# Financial Institutions (GFI)

## Title 1. Definitions; General Provisions

### Subtitle 2. General Provisions

#### Section 1-201

Except as otherwise expressly provided by this article, the Maryland General Corporation Law applies to a financial institution and to all of its corporate acts.

#### Section 1-202

(a) A requirement in this article that a document be acknowledged means that the document shall be acknowledged by an individual:

  (1) As the act of that individual; or

  (2) If the document is that of a corporate or other entity, as the act of that entity.

(b) A requirement in this article that a document be verified means that the document shall be verified by a declaration made under the penalties for perjury that the matters and facts contained in the document are true to the best of the knowledge, information, and belief of the individual making the declaration.

(c) The acknowledgment or verification shall be made:

  (1) Before an individual authorized to take acknowledgments or administer oaths; or

  (2) By a signed statement of acknowledgment or verification that:

    (i) Is in the document or attached to and made part of the document; and

    (ii) As to a verification, states that the statement is made under the penalties for perjury.

(d) If the procedures provided in subsection (c)(2) of this section are used:

  (1) A statement of acknowledgment has the same legal effect as an acknowledgment made before an individual authorized to take acknowledgments; and

  (2) A statement of verification subjects the individual making the statement to the penalties for perjury to the same extent as if the statement had been verified under oath before an individual authorized to administer oaths.

#### Section 1-203

Before any license or permit may be issued under this article to an employer to engage in an activity in which the employer may employ a covered employee, as defined in Sec. 9-101 of the Labor and Employment Article, the employer shall file with the issuing authority:

(1) A certificate of compliance with the Maryland Workers' Compensation Act; or

(2) The number of a workers' compensation insurance policy or binder.

#### Section 1-204

(a) A provision in an account agreement for a transfer on death in compliance with this section is nontestamentary and shall be effective according to the provisions of this section. Transfers pursuant to this section are effective in the form and manner prescribed by this section and are not to be considered testamentary.

(b)

  (1) In this section the following words have the meanings indicated.

  (2)

    (i) "Account" means any type of deposit or share account at a depository institution.

    (ii) "Account" includes:

      (1) Checking and other demand deposit accounts;

      (2) Negotiable order of withdrawal and other savings accounts;

      (3) Share draft accounts; and

      (4) Certificated and uncertificated time deposit accounts.

  (3) "Account agreement" means a written agreement, whether in one or more instruments, that establishes the type of account, the terms of account, and the relationship between the depository institution and the party or parties to the account.

  (4) "Beneficiary" means any person designated on a trust account as a person:

    (i) To whom the account belongs after the death of all trustees for the account; and

    (ii) Who does not possess a present right to draw upon funds in the account during the lifetime of any trustee for the account.

  (5) "Convenience person" means any person who is authorized to draw upon funds in an account:

    (i) Under a power of attorney given by one or more parties to the account; or

    (ii) By virtue of a designation in the account agreement appointing that person as agent of a party or the parties to the account for the convenience of the party or parties.

  (6) "Depository institution" means any State-chartered or federally chartered financial institution, other-state bank, or foreign bank that:

    (i) Is located in this State or maintains a branch in this State; and

    (ii) Is authorized to maintain accounts.

  (7) "Joint account" means any account other than a P.O.D. account or a trust account established in the name of two or more parties.

  (8)

    (i) "Multiple-party account" means any of the following types of accounts at a depository institution:

      (1) Joint account;

      (2)

        (P)

          (O)

            (D) account; or

      (3) Trust account.

    (ii) "Multiple-party account" does not include any:

      (1) Account established and designated for the deposit of funds of a corporation, partnership, joint venture, limited liability company, or other association of persons for business purposes;

      (2) Account established and designated for the deposit of funds of a charitable or civic organization;

      (3) Fiduciary account where the relationship is established other than by the account agreement;

      (4) Account established and designated as governed under the Maryland Uniform Transfers to Minors Act;

      (5) Account established and designated as governed under Title 13, Subtitle 4 of the Estates and Trusts Article; or

      (6) Account that would not be a multiple-party account except for the fact that one or more convenience persons are authorized to draw upon funds in the account.

  (9)

    (i) "Party" means any person who, by the terms of the account agreement, possesses a present right to draw upon funds in a multiple-party account.

    (ii) "Party" includes a trustee of a trust account.

    (iii) "Party" does not include a:

      (1) Beneficiary of a trust account;

      (2)

        (P)

          (O)

            (D) payee of a P.O.D. account; or

      (3) Convenience person.

  (10) "P.O.D. account" means any account established in the name of one or more parties where funds in the account may be drawn upon:

    (i) By one party during the party's lifetime and by one or more P.O.D. payees on the party's death; or

    (ii) By one or more parties during their respective lifetimes and, upon the death of all the parties, by one or more P.O.D. payees.

  (11) "P.O.D. payee" means any person designated on a P.O.D. account as a person:

    (i) To whom the account belongs after the death of all parties to the account; and

    (ii) Who does not possess a present right to draw upon funds in the account during the lifetime of any party to the account.

  (12)

    (i) "Power of attorney" means any writing signed by one or more parties to an account that authorizes one or more persons to draw upon funds in the account as agent or agents for the signing party or parties.

    (ii) The designation of a person as a convenience person on an account shall be deemed to be a durable power of attorney appointing that person as agent for the party or parties to the account regardless of any disability of the party or parties subsequent to the designation.

  (13)

    (i) "Trust account" means any account established in the name of one or more parties as trustees for one or more beneficiaries where:

      (1) None of the beneficiaries is also a trustee;

      (2) The trust relationship is established by the account agreement; and

      (3) There is no corpus of the trust other than the funds in the account.

    (ii) "Trust account" does not include a:

      (1) Trust account under a testamentary trust, declaration of trust, or a trust agreement that has significance apart from the account; or

      (2) Fiduciary account arising from a fiduciary relationship.

(c)

  (1) A depository institution is authorized to establish multiple-party accounts subject to the terms of this section.

  (2) Multiple-party accounts established on or after October 1, 1993, shall be subject to and comply with the terms of this section.

  (3) A multiple-party account established before October 1, 1993, shall be subject to and comply with the terms of this section if:

    (i) The parties expressly state in an account agreement that complies with subsection (e) of this section that the account shall be subject to the terms of this section; or

    (ii)

      (1) The depository institution gives a written notice that:

      (A) States that the law applicable to the account has changed;

      (B) States that the party's rights under the account may change because of the change in law; and

      (C) Repeats the provisions of subsection (d) of this section; and

      (2) After that notice is given, any party to the account:

      (A) Increases or decreases the amount of the deposit in the account;

      (B) Presents evidence of the account for crediting of interest;

      (C) Corresponds or responds in writing with the depository institution concerning the account without rejecting in writing the provisions of this section; or

      (D) Otherwise indicates approval of the account being governed by this section as evidenced by a writing on file with the depository institution.

(d)

  (1) Upon the death of a party to a multiple-party account, the right to any funds in the account shall be determined in accordance with the express terms of the account agreement.

  (2) If the account agreement does not expressly establish the right to funds in the account upon the death of a party, or if there is no account agreement, any funds in the account upon the death of a party shall belong to the surviving party or parties.

  (3) Unless the account agreement expressly provides otherwise, upon the death of the last party to a multiple-party account, any funds remaining in the account shall belong to:

    (i) The beneficiaries of a trust account who are then living;

    (ii) The P.O.D. payees of a P.O.D. account who are then living; or

    (iii) Subject to paragraph (4) of this subsection, the personal representative of:

      (1) The last surviving party of a trust account if no beneficiary is then living;

      (2) The last surviving party of a P.O.D. account if no P.O.D. payee is then living; or

      (3) The last surviving party of a joint account.

  (4) No payment from a multiple-party account may be made to the personal representative of a deceased party unless:

    (i) Proof is presented to the depository institution showing that the deceased party was the last surviving party; or

    (ii) There is no right of survivorship under this section.

  (5) If there is no right of survivorship under this section, the depository institution may make payment from a multiple-party account to the personal representative of a deceased party without liability to:

    (i) Any other party; or

    (ii) Any party's heirs, personal representatives, or assigns.

  (6) No funds in an account shall belong to any convenience person by reason of that capacity.

(e)

  (1) Each account agreement for a multiple-party account opened on or after October 1, 1993, shall contain a clear and conspicuous written statement specifying that unless contrary direction is given in the account agreement, upon the death of a party, the funds in the multiple-party account shall belong to the surviving party or parties.

  (2) For multiple-party accounts opened on or after October 1, 1993, the depository institution shall give to the account party or parties:

    (i) A copy of the account agreement; or

    (ii) A written notice identifying the type of account, the survivorship rights of the parties to the account, and the method by which the account party or parties can obtain a copy of the account agreement.

(f) Unless the account agreement expressly provides otherwise, the funds in a multiple-party account may be withdrawn by any party or by a convenience person for any party or parties, whether or not any other party to the account is incapacitated or deceased.

(g) A depository institution may presume that an account established by the parties as a trust account complies with the definitional requirements of a trust account as set forth in subsection (b) of this section unless, prior to the establishment of the account, the depository institution is provided with written notice to the contrary.

(h) Any written materials required by this section to be given to account parties:

  (1) Shall be deemed given if:

    (i) Delivered in person to any one of the account parties; or

    (ii) Mailed to the account party or parties by first-class mail, postage prepaid, to the address for the account shown on the records of the depository institution; and

  (2) May be provided along with or as part of other materials given to account parties.

(i)

  (1) A person who has an ownership interest in an account that is not a multiple-party account may designate another person as a convenience person on that account.

  (2) No funds in the account shall belong to any convenience person by reason of that capacity.

#### Section 1-205

(a)

  (1) In this section the following words have the meanings indicated.

  (2) "Compliance review committee" means:

    (i) An audit, loan review, or compliance committee appointed by the board of directors of a depository institution; or

    (ii) Any other person to the extent the person acts in an investigatory capacity at the direction of a compliance review committee.

  (3) "Compliance review documents" means documents prepared for or created by a compliance review committee.

  (4) "Depository institution" means a State-chartered or federally chartered financial institution located in this State that is authorized to maintain deposit or share accounts.

  (5) "Loan review committee" means a person or group of persons who, on behalf of a depository institution, reviews loans held by the institution for the purpose of assessing the credit quality of the loans, compliance with the institution's loan policies, and compliance with applicable laws and regulations.

  (6) "Person" means an individual, group of individuals, board, committee, partnership, firm, association, corporation, or other entity.

(b) This section applies to a compliance review committee whose functions are to evaluate and seek to improve:

  (1) Loan underwriting standards;

  (2) Asset quality;

  (3) Financial reporting to federal or State regulatory agencies; or

  (4) Compliance with federal or State statutory or regulatory requirements.

(c) Except as provided in subsection (d) of this section:

  (1) Compliance review documents are confidential and are not discoverable or admissible in evidence in any civil action arising out of matters evaluated by the compliance review committee; and

  (2) Compliance review documents delivered to a federal or State governmental agency remain confidential and are not discoverable or admissible in evidence in any civil action arising out of matters evaluated by the compliance review committee.

(d) Subsection (c) of this section does not apply to any information required by statute or regulation to be maintained by or provided to a governmental agency while the information is in the possession of the governmental agency to the extent applicable law expressly authorizes its disclosure.

(e) This section may not be construed to limit the discovery or admissibility in any civil action of any documents that are not compliance review documents.

#### Section 1-206

(a) In this section, "fiduciary deposit surety bond" means a surety bond that:

  (1) Guarantees the payment of deposited funds awaiting distribution or investment held by a financial institution in a fiduciary capacity; and

  (2) Subject to the terms and conditions of the bond, is irrevocable and absolute.

(b) Except as provided in Sec.Sec. 6-202 and 6-209 of the State Finance and Procurement Article, if applicable law requires a deposit made by a financial institution to be collateralized, the financial institution may take as collateral for the deposit, in addition to any other permissible collateral, a fiduciary deposit surety bond issued by an insurance company authorized to do business in this State, the claims-paying ability of which is rated in the highest category by at least two nationally recognized statistical rating agencies.

#### Section 1-208

(a) The directors and officers of a financial institution shall develop and implement written:

  (1) Policies governing real estate appraisal; and

  (2) Procedures governing the hiring and performance of real estate appraisers.

(b) The procedures required under subsection (a)(2) of this section shall set forth specific factors to be considered by the financial institution's directors and officers, including:

  (1) Whether the appraiser is licensed or certified under the Business Occupations and Professions Article; and

  (2) The real estate appraiser's:

    (i) Professional education; and

    (ii) Experience in real estate appraising.

(c) Prior to implementation, a financial institution shall submit its real estate appraisal policies and procedures to the Commissioner for review and approval.

#### Section 1-209

(a) Only the State may enact a law which purports to regulate extensions of credit made by a financial institution.

(b) This section does not:

  (1) Affect federal law preemption of State law;

  (2) Restrict or otherwise affect local laws that establish property ownership or the rights and obligations of property owners;

  (3) Restrict or otherwise affect a local government's ability to regulate its fiscal, economic, or community development policy;

  (4) Restrict or otherwise affect a local government's ability to enact laws or adopt regulations relating to fair housing or other civil rights; or

  (5) Restrict or otherwise affect a local government's ability to establish or administer loan programs to assist residents with financial needs.

#### Section 1-210

(a)

  (1) In this section the following words have the meanings indicated.

  (2) "Account agreement" means one or more written instruments that establish when a certificate of deposit is payable.

  (3) "Certificate of deposit" means a deposit or share account at a depository institution that:

    (i) Is payable by the depository institution at the expiration of a specified time; and

    (ii) May be transferable or nontransferable, negotiable or nonnegotiable, and renewable or nonrenewable.

  (4) "Depository institution" means a State-chartered or federally chartered financial institution located in the State that is authorized to maintain certificates of deposit.

  (5) "Maturity date" means the time specified in an account agreement when a certificate of deposit is first payable, without taking into account any agreement regarding renewals.

(b) Subject to subsection (c) of this section, an action to enforce the obligation of a depository institution to pay all or part of the balance of a certificate of deposit must be commenced by the earlier of:

  (1) The time that an action to enforce an obligation under Sec. 3-118(e) of the Commercial Law Article must be commenced, if the certificate of deposit is subject to that section; or

  (2) 6 years after the later of:

    (i) The maturity date of the certificate of deposit;

    (ii) The due date of the certificate of deposit indicated in the depository institution's last written notice of renewal of the certificate of deposit, if any;

    (iii) The date of the last written communication from the depository institution recognizing the depository institution's obligation to pay the certificate of deposit; or

    (iv) The last day of the taxable year for which a person identified in the certificate of deposit last reported interest income earned on the certificate of deposit on a federal or State income tax return.

(c) Notwithstanding subsection (b) of this section, an action to enforce the obligation of a depository institution to pay all or part of the balance of an automatically renewing certificate of deposit in existence on June 1, 2006, must be commenced by the later of:

  (1) 6 years after the later of the events described in subsection (b)(2)(i) through (iv) of this section; or

  (2) 1 year after June 1, 2006.

#### Section 1-211

(a)

  (1) In this section the following words have the meanings indicated.

  (2) "Depository institution" means a financial institution that:

    (i) Is located in this State or maintains a branch in this State; and

    (ii) Is authorized to maintain qualifying accounts.

  (3) "Eligible customer" means an individual who:

    (i) Maintains a qualifying account at a depository institution;

    (ii) Is an adult; and

    (iii) Is a resident of this State.

  (4) "Qualifying account" means a savings account, share account, or other savings product or program:

    (i) Offered by a depository institution;

    (ii) Insured by the Federal Deposit Insurance Corporation, the National Credit Union Administration, or a credit union share guaranty corporation that is approved by the Commissioner; and

    (iii) Through which eligible customers may obtain chances to win prizes in a savings promotion raffle.

  (5) "Savings promotion raffle" means a contest in which:

    (i) The sole consideration required for a chance of winning designated prizes is obtained by the deposit of a specified amount of money in a qualifying account; and

    (ii) Each ticket or entry has an equal chance of being drawn.

(b) A depository institution may conduct a savings promotion raffle for the exclusive benefit of eligible customers if:

  (1) The depository institution maintains books and records relating to the savings promotion raffle; and

  (2) The savings promotion raffle will not:

    (i) Harm the depository institution's ability to operate in a safe and sound manner; or

    (ii) Mislead the depository institution's customers.

(c) Except as preempted by federal law, the Commissioner may:

  (1) Examine the conduct of a savings promotion raffle; and

  (2) Issue a cease and desist order under Sec. 5-808 of this article for a violation of this section.

#### Section 1-212

If a financial institution requires a customer to provide an answer to a security question in connection with the provision of an account, the financial institution shall allow the customer to choose from at least two security questions options for each required security question.

#### Section 1-213

(a)

  (1) In this section the following words have the meanings indicated.

  (2) "Credit union" has the meaning stated in Sec. 6-101 of this article.

  (3) "Savings and loan association" has the meaning stated in Sec. 8-101 of this article.

(b) This section applies only to:

  (1) A banking institution;

  (2) A credit union;

  (3) A savings and loan association;

  (4) A community development financial institution; and

  (5) A credit grantor regulated under Title 11 of this article.

(c) When evaluating an application for a primary residential mortgage loan or an extension of credit, an entity subject to this section shall:

  (1) Adhere to the rules concerning evaluations of applications established under 12 C.F.R. Sec. 1002.6, including consideration of the following verifiable alternative indications of creditworthiness presented or made available to the entity by the applicant:

    (i) History of rent or mortgage payments;

    (ii) History of utility payments;

    (iii) School attendance; and

    (iv) Work attendance; and

  (2) If the applicant requests, consider other verifiable alternative indications of creditworthiness presented or made available to the entity by the applicant.

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Md. Code Ann., Fin. Inst. (as displayed at mgaleg.maryland.gov, October 16, 2026)