Senate Bill sb2960

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    Florida Senate - 2004                                  SB 2960

    By Senator Alexander





    17-1577-04

  1                      A bill to be entitled

  2         An act relating to banking; amending s.

  3         494.0025, F.S.; prohibiting the use of the name

  4         or logo of a financial institution or its

  5         affiliates or subsidiaries under certain

  6         circumstances without written consent; amending

  7         s. 516.07, F.S.; providing that the use of the

  8         name or logo of a financial institution or its

  9         affiliates or subsidiaries under certain

10         circumstances without written consent is

11         grounds for denial of license or for

12         disciplinary action; amending s. 520.995, F.S.;

13         providing that the use of the name or logo of a

14         financial institution or its affiliates or

15         subsidiaries under certain circumstances

16         without written consent is grounds for

17         disciplinary action; amending s. 626.9541,

18         F.S.; providing that the deceptive use of a

19         name is an unfair method of competition and an

20         unfair or deceptive act or practice; amending

21         s. 655.005, F.S.; revising certain definitions

22         relating to financial institutions to include

23         the term "international branch"; amending s.

24         655.0322, F.S.; revising the definition of the

25         term "financial institution" to include an

26         international branch; amending s. 655.0385,

27         F.S.; clarifying requirements for notification

28         of the appointment of an executive director or

29         equivalent by state financial institutions;

30         requiring a nonrefundable fee to accompany

31         notification; amending s. 655.045, F.S.;

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 1         providing an exemption from audit requirements;

 2         amending s. 655.059, F.S.; providing for the

 3         inspection and examination of financial

 4         institution records and books pursuant to

 5         subpoena; providing for reimbursement of

 6         reasonable costs and fees for compliance;

 7         providing for setting the reimbursement amount

 8         when charges are contested; amending s.

 9         655.921, F.S.; prohibiting certain out-of-state

10         financial institutions from locating branch

11         offices in the state in order to qualify for

12         certain exempt transactions; deleting

13         provisions relating to authorization of offices

14         in the state; amending s. 655.922, F.S.;

15         clarifying provisions authorizing financial

16         institutions under another state's financial

17         codes to transact business in this state;

18         expanding the names or titles under which only

19         a financial institution may transact business;

20         prohibiting the use of the name or logo of a

21         financial institution or its affiliates or

22         subsidiaries under certain circumstances

23         without written consent; requiring the

24         Financial Services Commission to adopt rules;

25         amending s. 655.94, F.S.; deleting a

26         prohibition against certain notary publics

27         being involved in opening safety deposit boxes

28         for nonpayment of rent; requiring use of

29         certified mail instead of registered mail;

30         amending. s. 658.16, F.S.; providing criteria

31         for a bank or trust company chartered as a

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 1         limited liability company to be considered

 2         "incorporated" under the financial institutions

 3         codes; providing definitions; amending s.

 4         658.23, F.S.; correcting terminology; deleting

 5         a requirement for a current copy of the bylaws

 6         of a bank or trust company to be on file with

 7         the Office of Financial Regulation; amending s.

 8         658.26, F.S.; providing for state banks to

 9         relocate offices upon approval; providing that

10         certain financial institutions may establish or

11         relocate an office upon written notification;

12         providing requirements for notification and a

13         fee; requiring an application for relocation of

14         a main office outside the state; exempting

15         applications from publication in the Florida

16         Administrative Weekly; modifying requirements

17         for applications for branch offices by a bank

18         ineligible for branch notification; deleting a

19         requirement that such applications be published

20         in the Florida Administrative Weekly and be

21         subject to ch. 120, F.S.; requiring a

22         relocation application to be filed with the

23         Office of Financial Regulation; providing for a

24         filing fee, investigations, and restrictions

25         relating to such applications; amending s.

26         658.33, F.S.; adding to the list of persons who

27         must meet certain qualification levels;

28         providing for a waiver of qualification

29         requirements; amending s. 658.37, F.S.;

30         prohibiting an imminently insolvent bank from

31         paying dividends; amending s. 658.48, F.S.;

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 1         specifying limitations on making loans and

 2         extending credit by a bank declared to be

 3         imminently insolvent; amending s. 658.67, F.S.;

 4         providing multiple dates for the assessment of

 5         the value of property acquisition as security;

 6         amending s. 658.73, F.S.; delineating which

 7         entities or individuals must pay a fee for a

 8         certificate of good standing; amending s.

 9         663.16, F.S.; revising definitions to include

10         the term "branch" and to reduce the percentage

11         of voting stock necessary for consideration as

12         control; amending s. 663.304, F.S.; deleting a

13         requirement for reservation of a proposed

14         corporate name with the Department of State;

15         amending s. 665.034, F.S.; revising a

16         percentage designating control of an

17         association; amending s. 674.406, F.S.;

18         reducing the time that banks must retain

19         receipts of items; reducing the time within

20         which one must report unauthorized signatures;

21         providing a time limitation within which to

22         assert claims against a bank for an

23         unauthorized endorsement; repealing s. 658.68,

24         F.S., relating to liquidity requirements for a

25         state bank; providing an effective date.

26  

27  Be It Enacted by the Legislature of the State of Florida:

28  

29         Section 1.  Subsection (10) is added to section

30  494.0025, Florida Statutes, to read:

31  

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 1         494.0025  Prohibited practices.--It is unlawful for any

 2  person:

 3         (10)  To use the name or logo of a financial

 4  institution or its affiliates or subsidiaries when marketing

 5  or soliciting existing or prospective customers if such

 6  marketing materials are used without the written consent of

 7  the financial institution and in a manner that would lead a

 8  reasonable person to believe that the material or solicitation

 9  originated from, was endorsed by, or is related to or the

10  responsibility of the financial institution or its affiliates

11  or subsidiaries.

12         Section 2.  Paragraph (o) is added to subsection (1) of

13  section 516.07, Florida Statutes, to read:

14         516.07  Grounds for denial of license or for

15  disciplinary action.--

16         (1)  The following acts are violations of this chapter

17  and constitute grounds for denial of an application for a

18  license to make consumer finance loans and grounds for any of

19  the disciplinary actions specified in subsection (2):

20         (o)  Using the name or logo of a financial institution

21  or its affiliates or subsidiaries when marketing or soliciting

22  existing or prospective customers if such marketing materials

23  are used without the written consent of the financial

24  institution and in a manner that would lead a reasonable

25  person to believe that the material or solicitation originated

26  from, was endorsed by, or is related to or the responsibility

27  of the financial institution or its affiliates or

28  subsidiaries.

29         Section 3.  Paragraph (j) is added to subsection (1) of

30  section 520.995, Florida Statutes, to read:

31         520.995  Grounds for disciplinary action.--

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 1         (1)  The following acts are violations of this chapter

 2  and constitute grounds for the disciplinary actions specified

 3  in subsection (2):

 4         (j)  Using the name or logo of a financial institution

 5  or its affiliates or subsidiaries when marketing or soliciting

 6  existing or prospective customers if such marketing materials

 7  are used without the written consent of the financial

 8  institution and in a manner that would lead a reasonable

 9  person to believe that the material or solicitation originated

10  from, was endorsed by, or is related to or the responsibility

11  of the financial institution or its affiliates or

12  subsidiaries.

13         Section 4.  Paragraph (bb) is added to subsection (1)

14  of section 626.9541, Florida Statutes, to read:

15         626.9541  Unfair methods of competition and unfair or

16  deceptive acts or practices defined.--

17         (1)  UNFAIR METHODS OF COMPETITION AND UNFAIR OR

18  DECEPTIVE ACTS.--The following are defined as unfair methods

19  of competition and unfair or deceptive acts or practices:

20         (bb)  Deceptive use of name.--Using the name or logo of

21  a financial institution or its affiliates or subsidiaries when

22  marketing or soliciting existing or prospective customers if

23  such marketing materials are used without the written consent

24  of the financial institution and in a manner that would lead a

25  reasonable person to believe that the material or solicitation

26  originated from, was endorsed by, or is related to or the

27  responsibility of the financial institution or its affiliates

28  or subsidiaries.

29         Section 5.  Paragraphs (h) and (p) of subsection (1) of

30  section 655.005, Florida Statutes, are amended to read:

31         655.005  Definitions.--

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 1         (1)  As used in the financial institutions codes,

 2  unless the context otherwise requires, the term:

 3         (h)  "Financial institution" means a state or federal

 4  association, bank, savings bank, trust company, international

 5  bank agency, international branch, representative office or

 6  international administrative office, or credit union.

 7         (p)  "State financial institution" means a

 8  state-chartered or state-organized association, bank,

 9  investment company, trust company, international bank agency,

10  international branch, international representative office,

11  international administrative office, or credit union.

12         Section 6.  Subsection (1) of section 655.0322, Florida

13  Statutes, is amended to read:

14         655.0322  Prohibited acts and practices; criminal

15  penalties.--

16         (1)  As used in this section, the term "financial

17  institution" means a financial institution as defined in s.

18  655.50 which includes a state trust company, state or national

19  bank, state or federal association, state or federal savings

20  bank, state or federal credit union, Edge Act or agreement

21  corporation, international bank agency, international branch,

22  representative office or administrative office or other

23  business entity as defined by the commission by rule, whether

24  organized under the laws of this state, the laws of another

25  state, or the laws of the United States, which institution is

26  located in this state.

27         Section 7.  Section 655.0385, Florida Statutes, is

28  amended to read:

29         655.0385  Disapproval of directors and executive

30  officers.--

31  

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 1         (1)  Each state financial institution shall notify the

 2  office of the proposed appointment of any individual to the

 3  board of directors or the appointment or employment of any

 4  individual as an executive officer or equivalent position at

 5  least 60 days before such appointment or employment becomes

 6  effective, if the state financial institution:

 7         (a)  Has been chartered for less than 2 years;

 8         (b)  Has undergone a change in control or conversion

 9  within the preceding 2 years. The office may exempt a

10  financial institution from this paragraph if it operates in a

11  safe and sound manner;

12         (c)  Is not in compliance with the minimum capital

13  requirements applicable to such financial institution; or

14         (d)  Is otherwise operating in an unsafe and unsound

15  condition, as determined by the office, on the basis of such

16  financial institution's most recent report of condition or

17  report of examination.

18         (2)  A state financial institution may not appoint any

19  individual to the board of directors, or employ any individual

20  as an executive officer or equivalent position, if the office

21  issues a notice of disapproval with respect to that person.

22         (3)  The office shall issue a notice of disapproval if

23  the competence, experience, character, or integrity of the

24  individual to be appointed or employed indicates that it is

25  not in the best interests of the depositors, the members, or

26  the public to permit the individual to be employed by or

27  associated with the state financial institution.

28         (4)  Beginning 1 year after opening, each notification

29  of a proposed appointment of an individual to the board of

30  directors must be accompanied by a nonrefundable fee of $35.

31  

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 1         (5)(4)  The commission may adopt rules to implement

 2  this section.

 3         Section 8.  Subsection (3) of section 655.045, Florida

 4  Statutes, is amended to read:

 5         655.045  Examinations, reports, and internal audits;

 6  penalty.--

 7         (3)(a)  The board of directors of each state financial

 8  institution or, in the case of a credit union, the supervisory

 9  committee or audit committee shall perform or cause to be

10  performed, within each calendar year, an internal audit of

11  each state financial institution, subsidiary, or service

12  corporation and to file a copy of the report and findings of

13  such audit with the office on a timely basis.  Such internal

14  audit must include such information as the commission by rule

15  requires for that type of institution.

16         (b)  With the approval of the office, the board of

17  directors or, in the case of a credit union, the supervisory

18  committee may elect, in lieu of such periodic audits, to adopt

19  and implement an adequate continuous audit system and

20  procedure which must include full, adequate, and continuous

21  written reports to, and review by, the board of directors or,

22  in the case of a credit union, the supervisory committee,

23  together with written statements of the actions taken thereon

24  and reasons for omissions to take actions, all of which shall

25  be noted in the minutes and filed among the records of the

26  board of directors or, in the case of a credit union, the

27  supervisory committee.  If at any time such continuous audit

28  system and procedure, including the reports and statements,

29  becomes inadequate, in the judgment of the office, the state

30  financial institution shall promptly make such changes as may

31  

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 1  be required by the office to cause the same to accomplish the

 2  purpose of this section.

 3         (c)  Any de novo state financial institution open less

 4  than 4 months is exempt from the audit requirements of this

 5  section.

 6         Section 9.  Subsection (1) of section 655.059, Florida

 7  Statutes, is amended to read:

 8         655.059  Access to books and records; confidentiality;

 9  penalty for disclosure.--

10         (1)  The books and records of a financial institution

11  are confidential and shall be made available for inspection

12  and examination only:

13         (a)  To the office or its duly authorized

14  representative;

15         (b)  To any person duly authorized to act for the

16  financial institution;

17         (c)  To any federal or state instrumentality or agency

18  authorized to inspect or examine the books and records of an

19  insured financial institution;

20         (d)  With respect to an international banking

21  corporation, to the home-country supervisor of the

22  corporation, provided:

23         1.  The supervisor provides advance notice to the

24  office that the supervisor intends to examine the Florida

25  office of the corporation.

26         2.  The supervisor confirms to the office that the

27  purpose of the examination is to ensure the safety and

28  soundness of the corporation.

29         3.  The books and records pertaining to customer

30  deposit, investment, and custodial accounts are not disclosed

31  to the supervisor.

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 1         4.  At any time during the conduct of the examination,

 2  the office reserves the right to have an examiner present or

 3  to participate jointly in the examination.

 4  

 5  For purposes of this paragraph, "home-country supervisor"

 6  means the governmental entity in the corporation's home

 7  country with responsibility for the supervision and regulation

 8  of the corporation;

 9         (e)  As compelled by a court of competent jurisdiction,

10  pursuant to a subpoena issued pursuant to the Florida Rules of

11  Civil or Criminal Procedure or the Federal Rules of Civil

12  Procedure, or pursuant to a subpoena issued in accordance with

13  state or federal law. Prior to the production of the books and

14  records of a financial institution, the party seeking

15  production must reimburse the financial institution for the

16  reasonable costs and fees incurred in compliance with the

17  production. If the parties disagree regarding the amount of

18  reimbursement, the party seeking the records may request the

19  court or agency having jurisdiction to set the amount of

20  reimbursement;

21         (f)  As compelled by legislative subpoena as provided

22  by law, in which case the provisions of s. 655.057 apply;

23         (g)  Pursuant to a subpoena, to any federal or state

24  law enforcement or prosecutorial instrumentality authorized to

25  investigate suspected criminal activity;

26         (h)  As authorized by the board of directors of the

27  financial institution; or

28         (i)  As provided in subsection (2).

29         Section 10.  Section 655.921, Florida Statutes, is

30  amended to read:

31  

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 1         655.921  Transaction of business by out-of-state

 2  financial institutions; exempt transactions in the financial

 3  institutions codes.--

 4         (1)  Nothing in the financial institutions codes shall

 5  be construed to prohibit a financial institution having its

 6  principal place of business outside this state and not

 7  operating branches in this state from:

 8         (a)  Contracting in this state with any person to

 9  acquire from such person a part, or the entire, interest in a

10  loan that such person proposes to make, has heretofore made,

11  or hereafter makes, together with a like interest in any

12  security instrument covering real or personal property in the

13  state proposed to be given or hereafter or heretofore given to

14  such person to secure or evidence such loan.

15         (b)  Entering into mortgage servicing contracts with

16  persons authorized to transact business in this state and

17  enforcing in this state the obligations heretofore or

18  hereafter acquired by it in the transaction of business

19  outside this state or in the transaction of any business

20  authorized by this section.

21         (c)  Acquiring, holding, leasing, mortgaging,

22  contracting with respect to, or otherwise protecting,

23  managing, or conveying property in this state which has

24  heretofore or may hereafter be assigned, transferred,

25  mortgaged, or conveyed to it as security for, or in whole or

26  in part in satisfaction of, a loan or loans made by it or

27  obligations acquired by it in the transaction of any business

28  authorized by this section.

29         (d)  Making loans or committing to make loans to any

30  person located in this state and soliciting compensating

31  deposit balances in connection therewith.

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 1         (2)  No such financial institution shall be deemed to

 2  be transacting business in this state, or be required to

 3  qualify so to do, solely by reason of the performance of any

 4  of the acts or business authorized in this section. This

 5  section does not authorize or permit any such financial

 6  institution to maintain an office within the state.

 7         Section 11.  Section 655.922, Florida Statutes, is

 8  amended to read:

 9         655.922  Banking business by unauthorized persons; use

10  of name.--

11         (1)  No person other than a financial institution

12  authorized to do business in this state pursuant to the

13  financial institutions codes of any state or federal law

14  shall, in this state, engage in the business of soliciting or

15  receiving funds for deposit or of issuing certificates of

16  deposit or of paying checks; and no person shall establish or

17  maintain a place of business in this state for any of the

18  functions, transactions, or purposes mentioned in this

19  subsection.  Any person who violates the provisions of this

20  subsection is guilty of a felony of the third degree,

21  punishable as provided in s. 775.082, s. 775.083, or s.

22  775.084.  This subsection does not prohibit the issuance or

23  sale by a financial institution of traveler's checks, money

24  orders, or other instruments for the transmission or payment

25  of money, by or through employees or agents of the financial

26  institution off the financial institution's premises.

27         (2)  No person other than a financial institution

28  shall, in this state:

29         (a)  Transact business under any name or title,

30  including a corporate or fictitious name, trademark, or other

31  manner, that contains the words "bank," "banco," "banque,"

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 1  "banker," "banking," "trust company," "savings and loan

 2  association," "savings bank," or "credit union," or words of

 3  similar import, in any context or in any manner;

 4         (b)  Use any name, word, sign, symbol, or device in any

 5  context or in any manner; or

 6         (c)  Circulate or use any letterhead, billhead,

 7  circular, paper, or writing of any kind or otherwise advertise

 8  or represent in any manner,

 9  

10  which indicates or reasonably implies that the business being

11  conducted or advertised is the kind or character of business

12  transacted or conducted by a financial institution or which is

13  likely to lead any person to believe that such business is

14  that of a financial institution; however, the words "bank,"

15  "banker," "banking," "trust company," "savings and loan

16  association," "savings bank," or "credit union," or the plural

17  of any thereof, may be used by, and in the corporate or other

18  name or title of, any company which is or becomes a financial

19  institution holding company pursuant to federal law; any

20  subsidiary of any such financial institution holding company

21  which includes as a part of its name or title all or any part,

22  or abbreviations, of the name or title of the financial

23  institution holding company of which it is a subsidiary; any

24  trade organization or association, whether or not

25  incorporated, functioning for the purpose of promoting the

26  interests of financial institutions or financial institution

27  holding companies, the active members of which are financial

28  institutions or financial institution holding companies; and

29  any international development bank chartered pursuant to part

30  II of chapter 663.

31  

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 1         (3)  No person may use the name or logo of any

 2  financial institution or an affiliate or subsidiary thereof,

 3  or use a name similar to that of a financial institution or an

 4  affiliate or subsidiary thereof, to market or solicit business

 5  from a customer or prospective customer of such institution

 6  if:

 7         (a)  The solicitation is done without the written

 8  consent of the financial institution or its affiliate or

 9  subsidiary; and

10         (b)  A reasonable person would believe that the

11  materials originated from, are endorsed by, or are connected

12  with the financial institution or its affiliates or

13  subsidiaries.

14         (4)(3)  Any court, in a proceeding brought by the

15  office, by any financial institution the principal place of

16  business of which is in this state, or by any other person

17  residing, or whose principal place of business is located, in

18  this state and whose interests are substantially affected

19  thereby, may enjoin any person from violating any of the

20  provisions of this section.  For the purposes of this

21  subsection, the interests of a trade organization or

22  association are deemed to be substantially affected if the

23  interests of any of its members are so affected. In addition,

24  the office may issue and serve upon any person who violates

25  any of the provisions of this section a complaint seeking a

26  cease and desist order in accordance with the procedures and

27  in the manner prescribed by s. 655.033.

28         (5)(4)  Nothing in this section shall be construed to

29  prohibit the lawful establishment or the lawful operations of

30  a financial institution and nothing in this code shall be

31  construed to prohibit any advertisement or other activity in

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 1  this state by any person if such prohibition would contravene

 2  any applicable federal law which preempts the law of this

 3  state.

 4         (6)  The commission shall adopt rules to administer

 5  this section.

 6         Section 12.  Subsection (1) of section 655.94, Florida

 7  Statutes, is amended to read:

 8         655.94  Special remedies for nonpayment of rent.--

 9         (1)  If the rental due on a safe-deposit box has not

10  been paid for 3 months, the lessor may send a notice by

11  registered mail to the last known address of the lessee

12  stating that the safe-deposit box will be opened and its

13  contents stored at the expense of the lessee unless payment of

14  the rental is made within 30 days.  If the rental is not paid

15  within 30 days from the mailing of the notice, the box may be

16  opened in the presence of an officer of the lessor and of a

17  notary public who is not a director, officer, employee, or

18  stockholder of the lessor.  The contents shall be sealed in a

19  package by a notary public who shall write on the outside the

20  name of the lessee and the date of the opening. The notary

21  public shall execute a certificate reciting the name of the

22  lessee, the date of the opening of the box, and a list of its

23  contents.  The certificate shall be included in the package,

24  and a copy of the certificate shall be sent by certified

25  registered mail to the last known address of the lessee.  The

26  package shall then be placed in the general vaults of the

27  lessor at a rental not exceeding the rental previously charged

28  for the box.  The lessor has a lien on the package and its

29  contents to the extent of any rental due and owing plus the

30  actual, reasonable costs of removing the contents from the

31  safe-deposit box.

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 1         Section 13.  Section 658.16, Florida Statutes, is

 2  amended to read:

 3         658.16  Creation of banking or trust corporation.--

 4         (1)  When authorized by the office, as provided herein,

 5  a corporation may be formed under the laws of this state for

 6  the purpose of becoming a state bank or a state trust company

 7  and conducting a general banking or trust business.

 8         (2)  A bank or trust company that is chartered as a

 9  limited liability company under the law of any state is deemed

10  to be incorporated under the financial institutions codes if:

11         (a)  The institution is not subject to automatic

12  termination, dissolution, or suspension upon the occurrence of

13  an event including the death, disability, bankruptcy,

14  expulsion, or withdrawal of an owner of the institution, other

15  than the passage of time;

16         (b)  The exclusive authority to manage the institution

17  is vested in a board of managers or directors that is elected

18  or appointed by the owners which operates in substantially the

19  same manner as, and has substantially the same rights, powers,

20  privileges, duties, and responsibilities, as a board of

21  directors of a bank or trust company chartered as a

22  corporation; and

23         (c)  Neither the laws of the state of the institution's

24  organization nor the institution's operating agreement,

25  bylaws, or other organizational documents:

26         1.  Provide that an owner of the institution is liable

27  for the debts, liabilities, or obligations of the institution

28  in excess of the amount of the owner's investment; or

29         2.  Require the consent of any other owner of the

30  institution in order for an owner to transfer an ownership

31  interest in the institution, including voting rights.

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 1         (3)  As used in the financial institutions codes, the

 2  term:

 3         (a)  "Stockholder" or "shareholder" includes an owner

 4  of any interest in a bank or trust company chartered as a

 5  limited liability company, including a member or participant;

 6         (b)  "Director" includes a manager or director of a

 7  bank or trust company chartered as a limited liability

 8  company, or other person who has, with respect to such a bank

 9  or trust company, authority substantially similar to that of a

10  director of a corporation;

11         (c)  "Officer" includes an officer of a bank or trust

12  company chartered as a limited liability company, or other

13  person who has, with respect to such a bank or trust company,

14  authority substantially similar to that of an officer of a

15  corporation;

16         (d)  "Stock," "voting stock," "voting shares," and

17  "voting securities" includes similar ownership interests in a

18  bank or trust company chartered as a limited liability

19  company, including certificates or other evidence of ownership

20  interests;

21         (e)  "Articles of incorporation" or "bylaws" of a bank

22  or trust company chartered as a limited liability company

23  means the institution's articles of organization and operating

24  agreement or other organizational documentation that is

25  substantially similar to that of a corporation;

26         (f)  "Par value" of any ownership interest in a bank or

27  trust company chartered as a limited liability company means

28  the amount of capital which must be invested for each unit of

29  ownership; and

30  

31  

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 1         (g)  "Dividend" includes distributions of earnings to

 2  the owners of a bank or trust company chartered as a limited

 3  liability company.

 4         Section 14.  Subsection (5) of section 658.23, Florida

 5  Statutes, is amended to read:

 6         658.23  Submission of articles of incorporation;

 7  contents; form; approval; filing; commencement of corporate

 8  existence; bylaws.--

 9         (5)  Unless the articles of incorporation provide

10  otherwise, the board of directors shall have authority to

11  adopt or amend bylaws that do not conflict with bylaws that

12  may have been adopted by the stockholders.  The bylaws shall

13  be for the governance government of the bank or trust company,

14  subordinate only to the articles of incorporation and the laws

15  of the United States and of this state. A current copy of the

16  bylaws shall be filed with the office at all times.

17         Section 15.  Section 658.26, Florida Statutes, is

18  amended to read:

19         658.26  Places of transacting business; branches;

20  facilities.--

21         (1)  Any bank or trust company heretofore or hereafter

22  incorporated pursuant to this chapter shall have one main

23  office, which shall be located within the state.

24         (2)(a)  In addition, with the approval of the office

25  and upon such conditions as the commission or office

26  prescribes, any state bank or trust company may establish

27  branches or relocate offices within or outside the state. With

28  the approval of the office upon a determination that the

29  resulting bank or trust company will be of sound financial

30  condition, any bank or trust company incorporated pursuant to

31  

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 1  this chapter may establish branches by merger with any other

 2  bank or trust company.

 3         (b)  As provided by commission rules, a financial

 4  institution operating in a safe and sound manner may establish

 5  or relocate an office by filing a written notice with the

 6  office at least 30 days before opening or relocating that

 7  office, without filing an application or paying an application

 8  fee. The notification must specify the name and location of

 9  the office and effective date of the change. The relocation of

10  a main office to a location outside this state must be by

11  application only.

12         (c)  Applications filed pursuant to this subsection

13  need not be published in the Florida Administrative Weekly,

14  but shall otherwise be subject to chapter 120.

15         (d)(b)  An application to establish for a branch by a

16  bank that is ineligible does not meet the requirements for the

17  branch notification process shall be in writing in such form

18  as the commission prescribes and be supported by such

19  information, data, and records as the commission or office may

20  require to make findings necessary for approval. Applications

21  filed pursuant to this subsection shall not be published in

22  the Florida Administrative Weekly but shall otherwise be

23  subject to the provisions of chapter 120. Upon the filing of

24  an application and a nonrefundable filing fee for the

25  establishment of any branch permitted by paragraph (a), the

26  office shall make an investigation with respect to compliance

27  with the requirements of paragraph (a) and shall investigate

28  and consider all factors relevant to such requirements,

29  including the following:

30         1.  The sufficiency of capital accounts in relation to

31  the deposit liabilities of the bank, or in relation to the

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 1  number and valuation of fiduciary accounts of the trust

 2  company, including the proposed branch, and the additional

 3  fixed assets, if any, which are proposed for the branch and

 4  its operations, without undue risk to the bank or its

 5  depositors, or undue risk to the trust company or its

 6  fiduciary accounts;

 7         2.  The sufficiency of earnings and earning prospects

 8  of the bank or trust company to support the anticipated

 9  expenses and any anticipated operating losses of the branch

10  during its formative or initial years;

11         3.  The sufficiency and quality of management available

12  to operate the branch;

13         4.  The name of the proposed branch to determine if it

14  reasonably identifies the branch as a branch of the main

15  office and is not likely to unduly confuse the public; and

16         5.  Substantial compliance by the applicants with

17  applicable law governing their operations.

18         (e)(c)  A state bank that is not eligible for

19  notification of a branch relocation must file an application

20  in the form required by the commission. Upon the filing of a

21  relocation application and a nonrefundable filing fee, the

22  office shall investigate to determine whether the financial

23  institution has substantially complied with applicable law

24  governing its operations. Additional investments in land,

25  buildings, leases, and leasehold improvements resulting from

26  such relocation must comply with the limitations imposed by s.

27  658.67(7)(a). A main office may not be moved outside this

28  state unless the move is expressly authorized by the financial

29  institutions codes or by federal law. A financial institution

30  that has been in operation for less than 24 months must

31  provide evidence that the criteria of s. 658.21(1) will be

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 1  met. As provided by commission rule, a financial institution

 2  operating in a safe and sound manner may establish a branch by

 3  filing a written notice with the office at least 30 days

 4  before opening that branch. In such case, the financial

 5  institution need not file a branch application or pay a branch

 6  application fee.

 7         (3)(a)  An office in this state may be relocated with

 8  prior written approval of the office. An application for

 9  relocation shall be in writing in such form as the commission

10  prescribes and shall be supported by such information, data,

11  and records as the commission or office may require to make

12  findings necessary for approval.

13         (b)  Applications filed pursuant to this subsection

14  shall not be published in the Florida Administrative Weekly

15  but shall otherwise be subject to the provisions of chapter

16  120. Upon the filing of a relocation application and a

17  nonrefundable filing fee, the office shall investigate to

18  determine substantial compliance by the financial institution

19  with applicable law governing its operations. Additional

20  investments in land, buildings, leases, and leasehold

21  improvements resulting from such relocation shall comply with

22  the limitations imposed by s. 658.67(7)(a). A main office may

23  not be moved outside this state unless expressly authorized by

24  the financial institutions codes or by federal law.

25         (c)  A relocation application filed by a state bank or

26  trust company that is operating in a safe and sound manner

27  which is not denied within 10 working days after receipt shall

28  be deemed approved unless the office notifies the financial

29  institution in writing that the application was not complete.

30         (d)  In addition to the application required by

31  paragraph (a), a financial institution whose main office in

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 1  this state has been in operation less than 24 months must

 2  provide evidence that the criteria of s. 658.21(1) will be

 3  met.

 4         (e)  A branch office may be closed with 30 days' prior

 5  written notice to the office. The notice shall include any

 6  information the commission prescribes by rule.

 7         (3)(4)  With prior written notification to the office,

 8  any bank may operate facilities which are not physically

 9  connected to the main or branch office of the bank, provided

10  that the facilities are situated on the property of the main

11  or branch office or property contiguous thereto. Property

12  which is separated from the main or branch office of a bank by

13  only a street, and one or more walkways and alleyways are

14  determined to be, for purposes of this subsection, contiguous

15  to the property of the main or branch office.

16         (4)(5)  A bank may provide, directly or through a

17  contract with another company, off-premises armored car

18  service to its customers. Armored car services shall not be

19  considered a branch for the purposes of subsection (2).

20         (5)(6)(a)  Any state bank that is a subsidiary of a

21  bank holding company may agree to receive deposits, renew time

22  deposits, close loans, service loans, and receive payments on

23  loans and other obligations, as an agent for an affiliated

24  depository institution.

25         (b)  The term "close loan" does not include the making

26  of a decision to extend credit or the extension of credit.

27         (c)  As used in this section, "receive deposits" means

28  the taking of deposits to be credited to an existing account

29  and does not include the opening or origination of new deposit

30  accounts at an affiliated institution by the agent

31  institution.

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 1         (d)  Under this section, affiliated banks may act as

 2  agents for one another regardless of whether the institutions

 3  are located in the same or different states. This section

 4  applies solely to affiliated depository institutions acting as

 5  agents, and has no application to agency relationships

 6  concerning nondepositories as agent, whether or not affiliated

 7  with the depository institution.

 8         (e)  In addition, under this section, agent banks may

 9  perform ministerial functions for the principal bank making a

10  loan. Ministerial functions include, but are not limited to,

11  such activities as providing loan applications, assembling

12  documents, providing a location for returning documents

13  necessary for making the loan, providing loan account

14  information, and receiving payments. It does not include such

15  loan functions as evaluating applications or disbursing loan

16  funds.

17         Section 16.  Subsection (5) of section 658.33, Florida

18  Statutes, is amended to read:

19         658.33  Directors, number, qualifications; officers.--

20         (5)  The president, or chief executive officer, or any

21  other person, regardless of title, who has equivalent rank or

22  leads the overall operations of a bank or trust company must

23  have had at least 1 year of direct experience as an executive

24  officer, director, or regulator of a financial institution

25  within the last 3 years. This requirement may be waived by the

26  office after considering the overall experience and expertise

27  of the proposed officer and the condition of the bank or trust

28  company, as reflected in the most recent regulatory

29  examination report and other available data.

30         Section 17.  Section 658.37, Florida Statutes, is

31  amended to read:

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 1         658.37  Dividends and surplus.--

 2         (1)  The directors of any bank or trust company, after

 3  charging off bad debts, depreciation, and other worthless

 4  assets if any, and making provision for reasonably anticipated

 5  future losses on loans and other assets, may quarterly,

 6  semiannually, or annually declare a dividend of so much of the

 7  aggregate of the net profits of that period combined with its

 8  retained net profits of the preceding 2 years as they shall

 9  judge expedient, and, with the approval of the office, any

10  bank or trust company may declare a dividend from retained net

11  profits which accrued prior to the preceding 2 years, but each

12  bank or trust company shall, before the declaration of a

13  dividend on its common stock, carry 20 percent of its net

14  profits for such preceding period as is covered by the

15  dividend to its surplus fund, until the same shall at least

16  equal the amount of its common and preferred stock then issued

17  and outstanding. No bank or trust company shall declare any

18  dividend at any time at which its net income from the current

19  year combined with the retained net income from the preceding

20  2 years is a loss or which would cause the capital accounts of

21  the bank or trust company to fall below the minimum amount

22  required by law, regulation, order, or any written agreement

23  with the office or a state or federal regulatory agency. A

24  bank or trust company may, however, split up or divide the

25  issued shares of capital stock into a greater number of shares

26  without increasing or decreasing the capital accounts of the

27  bank or trust company, and such shall not be construed to be a

28  dividend within the meaning of this section.

29         (2)  A bank that has been determined to be imminently

30  insolvent may not pay a dividend.

31  

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 1         Section 18.  Present subsection (10) of section 658.48,

 2  Florida Statutes, is redesignated as subsection (11), and a

 3  new subsection (10) is added to that section, to read:

 4         658.48  Loans.--A state bank may make loans and

 5  extensions of credit, with or without security, subject to the

 6  following limitations and provisions:

 7         (10)  IMMINENTLY INSOLVENT BANK.--When the office has

 8  determined that a state bank is imminently insolvent, the bank

 9  may not make any new loans or discounts other than by

10  discounting or purchasing bills of exchange payable at sight.

11         Section 19.  Paragraph (a) of subsection (9) of section

12  658.67, Florida Statutes, is amended to read:

13         658.67  Investment powers and limitations.--A bank may

14  invest its funds, and a trust company may invest its corporate

15  funds, subject to the following definitions, restrictions, and

16  limitations:

17         (9)  ACQUISITIONS OF PROPERTY AS SECURITY.--A bank or

18  trust company may acquire property of any kind to secure,

19  protect, or satisfy a loan or investment previously made in

20  good faith, and such property shall be entered on the books of

21  the bank or trust company and held and disposed of subject to

22  the following conditions and limitations:

23         (a)  The book entry shall be the lesser of the balance

24  of the loan or investment plus acquisition costs and accrued

25  interest or the appraisal value or market value of the

26  property acquired which shall be determined and dated within 1

27  year prior to or 90 days after the date of acquisition and in

28  compliance with s. 655.60.

29         Section 20.  Subsection (4) of section 658.73, Florida

30  Statutes, is amended to read:

31         658.73  Fees and assessments.--

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 1         (4)  Any individual or entity other than a financial

 2  institution chartered in this state must Each state bank and

 3  state trust company shall pay to the office $25 for each

 4  "certificate of good standing" certifying that a

 5  state-chartered financial institution is licensed to conduct

 6  business in this state under the financial institutions codes.

 7  All such requests shall be in writing. The office shall waive

 8  this fee when the request is by a state or federal regulatory

 9  agency or law enforcement agency.

10         Section 21.  Subsections (4) and (7) of section 663.16,

11  Florida Statutes, are amended to read:

12         663.16  Definitions; ss. 663.17-663.181.--As used in

13  ss. 663.17-663.181, the term:

14         (4)  Except where the context otherwise requires,

15  "international banking corporation" or "corporation" means any

16  international bank agency or branch operating in this state.

17         (7)  "Control" means any person or group of persons

18  acting in concert, directly or indirectly, owning,

19  controlling, or holding the power to vote 25 more than 50

20  percent or more of the voting stock of a company, or having

21  the ability in any manner to elect a majority of directors of

22  a corporation, or otherwise exercising a controlling influence

23  over the management and policies of a corporation as

24  determined by the office.

25         Section 22.  Subsection (1) of section 663.304, Florida

26  Statutes, is amended to read:

27         663.304  Application for authority to organize an

28  international development bank.--

29         (1)  A written application for authority to organize an

30  international development bank shall be filed with the office

31  by the proposed incorporator and shall include:

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 1         (a)  The name, residence, and occupation of each

 2  incorporator and proposed director.

 3         (b)  The proposed corporate name and evidence of

 4  reservation of the proposed corporate name with the Department

 5  of State.

 6         (b)(c)  The total initial capital and the number of

 7  shares of capital stock to be authorized.

 8         (c)(d)  The location, by street and post-office address

 9  and county, of the principal office of the proposed

10  international development bank.

11         (d)(e)  If known, the name and residence of the

12  proposed president and the proposed chief executive officer,

13  if other than the proposed president.

14         (e)(f)  Such detailed financial, business, and

15  biographical information as the commission or office may

16  reasonably require for each proposed director and for the

17  proposed president and the proposed chief executive officer,

18  if other than the president.

19         Section 23.  Paragraph (a) of subsection (4) of section

20  665.034, Florida Statutes, is amended to read:

21         665.034  Acquisition of assets of or control over an

22  association.--

23         (4)  For purposes of this section, a person or group of

24  persons shall be deemed to have control of an association if

25  such person or group of persons:

26         (a)  Directly or indirectly, or acting in concert with

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

28  controls, holds with powers to vote, or holds proxies

29  representing more than 25 percent or more of the voting common

30  stock of such association.

31  

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 1         Section 24.  Subsections (2) and (6) of section

 2  674.406, Florida Statutes, are amended to read:

 3         674.406  Customer's duty to discover and report

 4  unauthorized signature or alteration.--

 5         (2)  If the items are not returned to the customer, the

 6  person retaining the items shall either retain the items or,

 7  if the items are destroyed, maintain the capacity to furnish

 8  legible copies of the items until the expiration of 5 7 years

 9  after receipt of the items. A customer may request an item

10  from the bank that paid the item, and that bank must provide

11  in a reasonable time either the item or, if the item has been

12  destroyed or is not otherwise obtainable, a legible copy of

13  the item.

14         (6)  Without regard to care or lack of care of either

15  the customer or the bank, a customer who does not within 90

16  days 1 year after the statement or items are made available to

17  the customer (subsection (1)) discover and report the

18  customer's unauthorized signature on or any alteration on the

19  item or who does not, within 1 year after that time, discover,

20  and report any unauthorized endorsement is precluded from

21  asserting against the bank the unauthorized signature or

22  alteration.  If there is a preclusion under this subsection,

23  the payor bank may not recover for breach of warranty under s.

24  674.2081 with respect to the unauthorized signature or

25  alteration to which the preclusion applies.

26         Section 25.  Section 658.68, Florida Statutes, is

27  repealed.

28         Section 26.  This act shall take effect July 1, 2004.

29  

30  

31  

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 1            *****************************************

 2                          SENATE SUMMARY

 3    Prohibits the unauthorized use of the names or logos of
      certain financial institutions and provides penalties for
 4    such use. Revises certain definitions to include the term
      "international branch." Clarifies certain provisions
 5    regarding notification of the appointment of directors
      and others. Provides for a fee. Provides an exemption
 6    from audit requirements. Provides for records inspections
      pursuant to subpoenas. Provides for cost reimbursement
 7    for such inspections. Prohibits certain institutions from
      locating offices in this state under certain
 8    circumstances. Conforms provisions. Provides additional
      names under which financial institutions may operate.
 9    Provides for the Financial Services Commission to adopt
      rules. Deletes provisions prohibiting certain notaries
10    from opening safe deposit boxes. Revises mailing
      requirements. Prohibits certain limited liability
11    companies from operating as corporations. Deletes certain
      bylaws concerning filing requirements. Provides for the
12    relocation of certain offices upon written notification.
      Exempts certain applications from publication
13    requirements. Modifies certain branch office application
      requirements. Provides for certain persons to meet
14    specified qualification levels. Provides for a waiver.
      Prohibits imminently insolvent banks from taking certain
15    actions and limits their operational powers. Provides for
      a fee and revises certain definitions to include
16    branches. Deletes a name reservation requirement. Revises
      a percentage requirement for control of an association.
17    Reduces the time within which a person can report
      unauthorized endorsements or assert claims for such acts.
18    Repeals certain state bank liquidity requirements. (See
      bill for details.)
19  

20  

21  

22  

23  

24  

25  

26  

27  

28  

29  

30  

31  

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