissioner. 13
42984082 (b) To the extent reasonably necessary to avoid or minimize loss on 14
42994083 real estate acquired as permitted by subsection (a) of this section, a state 15
43004084 trust company may exchange real estate for other real estate or personal 16
43014085 property, invest additional funds in or improve real estate acquired under 17
43024086 this subsection or subsection (a) of this section, or acquire additional real 18
43034087 estate. 19
43044088 (c) A state trust company shall dispose of any real estate subject to 20
43054089 subdivisions (a)(1) and (2) of this section not later than: 21
43064090 (1) The fifth anniversary of the date: 22
43074091 (A) It was acquired, except as otherwise provided by rules 23
43084092 adopted under this chapter; or 24
43094093 (B) It ceases to be used as a state trust company 25
43104094 facility; or 26
43114095 (2) The third anniversary of the date it ceases to be a state 27
43124096 trust company facility as provided by § 23 -51-502(b). 28
43134097 (d) A state trust company may apply to the commissioner for one (1) or 29
43144098 more extensions of time for disposing of real estate, which the commissioner 30
43154099 may grant if the commissioner determines that: 31
43164100 (1) The state trust company has made a good faith effort to 32
43174101 dispose of the real estate; or 33
43184102 (2) Disposal of the real estate would be detrimental to the 34
43194103 state trust company. 35
4320- 36 As Engrossed: S2/17/25 SB230
4321-
4322- 109 02-17-2025 11:15:03 ANS145
4323-
4324-
4104+ 36 SB230
4105+
4106+ 109 02/13/2025 12:57:21 PM ANS145
43254107 23-51-504. Investment in securities. 1
43264108 (a) A state trust company may invest its corporate funds in any type 2
43274109 or character of equity or investment securities subject to the limitations 3
43284110 provided by this section. 4
43294111 (b) Unless the Bank Commissioner approves maintenance of a lesser 5
43304112 amount in writing, a state trust company shall invest and maintain an amount 6
43314113 equal to not less than forty percent (40%) of the state trust company's 7
43324114 capital under § 23-51-403 in unencumbered cash, cash equivalents, and readily 8
43334115 marketable securities. 9
43344116 (c)(1) Subject to subsection (d) of this section, the total investment 10
43354117 in equity and investment securities of any one issuer, obligor, or maker, 11
43364118 held by the state trust company for its own account, shall not exceed an 12
43374119 amount equal to twenty percent (20%) of the state trust company's capital 13
43384120 base. 14
43394121 (2) The commissioner may authorize investments in excess of this 15
43404122 limitation on written application if the commissioner concludes that: 16
43414123 (A) The excess investment is not prohibited by other 17
43424124 applicable law; and 18
43434125 (B) The safety and soundness of the requesting state trust 19
43444126 company is not adversely affected. 20
43454127 (d) Notwithstanding subsection (c) of this section, a state trust 21
43464128 company may purchase for its own account, without limitation and subject only 22
43474129 to the exercise of prudent judgment: 23
43484130 (1) Direct obligations of the United States Government; 24
43494131 (2) Obligations of agencies and instrumentalities created by act 25
43504132 of the United States Congress and authorized thereby to issue securities or 26
43514133 evidences of indebtedness, regardless of guarantee of repayment by the United 27
43524134 States Government; 28
43534135 (3) Obligations the principal and interest of which are fully 29
43544136 guaranteed by the United States Government or an agency or an instrumentality 30
43554137 created by an act of the United States Congress and authorized thereby to 31
43564138 issue such a guarantee; 32
43574139 (4) Obligations the principal and interest of which are fully 33
43584140 secured, insured, or covered by commitments or agreements to purchase by the 34
43594141 United States Government or an agency or instrumentality created by an act of 35
4360-the United States Congress and authorized thereby to issue such commitments 36 As Engrossed: S2/17/25 SB230
4361-
4362- 110 02-17-2025 11:15:03 ANS145
4363-
4364-
4142+the United States Congress and authorized thereby to issue such commitments 36 SB230
4143+
4144+ 110 02/13/2025 12:57:21 PM ANS145
43654145 or agreements; 1
43664146 (5) General obligations of the states of the United States and 2
43674147 of the political subdivisions, municipalities, commonwealths, territories or 3
43684148 insular possessions of the United States; 4
43694149 (6) Obligations issued by the State Board of Education under 5
43704150 authority of the Arkansas Constitution or applicable statutes; 6
43714151 (7) Warrants of political subdivisions of the State of Arkansas 7
43724152 and municipalities of the State of Arkansas having maturities not exceeding 8
43734153 one (1) year; 9
43744154 (8) Prerefunded municipal bonds, the principal and interest of 10
43754155 which are fully secured by the principal and interest of a direct obligation 11
43764156 of the United States Government; 12
43774157 (9) The sale of federal funds with a maturity of not more than 13
43784158 one (1) business day; 14
43794159 (10) Demand, savings, or time deposits or accounts of a 15
43804160 depository institution chartered by the United States, any state, or the 16
43814161 District of Columbia, provided funds invested in the demand, savings, or time 17
43824162 deposits or accounts are fully insured by a federal deposit insurance agency; 18
43834163 (11) Repurchase agreements that are fully collateralized by 19
43844164 direct obligations of the United States Government, and general obligations 20
43854165 of any state or any political subdivision of a state, if the repurchase 21
43864166 agreement provides for the taking of delivery of the collateral, either 22
43874167 directly or through an authorized custodian; and 23
43884168 (12) Securities of, or other interest in, any open -end type 24
43894169 investment company or investment trust registered under the Investment 25
43904170 Company Act of 1940, and which is defined as a “money market fund” under 17 26
43914171 C.F.R. § 270.2a-7, as it existed on January 1, 2025, if: 27
43924172 (A) The portfolio of the investment company or investment 28
43934173 trust is limited principally to United States Government obligations and to 29
43944174 repurchase agreements fully collateralized by United States Government 30
43954175 obligations; and 31
43964176 (B) The investment company or investment trust takes 32
43974177 delivery of the collateral either directly or through an authorized 33
43984178 custodian. 34
43994179 (e) The commissioner may adopt rules to establish limits, 35
4400-requirements, or exemptions other than those specified by this section for 36 As Engrossed: S2/17/25 SB230
4401-
4402- 111 02-17-2025 11:15:03 ANS145
4403-
4404-
4180+requirements, or exemptions other than those specified by this section for 36 SB230
4181+
4182+ 111 02/13/2025 12:57:21 PM ANS145
44054183 particular classes or categories of investment, or limit or expand investment 1
44064184 authority for state trust companies for particular classes or categories of 2
44074185 securities or other property. 3
44084186 4
44094187 23-51-505. Transactions in state trust company shares. 5
44104188 (a) A state trust company may acquire its own shares if: 6
44114189 (1) The amount of its undivided profits is sufficient to fully 7
44124190 absorb the acquisition of the shares under regulatory accounting principles; 8
44134191 and 9
44144192 (2) The state trust company obtains the prior written approval 10
44154193 of the Bank Commissioner. 11
44164194 (b) A state trust company shall not make loans upon the security of 12
44174195 its own shares. 13
44184196 14
44194197 23-51-506. Mutual funds. 15
44204198 (a) A state trust company may invest for its own account in equity 16
44214199 securities of an investment company registered under the Investment Company 17
44224200 Act of 1940, 15 U.S.C. § 80a -1 et seq., as it existed on January 1, 2025, and 18
44234201 the Securities Act of 1933, 15 U.S.C. § 77a et seq., as it existed on January 19
44244202 1, 2025, if the portfolio of the investment company consists wholly of 20
44254203 investments in which the state trust company could invest directly for its 21
44264204 own account. 22
44274205 (b) If the portfolio of an investment company described in subsection 23
44284206 (a) of this section consists wholly of investments in which the state trust 24
44294207 company could invest directly without limitation under § 23 -51-504, the state 25
44304208 trust company may invest in the investment company without limitation. 26
44314209 (c)(1) If the portfolio of an investment company described in 27
44324210 subsection (a) of this section contains an investment that is subject to the 28
44334211 limits of § 23-51-504, the state trust company shall not invest in the 29
44344212 investment company more than an amount equal to twenty percent (20%) of the 30
44354213 state trust company's capital base. 31
44364214 (2) Subdivision (c)(1) of this section does not apply to a money 32
44374215 market fund. 33
44384216 (d) In evaluating investment limits under this chapter, a state trust 34
44394217 company shall not be required to combine: 35
4440- (1) The state trust company's pro rata share of the securities 36 As Engrossed: S2/17/25 SB230
4441-
4442- 112 02-17-2025 11:15:03 ANS145
4443-
4444-
4218+ (1) The state trust company's pro rata share of the securities 36 SB230
4219+
4220+ 112 02/13/2025 12:57:21 PM ANS145
44454221 of an issuer in the portfolio of an investment company with the state trust 1
44464222 company's pro rata share of the securities of that issuer held by another 2
44474223 investment company in which the state trust company has invested; or 3
44484224 (2) The state trust company's own direct investment in the 4
44494225 securities of an issuer with the state trust company's pro rata share of the 5
44504226 securities of that issuer held by each investment company in which the state 6
44514227 trust company has invested under this section. 7
44524228 8
44534229 23-51-507. Lease financing transactions. 9
44544230 (a)(1) Subject to rules adopted under this chapter, a state trust 10
44554231 company may become the owner and lessor of tangible personal property for 11
44564232 lease financing transactions on a net lease basis on the specific request and 12
44574233 for the use of a client. 13
44584234 (2) Without the written approval of the Bank Commissioner to 14
44594235 continue holding property acquired for leasing purposes under this 15
44604236 subsection, the state trust company shall not hold the property more than six 16
44614237 (6) months after the date of expiration of the original or any extended or 17
44624238 renewed lease period agreed to by the client for whom the property was 18
44634239 acquired or by a subsequent lessee. 19
44644240 (b)(1) Rental payments received by the state trust company in a lease 20
44654241 financing transaction under this section are considered to be rent and not 21
44664242 interest or compensation for the use, forbearance, or detention of money. 22
44674243 (2) A lease financing transaction under this section is 23
44684244 considered to be a loan or extension of credit for purposes of this 24
44694245 subchapter. 25
44704246 26
44714247 23-51-508. Trust funds deposits. 27
44724248 (a) A state trust company may deposit trust funds with itself as an 28
44734249 investment if authorized by the settlor or the beneficiary, if: 29
44744250 (1) The state trust company maintains as security for the 30
44754251 deposits a separate fund of securities, legal for trust investments, under 31
44764252 control of a federal reserve bank or other entity approved by the Bank 32
44774253 Commissioner, either in this state or elsewhere; 33
44784254 (2) The total market value of the security is at all times at 34
44794255 least equal to the amount of the deposit; 35
4480- (3) The separate fund is designated as a separate fund; and 36 As Engrossed: S2/17/25 SB230
4481-
4482- 113 02-17-2025 11:15:03 ANS145
4483-
4484-
4256+ (3) The separate fund is designated as a separate fund; and 36 SB230
4257+
4258+ 113 02/13/2025 12:57:21 PM ANS145
44854259 (4) The separate fund is maintained under the control of another 1
44864260 trust institution, bank, or government agency. 2
44874261 (b)(1) A state trust company may make periodic withdrawals from or 3
44884262 additions to the securities fund required by subsection (a) of this section 4
44894263 as long as the required value is maintained. 5
44904264 (2) Income from the securities in the fund belongs to the state 6
44914265 trust company. 7
44924266 (c) Security for a deposit under this section is not required for a 8
44934267 deposit under subsection (a) of this section to the extent the deposit is 9
44944268 insured by the Federal Deposit Insurance Corporation or its successor. 10
44954269 11
44964270 23-51-509. Common investment funds. 12
44974271 (a) A state trust company may establish common trust funds to provide 13
44984272 investment to itself as a fiduciary. 14
44994273 (b) The Bank Commissioner may adopt rules to implement and administer 15
45004274 this section, including without limitation rules to establish investment and 16
45014275 participation limitations, disclosure of fees, audit requirements, limit or 17
45024276 expand investment authority for particular classes or categories of 18
45034277 securities or other property, advertising, exemptions, and other requirements 19
45044278 that may be necessary to administer this section. 20
45054279 21
45064280 23-51-510. Transactions with management and affiliates. 22
45074281 (a) Without the prior approval of a disinterested majority of the 23
45084282 board of a state trust company recorded in the minutes, or if a disinterested 24
45094283 majority cannot be obtained the prior written approval of a majority of the 25
45104284 disinterested directors of a state trust company and the Bank Commissioner, a 26
45114285 state trust company shall not directly or indirectly: 27
45124286 (1) Sell or lease an asset of the state trust company to an 28
45134287 officer, director, or principal shareholder of the state trust company or an 29
45144288 affiliate of the state trust company; 30
45154289 (2) Purchase or lease an asset in which an officer, director or 31
45164290 principal shareholder of the state trust company or an affiliate of the state 32
45174291 trust company has an interest; or 33
45184292 (3) Subject to § 23 -51-501, extend credit to an officer, 34
45194293 director, or principal shareholder of the state trust company or an affiliate 35
4520-of the state trust company. 36 As Engrossed: S2/17/25 SB230
4521-
4522- 114 02-17-2025 11:15:03 ANS145
4523-
4524-
4294+of the state trust company. 36 SB230
4295+
4296+ 114 02/13/2025 12:57:21 PM ANS145
45254297 (b)(1) Notwithstanding subsection (a) of this section, a lease 1
45264298 transaction described in subdivision (a)(2) of this section involving real 2
45274299 property shall not be consummated, renewed, or extended without the prior 3
45284300 written approval of the commissioner. 4
45294301 (2) For purposes of this subdivision only, an affiliate of the 5
45304302 state trust company does not include a subsidiary of the state trust company. 6
45314303 (c) Subject to § 23 -51-501, a state trust company shall not directly 7
45324304 or indirectly extend credit to an employee, officer, director, or principal 8
45334305 shareholder of the state trust company or an affiliate of the state trust 9
45344306 company, unless: 10
45354307 (1) The extension of credit: 11
45364308 (A) Is made on substantially the same terms, including 12
45374309 interest rates and collateral, as those prevailing at the time for comparable 13
45384310 transactions by the state trust company with persons who are not employees, 14
45394311 officers, directors, principal shareholders, or affiliates of the state trust 15
45404312 company; and 16
45414313 (B) Does not involve more than the normal risk of 17
45424314 repayment or present other unfavorable features; and 18
45434315 (2) The state trust company follows credit underwriting 19
45444316 procedures that are not less stringent than those applicable to comparable 20
45454317 transactions by the state trust company with persons who are not employees, 21
45464318 officers, directors, principal shareholders or affiliates of the state trust 22
45474319 company. 23
45484320 (d) An officer or director of the state trust company who knowingly 24
45494321 participates in or knowingly permits a violation of this section upon 25
45504322 conviction is guilty of a Class D felony. 26
45514323 (e) The commissioner may adopt rules to implement and administer this 27
45524324 section, including rules to establish limits, requirements, or exemptions 28
45534325 other than those specified by this section for particular categories of 29
45544326 transactions. 30
45554327 31
45564328 23-51-511. Subsidiaries. 32
45574329 (a) Except as otherwise provided by this chapter or rules adopted 33
45584330 under this chapter, a state trust company may acquire or establish a 34
45594331 subsidiary to conduct any activity that may lawfully be conducted through the 35
4560-form of organization chosen for the subsidiary. 36 As Engrossed: S2/17/25 SB230
4561-
4562- 115 02-17-2025 11:15:03 ANS145
4563-
4564-
4332+form of organization chosen for the subsidiary. 36 SB230
4333+
4334+ 115 02/13/2025 12:57:21 PM ANS145
45654335 (b)(1) A state trust company shall not: 1
45664336 (A) Invest more than an amount equal to twenty percent 2
45674337 (20%) of its capital base in a single subsidiary; and 3
45684338 (B) Invest an amount in excess of forty percent (40%) of 4
45694339 its capital base in all subsidiaries. 5
45704340 (2) The amount of a state trust company's investment in a 6
45714341 subsidiary is the total amount of the state trust company's investment in 7
45724342 equity or investment securities issued by its subsidiary and any loans and 8
45734343 extensions of credit from the state trust company to its subsidiary. 9
45744344 (3) The Bank Commissioner may authorize investments in excess of 10
45754345 these limitations on written application if the commissioner concludes that: 11
45764346 (A) The excess investment is not prohibited by other 12
45774347 applicable law; and 13
45784348 (B) The safety and soundness of the requesting state trust 14
45794349 company is not adversely affected. 15
45804350 (c) A state trust company that intends to acquire, establish, or 16
45814351 perform new activities through a subsidiary shall submit a letter to the 17
45824352 commissioner describing in detail the proposed activities of the subsidiary. 18
45834353 (d)(1) The state trust company may acquire or establish a subsidiary 19
45844354 or begin performing new activities in an existing subsidiary thirty (30) days 20
45854355 after the date the commissioner receives the state trust company's letter 21
45864356 submitted under subsection (c) of this section, unless the commissioner 22
45874357 specifies another date. 23
45884358 (2) The commissioner may extend the thirty -day period of review 24
45894359 on a determination that the state trust company's letter raises issues that 25
45904360 require additional information or additional time for analysis. 26
45914361 (3) If the period of review is extended, the state trust company 27
45924362 may acquire or establish the subsidiary, or perform new activities in an 28
45934363 existing subsidiary, only on prior written approval of the commissioner. 29
45944364 (e)(1) A subsidiary of a state trust company is subject to rules 30
45954365 adopted under this chapter. 31
45964366 (2) In the absence of rules, the commissioner may regulate a 32
45974367 subsidiary as if it were a state trust company. 33
45984368 34
45994369 Subchapter 6 — Acquisition of Control 35
4600- 36 As Engrossed: S2/17/25 SB230
4601-
4602- 116 02-17-2025 11:15:03 ANS145
4603-
4604-
4370+ 36 SB230
4371+
4372+ 116 02/13/2025 12:57:21 PM ANS145
46054373 23-51-601. Acquisition of control — Limitations. 1
46064374 (a) Except as expressly otherwise permitted, a person shall not, 2
46074375 without the prior written approval of the Bank Commissioner, directly or 3
46084376 indirectly acquire control of a state trust company through a change in a 4
46094377 legal or beneficial interest in voting securities of a state trust company or 5
46104378 a corporation or other entity owning voting securities of a state trust 6
46114379 company. 7
46124380 (b) This subchapter does not prohibit a person from negotiating to 8
46134381 acquire control of a state trust company or a person that controls a state 9
46144382 trust company. 10
46154383 (c) This section does not apply to: 11
46164384 (1) The acquisition of securities in connection with the 12
46174385 exercise of a security interest or otherwise in full or partial satisfaction 13
46184386 of a debt previously contracted for in good faith if the acquiring person 14
46194387 files written notice of acquisition with the commissioner before the person 15
46204388 votes the securities acquired; 16
46214389 (2) The acquisition of voting securities in any class or series 17
46224390 by a controlling person who has previously complied with and received 18
46234391 approval under this chapter or who was identified as a controlling person in 19
46244392 a prior application filed with and approved by the commissioner; 20
46254393 (3) An acquisition or transfer by operation of law, will, or 21
46264394 intestate succession if the acquiring person files written notice of 22
46274395 acquisition with the commissioner before the person votes the securities 23
46284396 acquired; or 24
46294397 (4) A transaction exempted by the commissioner by rule or order 25
46304398 because the transaction is not within the purposes of this subchapter or the 26
46314399 rule of the commissioner that the transaction is not necessary or appropriate 27
46324400 to achieve the objectives of this subchapter. 28
46334401 29
46344402 23-51-602. Application for acquisition of control. 30
46354403 (a) The proposed transferee seeking approval to acquire control of a 31
46364404 state trust company or a corporation or other entity that controls a state 32
46374405 trust company shall file with the Bank Commissioner: 33
46384406 (1) An application in the form prescribed by the commissioner; 34
46394407 (2) The filing fee in an amount not less than one thousand five 35
4640-hundred dollars ($1,500) and not more than three thousand dollars ($3,000), 36 As Engrossed: S2/17/25 SB230
4641-
4642- 117 02-17-2025 11:15:03 ANS145
4643-
4644-
4408+hundred dollars ($1,500) and not more than three thousand dollars ($3,000), 36 SB230
4409+
4410+ 117 02/13/2025 12:57:21 PM ANS145
46454411 as set by rules issued by the commissioner; and 1
46464412 (3) All information required by rule or that the commissioner 2
46474413 requires in a particular application as necessary to make an informed 3
46484414 decision to approve or reject the proposed acquisition. 4
46494415 (b) If the proposed transferee includes any group of individuals or 5
46504416 entities acting in concert, the information required by the commissioner may 6
46514417 be required of each member of the group. 7
46524418 (c) If the proposed transferee is not an Arkansas resident, an 8
46534419 Arkansas company, or an out -of-state company qualified to do business in this 9
46544420 state, a written consent to service of process on a resident of this state is 10
46554421 required for any action or suit arising out of or connected with the proposed 11
46564422 acquisition. 12
46574423 (d) The proposed transferee shall give public notice of the 13
46584424 application, its date of filing, and the identity of each participant, in the 14
46594425 form specified by the commissioner, through publication by one (1) insertion 15
46604426 in a newspaper of general statewide circulation, promptly after the 16
46614427 commissioner accepts the application as complete. 17
46624428 18
46634429 23-51-603. Hearing and decision on acquisition of control. 19
46644430 (a)(1) Not later than sixty (60) days after the application for 20
46654431 acquisition of control is officially filed under § 23 -51-602, the Bank 21
46664432 Commissioner may approve the application or set the application for hearing. 22
46674433 (2) If the commissioner sets a hearing, the commissioner shall 23
46684434 conduct a hearing as he or she considers advisable and consistent with 24
46694435 governing statutes and rules. 25
46704436 (b) Based on the record, the commissioner may issue an order denying 26
46714437 an application for acquisition of control if: 27
46724438 (1) The acquisition of control would substantially lessen 28
46734439 competition, be in restraint of trade, or is not in the public interest, 29
46744440 unless: 30
46754441 (A) The anticompetitive effects of the proposed 31
46764442 acquisition of control are clearly outweighed in the public interest by the 32
46774443 probable effect of acquisition of control in meeting the convenience and 33
46784444 needs of the community to be served; and 34
46794445 (B) The proposed acquisition of control is not in 35
4680-violation of law of this state or the United States; 36 As Engrossed: S2/17/25 SB230
4681-
4682- 118 02-17-2025 11:15:03 ANS145
4683-
4684-
4446+violation of law of this state or the United States; 36 SB230
4447+
4448+ 118 02/13/2025 12:57:21 PM ANS145
46854449 (2) The financial condition of the proposed transferee, or any 1
46864450 member of a group composing the proposed transferee, might jeopardize the 2
46874451 financial stability of the state trust company being acquired; 3
46884452 (3) Plans or proposals to operate, liquidate, or sell the state 4
46894453 trust company or its assets are not in the best interests of the state trust 5
46904454 company; 6
46914455 (4) The experience, ability, standing, competence, 7
46924456 trustworthiness, and integrity of the proposed transferee, or any member of a 8
46934457 group comprising the proposed transferee, are insufficient to justify a 9
46944458 belief that the state trust company will be free from improper or unlawful 10
46954459 influence or interference with respect to the state trust company's operation 11
46964460 in compliance with law; 12
46974461 (5) The state trust company will be insolvent, in a hazardous 13
46984462 condition, not have adequate capitalization, or not be in compliance with the 14
46994463 laws of this state after the acquisition; 15
47004464 (6) The proposed transferee has failed to furnish all 16
47014465 information pertinent to the application reasonably required by the 17
47024466 commissioner; or 18
47034467 (7) The proposed transferee is not acting in good faith. 19
47044468 (c)(1) If an application for acquisition of control filed under § 23 -20
47054469 51-602 is approved by the commissioner under this section, the transaction 21
47064470 may be consummated. 22
47074471 (2) Any written commitment from the proposed transferee offered 23
47084472 to and accepted by the commissioner as a condition that the application will 24
47094473 be approved is enforceable against the state trust company and the transferee 25
47104474 and is considered for all purposes an agreement under this subchapter. 26
47114475 27
47124476 23-51-604. Appeal from adverse decision. 28
47134477 (a)(1) If a hearing has been held and the Bank Commissioner has 29
47144478 entered an order denying the application for acquisition of control filed 30
47154479 under § 23-51-602 and the order has become final, the proposed transferee may 31
47164480 appeal the final order by filing a petition for judicial review under the 32
47174481 Arkansas Administrative Procedure Act, § 25 -15-201 et seq. 33
47184482 (2) The time for filing a petition for judicial review under 34
47194483 subdivision (a)(1) of this section shall run from the date the final decision 35
4720-of the commissioner is mailed or delivered, in written form, to the parties 36 As Engrossed: S2/17/25 SB230
4721-
4722- 119 02-17-2025 11:15:03 ANS145
4723-
4724-
4484+of the commissioner is mailed or delivered, in written form, to the parties 36 SB230
4485+
4486+ 119 02/13/2025 12:57:21 PM ANS145
47254487 desiring to appeal. 1
47264488 (b) The filing of an appeal under this section does not stay the order 2
47274489 of the commissioner. 3
47284490 4
47294491 23-51-605. Objection to other transfer. 5
47304492 This subchapter shall not be construed to prevent the Bank Commissioner 6
47314493 from investigating, commenting on, or seeking to enjoin or set aside a 7
47324494 transfer of voting securities that evidence a direct or indirect interest in 8
47334495 a state trust company, whether or not the transfer is included within this 9
47344496 subchapter, if the commissioner considers the transfer to be against the 10
47354497 public interest. 11
47364498 12
47374499 Subchapter 7 — Mergers, Purchases and Assumptions, and Sale of Assets 13
47384500 14
47394501 23-51-701. Merger authority. 15
47404502 (a) With the prior written approval of the Bank Commissioner, a state 16
47414503 trust company may merge: 17
47424504 (1) With and into a state bank to the same extent as a state 18
47434505 bank under the Arkansas Banking Code of 1997, chapters 45 -50 of this title; 19
47444506 or 20
47454507 (2) With another person to the same extent as a business 21
47464508 corporation under the Arkansas Business Corporation Act of 1987, § 4 -27-101 22
47474509 et seq., subject to this chapter. 23
47484510 (b) The approval of the board and the shareholders of both the state 24
47494511 trust company and the state bank who are parties to the merger shall be 25
47504512 obtained according to § 23 -48-503 as if the state trust company were a state 26
47514513 bank, except as otherwise provided by rules adopted under this chapter. 27
47524514 (c) The approval of the board and the shareholders of both the state 28
47534515 trust company and the person or named entities who are parties to the merger 29
47544516 shall be obtained according to the Arkansas Business Corporation Act of 1987, 30
47554517 § 4-27-101 et seq., as if the state trust company were a domestic 31
47564518 corporation, except as otherwise provided by rules adopted under this 32
47574519 chapter. 33
47584520 34
47594521 23-51-702. Merger application. 35
4760- (a) To apply for a merger under this subchapter, two (2) original 36 As Engrossed: S2/17/25 SB230
4761-
4762- 120 02-17-2025 11:15:03 ANS145
4763-
4764-
4522+ (a) To apply for a merger under this subchapter, two (2) original 36 SB230
4523+
4524+ 120 02/13/2025 12:57:21 PM ANS145
47654525 copies of the articles of merger and an application in the form required by 1
47664526 the Bank Commissioner shall be filed with the commissioner. 2
47674527 (b) The commissioner shall investigate the condition of the merging 3
47684528 parties. 4
47694529 (c) The commissioner may require the submission of additional 5
47704530 information as considered necessary to an informed decision. 6
47714531 7
47724532 23-51-703. Approval of merger by Bank Commissioner. 8
47734533 (a) The Bank Commissioner may approve a merger under this subchapter 9
47744534 if: 10
47754535 (1) A resulting state trust company will be solvent and have 11
47764536 adequate capitalization for its business and location; 12
47774537 (2) A resulting state trust company has in all respects complied 13
47784538 with the statutes and rules relative to the organization of a state trust 14
47794539 company; 15
47804540 (3) All fiduciary obligations and liabilities of a state trust 16
47814541 company that is a party to the merger have been properly discharged or 17
47824542 otherwise lawfully assumed or retained by a state trust company or other 18
47834543 fiduciary; 19
47844544 (4) A surviving, new, or acquiring person that is not authorized 20
47854545 to engage in the trust business will not engage in the trust business and has 21
47864546 in all respects complied with the laws of this state; and 22
47874547 (5) All conditions imposed by the commissioner have been 23
47884548 satisfied or otherwise resolved. 24
47894549 (b) If the commissioner approves the merger under this section and 25
47904550 finds that all required filing fees and investigative costs have been paid, 26
47914551 the commissioner shall: 27
47924552 (1) Endorse the face of both original copies of the articles of 28
47934553 merger with the date of approval and the word “Approved”; 29
47944554 (2) File one (1) original copy of the articles of merger in the 30
47954555 State Bank Department's records; and 31
47964556 (3) Deliver one (1) original copy of the articles of merger to 32
47974557 each surviving, new, or acquiring entity. 33
47984558 (c) A merger approved under this section is effective on the date of 34
47994559 approval, unless the merger agreement provides and the commissioner consents 35
4800-to a different effective date. 36 As Engrossed: S2/17/25 SB230
4801-
4802- 121 02-17-2025 11:15:03 ANS145
4803-
4804-
4560+to a different effective date. 36 SB230
4561+
4562+ 121 02/13/2025 12:57:21 PM ANS145
48054563 1
48064564 23-51-704. Rights of dissenters to mergers. 2
48074565 A shareholder of the state trust company may dissent from a merger 3
48084566 under this subchapter to the extent and by following the procedure provided 4
48094567 by the Arkansas Business Corporation Act of 1987, § 4 -27-101 et seq., or 5
48104568 rules adopted under this chapter. 6
48114569 7
48124570 23-51-705. Authority to purchase assets of another trust institution. 8
48134571 (a)(1) Subject to this section, a state trust company may purchase 9
48144572 assets of another state trust company or trust -related assets of another 10
48154573 trust institution, including the right to control accounts established with 11
48164574 the trust institution. 12
48174575 (2) Except as otherwise expressly provided by this chapter or 13
48184576 any other applicable statutes, the purchase of all or part of the assets of 14
48194577 the trust institution does not make the purchasing state trust company 15
48204578 responsible for any liability or obligation of the selling trust institution 16
48214579 that is not expressly assumed by the purchasing state trust company. 17
48224580 (3) Except as otherwise provided by this chapter, this 18
48234581 subchapter does not govern or prohibit the purchase by a trust institution of 19
48244582 all or part of the assets of a corporation or other entity that is not a 20
48254583 trust institution. 21
48264584 (b)(1) An application in the form required by the Bank Commissioner 22
48274585 shall be filed with the commissioner for any acquisition of all or 23
48284586 substantially all of: 24
48294587 (A) The assets of a state trust company; or 25
48304588 (B) The trust assets of another trust institution by a 26
48314589 state trust company. 27
48324590 (2) The commissioner shall investigate the condition of the 28
48334591 purchaser and seller and may require the submission of additional information 29
48344592 as considered necessary to make an informed decision. 30
48354593 (3) The commissioner shall approve the purchase if: 31
48364594 (A) The acquiring state trust company will be solvent, not 32
48374595 in a hazardous condition, and have sufficient capital for its business and 33
48384596 location; 34
48394597 (B) The acquiring state trust company has complied with 35
4840-all applicable statutes and rules, including without limitation any 36 As Engrossed: S2/17/25 SB230
4841-
4842- 122 02-17-2025 11:15:03 ANS145
4843-
4844-
4598+all applicable statutes and rules, including without limitation any 36 SB230
4599+
4600+ 122 02/13/2025 12:57:21 PM ANS145
48454601 applicable requirements of §§ 23 -51-903 and 23-51-906; 1
48464602 (C) All fiduciary obligations and liabilities of the 2
48474603 parties have been properly discharged or otherwise assumed by the acquiring 3
48484604 state trust company; 4
48494605 (D) All conditions imposed by the commissioner have been 5
48504606 satisfied or otherwise resolved; and 6
48514607 (E) All fees and costs have been paid. 7
48524608 (c) A purchase requiring an application under subsection (b) of this 8
48534609 section is effective on: 9
48544610 (1) The date of approval; or 10
48554611 (2) On the effective date stated in the purchase agreement if 11
48564612 the commissioner consents to that date. 12
48574613 (d) The acquiring state trust company shall succeed by operation of 13
48584614 law to all of the rights, privileges, and obligations of the selling trust 14
48594615 institution under each account included in the assets acquired. 15
48604616 16
48614617 23-51-706. Sale of assets. 17
48624618 (a) The board of a state trust company, with the Bank Commissioner's 18
48634619 approval, may cause a state trust company to sell all or substantially all of 19
48644620 its assets, including the right to control accounts established with the 20
48654621 state trust company, without shareholder approval if the commissioner finds: 21
48664622 (1) The interests of the state trust company's clients, 22
48674623 depositors, and creditors are jeopardized because of insolvency or imminent 23
48684624 insolvency of the state trust company; 24
48694625 (2) The sale is in the best interest of the state trust 25
48704626 company's clients and creditors; and 26
48714627 (3) The Federal Deposit Insurance Corporation or its successor 27
48724628 approves the transaction unless the deposits of the state trust company are 28
48734629 not insured. 29
48744630 (b) A sale under this section shall include an assumption and promise 30
48754631 by the buyer to pay or otherwise discharge: 31
48764632 (1) All of the state trust company's liabilities to clients and 32
48774633 depositors; 33
48784634 (2) All of the state trust company's liabilities for salaries of 34
48794635 the state trust company's employees incurred before the date of the sale; 35
4880- (3) Obligations incurred by the commissioner arising out of the 36 As Engrossed: S2/17/25 SB230
4881-
4882- 123 02-17-2025 11:15:03 ANS145
4883-
4884-
4636+ (3) Obligations incurred by the commissioner arising out of the 36 SB230
4637+
4638+ 123 02/13/2025 12:57:21 PM ANS145
48854639 supervision or sale of the state trust company; and 1
48864640 (4) Fees and assessments due the State Bank Department. 2
48874641 (c) This section does not limit the incidental power of a state trust 3
48884642 company to buy and sell assets in the ordinary course of business. 4
48894643 (d)(1) This section does not affect the commissioner's right to take 5
48904644 action under any other law. 6
48914645 (2) The sale by a state trust company of all or substantially 7
48924646 all of its assets with shareholder approval is deemed a voluntary dissolution 8
48934647 and liquidation and shall be governed by subchapter 10 of this chapter. 9
48944648 10
48954649 Subchapter 8 — Trust Offices 11
48964650 12
48974651 23-51-801. Branches of offices of state trust institutions. 13
48984652 (a) A state trust institution may act as a fiduciary and engage in a 14
48994653 trust business at each trust office as permitted by this chapter and at a 15
49004654 branch. 16
49014655 (b) Notwithstanding subsection (a) of this section, a state bank or a 17
49024656 state trust company shall not engage at an out -of-state office in any trust 18
49034657 business not permitted to be conducted at the out -of-state office by the laws 19
49044658 of the host state applicable to trust institutions chartered by the host 20
49054659 state. 21
49064660 22
49074661 23-51-802. Trust offices and representative trust offices. 23
49084662 (a)(1) A state trust institution may establish or acquire and maintain 24
49094663 trust offices or representative trust offices anywhere in this state. 25
49104664 (2) A state trust institution desiring to establish or acquire 26
49114665 and maintain a trust office or representative trust office under subdivision 27
49124666 (a)(1) of this section shall file an application with the Bank Commissioner 28
49134667 providing: 29
49144668 (A) The name of the state trust institution; 30
49154669 (B) The location of the proposed additional trust office 31
49164670 or representative trust office; 32
49174671 (C) A general description of the surrounding market area; 33
49184672 (D) Whether or not the location will be owned or leased; 34
49194673 (E) A copy of the resolution adopted by the board of the 35
4920-state trust institution authorizing the additional trust office or 36 As Engrossed: S2/17/25 SB230
4921-
4922- 124 02-17-2025 11:15:03 ANS145
4923-
4924-
4674+state trust institution authorizing the additional trust office or 36 SB230
4675+
4676+ 124 02/13/2025 12:57:21 PM ANS145
49254677 representative trust office; 1
49264678 (F) A general description of the activities to be 2
49274679 conducted; 3
49284680 (G) An estimate of the cost of the trust office or 4
49294681 representative trust office; 5
49304682 (H) Any additional information required by commissioner; 6
49314683 and 7
49324684 (I) The payment for the filing fee, if any, prescribed by 8
49334685 the commissioner. 9
4934- (c) The commissioner may deny approval of the additional trust office 10
4935-or representative trust office under subsection (a) of this section if the 11
4936-commissioner finds that the applicant lacks sufficient financial resources to 12
4937-undertake the proposed expansion without adversely affecting its safety or 13
4938-soundness or that the proposed trust office or representative trust office 14
4939-would be contrary to the public interest. 15
4940- 16
4941- 23-51-803. Out-of-state trust offices or representative trust offices. 17
4942- (a)(1) A state bank, a state trust company, or a savings association 18
4943-chartered under the laws of this state may establish and maintain a new trust 19
4944-office or representative trust office or acquire and maintain a trust office 20
4945-or representative trust office in a state other than this state. 21
4946- (2) A trust institution desiring to establish or acquire and 22
4947-maintain a trust office or representative trust office in another state under 23
4948-this section shall file an application in the form prescribed by the Bank 24
4949-Commissioner. 25
4950- (3) The application required under subdivision (a)(2) of this 26
4951-section shall provide: 27
4952- (A) The name of the trust institution; 28
4953- (B) The location of the proposed trust office or 29
4954-representative trust office; 30
4955- (C) A general description of the surrounding market area; 31
4956- (D) Whether or not the location will be owned or leased; 32
4957- (E) Whether or not the laws of the jurisdiction where the 33
4958-trust office or representative trust office will be located permit the trust 34
4959-office or representative trust office to be maintained by the trust 35
4960-institution; 36 As Engrossed: S2/17/25 SB230
4961-
4962- 125 02-17-2025 11:15:03 ANS145
4963-
4964-
4965- (F) A copy of the resolution adopted by the board 1
4966-authorizing the out-of-state trust office or representative trust office; and 2
4967- (G) The payment for the filing fee, if any, prescribed by 3
4968-the commissioner. 4
4969- (b) An applicant under this section may commence business at the 5
4970-additional trust office or representative trust office thirty (30) days after 6
4971-the date the commissioner receives the application, unless the commissioner 7
4972-specifies another date. 8
4973- (c)(1) The thirty-day period of review under subsection (b) of this 9
4974-section may be extended by the commissioner on a determination that the 10
4975-written notice raises issues that require additional information or 11
4976-additional time for analysis. 12
4977- (2) If the period of review is extended, the trust institution 13
4978-may establish the additional trust office or representative trust office only 14
4979-on prior written approval by the commissioner. 15
4980- (d)(1) The commissioner may deny approval of the additional trust 16
4981-office or representative trust office under this section if the commissioner 17
4982-finds that the applicant lacks sufficient financial resources to undertake 18
4983-the proposed expansion without adversely affecting its safety or soundness or 19
4984-that the proposed additional trust office or representative trust office 20
4985-would be contrary to the public interest. 21
4986- (2) In acting on the notice, the commissioner shall consider the 22
4987-views of the appropriate bank supervisory agencies. 23
4988- 24
4989-Subchapter 9 — Trust Offices of Out -of-State Trust Institutions 25
4686+ (c) The commissioner may approve the application of a state bank to 10
4687+establish a full-service branch if the commissioner determines that the 11
4688+establishment of the full -service branch is consistent with: 12
4689+ (1) Maintaining a sound banking system; 13
4690+ (2) Encouraging the state bank to help meet the credit needs of 14
4691+the community; 15
4692+ (3) Relying on the marketplace as generally the best regulator 16
4693+of economic activity; and 17
4694+ (4) Encouraging healthy competition to promote efficiency and 18
4695+better service to customers. 19
4696+ (d) The commissioner may deny approval of the additional trust office 20
4697+or representative trust office under subsection (a) of this section if the 21
4698+commissioner finds that the applicant lacks sufficient financial resources to 22
4699+undertake the proposed expansion without adversely affecting its safety or 23
4700+soundness or that the proposed trust office or representative trust office 24
4701+would be contrary to the public interest. 25
49904702 26
4991- 23-51-901. Out-of-state trust institution — Engaging in trust business 27
4992-at branch or trust office. 28
4993- An out-of-state trust institution may act as a fiduciary in this state 29
4994-or engage in a trust business at a trust office in this state only if it 30
4995-maintains a trust office in this state as permitted by this chapter or a 31
4996-branch in this state. 32
4703+ 23-51-803. Out-of-state trust offices or representative trust offices. 27
4704+ (a)(1) A state bank, a state trust company, or a savings association 28
4705+chartered under the laws of this state may establish and maintain a new trust 29
4706+office or representative trust office or acquire and maintain a trust office 30
4707+or representative trust office in a state other than this state. 31
4708+ (2) A trust institution desiring to establish or acquire and 32
4709+maintain a trust office or representative trust office in another state under 33
4710+this section shall file an application in the form prescribed by the Bank 34
4711+Commissioner. 35
4712+ (3) The application required under subdivision (a)(2) of this 36 SB230
4713+
4714+ 125 02/13/2025 12:57:21 PM ANS145
4715+section shall provide: 1
4716+ (A) The name of the trust institution; 2
4717+ (B) The location of the proposed trust office or 3
4718+representative trust office; 4
4719+ (C) A general description of the surrounding market area; 5
4720+ (D) Whether or not the location will be owned or leased; 6
4721+ (E) Whether or not the laws of the jurisdiction where the 7
4722+trust office or representative trust office will be located permit the trust 8
4723+office or representative trust office to be maintained by the trust 9
4724+institution; 10
4725+ (F) A copy of the resolution adopted by the board 11
4726+authorizing the out-of-state trust office or representative trust office; and 12
4727+ (G) The payment for the filing fee, if any, prescribed by 13
4728+the commissioner. 14
4729+ (b) An applicant under this section may commence business at the 15
4730+additional trust office or representative trust office thirty (30) days after 16
4731+the date the commissioner receives the application, unless the commissioner 17
4732+specifies another date. 18
4733+ (c)(1) The thirty-day period of review under subsection (b) of this 19
4734+section may be extended by the commissioner on a determination that the 20
4735+written notice raises issues that require additional information or 21
4736+additional time for analysis. 22
4737+ (2) If the period of review is extended, the trust institution 23
4738+may establish the additional trust office or representative trust office only 24
4739+on prior written approval by the commissioner. 25
4740+ (d)(1) The commissioner may deny approval of the additional trust 26
4741+office or representative trust office under this section if the commissioner 27
4742+finds that the applicant lacks sufficient financial resources to undertake 28
4743+the proposed expansion without adversely affecting its safety or soundness or 29
4744+that the proposed additional trust office or representative trust office 30
4745+would be contrary to the public interest. 31
4746+ (2) In acting on the notice, the commissioner shall consider the 32
4747+views of the appropriate bank supervisory agencies. 33
4748+ 34
4749+Subchapter 9 — Trust Offices of Out -of-State Trust Institutions 35
4750+ 36 SB230
4751+
4752+ 126 02/13/2025 12:57:21 PM ANS145
4753+ 23-51-901. Out-of-state trust institution — Engaging in trust business 1
4754+at branch or trust office. 2
4755+ An out-of-state trust institution may act as a fiduciary in this state 3
4756+or engage in a trust business at a trust office in this state only if it 4
4757+maintains a trust office in this state as permitted by this chapter or a 5
4758+branch in this state. 6
4759+ 7
4760+ 23-51-902. Establishing interstate trust office. 8
4761+ (a) An out-of-state trust institution that does not operate a trust 9
4762+office in this state and that meets the requirements of this chapter may 10
4763+establish and maintain a new trust office in this state. 11
4764+ (b) An out-of-state trust institution shall not establish a new trust 12
4765+office in this state unless a similar institution chartered under the laws of 13
4766+this state to act as a fiduciary is permitted to establish a new trust office 14
4767+that may engage in activities substantially similar to those permitted to 15
4768+trust offices of out -of-state trust institutions under § 23 -51-901 in the 16
4769+state where the out-of-state trust institution has its principal office. 17
4770+ 18
4771+ 23-51-903. Conditions for approval. 19
4772+ (a) A trust office of an out -of-state trust institution shall not be 20
4773+acquired or established in this state under this chapter unless: 21
4774+ (1) The out-of-state trust institution has confirmed in writing 22
4775+to the Bank Commissioner that for as long as the out -of-state trust 23
4776+institution maintains a trust office in this state, the out -of-state trust 24
4777+institution will comply with all applicable laws of this state; 25
4778+ (2) The applicant has provided satisfactory evidence to the 26
4779+commissioner of compliance with any applicable requirements of § 4 -27-1501 et 27
4780+seq. and the applicable requirements of the applicant's home state regulator 28
4781+for acquiring or establishing and maintaining the trust office; and 29
4782+ (3) The commissioner, acting within sixty (60) days after 30
4783+receiving an application under § 23 -51-906, has certified to the home state 31
4784+regulator that the requirements of this chapter have been met and the 32
4785+application has been approved or, if applicable, that any conditions imposed 33
4786+by the commissioner under subsection (b) of this section have been satisfied. 34
4787+ (b) The out-of-state trust institution may commence business at the 35
4788+trust office sixty (60) days after the date the commissioner receives the 36 SB230
4789+
4790+ 127 02/13/2025 12:57:21 PM ANS145
4791+application required under this chapter unless the commissioner specifies 1
4792+another date, if, with respect to an out -of-state trust institution that is 2
4793+not a depository institution and for which the commissioner has conditioned 3
4794+the approval on the satisfaction by the applicant of any requirement 4
4795+applicable to a state trust company under § 23 -51-403 or § 23-51-406(b), the 5
4796+institution has satisfied the conditions and provided to the commissioner 6
4797+satisfactory evidence that the conditions have been satisfied. 7
4798+ (c)(1) The sixty-day period of review under subsection (b) of this 8
4799+section may be extended by the commissioner on a determination that the 9
4800+application raises issues that require additional information or additional 10
4801+time for analysis. 11
4802+ (2) If the period of review is extended, the out -of-state trust 12
4803+institution may establish the trust office only on prior written approval by 13
4804+the commissioner. 14
4805+ (d)(1) The commissioner may deny approval of the trust office under 15
4806+this section if the commissioner finds that the applicant lacks sufficient 16
4807+financial resources to undertake the proposed expansion without adversely 17
4808+affecting its safety or soundness or that the proposed office is contrary to 18
4809+the public interest. 19
4810+ (2) In acting on the notice, the commissioner shall consider the 20
4811+views of the appropriate bank supervisory agencies. 21
4812+ 22
4813+ 23-51-904. Additional trust offices. 23
4814+ An out-of-state trust institution that maintains a trust office in this 24
4815+state under this chapter may establish or acquire additional trust offices or 25
4816+representative trust offices in this state to the same extent that a state 26
4817+trust institution may establish or acquire additional trust offices or 27
4818+representative trust offices in this state under § 23 -51-802. 28
4819+ 29
4820+ 23-51-905. Acquiring interstate trust office. 30
4821+ (a) An out-of-state trust institution that does not operate a trust 31
4822+office in this state and that meets the requirements of this chapter may 32
4823+acquire and maintain a trust office in this state. 33
4824+ (b) An out-of-state trust institution shall not maintain a trust 34
4825+office in this state unless a similar institution chartered under the laws of 35
4826+this state to act as a fiduciary is permitted to acquire and maintain a trust 36 SB230
4827+
4828+ 128 02/13/2025 12:57:21 PM ANS145
4829+office through an acquisition of a trust office in the state where the out -1
4830+of-state trust institution has its principal office and may engage in 2
4831+activities substantially similar to those permitted to trust offices of out -3
4832+of-state trust institutions under § 23 -51-901 in the state where the out -of-4
4833+state trust institution has its principal office. 5
4834+ 6
4835+ 23-51-906. Requirement of notice. 7
4836+ (a) An out-of-state trust institution desiring to establish and 8
4837+maintain a new trust office or acquire and maintain a trust office in this 9
4838+state under this chapter shall provide, or cause its home state regulator to 10
4839+provide, written notice of the proposed transaction to the Bank Commissioner 11
4840+on or after the date on which the out -of-state trust institution applies to 12
4841+the home state regulator for approval to establish and maintain or acquire 13
4842+the trust office. 14
4843+ (b) The filing of the notice under subsection (a) of this section 15
4844+shall be preceded or accompanied by a copy of the resolution adopted by the 16
4845+board of the out-of-state trust institution authorizing the additional trust 17
4846+office and the filing fee, if any, prescribed by the commissioner. 18
4847+ 19
4848+ 23-51-907. Trust business of out -of-state trust institution. 20
4849+ An out-of-state trust institution that establishes or maintains one (1) 21
4850+or more trust offices in this state under this subchapter may conduct any 22
4851+activity at each trust office that would be authorized under the laws of this 23
4852+state for a state trust institution to conduct at a trust office. 24
4853+ 25
4854+ 23-51-908. Representative trust office business. 26
4855+ (a) An out-of-state trust institution shall not act as a fiduciary, 27
4856+but may otherwise engage in a trust business, at a representative trust 28
4857+office as permitted by this subchapter. 29
4858+ (b) Subject to the requirements contained in this subchapter, an out -30
4859+of-state trust institution may establish and maintain representative trust 31
4860+offices anywhere in this state. 32
49974861 33
4998- 23-51-902. Establishing interstate trust office. 34
4999- (a) An out-of-state trust institution that does not operate a trust 35
5000-office in this state and that meets the requirements of this chapter may 36 As Engrossed: S2/17/25 SB230
5001-
5002- 126 02-17-2025 11:15:03 ANS145
5003-
5004-
5005-establish and maintain a new trust office in this state. 1
5006- (b) An out-of-state trust institution shall not establish a new trust 2
5007-office in this state unless a similar institution chartered under the laws of 3
5008-this state to act as a fiduciary is permitted to establish a new trust office 4
5009-that may engage in activities substantially similar to those permitted to 5
5010-trust offices of out -of-state trust institutions under § 23 -51-901 in the 6
5011-state where the out-of-state trust institution has its principal office. 7
4862+ 23-51-909. Registration of representative trust office. 34
4863+ (a)(1) An out-of-state trust institution may establish or acquire and 35
4864+maintain a representative trust office in this state. 36 SB230
4865+
4866+ 129 02/13/2025 12:57:21 PM ANS145
4867+ (2) An out-of-state trust institution not maintaining a trust 1
4868+office in this state and desiring to establish or acquire and maintain a 2
4869+representative trust office shall file an application in the form prescribed 3
4870+by the Bank Commissioner. 4
4871+ (3) The application under subdivision (a)(2) of this section 5
4872+shall provide: 6
4873+ (A) The name of the out -of-state trust institution; 7
4874+ (B) A certificate of good standing from the out -of-state 8
4875+trust institution's chartering authority; 9
4876+ (C) A copy of the resolution adopted by the board 10
4877+authorizing the representative trust office of the out -of-state trust 11
4878+institution; and 12
4879+ (D) The payment for the filing fee, if any, prescribed by 13
4880+the commissioner. 14
4881+ (b) An applicant under subsection (a) of this section may commence 15
4882+business at the representative trust office on the thirty -first day after the 16
4883+date the commissioner acknowledges receipt of the application, unless the 17
4884+commissioner specifies an earlier or later date. 18
4885+ (c)(1) The thirty-day period of review under subsection (a) of this 19
4886+section may be extended by the commissioner on a determination that the 20
4887+application raises issues that require additional information or additional 21
4888+time for analysis. 22
4889+ (2) If the period of review is extended, the out -of-state trust 23
4890+institution may establish the representative trust office only on prior 24
4891+written approval by the commissioner. 25
4892+ (d)(1) The commissioner may deny approval of the representative trust 26
4893+office under this section if the commissioner finds that the applicant lacks 27
4894+sufficient financial resources to undertake the proposed expansion without 28
4895+adversely affecting its safety or soundness or that the proposed 29
4896+representative trust office would be contrary to the public interests. 30
4897+ (2) In acting on the application, the commissioner shall 31
4898+consider the views of the appropriate bank supervisory agencies. 32
4899+ 33
4900+Subchapter 10 — Liquidation 34
4901+ 35
4902+ 23-51-1001. Voluntary liquidation. 36 SB230
4903+
4904+ 130 02/13/2025 12:57:21 PM ANS145
4905+ (a) A state trust company may go into voluntary liquidation and be 1
4906+closed, and may surrender the state trust company's charter and franchise as 2
4907+a corporation of this state by the affirmative votes of the shareholders of 3
4908+the state trust company owning a majority of the voting stock of the state 4
4909+trust company. 5
4910+ (b)(1) Shareholder action to liquidate a state trust company shall be 6
4911+taken at a meeting of the shareholders called by resolution of the board of 7
4912+the state trust company. 8
4913+ (2) The written notice required under subdivision (b)(1) of this 9
4914+section shall state the purpose of the meeting and be mailed to each 10
4915+shareholder, or in case of a shareholder's death, to the shareholder's legal 11
4916+representative, addressed to the shareholder's last known residence not less 12
4917+than ten (10) days before the date of the meeting. 13
4918+ (3) If shareholders elect to liquidate a state trust company 14
4919+under subsection (a) of this section, a certified copy of all proceedings of 15
4920+the meeting at which the action has been taken, attested by an officer of the 16
4921+state trust company, shall be transmitted to the Bank Commissioner for 17
4922+approval. 18
4923+ (c)(1) If the commissioner approves the liquidation, the commissioner 19
4924+shall issue to the state trust company under the commissioner's seal, an 20
4925+order for that purpose. 21
4926+ (2) An order shall not be issued by the commissioner under 22
4927+subdivision (c)(1) of this section until the commissioner is satisfied that 23
4928+provision has been made by the state trust company to satisfy and pay off all 24
4929+creditors. 25
4930+ (3)(A) When the commissioner approves the voluntary liquidation 26
4931+of a state trust company, the board of the state trust company shall: 27
4932+ (i) Publish a notice in a newspaper with a 28
4933+substantially statewide circulation published in the City of Little Rock that 29
4934+the state trust company is closing down its affairs and going into 30
4935+liquidation; and 31
4936+ (ii) Notify the creditors of the state trust company 32
4937+to present their claims for payment. 33
4938+ (B) The notice required under subdivision (c)(3)(A)(i) of 34
4939+this section shall be published one (1) time a week for four (4) consecutive 35
4940+weeks. 36 SB230
4941+
4942+ 131 02/13/2025 12:57:21 PM ANS145
4943+ (d) When a state trust company is in the process of voluntary 1
4944+liquidation, the state trust company is subject to examination by the 2
4945+commissioner and shall furnish reports from time to time as the commissioner 3
4946+may require. 4
4947+ (e) All unclaimed property remaining in the hands of a liquidated 5
4948+state trust company is subject to the Unclaimed Property Act, § 18 -28-201 et 6
4949+seq. 7
4950+ (f)(1) Upon the approval of the commissioner, a state trust company 8
4951+may sell and transfer to another trust institution, whether state or 9
4952+federally chartered, all of its assets of every kind upon terms as may be 10
4953+agreed upon and approved by the commissioner and by a majority vote of its 11
4954+board. 12
4955+ (2) A certified copy of the minutes of a meeting at which an 13
4956+action is taken, attested by an officer of the state trust company, together 14
4957+with a copy of the contract of sale and transfer, shall be filed with the 15
4958+commissioner. 16
4959+ (3) Whenever voluntary liquidation is approved by the 17
4960+commissioner or the sale and transfer of the assets of any state trust 18
4961+company is approved by the commissioner, the charter of the state trust 19
4962+company shall be canceled, subject, however, to its continued existence, as 20
4963+provided by this chapter and the Arkansas Business Corporation Act, § 4 -27-21
4964+101 et seq. 22
4965+ 23
4966+ 23-51-1002. Placing state trust company under Bank Commissioner’s 24
4967+control. 25
4968+ (a)(1) A state trust company may place its assets and business under 26
4969+the control of the Bank Commissioner for liquidation by a resolution of a 27
4970+majority of its directors or members upon notice to the commissioner. 28
4971+ (2) Upon taking possession of the state trust company, the 29
4972+commissioner, or the commissioner's appointed agent, shall retain possession 30
4973+of the state trust company until the state trust company is authorized by the 31
4974+commissioner to resume business or until the affairs of the state trust 32
4975+company has fully liquidated under this chapter. 33
4976+ (3) A state trust company shall not make any general assignment 34
4977+for the benefit of its creditors except by surrendering possession of its 35
4978+assets to the commissioner, as provided under this chapter. 36 SB230
4979+
4980+ 132 02/13/2025 12:57:21 PM ANS145
4981+ (b) If for any reason a state trust company suspends operations for 1
4982+any length of time, the state trust company immediately upon the suspension 2
4983+of operations, shall be deemed in the possession of the commissioner and 3
4984+subject to liquidation under this chapter. 4
4985+ 5
4986+ 23-51-1003. Application of Arkansas Banking Code of 1997. 6
4987+ When the Bank Commissioner, or the commissioner's appointed agent, 7
4988+takes possession of a state trust company under this subchapter, the 8
4989+commissioner or the commissioner's appointed agent shall proceed with the 9
4990+dissolution and liquidation of the state trust company under the procedures 10
4991+established for the dissolution and liquidation of state banks under the 11
4992+Arkansas Banking Code of 1997, chapters 45 -50 of this title. 12
4993+ 13
4994+Subchapter 11 — Trusts and Fiduciaries 14
4995+ 15
4996+ 23-51-1101. Delegation and fiduciary responsibility. 16
4997+ (a) A person acting as a trustee or as any other fiduciary under the 17
4998+laws of this state may delegate any investment, management, or administrative 18
4999+function if the person exercises reasonable care, judgment, and caution in: 19
5000+ (1) Selecting the delegate, taking into account the delegate's 20
5001+financial standing and reputation; 21
5002+ (2) Establishing the scope and other terms of any delegation; 22
5003+and 23
5004+ (3) Reviewing periodically the delegate's actions in order to 24
5005+monitor overall performance and compliance with the scope and other terms of 25
5006+the delegation. 26
5007+ (b) Notwithstanding any delegation permitted under subsection (a) of 27
5008+this section, a person acting as a trustee, except as provided in § 28 -73-28
5009+807, or in any other fiduciary capacity under the laws of this state shall 29
5010+retain responsibility for the due performance of any delegated fiduciary 30
5011+function. 31
5012+ 32
5013+ 23-51-1102. Affiliates. 33
5014+ (a) A person acting as a trustee or in any other fiduciary capacity 34
5015+under § 23-51-1101, may hire and compensate, as a delegate, an affiliate of 35
5016+the person if: 36 SB230
5017+
5018+ 133 02/13/2025 12:57:21 PM ANS145
5019+ (1) Authorized by a trust or fiduciary instrument; 1
5020+ (2) Authorized by court order; 2
5021+ (3) Authorized in writing by each affected client; or 3
5022+ (4) The standards of § 23 -51-1101 are satisfied. 4
5023+ (b) Fees paid to an affiliate shall be competitive with fees charged 5
5024+by nonaffiliates that provide substantially similar services. 6
5025+ 7
5026+ 23-51-1103. Fee determination. 8
5027+ The compensation arrangement between a client and a person acting as a 9
5028+trustee or as any other fiduciary under this chapter shall be at arm's 10
5029+length, and any compensation under such an arrangement shall be a reasonable 11
5030+amount with respect to the services rendered. 12
5031+ 13
5032+ 23-51-1104. Disclosure of potential conflicts of interest. 14
5033+ A company, proposing to act as a trustee or in any other fiduciary 15
5034+capacity under a written agreement to be entered into with a prospective 16
5035+client after September 1, 2025, and that company has any potential or actual 17
5036+conflict of interest that may reasonably be expected to have an impact on the 18
5037+independence or judgment of the trustee or fiduciary, shall disclose 19
5038+appropriate information concerning the actual or potential conflict of 20
5039+interest before entering into any written or oral trust or fiduciary 21
5040+agreement with the client or prospective client. 22
5041+ 23
5042+ 23-51-1105. Designation of trustee. 24
5043+ A person residing in this state may designate any trust institution to 25
5044+act as a fiduciary on behalf of the person. 26
5045+ 27
5046+ 23-51-1106. Choice of law governing trusts. 28
5047+ A trust institution that maintains a trust office or representative 29
5048+trust office in this state and its affected clients may designate either this 30
5049+state, a state where affected clients reside, or the state where the trust 31
5050+institution has its principal office as the state whose laws shall govern any 32
5051+written agreement between the trust institution and its client or any 33
5052+instrument under which the trust institution acts for a client. 34
5053+ 35
5054+ 23-51-1107. Choice of law governing fiduciary investments. 36 SB230
5055+
5056+ 134 02/13/2025 12:57:21 PM ANS145
5057+ A trust institution that maintains a trust office or representative 1
5058+trust office in this state and its affected clients may designate either this 2
5059+state, a state where affected clients reside, or the state where the trust 3
5060+institution has its principal office as the state whose laws shall govern 4
5061+with respect to the fiduciary investment standards applicable to any written 5
5062+agreement between the trust institution or its client and any other 6
5063+instrument under which the trust institution acts for a client. 7
50125064 8
5013- 23-51-903. Conditions for approval. 9
5014- (a) A trust office of an out -of-state trust institution shall not be 10
5015-acquired or established in this state under this chapter unless: 11
5016- (1) The out-of-state trust institution has confirmed in writing 12
5017-to the Bank Commissioner that for as long as the out -of-state trust 13
5018-institution maintains a trust office in this state, the out -of-state trust 14
5019-institution will comply with all applicable laws of this state; 15
5020- (2) The applicant has provided satisfactory evidence to the 16
5021-commissioner of compliance with any applicable requirements of § 4 -27-1501 et 17
5022-seq. and the applicable requirements of the applicant's home state regulator 18
5023-for acquiring or establishing and maintaining the trust office; and 19
5024- (3) The commissioner, acting within sixty (60) days after 20
5025-receiving an application under § 23 -51-906, has certified to the home state 21
5026-regulator that the requirements of this chapter have been met and the 22
5027-application has been approved or, if applicable, that any conditions imposed 23
5028-by the commissioner under subsection (b) of this section have been satisfied. 24
5029- (b) The out-of-state trust institution may commence business at the 25
5030-trust office sixty (60) days after the date the commissioner receives the 26
5031-application required under this chapter unless the commissioner specifies 27
5032-another date, if, with respect to an out -of-state trust institution that is 28
5033-not a depository institution and for which the commissioner has conditioned 29
5034-the approval on the satisfaction by the applicant of any requirement 30
5035-applicable to a state trust company under § 23 -51-403 or § 23-51-406(b), the 31
5036-institution has satisfied the conditions and provided to the commissioner 32
5037-satisfactory evidence that the conditions have been satisfied. 33
5038- (c)(1) The sixty-day period of review under subsection (b) of this 34
5039-section may be extended by the commissioner on a determination that the 35
5040-application raises issues that require additional information or additional 36 As Engrossed: S2/17/25 SB230
5041-
5042- 127 02-17-2025 11:15:03 ANS145
5043-
5044-
5045-time for analysis. 1
5046- (2) If the period of review is extended, the out -of-state trust 2
5047-institution may establish the trust office only on prior written approval by 3
5048-the commissioner. 4
5049- (d)(1) The commissioner may deny approval of the trust office under 5
5050-this section if the commissioner finds that the applicant lacks sufficient 6
5051-financial resources to undertake the proposed expansion without adversely 7
5052-affecting its safety or soundness or that the proposed office is contrary to 8
5053-the public interest. 9
5054- (2) In acting on the notice, the commissioner shall consider the 10
5055-views of the appropriate bank supervisory agencies. 11
5056- 12
5057- 23-51-904. Additional trust offices. 13
5058- An out-of-state trust institution that maintains a trust office in this 14
5059-state under this chapter may establish or acquire additional trust offices or 15
5060-representative trust offices in this state to the same extent that a state 16
5061-trust institution may establish or acquire additional trust offices or 17
5062-representative trust offices in this state under § 23 -51-802. 18
5063- 19
5064- 23-51-905. Acquiring interstate trust office. 20
5065- (a) An out-of-state trust institution that does not operate a trust 21
5066-office in this state and that meets the requirements of this chapter may 22
5067-acquire and maintain a trust office in this state. 23
5068- (b) An out-of-state trust institution shall not maintain a trust 24
5069-office in this state unless a similar institution chartered under the laws of 25
5070-this state to act as a fiduciary is permitted to acquire and maintain a trust 26
5071-office through an acquisition of a trust office in the state where the out -27
5072-of-state trust institution has its principal office and may engage in 28
5073-activities substantially similar to those permitted to trust offices of out -29
5074-of-state trust institutions under § 23 -51-901 in the state where the out -of-30
5075-state trust institution has its principal office. 31
5076- 32
5077- 23-51-906. Requirement of notice. 33
5078- (a) An out-of-state trust institution desiring to establish and 34
5079-maintain a new trust office or acquire and maintain a trust office in this 35
5080-state under this chapter shall provide, or cause its home state regulator to 36 As Engrossed: S2/17/25 SB230
5081-
5082- 128 02-17-2025 11:15:03 ANS145
5083-
5084-
5085-provide, written notice of the proposed transaction to the Bank Commissioner 1
5086-on or after the date on which the out -of-state trust institution applies to 2
5087-the home state regulator for approval to establish and maintain or acquire 3
5088-the trust office. 4
5089- (b) The filing of the notice under subsection (a) of this section 5
5090-shall be preceded or accompanied by a copy of the resolution adopted by the 6
5091-board of the out-of-state trust institution authorizing the additional trust 7
5092-office and the filing fee, if any, prescribed by the commissioner. 8
5093- 9
5094- 23-51-907. Trust business of out -of-state trust institution. 10
5095- An out-of-state trust institution that establishes or maintains one (1) 11
5096-or more trust offices in this state under this subchapter may conduct any 12
5097-activity at each trust office that would be authorized under the laws of this 13
5098-state for a state trust institution to conduct at a trust office. 14
5099- 15
5100- 23-51-908. Representative trust office business. 16
5101- (a) An out-of-state trust institution shall not act as a fiduciary, 17
5102-but may otherwise engage in a trust business, at a representative trust 18
5103-office as permitted by this subchapter. 19
5104- (b) Subject to the requirements contained in this subchapter, an out -20
5105-of-state trust institution may establish and maintain representative trust 21
5106-offices anywhere in this state. 22
5107- 23
5108- 23-51-909. Registration of representative trust office. 24
5109- (a)(1) An out-of-state trust institution may establish or acquire and 25
5110-maintain a representative trust office in this state. 26
5111- (2) An out-of-state trust institution not maintaining a trust 27
5112-office in this state and desiring to establish or acquire and maintain a 28
5113-representative trust office shall file an application in the form prescribed 29
5114-by the Bank Commissioner. 30
5115- (3) The application under subdivision (a)(2) of this section 31
5116-shall provide: 32
5117- (A) The name of the out -of-state trust institution; 33
5118- (B) A certificate of good standing from the out -of-state 34
5119-trust institution's chartering authority; 35
5120- (C) A copy of the resolution adopted by the board 36 As Engrossed: S2/17/25 SB230
5121-
5122- 129 02-17-2025 11:15:03 ANS145
5123-
5124-
5125-authorizing the representative trust office of the out -of-state trust 1
5126-institution; and 2
5127- (D) The payment for the filing fee, if any, prescribed by 3
5128-the commissioner. 4
5129- (b) An applicant under subsection (a) of this section may commence 5
5130-business at the representative trust office on the thirty -first day after the 6
5131-date the commissioner acknowledges receipt of the application, unless the 7
5132-commissioner specifies an earlier or later date. 8
5133- (c)(1) The thirty-day period of review under subsection (a) of this 9
5134-section may be extended by the commissioner on a determination that the 10
5135-application raises issues that require additional information or additional 11
5136-time for analysis. 12
5137- (2) If the period of review is extended, the out -of-state trust 13
5138-institution may establish the representative trust office only on prior 14
5139-written approval by the commissioner. 15
5140- (d)(1) The commissioner may deny approval of the representative trust 16
5141-office under this section if the commissioner finds that the applicant lacks 17
5142-sufficient financial resources to undertake the proposed expansion without 18
5143-adversely affecting its safety or soundness or that the proposed 19
5144-representative trust office would be contrary to the public interests. 20
5145- (2) In acting on the application, the commissioner shall 21
5146-consider the views of the appropriate bank supervisory agencies. 22
5147- 23
5148-Subchapter 10 — Liquidation 24
5149- 25
5150- 23-51-1001. Voluntary liquidation. 26
5151- (a) A state trust company may go into voluntary liquidation and be 27
5152-closed, and may surrender the state trust company's charter and franchise as 28
5153-a corporation of this state by the affirmative votes of the shareholders of 29
5154-the state trust company owning a majority of the voting stock of the state 30
5155-trust company. 31
5156- (b)(1) Shareholder action to liquidate a state trust company shall be 32
5157-taken at a meeting of the shareholders called by resolution of the board of 33
5158-the state trust company. 34
5159- (2) The written notice required under subdivision (b)(1) of this 35
5160-section shall state the purpose of the meeting and be mailed to each 36 As Engrossed: S2/17/25 SB230
5161-
5162- 130 02-17-2025 11:15:03 ANS145
5163-
5164-
5165-shareholder, or in case of a shareholder's death, to the shareholder's legal 1
5166-representative, addressed to the shareholder's last known residence not less 2
5167-than ten (10) days before the date of the meeting. 3
5168- (3) If shareholders elect to liquidate a state trust company 4
5169-under subsection (a) of this section, a certified copy of all proceedings of 5
5170-the meeting at which the action has been taken, attested by an officer of the 6
5171-state trust company, shall be transmitted to the Bank Commissioner for 7
5172-approval. 8
5173- (c)(1) If the commissioner approves the liquidation, the commissioner 9
5174-shall issue to the state trust company under the commissioner's seal, an 10
5175-order for that purpose. 11
5176- (2) An order shall not be issued by the commissioner under 12
5177-subdivision (c)(1) of this section until the commissioner is satisfied that 13
5178-provision has been made by the state trust company to satisfy and pay off all 14
5179-creditors. 15
5180- (3)(A) When the commissioner approves the voluntary liquidation 16
5181-of a state trust company, the board of the state trust company shall: 17
5182- (i) Publish a notice in a newspaper with a 18
5183-substantially statewide circulation published in the City of Little Rock that 19
5184-the state trust company is closing down its affairs and going into 20
5185-liquidation; and 21
5186- (ii) Notify the creditors of the state trust company 22
5187-to present their claims for payment. 23
5188- (B) The notice required under subdivision (c)(3)(A)(i) of 24
5189-this section shall be published one (1) time a week for four (4) consecutive 25
5190-weeks. 26
5191- (d) When a state trust company is in the process of voluntary 27
5192-liquidation, the state trust company is subject to examination by the 28
5193-commissioner and shall furnish reports from time to time as the commissioner 29
5194-may require. 30
5195- (e) All unclaimed property remaining in the hands of a liquidated 31
5196-state trust company is subject to the Unclaimed Property Act, § 18 -28-201 et 32
5197-seq. 33
5198- (f)(1) Upon the approval of the commissioner, a state trust company 34
5199-may sell and transfer to another trust institution, whether state or 35
5200-federally chartered, all of its assets of every kind upon terms as may be 36 As Engrossed: S2/17/25 SB230
5201-
5202- 131 02-17-2025 11:15:03 ANS145
5203-
5204-
5205-agreed upon and approved by the commissioner and by a majority vote of its 1
5206-board. 2
5207- (2) A certified copy of the minutes of a meeting at which an 3
5208-action is taken, attested by an officer of the state trust company, together 4
5209-with a copy of the contract of sale and transfer, shall be filed with the 5
5210-commissioner. 6
5211- (3) Whenever voluntary liquidation is approved by the 7
5212-commissioner or the sale and transfer of the assets of any state trust 8
5213-company is approved by the commissioner, the charter of the state trust 9
5214-company shall be canceled, subject, however, to its continued existence, as 10
5215-provided by this chapter and the Arkansas Business Corporation Act, § 4 -27-11
5216-101 et seq. 12
5217- 13
5218- 23-51-1002. Placing state trust company under Bank Commissioner’s 14
5219-control. 15
5220- (a)(1) A state trust company may place its assets and business under 16
5221-the control of the Bank Commissioner for liquidation by a resolution of a 17
5222-majority of its directors or members upon notice to the commissioner. 18
5223- (2) Upon taking possession of the state trust company, the 19
5224-commissioner, or the commissioner's appointed agent, shall retain possession 20
5225-of the state trust company until the state trust company is authorized by the 21
5226-commissioner to resume business or until the affairs of the state trust 22
5227-company has fully liquidated under this chapter. 23
5228- (3) A state trust company shall not make any general assignment 24
5229-for the benefit of its creditors except by surrendering possession of its 25
5230-assets to the commissioner, as provided under this chapter. 26
5231- (b) If for any reason a state trust company suspends operations for 27
5232-any length of time, the state trust company immediately upon the suspension 28
5233-of operations, shall be deemed in the possession of the commissioner and 29
5234-subject to liquidation under this chapter. 30
5235- 31
5236- 23-51-1003. Application of Arkansas Banking Code of 1997. 32
5237- When the Bank Commissioner, or the commissioner's appointed agent, 33
5238-takes possession of a state trust company under this subchapter, the 34
5239-commissioner or the commissioner's appointed agent shall proceed with the 35
5240-dissolution and liquidation of the state trust company under the procedures 36 As Engrossed: S2/17/25 SB230
5241-
5242- 132 02-17-2025 11:15:03 ANS145
5243-
5244-
5245-established for the dissolution and liquidation of state banks under the 1
5246-Arkansas Banking Code of 1997, chapters 45 -50 of this title. 2
5247- 3
5248-Subchapter 11 — Trusts and Fiduciaries 4
5249- 5
5250- 23-51-1101. Delegation and fiduciary responsibility. 6
5251- (a) A person acting as a trustee or as any other fiduciary under the 7
5252-laws of this state may delegate any investment, management, or administrative 8
5253-function if the person exercises reasonable care, judgment, and caution in: 9
5254- (1) Selecting the delegate, taking into account the delegate's 10
5255-financial standing and reputation; 11
5256- (2) Establishing the scope and other terms of any delegation; 12
5257-and 13
5258- (3) Reviewing periodically the delegate's actions in order to 14
5259-monitor overall performance and compliance with the scope and other terms of 15
5260-the delegation. 16
5261- (b) Notwithstanding any delegation permitted under subsection (a) of 17
5262-this section, a person acting as a trustee, except as provided in § 28 -73-18
5263-807, or in any other fiduciary capacity under the laws of this state shall 19
5264-retain responsibility for the due performance of any delegated fiduciary 20
5265-function. 21
5065+Subchapter 12 — Private Trust Company 9
5066+ 10
5067+ 23-51-1201. Private trust company. 11
5068+ (a) A private trust company engaging in the trust business in this 12
5069+state shall comply with the provisions of this chapter applicable to a trust 13
5070+company unless expressly exempted from those provisions in writing by the 14
5071+Bank Commissioner under this section or by rule adopted by the commissioner. 15
5072+ (b)(1) A private trust company or proposed private trust company may 16
5073+request in writing that it be exempted from specified provisions of §§ 23 -51-17
5074+110, 23-51-403(a), 23-51-405(b)(11), 23-51-406(b)(1), 23-51-407, 23-51-501, 18
5075+23-51-503, and 23-51-506(b)—(d). 19
5076+ (2) The commissioner may grant the exemption in whole or in part 20
5077+if the commissioner finds that the private trust company does not and will 21
5078+not transact business with the general public. 22
5079+ (c) An exemption granted under this section may be made subject to 23
5080+conditions or limitations imposed by the commissioner consistent with this 24
5081+subchapter. 25
5082+ (d)(1) At the expense of the private trust company, the commissioner 26
5083+may examine or investigate the private trust company in connection with an 27
5084+application for exemption. 28
5085+ (2) Unless the application presents novel or unusual questions, 29
5086+the commissioner shall approve the application for exemption or set the 30
5087+application for hearing not later than sixty (60) days after the date the 31
5088+commissioner considers the application complete and accepted for filing. 32
5089+ (3) The commissioner may require the submission of additional 33
5090+information as considered necessary to an informed decision. 34
5091+ 35
5092+ 23-51-1202. Definitions. 36 SB230
5093+
5094+ 135 02/13/2025 12:57:21 PM ANS145
5095+ As used in this subchapter: 1
5096+ (1) "Family member" means an individual who is related within 2
5097+the fourth degree of affinity or consanguinity to an individual or 3
5098+individuals who control a private trust company or that is controlled by one 4
5099+(1) or more trusts or charitable organizations established by the individual 5
5100+or individuals; and 6
5101+ (2) "Transact business with the general public" means any sales, 7
5102+solicitations, arrangements, agreements, or transactions to provide trust or 8
5103+other business services, whether or not for a fee, commission, or any other 9
5104+type of remuneration, with any client that is not a family member or a sole 10
5105+proprietorship, partnership, joint venture, association, trust, estate, 11
5106+business trust, or other company that is not one hundred percent (100%) owned 12
5107+by one (1) or more family members. 13
5108+ 14
5109+ 23-51-1203. Requirements for a private trust company. 15
5110+ (a)(1) A private trust company requesting an exemption from this 16
5111+chapter under § 23-51-1201 shall file an application with the Bank 17
5112+Commissioner containing: 18
5113+ (A) A nonrefundable application fee of an amount not less 19
5114+than three thousand dollars ($3,000) nor more than five thousand dollars 20
5115+($5,000), as set by rules issued by the commissioner; 21
5116+ (B) A detailed statement under oath showing the private 22
5117+trust company's assets and liabilities as of the end of the month previous to 23
5118+the filing of the application; 24
5119+ (C) A statement under oath of the reason for requesting 25
5120+the exemption; 26
5121+ (D) A statement under oath that the private trust company 27
5122+is not currently transacting business with the public and that the company 28
5123+will not conduct business with the public without the prior written 29
5124+permission of the commissioner; 30
5125+ (E) The current street mailing address and telephone 31
5126+number of the physical location in this state at which the private trust 32
5127+company will maintain its books and records, together with a statement under 33
5128+oath that the address given is true and correct and is not a United States 34
5129+Postal Service post office box or a private mailbox, postal box, or mail 35
5130+drop; 36 SB230
5131+
5132+ 136 02/13/2025 12:57:21 PM ANS145
5133+ (F) A listing of the specific provisions of this chapter 1
5134+for which the request for exemption is made; and 2
5135+ (G)(i) A certification that the private trust company is 3
5136+managed by, and its members are family members. 4
5137+ (ii) All individuals who control a private trust 5
5138+company or establish trusts or charitable organizations controlling the 6
5139+private trust company shall be related within the second degree of affinity 7
5140+or consanguinity. 8
5141+ (2) The commissioner shall not approve a private trust company 9
5142+exemption unless the application is completed as required in subdivision 10
5143+(a)(1) of this section. 11
5144+ (b) To maintain status as an exempt private trust company under this 12
5145+chapter, the exempt private trust company shall: 13
5146+ (1) Not transact business with the public; 14
5147+ (2)(A) File an annual certification that it is maintaining the 15
5148+conditions and limitations of its exempt status. 16
5149+ (B) The annual certification required under subdivision 17
5150+(b)(2)(A) of this section shall be filed: 18
5151+ (i) On a form provided by the commissioner and be 19
5152+accompanied by a fee set by rules issued by the commissioner; and 20
5153+ (ii) On or before June 30 of each year. 21
5154+ (C)(i) An annual certification shall not be valid unless 22
5155+it bears an acknowledgment stamped by the State Bank Department. 23
5156+ (ii) The department shall have thirty (30) days from 24
5157+the date of receipt to return a copy of the acknowledged annual certification 25
5158+to the exempt private trust company. 26
5159+ (iii) The burden shall be on the exempt private 27
5160+trust company to notify the department of a failure to return an acknowledged 28
5161+copy of an annual certification within the thirty -day period. 29
5162+ (iv) The commissioner may examine or investigate the 30
5163+exempt private trust company periodically as necessary to verify the annual 31
5164+certification; 32
5165+ (3) Comply with the principal office provisions of § 23 -51-402 33
5166+and with the address and telephone requirements of subdivision (a)(1)(E) of 34
5167+this section; and 35
5168+ (4) Pay all applicable corporate franchise taxes. 36 SB230
5169+
5170+ 137 02/13/2025 12:57:21 PM ANS145
5171+ 1
5172+ 23-51-1204. Change of control. 2
5173+ (a) Control of an exempt private trust company shall not be 3
5174+transferred or sold with exempt status. 4
5175+ (b) In a change of control, the acquiring control person shall comply 5
5176+with this chapter, and the exempt status of the private trust company shall 6
5177+automatically terminate upon the effective date of the transfer. 7
5178+ (c) A separate application for exempt status shall be filed if the 8
5179+acquiring person wishes to obtain or continue an exemption under this 9
5180+section. 10
5181+ 11
5182+ 23-51-1205. Authority to revoke. 12
5183+ (a) The Bank Commissioner may revoke the exempt status of a private 13
5184+trust company if the private trust company: 14
5185+ (1) Makes a false statement under oath on a document required to 15
5186+be filed under this chapter or by any rule promulgated by the commissioner; 16
5187+ (2) Fails to submit to an examination as required by § 23 -51-17
5188+1201(c); 18
5189+ (3) Withholds requested information from the commissioner; or 19
5190+ (4) Violates any provision of this section applicable to an 20
5191+exempt private trust company. 21
5192+ (b)(1) If the commissioner determines from examination or other 22
5193+credible evidence that a private trust company has violated any of the 23
5194+requirements of this section, the commissioner may by personal delivery or 24
5195+registered or certified mail, return receipt requested, notify the private 25
5196+trust company in writing that the private trust company's exempt status has 26
5197+been revoked. 27
5198+ (2) The notification required under subdivision (b)(1) of this 28
5199+section shall: 29
5200+ (A) State grounds for the revocation with reasonable 30
5201+certainty; and 31
5202+ (B) State the effective date of the revocation, which may 32
5203+not be sooner than five (5) calendar days after the date the notification is 33
5204+mailed or delivered. 34
5205+ (c)(1) A revocation under this section takes effect for the private 35
5206+trust company if the private trust company does not request a hearing in 36 SB230
5207+
5208+ 138 02/13/2025 12:57:21 PM ANS145
5209+writing before the effective date. 1
5210+ (2) After taking effect the revocation is final and 2
5211+nonappealable as to that private trust company, and the private trust company 3
5212+shall be subject to all of the requirements and provisions of this chapter 4
5213+applicable to state trust companies. 5
5214+ (d)(1) A private trust company shall have five (5) calendar days after 6
5215+the revocation is effective to comply with the provisions of this chapter 7
5216+from which it was formerly exempt. 8
5217+ (2) If, however, the commissioner determines, at the time of 9
5218+revocation, that the private trust company has been engaging in or attempting 10
5219+to engage in acts intended or designed to deceive or defraud the public, the 11
5220+commissioner may shorten or eliminate, in the commissioner's sole discretion, 12
5221+the five (5) calendar days compliance period. 13
5222+ (e) If the private trust company does not comply with this subchapter, 14
5223+including the capitalization requirements as have been determined by the 15
5224+commissioner as necessary to assure the safety and soundness of the private 16
5225+trust company, within the prescribed time period, the commissioner may: 17
5226+ (1) Institute any action or remedy prescribed by this chapter, 18
5227+or any applicable rule; or 19
5228+ (2) Refer the private trust company to the Attorney General for 20
5229+to initiate a quo warranto proceeding to revoke the charter. 21
52665230 22
5267- 23-51-1102. Affiliates. 23
5268- (a) A person acting as a trustee or in any other fiduciary capacity 24
5269-under § 23-51-1101, may hire and compensate, as a delegate, an affiliate of 25
5270-the person if: 26
5271- (1) Authorized by a trust or fiduciary instrument; 27
5272- (2) Authorized by court order; 28
5273- (3) Authorized in writing by each affected client; or 29
5274- (4) The standards of § 23 -51-1101 are satisfied. 30
5275- (b) Fees paid to an affiliate shall be competitive with fees charged 31
5276-by nonaffiliates that provide substantially similar services. 32
5277- 33
5278- 23-51-1103. Fee determination. 34
5279- The compensation arrangement between a client and a person acting as a 35
5280-trustee or as any other fiduciary under this chapter shall be at arm's 36 As Engrossed: S2/17/25 SB230
5281-
5282- 133 02-17-2025 11:15:03 ANS145
5283-
5284-
5285-length, and any compensation under such an arrangement shall be a reasonable 1
5286-amount with respect to the services rendered. 2
5287- 3
5288- 23-51-1104. Disclosure of potential conflicts of interest. 4
5289- A company, proposing to act as a trustee or in any other fiduciary 5
5290-capacity under a written agreement to be entered into with a prospective 6
5291-client after September 1, 2025, and that company has any potential or actual 7
5292-conflict of interest that may reasonably be expected to have an impact on the 8
5293-independence or judgment of the trustee or fiduciary, shall disclose 9
5294-appropriate information concerning the actual or potential conflict of 10
5295-interest before entering into any written or oral trust or fiduciary 11
5296-agreement with the client or prospective client. 12
5297- 13
5298- 23-51-1105. Designation of trustee. 14
5299- A person residing in this state may designate any trust institution to 15
5300-act as a fiduciary on behalf of the person. 16
5301- 17
5302- 23-51-1106. Choice of law governing trusts. 18
5303- A trust institution that maintains a trust office or representative 19
5304-trust office in this state and its affected clients may designate either this 20
5305-state, a state where affected clients reside, or the state where the trust 21
5306-institution has its principal office as the state whose laws shall govern any 22
5307-written agreement between the trust institution and its client or any 23
5308-instrument under which the trust institution acts for a client. 24
5309- 25
5310- 23-51-1107. Choice of law governing fiduciary investments. 26
5311- A trust institution that maintains a trust office or representative 27
5312-trust office in this state and its affected clients may designate either this 28
5313-state, a state where affected clients reside, or the state where the trust 29
5314-institution has its principal office as the state whose laws shall govern 30
5315-with respect to the fiduciary investment standards applicable to any written 31
5316-agreement between the trust institution or its client and any other 32
5317-instrument under which the trust institution acts for a client. 33
5318- 34
5319-Subchapter 12 — Private Trust Company 35
5320- 36 As Engrossed: S2/17/25 SB230
5321-
5322- 134 02-17-2025 11:15:03 ANS145
5323-
5324-
5325- 23-51-1201. Private trust company. 1
5326- (a) A private trust company engaging in the trust business in this 2
5327-state shall comply with the provisions of this chapter applicable to a trust 3
5328-company unless expressly exempted from those provisions in writing by the 4
5329-Bank Commissioner under this section or by rule adopted by the commissioner. 5
5330- (b)(1) A private trust company or proposed private trust company may 6
5331-request in writing that it be exempted from specified provisions of §§ 23 -51-7
5332-110, 23-51-403(a), 23-51-405(b)(11), 23-51-406(b)(1), 23-51-407, 23-51-501, 8
5333-23-51-503, and 23-51-506(b)—(d). 9
5334- (2) The commissioner may grant the exemption in whole or in part 10
5335-if the commissioner finds that the private trust company does not and will 11
5336-not transact business with the general public. 12
5337- (c) An exemption granted under this section may be made subject to 13
5338-conditions or limitations imposed by the commissioner consistent with this 14
5339-subchapter. 15
5340- (d)(1) At the expense of the private trust company, the commissioner 16
5341-may examine or investigate the private trust company in connection with an 17
5342-application for exemption. 18
5343- (2) Unless the application presents novel or unusual questions, 19
5344-the commissioner shall approve the application for exemption or set the 20
5345-application for hearing not later than sixty (60) days after the date the 21
5346-commissioner considers the application complete and accepted for filing. 22
5347- (3) The commissioner may require the submission of additional 23
5348-information as considered necessary to an informed decision. 24
5349- 25
5350- 23-51-1202. Definitions. 26
5351- As used in this subchapter: 27
5352- (1) "Family member" means an individual who is related within 28
5353-the fourth degree of affinity or consanguinity to an individual or 29
5354-individuals who control a private trust company or that is controlled by one 30
5355-(1) or more trusts or charitable organizations established by the individual 31
5356-or individuals; and 32
5357- (2) "Transact business with the general public" means any sales, 33
5358-solicitations, arrangements, agreements, or transactions to provide trust or 34
5359-other business services, whether or not for a fee, commission, or any other 35
5360-type of remuneration, with any client that is not a family member or a sole 36 As Engrossed: S2/17/25 SB230
5361-
5362- 135 02-17-2025 11:15:03 ANS145
5363-
5364-
5365-proprietorship, partnership, joint venture, association, trust, estate, 1
5366-business trust, or other company that is not one hundred percent (100%) owned 2
5367-by one (1) or more family members. 3
5368- 4
5369- 23-51-1203. Requirements for a private trust company. 5
5370- (a)(1) A private trust company requesting an exemption from this 6
5371-chapter under § 23-51-1201 shall file an application with the Bank 7
5372-Commissioner containing: 8
5373- (A) A nonrefundable application fee of an amount not less 9
5374-than three thousand dollars ($3,000) nor more than five thousand dollars 10
5375-($5,000), as set by rules issued by the commissioner; 11
5376- (B) A detailed statement under oath showing the private 12
5377-trust company's assets and liabilities as of the end of the month previous to 13
5378-the filing of the application; 14
5379- (C) A statement under oath of the reason for requesting 15
5380-the exemption; 16
5381- (D) A statement under oath that the private trust company 17
5382-is not currently transacting business with the public and that the company 18
5383-will not conduct business with the public without the prior written 19
5384-permission of the commissioner; 20
5385- (E) The current street mailing address and telephone 21
5386-number of the physical location in this state at which the private trust 22
5387-company will maintain its books and records, together with a statement under 23
5388-oath that the address given is true and correct and is not a United States 24
5389-Postal Service post office box or a private mailbox, postal box, or mail 25
5390-drop; 26
5391- (F) A listing of the specific provisions of this chapter 27
5392-for which the request for exemption is made; and 28
5393- (G)(i) A certification that the private trust company is 29
5394-managed by, and its members are family members. 30
5395- (ii) All individuals who control a private trust 31
5396-company or establish trusts or charitable organizations controlling the 32
5397-private trust company shall be related within the second degree of affinity 33
5398-or consanguinity. 34
5399- (2) The commissioner shall not approve a private trust company 35
5400-exemption unless the application is completed as required in subdivision 36 As Engrossed: S2/17/25 SB230
5401-
5402- 136 02-17-2025 11:15:03 ANS145
5403-
5404-
5405-(a)(1) of this section. 1
5406- (b) To maintain status as an exempt private trust company under this 2
5407-chapter, the exempt private trust company shall: 3
5408- (1) Not transact business with the public; 4
5409- (2)(A) File an annual certification that it is maintaining the 5
5410-conditions and limitations of its exempt status. 6
5411- (B) The annual certification required under subdivision 7
5412-(b)(2)(A) of this section shall be filed: 8
5413- (i) On a form provided by the commissioner and be 9
5414-accompanied by a fee set by rules issued by the commissioner; and 10
5415- (ii) On or before June 30 of each year. 11
5416- (C)(i) An annual certification shall not be valid unless 12
5417-it bears an acknowledgment stamped by the State Bank Department. 13
5418- (ii) The department shall have thirty (30) days from 14
5419-the date of receipt to return a copy of the acknowledged annual certification 15
5420-to the exempt private trust company. 16
5421- (iii) The burden shall be on the exempt private 17
5422-trust company to notify the department of a failure to return an acknowledged 18
5423-copy of an annual certification within the thirty -day period. 19
5424- (iv) The commissioner may examine or investigate the 20
5425-exempt private trust company periodically as necessary to verify the annual 21
5426-certification; 22
5427- (3) Comply with the principal office provisions of § 23 -51-402 23
5428-and with the address and telephone requirements of subdivision (a)(1)(E) of 24
5429-this section; and 25
5430- (4) Pay all applicable corporate franchise taxes. 26
5431- 27
5432- 23-51-1204. Change of control. 28
5433- (a) Control of an exempt private trust company shall not be 29
5434-transferred or sold with exempt status. 30
5435- (b) In a change of control, the acquiring control person shall comply 31
5436-with this chapter, and the exempt status of the private trust company shall 32
5437-automatically terminate upon the effective date of the transfer. 33
5438- (c) A separate application for exempt status shall be filed if the 34
5439-acquiring person wishes to obtain or continue an exemption under this 35
5440-section. 36 As Engrossed: S2/17/25 SB230
5441-
5442- 137 02-17-2025 11:15:03 ANS145
5443-
5444-
5445- 1
5446- 23-51-1205. Authority to revoke. 2
5447- (a) The Bank Commissioner may revoke the exempt status of a private 3
5448-trust company if the private trust company: 4
5449- (1) Makes a false statement under oath on a document required to 5
5450-be filed under this chapter or by any rule promulgated by the commissioner; 6
5451- (2) Fails to submit to an examination as required by § 23 -51-7
5452-1201(c); 8
5453- (3) Withholds requested information from the commissioner; or 9
5454- (4) Violates any provision of this section applicable to an 10
5455-exempt private trust company. 11
5456- (b)(1) If the commissioner determines from examination or other 12
5457-credible evidence that a private trust company has violated any of the 13
5458-requirements of this section, the commissioner may by personal delivery or 14
5459-registered or certified mail, return receipt requested, notify the private 15
5460-trust company in writing that the private trust company's exempt status has 16
5461-been revoked. 17
5462- (2) The notification required under subdivision (b)(1) of this 18
5463-section shall: 19
5464- (A) State grounds for the revocation with reasonable 20
5465-certainty; and 21
5466- (B) State the effective date of the revocation, which may 22
5467-not be sooner than five (5) calendar days after the date the notification is 23
5468-mailed or delivered. 24
5469- (c)(1) A revocation under this section takes effect for the private 25
5470-trust company if the private trust company does not request a hearing in 26
5471-writing before the effective date. 27
5472- (2) After taking effect the revocation is final and 28
5473-nonappealable as to that private trust company, and the private trust company 29
5474-shall be subject to all of the requirements and provisions of this chapter 30
5475-applicable to state trust companies. 31
5476- (d)(1) A private trust company shall have five (5) calendar days after 32
5477-the revocation is effective to comply with the provisions of this chapter 33
5478-from which it was formerly exempt. 34
5479- (2) If, however, the commissioner determines, at the time of 35
5480-revocation, that the private trust company has been engaging in or attempting 36 As Engrossed: S2/17/25 SB230
5481-
5482- 138 02-17-2025 11:15:03 ANS145
5483-
5484-
5485-to engage in acts intended or designed to deceive or defraud the public, the 1
5486-commissioner may shorten or eliminate, in the commissioner's sole discretion, 2
5487-the five (5) calendar days compliance period. 3
5488- (e) If the private trust company does not comply with this subchapter, 4
5489-including the capitalization requirements as have been determined by the 5
5490-commissioner as necessary to assure the safety and soundness of the private 6
5491-trust company, within the prescribed time period, the commissioner may: 7
5492- (1) Institute any action or remedy prescribed by this chapter, 8
5493-or any applicable rule; or 9
5494- (2) Refer the private trust company to the Attorney General for 10
5495-to initiate a quo warranto proceeding to revoke the charter. 11
5496- 12
5497- 23-51-1206. Conversion to public trust company. 13
5498- (a)(1) A private trust company may terminate its status as a private 14
5499-trust company and commence transacting business with the general public. 15
5500- (2) A private trust company desiring to commence transacting 16
5501-business with the general public shall file an application on a form 17
5502-prescribed by the Bank Commissioner. 18
5503- (3) The application required under subdivision (a)(2) of this 19
5504-section shall provide: 20
5505- (A) The name of the private trust company; 21
5506- (B) An acknowledgment that any exemption granted or 22
5507-otherwise applicable to the private trust company under this subchapter, 23
5508-shall cease to apply on the effective date of the notice; 24
5509- (C) A copy of the resolution adopted by the board 25
5510-authorizing the private trust company to commence transacting business with 26
5511-the general public; and 27
5512- (D) The payment of the filing fee, if any, prescribed by 28
5513-the commissioner. 29
5514- (b) The applicant may commence transacting business with the general 30
5515-public thirty (30) days after the application is approved by the 31
5516-commissioner, unless the commissioner specifies another date. 32
5517- (c)(1) The thirty-day period of review under subsection (b) of this 33
5518-section may be extended by the commissioner on determination that the 34
5519-application raises issues that require additional information or additional 35
5520-time for analysis. 36 As Engrossed: S2/17/25 SB230
5521-
5522- 139 02-17-2025 11:15:03 ANS145
5523-
5524-
5525- (2) If the period for review is extended, the applicant may 1
5526-commence transacting business with the public only on prior written approval 2
5527-by the commissioner. 3
5528- (d) The commissioner may deny approval of the application of the 4
5529-private trust company to commence transacting business with the general 5
5530-public if the commissioner finds that the: 6
5531- (1) Applicant lacks sufficient financial resources to undertake 7
5532-the proposed expansion without adversely affecting its safety or soundness; 8
5533- (2) Proposed transacting of business with the general public 9
5534-would be contrary to the public interest; or 10
5535- (3) Applicant will not within a reasonable period be in 11
5536-compliance with any provision of this chapter from which the applicant had 12
5537-been previously exempted under this subchapter. 13
5538- 14
5539-/s/J. Boyd 15
5540- 16
5541- 17
5542-APPROVED: 3/4/25 18
5543- 19
5544- 20
5545- 21
5546- 22
5547- 23
5231+ 23-51-1206. Conversion to public trust company. 23
5232+ (a)(1) A private trust company may terminate its status as a private 24
5233+trust company and commence transacting business with the general public. 25
5234+ (2) A private trust company desiring to commence transacting 26
5235+business with the general public shall file an application on a form 27
5236+prescribed by the Bank Commissioner. 28
5237+ (3) The application required under subdivision (a)(2) of this 29
5238+section shall provide: 30
5239+ (A) The name of the private trust company; 31
5240+ (B) An acknowledgment that any exemption granted or 32
5241+otherwise applicable to the private trust company under this subchapter, 33
5242+shall cease to apply on the effective date of the notice; 34
5243+ (C) A copy of the resolution adopted by the board 35
5244+authorizing the private trust company to commence transacting business with 36 SB230
5245+
5246+ 139 02/13/2025 12:57:21 PM ANS145
5247+the general public; and 1
5248+ (D) The payment of the filing fee, if any, prescribed by 2
5249+the commissioner. 3
5250+ (b) The applicant may commence transacting business with the general 4
5251+public thirty (30) days after the application is approved by the 5
5252+commissioner, unless the commissioner specifies another date. 6
5253+ (c)(1) The thirty-day period of review under subsection (b) of this 7
5254+section may be extended by the commissioner on determination that the 8
5255+application raises issues that require additional information or additional 9
5256+time for analysis. 10
5257+ (2) If the period for review is extended, the applicant may 11
5258+commence transacting business with the public only on prior written approval 12
5259+by the commissioner. 13
5260+ (d) The commissioner may deny approval of the application of the 14
5261+private trust company to commence transacting business with the general 15
5262+public if the commissioner finds that the: 16
5263+ (1) Applicant lacks sufficient financial resources to undertake 17
5264+the proposed expansion without adversely affecting its safety or soundness; 18
5265+ (2) Proposed transacting of business with the general public 19
5266+would be contrary to the public interest; or 20
5267+ (3) Applicant will not within a reasonable period be in 21
5268+compliance with any provision of this chapter from which the applicant had 22
5269+been previously exempted under this subchapter. 23
55485270 24
55495271 25
55505272 26
55515273 27
55525274 28
55535275 29
55545276 30
55555277 31
55565278 32
55575279 33
55585280 34
55595281 35
55605282 36