Section 11-41-133 - Acquisition of majority control over an existing association - definitions(1) As used in this section, unless the context otherwise requires: (a) "Entity" means a person or group of persons.(b) "Person" means an individual, corporation, partnership, trust, or similar organization.(c) An entity shall be deemed "to have control" of an association if said entity: (I) Directly or indirectly, or acting in concert with one or more persons, owns, controls, holds with the power to vote, or holds proxies representing more than twenty-five percent of the permanent stock of such association;(II) Controls in any manner the election of a majority of the directors of such association; or(III) Exercises a controlling influence over the management or policies of such association.(2)(a) Whenever an entity proposes to take an action or conduct an activity which would cause such entity to have control of that association, the entity shall first make application to the commissioner for a certificate of approval of such action or activity.(b) The application shall be in such form and provide such information as the commissioner may require by rule or regulation and shall be accompanied when submitted by a nonrefundable filing fee in the amount established by the commissioner.(3) After receipt of an application, the commissioner shall make an investigation and shall issue the certificate of approval only after the commissioner has determined:(a) That the controlling entity is qualified by character, experience, and financial responsibility to control the association in a legal and proper manner; and(b) That the interests of the public generally will not be jeopardized by the proposed action or activity causing the entity to have control of the association.(4) This section shall not apply to the acquisition of:(a) Directors' voting proxies acquired in the normal course of business as a result of a proxy solicitation in conjunction with a stockholders' meeting;(b) Stock held in a fiduciary capacity unless the acquiring person has sole discretionary authority to exercise voting rights with respect thereto;(c) Stock acquired in securing or collecting a debt contracted in good faith; except that it shall apply two years after the date of acquisition; or(d) Stock acquired by an underwriter in good faith and without any intent to evade the purpose of this section if the shares are held only for such reasonable period of time as will permit the sale thereof.(5) When the commissioner has not acted upon a completed application within sixty days of receipt thereof, it shall be considered approved.(6)(a) A domestic association may, subject to any applicable regulations of the federal deposit insurance corporation or its successor, invest in an association that is domiciled or conducts its principal operations in another state and acquire control of such association, and notwithstanding any other provision of articles 40 to 46 of this title to the contrary, if the entity proposing to acquire control of a domestic association is a foreign association, the foreign association shall, in addition to submitting all information pertinent to the evaluation of the application under this section that the commissioner may require together with all applicable fees, meet the following criteria: (I) The foreign association seeking the acquisition shall have deposits that it may hold insured by the federal deposit insurance corporation or its successor in accordance with the provisions of section 11-41-117; and(II) The foreign association shall be in compliance with the capital requirements specified in this subparagraph (II) as follows:(A) and (B) (Deleted by amendment, L. 2004, p. 150, § 57, effective July 1, 2004.)(C) On and after January 1, 1993, the foreign association shall have a ratio of total capital to total assets of not less than six percent or the prevailing regulatory capital requirements established by the federal deposit insurance corporation or its successor, whichever is greater; and(II.5) Once a capital threshold is established in accordance with the provisions of subparagraph (II) of this paragraph (a) it shall be the prevailing standard for purposes of this section to be applied by the commissioner regardless of any reduction below the prevailing regulatory capital threshold requirement unless the general assembly authorizes the application of a lower standard; and(III) The commissioner shall not approve any application for acquisition under this subsection (6) if such acquisition would result in the foreign association controlling at the time of the acquisition more than twenty-five percent of the aggregate of all deposits in all banks, savings and loan associations, federal savings banks, and other financial institutions located in Colorado, which are federally insured. For the purposes of this subsection (6), deposits shall be determined based upon the public reports most recently filed with the appropriate federal regulatory agency; and(IV) Except as provided in paragraph (b) of this subsection (6), the foreign association shall be domiciled or conduct its principal operations in a state which is both contiguous to Colorado and which also has laws that allow a domestic association to establish business operations in that state under conditions which are determined by the commissioner to be not more restrictive than those provided in articles 40 to 46 of this title. For the purpose of this subsection (6), the place where an association "conducts its principal operations" means the place where the largest percentage of the aggregate deposits of the foreign association and all of its subsidiaries are held.(b) On or after January 1, 1991, a foreign association seeking to acquire control of a domestic association may be domiciled or have its principal offices in any state without regard to its proximity to this state and without regard to the statutory conditions required by subparagraph (IV) of paragraph (a) of this subsection (6).(c) If a foreign association that meets the criteria established by this subsection (6) proposes to acquire control of a domestic association, the foreign association shall make an application for prior approval to the commissioner in the form and including any information that the commissioner requires, and the application must be accompanied by a nonrefundable filing fee in an amount determined by the commissioner. Upon receipt of a properly submitted application to acquire control of a domestic association, the commissioner shall proceed to investigate the application in accordance with this section. The commissioner shall not grant approval of the merger until the commissioner is satisfied that the criteria imposed by this section have been met and that the acquisition is not contrary to the public interest.(d) No foreign association may acquire control of a domestic association except in accordance with the provisions of this section, and no such acquisition shall be completed without a certificate of approval issued by the commissioner.(e) A domestic association which is acquired in accordance with the provisions of this section may continue to operate as a domestic association subject to the provisions of articles 40 to 46 of this title. Any officer of a foreign association that acquires a domestic association pursuant to this section whose primary duty is managing the day-to-day operations of the Colorado offices of such foreign association shall be a resident of Colorado.Amended by 2024 Ch. 350,§ 35, eff. 8/7/2024, app. to the operations of the division of financial services, the commissioner of financial services, the financial services board, credit unions, savings and loan associations, and life care institutions on or after 8/7/2024, including the imposition of fines by the commissioner of financial services against a person who violates a cease-and-desist order or a suspension or removal order.L. 83: Entire section added, p. 489, § 2, effective April 26. L. 84: (2)(b) amended, p. 381, § 9, effective May 11. L. 88: (6) added, p. 459, § 4, effective July 1. L. 89: (2)(a), (3)(a), and (3)(b) amended, p. 611, § 5, effective April 19. L. 2004: IP(6)(a), (6)(a)(I), and (6)(a)(II)(A) to (6)(a)(II)(C) amended, p. 150, § 57, effective July 1.(1) In 2000, subsection (6)(a)(II)(D), enacted in 1988, was renumbered as subsection (6)(a)(II.5) on revision.
(2) Section 67(2) of chapter 350 (HB 24-1381), Session Laws of Colorado 2024, provides that the act changing this section applies to the operations of the division of financial services, the commissioner of financial services, the financial services board, credit unions, savings and loan associations, and life care institutions on or after August 7, 2024, including the imposition of fines by the commissioner of financial services against a person who violates a cease-and-desist order or a suspension or removal order.
2024 Ch. 350, was passed without a safety clause. See Colo. Const. art. V, § 1(3).