Direct Branch, Agency, and Representative Offices of Foreign Banks.

Ala. Code tit. 5, ch. 13B, art. 3, div. 3

in effect

Ala. Code § 5-13B-80 Purpose.

5-13B-80. Purpose. Consistent with the federal International Banking Act, the Bank Holding Company Act, the Federal Deposit Insurance Act, and the Interstate Banking and Branching Efficiency Act, this division is intended: (1) To authorize banking activities and operations, under state licenses issued by the superintendent, of direct branch and agency offices in this state of foreign banks, generally under terms and conditions not less favorable than the terms and conditions under which such activities and operations may be conducted by federal branch or agency offices of foreign banks in the United States, and to set forth a statutory framework for the licensing, regulation, and supervision of such state-licensed offices of foreign banks by the superintendent to assure the safe and sound operation of such offices that are licensed under the laws of this state; and (2) To authorize representative offices in this state of foreign banks, and to set forth statutory provisions governing the licensing and supervision of such offices by the superintendent. (Acts 1995, No. 95-115, p. 134, §28.)

Ala. Code § 5-13B-81 Branches and Agencies of Foreign Banks - Necessity of Licensure.

5-13B-81. Branches and Agencies of Foreign Banks - Necessity of Licensure. (a) No foreign bank shall transact business in this state except at an Alabama state branch or Alabama state agency which it is licensed to establish and maintain pursuant to, and at which it conducts such activities as are permitted by, this article. (b) Subsection (a) shall not be deemed to prohibit: (1) Any foreign bank which maintains a federal agency or federal branch in this state from transacting at such federal agency or federal branch such business as it may be authorized to transact under applicable federal laws and regulations; or (2) Any foreign bank which does not maintain an Alabama state branch or Alabama state agency from making in this state loans secured by liens on real property located in this state; or (3) Any foreign bank which maintains an Alabama branch or agency from transacting business as agent for an affiliated depository or other institution in accordance with provisions of this article; or (4) Any foreign bank organized under the laws of a territory of the United States, Puerto Rico, Guam, American Samoa, or the Virgin Islands, the deposits of which are insured by the Federal Deposit Insurance Corporation, from establishing and operating an interstate branch in this state in its capacity as a “state bank” as defined in the Federal Deposit Insurance Act, pursuant to the authorities contained in that act and in the laws of this state. (c) For purposes of subsection (a), no foreign bank shall be deemed to be transacting business in this state merely because a subsidiary or affiliate transacts business in this state. (Acts 1995, No. 95-115, p. 134, §29.)

Ala. Code § 5-13B-82 Application to Establish and Maintain a Branch or Agency - Contents.

5-13B-82. Application to Establish and Maintain a Branch or Agency - Contents. (a) A foreign bank, in order to procure a license under this article to establish and maintain an Alabama state branch or Alabama state agency shall submit an application to the superintendent. Such application shall contain: (1) The same information as required by the Board of Governors of the Federal Reserve System for an application to establish a branch or agency, as the case may be, in the United States; and (2) Such additional information as the superintendent may require by regulation or order. (b) In addition to the information required to be included in an application for a license to establish and maintain an Alabama state branch or Alabama state agency listed in subsection (a), the superintendent may as he or she deems necessary or appropriate require a foreign bank to include as part of such an application an instrument irrevocably appointing the superintendent and his or her successors in office to be such foreign bank’s agent, representative, and attorney to receive service of any lawful process in any proceeding against the foreign bank or any of its successors which arises out of the foreign bank’s activities in this state after such appointment has been filed, with the same force and validity as if served on the foreign bank or its successor, as the case may be. Such appointment shall be in such form and contain such information as the superintendent may require by regulation or order. (Acts 1995, No. 95-115, p. 134, §30.)

Ala. Code § 5-13B-83 Application to Establish and Maintain a Branch or Agency - Manner of Filing and Determination.

5-13B-83. Application to Establish and Maintain a Branch or Agency - Manner of Filing and Determination. (a) A foreign bank making an application under this article for a license to establish and maintain an Alabama state branch or Alabama state agency shall deliver to the superintendent: (1) At least two, or more as the superintendent may require by regulation, duplicate originals of the foreign bank’s application; and (2) At least two, or more as the superintendent may require by regulation, copies of its charter or articles of incorporation and all amendments thereto, duly authenticated by the proper officer of the country of such foreign bank’s organization. (b) The superintendent shall issue a license to a foreign bank to establish and maintain an Alabama state branch or Alabama state agency if he or she finds that: (1) The foreign bank is of good character and sound financial standing; (2) The management of the foreign bank and the proposed management of the Alabama state branch or Alabama state agency are adequate; (3) The convenience and needs of persons to be served by the proposed Alabama state branch or Alabama state agency will be promoted; and (4) The foreign bank satisfies such other standards as the superintendent may establish by regulation. (c) If the superintendent determines to issue a license to a foreign bank to establish and maintain an Alabama state branch or Alabama state agency, he or she shall, when all fees have been paid as required under this article: (1) Endorse on each document filed as part of the application the word “Filed,” and the date of the filing thereof and return to the foreign bank a copy of each document so endorsed; (2) File in his or her office one of such duplicate originals of the application and copies of the charter or articles of incorporation and amendments thereto; and (3) Issue a license to establish and maintain an Alabama state branch or Alabama state agency to such foreign bank. (d) Each license issued to a foreign bank to establish and maintain an Alabama state branch or Alabama state agency shall state fully the name of the foreign bank to which such license is issued and all such other information as the superintendent may require by regulation or order. (e) The superintendent may, by regulation or order, prescribe abbreviated application procedures and standards applicable to applications by foreign banks that have already established an initial Alabama state branch or agency, subsequently to establish additional intrastate Alabama state branches or agencies, as the case may be. (Acts 1995, No. 95-115, p. 134, §31.)

Ala. Code § 5-13B-84 Application Fee.

5-13B-84. Application Fee. Upon applying to the superintendent under this article for a license to establish and maintain an Alabama state branch or Alabama state agency, a foreign bank shall pay to the superintendent an application fee in such amount and in such manner as the superintendent shall require by regulation. (Acts 1995, No. 95-115, p. 134, §32.)

Ala. Code § 5-13B-85 No Concurrent Maintenance of Federal Branches or Agencies.

5-13B-85. No Concurrent Maintenance of Federal Branches or Agencies. (a) No foreign bank which is licensed under this article to establish and maintain an Alabama state branch or Alabama state agency shall concurrently maintain a federal branch or federal agency in this state. (b) No foreign bank which maintains a federal branch or federal agency in this state shall concurrently be licensed under this article to maintain an Alabama state branch or Alabama state agency. (Acts 1995, No. 95-115, p. 134, §33.)

Ala. Code § 5-13B-86 Powers of Branch and Agency.

5-13B-86. Powers of Branch and Agency. (a) Except as otherwise specifically provided in this division or in regulations or orders adopted by the superintendent, and notwithstanding any other law or regulation of this state to the contrary, operations of a foreign bank at an Alabama state branch or Alabama state agency shall be conducted with the same rights, privileges, and powers as an Alabama state bank at the same location, including, but not limited to, the eligibility to exercise fiduciary or trust powers, and shall be subject to all the same duties, restrictions, penalties, liabilities, conditions, and limitations that would apply under the laws of this state to an Alabama state bank doing business at the same location. (b) Among other exceptions to the provisions of subsection (a) that may be required or authorized by the superintendent pursuant to the provisions of this division: (1) An Alabama state branch that was not grandfathered as an “insured branch” within the meaning of Section 6(c)(2) of the Federal International Banking Act (12 U.S.C. §3104(c)(2)) may not accept, from citizens or residents of the United States, deposits, other than credit balances that are incidental to or arise out of its exercise of other lawful banking powers, of less than one hundred thousand dollars ($100,000), except to the extent that such deposits are determined by the Federal Deposit Insurance Corporation not to constitute “domestic retail deposit activities requiring deposit insurance protection” within the meaning of Section 6 of the Federal International Banking Act (12 U.S.C. §3104); (2) An Alabama state agency may not accept any deposits from citizens or residents of the United States, other than credit balances that are incidental to or arise out of its exercise of other lawful banking powers, but it may accept deposits from persons who are neither citizens nor residents of the United States; (3) An Alabama state branch or Alabama state agency shall not be required to maintain federal or state deposit insurance under any law, regulation, or order of this state that requires Alabama state banks and other depository institutions to maintain such deposit insurance, and the superintendent may, by regulation or order, exclude or exempt uninsured Alabama state branches and/or Alabama agencies from, or otherwise modify the applicability to uninsured Alabama state branches and/or Alabama agencies of, any law or regulation of this state that is generally applicable to insured Alabama state banks, or that would otherwise be applicable to an insured Alabama state bank doing business at the same location, as the superintendent may deem necessary or desirable, taking into account applicable limitations on the retail deposit-taking powers and privileges of Alabama state branches and Alabama agencies; (4) Any limitation or restriction based on the capital stock and surplus of an Alabama state bank shall be deemed to refer, as applied to an Alabama state branch or Alabama state agency, to the dollar equivalent of the capital stock and surplus of the foreign bank, and if the foreign bank has more than one Alabama state branch or Alabama state agency in this state, the business transacted by all such Alabama state branches and Alabama state agencies shall be aggregated in determining compliance with the limitation; and (5) The superintendent is expressly authorized to adopt such additional or modify the applicability of any existing standards, conditions, or requirements, by regulation or order, as he or she may deem necessary to ensure the safety and soundness and the protection of creditors of the operations of branches and agencies of foreign banks in this state. (Acts 1995, No. 95-115, p. 134, §34.)

Ala. Code § 5-13B-87 Fiduciary Activities.

5-13B-87. Fiduciary Activities. (a) No foreign bank which is licensed to establish and maintain an Alabama state branch or Alabama state agency shall engage in fiduciary activities at such office unless such foreign bank shall have first obtained a certificate of authority from the superintendent to engage in fiduciary activities at such office. (b) An application to obtain a certificate of authority to engage in fiduciary activities shall be in such form and contain such information, and be accompanied by such reasonable fee, as the superintendent may require by regulation. The superintendent shall issue a certificate of authority to engage in fiduciary activities to a foreign bank making an application under this section if he or she finds that such foreign bank will exercise fiduciary powers in accordance with the laws and regulations of this state. (c) A foreign bank which holds a certificate of authority issued under this section may engage at its Alabama state branch or Alabama state agency in fiduciary activities to the same extent and in the same manner as if such foreign bank were an Alabama state bank. (d) A foreign bank which holds a certificate of authority issued under this section shall file all such reports, pay all such reasonable fees, and be subject to examination and supervision as the superintendent may determine by regulation. (e) The superintendent may suspend or revoke a certificate to engage in fiduciary activities issued under this section if he or she finds: (1) That conditions exist which would authorize the superintendent under this article to revoke or suspend such foreign bank’s license to establish and maintain an Alabama state branch or Alabama state agency; or (2) Any fact or condition exists which, if it had existed at the time of the foreign bank’s original application to obtain a certificate of authority to engage in fiduciary activities, would have resulted in the superintendent’s refusal to issue such certificate of authority to the foreign bank. (Acts 1995, No. 95-115, p. 134, §35.)

Ala. Code § 5-13B-88 Authority to Act as Agent.

5-13B-88. Authority to Act as Agent. (a) An Alabama state branch or Alabama state agency of a foreign bank licensed under this article may receive deposits, renew time deposits, close loans, service loans, and receive payments on loans and other obligations as an agent for any depository institution affiliate of such foreign bank, including branch, agency, and other offices of the same foreign bank located in other states, generally in accordance with the same terms, conditions, procedures, and requirements that are applicable under the laws and regulations of this state to such agency activities that may be conducted by Alabama state banks. (b) Notwithstanding any other provision of the laws or regulations of this state, an Alabama state branch or Alabama state agency of a foreign bank acting in this state as an agent in accordance with the provisions of this section shall not be considered to be a branch of such other depository institution affiliate; provided, however, that no Alabama state branch or Alabama agency shall be authorized by this section to act as agent for a branch or agency of an affiliated foreign bank other than the foreign bank which has been licensed to transact business in this state pursuant to this article. (c) An Alabama state branch or Alabama state agency of a foreign bank licensed under this article may not: (1) Conduct any activity as an agent under this section which such office is prohibited from conducting as a principal under any applicable federal or state law, including, but not limited to, the acceptance of impermissible deposits; or (2) As a principal, have an agent conduct any activity under this section which such office is prohibited from conducting under any applicable federal or state law, including, but not limited to, the acceptance of impermissible deposits. (d) An agency relationship between an Alabama state branch or Alabama state agency of a foreign bank licensed under this article and a depository institution affiliate of such foreign bank shall in any event be on terms that are consistent with safe and sound banking practices and all applicable regulations and orders of the superintendent. (Acts 1995, No. 95-115, p. 134, §36.)

Ala. Code § 5-13B-89 Representative Office of Foreign Banks - Necessity of Licensure.

5-13B-89. Representative Office of Foreign Banks - Necessity of Licensure. (a) No foreign bank shall establish or maintain an Alabama representative office unless such foreign bank is licensed by the superintendent to maintain such an Alabama representative office. (b) Nothing in subsection (a) shall be deemed to prohibit a foreign bank which maintains a federal agency or federal branch in this state from establishing or maintaining one or more Alabama representative offices. (Acts 1995, No. 95-115, p. 134, §37.)

Ala. Code § 5-13B-90 Representative Office - Application.

5-13B-90. Representative Office - Application. (a) The application for a license to establish and maintain an Alabama representative office shall be in writing under oath and shall be in such form and contain such information as the superintendent may require by regulation or order. The application shall be accompanied by a reasonable fee as the superintendent may establish by regulation. (b) The superintendent shall require a foreign bank to include as part of its application to establish and maintain an Alabama representative office an instrument irrevocably appointing the superintendent and his or her successors in office to be such foreign bank’s agent, representative, and attorney to receive service of any lawful process in any proceeding against such foreign bank or any of its successors which arises out of a transaction with its Alabama representative office, with the same force and validity as if served on the foreign bank or its successor, as the case may be. Such appointment shall be in such form and contain such information as the superintendent may require by regulation or order. (Acts 1995, No. 95-115, p. 134, §38.)

Ala. Code § 5-13B-91 Representative Office - Factors for Approval of Application.

5-13B-91. Representative Office - Factors for Approval of Application. (a) A foreign bank making an application for a license to establish and maintain an Alabama representative office shall deliver to the superintendent two, or more as the superintendent may require by regulation, duplicate originals of the foreign bank’s application. (b) The superintendent shall issue a license to a foreign bank to establish and maintain an Alabama representative office if he or she finds that: (1) The foreign bank is of good character and sound financial standing; (2) The management of the foreign banks and the proposed management of the Alabama representative office are adequate; and (3) The convenience and needs of persons to be served by the proposed Alabama representative office will be promoted. (c) If the superintendent determines to issue a license to a foreign bank to establish and maintain an Alabama representative office, he or she shall, when all fees have been paid as required under this article: (1) Endorse on each duplicate original of the application the word “Filed,” and the date of the filing thereof and return to the foreign bank one such duplicate original so endorsed; (2) File in his or her office one of such duplicate originals of the application; and (3) Issue a license to establish and maintain an Alabama representative office to such foreign bank. (d) Each license issued to a foreign bank to establish and maintain an Alabama representative office shall state fully the name of the foreign bank to which such license is issued, the address or addresses at which such Alabama representative office is to be located and all such other information as the superintendent may require by regulation. (Acts 1995, No. 95-115, p. 134, §39.)

Ala. Code § 5-13B-92 Representative Office - Permissible Activities.

5-13B-92. Representative Office - Permissible Activities. (a) A foreign bank which is licensed to establish and maintain an Alabama representative office may, subject to such regulations as the superintendent may prescribe, engage in the following activities: (1) Solicitation for loans and in connection therewith the assembly of credit information, making of property inspections and appraisals, securing of title information, preparation of applications for loans including making recommendations with respect to action thereon, solicitation of investors to purchase loans from the foreign bank, and the search for such investors to contract with the foreign bank for servicing of such loans; (2) The solicitation of new business; (3) The conduct of research; and (4) Back office administrative functions as may be more specifically defined in regulations issued by the superintendent. Any other activity which the foreign bank seeks to conduct at such office shall be subject to the prior written approval of the superintendent by general regulation or upon application in such form as the superintendent shall require by regulation or order. (b) Notwithstanding subsection (a), an Alabama representative office may engage in credit approval activities provided that the foreign bank (1) gives 45 days’ prior written notice to the superintendent; and (2) the superintendent does not object within such 45-day period to the conduct of such activities by the Alabama representative office. Written notice under this subsection shall be in such a form and contain such information as the superintendent shall require by regulation or order. (Acts 1995, No. 95-115, p. 134, §40.)

Ala. Code § 5-13B-93 Representative Office - Revocation of License.

5-13B-93. Representative Office - Revocation of License. The superintendent, after notice and opportunity for a hearing, may revoke a license to establish and maintain an Alabama representative office if he or she finds: (1) The foreign bank has violated any provision of this article or any other law, rule, or regulation of this state; or (2) Any fact or condition exists which, if it had existed at the time of the foreign bank’s original application for such license, would have resulted in the superintendent’s refusal to issue such license to the foreign bank. (Acts 1995, No. 95-115, p. 134, §41.)

Ala. Code § 5-13B-94 Posting of License.

5-13B-94. Posting of License. Each foreign bank which is licensed to establish and maintain an Alabama state branch, Alabama state agency, or Alabama representative office shall post its license in a conspicuous place at such office. (Acts 1995, No. 95-115, p. 134, §42.)

Ala. Code § 5-13B-95 Licenses Not Transferable.

5-13B-95. Licenses Not Transferable. No license issued by the superintendent in accordance with this article shall be transferable or assignable. (Acts 1995, No. 95-115, p. 134, §43.)

Ala. Code § 5-13B-96 Appointment of Superintendent as Agent for Service of Process.

5-13B-96. Appointment of Superintendent as Agent for Service of Process. (a) A foreign bank which is licensed to establish and maintain an Alabama state branch, Alabama state agency, or Alabama representative office shall file with the superintendent an instrument irrevocably appointing the superintendent and his or her successors in office to be such foreign bank’s agent, representative, and attorney to receive service of any lawful process in any judicial or administrative proceeding against the foreign bank or any of its successors which arises out of the foreign bank’s activities in this state after such appointment has been filed, with the same force and validity as if served directly on the foreign bank or its successor, as the case may be. Such appointment shall be in such form and contain such information as the superintendent may require by regulation or order. (b) Any foreign bank which establishes an Alabama state branch, Alabama state agency, or Alabama representative office and which has not filed with the superintendent an instrument pursuant to subsection (a) shall be deemed by the establishment of such office to have appointed the superintendent as its agent, representative, and attorney to receive service of any lawful process in any judicial or administrative proceeding against the foreign bank or any of its successors which arises out of the foreign bank’s activities in this state, with the same force and validity as if served directly on the foreign bank or its successor, as the case may be. (Acts 1995, No. 95-115, p. 134, §44.)

Ala. Code § 5-13B-97 Service of Process.

5-13B-97. Service of Process. (a) Service of any lawful process in any judicial or administrative proceeding against the foreign bank or any of its successors which arises out of the foreign bank’s activities in this state shall be made on the superintendent by delivering to and leaving with him or her, or with any official having charge of his or her office, duplicate copies of such process, notice, or demand. If any process, notice, or demand is served on the superintendent, he or she shall immediately cause a copy thereof to be forwarded by registered mail addressed to such foreign bank at its principal office as the same appears in his or her records. Any service so had on the superintendent shall be returnable in not less than 30 days. (b) Nothing in this article limits or affects the right to serve any process, notice, or demand required or permitted by law to be served upon a foreign corporation in any other manner now or hereafter permitted by law. (c) The superintendent shall keep a record of all processes, notices, and demands served upon him or her under this section and shall record therein the time of such service and his or her action with reference thereto. (Acts 1995, No. 95-115, p. 134, §45.)

Ala. Code § 5-13B-98 Filing of Amendments to Articles of Incorporation.

5-13B-98. Filing of Amendments to Articles of Incorporation. A foreign bank which is licensed to maintain an Alabama state branch or Alabama state agency, whenever its articles of incorporation are amended, shall forthwith file in the office of the superintendent a copy of such amendment duly authenticated by the proper officer of the country of such foreign bank’s organization, but the filing thereof may not of itself enlarge or alter the purpose or purposes for which such foreign bank is authorized to pursue in the transaction of its business in this state, nor authorize such foreign bank to transact business in this state under any name other than the name set forth in its license, nor extend the duration of its corporate existence. (Acts 1995, No. 95-115, p. 134, §46.)

Ala. Code § 5-13B-99 Amended License to Establish and Maintain a Branch or Agency.

5-13B-99. Amended License to Establish and Maintain a Branch or Agency. (a) A foreign bank which is licensed to establish and maintain an Alabama state branch or Alabama state agency must secure an amended license if it changes its corporate name, changes the duration of its corporate existence, or desires to pursue in this state other or additional purposes than those set forth in its prior application under this article for a license, by making application therefor to the superintendent. (b) The requirements with respect to the form and contents of an application under subsection (a), the manner of its execution, the filing of duplicate originals thereof with the superintendent, the issuance of an amended license and the effect thereof shall be the same as in the case of an initial application for a license to establish and maintain an Alabama state branch or Alabama state agency. (Acts 1995, No. 95-115, p. 134, §47.)

Ala. Code § 5-13B-100 Change of Control of Foreign Bank.

5-13B-100. Change of Control of Foreign Bank. A foreign bank which is licensed to establish and maintain an Alabama state branch, Alabama state agency, or Alabama representative office shall file with the superintendent a notice, in such form and containing such information as the superintendent may prescribe, no later than 14 calendar days after such foreign bank becomes aware of any acquisition of control of such foreign bank or merges with another foreign bank. (Acts 1995, No. 95-115, p. 134, §48.)

Ala. Code § 5-13B-101 Relocation of Office; Written Notice Necessary.

5-13B-101. Relocation of Office; Written Notice Necessary. (a) No foreign bank which is licensed to establish and maintain an Alabama state branch, Alabama state agency, or Alabama representative office shall relocate any such office unless the foreign bank provides prior written notice to the superintendent and the superintendent shall have approved such relocation. (b) Written notice provided by a foreign bank under this section shall be in such form and contain such information as the superintendent shall require by regulation or order. (Acts 1995, No. 95-115, p. 134, §49.)

Ala. Code § 5-13B-102 Examination; Payment of Fees.

5-13B-102. Examination; Payment of Fees. (a) An Alabama state branch, Alabama state agency, or Alabama representative office shall be subject to examination by the superintendent at such intervals and in such a manner as he or she shall establish by regulation or order. (b) In conducting an examination pursuant to this section, the superintendent shall: (1) Have full access to the offices, books, accounts, and records of each office located in this state, as well as all of the books, accounts, and records maintained in this state of any office not located in this state of such foreign bank; and (2) Have authority to require the attendance of and to examine under oath all persons whose testimony may be required relative to the activities of such office. (c) A foreign bank which is licensed to establish and maintain an Alabama state branch, Alabama state agency, or Alabama representative office shall be assessed a reasonable fee for the expenses incurred by the superintendent in making an examination of such office. Such fee shall be assessed in an amount and in a manner as the superintendent shall establish by regulation. (d) A foreign bank which is licensed to establish and maintain an Alabama state branch, Alabama state agency, or Alabama representative office shall be subject to all reasonable fees and expenses in such amounts as the superintendent may require by regulation. (Acts 1995, No. 95-115, p. 134, §50.)

Ala. Code § 5-13B-103 Supervision and Enforcement.

5-13B-103. Supervision and Enforcement. (a) The superintendent shall have all of the powers granted to him or her by the laws of this state to the extent appropriate to enable him or her to supervise each Alabama state branch, Alabama state agency, or Alabama representative office. (b) If, after notice and a hearing, the superintendent finds that any person has violated any provision of this article or of any regulation or order issued under this article, he or she may, in addition to any other remedy or action available to the superintendent under the laws of this state, order such person to pay to the superintendent a civil penalty in such a manner and in such an amount as the superintendent shall determine in accordance with the laws of this state and regulations thereunder. (c) In order to carry out the purposes under this article, the superintendent may: (1) Enter into cooperative, coordinating, or information-sharing agreements with any other bank supervisory agency or any organization affiliated or representing one or more bank supervisory agencies; (2) With respect to periodic examination or other supervision of a foreign bank that maintains an Alabama state branch, Alabama state agency, or Alabama representative office, accept reports of examinations performed by, and reports submitted to, other bank supervisory agencies in lieu of conducting examinations, or of receiving reports, as might otherwise be required under this division; (3) Enter into joint examinations or joint enforcement actions with any other bank supervisory agency having concurrent jurisdiction over any foreign bank, provided, however, that the superintendent may at any time take any such actions independently if the superintendent determines that such actions are necessary or appropriate to carry out his or her responsibilities under this article and to ensure compliance with the laws of this state; (4) Enter into contracts with any bank supervisory agency having concurrent regulatory or supervisory jurisdiction over a foreign bank maintaining an Alabama state branch, Alabama state agency, or Alabama representative office, to engage the services of such agency’s examiners at a reasonable rate of compensation or provide the services of the superintendent’s examiners at a reasonable rate of compensation, which contract shall be deemed a sole source, one vendor and one supplier contract under the procurement laws of this state and shall be exempt from competitive bidding requirements; and (5) Assess supervisory and examination fees that shall be payable by foreign banks maintaining an Alabama state branch, Alabama state agency, or Alabama representative office in connection with the superintendent’s performance of his or her duties under this article and in accordance with regulations adopted by the superintendent. (d) Supervisory or examination fees assessed by the superintendent in accordance with the provisions of this article may be shared with other bank supervisory agencies or any organizations affiliated with or representing one or more bank supervisory agencies in accordance with agreements between the superintendent and such agencies or organizations. (Acts 1995, No. 95-115, p. 134, §51.)

Ala. Code § 5-13B-104 Reports.

5-13B-104. Reports. (a) Each foreign bank which is licensed to establish and maintain an Alabama state branch, Alabama state agency, or Alabama representative office shall file with the superintendent such reports as and when the superintendent may require by regulation or order. (b) Each report filed with the superintendent under this article or under any regulation or order issued under this article shall be in such form and contain such information, shall be signed in such manner, and shall be verified in such manner, as the superintendent may require by regulation or order. (Acts 1995, No. 95-115, p. 134, §52.)

Ala. Code § 5-13B-105 Confidentiality of Examination Reports.

5-13B-105. Confidentiality of Examination Reports. (a) All reports of examinations and investigations, correspondence, and memoranda concerning or arising out of such examinations and investigations, including any duly authenticated copy or copies thereof in the possession of any foreign bank, shall not be subject to subpoena and shall not be made public unless, in the judgment of the superintendent, the public advantage will be served by the publication thereof, in which event the superintendent may publish or authorize the publication of a copy of any such report or any part thereof in such manner as may be deemed proper. (b) For the purposes of this section, reports of examinations shall include reports of examinations conducted by any bank supervisory agency which are considered confidential by such agency and which are in possession of the superintendent. (Acts 1995, No. 95-115, p. 134, §53.)

Ala. Code § 5-13B-106 Books, Accounts, and Records.

5-13B-106. Books, Accounts, and Records. Each foreign bank which is licensed to establish and maintain an Alabama state branch, Alabama state agency, or Alabama representative office shall maintain or make available at any such office appropriate books, accounts, and records reflecting (1) all transactions effected by or on behalf of such office and (2) all actions taken in this state by employees of the foreign banking corporation located in this state to effect transactions on behalf of any office of such foreign bank located outside this state. (Acts 1995, No. 95-115, p. 134, §54.)

Ala. Code § 5-13B-107 Separate Assets.

5-13B-107. Separate Assets. (a) Each foreign bank which is licensed to establish and maintain an Alabama state branch or Alabama state agency in this state shall keep the assets of its business in this state separate and apart from the assets of its business outside this state. (b) The creditors of a foreign bank arising out of transactions with, and recorded on the books of, its Alabama state branch or Alabama state agency shall be entitled to absolute preference and priority over creditors of such foreign bank offices located outside of Alabama with respect to the assets of such foreign bank’s offices in this state. (Acts 1995, No. 95-115, p. 134, §55.)

Ala. Code § 5-13B-108 Disclosure of Lack of Deposit Insurance.

5-13B-108. Disclosure of Lack of Deposit Insurance. Each foreign bank which is licensed to establish and maintain an Alabama state branch or Alabama state agency shall, in a manner established by the superintendent by regulation or order, give notice that deposits and credit balances in such office are not insured by the Federal Deposit Insurance Corporation. (Acts 1995, No. 95-115, p. 134, §56.)

Ala. Code § 5-13B-109 Limitations on Payment of Interest on Deposits.

5-13B-109. Limitations on Payment of Interest on Deposits. A foreign bank which is licensed to establish and maintain an Alabama state branch or Alabama state agency shall be subject to the same limitations with respect to the payment of interest on deposits as a state bank which is a member of the Federal Reserve System. (Acts 1995, No. 95-115, p. 134, §57.)

Ala. Code § 5-13B-110 Pledge of Assets.

5-13B-110. Pledge of Assets. (a) Each foreign bank which is licensed to establish and maintain an Alabama state branch or Alabama state agency shall keep on deposit, in accordance with such regulations or orders as the superintendent shall promulgate, with such unaffiliated Alabama banks as such foreign bank may designate and the superintendent may approve, interest-bearing stocks and bonds, notes, debentures, or other obligations of the United States or any agency or instrumentality thereof, or guaranteed by the United States, or of this state, or of a city, county, town, village, school district, or instrumentality of this state or guaranteed by this state, or dollar deposits, or obligations of the International Bank for Reconstruction and Development, or obligations issued by the InterAmerican Development Bank, or obligations of the Asian Development Bank, or obligations issued by the African Development Bank, or such other assets as the superintendent shall by regulation or order permit, to an aggregate amount to be determined by the superintendent, based upon principal amount or market value, whichever is lower, in the case of the above-described securities, and subject to such limitations as he or she shall prescribe. (b) The superintendent may from time to time require that the assets deposited pursuant to this section may be maintained by the foreign bank in such amount, in such form and subject to such conditions as he or she shall deem necessary or desirable for the maintenance of a sound financial condition, the protection of depositors and the public interest, and to maintain public confidence in the business of such Alabama state branch or Alabama state agency. The superintendent may give credit to reserves required to be maintained with a Federal Reserve Bank in or outside this state pursuant to federal law, in accordance with such regulations or procedures as the superintendent may promulgate. (c) So long as it shall continue business in the ordinary course, such foreign bank shall be permitted to collect interest on the securities deposited under this section and from time to time exchange, examine, and compare such securities. (Acts 1995, No. 95-115, p. 134, §58.)

Ala. Code § 5-13B-111 Asset Maintenance.

5-13B-111. Asset Maintenance. (a) Each foreign bank which is licensed to establish and maintain an Alabama state branch or Alabama state agency shall hold in this state currency, bonds, notes, debentures, drafts, bills of exchange, or other evidences of indebtedness, including loan participation agreements or certificates, or other obligations payable in the United States or in United States funds or, with the prior approval of the superintendent, in funds freely convertible into United States funds, or such other assets as the superintendent shall by regulation or order permit, in an amount which shall bear such relationship as the superintendent shall by regulation or order prescribe to liabilities of such foreign bank payable at or through its Alabama state branch or Alabama state agency, including acceptances, but excluding amounts due and other liabilities to other offices, agencies, or branches of, and wholly owned, except for a nominal number of directors’ shares, subsidiaries of, such foreign bank and such other liabilities as the superintendent shall determine. (b) The superintendent is specifically authorized, in implementing the provisions of this section, to: Vary the ratio of assets to liabilities for Alabama branches or Alabama agencies, applicable under this section, of certain foreign banks as may be determined by the superintendent in his or her sole discretion to be necessary or desirable to reflect differences among such Alabama branches or Alabama agencies on account of: (1) The financial condition of Alabama branch or agency offices of the foreign bank, (2) The financial condition of branch or agency offices of the same foreign bank located in other states, (3) General economic conditions prevalent in the home country of the parent foreign bank, or (4) The financial condition of the parent foreign bank itself, including, but not limited to: a. The financial condition of its branches and agencies located in other countries, b. The financial condition of its affiliated bank and nonbank subsidiaries in the United States, and c. The financial condition of the foreign bank on a worldwide consolidated basis or in its home country. (c) For the purposes of this section, the superintendent shall value marketable securities at principal amount or market value, whichever is lower, shall have the right to determine the value of any non-marketable bond, note, debenture, draft, bill of exchange, other evidence of indebtedness, including loan participation agreements or certificates, or of any other asset or obligation held or owed to the foreign bank or its Alabama state branch or Alabama state agency in this state, and in determining the amount of assets for the purpose of computing the above ratio of assets to liabilities, shall have the power by regulation or order to exclude in whole or in part any particular asset. (d) If, by reason of the existence or the potential occurrence of unusual and extraordinary circumstances, the superintendent deems it necessary or desirable for the maintenance of a sound financial condition, the protection of depositors, creditors, and the public interest, and to maintain public confidence in the business of an Alabama state branch or Alabama state agency, he or she may, subject to such terms and conditions as he or she may prescribe, require such foreign bank to deposit the assets required to be held in this state pursuant to this section with such Alabama banks, as the superintendent may designate. (e) The assets held to satisfy the assets to liabilities relationship, prescribed by the superintendent pursuant to this section, shall include obligations of any person for money borrowed from a foreign bank holding a license to establish and maintain an Alabama state branch or Alabama state agency only to the extent that the total of such obligations of any person are not more than 10 percent of such assets considered for purposes of this section. (Acts 1995, No. 95-115, p. 134, §59.)

Ala. Code § 5-13B-112 Voluntary Closure of Branch, Agency, or Representative Office - Application.

5-13B-112. Voluntary Closure of Branch, Agency, or Representative Office - Application. (a) No foreign bank which is licensed to establish and maintain an Alabama state branch, Alabama state agency, or Alabama representative office shall close such office without filing an application with, and obtaining the prior approval of, the superintendent. An application by a foreign bank under this section shall be in such form and include such information as the superintendent shall establish by regulation or order. (b) If the superintendent finds, with respect to an application by a foreign bank under this section, that the closing of such office will not be substantially detrimental to the public convenience and advantage, the superintendent shall approve such application. If the superintendent finds otherwise, he or she shall deny the application. (c) Whenever an application by a foreign bank under this section has been approved and all conditions precedent to such closing have been fulfilled, such foreign bank may close such office and shall promptly thereafter surrender to the superintendent the license which authorized the foreign bank to maintain the office. (Acts 1995, No. 95-115, p. 134, §60.)

Ala. Code § 5-13B-113 Suspension or Revocation of License; Factors.

5-13B-113. Suspension or Revocation of License; Factors. If, after notice and a hearing, the superintendent finds any of the following with respect to a foreign bank which is licensed to establish and maintain an Alabama state branch or Alabama state agency, he or she may issue an order suspending or revoking the license of such foreign bank: (1) That the foreign bank has violated any provision of this article or of any regulation or order issued under this article or any provision of any other applicable law, regulation, or order; (2) That the foreign bank is transacting activities in this state in an unsafe or unsound manner or, in any case, is transacting activities elsewhere in an unsafe or unsound manner; (3) That the foreign bank or any one or more of its Alabama state branches or Alabama state agencies is in an unsafe or unsound condition; (4) That the foreign bank has ceased to operate any of its offices in this state without the prior approval of the superintendent in accordance with this article; (5) That the foreign bank is insolvent in that it has ceased to pay its debts in the ordinary course of business, it cannot pay its debts as they become due, or its liabilities exceed its assets; (6) That the foreign bank has suspended payment of its obligations, has made an assignment for the benefit of its creditors, or has admitted in writing its inability to pay its debts as they become due; (7) That the foreign bank has applied for an adjudication of bankruptcy, reorganization, arrangement, or other relief under any foreign or domestic bankruptcy, reorganization, insolvency, or moratorium law, or that any person has applied for any such relief under such law against the foreign bank and the foreign bank has by any affirmative act approved of or consented to such action or such relief has been granted; (8) That a receiver, liquidator, or conservator has been appointed for the foreign bank or that any proceeding for such an appointment or any similar proceeding has been initiated in the country of the foreign bank’s organization; (9) That the existence of the foreign bank or the authority of the foreign bank to transact banking business under the laws of the country of the foreign bank’s organization has been suspended or terminated; and (10) That any fact or condition exists which, if it had existed at the time when the foreign bank applied for its license to transact business in this state, would have been grounds for denying such application. (Acts 1995, No. 95-115, p. 134, §61.)

Ala. Code § 5-13B-114 Immediate Suspension or Revocation.

5-13B-114. Immediate Suspension or Revocation. If the superintendent finds that any of the factors set forth in Section 5-13B-113 are true with respect to any foreign bank which is licensed to maintain an Alabama state branch or Alabama state agency and that it is necessary for the protection of the interests of creditors of the foreign bank’s business in this state or, in any case, for the protection of the public interest that the superintendent immediately suspend or revoke the license of the foreign bank, the superintendent may issue, without notice or hearing, an order suspending or revoking the license of the foreign bank for a period of up to 90 days, pending investigation or hearing. (Acts 1995, No. 95-115, p. 134, §62.)

Ala. Code § 5-13B-115 Seizure of Foreign Bank’s Property and Business; Liquidation.

5-13B-115. Seizure of Foreign Bank’s Property and Business; Liquidation. (a) If the superintendent finds that any of the factors set forth in Section 5-13B-113 are true with respect to any foreign bank which is licensed to establish and maintain an Alabama state branch or Alabama state agency and that it is necessary for the protection of the interests of the creditors of such foreign bank’s business in this state or for the protection of the public interest that he or she take immediate possession of the property and business of the foreign bank, the superintendent may by order forthwith take possession of the property and business of the foreign bank in this state and retain possession until the foreign bank resumes business in this state or is finally liquidated. The foreign bank may, with the consent of the superintendent, resume business in this state upon such conditions as the superintendent may prescribe by regulation or order. (b) At any time within 10 days after the superintendent has taken possession of the property and business of a foreign bank pursuant to subsection (a), such foreign bank may apply to the circuit court of the county in which the primary office of the foreign bank is located in this state for an order requiring the superintendent to show cause why he or she should not be enjoined from continuing such possession. The court may, upon good cause being shown, direct the superintendent to refrain from further proceedings and to surrender such possession. The judgment of the court having jurisdiction over any proceedings under this subsection may be appealed by the superintendent or by the foreign bank in the manner provided by law for appeals from a judgment of the circuit court. Where the superintendent appeals the judgment of the circuit court, such appeal shall operate as a stay of the judgment and a reinstatement of the superintendent’s possession. The superintendent shall not be required to post any bond. (c) Whenever the superintendent takes possession of the property and business of a foreign bank pursuant to subsection (a), he or she shall conserve or liquidate the property and business of such foreign bank pursuant to the laws of this state as if the foreign bank were an Alabama state bank, with absolute preference and priority given to the creditors of such foreign bank arising out of transactions with, and recorded on the books of, its Alabama state branch or Alabama state agency over the creditors of such foreign bank’s offices located outside this state. (d) When the superintendent has completed the liquidation of the property and business of a foreign bank, the superintendent shall transfer any remaining assets to such foreign bank in accordance with such orders as the court may issue. However, in case the foreign bank has an office in another state of the United States which is in liquidation and the assets of such office appear to be insufficient to pay in full the creditors of that office, the court shall order the superintendent to transfer to the liquidator of that office such amount of any such remaining assets as appears to be necessary to cover such insufficiency; if there are two or more such offices and the amount of remaining assets is less than the aggregate amount of insufficiencies with respect to the offices, the court shall order the superintendent to distribute the remaining assets among the liquidators of such offices in such manner as the court finds equitable. (Acts 1995, No. 95-115, p. 134, §63.)

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