§14102. General organizational powers

Link to law: http://legislature.vermont.gov/statutes/section/08/204/14102
Published: 2015

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The Vermont Statutes Online



Title

08

:
Banking and Insurance






Chapter

204

:
POWERS OF FINANCIAL INSTITUTIONS






Subchapter

001
:
GENERAL POWERS










 

§

14102. General organizational powers

(a) A Vermont

financial institution shall have all of the powers enumerated in Title 11 or

11A, depending on the organizational form of the institution.

(b) Unless

otherwise prohibited or limited by part 1, 2, or 5 of this title, a Vermont

financial institution has and may exercise all powers necessary or convenient

to effect the purposes for which the financial institution is organized or to

further the businesses in which the financial institution is or may be lawfully

engaged. Such powers shall include:

(1)

establishing, acquiring, investing, or participating in or utilizing a service

corporation;

(2) engaging,

directly or indirectly through an operating subsidiary, in closely related

activities as defined in subdivision 11101(14) of this title; and

(3) investing or

participating in an entity that engages in closely related activities but is

not an operating subsidiary, with the Commissioner's approval; provided,

however, the Commissioner may require that closely related activities be

conducted through a subsidiary whenever the Commissioner determines that a

limitation on the Vermont financial institution's direct financial risk is

prudent. A Vermont financial institution shall keep such records as may be

required by the Commissioner relative to the activities permitted by this

subsection. Service corporations and operating subsidiaries shall be subject to

regulation and supervision under this title.

(c) A Vermont

financial institution may engage in electronic banking.

(d) Any Vermont

financial institution may amend its organizational documents to provide for the

separation of its corporate franchises into separate departments according to

the nature of its business. In that event, it shall equitably apportion its

assets between those departments in such manner as the Commissioner shall

approve and thereafter shall maintain a segregation of the assets and

obligations of those departments. Depositors shall be notified of the

segregation and of the department to which their deposits are assigned. In case

of liquidation or the imposition of restrictions upon the payment of deposits,

at any time more than six months after such notice, the depositors of each of

the departments shall be entitled to receive payment of deposits out of the

assets of the department to which their deposits have been assigned in priority

to all depositors in the other department, and to creditors who become such

after the segregation, except as those obligations to creditors are properly

allocated to a department at the time the obligations are created. The assets

of the trust department shall be devoted first to meeting the obligations of

the financial institution to the beneficiaries of its trusts according to their

respective rights.

(e) A Vermont financial

institution shall have the power to join the Federal Reserve System or any

cooperative league or other entity organized for the purpose of protecting and

promoting the welfare of financial institutions and their depositors; and to

comply with all conditions of membership therein. A Vermont financial

institution which is a member of the Federal Reserve Bank is by this subsection

vested with all powers conferred upon member banks of the federal reserve

system by the terms of the Federal Reserve Act as fully and completely as if

those powers were specifically enumerated and described in this subsection, and

all those powers shall be exercised subject to all restrictions and limitations

imposed by the Federal Reserve Act or by regulations of the Federal Reserve

Board made pursuant thereto. A member financial institution under this

subsection shall continue to be subject to the supervision and examinations

required by the laws of this State, except that the Federal Reserve Board and

the Federal Deposit Insurance Corporation shall have the right, if deemed

necessary, to make examinations. The authorities of this State having

supervision over the financial institution may disclose to the Federal Reserve

Board or to the Federal Deposit Insurance Corporation or to their duly

appointed examiners, all information in reference to the affairs of any

financial institution which has become or desires to become a member.

(f) Subject to

the approval of the Commissioner, a Vermont financial institution may contract

with another financial institution or financial institutions for branch or

agency services or to provide those services to the customers of that financial

institution or financial institutions.

Notwithstanding the foregoing sentence,

any Vermont financial institution subsidiary of a bank holding company may

receive deposits, renew time deposits, close loans, service loans, and receive

payments on loans and other obligations as an agent for an affiliate depository

institution or contract to receive such services without such approval. (Added

1999, No. 153 (Adj. Sess.), § 2, eff. Jan. 1, 2001.)
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