Organization and Operation of Banks.

Ala. Code tit. 5, ch. 5A

in effect

Ala. Code § 5-5A-1 Procedure for Incorporation - Application for Permit.

5-5A-1. Procedure for Incorporation - Application for Permit. (a) The proposed incorporators of a bank shall execute and acknowledge an application for a permit in writing in the form prescribed by the superintendent and shall file the same in the office of the State Banking Department, which application shall be signed by all of the incorporators requesting a certificate authorizing the proposed bank to transact business at the place, time and under the name stated in said application. (b) At the time of filing said application, the applicant shall pay to the superintendent a filing fee. (c) The application shall name at a minimum five directors, and a majority of all directors shall be outside directors unless a written waiver is obtained from the superintendent. A director shall be deemed to be an outside director if the director will not serve as an officer, other than the chair, or an employee of the bank. (d) The application shall name a chair, chief executive officer, a chief financial/operations officer, and a chief lending officer of the bank. The chair must be an outside director. The superintendent may exercise discretion and waive any of the above requirements by written notice. (e) The superintendent shall designate the newspaper in which notice of intention to organize shall be published as required by Section 5-5A-2. (Acts 1980, No. 80-658, §5-5-1; Act 2011-589, p. 1306, §1.)

Ala. Code § 5-5A-2 Procedure for Incorporation - Notice of Intention to Incorporate.

5-5A-2. Procedure for Incorporation - Notice of Intention to Incorporate. Before a bank can become incorporated under the laws of Alabama, a notice of intention to organize such bank shall be published once a week for three successive weeks in the newspaper designated by the superintendent. Such notice shall specify the names of the proposed incorporators, the name of the proposed corporation, the place where it proposes to do business and the amount of capital paid in with which it will commence business, provided however, where the superintendent determines an emergency exists which might cause or has caused closing or liquidating an existing bank, the superintendent may waive such advance publication requirement in order to permit formation of a new bank, and such publication shall occur after the new bank commences business. (Acts 1980, No. 80-658, §5-5-2.)

Ala. Code § 5-5A-3 Procedure for Incorporation - Affidavit of Proposed Incorporators; Affidavit of Proposed Stockholders; Submission of Proposed Certificate of Incorporation; Disclosure to Stockholders.

5-5A-3. Procedure for Incorporation - Affidavit of Proposed Incorporators; Affidavit of Proposed Stockholders; Submission of Proposed Certificate of Incorporation; Disclosure to Stockholders. After the notice of intention to incorporate has been published, the parties named as proposed incorporators in the published notice of the proposed corporation shall make an affidavit before some officer authorized to administer oaths and in said affidavit shall set forth the fact of publication of the notice as required by Section 5-5A-2, the names of the proposed stockholders, and the names of the proposed executive officers; and attach to the affidavit a copy of the published notice; and each proposed stockholder shall make an affidavit which shall state for himself that he bona fide intends to become a stockholder in the amount subscribed for in the proposed bank. These affidavits shall be filed with the superintendent; and, at the time of filing these affidavits, the proposed incorporators shall submit to the superintendent the proposed certificate of incorporation of the bank. The proposed incorporators must also disclose in writing to each proposed stockholder such data as the superintendent may require. (Acts 1980, No. 80-658, §5-5-3.)

Ala. Code § 5-5A-4 Procedure for Incorporation - Investigation as to Fitness of Stockholders and Executive Officers and Necessity for Banks.

5-5A-4. Procedure for Incorporation - Investigation as to Fitness of Stockholders and Executive Officers and Necessity for Banks. The superintendent shall ascertain whether the character and general fitness of the persons named as proposed incorporators, proposed stockholders and proposed executive officers in the affidavit and in the proposed certificate of incorporation are such as to command the confidence of the community in which such bank is proposed to be located, and the superintendent shall make this inquiry and determination, regardless of whether or not objections to the incorporation are filed with him. The superintendent shall investigate the convenience and need for a bank in the community where the same is proposed to be located and shall also ascertain if there is sufficient business in said community to support said bank. (Acts 1980, No. 80-658, §5-5-4.)

Ala. Code § 5-5A-5 Procedure for Incorporation - Filing of Objections to Incorporation of Proposed Bank; Investigation of Objections.

5-5A-5. Procedure for Incorporation - Filing of Objections to Incorporation of Proposed Bank; Investigation of Objections. Any bank doing business in the community or any reputable citizen in the community may file with the superintendent an objection to the incorporation of the proposed bank, provided that the superintendent may refuse to accept objections after 15 days from the last date of publication of the notice of intention to incorporate. If such objection is filed, the superintendent shall thoroughly and specifically inquire into and investigate the objections. The superintendent in his investigation may summon witnesses to appear before him, and may administer oaths to such witnesses, and may examine such witnesses under oath. The superintendent may in his discretion disclose in confidence to the proposed incorporators such information which relates to the proposed bank as he deems appropriate and the superintendent and employees of the Banking Department shall be immune from suit in their individual capacity because of such disclosure and information. (Acts 1980, No. 80-658, §5-5-5.)

Ala. Code § 5-5A-6 Procedure for Incorporation - Certificate of Superintendent of Banks Authorizing Filing of Certificate of Incorporation.

5-5A-6. Procedure for Incorporation - Certificate of Superintendent of Banks Authorizing Filing of Certificate of Incorporation. If the superintendent shall be satisfied from his investigation that the character and general fitness of the persons named as stockholders and executive officers are such as to command the confidence of the community in which such bank is proposed to be located and that there is sufficient business to support said bank in said community and that the convenience and needs of said community shall be served, he shall pass upon the sufficiency of the certificate of incorporation; and, if he approves the certificate he shall issue under his hand and official seal a certificate authorizing the proper official or officials to file the certificate of incorporation upon proof of payment of subscription to the capital subscribed for as required by law. The superintendent shall transmit the proposed certificate of incorporation, together with said certificate made by him to the official or officials with which a certificate of incorporation would be filed under the business corporation laws of this state, and the superintendent shall keep on file in his office a duplicate of the certificates made by him. (Acts 1980, No. 80-658, §5-5-6.)

Ala. Code § 5-5A-7 Procedure for Incorporation - Filing and Recordation of Certificate of Incorporation.

5-5A-7. Procedure for Incorporation - Filing and Recordation of Certificate of Incorporation. The official or officials designated by the business corporation laws to file certificates of incorporation shall, upon the certificate of incorporation being duly signed by the incorporators and proof being duly made as required by law of the payment of subscription to the capital, file and record the certificate of incorporation and other papers necessary or deemed necessary in the incorporation of the bank, together with the said certificate issued by the superintendent. (Acts 1980, No. 80-658, §5-5-7.)

Ala. Code § 5-5A-8 Procedure for Incorporation - Refusal to Permit Incorporation; Appeal from Refusal to Banking Board.

5-5A-8. Procedure for Incorporation - Refusal to Permit Incorporation; Appeal from Refusal to Banking Board. If the superintendent is of the opinion from his investigation that the character and general fitness of the persons named as stockholders or executive officers are such as not to command the confidence of the community in which such bank is proposed to be located or that there is not a sufficient business to support said bank in said community or that the convenience or needs of said community shall not be served, he shall issue under his hand and official seal, a refusal to permit the incorporation of the proposed bank and a copy of his refusal shall be filed in the superintendent’s office, and the refusal and the proposed certificate of incorporation shall be returned to the proposed incorporators or their agent. No right of appeal to the Banking Board exists except upon refusal of the superintendent to permit incorporation. Any proposed stockholder or individual may appeal from such refusal of the superintendent by written notice of appeal filed with the superintendent within 28 days of the notice of refusal to the Banking Board. The Banking Board may take evidence and examine witnesses with respect to the propriety and justice vel non of said refusal and may make such findings and orders as may be necessary either to confirm said refusal or to permit the incorporation of such bank. Full power and authority is hereby vested in the State Banking Board to review, revise, and reverse or confirm any ruling or finding or order of the superintendent denying the establishment of state banks and to take evidence and examine witnesses of all parties touching such matters. The Banking Board will notify all parties of its decision. (Acts 1980, No. 80-658, §5-5-8.)

Ala. Code § 5-5A-9 Procedure for Incorporation - Judicial Review.

5-5A-9. Procedure for Incorporation - Judicial Review. Nothing in this chapter shall be construed to prevent the Circuit Court of Montgomery County, as provided by law, from reviewing and reversing either the action of the Banking Board in granting or refusing a charter or permitting the organization of a new bank or the action of the superintendent in granting a charter or permitting the organization of a new bank. Written notice of appeal must be filed with that court within 28 days of the order from which the appeal is taken. Upon proper proceedings, the court, after full hearing of the matters at issue, shall enter an order or judgment reversing or affirming the order appealed. The granting of a charter or permit by the superintendent or granting or refusal to grant a charter or permit by the Banking Board shall be taken as prima facie just and reasonable. (Acts 1980, No. 80-658, §5-5-9.)

Ala. Code § 5-5A-10 Permit to Transact Business - Required.

5-5A-10. Permit to Transact Business - Required. No bank shall engage in the banking business until it shall have received from the superintendent a permit to transact a banking business. Any person who shall hereafter transact any business as an officer or agent of any bank hereafter incorporated, before such bank is authorized to transact business as a bank by the permit of the superintendent, shall be guilty of a misdemeanor and upon conviction, shall be fined not less than $1,000.00 nor more than $10,000.00. Each day on which said person transacts such business shall be a separate offense. The superintendent is empowered to seek an injunction from any court of competent jurisdiction enjoining such transaction of business. (Acts 1980, No. 80-658, §5-5-10.)

Ala. Code § 5-5A-11 Permit to Transact Business - Examination; Issuance and Recordation of Permit.

5-5A-11. Permit to Transact Business - Examination; Issuance and Recordation of Permit. The superintendent shall, before issuing his permit to any bank to commence business under the application provided for in Section 5-5A-1, examine or cause an examination to be made in order to ascertain whether the requisite capital of such bank has been paid in cash. If the superintendent shall find that the requisite capital has been paid in cash, that the certificate of incorporation has been approved and recorded and that all other requirements for the issuance of the permit have been met, he shall issue his permit authorizing such bank to commence business at the place, time and under the name as stated in the application for the permit and to transact business in this state as a bank, which permit shall be recorded in the office of the superintendent in a book to be kept by him for that purpose, and a certified copy thereof shall be filed and recorded at the expense of the bank in the office of the official or officials with which the certificate of incorporation of the bank has been filed. (Acts 1980, No. 80-658, §5-5-11.)

Ala. Code § 5-5A-12 Membership in Federal Deposit Insurance Corporation, Etc.

5-5A-12. Membership in Federal Deposit Insurance Corporation, Etc. All banks now or hereafter operating under the laws of this state shall be members of the Federal Deposit Insurance Corporation or such other agency as may be created to insure the deposits of such bank. (Acts 1980, No. 80-658, §5-5-12.)

Ala. Code § 5-5A-13 Filing Fee; Other Fees.

5-5A-13. Filing Fee; Other Fees. (a) The Banking Board shall from time to time fix the amount of the fee for filing an application for a new bank, and for: (1) Establishment of a branch of an existing bank; (2) Conversion of a national bank to a state bank; (3) A merger of two or more existing banks; (4) Establishment and operation of any facility authorized under the provisions of Sections 5-2A-7 and 5-2A-8; (5) Acquisition of a majority of voting stock of a bank; (6) Any examination necessitated by the foregoing; and (7) Other actions that require the approval of the superintendent or the Banking Board. (b) All such fees shall be paid into the special fund set up by the State Treasurer pursuant to Section 5-2A-20. (Acts 1980, No. 80-658, §5-5-13.)

Ala. Code § 5-5A-14 Capital - Minimum Amount Required for Incorporation of Bank.

5-5A-14. Capital - Minimum Amount Required for Incorporation of Bank. (a) No bank hereafter organized under the laws of Alabama shall have total initial capital accounts actually paid in of less than $800,000.00. (b) The superintendent may require a higher amount of capital accounts and where the bank will have no significance except as a means of acquiring the assets or the voting shares of an existing bank, the superintendent may require a lesser amount of capital accounts. (Acts 1980, No. 80-658, §5-5-14.)

Ala. Code § 5-5A-15 Capital - Increase or Decrease.

5-5A-15. Capital - Increase or Decrease. Any bank shall with the consent of the superintendent have power and authority to increase or decrease its authorized capital in the manner provided for a corporation under the business corporation laws of this state. (Acts 1980, No. 80-658, §5-5-15.)

Ala. Code § 5-5A-16 Issuance of Capital Notes and Debentures.

5-5A-16. Issuance of Capital Notes and Debentures. No bank shall issue capital notes or capital debentures except with the prior written approval of the superintendent under such conditions as he may impose. (Acts 1980, No. 80-658, §5-5-16.)

Ala. Code § 5-5A-17 Amendment of Certificate of Incorporation; Approval of Amended Certificate of Incorporation.

5-5A-17. Amendment of Certificate of Incorporation; Approval of Amended Certificate of Incorporation. A bank may amend its certificate of incorporation in the manner provided by the laws governing business corporations. No proposed amendment of a certificate of incorporation of a bank is valid unless approved in writing by the superintendent and may not be recorded unless such written approval accompanies the proposed amendment. (Acts 1980, No. 80-658, §5-5-17.)

Ala. Code § 5-5A-18 Powers of Banks Generally.

5-5A-18. Powers of Banks Generally. Corporations formed for the purpose of doing business as a bank may: (1) Discount bills, notes or other evidences of debt; (2) Receive and pay out deposits, with or without interest, pay checks, and impose charges for any services; (3) Receive on special deposit money, bullion or foreign coins or bonds or other securities; (4) Buy and sell foreign and domestic exchanges, gold and silver bullion or foreign coins, bonds, bills of exchange, notes and other negotiable paper; (5) Lend money on personal security or upon pledges of bonds, stocks or other negotiable securities; (6) Take and receive security by mortgage, security agreement or otherwise on property, real and personal; (7) Become trustees for any purpose and be appointed and act as executors, administrators, guardians, receivers, or fiduciaries upon receiving the prior written approval of the superintendent under Section 5-11A-1; (8) Lease real and personal property upon specific request of a customer, provided such banks must comply with any applicable Alabama laws regulating leasing real property or improvements thereon to others; (9) Perform computer, management, and travel agency services for others; (10) Subscribe to the capital stock and become a member of the Federal Reserve System and comply with rules and regulations thereof; (11) Accept deposits and payments on loans and other obligations as agent for other banks located in this state that are subsidiaries of the same bank holding company. If banks located in this state are affiliates, they may accept deposits and payments on loans and other obligations as agent for each other. Banks acting as agents for other banks under this subsection shall not be deemed branch offices of the banks for which they act. As used in this subsection, banks are “affiliates” if the same person or persons directly or indirectly own or control either a majority of the voting shares or more than 50 percent of the number of shares entitled to elect the directors of both banks; and (12) Do any business and exercise any powers incident to the business of banks. (Acts 1980, No. 80-658, §5-5-18; Acts 1990, No. 90-217, p. 253.)

Ala. Code § 5-5A-18.1 Banks and Trust Companies to Have Power of Federally Chartered or Regulated Financial Institution.

5-5A-18.1. Banks and Trust Companies to Have Power of Federally Chartered or Regulated Financial Institution. In addition to all other rights and powers provided under this title, banks and trust companies chartered by this state and supervised by the superintendent and banks or trust companies chartered by any other state which are doing business or proposing to conduct any bank or trust company activities in this state and each of their subsidiaries, subject to the prior approval of the superintendent, may make any loan or investment , exercise any power, and engage in any activity which they could make , exercise, or engage in if incorporated or operating as a federally chartered or regulated financial institution and they shall be entitled to all rights, privileges, and protections granted or available to federally chartered or regulated financial institutions. In addition to other conditions determined at the superintendent’s discretion, any approval granted under this section to a bank or trust company chartered by another state or to subsidiaries of a bank or trust company chartered by another state may be conditioned upon the existence of reciprocal authority from the other state for Alabama state banks and trust companies or their subsidiaries to exercise the same power or engage in the same activity in the other state. The provisions of this section shall take priority and be given effect over any other general or specific provisions of Alabama law to the contrary. Except in the case of a natural disaster or other emergency, in determining whether to issue an approval of an activity, right, privilege, or protection under this section, the superintendent shall consider the importance of maintaining a competitive dual banking system and whether such an approval is contrary to the public interest. In the event of a natural disaster or other national, regional, state, or local emergency, the superintendent may temporarily waive or suspend requirements for bank and trust company compliance with any other general or specific provisions of this title. At the discretion of the superintendent, an approval issued under this section to any bank, trust company, or subsidiary of a bank or trust company may apply to all banks, trust companies, and their subsidiaries. Approvals granted under this section shall not exempt the applicant or its subsidiary from applicable licensure and regulatory requirements of Articles 1, 2, and 4 of Chapter 27 of Title 34, except where a national bank or its subsidiary would not be subject to the licensure or regulatory requirements of Articles 1, 2, and 4 of Chapter 27 of Title 34. For the purposes of this section, the term federally chartered financial institution means any bank, savings bank, limited purpose bank, savings and loan association, other institution whose deposits are federally insured, or trust company chartered by the Office of the Comptroller of the Currency or the Office of Thrift Supervision, or their successor agencies, and any subsidiary of such institutions. (Acts 1988, No. 88-554, p. 870; Acts 1995, No. 95-115, p. 134, §71; Act 2007-224, p. 284, §1.)

Ala. Code § 5-5A-19 Reserves.

5-5A-19. Reserves. (a) A bank which is not a member of the Federal Reserve System shall maintain at all times a reserve fund in an amount fixed by resolution of the Banking Board. The amount of the required reserve for each day shall be computed on the basis of average daily deposits covering such biweekly or shorter periods as shall be fixed by resolution of the Banking Board. This reserve shall consist of cash on hand and demand deposits due from other banks. (b) A bank shall give written notice to the superintendent, in the manner prescribed by the superintendent for such notice, of any deficiency in the amount or form of the reserve fund required by this section within three business days after the close of any scheduled averaging period during which deficiency occurs. Such bank shall pay to the superintendent a fee because of this deficiency which shall be fixed by the Banking Board. All such fees shall be paid into the special fund set up by the State Treasurer pursuant to Section 5-2A-20. (c) A bank which is a member of the Federal Reserve System shall maintain at all times a reserve fund in accordance with the requirements applicable to a member bank under the laws of the United States. (Acts 1980, No. 80-658, p. 1259, §5-5-19; Acts 1981, No. 81-687, p. 1158.)

Ala. Code § 5-5A-20 Branch Banks; Commercial Affiliates.

5-5A-20. Branch Banks; Commercial Affiliates. (a) Alabama banks may establish a branch or office for the transaction of the banking business within the State of Alabama upon prior approval of the superintendent. Alabama banks may establish a branch or office for the transaction of a banking business in any state other than Alabama, any territory of the United States, or in any foreign country in accordance with the provisions of federal law, the laws of the other state, territory, or foreign country and upon the prior approval of the superintendent. (b) All laws or parts of laws, whether general, local, or general laws of local applications, which conflict with this section are hereby repealed to the extent of such conflict. (c) Neither an Alabama bank nor an out-of-state bank may establish or maintain a branch or office for the transaction of the banking business in Alabama on the premises of a commercial affiliate of the bank. For purposes of this section, commercial affiliate is an affiliate of the bank as set forth in subsection (k) of Section 2 of the Bank Holding Company Act which engages in commerce. An entity engages in commerce when 15 percent or more of its revenue is derived from activities other than those in which a bank holding company, or its subsidiaries, may engage. Premises of the commercial affiliate are any physical locations where the commercial affiliate directly or indirectly maintains ownership or conducts business. (Acts 1980, No. 80-658, p. 1259, §5-5-20; Acts 1983, 1st Ex. Sess., No. 83-73, p. 76; Acts 1985, No. 85-364, p. 307; Acts 1995, No. 95-115, p. 134, §72; Act 2007-224, p. 284, §1.)

Ala. Code § 5-5A-21 Surplus; Restriction on Dividends.

5-5A-21. Surplus; Restriction on Dividends. Every bank shall transfer to surplus each year at least 10 percent of its net earnings until the surplus of such bank shall be equal to at least 20 percent of its capital, and it shall be unlawful for such bank to declare or pay a dividend in excess of 90 percent of the net earnings of such bank until the surplus of such bank shall be equal to at least 20 percent of capital. Thereafter the prior written approval of the superintendent shall be required if the total of all dividends declared by the bank in any calendar year shall exceed the total of its net earnings of that year combined with its retained net earnings of the preceding two years, less any required transfers to surplus. No dividends, withdrawals or transfers may be made from the bank’s surplus without the prior written approval of the superintendent. For the purpose of this section the term “net earnings” shall mean the remainder of all earnings from current operations plus actual recoveries on loans and investments and other assets, after deducting from the total thereof all current operating expenses, actual losses, accrued dividends on preferred stock, if any, and all federal, state and local taxes. (Acts 1980, No. 80-658, §5-5-21.)

Ala. Code § 5-5A-22 Limits of Indebtedness.

5-5A-22. Limits of Indebtedness. (a) No bank shall make a loan to any one person which, when combined with all other loans to such person, would cause total loans to that person to exceed: (1) Ten percent of the capital accounts of the bank, if such loans are not secured, or (2) Twenty percent of the capital accounts of the bank, if loans in excess of 10 percent of capital are fully secured. (b) No loans which would exceed the limitation set forth in subsection (a)(1) shall be made unless duly authorized or approved in advance by the board of directors of the bank, a committee of the board of directors of the bank, or a loan committee, with such authorization or approval recorded in minutes of the meeting at which the authority was given. (c)(1) As used in this section, the term “capital accounts” shall include capital, surplus, and undivided profits as defined in Section 5-1A-2, together with obligations of the bank subordinated in priority upon liquidation or dissolution to the claims of depositors of the bank. The term shall also include such reserves as may from time to time be permitted to be included by the superintendent. (2) In calculating total loans to a person under this section the following rules shall govern: a. In computing the total liabilities of any person to a bank, there shall be included all liabilities to the bank as maker or acceptor of paper discounted with or sold to such bank and the liability of the indorser, drawer, or guarantor who obtains a loan from or discounts paper with or sells paper under his or her guaranty or repurchase agreement to such bank. b. In computing the total liabilities of any person to a bank, there shall be included all liabilities to the bank of any partnership or any unincorporated association of which such person is a member, any loans made for such person’s benefit or for the benefit of such partnership or unincorporated association, and any loans made to, or for the benefit of, a corporation of which such person owns 35 percent or more of the capital. c. In computing the total liabilities of any partnership or unincorporated association to a bank, there shall be included all liabilities of its individual members to such bank, loans made for the benefit of such partnership or unincorporated association or any member thereof, and any loan made to, or for the benefit of, any corporation of which any member owns 35 percent or more of the capital. d. In computing the total liabilities of any corporation to a bank, there shall be included all loans made for the benefit of the corporation, and all loans to, or for the benefit of any partnership or unincorporated association, or any member thereof, who owns 35 percent or more of the capital of such corporation. e. In computing the total liabilities of any person to a bank, direct or indirect loans to such person’s spouse will be aggregated and treated as loans to such person until the bank can satisfy the superintendent that each spouse has a separate net worth and available assets or cash flow to independently repay and service each individual spouse’s debts, and such net worth, assets, or cash flow of each is not dependent on decisions made or actions taken by the other. f. In computing total liabilities of any person to a bank, any credit exposure to a person arising from a derivative transaction, repurchase agreement, reverse repurchase agreement, securities lending transaction, or securities borrowing transaction between the bank and the person shall be included. For the purposes of this paragraph the term derivative transaction shall include any transaction that is a contract, agreement, swap, warrant, note, or option that is based, in whole or in part, on the value of, any interest in, or any quantitative measure or the occurrence of any event relating to, one or more commodities, securities, currencies, interest or other rates, indices, or other assets. (d) There shall be excluded from the limits set forth in subsection (a) the following: (1) Indebtedness evidenced by commercial paper drawn in good faith against actually existing values and secured by a security interest upon goods in transit with shippers’ order, bills of lading, or comparable instruments attached; (2) Deposits in a reserve depository or a Federal Reserve Bank; (3) Loans to the extent secured by: a. Obligations of, and obligations guaranteed by the United States, the State of Alabama, any political subdivision of the State of Alabama, any public body of the State of Alabama, or a public body of any political subdivision of the State of Alabama if the obligations or guarantees are general obligations thereof; b. Obligations which the bank would be authorized to acquire without limit as investment securities; c. Guarantees or commitments or agreements to take over or purchase made by any department, bureau, board, commission, or establishment of the United States or any corporation owned directly or indirectly by the United States; or d. At least a like amount of cash or deposits held by the lending bank. (4) Investment securities acquired by the bank; (5) Such other loans, liabilities, or transactions as shall from time to time be established by regulations of the State Banking Department. (e) It shall be the duty of the superintendent to order any loans in excess of the amount fixed in this section reduced to the legal limit within 30 days of the superintendent’s issuance of a written report of examination detailing such excess. If such reduction is not made by the bank within 30 days of the superintendent’s order, the superintendent may take appropriate action, including ordering the excess charged to profit and loss if, in his or her opinion, such excess is not well secured, or may by order impose civil money penalties against the bank not to exceed the amount of interest and fees paid or contracted to be paid to the bank on the loan or loans in excess of the amount fixed in this section. If such order of the superintendent is not complied with, the superintendent may proceed as in other cases provided for violation of the orders of the superintendent, and the bank shall have the same rights to a hearing and of appeal as are provided in Section 5-2A-12. (Acts 1980, No. 80-658, p. 1259, §5-5-22; Act 2007-224, p. 284, §1; Act 2011-589, p. 1306, §1.)

Ala. Code § 5-5A-23 Investments and Loans with Respect to Housing.

5-5A-23. Investments and Loans with Respect to Housing. (a) Banks, insurance companies and savings and loan associations are authorized: (1) To make such loans and advances of credit and purchases of obligations representing loans and advances of credit as are eligible for insurance and to obtain such insurance; and (2) To make such loans secured by real property or leasehold as the Federal Housing Administrator insures or makes a commitment to insure and to obtain such insurance. (b) It shall be lawful for banks, insurance companies or savings and loan associations to purchase, invest in and dispose of bonds or notes secured by mortgages issued by the Federal Housing Administrator and in securities issued by national mortgage associations. (c) No law of this state requiring security upon which loans or investments may be made, or prescribing or limiting interest rates upon loans or investments, or prescribing or limiting the period for which loans or investments may be made shall be deemed to apply to loans or investments made pursuant to the foregoing paragraph. (d) Any bank or trust company purchasing, investing in or otherwise holding in any fiduciary capacity for the benefit of any ward or other beneficiary any mortgage loan insured by the Federal Housing Administrator shall be entitled to receive and retain for its own individual or corporate account any service charge allowed by said administrator on account of the servicing of the insured mortgage loan. Such service charge shall be considered as a reimbursement to such fiduciary for the additional expense of handling for the mortgagor and the Federal Housing Administrator monthly collections on such mortgage loan and payments of taxes, insurance and other charges on the property securing such loan as such administrator and regulations may require. (e) Wherever, by statute of this state, collateral is required as security for the deposit of public or other funds, or deposits are required to be made with any public official or department, or an investment of capital or surplus or a reserve or other fund is required to be maintained, consisting of designated securities, notes and bonds insured by the Federal Housing Administrator and debentures issued by the Federal Housing Administrator and obligations of national mortgage associations shall be acceptable at face value for such purposes. (Acts 1980, No. 80-658, §5-5-23.)

Ala. Code § 5-5A-25 Acceptance of Drafts or Bills of Exchange Arising from Transactions Involving Shipment of Goods - Authority.

5-5A-25. Acceptance of Drafts or Bills of Exchange Arising from Transactions Involving Shipment of Goods - Authority. Any bank in Alabama may accept drafts or bills of exchange drawn upon it, having not more than six months’ sight to run, exclusive of days of grace, which grew out of transactions involving the importation or exportation of goods or which grew out of transactions involving the domestic shipment of goods, if shipping documents conveying or securing title are attached at the time of acceptance or which are secured at the time of acceptance by a warehouse receipt or other such document conveying or securing title covering readily marketable staples. The bank shall keep a careful record of all such acceptances and show the same as a liability on its general books. (Acts 1980, No. 80-658, §5-5-25.)

Ala. Code § 5-5A-26 Acceptance of Drafts or Bills of Exchange Arising from Transactions Involving Shipment of Goods - Limitations.

5-5A-26. Acceptance of Drafts or Bills of Exchange Arising from Transactions Involving Shipment of Goods - Limitations. No bank shall accept, whether in a foreign or domestic transaction, for any one person, company, firm or corporation, to an amount equal at any time in the aggregate to more than 10 percent of its paid up and unimpaired capital and surplus, unless the bank is secured either by attached documents or by some other actual security growing out of the same transaction as the acceptance, and no bank shall accept such bills to an amount equal at any time in the aggregate to more than one half of its paid up and unimpaired capital stock and surplus. Banks which are members of the Federal Reserve System may accept such bills to an amount not exceeding at any time in the aggregate 100 percent of their paid up and unimpaired capital and surplus, but the aggregate of acceptances growing out of domestic transactions shall in no event exceed 50 percent of such capital and surplus. (Acts 1980, No. 80-658, §5-5-26.)

Ala. Code § 5-5A-27 Loans Secured by Own Stock; Purchase of Own Stock; Ownership of Capital Stock of Other Banks.

5-5A-27. Loans Secured by Own Stock; Purchase of Own Stock; Ownership of Capital Stock of Other Banks. No bank shall make a loan taking its own stock as security therefor or directly or indirectly purchase shares of its own stock, except in pursuance of provisions of law for reducing its capital stock. No bank shall subscribe for or own capital stock in any other bank except in the usual course of business in payment of an indebtedness or in order to prevent a loss on a debt owing to it and the bank must sell said stock within one year from the time the same is acquired unless this time period is extended by the superintendent; provided, however, that nothing in this section shall prohibit the ownership by any bank of any stock in another bank acquired prior to May 28, 1980. (Acts 1980, No. 80-658, §5-5-27.)

Ala. Code § 5-5A-28 Pledge of Assets.

5-5A-28. Pledge of Assets. No bank may pledge assets as security for deposits, except any bank is authorized to pledge acceptable assets as security for deposits of trust funds deposited by its trust department and of public funds, heretofore or hereafter deposited, by the United States or any agency or governmental instrumentality of the United States or by a state or any political subdivision of a state or any agency or other governmental instrumentality of such subdivision, including any county, municipal corporation, county, city, or other public board of education, including any custodian or treasurer of county, city, or other public school funds, any improvement authority heretofore or hereafter incorporated or any public corporation, including each board, authority, or district heretofore or hereafter organized or created in a state pursuant to authorization or determination by any municipality or municipalities or by any county or counties or the governing body of any one or more thereof. For purposes of this section, banks may only pledge assets to secure deposits of Alabama public entities that are defined as covered public entities or covered public officials under Section 41-14A-2. The word “deposits,” as used in this section, means deposits of all kinds, including, without limiting the generality of the foregoing, deposits in savings accounts, deposits in checking accounts, deposits in special trust funds, demand deposits, special deposits, time deposits on which interest is to be paid, and deposits for which a bank has issued its certificates of deposit. (Acts 1980, No. 80-658, p. 1259, §5-5-28; Acts 1988, No. 88-260, p. 401; Act 2007-224, p. 284, §1.)

Ala. Code § 5-5A-29 Security Not Required When Deposits Insured.

5-5A-29. Security Not Required When Deposits Insured. Notwithstanding any provision of law of this state or of any political subdivision of the state or any agency or governmental instrumentality of such subdivision requiring security for deposits in the form of collateral, surety bond or in any other form, security for such deposits shall not be required to the extent said deposits are insured by the Federal Deposit Insurance Corporation or any successor thereto. (Acts 1980, No. 80-658, §5-5-29.)

Ala. Code § 5-5A-30 Transactions of Business on Legal Holidays; Use of Automated Teller Machine or Other Instrumentality, Transaction Fees, Disclosure; Limitation on Contractual Fee Restrictions, Intent of Limitation, Applicability.

5-5A-30. Transactions of Business on Legal Holidays; Use of Automated Teller Machine or Other Instrumentality, Transaction Fees, Disclosure; Limitation on Contractual Fee Restrictions, Intent of Limitation, Applicability. (a) Any bank may lawfully receive deposits or paychecks or sight drafts and transact any other business on any legal holiday, excepting Sunday, in the same manner and way that it is authorized to do on any legal banking day. (b) Nothing in this section, nor any other law of this state, shall be construed to prohibit a bank the use of an automated teller machine, or other instrumentality as authorized by Section 5-2A-7 and Section 5-2A-8, 24 hours each day of the week including Sunday, and the use of the machine or other instrumentality by any bank is hereby authorized, provided the machine or other instrumentality and the use thereof is first approved by the appropriate bank regulatory authority, if the approval is required. A bank owning or operating a machine or other instrumentality may charge a transaction fee to the person using the machine or other instrumentality. The transaction fee shall be disclosed: (i) on a sign posted on the machine or other instrumentality or at a location in view of a person while viewing the machine or other instrumentality; or (ii) electronically during the course of the transaction in a manner that permits a person to cancel the transaction without incurring the transaction fee. (c) No contract with a bank organized under the laws of this state or a national bank located in this state permitting the use of any automated teller machine or other instrumentality owned or operated by a bank by customers of any other financial institution shall prohibit, limit, or restrict the right of the bank to charge any fees not prohibited to the bank by law or require a bank to limit or waive its rights under this chapter. (d) The amendments to subsection (b) made by Acts 1994, No. 94-104 shall be cumulative with, declare, and clarify existing law. The transaction fee shall be in addition to any fees and charges to which a bank and its customer may agree from time to time with regard to the use of any automated teller machine or other instrumentality. (e) Subsection (c) shall apply to all contracts permitting the use of automated teller machines or other instrumentalities by customers of another financial institution irrespective of whether the contract was entered into before or after February 18, 1994. (Acts 1980, No. 80-658, p. 1259, §5-5-30; Acts 1994, No. 94-104, p. 114, §1.)

Ala. Code § 5-5A-31 Liability for Transactions on Legal Holidays.

5-5A-31. Liability for Transactions on Legal Holidays. A bank shall be liable for and chargeable with deposits received and other business transacted on a legal holiday the same as if such deposit were received or business transacted on a legal banking day and shall have the same protection for payment of checks or sight drafts and business on a holiday that it would have if such payments were made and such transactions had on a legal banking day. (Acts 1980, No. 80-658, §5-5-31.)

Ala. Code § 5-5A-32 Closing of Banks, Etc., Permitted on One Business Day of Each Week.

5-5A-32. Closing of Banks, Etc., Permitted on One Business Day of Each Week. (a) Any bank or any branch or branches thereof may close on any one business day of each week and shall have this right even though there shall fall in such week a holiday as established in Section 1-3-8. If the superintendent should determine that an emergency should exist, he may authorize any bank or any branch or branches thereof to close on one or more business days. (b) Any such day upon which such bank or any branch or branches thereof may elect to close shall with respect to such institution be deemed a holiday for all purposes and not a business day. All acts omitted or done by such bank or any branch or branches thereof upon any such day shall have the same consequence and effect as if omitted or done upon the next succeeding business day, and any act authorized, required or permitted to be performed at or with respect to any such bank or any branch or branches thereof on the days so fixed may be performed on the next succeeding business day, and no liability or loss of rights of any kind shall result from such delay to any person or to any bank, or any branch or branches thereof. (Acts 1980, No. 80-658, §5-5-32.)

Ala. Code § 5-5A-33 Bank to Pay Checks Drawn on It at Par.

5-5A-33. Bank to Pay Checks Drawn on It at Par. Any bank shall pay all checks drawn on it and transmitted in a cash letter at par and shall make no charge for the payment of such checks the first time presented to it for payment. (Acts 1980, No. 80-658, §5-5-33.)

Ala. Code § 5-5A-35 Agreements Between Principal and Sureties on Bond for Deposit of Money and Assets in Bank, Etc.

5-5A-35. Agreements Between Principal and Sureties on Bond for Deposit of Money and Assets in Bank, Etc. It shall be lawful for any party of whom a bond, undertaking or other obligation is required to agree with his surety or sureties for the deposit of any or all money and assets for which he and his surety or sureties are or may be held responsible with a bank, or with other depository approved by the court or a judge thereof, if such deposit is otherwise proper, for the safekeeping thereof, and in such manner as to prevent the withdrawal of such money or assets or any part thereof, without the written consent of such surety or sureties, or an order of court or a judge thereof made on such notice to such surety or sureties as such court or judge may direct; provided, however, that such agreement shall not in any manner release from or change the liability of the principal or sureties as established by the terms of the bond. (Acts 1980, No. 80-658, §5-5-35.)

Ala. Code § 5-5A-36 Notice Upon Maturity of Certificate of Deposit Issued for More Than 90 Days.

5-5A-36. Notice Upon Maturity of Certificate of Deposit Issued for More Than 90 Days. In the case of certificates of deposit issued for more than 90 days which are automatically renewable, a bank shall send within a reasonable period, but in no event less than five days before the next maturity, a written notice to the last known address of record. (Acts 1980, No. 80-658, §5-5-36.)

Ala. Code § 5-5A-37 Rights of Minors.

5-5A-37. Rights of Minors. A minor may make, in her or his own name, a deposit in any bank, and such deposit may be general or special, and shall be paid only to such minor, or upon his or her order, and not to the parents or guardians of such minor, and such payment shall be valid as against the minor child, his or her parents or guardian. (Acts 1980, No. 80-658, §5-5-37.)

Ala. Code § 5-5A-38 Disposition of Small Deposits of Deceased Person - to Whom Payable; When Bond Required.

5-5A-38. Disposition of Small Deposits of Deceased Person - to Whom Payable; When Bond Required. Whenever a person shall die leaving deposits in a bank not exceeding $5,000.00 in the aggregate, the bank may in its discretion discharge itself from liability thereafter by paying the deposits to the surviving spouse of the deceased or, if there is none, to the adult children and to the person having the actual custody and control of the minor child or children of the deceased; provided, that such person, if not the legal guardian, shall execute to the probate judge of the county where the principal office of the bank is located a bond in the penal sum of double the amount of the portion of such deposit he receives for the faithful accounting of the money so received, which shall be approved by said probate judge; or, if there is no surviving spouse or child or children, to the person or persons who, under the laws of Alabama, are the next of kin and inherit the personal property of the deceased. The bank shall be fully protected by requiring an affidavit by some reputable citizen as to the facts specified. (Acts 1980, No. 80-658, §5-5-38.)

Ala. Code § 5-5A-39 Disposition of Small Deposits of Deceased Person - Time for Payment; When Payment Prohibited.

5-5A-39. Disposition of Small Deposits of Deceased Person - Time for Payment; When Payment Prohibited. No payment shall be made pursuant to Section 5-5A-38 by the bank before the lapse of 60 days from the date of the death of the deceased, and no payment shall be made by the bank under this section if letters testamentary or of administration have been issued to a personal representative or a proceeding is pending in the court in this state which would have jurisdiction of the administration of the estate. The bank shall be fully protected by requiring an affidavit by some reputable citizen as to the facts specified. (Acts 1980, No. 80-658, §5-5-39.)

Ala. Code § 5-5A-40 Disposition of Deposit in Trust for Another Upon Death of Trustee.

5-5A-40. Disposition of Deposit in Trust for Another Upon Death of Trustee. Whenever any deposit shall be made in any bank by any person in trust for another and no other or further notice of the existence and terms of a legal and valid trust shall have been given in writing to and received by the bank, in the event of the death of the trustee, such deposit or any part thereof, together with any interest thereon, may be paid to the person for whom said deposit was made, whether a minor or adult, and the receipt or acquittance of such person shall fully relieve and release said bank from all liability. (Acts 1980, No. 80-658, §5-5-40.)

Ala. Code § 5-5A-41 Payment of Deposits Made in Names of Two Persons Upon Death of One; More Than Two Persons with Provision for Survivorship.

5-5A-41. Payment of Deposits Made in Names of Two Persons Upon Death of One; More Than Two Persons with Provision for Survivorship. (a) Any deposit heretofore or hereafter made in any bank in the names of two or more persons payable to any of such persons, upon the death of either of said persons, may be paid by the bank to the survivors jointly, irrespective of whether or not: (1) The form of the deposit or deposit contract contains any provision for survivorship; (2) The funds deposited were the property of only one said person; (3) There was at the time of making such deposit any intention on the part of the person making such deposit to vest the other with a present interest therein; (4) Only one of said persons during their joint lives had the right to withdraw such deposit; (5) There was any delivery of any bank book, account book, savings account book, certificate of deposit or other writing by the person making such deposit to the other of such persons; or (6) Any other circumstances. The bank in which such deposit is made may pay such deposit, or any part thereof or interest thereon, to either of said persons, or if one is dead, to the surviving of them, and such payment shall fully release and discharge the bank from all liability for any payment so made. (b) The provisions of this section shall apply to savings accounts, checking accounts and certificates of deposit and shall also apply to any deposit made in the names of more than two persons where there is an express written provision for survivorship in the deposit contract. (c) Nothing contained in this section shall be construed to prohibit the person making such deposit from withdrawing or collecting the same during his lifetime; nor shall anything contained in this section prohibit any person or persons making a deposit in the names of more than one person from providing for disposition of such deposit and interest thereon in a manner different from that provided above in this section, provided such different manner of disposition is expressly provided for in writing in the deposit contract. (Acts 1980, No. 80-658, §5-5-41.)

Ala. Code § 5-5A-42 Adverse Claims to Deposits.

5-5A-42. Adverse Claims to Deposits. Notice to any bank of an adverse claim to a deposit standing on its books to the credit of any person shall not be effectual to cause said bank to recognize said adverse claimant unless said adverse claimant shall also either procure a restraining order, injunction or other appropriate process against said bank from a court of competent jurisdiction in a civil action therein instituted by such claimant wherein the person to whose credit the deposit stands is made a party and served with summons or shall execute to said bank in form and with sureties acceptable to it, a bond indemnifying said bank from any and all liability, loss, damage, costs and expenses for and on account of the payment or recognition of such adverse claim or the dishonor of or failure to pay the check or failure to comply with other order of the person to whose credit the deposit stands on the books of said bank; provided, that this section shall not apply in any instance where the person to whose credit the deposit stands is a fiduciary for such adverse claimant and the facts constituting such relationship, as well as the facts showing reasonable cause of belief on the part of the said claimant that the said fiduciary is about to misappropriate said deposit, are made to appear by the affidavit of such claimant. (Acts 1980, No. 80-658, §5-5-42.)

Ala. Code § 5-5A-43 Disclosure of Customer Financial Records.

5-5A-43. Disclosure of Customer Financial Records. A bank shall disclose financial records of its customers pursuant to a lawful subpoena, summons, warrant or court order issued by or at the request of any state agency, political subdivision, instrumentality, or officer or employee thereof and served upon the bank. No bank, director, officer, employee or agent thereof shall be held civilly or criminally responsible for disclosure of financial records pursuant to a subpoena, summons, warrant or court order which on its face appears to have been issued upon lawful authority. (Acts 1980, No. 80-658, §5-5-43.)

Ala. Code § 5-5A-44 Acquisition of Majority of Voting Shares of a Bank; Procedure.

5-5A-44. Acquisition of Majority of Voting Shares of a Bank; Procedure. (a) No person, acting directly or indirectly or through or in concert with one or more persons, may acquire control of a state bank or of any corporation or other entity having control of a state bank, unless an application is filed with the superintendent for review of the proposed transaction and for his or her action, if any, as provided in this section. (b) The application shall be on a form prescribed by the superintendent and shall be made under oath. The application must contain all information that the superintendent by regulation requires to be furnished in an application, as well as any information that the superintendent orders to be included in the particular application being filed and shall be accompanied by the filing fee prescribed by the Banking Board. For the purposes of this section, the Banking Board may reduce or waive any prescribed fees for applications where a change of control application must also be filed with a responsible federal bank supervisory agency, and the superintendent may accept a copy of the application filed with the responsible federal bank supervisory agency. The superintendent is authorized to waive any prescribed application fees for transactions which the superintendent exempts under subsection (g) (3). No acquiring party may acquire control of a bank unless the superintendent has approved the acquiring party’s acquisition plan. All persons with whom the acquiring party acts directly, indirectly, through, or in concert with to acquire control shall be identified in the application and shall provide all information required by the superintendent. The acquiring party shall file its application with the superintendent, and the application shall, except to the extent expressly waived by the superintendent, contain the following information: (1) The identity, personal history, business background, and experience of each person by whom or on whose behalf the acquisition is to be made, including his or her material business activities and affiliations during the past five years, and a description of any material pending legal or administrative proceedings in which he or she is a party and any criminal indictment or conviction of such person by a state or federal court. (2) A statement of the assets and liabilities of each person by whom or on whose behalf the acquisition is to be made, as of the end of the fiscal year for each of the five fiscal years immediately preceding the date of the notice, together with related statements of income and source and application of funds for each of the fiscal years then concluded, all prepared in accordance with generally accepted accounting principles consistently applied, and an interim statement of the assets and liabilities for each such person, together with related statements of income and source and application of funds, as of a date not more than 90 days prior to the date of the filing of the notice. (3) The terms and conditions of the proposed acquisition and the manner in which the acquisition is to be made. (4) The identity, source, and amount of the funds or other consideration used or to be used in making the acquisition, and if any part of these funds or other consideration has been or is to be borrowed or otherwise obtained for the purpose of making the acquisition, a description of the transaction, the names of the parties, and any arrangements, agreements, or understandings with such persons. (5) Any plans or proposals which any acquiring party making the acquisition may have to liquidate the bank, to sell its assets or merge it with any company or to make any other major change in its business or corporate structure or management. (6) The identification of any person employed, retained, or to be compensated by the acquiring party, or by any person on his or her behalf, to make solicitations or recommendations to stockholders for the purpose of assisting in the acquisition, and a brief description of the terms of such employment, retainer, or arrangement for compensation. (7) Copies of all invitations or tenders or advertisements making a tender offer to stockholders for purchase of their stock to be used in connection with the proposed acquisition. (8) If any tender offer, request, or invitation for tenders, or other agreement to acquire control is proposed to be made by means of a registration statement under the Federal Securities Act of 1933, as amended, or under circumstances requiring the disclosure of similar information under the Federal Securities Exchange Act of 1934, as amended, or in an application filed with the Federal Deposit Insurance Corporation, the Board of Governors of the Federal Reserve System, or the Securities Commissioner of Alabama requiring similar disclosure, the superintendent may accept the registration statement or application with any additional information as the superintendent may require in lieu of the requirements of this section. (9) If, while an application is pending, any material change occurs in the facts stated in the application, the acquiring party within 10 days after the change shall file with the superintendent an amendment to the application describing the change in accordance with rules the superintendent may adopt. Information obtained by the superintendent under this section is confidential and may not be disclosed by the superintendent or any officer or employee of the State Banking Department, except that the superintendent may in his or her discretion, if the superintendent deems it necessary or proper to the enforcement of the laws of this state or the United States and to the best interest of the public, divulge such information to any department, agency, or instrumentality of the state or federal government. (c) For purposes of this section, the following terms shall have the following meanings: (1) ACTING THROUGH OR IN CONCERT. Knowing participation in a joint activity or parallel action towards a common goal of acquiring control of a state bank or any corporation or other entity having control of a state bank whether or not pursuant to an express agreement. (2) CONTROL. The power, directly or indirectly, to direct the management or policies of a state bank or of any corporation or other entity having that power or ownership of or power to vote (whether through the exercise of proxies or otherwise) the lesser of either of the following: a. Twenty-five percent or more of any class of the voting securities of a state bank or of any corporation or other entity having control of a state bank. b. Ten percent or more of any class of the voting securities of a state bank or of any corporation or other entity having control of a state bank if no other person will own, control, or hold the power to vote a majority of that class of voting securities immediately after the transaction. (3) PERSON. An individual or a corporation, partnership, trust, association, joint venture, pool, syndicate, sole proprietorship, unincorporated organization, or any other form of entity not specifically listed herein. (d) The superintendent shall issue an order denying an application if he or she finds that any of the following circumstances exist: (1) The financial condition of any acquiring person is such as might jeopardize the financial stability of the bank or prejudice the interests of the depositors or stockholders of the bank. (2) The competence, experience, or integrity of any acquiring person or of any of the proposed management personnel indicates that it would not be in the interest of the depositors or stockholders of the bank, or in the interest of the public to permit such person to control the bank. (3) Any acquiring person neglects, fails, or refuses to furnish the superintendent all the information required by the superintendent. (4) The plans or proposals which any acquiring person may have to make any major change in the business or corporate structure or management may be detrimental to the safety and soundness of the state bank or of any corporation or other entity having control of the state bank. (5) The effect of the proposed acquisition of control may result in a substantial reduction of competition in this state or communities served by the state bank to be acquired. (6) The proposed acquisition of control may have a significantly adverse effect on the convenience and needs of the community or communities that are served by the state bank. (e) The superintendent shall approve or deny a change of control under this section within 60 days after receipt of a completed application; provided that if the superintendent requests additional information from the applicant following receipt of a completed application, the time limit for the decision by the superintendent shall be the later of (1) the date set forth above in this subsection; or (2) 30 days after the receipt by the superintendent of the requested additional information. Any agreement entered into by the applicants and the superintendent as a condition that the application will not be denied is enforceable against the applicant and the bank. (f) From any final order denying the application the applicant may appeal the decision in the manner and through the procedures established in Sections 5-5A-8 and 5-5A-9 for the denial of incorporation of a bank. (g) This section does not apply to any of the following: (1) The acquisition of securities in connection with the exercise of a security interest or otherwise by way of foreclosure on default in the payment of a debt previously contracted for in good faith. (2) Acquisitions or transfers by gift, by will, or intestate succession. (3) Any transaction which the superintendent by regulation, order, or written interpretation may exempt as not being contemplated by the purposes of this section or the regulation of which is not necessary or appropriate for the protection of the bank. However, in any change of control transaction exempted from filing an application pursuant to this subsection, the acquiring person shall notify the superintendent within 60 days of obtaining control, shall submit a business plan including management structure within 90 days of obtaining control for approval by the superintendent, and shall obtain the superintendent’s prior approval for any changes to the business plan during the first three years from the date of change of control. (h) If it appears to the superintendent that any person has committed or is about to commit a violation of this section or any regulation or order of the superintendent adopted under it, the Attorney General on behalf of the superintendent may apply to the Circuit Court of Montgomery County for an order enjoining the violation and for any other equitable relief as the nature of the case may require. (i) Fees collected under this section shall be paid into the special fund established by the State Treasurer pursuant to Section 5-2A-20. (j) This section applies to acquisitions subject to this section that occur on or after May 6, 2016. (Acts 1980, No. 80-658, §5-5-44; Act 2010-548, p. 966, §1; Act 2011-589, p. 1306, §1; Act 2016-278, §§1, 2.)

Ala. Code § 5-5A-45 Initiation of Run on Banks, Etc.

5-5A-45. Initiation of Run on Banks, Etc. Any person or persons whose business it is, either as individuals, agents or officers of banks, to receive checks, drafts and demands, when the same are not entitled to days of grace, upon any bank, and who receives the same, for collection and retains the same for an unreasonable time, without making known to the drawee bank that such collections and demands are held for collection, in order to accumulate a large amount for the purpose of starting what is commonly called a “run” on such bank, or for the purpose of embarrassing such drawee bank shall be guilty of a misdemeanor. (Acts 1980, No. 80-658, §5-5-45.)

Ala. Code § 5-5A-46 False, Etc., Statements, Etc., Affecting Financial Standing of Bank.

5-5A-46. False, Etc., Statements, Etc., Affecting Financial Standing of Bank. Any person who shall willfully and maliciously make, circulate or transmit to another or others any false, libelous or slanderous statement, rumor or suggestion written, printed or by word of mouth which is directly or by inference derogatory to the financial condition, or affects the solvency or financial standing of any bank, or who shall counsel, aid, procure or induce another to start, transmit or circulate any such statement or rumor shall be guilty of a misdemeanor. (Acts 1980, No. 80-658, §5-5-46.)

Ala. Code § 5-5A-47 Liability of Directors or Officers; Enforcement Powers of Superintendent.

5-5A-47. Liability of Directors or Officers; Enforcement Powers of Superintendent. If the directors or officers of any bank knowingly and willfully violate or knowingly and willfully permit any of the officers, agents, or employees of the bank to violate any of the provisions of this title, each and every director or officer engaging in such knowing and willful violation or knowing and willful permission shall be liable in his or her personal and individual capacity for all damages which the bank or any other person shall have sustained in consequence of such violation. The superintendent may use enforcement powers granted by Section 5-2A-12 to seek restitution for or on behalf of the bank for damages resulting from such violations. Further, the superintendent shall have standing to intervene in any court action arising out of or relating to such violation in order to protect the interests of the superintendent, the bank, or its shareholders. (Acts 1980, No. 80-658, §5-5-47; Act 2007-224, p. 284, §1.)

Source: Alabama Legislature (alison.legislature.state.al.us)URL: https://alison.legislature.state.al.us/code-of-alabamaFetched: 10/20/2026