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The Vermont Statutes Online



Title

08

:
Banking and Insurance






Chapter

201

:
SUPERVISION; DEFINITIONS






Subchapter

001
:
DEFINITIONS










 

§

11101. Definitions

Except as

otherwise specifically provided elsewhere in this title, and subject to such

definitions as the Commissioner may adopt pursuant to regulations hereafter,

the following terms have the following meanings for purposes of Parts 1, 2, and

5 of this title, unless the context clearly indicates otherwise.

(1)

"Affiliate" means any company or person that, directly or indirectly,

controls, is controlled by, or is under common control with another company.

(2)

"Automated teller machine" or "ATM" means an electronic

device at which a natural person may make deposits to an account by cash or

check and perform other account transactions. Point-of-sale terminals, machines

that only dispense cash, night depositories, and lobby deposit boxes are not

automated teller machines.

(3)

"Bank" or "bank and trust company" means any financial

institution organized under the prior laws of this State that is authorized to

exercise the powers and subject to the conditions and limitations on the

exercise of those powers as set forth in chapter 204 of this title.

(4) "Bank

credit card" means a card, plate, or other credit device issued by a bank

or financial institution to a cardholder for the purpose of obtaining money,

property, labor, or services on credit. The term "bank credit card"

shall not be deemed to include a debit card; provided, however, that a credit

card may include features of a debit card.

(5) "Bank

holding company" shall have the same meaning as in 12 U.S.C. § 1841(a) and

shall include a financial holding company as defined in 12 U.S.C. § 1841(p).

(6)

"Banking day" shall mean each day that a financial institution is

open to the public for the transaction of substantially all of its banking

functions and shall be deemed a banking day for the purposes of all

transactions with the financial institution under this title, Title 9A as it

applies to financial institutions, and all other provisions of law applicable

to financial institutions and the business of banking in this state.

(7)

"Billing date" means the cycle date on the financial institution

books and statements, which statements shall be mailed four days after the

closing of the cycle.

(8)

"Billing period" means the time interval between periodic statement

dates. A billing period shall be considered a month or monthly if the last day

of each billing period is on the same day of each month or does not vary by

more than four days each month.

(9)

"Borrower" means any person who is named as a borrower or debtor in a

loan or extension of credit, including a drawer, endorser, or guarantor who is

deemed a borrower under subsection 14301(d) of this title.

(10)

"Branch" means any office of a financial institution at which

deposits are received, checks paid, or money lent. A branch may include a

messenger service, mobile branch, temporary facility, night depository (drop

box), drive-in facility, or a seasonal agency. A branch does not include:

(A) a remote

service unit;

(B) an office

which does not permit members of the public to have physical access for

purposes of making deposits, paying checks, or borrowing money;

(C) an office

which is located at the site of, or is an extension of, an approved main or

branch office;

(D) a loan

production office; or

(E) deposit

production office.

(11)

"Business of banking," "business of financial

institutions," or "banking business" means soliciting,

receiving, or accepting money or its equivalent on deposit and the loaning of

money as a regular business by any person.

(12)(A)

"Capital," for purposes of determining statutory limits that are

based on the amount of a bank's or financial institution's capital or surplus,

(i) means the

sum of the amount of common stock outstanding and unimpaired, the amount of

perpetual preferred stock outstanding and unimpaired, and the amount of capital

surplus, and undivided profits, for financial institutions organized as

corporations;

(ii) means the

sum of members' or partners' contributions and undistributed earnings of the

company or partnership, for financial institutions organized as limited

liability companies, limited partnerships, or limited liability partnerships;

or

(iii) means the

sum of capital deposits, surplus, and undivided earnings for all other

financial institutions.

(B) For purposes

of evaluating a Vermont depository institution's financial condition and safety

and soundness, "capital" shall be determined in accordance with

applicable federal regulations and interagency guidelines issued jointly by the

Federal Deposit Insurance Corporation, the Office of the Comptroller of the

Currency, the Board of Governors of the Federal Reserve System, and the Office

of Thrift Supervision.

(13)

"Charter" means the grant of authority to a financial institution

under state or federal law to operate as a financial institution.

(14) "Closely

related activities" mean those activities that are part of the business of

banking, are closely related to the business of banking, are convenient and

useful to the business of banking, are reasonably related to the operation of a

financial institution, or are financial in nature or incidental to such

financial activity. Closely related activities include, business and

professional services, data processing, courier and messenger services,

credit-related activities, consumer services, real estate-related services,

insurance and related services, securities brokerage, investment advice,

securities underwriting, mutual fund activities, financial consulting, tax

planning and preparation, community development and charitable activities, and

any activities reasonably related or incidental to these activities. A

"closely related activity" shall include:

(A) any activity

that may be authorized from time to time for financial institutions or their

service corporations or subsidiaries, including financial subsidiaries as

defined in Subdivision 5136A(g)(3) of Chapter One of Title XLII of the Revised

Statutes of the United States, to engage in pursuant to statutes administered

by the Board of Governors of the Federal Reserve System, the Office of the

Comptroller of the Currency, or the Office of Thrift Supervision; and

(B) any

additional activities that the Commissioner by rule or order determines to be a

"closely related activity."

(15)

"Commercial bank" means a bank or bank and trust company organized

under prior law of this State or the laws of the United States, another

country, or state, but does not include a special purpose financial institution

or similar entity.

(16)

"Commissioner" means the Commissioner of Financial Regulation.

(17)

"Control" means that a person, directly or indirectly or acting

through one or more other persons or through one or more subsidiaries, owns,

controls, or has power to vote 25 percent or more of any class of equity

interest of a financial institution; the person controls in any manner the

election of a majority of the directors of the financial institution; or that

the person directly or indirectly exercises a controlling influence over the

management or policies of the financial institution. For depository

institutions, control determinations may be made under the federal Bank Holding

Company Act of 1956, 12 U.S.C. § 1841 et seq., or the federal Change in Bank

Control Act, 12 U.S.C. 1817(j), or the Home Owners Loan Act, 12 U.S.C. § 1467a,

as applicable in the circumstances. For institutions that are not depository

institutions, control may be determined by the Commissioner.

(18)

"Cooperative financial institution" means any financial institution

organized pursuant to chapter 203 in which the earnings and net worth of the

institution inure to the ultimate benefit of the members.

(19)

"Day" means a calendar day unless otherwise expressly provided.

(20) "Debit

card" means a card, plate, or other device issued by a bank or financial

institution to a depositor for the purpose of drawing funds from a deposit

account, and which does not include any credit features other than (i)

provisions to maintain a minimum deposit account balance, or (ii) protection

against deposit account overdrafts.

(21)

"Department" means the Vermont Department of Financial Regulation.

(22)

"Deposit production office" means any place of business of a

financial institution at which information is distributed or assistance

provided in connection with the opening of new deposit accounts, provided that

any initial deposit of funds is made at the main office or an authorized branch

of the financial institution and not at such office.

(23)

"Depositors" of a financial institution, solely for the purposes of

chapter 210 of this title, include the holders of its regular savings accounts,

other savings accounts, NOW accounts, certificates of deposit and other

deposits having a fixed maturity, and all other accounts except noninterest

bearing demand deposits.

(24)

"Depository institution" shall mean an insured depository institution

within the meaning of 12 U.S.C. § 1813(c)(2).

(25)

"Director" means a member of the governing body of a financial

institution.

(26)

"Electronic banking" means conducting the business of banking and any

closely related activity electronically.

(27) "Equity

interest" means common stock, preferred stock, members' or partners'

interests, or any other type of capital instrument that entitles the holder to

vote pursuant to the financial institution's organizational documents;

provided, however, that this definition shall not be deemed to prohibit or

impair the creation of nonvoting classes of stock or other ownership interests

in a financial institution.

(28)

"Executive officer" shall have the same meaning as in Regulation O of

the Federal Reserve Board, 12 C.F.R. Part 215.

(29)

"Federal association" means a savings and loan association, savings

bank, or other financial institution organized pursuant to the Act of Congress

entitled "Home Owners' Loan Act of 1933", as amended.

(30)

"Federal Deposit Insurance Corporation" or "FDIC" shall

have the same meaning as in 12 U.S.C. § 1811.

(31)

"Fiduciary capacity" means every capacity specified in section 14401

of this title and every other capacity in which a financial institution acts or

may act through its trust department pursuant to chapter 204, subchapter 4 of

this title, including trusteeship with respect to collective investment funds.

(32)

"Financial institution" means any Vermont financial institution,

state financial institution, and national financial institution.

(33)

"Financial institution holding company" means any company which has

control over any financial institution or has control over any company which

controls any financial institution and shall include bank holding companies as

defined in subdivision (5) of this section and savings and loan holding

companies as defined in 12 U.S.C. § 1467a.

(34)

"Foreign bank" means any company organized under the laws of a

foreign country, a territory of the United States, Puerto Rico, Guam, American

Samoa or the Virgin Islands that engages directly in the banking business.

"Foreign bank" includes foreign commercial banks, foreign merchant

banks, and other foreign institutions that engage in usual banking activities

in connection with the banking business in the countries where the foreign

institutions are organized or operating.

(35)

"Governing body" means the body that oversees the affairs of a

financial institution. The governing body may also be referred to as the

"board of directors," "board of trustees," "board of

managers," "partners' committee," or "managing partners'

committee," depending upon the ownership structure of the financial

institution.

(36) "Home

state" means, for a national financial institution, the state in which the

main office of the national financial institution is deemed to be located; for

a state financial institution, the state by which the financial institution is

chartered; and for a foreign bank, the state of the United States that the

foreign bank has designated as its home state as determined in accordance with

12 U.S.C. § 3103(c).

(37) "Host

state" means a state, other than the home state of a bank or financial

institution, in which the bank or financial institution maintains or seeks to

establish and maintain a branch.

(38) "Investor"

means any person who has an equity interest in a financial institution and is

entitled to vote under the institution's organizational documents; provided,

however, that this definition shall not be deemed to prohibit or impair the ownership

rights of the holders of nonvoting classes of stock or other ownership

interests in a financial institution.

(39)

"Investor-owned institution" means a financial institution organized

under chapter 202 of this title.

(40) "Loan

production" means the business of a financial institution in which loans

or loan contracts are originated, but not approved, in this State.

(41)

"Mutual financial institution" or "mutual institution"

means any financial institution organized pursuant to chapter 203 of this

title, in which the earnings and net worth of the institution inure to the

ultimate benefit of the depositors.

(42)

"Mutual holding company" means, solely for the purposes of chapter

210 of this title, the corporation that continues in the mutual form as the

corporate parent of a stock financial institution resulting from the

reorganization of a mutual financial institution pursuant to chapter 210 of

this title.

(43)

"Mutual holding company subsidiary financial institution" means, for

purposes of chapter 210 of this title, an investor-owned financial institution

organized under chapter 202 of this title to receive the assets and liabilities

of a reorganizing mutual financial institution in accordance with the

provisions of chapter 210 of this title, and which will be a subsidiary of the

mutual holding company upon consummation of a reorganization under chapter 210

of this title.

(44)

"Mutual voter" means a corporator of a mutual financial institution

or member of a cooperative financial institution.

(45)

"National bank" means a commercial banking association or limited

purpose banking association organized pursuant to the Act of Congress entitled

"The National Bank Act," as amended, or any subsequent Act of

Congress relating thereto.

(46)

"National financial institution" means a national bank as defined in

subdivision (45) of this section or a federal association as defined in

subdivision (29).

(47)

"National trust company" means a national bank with powers generally

limited to trust or fiduciary matters.

(48)

"Nondepository trust company" means any Vermont financial institution

with powers generally limited to trust or fiduciary matters or any national

trust company, organized for the purpose of consolidation or reorganization of

trust operations pursuant to section 12602 of this title or organized as a

trust company under prior law.

(49)

"Officer" means a person who has been given managerial or other

high-level duties by the governing body or organizational documents of the

financial institution. Depending upon the ownership structure of the

institution, an officer may include a person with the title of chair,

president, secretary, vice president, treasurer, manager, managing partner, or

partner. For organizations that are not corporate in nature, the term secretary

shall refer to the person to whom the governing body has delegated

responsibility for the custody of the minutes of the meetings of the governing

body and the equity interest holders, and for authenticating records of the

organization.

(50)

"Operating subsidiary" means an entity which is owned in whole or in

part by a Vermont financial institution and whose activities are limited to the

business of banking and closely related activities and in which a financial

institution or financial institution holding company directly or indirectly

holds more than 50 percent of the equity interests, but not including any

equity interest:

(A) taken in

satisfaction of a debt previously contracted; or

(B) held in a

fiduciary capacity.

(51)

"Organizational document" means the charter, certificate of

organization, articles of incorporation, articles of association, articles of

organization, certificate of limited liability partnership, bylaws, or other

internal governance documents, operating agreement, partnership agreement, or

any other similar document required to be filed with and approved by the

Commissioner pursuant to section 12101 or 13101 of this title.

(52)

"Principal" means, with respect to a trust account, the individual or

entity to whom the financial institution ordinarily furnishes statements of

account and other customer communications regarding such trust account.

(53)

"Proprietary interests" of the depositors of a mutual or cooperative

financial institution refer to the proportionate inchoate interests that such

depositors have in the net worth of such financial institution, such interests

maturing and being realized upon the financial institution's liquidation and

after the claims of all creditors, including those of depositors as creditors,

have been satisfied. "Proprietary interests" of the depositors of a

subsidiary financial institution refer to the proportionate inchoate interests

that such depositors have in the net worth of the mutual holding company of which

such financial institution is a subsidiary, such interests maturing and being

realized upon the mutual holding company's liquidation and after the claims of

all creditors have been satisfied.

(54) "Real

estate-related services" means real estate investment and development,

including maintenance and management of improved real estate; real estate

appraising; real estate settlement services; real estate brokerage activities

with respect to properties owned by a financial institution authorized to do

business in this State, a bank holding company, or subsidiaries thereof,

regardless of how the property is acquired or for what purpose; or any real

estate-related service authorized by this title or by rule or order of the

Commissioner or any real estate-related service authorized for any financial

institution chartered by or otherwise subject to the jurisdiction of the

federal government.

(55)

"Remote Service Unit" or "RSU" means an automated,

unstaffed banking facility, such as an automated teller machine, cash dispensing

machine, point-of-sale terminal or other remote electronic facility, at which

deposits are received, cash disbursed, or money lent.

(56)

"Savings and loan association," "association,"

"cooperative savings and loan association," or "foreign building

and loan association" means a financial institution organized under the

prior laws of this State that is authorized to exercise the powers and subject

to the conditions and limitations on those powers set forth in chapter 204 of

this title.

(57)

"Savings bank" means a financial institution organized under the

prior laws of this State that is authorized to exercise the powers and subject

to the conditions and limitations on those powers set forth in chapter 204 of

this title.

(58)

"Service corporation" means a corporation substantially all the

activities of which consist of originating, purchasing, selling, and servicing

loans and participation interests therein; or clerical, bookkeeping,

accounting, and statistical or similar functions related to a financial institution

or real estate activities; or management, personnel, marketing, or investment

counseling related to a financial institution or real estate activities; or any

activity authorized by the Commissioner by rule or order that has not been

prohibited by federal law for service corporations.

(59)

"Special purpose financial institution" means an institution

authorized and operating pursuant to subchapter 6 of chapter 202 of this title

or other entity with the same or similar functions by whatever name that was

established prior to the effective date of this section.

(60) "State

financial institution" means a bank, bank and trust company, commercial

bank, industrial loan corporation that is a depository institution with

insurance by the Federal Deposit Insurance Corporation, limited or special

purpose bank, special purpose financial institution, savings and loan

association, savings bank, trust company, nondepository trust company, and

universal financial institution, or other entity with the same or similar functions

by whatever name that is organized under the laws of a state other than Vermont

or by special act of the legislature of a state other than Vermont and is

regulated by its home state in an equivalent manner to a Vermont financial

institution; however, trust company as used in this subdivision shall not

include an entity which is regulated by its home state in an equivalent manner

to an independent trust company as defined in chapter 77 of this title. Nothing

in this definition shall be deemed to be a grant of authority to any person to

operate as a financial institution unless otherwise authorized under law.

(61) "State

trust company" means a special purpose financial institution that is

organized under the laws of a state other than Vermont and whose business is

limited to trust or fiduciary powers as those powers are set forth in

subchapter 4 of chapter 204 of this title.

(62)

"Subsidiary" means an organization owned or controlled by a financial

institution or financial institution holding company.

(63)

"Supervisory agency" means:

(A) The banking

department or equivalent agency of a state;

(B) The Federal

Deposit Insurance Corporation;

(C) The National

Credit Union Administration;

(D) The Federal

Reserve Board;

(E) The Office

of Thrift Supervision;

(F) The Office

of the Comptroller of the Currency;

(G) Any

successor agency to any of the agencies enumerated in this section.

(64)

"Universal financial institution" means an investor-owned institution

or a mutual or cooperative financial institution authorized by its

organizational documents to exercise all the powers granted in chapter 204 of

this title and includes any bank, bank and trust company, commercial bank,

savings bank, and savings and loan association established prior to the

effective date of this section, pursuant to this title, or by special act of

the Legislature.

(65)

"Vermont financial institution" means a special purpose institution

or universal financial institution organized under the laws of the State of

Vermont.

(66)

"Derivative transaction" means any transaction that is a contract,

agreement, swap, warrant, note, or option that is based, in whole or in part,

on the value of any interest in or any quantitative measure or the occurrence

of any event relating to one or more commodities, securities, currencies,

interest, or other rates, indices, or other assets. (Added 1999, No. 153 (Adj.

Sess.), § 2, eff. Jan. 1, 2001; amended 2001, No. 73 (Adj. Sess.), § 2, eff.

Feb. 2, 2002; 2011, No. 78 (Adj. Sess.), §§ 2, 25, eff. April 2, 2012.)