PRIOR PRINTER'S NO. 3417 PRINTER'S NO. 3516
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, 19940H2650B3516 - 2 -
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 19940H2650B3516 - 3 -
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,
19940H2650B3516 - 4 -
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 19940H2650B3516 - 5 -
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. <-- C22L07JAM/19940H2650B3516 - 6 -