Okla. Admin. Code § 85:10-11-9.1

Current through Vol. 42, No. 4, November 1, 2024

Section 85:10-11-9.1 - Financial subsidiaries

(a) A bank may control or hold an interest in a financial subsidiary, subject to the prior written approval of the Commissioner, and the following conditions:

(1) the bank and each depository institution affiliate of the bank must be well capitalized after deducting the aggregate amount of the outstanding equity investment, including retained earnings, of the bank in all its financial subsidiaries. The term "well capitalized" shall have the same meaning given the term in section 38 of the Federal Deposit Insurance Act;

(2) the bank must be well-managed, which shall mean the achievement of a composite CAMELS rating of 1 or 2 on the most recent examination and at least a rating of 2 for management. If the bank has not yet been examined, a bank may be considered well managed if the Commissioner determines that the bank's managerial resources are satisfactory;

(3) the aggregated consolidated total assets of all financial subsidiaries of the bank do not exceed the lesser of 45% of the consolidated total assets of the parent bank or $50 billion;

(4) the bank may not have received at its most recent examination for compliance with the Community Reinvestment Act a rating of less than "satisfactory";

(5) the bank must file an application with the Commissioner which includes:

(A) a description of the activities to be conducted by the financial subsidiary;

(B) a list of each license, permit, or other evidence of approval, if any, which the financial subsidiary, or one of its officers or employees, must hold as a condition for conducting activities;

(C) appropriate certifications as to compliance with the provisions of this section;

(D) a description and analysis of the specific legal authority permitting the activity to be conducted by the financial subsidiary; and

(E) such other information as the Commissioner may require.

(b) For purposes of this section, a "financial subsidiary" shall be defined according to section 46 of the Federal Deposit Insurance Act. Activities conducted through a financial subsidiary shall include any activity permitted for a financial subsidiary under section 5136A of the Revised Statutes of the United States ( 12 U.S.C. § 24 a). Provided, however, a state bank may continue to seek approval for subsidiary activities permissible under the Oklahoma Banking Code and section 24 of the Federal Deposit Insurance Act without complying with the provisions of this section.

(c) The assets and liabilities of a bank's financial subsidiaries shall not be consolidated with those of the bank.

(d) The organizational structure of the financial subsidiary must protect the separate corporate identity of the bank and may not subject the bank, its subsidiaries, or its affiliates to unlimited liability. The separate organizational structure of the subsidiary must withstand scrutiny under Oklahoma law, and any other law which the subsidiary was organized, so that the liabilities of the subsidiary are not attributable to the bank.

(e) For purposes of Sections 23A and 23B of the Federal Reserve Act, the financial subsidiary shall be considered an affiliate of the bank and not a subsidiary, and the bank must comply with all provisions of Section 23A and 23B of the Federal Reserve Act.

(f) Each financial subsidiary shall be subject to examination and supervision by the Commissioner in the same manner and to the same extent as the parent bank. If the Commissioner shall determine that the financial subsidiary is created or operated in violation of the Banking Code or Board rules, or that the manner of operation is detrimental to the business of the parent bank and/or its depositors, the Commissioner may order the bank to dispose of all or any part of the financial subsidiary upon such terms as the Commissioner may deem proper.

(g) The bank shall attach to its application a copy of the proposed certificate of incorporation and bylaws of the subsidiary or other similar organizational documentation in the case of a non-corporate entity.

(h) The fee for reviewing an application for a financial subsidiary shall be the same as that for reviewing the application of an operating subsidiary. The application with attachments shall be accompanied by the appropriate fee. If the Commissioner approves the application and attached documents, the bank shall file the organizational documents with the Oklahoma Secretary of State (if the financial subsidiary is an Oklahoma organization), return a certified copy to the Department, and forward necessary copies to the Federal Deposit Insurance Corporation or the Federal Reserve System.

(i) Prior to disposition or dissolution of a financial subsidiary, the parent bank shall notify the Commissioner.

Okla. Admin. Code § 85:10-11-9.1

Added at 18 Ok Reg 1853, eff 6-11-01; Amended at 25 Ok Reg 1064, eff 5-25-08