The request for authority to organize and establish a corporation to engage in the banking or trust business shall be set forth in an application in such form and containing such information as the commissioner may require and shall be accompanied by a fee of five thousand dollars ($5,000).
BankingApplication
Section § 1020
If you want to start a bank or trust company, you need to fill out an application with specific information required by the commissioner. You also have to pay a $5,000 fee when submitting your application.
banking corporation trust business application process
Section § 1021
If someone wants to apply for something and contacts the commissioner, the commissioner will let them know in writing that they can have a meeting before actually applying to discuss any questions. However, the commissioner cannot decide on the application before it's officially submitted.
Upon receiving a request for an application, the commissioner shall inform the prospective applicant in writing that the commissioner is available to confer with such prospective applicant in advance of the filing of an application for the purpose of discussing questions relating to such application. However, no application shall be decided in advance of filing.
application process commissioner meeting pre-application consultation
Section § 1022
Before a new bank or trust company can be established, a commissioner will conduct a thorough investigation. This review includes examining the organizers' character and motives, the area's need for additional banking facilities, and the financial and business qualifications of the proposed officers and stockholders. They also look at factors that might affect the new bank's relationship with the community.
Upon the filing of an application the commissioner shall make or cause to be made a careful investigation and examination relative to the following:
(a)CA Financial Code § 1022(a) The character, reputation, and financial standing of the organizers or incorporators and their motives in seeking to organize the proposed bank or trust company.
(b)CA Financial Code § 1022(b) The need for banking or trust facilities or
additional banking or trust facilities, as the case may be, giving particular consideration to the adequacy of existing banking or trust facilities and the need for further banking or trust facilities.
(c)CA Financial Code § 1022(c) The character, financial responsibility, banking or trust experience, and business qualifications of the proposed officers of the bank or trust company.
(d)CA Financial Code § 1022(d) The character, financial responsibility, business experience, and standing of the proposed stockholders and directors.
(e)CA Financial Code § 1022(e) Other facts and circumstances bearing on the proposed bank or trust company and its relation to the locality as in the opinion of the commissioner may be relevant.
bank establishment requirements trust company approval commissioner investigation
Section § 1023
This law outlines what the commissioner must verify before approving the creation of a new bank or trust company. They need to ensure it benefits the public and likely will be successful, has legitimate goals, and adequate capital. They also check that the officers have proper experience, the name won't cause confusion with others, and all legal requirements are met.
The commissioner may give or withhold his or her approval of the application in his or her discretion, but he or she shall not approve the application until he or she has ascertained to his or her satisfaction:
(a)CA Financial Code § 1023(a) That the public convenience and advantage will be promoted by the establishment of the proposed bank or trust company.
(b)CA Financial Code § 1023(b) That the proposed bank or
trust company will have a reasonable promise of successful operation.
(c)CA Financial Code § 1023(c) That the bank is being formed for no other purpose than the legitimate objects contemplated by this division.
(d)CA Financial Code § 1023(d) That the proposed capital structure is adequate.
(e)CA Financial Code § 1023(e) That the proposed officers and directors have sufficient banking or trust experience, ability, and standing to afford reasonable promise of successful operation.
(f)CA Financial Code § 1023(f) That the name of the proposed bank or trust company does not resemble, so closely as to be likely to cause confusion, the name of any other bank or trust company transacting business in this state or which had previously transacted business in this state.
(g)CA Financial Code § 1023(g) That the applicant has complied
with all of the applicable provisions of this division.
commissioner approval public convenience successful operation
Section § 1024
This section gives the commissioner authority to assess whether a proposed bank or trust company is likely to succeed and serve the public interest. If a potential director or officer has been convicted of a crime involving fraud or dishonesty, the commissioner can decide they aren't fit for the role. Similarly, if the person controlling the proposed bank has a questionable background, it might be deemed not beneficial for the public. However, these are not the only criteria the commissioner can use when evaluating a bank or trust company’s potential success or benefits.
(a)CA Financial Code § 1024(a) In this section, “control” has the meaning set forth in Section 1250.
(b)CA Financial Code § 1024(b) For purposes of Section 1023, the commissioner may find:
(1)CA Financial Code § 1024(b)(1) That a proposed officer or director of a proposed bank or trust company does not have sufficient standing to afford reasonable promise of successful operation if such person has been convicted of, or has pleaded nolo contendere to, any crime involving fraud or dishonesty.
(2)CA Financial Code § 1024(b)(2) That the establishment of a proposed bank or trust company will not promote the public convenience and advantage if any person who is proposed to control
the proposed bank or trust company or any director or officer of such person has been convicted of, or has pleaded nolo contendere to, any crime involving fraud or dishonesty.
(c)CA Financial Code § 1024(c) Subdivision (b) shall not be deemed to be the only grounds upon which the commissioner may find, for purposes of Section 1023, that a proposed officer or director of a proposed bank or trust company does not have sufficient standing to afford reasonable promise of successful operation or that the establishment of a proposed bank or trust company will not promote the public convenience and advantage.
bank officer qualifications bank director qualifications crime involving fraud
Section § 1025
If your application is going to be denied, the commissioner must notify you at least 30 days in advance. They must send this notice in writing and let you know that you have the right to discuss why your application may be denied. To set up this meeting, you need to send a written request to the commissioner within 20 days of getting the notice. If you request a meeting, they can't deny your application before the meeting takes place.
At least 30 days before denying an application, the commissioner shall by mail or other method of service give written notice of the intended denial of an application and of the right of the applicant to meet with the commissioner regarding the reasons for such denial. The request for such meeting shall be in writing and delivered to the commissioner within 20 calendar days of the date of giving of the notice of intended denial. If a request is made for such meeting, the application may
not be denied until after the meeting.
application denial notice commissioner meeting right to discuss denial
Section § 1026
The commissioner has the power to approve applications for creating a corporation that wants to run a banking or trust business. When giving this approval, the commissioner can set any conditions they think are necessary, reasonable, or beneficial for the public.
The commissioner may, in approving an application to organize and establish a corporation to engage in the banking or trust business pursuant to Section 1023, impose any conditions the commissioner deems reasonable or necessary or advisable in the public interest.
banking corporation approval trust business conditions organize corporation
Section § 1027
This law says that with the commissioner's approval, a new bank can be created specifically to help with a merger or someone taking control of another bank, and the new bank can continue after the merger or acquisition. Some existing sections about bank formations do not apply to this process. However, other specific regulations starting with Section 370 will apply.
If you want to start a bank for these purposes, you have to pay a fee of $2,500 when you ask for approval.
(a)CA Financial Code § 1027(a) With the approval of the commissioner, a bank may be formed to facilitate a merger or an acquisition of control. The new bank may survive the merger or acquisition of control.
(b)CA Financial Code § 1027(b) Sections 1020, 1021, 1022, 1023, and 1024 shall not apply to the formation of a bank pursuant to subdivision (a).
(c)CA Financial Code § 1027(c) Article 4 (commencing with Section 370) of Chapter 3 of
Division 1 shall apply to a bank formed pursuant to subdivision (a).
(d)CA Financial Code § 1027(d) A request for approval to form a bank in accordance with subdivision (a) shall be accompanied by a fee of two thousand five hundred dollars ($2,500).
bank formation merger facilitation acquisition of control
