This chapter is known and may be cited as the “Bank Extraordinary Situation Closing Act.”
Chapter 4.5Bank Extraordinary Situation Closing
Section § 1090
This law is called the “Bank Extraordinary Situation Closing Act.” It deals with allowing banks to close during unusual or extreme situations.
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Section § 1091
An 'extraordinary situation' refers to any event or condition, not covered by Section 592, that disrupts normal banking activities or threatens the safety or security of people or property at one or more bank locations.
“Extraordinary situation” means any condition or occurrence, other than as set forth in Section 592, that may interfere or is inconsistent with the conduct of normal business operations at one or more offices of a bank or which poses a threat to the safety or security of persons or property, or both.
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Section § 1092
This law allows the commissioner to permit banks in areas affected by extraordinary situations, like natural disasters or emergencies, to close their offices temporarily. The closures last until the commissioner declares the situation is over, or until the bank's officers decide to reopen, depending on what's needed to safely resume operations.
Whenever the commissioner determines that an extraordinary situation exists anywhere in this state the commissioner may, by proclamation, authorize banks located in the affected area or areas to close any or all of their offices. The office or offices so closed shall remain closed until the commissioner proclaims that the extraordinary situation has ended or until such earlier time as the officers of the bank determine that one or more closed offices should reopen and in either event for
such further time thereafter as may reasonably be required to reopen.
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Section § 1093
This law explains when bank officers can decide to close a bank office. If they think there's an extraordinary situation affecting their office, they can choose not to open it or to close it early, even if there's no official declaration from the commissioner. However, the bank can't stay closed for more than 48 hours in a row without getting approval, and not for more than 24 hours if the commissioner says no, excluding holidays.
Additionally, bank officers can close offices if the Governor or President declares a day for mourning, celebration, or special observance.
(a)CA Financial Code § 1093(a) Whenever the officers of a bank are of the opinion that an extraordinary situation exists which affects or may affect one or more of a bank’s offices, they shall have the authority in the reasonable and proper exercise of their discretion to determine not to open such offices on any business or banking day, or, if such offices have opened to close one or more of them during the continuation of such extraordinary situation even if the commissioner has not issued
and does not issue a proclamation of extraordinary situation. The office or offices so closed shall remain closed until such time as the officers determine with respect to each such office that the extraordinary situation has ended and for such further time thereafter as may reasonably be required to be reopened; however, in no case shall such office or offices remain closed for more than 48 consecutive hours excluding other legal holidays without requesting the approval of the commissioner nor, in case such request is denied by the commissioner, for more than 24 consecutive hours excluding other legal holidays after such denial.
(b)CA Financial Code § 1093(b) The officers of a bank may close one or more of the bank’s offices on any day or days designated for mourning, rejoicing, or other special observance by proclamation of the Governor or the President of the United States.
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Section § 1094
If a bank decides to close any of its offices, it must quickly inform the commissioner about this decision using any available method of communication.
A bank closing an office or offices pursuant to the authority granted under subdivision (a) of Section 1093 shall give prompt notice of its action to the commissioner, by any means available.
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Section § 1095
If a bank or any of its branches is closed according to the rules in this chapter, that day counts as a legal holiday for all banking activities at that location. This means things like deposits, transactions, or other banking operations won't be processed. Importantly, no one at the bank can be held responsible for any issues or losses caused by this closure.
Any day on which a bank or any one or more of its offices is closed pursuant to the authorization granted by this chapter shall be, with respect to such bank or any of its offices which are closed, a legal holiday for all purposes with respect to any banking business of any character. No liability, or loss of rights of any kind, on the part of any bank or director, officer, or employee thereof, shall accrue or result by virtue of any closing authorized by this chapter.
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Section § 1096
This law states that the rules in this chapter are meant to be added to, not replace or limit, other state or federal laws that allow banks to close or delay their services due to uncontrollable and extraordinary situations.
Provisions of this chapter shall be construed and applied as being in addition to, and not a substitution for, or limitation of, any other law of this state or the United States authorizing the closing of a bank or excusing the delay by a bank in the performance of its duties and obligations because of extraordinary situations or conditions beyond the bank’s control or otherwise.
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