<section article="gfi" article_name="Financial Institutions" number="5-101" title_number="5" title_name="Banking Institutions -- General Provisions" subtitle_number="1" subtitle_name="Definitions"> <level label="a"> <text>In this title the following words have the meanings indicated.</text> </level> <level label="b"> <text>“CAMELS” means the composite rating adopted by the federal Financial Institutions Examination Council to evaluate the adequacy of capital, quality of assets, capability of management, quality and level of earnings, adequacy of liquidity, and sensitivity to market risk.</text> </level> <level label="c"> <text>“Capital stock” includes both common and preferred stock of a commercial bank.</text> </level> <level label="d"> <text>“Examiner” means:</text> <level label="1"> <text>The Commissioner; and</text> </level> <level label="2"> <text>An individual whom the Commissioner designates as examiner.</text> </level> </level> <level label="e"> <text>“Federal banking authority” means, as the context requires:</text> <level label="1"> <text>The Federal Deposit Insurance Corporation;</text> </level> <level label="2"> <text>The Federal Reserve Bank of Richmond; or</text> </level> <level label="3"> <text>Any other appropriate federal banking authority.</text> </level> </level> <level label="f"> <text>“Nondepository trust company” means a trust company that is not insured by the Federal Deposit Insurance Corporation.</text> </level> <level label="g"> <text>“Savings bank” means an institution that:</text> <level label="1"> <text>Is incorporated under the laws of this State as a savings bank; and</text> </level> <level label="2"> <text>Engages only in the business of savings banking.</text> </level> </level> <level label="h"> <text>“Trust company” means an institution that is incorporated under the laws of this State as a trust company.</text> </level> </section> <section article="gfi" article_name="Financial Institutions" number="5-201" title_number="5" title_name="Banking Institutions -- General Provisions" subtitle_number="2" subtitle_name="Examinations and Reports"> <level label="a"> <text>An examiner shall visit each banking institution and examine its business:</text> <level label="1"> <text>At least once during each calendar year, unless the Commissioner determines that, during a calendar year, an examination is unnecessary, in which event an examination shall occur no less frequently than once every 18 months;</text> </level> <level label="2"> <text>When asked to do so by the board of directors of the institution; or</text> </level> <level label="3"> <text>At any other time that the Commissioner considers necessary.</text> </level> </level> <level label="b"> <text>The examiner shall determine:</text> <level label="1"> <text>The condition of the institution; and</text> </level> <level label="2"> <text>Whether it is complying with the law.</text> </level> </level> <level label="c"> <text>During an examination, the examiner, in the presence of an officer of the banking institution, shall have access to all of the vaults and records of the institution.</text> </level> </section> <section article="gfi" article_name="Financial Institutions" number="5-202" title_number="5" title_name="Banking Institutions -- General Provisions" subtitle_number="2" subtitle_name="Examinations and Reports"> <level label="a"> <text>The Commissioner or deputy Commissioner may:</text> <level label="1"> <text>Summon any officer, manager, trustee, employee, or agent of any banking institution and any other witness that the Commissioner thinks proper;</text> </level> <level label="2"> <text>Administer an oath to that person; and</text> </level> <level label="3"> <text>Question that person about the affairs of the institution.</text> </level> </level> <level label="b"> <text>The Commissioner or deputy Commissioner may not delegate the powers granted by subsection (a) of this section.</text> </level> <level label="c"> <level label="1"> <text>A person may not:</text> <level label="i"> <text>Obstruct the Commissioner or any person acting for the Commissioner in the performance of the duties of the Commissioner; or</text> </level> <level label="ii"> <text>Refuse to appear or testify without good cause when summoned under this section.</text> </level> </level> <level label="2"> <text>Any person who violates any provision of this subsection is guilty of a misdemeanor and on conviction is subject to a fine not exceeding $1,000 or imprisonment not exceeding 1 year or both.</text> </level> </level> </section> <section article="gfi" article_name="Financial Institutions" number="5-203" future_version_removed="true" title_number="5" title_name="Banking Institutions -- General Provisions" subtitle_number="2" subtitle_name="Examinations and Reports"> <level label="a"> <level label="1"> <text>In this section the following words have the meanings indicated.</text> </level> <level label="2"> <text>“Branch” means a deposit–taking office of a banking institution in the State that is open to the public as of December 31 of the calendar year immediately preceding a request for an assessment offset credit.</text> </level> <level label="3"> <text>“De novo branch” means a deposit–taking office of a banking institution in the State that was opened to the public for the first time during the calendar year immediately preceding a request for an assessment offset credit that:</text> <level label="i"> <text>Was originally established by the banking institution as a branch; but</text> </level> <level label="ii"> <text>Did not become a branch of the banking institution as a result of:</text> <level label="1"> <text>The acquisition by the banking institution of an insured depository institution or a branch of an insured depository institution; or</text> </level> <level label="2"> <text>The conversion, merger, or consolidation of an insured depository institution or a branch of an insured depository institution.</text> </level> </level> </level> <level label="4"> <text>“Deposits” means deposits originated and housed at a branch located in a low– to moderate–income tract as reported by a banking institution to the Federal Deposit Insurance Corporation each year as of December 31.</text> </level> <level label="5"> <text>“Low– to moderate–income tract” means a census tract delineated by the U.S. Bureau of the Census in the most recent decennial census as published by the Federal Financial Institutions Examination Council that corresponds to low– to moderate–income level classifications as defined by the regulation of the Federal Reserve Board implementing the federal Community Reinvestment Act, 12 C.F.R. § 228.12.</text> </level> <level label="6"> <text>“Maryland Opportunity Account” means a transaction account offered by a banking institution to customers that meets standards annually determined by the Commissioner that promote fair and equal access to financial services.</text> </level> </level> <level label="b"> <text>The Commissioner shall impose annual assessments on each banking institution as provided in this section to cover the expense of regulating banking institutions.</text> </level> <level label="c"> <level label="1"> <text>Except as provided in paragraph (2) of this subsection, the Commissioner shall assess each banking institution the sum of:</text> <level label="i"> <text>$8,000; plus</text> </level> <level label="ii"> <level label="1"> <text>12 cents for each $1,000 of the assets of the institution over $50,000,000, but not more than $250,000,000;</text> </level> <level label="2"> <text>10 cents for each $1,000 of assets over $250,000,000, but not more than $500,000,000;</text> </level> <level label="3"> <text>9 cents for each $1,000 of assets over $500,000,000, but not more than $1,000,000,000;</text> </level> <level label="4"> <text>8 cents for each $1,000 of assets over $1,000,000,000, but not more than $10,000,000,000; and</text> </level> <level label="5"> <text>7 cents for each $1,000 of assets over $10,000,000,000.</text> </level> </level> </level> <level label="2"> <text>If a banking institution is not in the business of accepting deposits or retaining funds in a deposit account as defined in § 5–509 of this title, the Commissioner shall assess the banking institution the sum of:</text> <level label="i"> <text>$5,000; plus</text> </level> <level label="ii"> <level label="1"> <level label="0"> <text>3 cents for each $1,000 of managed assets held in a fiduciary capacity up to $5,000,000,000;</text> </level> </level> <level label="2"> <level label="0"> <text>2 cents for each $1,000 of managed assets held in a fiduciary capacity over $5,000,000,000, but not more than $20,000,000,000;</text> </level> </level> <level label="3"> <level label="0"> <text>1 cent for each $1,000 of managed assets held in a fiduciary capacity over $20,000,000,000 up to $27,500,000,000;</text> </level> </level> <level label="4"> <level label="0"> <text>2 cents for each $1,000 of nonmanaged and custodial assets held in a fiduciary capacity up to $5,000,000,000; and</text> </level> </level> <level label="5"> <level label="0"> <text>1 cent for each $1,000 of nonmanaged and custodial assets held in a fiduciary capacity over $5,000,000,000 up to $20,000,000,000.</text> </level> </level> </level> </level> <level label="3"> <text>The assessments shall be based on assets stated in a banking institution’s most recent financial report.</text> </level> </level> <level label="d"> <level label="1"> <text>A well–capitalized banking institution with a composite CAMELS rating of 1 or 2 may file with the Commissioner a request for an assessment offset credit of:</text> </level> <level label="i"> <text>12 cents for each $1,000 of deposits in a de novo branch located in a low– to moderate–income tract in the State for the first 5 years after the date the branch opened; or</text> </level> <level label="ii"> <text>6 cents for each $1,000 of deposits in a branch located in a low– to moderate–income tract not to exceed the cap set by the Commissioner by December 31 of the calendar year immediately preceding the request for an assessment offset credit.</text> </level> <level label="2"> <text>In addition to an assessment offset credit under paragraph (1) of this subsection, a well–capitalized banking institution with a composite CAMELS rating of 1, 2, or 3 may file with the Commissioner a request for an assessment offset credit of:</text> <level label="i"> <text>$5,000 on receiving the Commissioner’s initial approval that the banking institution offers at least one Maryland Opportunity Account; and</text> </level> <level label="ii"> <text>$3,000 for each year thereafter that the banking institution offers at least one Maryland Opportunity Account that, as determined by the Commissioner, remains in active use by the banking institution’s customers.</text> </level> </level> </level> <level label="e"> <text>Notwithstanding subsection (c) of this section, for a banking institution with a composite CAMELS rating of 3, 4, or 5 for its most recent examination, the annual assessment imposed under this section shall be increased by an additional 25%.</text> </level> <level label="f"> <text>A banking institution shall pay the assessment imposed under this section to the Commissioner on or before the April 15 after it is imposed.</text> </level> <level label="g"> <text>The Commissioner may designate a successor index for the low– to moderate–income tract if the Federal Financial Institutions Examination Council tract income level data is no longer published.</text> </level> </section> <section article="gfi" article_name="Financial Institutions" number="5-204" title_number="5" title_name="Banking Institutions -- General Provisions" subtitle_number="2" subtitle_name="Examinations and Reports"> <text>Instead of making an examination under this subtitle, the Commissioner may accept a copy of the report of a reasonably recent examination of the banking institution by a federal banking authority.</text> </section> <section article="gfi" article_name="Financial Institutions" number="5-205" title_number="5" title_name="Banking Institutions -- General Provisions" subtitle_number="2" subtitle_name="Examinations and Reports"> <text>The directors of a banking institution shall have a certified public accountant audit the institution at least once every 5 years.</text> </section> <section article="gfi" article_name="Financial Institutions" number="5-206" title_number="5" title_name="Banking Institutions -- General Provisions" subtitle_number="2" subtitle_name="Examinations and Reports"> <level label="a"> <text>At least twice a year, the Commissioner shall ask every banking institution to submit a financial report that shows in detail the assets and liabilities of the institution as of the close of the business day that the Commissioner specifies.</text> </level> <level label="b"> <text>The Commissioner shall:</text> <level label="1"> <text>Provide forms that conform as closely as practicable to the forms that the federal banking authorities use; or</text> </level> <level label="2"> <text>Accept from a banking institution a copy of a reasonably recent report that the institution submitted to a federal banking authority.</text> </level> </level> <level label="c"> <level label="1"> <text>Within 30 days after a banking institution receives the request for a financial report, the institution shall submit the report.</text> </level> <level label="2"> <text>Each report shall be signed and verified by the president, vice president, cashier, or treasurer of the banking institution.</text> </level> </level> <level label="d"> <text>Upon the written request of a banking institution, the Commissioner may permit the financial reports required by this section to be electronically submitted provided that:</text> <level label="1"> <text>The appropriate federal banking authority has approved electronic submission of the report as satisfactory for its requirements;</text> </level> <level label="2"> <text>The report is submitted through a federally approved vendor; and</text> </level> <level label="3"> <text>The banking institution retains, for at least 2 years, a copy of the report, signed and verified by the president, vice president, cashier, or treasurer of the banking institution.</text> </level> </level> </section> <section article="gfi" article_name="Financial Institutions" number="5-206.1" title_number="5" title_name="Banking Institutions -- General Provisions" subtitle_number="2" subtitle_name="Examinations and Reports"> <level label="a"> <text>Within 30 days of receipt, a national banking association located in the State, a banking institution, or an other-state bank that maintains a branch in this State shall submit to the Commissioner a copy of the public portion of its most recent Community Reinvestment Act performance evaluation prepared by the federal regulatory agency that examines the association, institution, or bank, together with a copy of any written response to the evaluation prepared by the association, institution, or bank for its public Community Reinvestment Act file.</text> </level> <level label="b"> <level label="1"> <text>Upon request, the Commissioner shall make available to the public a copy of the documents submitted under this section.</text> </level> <level label="2"> <text>The Commissioner may charge a reasonable fee to a person requesting a copy to help defray the costs of providing copies of the documents to the public.</text> </level> </level> </section> <section article="gfi" article_name="Financial Institutions" number="5-207" title_number="5" title_name="Banking Institutions -- General Provisions" subtitle_number="2" subtitle_name="Examinations and Reports"> <level label="a"> <text>At any time that the Commissioner considers necessary, the Commissioner may ask a banking institution or an other-state bank that maintains a branch in this State to submit a special financial report.</text> </level> <level label="b"> <text>Each report under this section shall be made in the same manner as provided in § 5-206 of this subtitle.</text> </level> </section> <section article="gfi" article_name="Financial Institutions" number="5-208" title_number="5" title_name="Banking Institutions -- General Provisions" subtitle_number="2" subtitle_name="Examinations and Reports"> <level label="a"> <text>If a banking institution or an other–state bank fails to make any report or submit proof of publication as required by this article, the banking institution or other–state bank is subject, in the discretion of the Commissioner, to a civil penalty not exceeding $500 for each day that the report or proof is overdue.</text> </level> <level label="b"> <text>The Commissioner may institute proceedings to enforce this section.</text> </level> </section> <section article="gfi" article_name="Financial Institutions" number="5-210" title_number="5" title_name="Banking Institutions -- General Provisions" subtitle_number="2" subtitle_name="Examinations and Reports"> <text>An examiner shall have access to all the records of a subsidiary savings bank, its mutual holding company, or other related entity including the records of any controlling person, director, officer, agent, or employee of the subsidiary savings bank, its mutual holding company, or other related entity that relate to the business of the subsidiary savings bank, its mutual holding company, or other related entity.</text> </section> <section article="gfi" article_name="Financial Institutions" number="5-301" title_number="5" title_name="Banking Institutions -- General Provisions" subtitle_number="3" subtitle_name="Deposits"> <text>Any banking institution may offer time account services to its customers.</text> </section> <section article="gfi" article_name="Financial Institutions" number="5-302" title_number="5" title_name="Banking Institutions -- General Provisions" subtitle_number="3" subtitle_name="Deposits"> <level label="a"> <level label="1"> <text>As to the interest bearing account of each depositor in a banking institution, the banking institution shall generally make available to any customer with an existing account, in addition to actually giving to the customer, on the opening of the interest bearing account and, later, on demand of the customer:</text> <level label="i"> <text>Written notice of:</text> <level label="1"> <text>The annual rate of simple interest currently in effect;</text> </level> <level label="2"> <text>The dates, if any, on which the current rate of interest may be changed, and the terms and conditions under which each successive interest rate will be applied;</text> </level> <level label="3"> <text>The date or point in time on which the deposit begins to earn interest;</text> </level> <level label="4"> <text>The method of determining the account balance on which interest earned is calculated, including the methods for day of deposit to day of withdrawal and low periodic balance;</text> </level> <level label="5"> <text>Whether interest is compounded and where applicable, the period for compounding;</text> </level> <level label="6"> <text>The annual percentage yield in 1 year based on the rate of simple interest and compounding method;</text> </level> <level label="7"> <text>The date or point in time when interest earned is credited to the account;</text> </level> <level label="8"> <text>The amount of loss of accumulated earned interest if an account is closed before the date on which interest is regularly credited;</text> </level> <level label="9"> <text>The policy on the availability of deposited funds; and</text> </level> <level label="10"> <text>Any fees, charges, or penalties which may be applied and the conditions under which the fees, charges, or penalties may be assessed; and</text> </level> </level> <level label="ii"> <text>The following written notice:</text> <text>“Under Maryland law, all funds remaining in this interest bearing account become the property of this State after the account has been inactive for 5 years and notice is sent to the depositor at that depositor’s last known address. This account will be considered inactive if the owner has not: (1) increased or decreased the amount in the account; (2) presented the passbook or other similar evidence of the account for the crediting of interest; (3) written to this financial institution about the account; or (4) otherwise indicated an interest in the account as evidenced by a memorandum on file with this financial institution.”</text> </level> </level> <level label="2"> <text>Not less than 30 days before a banking institution adopts any change regarding any information required under paragraph (1)(i) of this subsection, the banking institution shall inform each customer of the change in the banking institution’s periodic statement or by written notice.</text> </level> </level> <level label="b"> <text>A banking institution shall pay interest on each interest bearing account that is instituted for a specific purpose, including “Christmas” or “vacation” accounts, for a period of 1 year or less at an annual rate not less than the weekly average yield on United States Treasury securities adjusted to a constant maturity of 1 year, as published by the Federal Reserve in “Selected Interest Rates (Daily) – H.15”, as of the first business day of the calendar year.</text> </level> <level label="c"> <text>A banking institution that fails to comply with subsection (a) or (b) of this section shall be liable to any customer of the banking institution who sustains any injury or loss as the result of the failure to comply for:</text> <level label="1"> <text>All foreseeable losses incurred by the customer; and</text> </level> <level label="2"> <text>Reasonable attorney’s fees.</text> </level> </level> <level label="d"> <level label="1"> <text>Subject to paragraph (2) of this subsection, on or after October 1, 1992, a banking institution shall comply with the requirements in:</text> <level label="i"> <text>Subsection (a) of this section; or</text> </level> <level label="ii"> <text>Final regulations adopted by the Federal Reserve Board pursuant to § 269 of Public Law 102-242.</text> </level> </level> <level label="2"> <text>On or after the date when compliance with the final regulations adopted by the Federal Reserve Board pursuant to § 269 of Public Law 102-242 is mandatory, a banking institution shall comply with the requirements in those final regulations and subsection (a) of this section shall be null and void.</text> </level> </level> </section> <section article="gfi" article_name="Financial Institutions" number="5-305" title_number="5" title_name="Banking Institutions -- General Provisions" subtitle_number="3" subtitle_name="Deposits"> <text>If a deposit in a banking institution is made by and in the name of a minor:</text> <level label="1"> <text>The institution shall hold the money for the exclusive benefit of the minor or that minor’s creditors;</text> </level> <level label="2"> <text>The minor may withdraw money from the account; and</text> </level> <level label="3"> <text>A receipt signed by the minor discharges the institution for the withdrawal.</text> </level> </section> <section article="gfi" article_name="Financial Institutions" number="5-306" title_number="5" title_name="Banking Institutions -- General Provisions" subtitle_number="3" subtitle_name="Deposits"> <level label="a"> <text>Except as provided in subsection (b) of this section, a banking institution is not required to recognize or take any action on any claim to a deposit or to money or property held by it or contained in a safe-deposit box, if that claim is adverse to the interests of any person who, on its records, appears to be entitled to the deposit, money, or property.</text> </level> <level label="b"> <text>If, in an action to which the adverse claimant is a party, a court order or decree involving a claim to the deposit, money, or property is served on the banking institution, the banking institution may or, if required by the court, shall impound the deposit, money, or property, subject to further order of the court, without any liability on its part to anyone for doing so.</text> </level> </section> <section article="gfi" article_name="Financial Institutions" number="5-307" title_number="5" title_name="Banking Institutions -- General Provisions" subtitle_number="3" subtitle_name="Deposits"> <text>A banking institution is liable to the depositor for the loss of any check that the institution loses or misplaces before the check clears the clearinghouse.</text> </section> <section article="gfi" article_name="Financial Institutions" number="5-308" title_number="5" title_name="Banking Institutions -- General Provisions" subtitle_number="3" subtitle_name="Deposits"> <text>A banking institution may not impose a service charge on any deposit if withdrawals are restricted by law or by any rule or regulation of the Commissioner.</text> </section> <section article="gfi" article_name="Financial Institutions" number="5-309" title_number="5" title_name="Banking Institutions -- General Provisions" subtitle_number="3" subtitle_name="Deposits"> <level label="a"> <text>In this section, “payor institution” means a bank, credit union, or savings and loan association by which an item is payable as drawn or accepted.</text> </level> <level label="b"> <text>As to each account of each depositor in a banking institution, the banking institution shall give to the customer, on opening of the account and on any later demand of the customer, written notice of the time after which the funds represented by an item deposited to the account shall be available for withdrawal as of right, for each of the situations where the banking institution:</text> <level label="1"> <text>Is also the payor institution;</text> </level> <level label="2"> <text>Is located in the same state as the payor institution; and</text> </level> <level label="3"> <text>Is located in a different state from that in which the payor institution is located.</text> </level> </level> <level label="c"> <text>The notice shall also state the time after which the funds represented by an item become available for withdrawal as of right where the item is issued by:</text> <level label="1"> <text>The Maryland State Government or any agency thereof;</text> </level> <level label="2"> <text>The United States Treasury; and</text> </level> <level label="3"> <text>Any agency of the federal government.</text> </level> </level> <level label="d"> <text>The notice shall be printed in type no smaller than elite typewriter characters.</text> </level> </section> <section article="gfi" article_name="Financial Institutions" number="5-310" title_number="5" title_name="Banking Institutions -- General Provisions" subtitle_number="3" subtitle_name="Deposits"> <level label="a"> <text>Any checks provided directly or indirectly by a banking institution or trust company for use in connection with a personal checking account shall have the numerical month and year in which the account was opened printed on the face of the checks, except as provided in subsection (b) of this section.</text> </level> <level label="b"> <text>The provisions of subsection (a) of this section shall not apply under certain conditions:</text> <level label="1"> <text>If an individual personal checking account is closed at a particular bank and a joint personal account is opened at the same bank, that includes one of the customers who previously had the individual personal account, then the numerical month and year printed on the face of the checks shall be the numerical month and year in which the individual personal account was established.</text> </level> <level label="2"> <text>If a joint personal account is closed at a particular bank and an individual personal account is opened at the same bank by one of the customers who previously was included under the joint account, then the numerical month and year printed on the face of the checks shall be the numerical month and year in which the joint account was established.</text> </level> <level label="3"> <text>If a customer with an individual personal account or with a joint personal account opens an additional account at the same bank, then the numerical month and year printed on the face of the checks shall be the numerical month and year in which the initial account was established.</text> </level> <level label="4"> <text>In the case of a personal checking account that is closed and a new personal checking account opened simultaneously on the advice of the bank, the checks for the new account shall have the numerical month and year in which the closed account was originally opened printed on the face of the checks.</text> </level> <level label="5"> <text>If the closed account was opened prior to July 1, 1987, a date is not required to be printed on the checks.</text> </level> </level> <level label="c"> <text>A check, draft, or order provided on the opening of any personal checking account for use by the customer until printed checks have been prepared is not required to have the numerical month and year in which the account was opened printed on the face of the check, draft, or order.</text> </level> <level label="d"> <level label="1"> <text>The banking institution and the check printer may not be held liable for unintentional errors in the month and year printed on the face of the checks.</text> </level> <level label="2"> <text>The customer may not be charged for the reprinting of the checks when the checks are reprinted due to error in the month and year printed on the face of the checks.</text> </level> </level> </section> <section article="gfi" article_name="Financial Institutions" number="5-401" title_number="5" title_name="Banking Institutions -- General Provisions" subtitle_number="4" subtitle_name="Affiliates and Bank Service Corporations"> <level label="a"> <text>In this subtitle the following words have the meanings indicated.</text> </level> <level label="b"> <text>“Affiliate” means any association, corporation, business trust, statutory trust, or other similar organization that:</text> <level label="1"> <text>Is not a bank service corporation and is controlled by a banking institution through:</text> <level label="i"> <text>Direct or indirect ownership or control of more than 50 percent of the voting rights;</text> </level> <level label="ii"> <text>Control of the election of a majority of the management;</text> </level> <level label="iii"> <text>Direct or indirect ownership or control of more than 50 percent of the voting rights exercised at the last election of the management;</text> </level> <level label="iv"> <text>Directors of the banking institution constituting a majority of the management of the organization; or</text> </level> <level label="v"> <text>Any direct or indirect control by stockholders of the banking institution, if the stockholders own or control:</text> <level label="1"> <text>More than 50 percent of the voting rights in the banking institution; or</text> </level> <level label="2"> <text>More than 50 percent of the voting rights exercised at the last election of directors of the banking institution; or</text> </level> </level> </level> <level label="2"> <text>Controls a banking institution through:</text> <level label="i"> <text>Direct or indirect ownership or control of more than 50 percent of the voting rights;</text> </level> <level label="ii"> <text>Control of the election of a majority of the directors of the banking institution;</text> </level> <level label="iii"> <text>Direct or indirect ownership or control of more than 50 percent of the voting rights exercised at the last election of the directors; or</text> </level> <level label="iv"> <text>The holding of substantially all of the capital stock of the banking institution by trustees for stockholders of the organization.</text> </level> </level> </level> <level label="c"> <text>“Bank service corporation” means a corporation:</text> <level label="1"> <text>At least some of the stock of which is owned by a banking institution; and</text> </level> <level label="2"> <text>That is organized to perform bank service corporation activities of the type permitted under applicable provisions of Title 12 of the United States Code to a bank service corporation owned exclusively by national banking associations.</text> </level> </level> <level label="d"> <text>“Management” means the directors, trustees, or other persons exercising similar functions of an association, corporation, business trust, statutory trust, or other similar organization.</text> </level> </section> <section article="gfi" article_name="Financial Institutions" number="5-402" title_number="5" title_name="Banking Institutions -- General Provisions" subtitle_number="4" subtitle_name="Affiliates and Bank Service Corporations"> <text>This subtitle does not:</text> <level label="1"> <text>Affect any affiliate, if the affiliation existed on June 1, 1935; or</text> </level> <level label="2"> <text>Apply to a purchase by a banking institution of the stock of a small business investment company under the federal Small Business Investment Act of 1958, except that the value at which the purchased shares are carried on the books of the banking institution may not exceed 2 percent of its unimpaired capital and surplus.</text> </level> </section> <section article="gfi" article_name="Financial Institutions" number="5-403" title_number="5" title_name="Banking Institutions -- General Provisions" subtitle_number="4" subtitle_name="Affiliates and Bank Service Corporations"> <level label="a"> <text>Subject to this section, a banking institution may have an affiliate that:</text> <level label="1"> <text>Provides a financial, fiduciary, or insurance service to the banking institution, its other affiliates, or the public; or</text> </level> <level label="2"> <text>If it is an affiliate under § 5–401(b)(1)(i) of this subtitle, conducts an activity that is permissible for a banking institution.</text> </level> </level> <level label="b"> <text>Except as provided in subsections (d) and (e) of this section, a banking institution that intends to acquire or establish an affiliate, or to conduct a new activity in an existing affiliate, shall apply to and receive the prior approval of the Commissioner.</text> </level> <level label="c"> <text>On application of the banking institution, an affiliate shall be approved if:</text> <level label="1"> <text>The Commissioner determines that the approval is:</text> <level label="i"> <text>Reasonably required to protect the welfare of the general economy of this State and of the banking institution; or</text> </level> <level label="ii"> <text>Not detrimental to the public interest or to the banking institution;</text> </level> </level> <level label="2"> <text>The approval imposes the same conditions that federal law requires or permits as to a national banking association; and</text> </level> <level label="3"> <text>The transaction complies with the rules, regulations, and conditions that the Commissioner adopts.</text> </level> </level> <level label="d"> <text>Except as provided in subsection (e) of this section, if a banking institution is rated CAMELS 1 or 2 and remains well capitalized in accordance with the requirements of the Federal Deposit Insurance Act, the banking institution may acquire or establish an affiliate, or conduct a new activity in an existing affiliate if:</text> <level label="1"> <text>Within 10 days after acquiring or establishing the affiliate or commencing the activity, the banking institution provides notice to the Commissioner of the acquisition or establishment of the affiliate or the activity; and</text> </level> <level label="2"> <text>The affiliate only engages in any of the following activities:</text> <level label="i"> <text>Holding and managing assets acquired by the banking institution through foreclosure or otherwise in good faith to compromise a doubtful claim, or in the ordinary course of collecting a debt previously contracted;</text> </level> <level label="ii"> <text>Providing direct services to the banking institution or other affiliates;</text> </level> <level label="iii"> <text>Making, purchasing, selling, or servicing for others loans or other extensions of credit; or</text> </level> <level label="iv"> <text>Leasing personal property.</text> </level> </level> </level> <level label="e"> <text>No application or notice is required if the activities of a new affiliate:</text> <level label="1"> <text>Are limited to those activities previously reported by the banking institution to the Commissioner in connection with the establishment or acquisition of a prior affiliate;</text> </level> <level label="2"> <text>Continue to be legally permissible for banking institutions; and</text> </level> <level label="3"> <text>Will be conducted subject to the same conditions imposed by the Commissioner for the prior affiliate.</text> </level> </level> <level label="f"> <text>All activities and the establishment or acquisition of an affiliate under subsection (d) of this section are subject to:</text> <level label="1"> <text>The same conditions that federal law requires or permits as to a national banking association; and</text> </level> <level label="2"> <text>The rules, regulations, and conditions that the Commissioner adopts.</text> </level> </level> </section> <section article="gfi" article_name="Financial Institutions" number="5-404" title_number="5" title_name="Banking Institutions -- General Provisions" subtitle_number="4" subtitle_name="Affiliates and Bank Service Corporations"> <text>The Commissioner has the same authority to examine the business of an affiliate that the Commissioner has as to a banking institution.</text> </section> <section article="gfi" article_name="Financial Institutions" number="5-405" title_number="5" title_name="Banking Institutions -- General Provisions" subtitle_number="4" subtitle_name="Affiliates and Bank Service Corporations"> <level label="a"> <text>Except as provided in this section, or otherwise expressly provided by State law, a banking institution may not have a bank service corporation.</text> </level> <level label="b"> <text>If the Commissioner approves, a banking institution may have a bank service corporation.</text> </level> <level label="c"> <text>On application of the banking institution, a bank service corporation shall be approved if:</text> <level label="1"> <text>The Commissioner determines that approval is:</text> <level label="i"> <text>Reasonably required to protect the welfare of the general economy of the State and of the banking institution; and</text> </level> <level label="ii"> <text>Not detrimental to the public interest or to the banking institution;</text> </level> </level> <level label="2"> <text>The approval imposes the same conditions that federal law requires or permits as to a bank service corporation owned exclusively by national banking associations; and</text> </level> <level label="3"> <text>The transaction complies with the rules, regulations, and conditions that the Commissioner adopts.</text> </level> </level> <level label="d"> <text>This section does not apply to any bank service corporation organized before July 1, 1984.</text> </level> </section> <section article="gfi" article_name="Financial Institutions" number="5-406" title_number="5" title_name="Banking Institutions -- General Provisions" subtitle_number="4" subtitle_name="Affiliates and Bank Service Corporations"> <text>The Commissioner has the same authority to examine the business of a bank service corporation that the Commissioner has as to a banking institution.</text> </section> <section article="gfi" article_name="Financial Institutions" number="5-407" title_number="5" title_name="Banking Institutions -- General Provisions" subtitle_number="4" subtitle_name="Affiliates and Bank Service Corporations"> <text>A banking institution may not permit any bank services to be performed for it, whether by contract or otherwise, unless the banking institution and the person performing the bank services give the Commissioner satisfactory assurances that the performance of the bank services will be subject to regulation and examination by the Commissioner to the same extent as if the banking institution itself were performing the bank services.</text> </section> <section article="gfi" article_name="Financial Institutions" number="5-503" title_number="5" title_name="Banking Institutions -- General Provisions" subtitle_number="5" subtitle_name="Miscellaneous Regulations"> <level label="a"> <text>A banking institution may buy and hold real property only as provided in this section.</text> </level> <level label="b"> <level label="1"> <text>Subject to the limitations in paragraph (3) of this subsection, a banking institution may buy or hold any real property that is necessary for the convenient transaction of its business.</text> </level> <level label="2"> <text>In addition to its offices, this property may include:</text> <level label="i"> <text>A parking lot that the banking institution provides, with or without charge, primarily for the use of its customers; and</text> </level> <level label="ii"> <text>Any rental space that is located in the bank building or on adjoining land.</text> </level> </level> <level label="3"> <text>Except as provided in paragraph (4) of this subsection, a banking institution may not invest in its bank building and furnishings more than an amount that equals 50 percent of its unimpaired capital and surplus or guaranty fund.</text> </level> <level label="4"> <text>If a banking institution is rated CAMELS 1 or 2 and remains well capitalized in accordance with the requirements of the Federal Deposit Insurance Act, it may invest in its bank building and furnishings an amount equivalent to 75 percent of its:</text> <level label="i"> <text>Unimpaired capital, surplus, and undivided profits; or</text> </level> <level label="ii"> <text>Guaranty fund and undivided profits.</text> </level> </level> </level> <level label="c"> <level label="1"> <text>Subject to the limitations in paragraphs (2) and (3) of this subsection, a banking institution may hold any real property that the banking institution acquires:</text> <level label="i"> <text>In satisfaction of a debt contracted in the course of its business; or</text> </level> <level label="ii"> <text>At sale on a judgment, decree, or mortgage foreclosure under a security that it holds.</text> </level> </level> <level label="2"> <text>At a sale, a banking institution may not bid more than the amount of money that is necessary to satisfy the secured debts and costs.</text> </level> <level label="3"> <text>A banking institution:</text> <level label="i"> <text>May not hold property acquired under this subsection for more than:</text> <level label="1"> <text>8 years; and</text> </level> <level label="2"> <text>Under conditions that the Commissioner sets, 2 additional years; and</text> </level> </level> <level label="ii"> <text>Within 1 year after that period, shall:</text> <level label="1"> <text>Sell the property; or</text> </level> <level label="2"> <text>Reduce the value of the property on its books to a value that the Commissioner approves.</text> </level> </level> </level> </level> </section> <section article="gfi" article_name="Financial Institutions" number="5-504" title_number="5" title_name="Banking Institutions -- General Provisions" subtitle_number="5" subtitle_name="Miscellaneous Regulations"> <level label="a"> <text>Notwithstanding any other provision of the laws or regulations of this State and subject to subsection (b) of this section, a banking institution may engage in any additional activity, service, or other practice in which, under federal law, national banking associations may engage subject to the same conditions that federal law requires or allows as to national banking associations.</text> </level> <level label="b"> <level label="1"> <text>A banking institution shall provide the Commissioner with written notice at least 45 calendar days before engaging in any activity, service, or other practice authorized under subsection (a) of this section.</text> </level> <level label="2"> <text>The notice required under paragraph (1) of this subsection shall include a description of the proposed activity, service, or other practice, including:</text> <level label="i"> <text>The specific authority for the activity, service, or other practice; and</text> </level> <level label="ii"> <text>Any condition that federal law requires or allows as to national banking associations.</text> </level> </level> <level label="3"> <text>The banking institution may begin to perform the activity, service, or other practice on the first business day after the 45th calendar day from the date the Commissioner receives the notice under paragraph (1) of this subsection unless the Commissioner:</text> <level label="i"> <text>Specifies a different date; or</text> </level> <level label="ii"> <text>Prohibits the activity, service, or other practice.</text> </level> </level> </level> <level label="c"> <text>The Commissioner may extend the 45–day period under subsection (b)(3) of this section if the Commissioner determines that the banking institution’s notice requires additional information or additional time for analysis.</text> </level> <level label="d"> <text>The Commissioner may prohibit a banking institution from performing the activity, service, or other practice described in the notice provided under subsection (b) of this section if the Commissioner determines that performing the activity, service, or other practice would:</text> <level label="1"> <text>Adversely affect the safety and soundness of the banking institution;</text> </level> <level label="2"> <text>Be detrimental to the welfare of the general economy of this State; or</text> </level> <level label="3"> <text>Be detrimental to the public interest or to banking institutions.</text> </level> </level> </section> <section article="gfi" article_name="Financial Institutions" number="5-506" title_number="5" title_name="Banking Institutions -- General Provisions" subtitle_number="5" subtitle_name="Miscellaneous Regulations"> <text>Before a banking institution makes an unsecured loan of $10,000 or more to any person, the banking institution shall obtain sufficient financial information from the person to support the loan.</text> </section> <section article="gfi" article_name="Financial Institutions" number="5-507" title_number="5" title_name="Banking Institutions -- General Provisions" subtitle_number="5" subtitle_name="Miscellaneous Regulations"> <level label="a"> <text>If a banking institution rejects an application for a residential mortgage loan, the banking institution shall give the applicant, at the applicant’s request, written notice of the rejection.</text> </level> <level label="b"> <text>The applicant may use this written notice as evidence of rejection for purposes of the Maryland Home Financing Program.</text> </level> </section> <section article="gfi" article_name="Financial Institutions" number="5-508" title_number="5" title_name="Banking Institutions -- General Provisions" subtitle_number="5" subtitle_name="Miscellaneous Regulations"> <text>If a banking institution holds a first mortgage on residential property and a private mortgage insurance corporation partially insures the mortgage, the banking institution shall eliminate all charges to the mortgagor for mortgage insurance premiums when the mortgage is reduced to the level at which the federal Homeowners Protection Act of 1998 requires termination of the private mortgage insurance insuring the mortgage.</text> </section> <section article="gfi" article_name="Financial Institutions" number="5-509" title_number="5" title_name="Banking Institutions -- General Provisions" subtitle_number="5" subtitle_name="Miscellaneous Regulations"> <level label="a"> <text>Each banking institution shall be a member of the Federal Deposit Insurance Corporation unless the institution is not in the business of accepting deposits or retaining funds in a deposit account. A banking institution is not in the business of accepting deposits if it accepts a deposit as a trustee or custodian and is not in the business of retaining deposits if the deposits do not remain in a deposit account of the institution for more than two consecutive banking days. Any institution which is not in the business of accepting deposits or retaining funds in a deposit account as defined in this section shall not be bound by the provisions of § 5–403(c)(2) of this title.</text> </level> <level label="b"> <text>If approved by a majority of its directors, a banking institution may:</text> <level label="1"> <text>Become and participate as a member of the Federal Reserve System; or</text> </level> <level label="2"> <text>Withdraw from the system.</text> </level> </level> </section> <section article="gfi" article_name="Financial Institutions" number="5-511" title_number="5" title_name="Banking Institutions -- General Provisions" subtitle_number="5" subtitle_name="Miscellaneous Regulations"> <level label="a"> <text>Banking institutions may not have common directors unless the Commissioner finds that a common directorship is in the public interest and not detrimental to either banking institution.</text> </level> <level label="b"> <level label="1"> <text>An individual who now is a director of more than one banking institution may complete the term of office of each directorship and may be reelected to each directorship.</text> </level> <level label="2"> <text>This section does not prohibit any person from being an officer, employee, director, or trustee of a mutual holding company and its subsidiary savings bank, shares of which are owned by the same mutual holding company.</text> </level> </level> </section> <section article="gfi" article_name="Financial Institutions" number="5-512" title_number="5" title_name="Banking Institutions -- General Provisions" subtitle_number="5" subtitle_name="Miscellaneous Regulations"> <level label="a"> <level label="1"> <text>In this section the following words have the meanings indicated.</text> </level> <level label="2"> <text>“Commercial loan” means a loan that is made:</text> <level label="i"> <text>Solely to acquire or carry on a business or commercial enterprise; or</text> </level> <level label="ii"> <text>To any business or commercial organization.</text> </level> </level> <level label="3"> <text>“Consumer loan” means a loan that is made primarily for personal, family, or household purposes.</text> </level> <level label="4"> <text>“Executive officer” has the meaning stated in Title 12 of the Code of Federal Regulations, § 215.2.</text> </level> </level> <level label="b"> <text>Unless the loan is approved or exempted from approval as provided in this section, the following persons may not borrow, directly or indirectly, any money from a banking institution:</text> <level label="1"> <text>Any director, officer, or employee of the banking institution;</text> </level> <level label="2"> <text>Any partnership of which the director, officer, or employee is a member; or</text> </level> <level label="3"> <text>Any corporation in which the director, officer, or employee is an officer or owns the majority interest.</text> </level> </level> <level label="c"> <text>This section does not require approval of:</text> <level label="1"> <text>A commercial loan that is made to:</text> <level label="i"> <text>A director of the banking institution, unless the director also is an officer or employee of the banking institution;</text> </level> <level label="ii"> <text>A partnership of which the director is a member, unless an officer or employee of the banking institution also is a member of that partnership; or</text> </level> <level label="iii"> <text>A corporation in which the director holds any interest, unless an officer or employee of the banking institution is an officer or owns the majority interest in that corporation; or</text> </level> </level> <level label="2"> <text>A loan that is:</text> <level label="i"> <text>A consumer loan; and</text> </level> <level label="ii"> <text>Is made to an employee of a banking institution who is not an executive officer or director of the banking institution.</text> </level> </level> </level> <level label="d"> <level label="1"> <text>A loan to a director, officer, or employee of a banking institution may be made only if the loan has been approved by a resolution adopted at and recorded in the minutes of a meeting of:</text> <level label="i"> <text>The board of directors of the banking institution; or</text> </level> <level label="ii"> <text>The executive committee of the banking institution, if that committee is authorized to make loans.</text> </level> </level> <level label="2"> <text>If a loan is approved by an executive committee, the loan approval shall be reported to the board of directors at its next meeting.</text> </level> </level> <level label="e"> <level label="1"> <text>A loan made under this section shall be reviewed every 6 months by the board of directors.</text> </level> <level label="2"> <text>The loan may not be renewed or extended unless the renewal or extension has been approved by a resolution adopted at a meeting of the board of directors and recorded in the minutes of the meeting.</text> </level> </level> <level label="f"> <text>All loans to a director, officer, or employee of a banking institution are subject to the limitations imposed by § 3-601 of this article.</text> </level> </section> <section article="gfi" article_name="Financial Institutions" number="5-513" title_number="5" title_name="Banking Institutions -- General Provisions" subtitle_number="5" subtitle_name="Miscellaneous Regulations"> <level label="a"> <level label="1"> <text>In this section the following words have the meanings indicated.</text> </level> <level label="2"> <text>“Check” means a draft that is drawn on a banking institution and payable on demand.</text> </level> <level label="3"> <text>“Check facsimile” means a copy of an original check reproduced through photographic, photostatic, microfilm, microcard, miniature photographic, optical imaging, electronic, digital, magnetic, wireless, electromagnetic, or other process that accurately reproduces or forms a durable medium for reproducing the original check.</text> </level> <level label="4"> <text>“Draft” has the meaning stated in § 3-104 of the Commercial Law Article.</text> </level> <level label="5"> <text>“Truncated account” means a checking, negotiable order of withdrawal, or similar deposit account for which the original checks drawn on the account are not returned to the customer on a regular basis.</text> </level> </level> <level label="b"> <level label="1"> <level label="i"> <text>On request of a customer with a truncated account, a banking institution shall return any check the customer requires for tax audits or litigation or in connection with campaign finance reporting requirements under the Election Law Article, at no cost to the customer.</text> </level> <level label="ii"> <text>If a banking institution returns check facsimiles instead of original checks to a customer under subparagraph (i) of this paragraph, on request of the customer, the banking institution shall return to the customer, at no additional cost to the customer, check facsimiles of the front and the back of the customer’s original checks that are at least the same size as the customer’s original checks.</text> </level> </level> <level label="2"> <text>Subject to the requirements of subsection (c)(1) and (2) of this section, in all other instances, on request of a customer with a truncated account, the banking institution shall return a maximum of 2 checks per month, at no cost to the customer.</text> </level> <level label="3"> <text>A banking institution required to return a check to a customer under this subsection may return a check facsimile instead of the original check.</text> </level> </level> <level label="c"> <level label="1"> <text>On request of a customer with a truncated account under which the customer does not receive check facsimiles on a regular basis, a banking institution shall return to the customer on a regular basis, at the banking institution’s option, either the customer’s original checks or check facsimiles of the front of the customer’s original checks.</text> </level> <level label="2"> <text>On request of a customer with a truncated account under which the banking institution returns check facsimiles on a regular basis, a banking institution shall return to the customer on a regular basis, at no additional cost to the customer, check facsimiles of the front of the customer’s original checks that are at least the same size as the customer’s original checks.</text> </level> </level> </section> <section article="gfi" article_name="Financial Institutions" number="5-514" title_number="5" title_name="Banking Institutions -- General Provisions" subtitle_number="5" subtitle_name="Miscellaneous Regulations"> <level label="a"> <level label="1"> <text>In this section the following words have the meanings indicated.</text> </level> <level label="2"> <text>“Conventional home mortgage loan” has the meaning stated in § 11–501 of this article.</text> </level> <level label="3"> <text>“Dwelling” has the meaning stated in § 11–501 of this article.</text> </level> <level label="4"> <text>“Shared appreciation agreement” has the meaning stated in § 11–501 of this article.</text> </level> </level> <level label="b"> <level label="1"> <text>This subsection applies only to a conventional home mortgage loan that is not already required by law or regulation by the State or federal government to be assumable in connection with the granting of absolute divorce.</text> </level> <level label="2"> <text>A banking institution shall include in any conventional home mortgage loan a provision authorizing any of the existing borrowers to purchase the property interest of another borrower on the loan by assuming the seller’s portion of the mortgage if:</text> <level label="i"> <text>The assumption is in connection with the granting of a decree of absolute divorce; and</text> </level> <level label="ii"> <text>The banking institution determines that the assuming borrower qualifies for the loan.</text> </level> </level> </level> <level label="c"> <text>A banking institution shall disclose an assumption provision in any conventional home mortgage loan in writing to a loan applicant before the completion of the loan application.</text> </level> </section> <section article="gfi" article_name="Financial Institutions" number="5-601" title_number="5" title_name="Banking Institutions -- General Provisions" subtitle_number="6" subtitle_name="Reorganizations"> <level label="a"> <text>The board of directors of any banking institution may place the banking institution, including its property, records, and business, in the hands of the Commissioner by posting on the front door of each banking office of the institution a notice that states: “This institution is in the hands of the Maryland Commissioner of Financial Regulation”.</text> </level> <level label="b"> <text>The banking institution immediately shall notify the Commissioner of its action, and the Commissioner immediately shall take possession of the institution.</text> </level> </section> <section article="gfi" article_name="Financial Institutions" number="5-602" title_number="5" title_name="Banking Institutions -- General Provisions" subtitle_number="6" subtitle_name="Reorganizations"> <level label="a"> <level label="1"> <text>If the Commissioner finds that the capital stock account of any commercial bank is impaired because of a loss or for any other reason, the Commissioner, by notice to the board of directors of the commercial bank, may require the commercial bank to correct the impairment.</text> </level> <level label="2"> <text>If the commercial bank fails to correct the impairment within 3 months after the board receives the notice, the Commissioner may take possession of the commercial bank, including its property, records, and business.</text> </level> </level> <level label="b"> <level label="1"> <text>If the reserves of any commercial bank fall below the amount required under this article:</text> <level label="i"> <text>The commercial bank may not increase its loans or discounts until the deficiency is corrected, except by discounting or buying drafts payable at sight or on demand; and</text> </level> <level label="ii"> <text>The Commissioner, by notice to the board of directors of the commercial bank, shall require the commercial bank to correct the deficiency.</text> </level> </level> <level label="2"> <text>If the commercial bank fails to correct the deficiency within 30 days after the board receives the notice, the Commissioner may take possession of the commercial bank, including its property, records, and business.</text> </level> </level> </section> <section article="gfi" article_name="Financial Institutions" number="5-602.1" title_number="5" title_name="Banking Institutions -- General Provisions" subtitle_number="6" subtitle_name="Reorganizations"> <level label="a"> <text>In this section, “insolvent” means:</text> <level label="1"> <text>Incapable of meeting the demands of creditors; or</text> </level> <level label="2"> <text>Having liabilities that exceed assets.</text> </level> </level> <level label="b"> <text>Notwithstanding the notice and timing requirements in § 5–602 of this subtitle, if the Commissioner determines that a nondepository trust company is insolvent, the Commissioner may take immediate possession of the nondepository trust company, including its property, records, and business, by:</text> <level label="1"> <text>Posting on the front door of each banking office of the nondepository trust company a notice that states: “This institution is in the hands of the Maryland Commissioner of Financial Regulation”; and</text> </level> <level label="2"> <text>Immediately delivering written notice to the board of directors of the nondepository trust company that the Commissioner has taken possession of the nondepository trust company.</text> </level> </level> </section> <section article="gfi" article_name="Financial Institutions" number="5-603" title_number="5" title_name="Banking Institutions -- General Provisions" subtitle_number="6" subtitle_name="Reorganizations"> <text>As long as the Commissioner has possession of a banking institution, the property, records, and business of the institution are not subject to attachment, lien, execution, or distraint of any kind.</text> </section> <section article="gfi" article_name="Financial Institutions" number="5-604" title_number="5" title_name="Banking Institutions -- General Provisions" subtitle_number="6" subtitle_name="Reorganizations"> <text>After the Commissioner takes possession of a banking institution, the Commissioner promptly shall give notice of that fact to:</text> <level label="1"> <text>Each person who has any asset of the institution; and</text> </level> <level label="2"> <text>The general public, by notice published in an appropriate newspaper.</text> </level> </section> <section article="gfi" article_name="Financial Institutions" number="5-604.1" title_number="5" title_name="Banking Institutions -- General Provisions" subtitle_number="6" subtitle_name="Reorganizations"> <level label="a"> <text>All necessary and reasonable expenses of the Commissioner that are court approved and related to the Commissioner’s possession of a nondepository trust company, including costs associated with the receivership, reorganization, or liquidation of the nondepository trust company, shall be paid from the assets of the nondepository trust company, the proceeds of the sale of securities pledged under § 3–211.1 of this article, or recovery against a surety bond delivered under § 3–211.1 of this article.</text> </level> <level label="b"> <text>Any proceeds of a sale of pledged securities that remain after making the payments required under subsection (a) of this section and § 5–606(b)(2) of this subtitle shall be an asset of the nondepository trust company.</text> </level> </section> <section article="gfi" article_name="Financial Institutions" number="5-605" title_number="5" title_name="Banking Institutions -- General Provisions" subtitle_number="6" subtitle_name="Reorganizations"> <level label="a"> <text>Within a reasonable time after the Commissioner takes possession of a banking institution, the Commissioner, in the name of this State, shall petition an equity court in the county where the banking institution has its principal banking office to:</text> <level label="1"> <text>Take jurisdiction over the banking institution; and</text> </level> <level label="2"> <text>Subject to subsection (b) of this section, appoint as receiver:</text> <level label="i"> <text>An examiner; or</text> </level> <level label="ii"> <text>The Federal Deposit Insurance Corporation.</text> </level> </level> </level> <level label="b"> <level label="1"> <text>The Commissioner may petition for appointment of the Federal Deposit Insurance Corporation as receiver only of a banking institution that the Corporation insures.</text> </level> <level label="2"> <text>Appointment of the Federal Deposit Insurance Corporation becomes effective when the Corporation files with the court and the court approves a certificate of acceptance.</text> </level> </level> <level label="c"> <text>A receiver shall provide any bond that the court requires.</text> </level> <level label="d"> <text>If an examiner is appointed receiver, the examiner:</text> <level label="1"> <text>May not receive further compensation for services as receiver; but</text> </level> <level label="2"> <text>Subject to order of the court, is entitled to reimbursement for expenses for legal and clerical help and travel.</text> </level> </level> </section> <section article="gfi" article_name="Financial Institutions" number="5-606" title_number="5" title_name="Banking Institutions -- General Provisions" subtitle_number="6" subtitle_name="Reorganizations"> <level label="a"> <level label="1"> <text>The receiver may appoint any clerks needed to carry out the receivership.</text> </level> <level label="2"> <text>The salaries of these clerks shall be paid out of the funds of the banking institution.</text> </level> </level> <level label="b"> <level label="1"> <text>Notwithstanding subsection (a) of this section, the receiver of a nondepository trust company may, as needed to carry out the receivership:</text> <level label="i"> <text>Appoint any clerks, agents, counsel, employees, and assistants; and</text> </level> <level label="ii"> <text>Retain officers and employees of the nondepository trust company.</text> </level> </level> <level label="2"> <text>The salaries and all other expenses of the individuals specified under paragraph (1) of this subsection that are court approved shall be paid from the assets of the nondepository trust company, the proceeds of the sale of securities pledged under § 3–211.1 of this article, or recovery against a surety bond delivered under § 3–211.1 of this article.</text> </level> <level label="3"> <text>Any proceeds of a sale of pledged securities that remain after making the payments required under paragraph (2) of this subsection and § 5–604.1(a) of this subtitle shall be an asset of the nondepository trust company.</text> </level> </level> <level label="c"> <text>The receiver may borrow money and, with the approval of the court, pledge, mortgage, or encumber any of the institution’s assets to:</text> <level label="1"> <text>Pay the obligations of the institution;</text> </level> <level label="2"> <text>Pay dividends to the depositors or creditors of the institution; or</text> </level> <level label="3"> <text>Enable the institution to reopen or reorganize.</text> </level> </level> <level label="d"> <level label="1"> <text>The receiver shall file with the court, in the form that the court requires, an itemized account of:</text> <level label="i"> <text>All receipts, disbursements, and expenses; and</text> </level> <level label="ii"> <text>Any proposed distribution.</text> </level> </level> <level label="2"> <text>The court shall accept the account to the same extent as if an auditor of the court had prepared and filed the account.</text> </level> </level> <level label="e"> <level label="1"> <text>Except as provided in paragraph (2) of this subsection, the receiver may not make any distribution until the court ratifies the receiver’s account.</text> </level> <level label="2"> <text>With the approval of the court, the receiver may pay in full each creditor whose total claims do not exceed $5.</text> </level> </level> </section> <section article="gfi" article_name="Financial Institutions" number="5-607" title_number="5" title_name="Banking Institutions -- General Provisions" subtitle_number="6" subtitle_name="Reorganizations"> <level label="a"> <text>All money received by the receiver shall be deposited to the receiver’s credit in any bank or trust company that the receiver chooses.</text> </level> <level label="b"> <level label="1"> <text>To safekeep and to secure payment of the money deposited with it, the depository bank or trust company shall deposit with the office of the Commissioner general obligations of or obligations guaranteed by the federal government, this State, or any of its political subdivisions.</text> </level> <level label="2"> <text>These obligations shall be valued at the lower of market value or par value, and their value always shall be at least equal to the deposits of the receiver in the bank or trust company.</text> </level> </level> <level label="c"> <text>The receiver may waive this requirement for obligations for any money remaining more than 6 months after the dividend checks are mailed to the creditors and depositors.</text> </level> </section> <section article="gfi" article_name="Financial Institutions" number="5-608" title_number="5" title_name="Banking Institutions -- General Provisions" subtitle_number="6" subtitle_name="Reorganizations"> <text>If the court appoints an attorney to advise the receiver, the receiver shall set the attorney’s fees, subject to approval by the court.</text> </section> <section article="gfi" article_name="Financial Institutions" number="5-609" title_number="5" title_name="Banking Institutions -- General Provisions" subtitle_number="6" subtitle_name="Reorganizations"> <text>Within 6 months after taking possession of any banking institution, the Commissioner shall file with the court a complete and detailed report on the institution.</text> </section> <section article="gfi" article_name="Financial Institutions" number="5-610" title_number="5" title_name="Banking Institutions -- General Provisions" subtitle_number="6" subtitle_name="Reorganizations"> <text>As long as an examiner is in possession of any banking institution, the Commissioner may permit the institution to reopen under the conditions that the Commissioner approves and take the steps necessary to wind up any pending court proceeding.</text> </section> <section article="gfi" article_name="Financial Institutions" number="5-611" title_number="5" title_name="Banking Institutions -- General Provisions" subtitle_number="6" subtitle_name="Reorganizations"> <level label="a"> <text>The board of directors or the depositors representing not less than 25 percent of the deposit liability of any banking institution that is in the possession of a receiver may:</text> <level label="1"> <text>Propose a plan of reorganization for the reorganization and reopening of the banking institution or for the establishment of a new State banking institution, national banking association, or other corporation that they consider necessary; and</text> </level> <level label="2"> <text>Choose a committee to represent them to carry out the plan.</text> </level> </level> <level label="b"> <level label="1"> <text>The plan for reorganization of a commercial bank may provide for:</text> <level label="i"> <text>The voluntary surrender or exchange of all or part of the outstanding capital stock of the commercial bank and the resale of that stock;</text> </level> <level label="ii"> <text>The sale of additional authorized stock;</text> </level> <level label="iii"> <text>The voluntary subscription or contribution by depositors and creditors to a guaranty fund; and</text> </level> <level label="iv"> <text>Any other protection for the depositors and creditors.</text> </level> </level> <level label="2"> <text>The plan for reorganization of a savings bank may provide only for the voluntary subscription or contribution by depositors and creditors to a guaranty fund.</text> </level> </level> </section> <section article="gfi" article_name="Financial Institutions" number="5-612" title_number="5" title_name="Banking Institutions -- General Provisions" subtitle_number="6" subtitle_name="Reorganizations"> <level label="a"> <text>The plan of reorganization shall be filed with the Commissioner.</text> </level> <level label="b"> <level label="1"> <text>The Commissioner may approve or disapprove the plan without a hearing.</text> </level> <level label="2"> <text>If the Commissioner is satisfied that the proposed plan is in the best interests of the depositors and creditors of the banking institution, the Commissioner shall:</text> <level label="i"> <text>Approve the plan; and</text> </level> <level label="ii"> <text>Publish a notice of the approval in the Maryland Register as provided in the State Documents Law.</text> </level> </level> <level label="3"> <text>The provisions of §§ 3-209, 3-211, and 3-301 of this article, to the extent that they require the capital stock and surplus of a commercial bank to be paid in full and in money, do not apply to the reorganization and reopening of a banking institution or the establishment of a new banking institution under this section.</text> </level> </level> <level label="c"> <level label="1"> <text>Within 5 days after approval by the Commissioner, the banking institution or the proponents of the plan shall send a notice to each depositor or other creditor at the address shown on the books of the institution.</text> </level> <level label="2"> <text>The notice shall:</text> <level label="i"> <text>State that the plan has been filed with and is open to inspection at the office of the Commissioner; and</text> </level> <level label="ii"> <text>Include a summary of the important provisions of the plan.</text> </level> </level> <level label="3"> <text>Failure to notify any party in interest does not affect the validity of the plan or its implementation.</text> </level> <level label="4"> <text>A certificate of the banking institution’s president or of the proponents of the plan that the notice has been given is prima facie proof of compliance with this subsection.</text> </level> </level> <level label="d"> <level label="1"> <text>Within 30 days after the first publication of the Commissioner’s notice, any party in interest who did not approve the plan may apply to the court for the value of that party’s interest.</text> </level> <level label="2"> <text>Unless depositors and other unsecured creditors holding one third or more of the dollar amount of all claims apply for the value of their interests, the court may pass an order approving the plan and setting the terms and conditions for termination of receivership.</text> </level> <level label="3"> <text>If sufficient creditors apply, the court shall:</text> <level label="i"> <text>Determine the present cash value of the nonapproving party’s interest on the basis of a judicial liquidation of the banking institution and order payment to the party of that amount, in money or in kind; or</text> </level> <level label="ii"> <text>Apportion to the nonapproving party a distributive share in the assets of the banking institution.</text> </level> </level> <level label="4"> <text>If the court apportions the assets of the banking institution:</text> <level label="i"> <text>Assets divisible in kind shall be apportioned between the institution and the nonapproving parties; and</text> </level> <level label="ii"> <text>Assets not divisible in kind shall be apportioned by allotting to the nonapproving parties shares of stock, securities, or certificates of interest that are issued by a corporation or trustee and that represent the nonapproving parties’ interests in the indivisible assets, and the entire amount allotted to the nonapproving parties shall be delivered and paid to the receiver for liquidation for their benefit.</text> </level> </level> </level> <level label="e"> <text>Within 10 days after the final decision of the court, the proponents of the plan of reorganization may abandon it.</text> </level> </section> <section article="gfi" article_name="Financial Institutions" number="5-613" title_number="5" title_name="Banking Institutions -- General Provisions" subtitle_number="6" subtitle_name="Reorganizations"> <text>With the consent of the local governing body of any political subdivision that has money deposited with a banking institution, its treasurer or similar fiscal officer may:</text> <level label="1"> <text>Consent to a plan of reorganization proposed under this subtitle; and</text> </level> <level label="2"> <text>Bind the political subdivision to limit withdrawals from the institution as provided in the plan.</text> </level> </section> <section article="gfi" article_name="Financial Institutions" number="5-614" title_number="5" title_name="Banking Institutions -- General Provisions" subtitle_number="6" subtitle_name="Reorganizations"> <level label="a"> <text>If the Federal Deposit Insurance Corporation is receiver of a banking institution, the Corporation may:</text> <level label="1"> <text>Operate the trust department of the institution; and</text> </level> <level label="2"> <text>Liquidate the institution as provided in this subtitle or under federal law.</text> </level> </level> <level label="b"> <level label="1"> <text>This subsection applies whether or not the Federal Deposit Insurance Corporation is the receiver of the banking institution.</text> </level> <level label="2"> <text>If the Federal Deposit Insurance Corporation pays the insured deposit liabilities of a banking institution, it is subrogated to the rights of the depositors against the institution to the same extent as it would be subrogated to the rights of the depositors against a closed national banking association under federal law.</text> </level> <level label="3"> <text>The rights of the depositors and creditors of the banking institution are governed by the laws of this State.</text> </level> </level> </section> <section article="gfi" article_name="Financial Institutions" number="5-615" title_number="5" title_name="Banking Institutions -- General Provisions" subtitle_number="6" subtitle_name="Reorganizations"> <text>In the distribution of the general assets of a trust company that is liquidated or reorganized, the person who succeeds the trust company as a personal representative, guardian, trustee, receiver, or other fiduciary has a preference for all debts and accounts that are due to or held by it as fiduciary over all other debts and liabilities, including salaries and wages of employees.</text> </section> <section article="gfi" article_name="Financial Institutions" number="5-701" title_number="5" title_name="Banking Institutions -- General Provisions" subtitle_number="7" subtitle_name="Bank Holidays"> <level label="a"> <text>In this subtitle the following words have the meanings indicated.</text> </level> <level label="b"> <text>“Federal holiday” means, as to each corresponding legal holiday, the date that the federal government designates for observance of the holiday.</text> </level> <level label="c"> <text>“Optional bank holiday” means a day on which a banking institution is authorized to be closed.</text> </level> </section> <section article="gfi" article_name="Financial Institutions" number="5-702" title_number="5" title_name="Banking Institutions -- General Provisions" subtitle_number="7" subtitle_name="Bank Holidays"> <text>For the purposes of this subtitle, the operation of an automated teller machine or the conduct of internal operations by a banking institution does not constitute being open for business.</text> </section> <section article="gfi" article_name="Financial Institutions" number="5-703" title_number="5" title_name="Banking Institutions -- General Provisions" subtitle_number="7" subtitle_name="Bank Holidays"> <level label="a"> <text>Except as provided in subsection (b) of this section, a banking institution shall be open for business on each day during the year except for the days on which the banking institution is required or authorized by this subtitle to be closed.</text> </level> <level label="b"> <text>The Commissioner may approve the operation of a branch that is open for business fewer days than described in subsection (a) of this section if the Commissioner determines that:</text> <level label="1"> <text>The branch will serve a customer base or community that has unique banking needs;</text> </level> <level label="2"> <text>At least 1 other branch of the banking institution is open for business as described in subsection (a) of this section; and</text> </level> <level label="3"> <text>The operation of the branch will not be detrimental to the public interest or to banking institutions.</text> </level> </level> </section> <section article="gfi" article_name="Financial Institutions" number="5-704" title_number="5" title_name="Banking Institutions -- General Provisions" subtitle_number="7" subtitle_name="Bank Holidays"> <text>Each banking institution shall be closed on Sunday.</text> </section> <section article="gfi" article_name="Financial Institutions" number="5-705" title_number="5" title_name="Banking Institutions -- General Provisions" subtitle_number="7" subtitle_name="Bank Holidays"> <level label="a"> <level label="1"> <text>Subject to paragraph (2) of this subsection, each banking institution shall be closed on the following legal holidays:</text> <level label="i"> <text>New Year’s Day;</text> </level> <level label="ii"> <text>Dr. Martin Luther King, Jr.’s Birthday;</text> </level> <level label="iii"> <text>Washington’s Birthday;</text> </level> <level label="iv"> <text>Good Friday;</text> </level> <level label="v"> <text>Memorial Day;</text> </level> <level label="vi"> <text>Independence Day;</text> </level> <level label="vii"> <text>Labor Day;</text> </level> <level label="viii"> <text>Columbus Day;</text> </level> <level label="ix"> <text>Veterans’ Day;</text> </level> <level label="x"> <text>Thanksgiving Day; and</text> </level> <level label="xi"> <text>Christmas Day.</text> </level> </level> <level label="2"> <level label="i"> <text>When a legal holiday differs from the corresponding federal holiday, a banking institution:</text> <level label="1"> <text>May be closed on both holidays; and</text> </level> <level label="2"> <text>Shall be closed on one of the holidays.</text> </level> </level> <level label="ii"> <text>When there is no corresponding federal holiday for a legal holiday listed in paragraph (1) of this subsection, a banking institution:</text> <level label="1"> <text>May be closed on the legal holiday; or</text> </level> <level label="2"> <text>May remain open on the legal holiday.</text> </level> </level> </level> </level> <level label="b"> <level label="1"> <text>Each legal holiday that is not listed in subsection (a) of this section is an optional bank holiday.</text> </level> <level label="2"> <text>When, as to any optional bank holiday, the legal holiday differs from the corresponding federal holiday, a banking institution may be closed on:</text> <level label="i"> <text>Both holidays;</text> </level> <level label="ii"> <text>The legal holiday; or</text> </level> <level label="iii"> <text>The federal holiday.</text> </level> </level> </level> </section> <section article="gfi" article_name="Financial Institutions" number="5-706" title_number="5" title_name="Banking Institutions -- General Provisions" subtitle_number="7" subtitle_name="Bank Holidays"> <level label="a"> <text>Saturday is an optional bank holiday.</text> </level> <level label="b"> <text>A banking institution that opens for business on Saturday may close at noon.</text> </level> </section> <section article="gfi" article_name="Financial Institutions" number="5-707" title_number="5" title_name="Banking Institutions -- General Provisions" subtitle_number="7" subtitle_name="Bank Holidays"> <level label="a"> <level label="1"> <text>In this section, “emergency” has the meaning stated in § 14–307 of the Public Safety Article.</text> </level> <level label="2"> <text>“Emergency” includes a cybersecurity incident that necessitates the closure of a banking institution or a branch of a banking institution.</text> </level> </level> <level label="b"> <level label="1"> <text>If the Governor proclaims that an emergency exists in a political subdivision and designates days for the general cessation of business in the subdivision, each banking office that is located within the subdivision shall be closed on those days.</text> </level> <level label="2"> <text>If the Governor proclaims that an emergency exists in a political subdivision, the Governor may designate days on which each banking office that is located within the subdivision may be closed.</text> </level> <level label="3"> <text>If the Governor proclaims that an emergency exists as to a particular banking office, that office may be closed on those days that the Governor designates.</text> </level> <level label="4"> <text>When the Governor authorizes, but does not require, the banking institution to be closed, the chairman of its board of directors or its president shall decide whether to close or remain open.</text> </level> </level> <level label="c"> <level label="1"> <text>If an emergency exists and affects a banking institution and if it is not practical to obtain a proclamation from the Governor before closing the affected institution, the chairman of its board of directors or its president:</text> <level label="i"> <text>May close the banking institution; and</text> </level> <level label="ii"> <text>As soon as possible, but within 24 hours after the closing, shall notify the Governor of the reasons for the closing.</text> </level> </level> <level label="2"> <text>A banking institution may be closed under this subsection until the earlier of:</text> <level label="i"> <text>Issuance by the Governor of a proclamation that relates to the emergency closing;</text> </level> <level label="ii"> <text>Notice to the banking institution that the Governor will not issue a proclamation;</text> </level> <level label="iii"> <text>Reopening of the banking institution by the chairman of its board of directors or by its president; or</text> </level> <level label="iv"> <text>5 p.m. on the third day after the closing, except for Saturdays, Sundays, and legal holidays.</text> </level> </level> </level> </section> <section article="gfi" article_name="Financial Institutions" number="5-708" title_number="5" title_name="Banking Institutions -- General Provisions" subtitle_number="7" subtitle_name="Bank Holidays"> <text>A banking institution shall be open for business or shall be closed on optional bank holidays, as the directors of the banking institution may specify by resolution.</text> </section> <section article="gfi" article_name="Financial Institutions" number="5-801" title_number="5" title_name="Banking Institutions -- General Provisions" subtitle_number="8" subtitle_name="Prohibited Activities; Penalties"> <level label="a"> <text>If the Commissioner believes that a director or officer of a banking institution has engaged in an unsafe or unsound banking practice, the Commissioner shall send a warning to the director or officer.</text> </level> <level label="b"> <level label="1"> <text>If the Commissioner finds that the director or officer has continued to engage in the unsafe or unsound practice, the Commissioner may report the facts to the Secretary of Labor and the Attorney General.</text> </level> <level label="2"> <text>A copy of the report shall be sent by certified mail, return receipt requested, bearing a postmark from the United States Postal Service, to each director of the banking institution.</text> </level> </level> <level label="c"> <level label="1"> <text>After giving the officer or director an opportunity to be heard, if the Commissioner finds that the unsafe or unsound practice continued after the warning, the Commissioner with the approval of the Secretary of Labor may remove the officer or director.</text> </level> <level label="2"> <text>A copy of the removal order shall be served on the individual removed and the banking institution.</text> </level> </level> </section> <section article="gfi" article_name="Financial Institutions" number="5-802" title_number="5" title_name="Banking Institutions -- General Provisions" subtitle_number="8" subtitle_name="Prohibited Activities; Penalties"> <level label="a"> <text>If the Commissioner believes that a banking institution or any of its directors, officers, trustees, managers, agents, or employees has violated any provision of this article that relates to the institution, the Commissioner immediately shall report the violation to the Secretary of Labor, who shall ask the Attorney General to take the appropriate steps to institute a prosecution for the violation.</text> </level> <level label="b"> <level label="1"> <text>The Commissioner shall send a warning to a director or officer of a banking institution who the Commissioner believes has violated any provision of this article that relates to the institution.</text> </level> <level label="2"> <text>If, after the warning, the director or officer continues to violate the law, the director or officer may be removed as provided in § 5–801 of this subtitle.</text> </level> </level> <level label="c"> <text>Unless another penalty specifically is provided elsewhere in this article, any banking institution and any director, officer, trustee, manager, agent, or employee of a banking institution who violates any provision of this article that relates to the institution is guilty of a misdemeanor and on conviction is subject to a fine not exceeding $3,000 or imprisonment not exceeding 5 years or both.</text> </level> </section> <section article="gfi" article_name="Financial Institutions" number="5-803" title_number="5" title_name="Banking Institutions -- General Provisions" subtitle_number="8" subtitle_name="Prohibited Activities; Penalties"> <level label="a"> <text>An officer, director, or employee of a bank, trust company, or savings bank may not willfully and knowingly make or cause to be made a false statement or false entry in its records or, with the intent to deceive a person authorized to examine the affairs of the bank, trust company, or savings bank, sign or exhibit false records.</text> </level> <level label="b"> <text>Any officer, director, or employee who violates any provision of this section is guilty of a felony and on conviction is subject to a fine not exceeding $5,000 or imprisonment not exceeding 10 years or both.</text> </level> </section> <section article="gfi" article_name="Financial Institutions" number="5-804" title_number="5" title_name="Banking Institutions -- General Provisions" subtitle_number="8" subtitle_name="Prohibited Activities; Penalties"> <level label="a"> <text>An officer or employee of a banking institution may not accept a deposit knowing that the institution is insolvent.</text> </level> <level label="b"> <text>An officer or employee who violates any provision of this section is guilty of a misdemeanor and on conviction is subject to imprisonment in the State Penitentiary for a period not exceeding 3 years.</text> </level> </section> <section article="gfi" article_name="Financial Institutions" number="5-805" title_number="5" title_name="Banking Institutions -- General Provisions" subtitle_number="8" subtitle_name="Prohibited Activities; Penalties"> <level label="a"> <text>A person may not willfully make, circulate, or send to another any untrue statement that is derogatory to the financial condition or affects the solvency or financial standing of any bank, trust company, or savings bank doing business in this State or counsel, aid, procure, or induce another to make, circulate, or send to another such a statement.</text> </level> <level label="b"> <text>Any person who violates any provision of this section is guilty of a misdemeanor and on conviction is subject to a fine not exceeding $1,000 or imprisonment not exceeding 3 years.</text> </level> </section> <section article="gfi" article_name="Financial Institutions" number="5-806" title_number="5" title_name="Banking Institutions -- General Provisions" subtitle_number="8" subtitle_name="Prohibited Activities; Penalties"> <level label="a"> <text>Except for a banking institution, a national banking association, an other–state bank, or a savings and loan association that is authorized to do business in this State, a person may not use any name, title, or other words that represent that the person is authorized to do the business of banking in this State.</text> </level> <level label="b"> <level label="1"> <level label="i"> <text>In this subsection the following terms have the meanings indicated.</text> </level> <level label="ii"> <level label="1"> <text>“Bank” means any banking institution, national banking association, other–state bank, or savings and loan association that is authorized to do business in this State, and any subsidiary or affiliate of the entity.</text> </level> <level label="2"> <text>“Bank” includes any Farm Credit System institution in this State.</text> </level> </level> <level label="iii"> <text>“Name” means the name, trade name, trademark, service mark, logo, or tagline used by a bank to identify itself.</text> </level> </level> <level label="2"> <text>Except with the consent of the bank, a person may not use the name of a bank or any term or design that is similar to the name of a bank in any marketing material provided to another person or in any solicitation of another person in a manner that may cause a reasonable person to be confused, mistaken, or deceived that the marketing material or solicitation:</text> <level label="i"> <text>Originated from the bank;</text> </level> <level label="ii"> <text>Originated from someone affiliated, connected, or associated with the bank;</text> </level> <level label="iii"> <text>Is approved or sponsored by the bank; or</text> </level> <level label="iv"> <text>Is the responsibility of the bank.</text> </level> </level> </level> <level label="c"> <text>In addition to any other remedies a bank may have under any other provision of law, a bank that is affected by a violation of subsection (b) of this section may bring an action against the person that committed the violation to recover:</text> <level label="1"> <text>Actual damages sustained as a result of the violation;</text> </level> <level label="2"> <text>Either:</text> <level label="i"> <text>All profits attributable to the violation; or</text> </level> <level label="ii"> <text>$1,000 for each violation; and</text> </level> </level> <level label="3"> <text>Court costs and reasonable attorney’s fees.</text> </level> </level> <level label="d"> <text>Any person who violates subsection (a) of this section is guilty of a misdemeanor and on conviction is subject to a fine not exceeding $3,000 or imprisonment not exceeding 5 years or both.</text> </level> </section> <section article="gfi" article_name="Financial Institutions" number="5-807" title_number="5" title_name="Banking Institutions -- General Provisions" subtitle_number="8" subtitle_name="Prohibited Activities; Penalties"> <level label="a"> <text>A banking institution may not:</text> <level label="1"> <text>Issue an advertisement or make a representation that is false, misleading, or deceptive;</text> </level> <level label="2"> <text>Impose as a condition for a loan any restriction on obtaining credit, property, or service from a competitor unless the restriction is reasonably necessary to secure the loan;</text> </level> <level label="3"> <text>Impose as a condition for a service any restriction on obtaining credit, property, or service from a competitor; or</text> </level> <level label="4"> <text>Engage in an act or practice that is anticompetitive, unfair, deceptive, or injurious to public interest.</text> </level> </level> <level label="b"> <text>The Commissioner may further define specific acts or practices that are anticompetitive, unfair, deceptive, or injurious to the public interest.</text> </level> <level label="c"> <text>A banking institution and any director, officer, trustee, manager, agent, or employee of a banking institution who violates any provision of this section is guilty of a misdemeanor and on conviction is subject to a fine not exceeding $3,000 or imprisonment not exceeding 5 years or both.</text> </level> </section> <section article="gfi" article_name="Financial Institutions" number="5-808" title_number="5" title_name="Banking Institutions -- General Provisions" subtitle_number="8" subtitle_name="Prohibited Activities; Penalties"> <level label="a"> <text>The Commissioner may order any banking institution to cease and desist from:</text> <level label="1"> <text>An unsafe or unsound banking practice;</text> </level> <level label="2"> <text>A practice that is injurious to the public interest; or</text> </level> <level label="3"> <text>A violation of a law, rule, or regulation that relates to the Commissioner’s supervision of the institution.</text> </level> </level> <level label="b"> <text>To protect depositors, stockholders, or the public, the Commissioner may include in a cease and desist order a restriction on the withdrawal of money from any banking institution.</text> </level> <level label="c"> <text>The Commissioner may include in a cease and desist order a requirement that the officers or directors of a banking institution act affirmatively to correct any violation or practice.</text> </level> <level label="d"> <level label="1"> <text>Before a cease and desist order takes effect, the Commissioner shall give the banking institution an opportunity for a hearing.</text> </level> <level label="2"> <text>Notice of the hearing shall be given and the hearing shall be held in accordance with the Administrative Procedure Act.</text> </level> </level> <level label="e"> <text>If the Commissioner determines that the violation or practice under subsection (a) of this section requires immediate action to protect depositors, stockholders, or the public, the Commissioner:</text> <level label="1"> <text>May issue a cease and desist order that is effective on service; and</text> </level> <level label="2"> <text>Shall give the banking institution an opportunity for a hearing to rescind the order.</text> </level> </level> </section> <section article="gfi" article_name="Financial Institutions" number="5-808.1" title_number="5" title_name="Banking Institutions -- General Provisions" subtitle_number="8" subtitle_name="Prohibited Activities; Penalties"> <level label="a"> <text>After notice and a hearing, the Commissioner may assess a civil penalty against a banking institution that the Commissioner determines has:</text> <level label="1"> <text>Violated a cease and desist order issued by the Commissioner under § 5–808 of this subtitle; or</text> </level> <level label="2"> <text>Engaged in:</text> <level label="i"> <text>An unsafe or unsound banking practice; or</text> </level> <level label="ii"> <text>A practice that is injurious to the public interest.</text> </level> </level> </level> <level label="b"> <text>The civil penalty may not exceed:</text> <level label="1"> <text>$1,000 per violation; and</text> </level> <level label="2"> <text>$1,000 per violation for each day that the violation continues.</text> </level> </level> <level label="c"> <level label="1"> <text>A civil penalty shall be assessed by written notice of assessment served on the person to be assessed.</text> </level> <level label="2"> <text>The notice of assessment shall state the:</text> <level label="i"> <text>Amount of the civil penalty;</text> </level> <level label="ii"> <text>Legal authority for the assessment; and</text> </level> <level label="iii"> <text>Matters of fact or law constituting the grounds for the assessment.</text> </level> </level> <level label="3"> <text>The notice of assessment shall constitute a final order for purposes of judicial review pursuant to § 10–221 of the State Government Article.</text> </level> </level> <level label="d"> <text>In determining the amount of the civil penalty to be assessed, the Commissioner shall consider:</text> <level label="1"> <text>The seriousness of the violation;</text> </level> <level label="2"> <text>The good faith of the violator;</text> </level> <level label="3"> <text>The violator’s history of previous violations;</text> </level> <level label="4"> <text>The deleterious effect of the violation on the public and the banking industry;</text> </level> <level label="5"> <text>The assets of the violator; and</text> </level> <level label="6"> <text>Any other factors relevant to the determination of the civil penalty.</text> </level> </level> <level label="e"> <level label="1"> <text>A civil penalty assessed under this section shall be due and payable within 30 days after the Commissioner issues the notice of assessment.</text> </level> <level label="2"> <text>The Commissioner may reduce or set aside a civil penalty.</text> </level> </level> <level label="f"> <text>The Commissioner shall pay all civil penalties collected under this section into the General Fund of the State.</text> </level> </section> <section article="gfi" article_name="Financial Institutions" number="5-808.2" title_number="5" title_name="Banking Institutions -- General Provisions" subtitle_number="8" subtitle_name="Prohibited Activities; Penalties"> <level label="a"> <text>In this section, “extraordinary circumstances” means a situation presenting specific concerns about the prompt withdrawal of money from, or the safety and soundness of, a banking institution.</text> </level> <level label="b"> <text>In extraordinary circumstances and with the consent of the banking institution, the Commissioner may close to the public a hearing concerning the assessment of a civil penalty, an order to cease and desist, or any other formal enforcement action by the Commissioner.</text> </level> </section> <section article="gfi" article_name="Financial Institutions" number="5-809" title_number="5" title_name="Banking Institutions -- General Provisions" subtitle_number="8" subtitle_name="Prohibited Activities; Penalties"> <text>On application by the Commissioner, a court of competent jurisdiction may issue an injunction to restrain a banking institution from:</text> <level label="1"> <text>An unsafe or unsound banking practice;</text> </level> <level label="2"> <text>A practice that is injurious to the public interest; or</text> </level> <level label="3"> <text>A violation of a law, rule, or regulation that relates to the Commissioner’s supervision of the institution.</text> </level> </section> <section article="gfi" article_name="Financial Institutions" number="5-901" title_number="5" title_name="Banking Institutions -- General Provisions" subtitle_number="9" subtitle_name="Bank Holding Companies"> <level label="a"> <text>In this subtitle the following words have the meanings indicated.</text> </level> <level label="b"> <text>“Acquire” means:</text> <level label="1"> <text>For one bank holding company to merge or consolidate with another bank holding company;</text> </level> <level label="2"> <text>For a bank holding company to assume direct or indirect ownership or control of:</text> <level label="i"> <text>More than 5 percent of any class of voting shares of another bank holding company or a bank; or</text> </level> <level label="ii"> <text>All or substantially all of the assets of another bank holding company or a bank; or</text> </level> </level> <level label="3"> <text>To take any other action that results in the direct or indirect control by a bank holding company of another bank holding company or a bank.</text> </level> </level> <level label="c"> <text>“Affiliate” has the meaning stated in § 5-401 of this title.</text> </level> <level label="d"> <text>“Bank” has the meaning stated in § 2(c) of the Bank Holding Company Act.</text> </level> <level label="e"> <text>“Bank holding company”:</text> <level label="1"> <text>Has the meaning stated in § 2(a) of the Bank Holding Company Act; and</text> </level> <level label="2"> <text>Unless the context requires otherwise, includes:</text> <level label="i"> <text>A Maryland bank holding company;</text> </level> <level label="ii"> <text>An out-of-state bank holding company;</text> </level> <level label="iii"> <text>A foreign bank holding company; and</text> </level> <level label="iv"> <text>A corporation or other entity that becomes a bank holding company by making an acquisition under this subtitle.</text> </level> </level> </level> <level label="f"> <text>“Bank Holding Company Act” means the federal Bank Holding Company Act of 1956.</text> </level> <level label="g"> <text>“Bank supervisory agency” means:</text> <level label="1"> <text>The Office of the Comptroller of the Currency, the Federal Deposit Insurance Corporation, the Board of Governors of the Federal Reserve System, and the Office of Foreign Assets Control, and any successor to these agencies;</text> </level> <level label="2"> <text>Any agency of another state with primary responsibility for chartering and supervising banks; and</text> </level> <level label="3"> <text>Any agency of a foreign country with primary responsibility for chartering and supervising banks.</text> </level> </level> <level label="h"> <text>“Control” has the meaning stated in § 2(a) of the Bank Holding Company Act.</text> </level> <level label="i"> <text>“Deposit”:</text> <level label="1"> <text>With respect to any bank holding company other than a foreign bank holding company, has the meaning stated in 12 U.S.C. § 1813(l); and</text> </level> <level label="2"> <text>With respect to a foreign bank holding company, has the meaning stated in the law of the country in which the holding company is organized or incorporated.</text> </level> </level> <level label="j"> <text>“Foreign bank holding company” means a bank holding company with its principal place of business outside the United States.</text> </level> <level label="k"> <text>“Insured depository institution” means any financial institution the deposits of which are insured by the Federal Deposit Insurance Corporation.</text> </level> <level label="l"> <text>“Maryland bank” means a bank that is:</text> <level label="1"> <text>Organized under Title 3 or Title 4 of this article; or</text> </level> <level label="2"> <text>Organized under federal law and having its main office in this State.</text> </level> </level> <level label="m"> <text>“Maryland bank holding company” means a bank holding company that:</text> <level label="1"> <text>Had its principal place of business in this State on the later of July 1, 1966 or the date on which the company became a bank holding company; and</text> </level> <level label="2"> <text>Is not controlled by a bank holding company other than a Maryland bank holding company.</text> </level> </level> <level label="n"> <level label="1"> <text>“Out-of-state bank holding company” means a bank holding company that is not a Maryland bank holding company.</text> </level> <level label="2"> <text>“Out-of-state bank holding company” includes a foreign bank holding company.</text> </level> </level> <level label="o"> <text>“Principal place of business” means the jurisdiction in which the total deposits of a bank holding company’s bank subsidiaries are the greatest.</text> </level> <level label="p"> <text>“State” means any state, territory, or other possession of the United States, including the District of Columbia.</text> </level> <level label="q"> <text>“Subsidiary” has the meaning stated in § 2(d) of the Bank Holding Company Act.</text> </level> </section> <section article="gfi" article_name="Financial Institutions" number="5-902" title_number="5" title_name="Banking Institutions -- General Provisions" subtitle_number="9" subtitle_name="Bank Holding Companies"> <text>This subtitle sets forth the conditions under which a bank holding company may acquire a Maryland bank or a Maryland bank holding company.</text> </section> <section article="gfi" article_name="Financial Institutions" number="5-903" title_number="5" title_name="Banking Institutions -- General Provisions" subtitle_number="9" subtitle_name="Bank Holding Companies"> <level label="a"> <text>Except as otherwise expressly permitted by federal law, no bank holding company may acquire a Maryland bank holding company or a Maryland bank without the approval of the Commissioner.</text> </level> <level label="b"> <text>The prohibition in subsection (a) of this section shall not apply where the acquisition is made:</text> <level label="1"> <text>Solely for the purpose of facilitating an acquisition otherwise permitted under this subtitle;</text> </level> <level label="2"> <text>In a transaction arranged by the Commissioner or another bank supervisory agency to prevent the insolvency or closing of the acquired bank; or</text> </level> <level label="3"> <text>In a transaction in which a bank forms its own bank holding company, if the ownership rights of the former bank shareholders are substantially similar to those of the shareholders of the new holding company.</text> </level> </level> <level label="c"> <text>In a transaction for which the Commissioner’s approval is not required under this section, the parties shall give written notice to the Commissioner at least 15 days before the effective date of the acquisition.</text> </level> </section> <section article="gfi" article_name="Financial Institutions" number="5-904" title_number="5" title_name="Banking Institutions -- General Provisions" subtitle_number="9" subtitle_name="Bank Holding Companies"> <level label="a"> <text>A bank holding company that proposes to make an acquisition under this subtitle shall:</text> <level label="1"> <text>File with the Commissioner an application in the form that the Commissioner requires;</text> </level> <level label="2"> <text>Pay to the Commissioner an application fee of $1,500; and</text> </level> <level label="3"> <text>Submit proof that the applicant has complied with all public notice and publication requirements applicable under the Bank Holding Company Act.</text> </level> </level> <level label="b"> <text>To the extent consistent with the effective discharge of the Commissioner’s responsibilities, the forms established under this subtitle for application, notice, and reporting shall conform to those established under the Bank Holding Company Act.</text> </level> </section> <section article="gfi" article_name="Financial Institutions" number="5-905" title_number="5" title_name="Banking Institutions -- General Provisions" subtitle_number="9" subtitle_name="Bank Holding Companies"> <level label="a"> <text>In deciding whether to approve an application under § 5-904 of this subtitle, the Commissioner shall consider whether the acquisition:</text> <level label="1"> <text>May be detrimental to the safety and soundness of the Maryland bank or Maryland bank holding company to be acquired; or</text> </level> <level label="2"> <text>May result in an undue concentration of resources or a substantial reduction of competition in the State.</text> </level> </level> <level label="b"> <text>Except as provided in this section, the Commissioner may not approve an acquisition if on consummation of the transaction the applicant, including any insured depository institution affiliate of the applicant, would control 30 percent or more of the total amount of deposits of insured depository institutions in the State.</text> </level> <level label="c"> <text>The Commissioner may by regulation adopt a procedure by which the 30 percent deposit limit may be waived for good cause.</text> </level> </section> <section article="gfi" article_name="Financial Institutions" number="5-906" title_number="5" title_name="Banking Institutions -- General Provisions" subtitle_number="9" subtitle_name="Bank Holding Companies"> <level label="a"> <text>The Commissioner shall decide whether to approve an application under § 5-904 of this subtitle within 60 days of receipt of a completed application.</text> </level> <level label="b"> <text>An application shall be deemed approved if the Commissioner takes no action on the application within the time limits specified in this section.</text> </level> </section> <section article="gfi" article_name="Financial Institutions" number="5-907" title_number="5" title_name="Banking Institutions -- General Provisions" subtitle_number="9" subtitle_name="Bank Holding Companies"> <level label="a"> <text>To the extent specified by the Commissioner by regulation or written request, each bank holding company that controls a Maryland bank or a Maryland bank holding company shall submit to the Commissioner:</text> <level label="1"> <text>Copies of reports filed for the preceding calendar year with a bank supervisory agency by each Maryland bank controlled by the bank holding company; and</text> </level> <level label="2"> <text>A report specifying as of the end of the preceding calendar year, for each branch of each Maryland bank controlled by the bank holding company:</text> <level label="i"> <text>The location; and</text> </level> <level label="ii"> <text>The amount of deposits held.</text> </level> </level> </level> <level label="b"> <text>The reports specified in subsection (a) of this section:</text> <level label="1"> <text>May consist of a copy of a report filed with another bank supervisory agency that contains substantially similar information; and</text> </level> <level label="2"> <text>May not be requested by the Commissioner unless the Commissioner determines that the information is not available from another bank supervisory agency.</text> </level> </level> <level label="c"> <text>At the request of the Commissioner, to the extent permitted by applicable State or federal law, each bank holding company that controls a Maryland bank or a Maryland bank holding company shall provide to the Commissioner copies of reports of examination prepared by any bank supervisory agency in connection with the examination of any Maryland bank.</text> </level> </section> <section article="gfi" article_name="Financial Institutions" number="5-908" title_number="5" title_name="Banking Institutions -- General Provisions" subtitle_number="9" subtitle_name="Bank Holding Companies"> <text>The Commissioner may enforce the provisions of this subtitle by any appropriate action in the circuit courts of the State, including actions for injunctive relief and for divestment.</text> </section> <section article="gfi" article_name="Financial Institutions" number="5-910" title_number="5" title_name="Banking Institutions -- General Provisions" subtitle_number="9" subtitle_name="Bank Holding Companies"> <text>If any provision of this subtitle or the application thereof to any person or circumstance is held invalid for any reason in a court of competent jurisdiction, the invalidity does not affect other provisions or any other application of this subtitle that can be given effect without the invalid provision or application.</text> </section> <section article="gfi" article_name="Financial Institutions" number="5-1001" title_number="5" title_name="Banking Institutions -- General Provisions" subtitle_number="10" subtitle_name="Branch Banking"> <level label="a"> <text>In this subtitle the following words have the meanings indicated.</text> </level> <level label="b"> <text>“Affiliate” means any company that controls, is controlled by, or is under common control with another company.</text> </level> <level label="c"> <text>“Bank” has the meaning stated in the Federal Deposit Insurance Act, 12 U.S.C. § 1813(a)(1).</text> </level> <level label="d"> <text>“Bank supervisory agency” means:</text> <level label="1"> <text>The Office of the Comptroller of the Currency, the Federal Deposit Insurance Corporation, the Board of Governors of the Federal Reserve System, or any successor to these agencies; or</text> </level> <level label="2"> <text>An agency of another state with primary responsibility for chartering and supervising banks.</text> </level> </level> <level label="e"> <level label="1"> <text>“Branch” means a bank office open to the public at which deposits are received, checks are paid, or money is lent.</text> </level> <level label="2"> <text>“Branch” includes a mobile branch or other special-purpose facility that performs a function of a branch.</text> </level> <level label="3"> <text>“Branch” does not include an automated teller machine as defined in § 1-401 of this article.</text> </level> </level> <level label="f"> <text>“Commercial activities” means activities in which a bank holding company, a financial holding company, a national bank, or a national bank financial subsidiary may not engage under federal law.</text> </level> <level label="g"> <text>“De novo branch” means a branch of an out-of-state bank or banking institution that:</text> <level label="1"> <text>Is originally established by the out-of-state bank or banking institution as a branch; and</text> </level> <level label="2"> <text>Does not become a branch of the out-of-state bank or banking institution as a result of:</text> <level label="i"> <text>The acquisition by the out-of-state bank or banking institution of an insured depository institution or a branch of an insured depository institution; or</text> </level> <level label="ii"> <text>The conversion, merger, or consolidation of an insured depository institution or a branch of an insured depository institution.</text> </level> </level> </level> <level label="h"> <text>“Home state” means:</text> <level label="1"> <text>As to a national banking association, the state in which its main office is located; and</text> </level> <level label="2"> <text>As to a state-chartered bank, the state by which it is chartered.</text> </level> </level> <level label="i"> <text>“Home state regulator” means the agency in a bank’s home state with primary responsibility for chartering and regulating banks.</text> </level> <level label="j"> <text>“Host state” means a state, other than the home state of a bank, in which the bank maintains or seeks to establish a branch.</text> </level> <level label="k"> <text>“Insured depository institution” means any financial institution the deposits of which are insured by the Federal Deposit Insurance Corporation.</text> </level> <level label="l"> <text>“National banking association” means a bank chartered under the National Bank Act.</text> </level> <level label="m"> <text>“Other-state bank” means a bank chartered and primarily regulated by another state.</text> </level> <level label="n"> <text>“Out-of-state bank” means:</text> <level label="1"> <text>A national banking association with its main office in a state other than this State; or</text> </level> <level label="2"> <text>An other-state bank.</text> </level> </level> </section> <section article="gfi" article_name="Financial Institutions" number="5-1002" title_number="5" title_name="Banking Institutions -- General Provisions" subtitle_number="10" subtitle_name="Branch Banking"> <text>This subtitle sets forth the conditions under which:</text> <level label="1"> <text>An out-of-state bank may establish branches in this State; and</text> </level> <level label="2"> <text>A banking institution may establish branches within or outside this State.</text> </level> </section> <section article="gfi" article_name="Financial Institutions" number="5-1003" title_number="5" title_name="Banking Institutions -- General Provisions" subtitle_number="10" subtitle_name="Branch Banking"> <level label="a"> <text>A banking institution or an out–of–state bank may establish a branch in this State by:</text> <level label="1"> <text>Subject to subsection (b) of this section, opening a de novo branch;</text> </level> <level label="2"> <text>Purchasing an existing branch from a bank or an insured depository institution; or</text> </level> <level label="3"> <text>Converting former headquarters or retaining former branches following:</text> <level label="i"> <text>The purchase of all or substantially all of the assets of a bank or an insured depository institution; or</text> </level> <level label="ii"> <text>A merger or a consolidation with a bank or an insured depository institution.</text> </level> </level> </level> <level label="b"> <text>An out–of–state bank may establish a de novo branch in this State under subsection (a)(1) of this section only if the home state of the out–of–state bank allows a banking institution to open a de novo branch in its state.</text> </level> <level label="c"> <text>A banking institution or an out–of–state bank may not establish or maintain a branch in this State on the premises or property of an affiliate if the affiliate engages in commercial activities.</text> </level> </section> <section article="gfi" article_name="Financial Institutions" number="5-1004" title_number="5" title_name="Banking Institutions -- General Provisions" subtitle_number="10" subtitle_name="Branch Banking"> <text>A banking institution may establish a branch in another state by any means permitted by the laws of that state or by federal law.</text> </section> <section article="gfi" article_name="Financial Institutions" number="5-1005" title_number="5" title_name="Banking Institutions -- General Provisions" subtitle_number="10" subtitle_name="Branch Banking"> <level label="a"> <text>Except as provided in subsection (b) of this section, a banking institution that proposes to establish a branch in this State or in another state shall:</text> <level label="1"> <text>File with the Commissioner, at least 30 days before the intended opening date, a notice of intention to open a branch; and</text> </level> <level label="2"> <text>Submit to the Commissioner any information the Commissioner requires in order to evaluate the proposed branch.</text> </level> </level> <level label="b"> <text>A well–capitalized banking institution with a composite CAMELS rating of one or two may establish a branch in this State by filing with the Commissioner an expedited notice, in the form that the Commissioner requires, at least 30 days before the intended opening date.</text> </level> </section> <section article="gfi" article_name="Financial Institutions" number="5-1006" title_number="5" title_name="Banking Institutions -- General Provisions" subtitle_number="10" subtitle_name="Branch Banking"> <level label="a"> <text>Subject to subsection (b) of this section, in deciding whether to approve a branch of a banking institution, the Commissioner shall consider:</text> <level label="1"> <text>If the branch is to be established in this State, whether the establishment of the branch will promote the public convenience;</text> </level> <level label="2"> <text>Whether the applicant has sufficient capital to support the branch; and</text> </level> <level label="3"> <text>Whether the applicant is generally operating in compliance with the provisions of this article.</text> </level> </level> <level label="b"> <level label="1"> <text>Subject to paragraph (2) of this subsection, a well–capitalized banking institution with a composite CAMELS rating of one or two may open a branch in this State without the approval of the Commissioner 30 days after filing an expedited notice for the proposed branch under § 5–1005(b) of this subtitle.</text> </level> <level label="2"> <text>The Commissioner may:</text> <level label="i"> <text>Require the submission of additional information regarding the proposed establishment of a branch during the 30–day period that the expedited notice is pending; and</text> </level> <level label="ii"> <text>Prohibit the establishment of the branch within the 30–day period if the Commissioner determines that establishment of the branch is not consistent with the standards set forth in subsection (a) of this section.</text> </level> </level> </level> </section> <section article="gfi" article_name="Financial Institutions" number="5-1007" title_number="5" title_name="Banking Institutions -- General Provisions" subtitle_number="10" subtitle_name="Branch Banking"> <level label="a"> <text>The Commissioner shall decide whether to approve the establishment of a branch of a banking institution within 30 days of receipt of the notice specified in § 5-1005 of this subtitle.</text> </level> <level label="b"> <text>A branch shall be deemed approved if the Commissioner takes no action on the notice within the time limit specified in this section.</text> </level> </section> <section article="gfi" article_name="Financial Institutions" number="5-1008" title_number="5" title_name="Banking Institutions -- General Provisions" subtitle_number="10" subtitle_name="Branch Banking"> <level label="a"> <text>A banking institution that establishes a branch in another state may exercise at that branch all powers and rights permitted to banks in that state unless the Commissioner determines that the exercise of a power or right would threaten the safety and soundness of the banking institution.</text> </level> <level label="b"> <text>An other-state bank that establishes a branch in this State may exercise at the branch all powers and rights permitted to banking institutions in this State notwithstanding any other law of this State to the contrary, unless that bank’s home state regulator determines that the exercise of a power or right would threaten the safety and soundness of the other-state bank.</text> </level> <level label="c"> <text>Any person authorized by a law of this State to engage in business with banks located in this State, including the making of deposits, is authorized to engage in the same business with an other-state bank at that other-state bank’s branch in this State.</text> </level> </section> <section article="gfi" article_name="Financial Institutions" number="5-1009" title_number="5" title_name="Banking Institutions -- General Provisions" subtitle_number="10" subtitle_name="Branch Banking"> <level label="a"> <text>Subject to § 5-1012 of this subtitle, the Commissioner shall have the power to examine every branch of an other-state bank located in this State for the same purposes and to the same extent as the Commissioner may examine a branch of a banking institution.</text> </level> <level label="b"> <text>The Commissioner may enter into agreements with bank supervisory agencies regarding the scope, timing, coordination, and frequency of examinations and other supervisory matters, including the sharing of information obtained through examination of other-state banks that maintain branches in this State.</text> </level> <level label="c"> <text>Supervisory and examination fees related to the Commissioner’s oversight of Maryland branches of other-state banks and branches of banking institutions in other states may be imposed and shall be calculated in the manner agreed to between the Commissioner and the home state regulators.</text> </level> </section> <section article="gfi" article_name="Financial Institutions" number="5-1010" title_number="5" title_name="Banking Institutions -- General Provisions" subtitle_number="10" subtitle_name="Branch Banking"> <level label="a"> <text>Subject to § 5-1012 of this subtitle, if the Commissioner finds that a branch of an other-state bank in this State is being operated in an unsafe or unsound manner or there is any violation of Maryland law by the branch of the other-state bank, the Commissioner may undertake enforcement actions as otherwise authorized under provisions in this article governing banking institutions.</text> </level> <level label="b"> <text>The Commissioner may enter into joint enforcement actions with other bank supervisory agencies having concurrent jurisdiction over an other-state bank that has a branch in this State.</text> </level> </section> <section article="gfi" article_name="Financial Institutions" number="5-1011" title_number="5" title_name="Banking Institutions -- General Provisions" subtitle_number="10" subtitle_name="Branch Banking"> <text>Subject to § 5-1012 of this subtitle, the Commissioner may require a bank that maintains a branch in this State to submit to the Commissioner its consolidated reports of condition and income in the form specified by the Federal Financial Institutions Examination Council.</text> </section> <section article="gfi" article_name="Financial Institutions" number="5-1012" title_number="5" title_name="Banking Institutions -- General Provisions" subtitle_number="10" subtitle_name="Branch Banking"> <text>With respect to the supervision, enforcement, and reporting requirements of §§ 5-1009, 5-1010, and 5-1011 of this subtitle, the Commissioner shall act primarily in cooperation with the home state regulator or federal regulator of the affected out-of-state bank.</text> </section> <section article="gfi" article_name="Financial Institutions" number="5-1013" title_number="5" title_name="Banking Institutions -- General Provisions" subtitle_number="10" subtitle_name="Branch Banking"> <level label="a"> <text>Except as provided in this section, the Commissioner may not approve a transaction resulting in the establishment of a branch or branches by a bank, other than a de novo branch, if on consummation of the transaction the applicant, including any insured depository institution affiliate of the applicant, would control 30 percent or more of the total amount of deposits of insured depository institutions in this State.</text> </level> <level label="b"> <text>The Commissioner may by regulation adopt a procedure by which the 30 percent deposit limit may be waived for good cause.</text> </level> </section> <section article="gfi" article_name="Financial Institutions" number="5-1014" title_number="5" title_name="Banking Institutions -- General Provisions" subtitle_number="10" subtitle_name="Branch Banking"> <level label="a"> <text>An out-of-state bank that proposes to establish a branch in this State:</text> <level label="1"> <text>Shall qualify under § 7-203 of the Corporations and Associations Article to do business in the State as a foreign corporation; and</text> </level> <level label="2"> <text>Within 15 days of filing a branch application with the appropriate bank supervisory agency, shall provide the Commissioner with a copy of the branch application.</text> </level> </level> <level label="b"> <text>An out-of-state bank that does not have a branch in this State on September 29, 1995, may not establish a branch in this State before June 1, 1997, unless the laws of that bank’s home state would permit a banking institution to establish a branch in that state under substantially similar conditions as those imposed by this subtitle.</text> </level> <level label="c"> <text>An out-of-state bank that has a branch in this State may establish additional branches in this State to the same extent as a banking institution or to the extent otherwise permitted by federal law.</text> </level> </section> <section article="gfi" article_name="Financial Institutions" number="5-1015" title_number="5" title_name="Banking Institutions -- General Provisions" subtitle_number="10" subtitle_name="Branch Banking"> <text>If any provision of this subtitle or the application thereof to any person or circumstance is held invalid for any reason in a court of competent jurisdiction, the invalidity does not affect other provisions or any other application of this subtitle that can be given effect without the invalid provision or application.</text> </section> <section article="gfi" article_name="Financial Institutions" number="5-1101" title_number="5" title_name="Banking Institutions -- General Provisions" subtitle_number="11" subtitle_name="Savings and Loan Associations -- Emergency Interstate Acquisitions"> <level label="a"> <text>In this subtitle the following words have the meanings indicated.</text> </level> <level label="b"> <text>“Acquire” means to assume ownership or control, directly or indirectly, of any voting shares of, interest in, or all or a substantial portion of the assets and liabilities, including, unless otherwise determined in writing by the Director of the State of Maryland Deposit Insurance Fund Corporation to be in the best financial interest of the Fund, all savings accounts liabilities that are insured by the Fund, to the extent of the insurance, and liabilities to the State, of the following institutions:</text> <level label="1"> <text>A savings and loan association;</text> </level> <level label="2"> <text>A newly-formed commercial bank chartered to consummate a transaction with a savings and loan association under this subtitle; or</text> </level> <level label="3"> <text>A commercial bank that results from the conversion of a savings and loan association.</text> </level> </level> <level label="c"> <text>“Act” means the federal Bank Holding Company Act of 1956, as amended.</text> </level> <level label="d"> <text>“Maryland bank holding company” means a company that is defined as a bank holding company under the Act and that conducted its principal banking business in Maryland on July 1, 1966, or on the date on which the company became a bank holding company under the Act, whichever occurred later.</text> </level> <level label="e"> <text>“Out-of-state bank holding company” means a company that is defined as a bank holding company under the Act and that conducted its principal banking business in a jurisdiction of the United States other than Maryland on July 1, 1966, or on the date on which the company became a bank holding company under the Act, whichever occurred later.</text> </level> <level label="f"> <text>“Savings accounts” has the meaning stated in § 10-101(k) of this article.</text> </level> <level label="g"> <text>“Savings and loan association” means a corporation that is:</text> <level label="1"> <text>Chartered under the laws of this State as a savings and loan association; and</text> </level> <level label="2"> <text>Insured by the State of Maryland Deposit Insurance Fund Corporation.</text> </level> </level> </section> <section article="gfi" article_name="Financial Institutions" number="5-1101.1" title_number="5" title_name="Banking Institutions -- General Provisions" subtitle_number="11" subtitle_name="Savings and Loan Associations -- Emergency Interstate Acquisitions"> <text>The provisions of this subtitle which authorize an out–of–state bank holding company to acquire and hold certain institutions are only in effect through June 1, 1986. Any acquisition that was approved under this subtitle before June 1, 1986, remains subject to the terms and conditions that were in effect before that date, including the authorizations in § 5–1102(c) and (d) of this subtitle.</text> </section> <section article="gfi" article_name="Financial Institutions" number="5-1102" title_number="5" title_name="Banking Institutions -- General Provisions" subtitle_number="11" subtitle_name="Savings and Loan Associations -- Emergency Interstate Acquisitions"> <level label="a"> <text>This subtitle sets forth the conditions under which an out-of-state bank holding company may acquire and hold:</text> <level label="1"> <text>One or more savings and loan associations to be converted into one or more commercial banks; or</text> </level> <level label="2"> <text>One or more newly-formed commercial banks that have acquired or acquire one or more savings and loan associations.</text> </level> </level> <level label="b"> <text>The acquisition of a commercial bank by an out-of-state bank holding company under this subtitle is authorized for purposes of § 3(d) of the Act.</text> </level> <level label="c"> <text>Notwithstanding any other provision of law, an out-of-state bank holding company that has made an acquisition under this subtitle subsequently shall be permitted, directly or indirectly, to acquire and hold Maryland bank holding companies or constituent banks, as defined in Title 3, Subtitle 7 of this article, in this State as if the out-of-state bank holding company were a bank holding company the operations of whose banking subsidiaries are principally conducted in this State for purposes of § 3(d) of the Act. Any merger with or acquisition of a Maryland bank holding company by an out-of-state bank holding company, directly or indirectly, or any consolidation with, merger with or transfer of assets to a constituent bank by an out-of-state bank holding company, directly or indirectly, shall be governed by the procedural requirements of Subtitle 10 of this title.</text> </level> <level label="d"> <text>Except for the procedural requirements of this section, an out-of-state bank holding company may acquire and hold Maryland bank holding companies or constituent banks in this State under subsection (c) of this section without regard to the restrictions found in Subtitle 10 of this title.</text> </level> </section> <section article="gfi" article_name="Financial Institutions" number="5-1103" title_number="5" title_name="Banking Institutions -- General Provisions" subtitle_number="11" subtitle_name="Savings and Loan Associations -- Emergency Interstate Acquisitions"> <level label="a"> <text>An out–of–state bank holding company may acquire one or more savings and loan associations and convert one or more of the acquired savings and loan associations into one or more commercial banks or one or more newly–formed commercial banks that have acquired or will acquire one or more savings and loan associations, if the out–of–state bank holding company and the entity to be acquired:</text> <level label="1"> <text>File jointly an application and a plan of acquisition for approval with the Commissioner that contain the information the Commissioner may require;</text> </level> <level label="2"> <text>Submit with the application:</text> <level label="i"> <text>The designation of a resident of this State as the applicant’s agent for the service of any paper, notice, or legal process on the applicant in connection with matters arising out of this subtitle; and</text> </level> <level label="ii"> <text>A filing fee of $5,000; and</text> </level> </level> <level label="3"> <text>Receive approval of the acquisition from the Commissioner after the Commissioner has received:</text> <level label="i"> <text>Advice from the Director of the Division of Savings and Loan Associations and the Fund Director of the State of Maryland Deposit Insurance Fund Corporation; and</text> </level> <level label="ii"> <text>The concurrence of the Secretary of Labor.</text> </level> </level> </level> <level label="b"> <level label="1"> <text>The plan of acquisition under this section shall contain sufficient information to allow the Commissioner to consider the following:</text> <level label="i"> <text>The financial and managerial resources of the out–of–state bank holding company;</text> </level> <level label="ii"> <text>The future prospects and business plan for the successor commercial bank;</text> </level> <level label="iii"> <text>The financial history and future prospects of the out–of–state bank holding company;</text> </level> <level label="iv"> <text>The impact of the proposed acquisition on competition and concentration of financial resources in this State;</text> </level> <level label="v"> <text>Initial capital investments, loan policy, investment policy, dividend policy, and general plan of business, including the amount and cost of consumer and business services to be offered in this State; and</text> </level> <level label="vi"> <text>The corporate and regulatory steps necessary to consummate the acquisition.</text> </level> </level> <level label="2"> <text>An out–of–state bank holding company that has made an acquisition under this subtitle shall, within 30 days of adoption, submit to the Commissioner a copy of its most recently adopted federal Community Reinvestment Act statement.</text> </level> <level label="3"> <text>Within 30 days of receipt, the holding company shall submit to the Commissioner a copy of the public portion of its most recent Community Reinvestment Act performance evaluation prepared by the federal regulatory agency that examines the holding company, together with a copy of any written response to the evaluation prepared by the holding company for its public Community Reinvestment Act file.</text> </level> <level label="4"> <level label="i"> <text>Upon request, the Commissioner shall make available to the public a copy of the documents submitted under this subsection.</text> </level> <level label="ii"> <text>The Commissioner may charge a reasonable fee to a person requesting a copy to help defray the costs of providing copies of the documents to the public.</text> </level> </level> </level> <level label="c"> <level label="1"> <text>Except as otherwise provided by law, any person who knowingly submits false information to the Commissioner while complying with this section is guilty of a misdemeanor.</text> </level> <level label="2"> <text>A person who violates this section is subject to a fine of not more than $1,000, or imprisonment for not more than 5 years, or both.</text> </level> </level> <level label="d"> <text>The Commissioner may not grant approval of an acquisition and conversion under this subsection unless the Commissioner finds:</text> <level label="1"> <text>One or more of the savings and loan associations to be acquired:</text> <level label="i"> <text>Was placed into a conservatorship or receivership under Title 9, Subtitle 7 of this article before October 15, 1985, and continues to be under the control of a conservator or receiver at the time the plan of acquisition is filed; or</text> </level> <level label="ii"> <text>Before October 15, 1985, has been the subject of an executive order imposing limitations on withdrawals from savings accounts that are more restrictive than those set forth in Executive Order 01.01.1985.11 (May 21, 1985), as amended;</text> </level> </level> <level label="2"> <level label="i"> <text>The aggregate total savings account liability of the association or associations to be acquired was at least $450,000,000 on June 1, 1985; or</text> </level> <level label="ii"> <text>The aggregate total savings account liability is less than $450,000,000 but greater than $250,000,000 on June 1, 1985, and the approval is:</text> <level label="1"> <text>Reasonably required to protect the welfare of the general economy of this State and of the acquired association or associations;</text> </level> <level label="2"> <text>Not detrimental to the public interest or to the acquired association or associations;</text> </level> <level label="3"> <text>Consistent with the general need for banking services in the State; and</text> </level> <level label="4"> <text>Concurred in by the Governor;</text> </level> </level> </level> <level label="3"> <text>Exigent circumstances exist such that the planned acquisition is necessary to maintain the viability or prevent the probable failure of one or more of the savings and loan associations to be acquired;</text> </level> <level label="4"> <text>The out–of–state bank holding company has sufficient financial strength to assume its obligations under item (5) of this subsection;</text> </level> <level label="5"> <text>The application contains the unconditional undertaking of the out–of–state bank holding company to be bound by the provisions of § 5–1107 of this subtitle;</text> </level> <level label="6"> <text>The commercial bank to be formed will be a member of the Federal Reserve System; and</text> </level> <level label="7"> <text>That, upon the completion of any mergers, conversions, or acquisition to be made under the plan of acquisition, immediate access to savings accounts by account holders is provided subject to any terms and conditions governing those savings accounts.</text> </level> </level> <level label="e"> <level label="1"> <text>Each merger, conversion, or acquisition to be made under the plan of acquisition:</text> <level label="i"> <text>Except as provided in this subtitle, shall comply with Title 3 of the Corporations and Associations Article;</text> </level> <level label="ii"> <text>Shall be approved by the board of directors of each commercial bank and savings and loan association; and</text> </level> <level label="iii"> <text>Subject to the provisions of paragraph (3) of this subsection, requires approval by a majority vote of the total number of votes entitled to be cast on the matter.</text> </level> </level> <level label="2"> <text>As to each conversion, the savings and loan association to be converted shall file with the Commissioner a bank charter and otherwise comply with § 3–203 of this article.</text> </level> <level label="3"> <text>Sufficient evidence of the approval required by paragraph (1)(iii) of this subsection is a written consent signed by the shareholders or members having not less than a majority of the votes that would be entitled to be voted at a meeting at which all shareholders or members were present.</text> </level> <level label="4"> <text>Notwithstanding any other provision of this section or any other law, the approval by the shareholders or members of a savings and loan association for which a receiver has been appointed under § 9–708 of this article of a merger, conversion, or acquisition involving that savings and loan association is not required if, after notice and a hearing, the circuit court administering the receivership determines that:</text> <level label="i"> <text>The savings and loan association is insolvent; or</text> </level> <level label="ii"> <text>The merger, conversion, or acquisition will not result in the shareholders or members of the association receiving property of a lesser value in their capacity as shareholders or members than they otherwise would upon a complete liquidation of the savings and loan association in receivership.</text> </level> </level> </level> <level label="f"> <text>The provisions of Title 3, Subtitle 7 and Title 9, Subtitle 6 of this article do not apply to any consolidation, merger, transfer of assets, or conversion under this subtitle.</text> </level> </section> <section article="gfi" article_name="Financial Institutions" number="5-1104" title_number="5" title_name="Banking Institutions -- General Provisions" subtitle_number="11" subtitle_name="Savings and Loan Associations -- Emergency Interstate Acquisitions"> <text>If the Commissioner deems it appropriate in order to consummate an acquisition under this subtitle, the Commissioner may:</text> <level label="1"> <text>Convert the charter, form of ownership, or operating powers of a savings and loan association into the charter, form of ownership, or operating powers of a commercial bank;</text> </level> <level label="2"> <text>Authorize the consolidation, merger, or transfer of assets of a savings and loan association into one or more savings and loan associations or commercial banks; and</text> </level> <level label="3"> <text>Charter a new commercial bank or savings and loan association to acquire all or a substantial portion of the assets and liabilities of an existing savings and loan association, including all savings accounts liabilities and liabilities to the State.</text> </level> </section> <section article="gfi" article_name="Financial Institutions" number="5-1105" title_number="5" title_name="Banking Institutions -- General Provisions" subtitle_number="11" subtitle_name="Savings and Loan Associations -- Emergency Interstate Acquisitions"> <level label="a"> <text>Except as provided in subsections (b), (c), (d), and (e) of this section, a commercial bank acquired under this subtitle may exercise all the powers of, and shall be subject only to those restrictions imposed on a commercial bank owned by a Maryland bank holding company under applicable State law.</text> </level> <level label="b"> <text>A commercial bank that results from a conversion of a savings and loan association or acquires a savings and loan association may hold assets or conduct business activities, other than insurance assets and insurance activities, that result from the acquisition of a savings and loan association and that do not conform with applicable law, unless a different period is authorized by federal regulatory agencies:</text> <level label="1"> <text>For a period of 5 years after the acquisition; and</text> </level> <level label="2"> <text>If the Commissioner approves, for an additional period not exceeding 5 years.</text> </level> </level> <level label="c"> <text>A commercial bank that results from a conversion of a savings and loan association or acquires a savings and loan association may hold insurance assets or conduct insurance activities that result from the acquisition of a savings and loan association and that do not conform with applicable law, unless a different period is authorized by federal regulatory agencies, for a period of 2 years after the date of acquisition.</text> </level> <level label="d"> <text>Except as provided in subsection (c) of this section, a commercial bank acquired under this subtitle may hold insurance assets or conduct insurance activities only to the extent permitted under applicable law to a Maryland commercial bank.</text> </level> <level label="e"> <text>A commercial bank that results from the conversion of a savings and loan association or acquires a savings and loan association that is subject to the provisions of this section may not exercise any rights afforded to a Maryland bank, a Maryland bank holding company, or an out-of-state bank holding company under any Maryland law authorizing reciprocal interstate banking acquisitions until such time as national reciprocal interstate banking is authorized under State law.</text> </level> </section> <section article="gfi" article_name="Financial Institutions" number="5-1106" title_number="5" title_name="Banking Institutions -- General Provisions" subtitle_number="11" subtitle_name="Savings and Loan Associations -- Emergency Interstate Acquisitions"> <level label="a"> <text>Notwithstanding any other provisions of law to the contrary, the Commissioner may:</text> <level label="1"> <text>Exercise any State regulatory approval that may be required to complete a plan of acquisition under this subtitle; and</text> </level> <level label="2"> <text>Waive any procedural requirements, including publication and hearing procedures, if the Commissioner determines that prompt approval of the application protects the best interests of the depositors and creditors of the savings and loan association to be acquired under this subtitle and is in the public interest.</text> </level> </level> <level label="b"> <text>The Commissioner shall give notice in the Maryland Register of the final action that has been taken on an application filed under this subtitle.</text> </level> </section> <section article="gfi" article_name="Financial Institutions" number="5-1107" title_number="5" title_name="Banking Institutions -- General Provisions" subtitle_number="11" subtitle_name="Savings and Loan Associations -- Emergency Interstate Acquisitions"> <text>Upon and after the acquisition of each savings and loan association or commercial bank successor to a savings and loan association to be acquired under this subtitle, the out-of-state bank holding company and the acquired institution shall, unless otherwise determined in writing by the Fund Director to be in the best financial interest of the Fund:</text> <level label="1"> <text>Defend, indemnify, and hold harmless the State of Maryland, its agencies, instrumentalities, officials, agents, and employees from all claims of:</text> <level label="i"> <text>Holders of savings accounts in that savings and loan association arising out of insurance of their accounts by the Maryland Savings-Share Insurance Corporation or the State of Maryland Deposit Insurance Fund Corporation; and</text> </level> <level label="ii"> <text>Parties to loan agreements, loan commitments, lines of credit, or letters of credit of that savings and loan association arising solely out of the failure of the commercial bank to honor within a reasonable period of time after its acquisition by the out-of-state bank holding company the terms of a legally binding written commitment entered into by that savings and loan association;</text> </level> </level> <level label="2"> <text>Relinquish any right to and release the State of Maryland Deposit Insurance Fund Corporation from any obligation to return any part of the capital deposit required for membership in the Fund; and</text> </level> <level label="3"> <text>Provide for repayment of any indebtedness incurred by an acquired savings and loan association to the former Maryland Savings-Share Insurance Corporation or the State of Maryland Deposit Insurance Fund Corporation.</text> </level> </section>