SLS 18RS-549 ORIGINAL
2018 Regular Session
SENATE BILL NO. 333
BY SENATOR MARTINY
FINANCIAL INSTITUTIONS. Provides relative to supervisory control of state banks.
(8/1/18)
1 AN ACT
2 To enact Part I-A of Subchapter C of Chapter 3 of Title 6 of the Louisiana Revised Statutes
3 of 1950, to be comprised of R.S. 6:388 through 390, relative to state banks; to
4 provide for powers and duties of the commissioner; to provide for supervisory
5 control of a state bank; to provide for certain terms, conditions, and procedures of
6 supervisory control; to provide for costs; and to provide for related matters.
7 Be it enacted by the Legislature of Louisiana:
8 Section 1. Part I-A of Subchapter C of Chapter 3 of Title 6 of the Louisiana Revised
9 Statutes of 1950, comprised of R.S. 6:388 through 390, is hereby enacted to read as follows:
10 §388. Voluntary supervisory control
11 A. The board of directors of a state bank may consent to the
12 commissioner's appointment of a supervisor over the bank if the commissioner
13 finds from examination or other credible evidence any of the following:
14 (1) The state bank or any person participating in the affairs of the bank
15 or its subsidiaries or holding companies has done any of the following:
16 (a) Violated or is about to violate an order of the commissioner or any
17 other state or federal regulator.
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SLS 18RS-549 ORIGINAL
1 (b) Provided false or misleading information to the commissioner or to
2 any other state or federal regulator.
3 (c) Committed or is about to commit a fraudulent or criminal act in
4 conducting the affairs of the state bank that may cause the bank or a subsidiary
5 or holding company of the bank to become or be in danger of becoming
6 insolvent.
7 (d) Committed or is about to commit an act that threatens immediate
8 or irreparable harm to the public or the state bank, a subsidiary of the bank, or
9 any deposit account holder or creditor of the bank.
10 (e) Committed or is about to commit a breach of fiduciary duty that
11 results in actual or probable substantial financial losses or other damages to the
12 state bank or a subsidiary of the state bank, or that would seriously prejudice
13 the interest of the deposit account holders or holders of other security issued by
14 the bank.
15 (2) Any or all conditions necessary to commence a conservatorship have
16 been met.
17 (3) The state bank is in imminent danger of insolvency.
18 (4) The state bank is in an unsafe or unsound condition and that
19 supervision is necessary and is in the best interest of the bank and its depositors,
20 creditors, and shareholders, or the public.
21 B. The agreement may provide for the appointment of one or more
22 deputy supervisors.
23 C. A supervisor or deputy supervisor shall serve until the earlier of:
24 (1) The expiration of the period stated in the agreement of supervision.
25 (2) The date the commissioner determines that the condition of the state
26 bank has improved to the extent that the presence of a supervisor or deputy
27 supervisor is no longer necessary.
28 (3) The date the commissioner appoints a substitute supervisor or
29 deputy supervisor.
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1 D. The provisions of this Part may be relied upon by the commissioner
2 and the board of directors of a state bank for the purposes of entering into a
3 voluntary supervisory control agreement.
4 §389. Authority of supervisor
5 A. A supervisor or deputy supervisor shall have the same powers of
6 management and control as a conservator as provided in R.S. 6:385(1) through
7 (7) and any other power established by agreement between the commissioner
8 and the state bank's board of directors.
9 B. During a period of supervision, a state bank, without the prior
10 approval of the commissioner or the supervisor or as otherwise permitted or
11 restricted by the order of supervision, shall not do any of the following:
12 (1) Dispose of, sell, transfer, convey, or encumber the bank's assets.
13 (2) Lend or invest the bank's money.
14 (3) Incur a debt, obligation, or liability.
15 (4) Pay a cash dividend to the bank's shareholders.
16 (5) Remove an executive officer or director, change the number of
17 executive officers or directors, or have any other change in the position of
18 executive officer or director.
19 §390. Cost of supervisory control
20 The cost of the supervisory control of a state bank shall be set by the
21 commissioner and paid by the state bank.
The original instrument and the following digest, which constitutes no part
of the legislative instrument, were prepared by Michelle Ridge.
DIGEST
SB 333 Original 2018 Regular Session Martiny
Present law provides for the duties and authority of the commissioner of the Office of
Financial Institutions.
Proposed law provides for terms and procedures of the voluntary supervisory control of a
state bank by the commissioner.
Proposed law provides that the board of directors of a state bank may consent to the
commissioner's appointment of a supervisor over the bank if the commissioner finds from
examination or other credible evidence any of the following:
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(1) The state bank or any person participating in the affairs of the bank or its subsidiaries
or holding companies has done any of the following:
(a)Violated or is about to violate an order of the commissioner or any other state
or federal regulator.
(b)Provided false or misleading information to the commissioner or to any other
state or federal regulator.
(c) Committed or is about to commit a fraudulent or criminal act in conducting
the affairs of the state bank that may cause the bank or a subsidiary or
holding company of the bank to become or be in danger of becoming
insolvent.
(d)Committed or is about to commit an act that threatens immediate or
irreparable harm to the public or the state bank, a subsidiary of the bank, or
any deposit account holder or creditor of the bank.
(e)Committed or is about to commit a breach of fiduciary duty that results in
actual or probable substantial financial losses or other damages to the state
bank or a subsidiary of the state bank or that would seriously prejudice the
interest of the deposit account holders or holders of other security issued by
the bank.
(2)Any or all conditions necessary to commence a conservatorship have been met.
(3)The state bank is in imminent danger of insolvency.
(4)The state bank is in an unsafe or unsound condition and that supervision is necessary
and is in the best interest of the bank and its depositors, creditors, and shareholders,
or the public.
Proposed law provides that the agreement may provide for the appointment of one or more
deputy supervisors.
Proposed law provides that a supervisor or deputy supervisor shall serve until the earlier of:
(1)The expiration of the period stated in the agreement of supervision.
(2)The date the commissioner determines that the condition of the state bank has
improved to the extent that the presence of a supervisor or deputy supervisor is no
longer necessary.
(3)The date the commissioner appoints a substitute supervisor or deputy supervisor.
Proposed law may be relied upon by the commissioner and the board of directors of a state
bank for the purposes of entering into a voluntary supervisory control agreement.
Proposed law provides that a supervisor or deputy supervisor shall have the same powers of
management and control as a conservator and any other power established by agreement
between the commissioner and the state bank's board of directors.
Proposed law provides that during a period of supervision, a state bank, without the prior
approval of the commissioner or the supervisor or as otherwise permitted or restricted by the
order of supervision, shall not do any of the following:
(1)Dispose of, sell, transfer, convey, or encumber the bank's assets.
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(2)Lend or invest the bank's money.
(3)Incur a debt, obligation, or liability.
(4)Pay a cash dividend to the bank's shareholders.
(5)Remove an executive officer or director, change the number of executive officers or
directors, or have any other change in the position of executive officers or directors.
Proposed law provides that the cost of the supervisory control of a state bank shall be set by
the commissioner and paid by the state bank.
Effective August 1, 2018.
(Adds R.S. 6:388-390)
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Coding: Words which are struck through are deletions from existing law;
words in boldface type and underscored are additions.