PRIOR PRINTER'S NO. 3417                      PRINTER'S NO. 3516

THE GENERAL ASSEMBLY OF PENNSYLVANIA


HOUSE BILL

No. 2650 Session of 1994


        INTRODUCED BY LESCOVITZ, CESSAR, COY, WOZNIAK, OLASZ, GODSHALL,
           McCALL AND M. N. WRIGHT, MARCH 23, 1994

        AS REPORTED FROM COMMITTEE ON BUSINESS AND ECONOMIC DEVELOPMENT,
           HOUSE OF REPRESENTATIVES, AS AMENDED, APRIL 12, 1994

                                     AN ACT

     1  Amending the act of November 30, 1965 (P.L.847, No.356),
     2     entitled "An act relating to and regulating the business of
     3     banking and the exercise by corporations of fiduciary powers;
     4     affecting persons engaged in the business of banking and
     5     corporations exercising fiduciary powers and affiliates of
     6     such persons; affecting the shareholders of such persons and
     7     the directors, trustees, officers, attorneys and employes of
     8     such persons and of the affiliates of such persons; affecting
     9     national banks located in the Commonwealth; affecting persons
    10     dealing with persons engaged in the business of banking,
    11     corporations exercising fiduciary powers and national banks;
    12     conferring powers and imposing duties on the Banking Board,
    13     on certain departments and officers of the Commonwealth and
    14     on courts, prothonotaries, clerks and recorders of deeds;
    15     providing penalties; and repealing certain acts and parts of
    16     acts," further providing for mergers, consolidations and
    17     conversions of savings banks.

    18     The General Assembly of the Commonwealth of Pennsylvania
    19  hereby enacts as follows:
    20     Section 1.  Section 1609(a) and (b) of the act of November
    21  30, 1965 (P.L.847, No.356), known as the Banking Code of 1965,
    22  amended July 6, 1984 (P.L.606, No.125), July 6, 1984 (P.L.621,
    23  No.128), July 10, 1986 (P.L.1393, No.119), December 18, 1986
    24  (P.L.1702, No.205) and December 18, 1990 (P.L.766, No.191), are
    25  amended to read:

     1  Section 1609.  Mergers, Consolidations and Conversions of
     2                 Savings Banks
     3     (a)  Authority to merge, consolidate or convert--
     4         (i)  upon compliance with the requirements of sections
     5     1602, 1603, 1604, 1605 and 1606, a savings bank may enter
     6     into a merger or consolidation with one or more other savings
     7     banks. In the event the book value of the total assets of the
     8     acquired savings bank is less than one percent in excess of
     9     the book value of the total liabilities, the resulting
    10     institution may maintain as a branch, any office operated by
    11     the acquired institution.
    12         (ii)  upon compliance with the requirements of this
    13     section and other applicable law, one or more savings banks
    14     and one or more associations may merge into a savings bank or
    15     into an association or consolidate into a new savings bank or
    16     a new association. The word "association" in this chapter
    17     shall mean an association subject to the Savings Association
    18     Code of 1967.
    19         (iii)  upon compliance with the requirements of this
    20     section and other applicable law,
    21             (A)  one or more savings banks, one or more Federal
    22         savings banks and one or more Federal savings and loan
    23         associations may merge into a savings bank, Federal
    24         savings bank or a Federal savings and loan association or
    25         consolidate into a new savings bank, a new Federal
    26         savings bank or a new Federal savings and loan
    27         association,
    28             (B)  one or more savings banks may merge or
    29         consolidate with a regional thrift institution, and,
    30         after March 4, 1990, with a foreign thrift institution,
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     1         as those terms are defined in and subject to any
     2         applicable limits of section 117, and
     3             (C)  a business corporation which owns all of the
     4         issued and outstanding shares of a savings bank may merge
     5         into such savings bank.
     6         (iv)  the authority of a savings bank to merge or
     7     consolidate into a Federal savings bank or Federal savings
     8     and loan association shall be subject to the condition that
     9     at the time of the transaction the laws of the United States
    10     shall authorize a Federal savings bank or Federal savings and
    11     loan association to merge or consolidate into a savings bank.
    12         (v)  upon compliance with the requirements of this
    13     section and other applicable law,
    14             (A)  a savings bank may be converted into an
    15         association,
    16             (B)  a savings bank may be converted into a Federal
    17         savings bank or a Federal savings and loan association,
    18         subject to the condition that at the time of the
    19         transaction the laws of the United States shall authorize
    20         a Federal savings bank or a Federal savings and loan
    21         association to convert into a savings bank, or
    22             (C)  an association may convert to a savings bank. An
    23         association whose deposits were insured by the
    24         Pennsylvania Savings Association Insurance Corporation
    25         prior to conversion may maintain all existing branches
    26         operating at the time application for conversion is made
    27         if the application is made within ninety days of the
    28         effective date of this subclause.
    29         (vi)  upon compliance with the requirements of this
    30     section and other applicable law and subject to the laws of
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     1     the United States, a Federal savings bank or a Federal
     2     savings and loan association may be converted into a savings
     3     bank or an association.
     4         (vii)  upon compliance with the requirements of this
     5     section, a mutual savings bank may be converted into a stock
     6     savings bank. A stock savings bank shall have authority, upon
     7     compliance with the requirements of this section, to enter
     8     into a merger or consolidation with one or more other stock
     9     savings banks, banks, national banking associations, bank and
    10     trust companies, trust companies or stock savings and loan
    11     associations.
    12         (viii)  all mergers, consolidations and conversions in
    13     which the resulting corporation is a savings bank or an
    14     association shall be subject to the approval of the
    15     department.
    16     (b)  Requirements for a merger, consolidation or conversion--
    17  The requirements for a merger, consolidation or conversion under
    18  clauses (ii), (iii), (v), (vi) or (vii) of subsection (a) which
    19  must be satisfied by the parties thereto are as follows:
    20         (i)  the parties shall adopt a plan stating the method,
    21     terms and conditions of the merger, consolidation or
    22     conversion, including the rights under the plan of the
    23     members, depositors and shareholders, if any, of each of the
    24     parties, and any agreement concerning the merger or
    25     consolidation.
    26         (ii)  if the proposed merger, consolidation or conversion
    27     will result in a Federal savings bank, a savings bank, a
    28     Federal savings and loan association or an association,
    29     adoption of the plan by each party thereto shall require the
    30     affirmative vote,
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     1             (A)  in the case of a mutual savings bank, of at
     2         least two-thirds of the trustees present at a meeting at
     3         which the plan is proposed, and two-thirds of all the
     4         trustees at a subsequent meeting held upon not less than
     5         ten days' notice to all the trustees,
     6             (B)  in the case of a stock savings bank, of at least
     7         a majority of the trustees, at a meeting held upon not
     8         less than ten days' notice to all the trustees, and of
     9         the shareholders entitled to cast at least two-thirds of
    10         the votes which all shareholders are entitled to cast
    11         thereon, at a meeting held upon not less than ten days'
    12         notice to all shareholders,
    13             (C)  in the case of a Federal savings bank, a Federal
    14         savings and loan association or an association, of two-
    15         thirds of the entire membership of the board of
    16         directors,
    17             (D)  in the case of any other party, such vote as is
    18         required by law for merger, consolidation or conversion,
    19         and
    20             (E)  in the case of the notice required to be given
    21         to the trustees of a savings bank and to the shareholders
    22         of a stock savings bank shall include a copy or summary
    23         of the plan. The department may require such vote of the
    24         members of an association as it deems proper.
    25         (iii)  any modification of a plan which has been adopted
    26     shall be made by any method provided therein, or in the
    27     absence of such provision by the same vote as that required
    28     for adoption.
    29         (iv)  if a proposed merger, consolidation or conversion
    30     will result in a savings bank or an association, an
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     1     application for the required approval thereof by the
     2     department shall be made in a manner prescribed by the
     3     department. The department may require notice to be given to
     4     such persons as it designates. There shall also be delivered
     5     to the department:
     6             (A)  articles of merger, consolidation or conversion,
     7             (B)  applicable fees payable to the department in
     8         connection with the articles and with the conduct of the
     9         investigation required by subsection (e),
    10             (C)  if the resulting corporation is an association,
    11         any documents or other items required under the Savings
    12         Association Code of 1967.
    13             (D)  if the proposed name of the resulting savings
    14         bank or association is not identical with the name of one
    15         of the parties to the plan, evidence of reservation of
    16         such name in the Department of State, and
    17             (E)  if there is any modification of the plan at any
    18         time prior to the approval by the department, an
    19         amendment of the application and, if necessary, of the
    20         articles, signed in the same manner as the originals,
    21         setting forth the modification of the plan, the method by
    22         which such modification was adopted and any related
    23         change in the provisions of the articles of merger,
    24         consolidation or conversion.
    25         (v)  If a proposed merger, consolidation or conversion
    26     will result in a national banking association, all
    27     requirements of the applicable Federal law shall be met.
    28     * * *
    29     Section 2.  This act shall take effect in 60 days              <--
    30  IMMEDIATELY.                                                      <--
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