General Provisions.

Ala. Code tit. 5, ch. 2A, art. 1

in effect

Ala. Code § 5-2A-1 Creation of Department; Duties Generally.

5-2A-1. Creation of Department; Duties Generally. There shall be a State Banking Department which shall administer the laws of this state which regulate or otherwise relate to corporations doing or carrying on a banking business in the state, all laws relating to savings and loan associations doing business in this state and all laws relating to persons, firms or corporations engaging in the loan business in this state. The authority of the State Banking Department to perform such functions shall be exclusive. (Acts 1980, No. 80-658, p. 1259, §5-2-1; Acts 1985, No. 85-457, p. 425, §1.)

Ala. Code § 5-2A-2 Offices, Venue.

5-2A-2. Offices, Venue. The State Banking Department shall locate and maintain its principal office in the City of Montgomery, Alabama, from which place it shall perform its duties and transact its business. Unless otherwise provided in Chapters 1A through 13B and Chapter 20 of this title, all actions in which the superintendent, the Banking Department or its employees, the Banking Board or its members are named or joined shall be brought in the Circuit Court of Montgomery County. (Acts 1980, No. 80-658, §5-2-2; Acts 1995, No. 95-115, p. 134, §68.)

Ala. Code § 5-2A-3 Superintendent - Qualifications, Appointment and Term of Office; Filling of Vacancies.

5-2A-3. Superintendent - Qualifications, Appointment and Term of Office; Filling of Vacancies. The State Banking Department shall be in the charge of the superintendent, who shall be the chief executive officer of the department. The superintendent shall be a person of good character and shall be neither directly nor indirectly interested in, nor borrow money from, a bank chartered under the laws of this state. Debts of the superintendent existing at the time of his or her appointment with banks chartered under the laws of this state may not be extended or renewed. The superintendent shall be appointed by the Governor by and with the consent of the Senate and his or her salary shall be set by the Governor within a salary range established by the Banking Board. The salary of any Assistant Superintendent of Banks shall be set by the Governor within a salary range established by the Banking Board for the position of Assistant Superintendent of Banks. Sections 36-6-5 and 36-6-6 shall not apply to the Superintendent of Banks. The term of office of the superintendent shall expire on the first day of February after the expiration of the term of office of the Governor making the appointment. If for any reason there is a vacancy in the office while the Senate is not in session, the Governor shall appoint a superintendent who shall hold office and exercise the powers conferred by law upon the office until the Senate meets and passes on the appointment. If the appointment is disapproved by the Senate, the appointee shall vacate the office immediately and another appointment shall be made by the Governor in like manner until an appointment is confirmed by the Senate. To be eligible for appointment as superintendent, a person shall have had at least five years’ experience in the 10 years next preceding the appointment either as an officer of an Alabama bank or an examiner or other officer in a federal or state bank supervisory agency, including the Office of the Comptroller of the Currency, the Federal Reserve System, the Federal Deposit Insurance Corporation, and the banking departments of the various states or other equivalent experience for at least five years in the 10 years next preceding the appointment. (Acts 1980, No. 80-658, p. 1259, §5-2-5; Acts 1993, No. 93-725, p. 1461, §1; Acts 1994, 1st Ex. Sess., No. 94-767, p. 51, §1.)

Ala. Code § 5-2A-4 Superintendent - Oath and Bond.

5-2A-4. Superintendent - Oath and Bond. The superintendent, before entering upon the discharge of his duties, shall take and subscribe to the oath prescribed by the constitution and laws of this state, and shall give bond in the penal sum of $25,000.00. The oath and the bond shall be filed with the Secretary of State. (Acts 1980, No. 80-658, §5-2-6.)

Ala. Code § 5-2A-5 Superintendent - Seal of Office; Recordation of Executed Papers.

5-2A-5. Superintendent - Seal of Office; Recordation of Executed Papers. The Secretary of State shall provide the superintendent with an official seal. Every paper executed by him as such superintendent, in pursuance of any authority conferred on him by law and sealed with his official seal, shall be received in evidence and may be recorded in the proper recording office in the state in the same manner and with the same effect as a deed regularly acknowledged or proven. (Acts 1980, No. 80-658, §5-2-7.)

Ala. Code § 5-2A-6 Superintendent - Removal; Removal of Member of Banking Board.

5-2A-6. Superintendent - Removal; Removal of Member of Banking Board. (a) The superintendent or any member of the Banking Board may be removed from office by a vote of two thirds of the members of the entire banking board for: (1) Neglect of duty; (2) Malfeasance; (3) Misfeasance; (4) Extortion or corruption in office; (5) Incompetency; (6) Intemperance in the use of intoxicating liquors or narcotics to such an extent, in view of the dignity of the office and the importance of its duties, as to render such person unfit for the discharge of his duties; or (7) Any offense involving moral turpitude while in office, committed under color thereof or connected therewith. (b) The superintendent may also be removed from office, without cause, upon written order of four appointed members of the Banking Board and the Governor. (Acts 1980, No. 80-658, §5-2-8.)

Ala. Code § 5-2A-7 Superintendent - Expansion of Banking Powers; Rules and Regulations.

5-2A-7. Superintendent - Expansion of Banking Powers; Rules and Regulations. (a) The Legislature finds as fact and determines that the financial industry composed of those banks and savings and loan associations having their principal place of business in Alabama must keep pace with technological and other improvements constantly being made throughout the United States so as to enable Alabama banks and savings and loan associations to render better and more efficient services to the citizens of Alabama. It is necessary and desirable that the superintendent be given additional authority in these fields. (b) The superintendent is hereby authorized to expand banking powers of Alabama banks or the powers of Alabama savings and loan associations in order to: (1) Accommodate or take advantage of changing technologies; and (2) Assure the ability of Alabama banks and Alabama savings and loan associations to be responsive in their respective businesses to the needs and conveniences demanded by consumers and businesses through on-premises as well as off-premises operations; provided, that nothing in this section shall enable the superintendent to authorize banks to engage in activities which are not properly incident to the business of banking nor to enable the superintendent to authorize savings and loan associations to engage in the business of offering financial services which are now prohibited to them. No bank, nor savings and loan association having its principal place of business outside of Alabama may engage in the banking or savings and loan business in Alabama under the provisions of this section; provided, that the superintendent is authorized to enter into agreements with the appropriate regulatory authorities of other states or of the United States, under the terms of which banks or savings and loan associations of such foreign state or subject to federal regulatory jurisdiction, and banks and savings and loan associations having their principal place of business in Alabama are given and may exercise reciprocal rights. (c) The superintendent is authorized to issue regulations under subsection (b) and shall give notice in writing of any such proposed regulation to each Alabama bank and Alabama savings and loan association affected thereby, inviting comments, and shall give due consideration to such comments before adopting any final regulation. Any regulation issued under this section relating to banks shall be adopted pursuant to the provision of Section 5-2A-9. Any Alabama bank, Alabama savings and loan association and any foreign corporation or association covered by the provisions of subsection (b) desiring to exercise any such expanded power must secure in advance written permission of the superintendent. The superintendent may prescribe the form or forms for such applications for permits and may impose reasonable conditions in granting such permits. (d) To the extent permitted by federal law, the provisions hereof may be utilized by national banks and federally chartered savings and loan associations. (Acts 1980, No. 80-658, p. 1259, §5-2-9; Acts 1985, No. 85-457, p. 425, §2.)

Ala. Code § 5-2A-8 Superintendent - Promulgation and Interpretation of Regulations.

5-2A-8. Superintendent - Promulgation and Interpretation of Regulations. The superintendent may, with the concurrence of a majority of the members of the State Banking Board or as otherwise provided in this title, promulgate such reasonable regulations, consistent with the laws of this state, as may be necessary to carry out the provisions of this title over which the State Banking Department has jurisdiction. The superintendent shall, in addition, issue written interpretations of banking laws and regulations. Any bank or bank holding company and any officer or director thereof relying on any regulation or interpretation shall be fully protected even though the same shall be thereafter ruled invalid for any reason by a court of competent jurisdiction. (Acts 1980, No. 80-658, p. 1259, §5-2-10; Acts 1985, No. 85-457, p. 425, §3; Acts 1995, No. 95-115, p. 134, §69; Act 2013-352, p. 1261, §1.)

Ala. Code § 5-2A-9 Superintendent - Procedure for Promulgation of Regulations; Emergency Regulations; Judicial Review.

5-2A-9. Superintendent - Procedure for Promulgation of Regulations; Emergency Regulations; Judicial Review. (a) Prior to the adoption, amendment, or repeal of any regulation, the superintendent shall: (1) Give at least 35 days’ notice of the intended action. The notice shall include a statement of either the terms or substance of the intended action or a description of the subjects and issues involved, and the time when, the place where, and the manner in which interested persons may present their views thereon. The notice shall be mailed to all banks in this state and shall be published in a newspaper of general circulation in Montgomery County. A complete copy of the proposed regulation shall be filed with the Secretary of State; and (2) Afford all interested persons reasonable opportunity to submit data, views, or arguments, orally or in writing. Opportunity for oral hearing must be granted if requested by 25 persons, by a governmental subdivision or agency, or by an association having not less than 25 members. The superintendent shall consider fully all written and oral submissions respecting the proposed regulation. Upon adoption of a regulation, the superintendent, if requested to do so by an interested person either prior to adoption or within 30 days thereafter, shall issue a concise statement of the principal reasons for and against its adoption, incorporating therein the reasons for overruling the considerations urged against its adoption. (b) Notwithstanding any other provision of this section to the contrary, if the superintendent finds that an immediate danger to the public welfare requires adoption of a regulation upon fewer than 35 days’ notice and states in writing his reasons for that finding, he may proceed without prior notice or hearing or upon any abbreviated notice and hearing that he finds practicable to adopt an emergency regulation. The regulation shall become effective immediately, unless otherwise stated therein, upon the filing of the regulation and a copy of the written statement of the reasons therefor with the Secretary of State. The regulation may be effective for a period of not longer than 120 days and shall not be renewable. The superintendent and Banking Board shall not adopt the same or a substantially similar emergency regulation within one calendar year from its first adoption unless the superintendent clearly establishes it could not reasonably be foreseen during the initial 120-day period that such emergency would continue or would likely reoccur during the next nine months. The adoption of the same or a substantially similar regulation by normal regulation-making procedures is not precluded. (c) No regulation hereafter adopted is valid unless adopted in substantial compliance with this section. A proceeding to contest any regulation on the ground of noncompliance with the procedural requirements of this section must be commenced within two years from the effective date of the regulation; provided, however, that a proceeding to contest a regulation based on failure to provide notice as herein required or on an incorrect interpretation of the law may be commenced at any time. (d) The validity or applicability of any regulation or an interpretation of the Banking Department may be determined in an action for declaratory judgment brought in the Circuit Court of Montgomery County when it is alleged that the adoption, amendment or repeal of any regulation or any interpretation or the application or threatened application of any regulation or any interpretation interferes with or impairs or threatens to interfere with or impair the legal rights and privileges of the bank or any person affected thereby. (Acts 1980, No. 80-658, §5-2-11.)

Ala. Code § 5-2A-10 Superintendent - Make Good Any Impairment of Capital.

5-2A-10. Superintendent - Make Good Any Impairment of Capital. Whenever the superintendent shall have reason to believe that the capital of any bank is impaired, he may in his discretion require such bank to make good the deficit by the date specified by him, which requirement shall be in writing. The superintendent may cause the affairs of any such bank to be examined to ascertain the amount of such impairment and whether the deficiency has been made good as required by law. (Acts 1980, No. 80-658, §5-2-12.)

Ala. Code § 5-2A-11 Superintendent - Losses; Bank to Correct Impairment of Capital.

5-2A-11. Superintendent - Losses; Bank to Correct Impairment of Capital. Whenever losses are sustained by a bank, such losses shall be charged on the books of the bank as losses so that the books of the bank will show the true condition of the bank. When, by reason of losses or otherwise, the capital of a bank is impaired, and when the bank has been notified by the superintendent, under Section 5-2A-10, the bank must make good its impairment of capital in a manner approved by the superintendent. (Acts 1980, No. 80-658, §5-2-13.)

Ala. Code § 5-2A-12 Superintendent - Order to Correct Unsafe and Unsound Matters; Penalties; Procedure.

5-2A-12. Superintendent - Order to Correct Unsafe and Unsound Matters; Penalties; Procedure. (a) For purposes of this section, a bank holding company is a holding company organized under the laws of Alabama or another state in the United States that directly owns a majority of the voting securities of an Alabama state bank. (b) The superintendent may order a bank, a bank holding company, the board of directors, any director or directors, and any officer or officers of any bank or bank holding company, individually or collectively (hereafter affected person, whether one or more) to correct any matters in the conduct of the affairs of the bank which in the opinion of the superintendent are unsafe and unsound. The Banking Board, after at least 20 days’ written notice by the superintendent to the bank and any affected person, and a hearing before the Banking Board, may direct the superintendent to issue an order that imposes civil money penalties on the bank or bank holding company and affected person and, if so determined by the Banking Board, that removes any affected person: (1) Who does not comply with the superintendent’s order to correct unsafe and unsound matters if the Banking Board by written order enters a finding that the bank has thereby suffered or will probably suffer substantial financial loss and that such practice is one involving personal dishonesty on the part of such affected person or one which demonstrates a willful and continuing disregard for the safety and soundness of the bank or bank holding company, the result of which has caused the bank to suffer or which is likely to cause the bank to suffer substantial financial loss; or (2) Whose conduct: a. demonstrates personal dishonesty in connection with the business, operations, assets, or liabilities of the bank or bank holding company; or b. demonstrates a willful and continuing disregard for the safety and soundness of the bank, the result of which has caused or is likely to cause the bank or bank holding company to suffer substantial financial loss. (c) The amount of civil money penalties imposed shall not exceed one thousand dollars ($1,000) per day with a maximum amount of one hundred thousand dollars ($100,000) in the aggregate for all violations of an order of the superintendent. An order of removal also may prohibit the affected person from participating in the affairs of any Alabama state bank or any holding company that controls an Alabama state bank. In the superintendent’s order to the bank or affected person of the imposition of civil money penalties or removal, the superintendent shall include a specific statement of the facts constituting the alleged unsafe and unsound conduct to be made the basis of the imposition of civil money penalties or removal. At the hearing thereon before the Banking Board, the board of directors of the bank or the affected person shall have the right to appear in person or by counsel. No member of the Banking Board, other than the superintendent, may participate in the hearing if such member is affiliated with the bank or affected person or has previously been involved in a determination to institute the proceedings leading to the hearing. Any order of the superintendent as directed by the Banking Board, imposing civil money penalties or directing removal of an affected person shall within 28 days of the date of entry thereof be appealable to the Circuit Court of Montgomery County, which appeal shall be conducted de novo. Pending expiration of the time for appeal, the order imposing civil money penalties or of removal shall not become effective and neither the superintendent nor the Banking Board shall publicly disclose such order except in connection with the appeal. All proceedings before the Banking Board shall be confidential. Any person violating this section by disclosure of nonpublic information presented at a confidential hearing before the Banking Board, other than the disclosure that may result in connection with an appeal thereof, shall be guilty of a Class A misdemeanor. (Acts 1980, No. 80-658, §5-2-14; Act 2007-224, p. 284, §1; Act 2010-548, p. 966, §1; Act 2011-589, p. 1306, §1.)

Ala. Code § 5-2A-13 Superintendent - Annual Report to Governor; Publication and Distribution, Etc.

5-2A-13. Superintendent - Annual Report to Governor; Publication and Distribution, Etc. The superintendent shall make from the reports of the department during the year an annual report to the Governor on the activities of the banking department and such other information as the Governor may request and shall keep on file as a public record in the superintendent’s office a copy thereof. The board may print for public distribution such annual report and such other material as it deems suitable for the more effective administration of departmental business. (Acts 1980, No. 80-658, §5-2-15.)

Ala. Code § 5-2A-14 Superintendent - Reports of Criminal Violations to Grand Juries.

5-2A-14. Superintendent - Reports of Criminal Violations to Grand Juries. The superintendent may submit to any grand jury any criminal violations of the banking laws known to him or her to have occurred pursuant to applicable law regarding criminal venue and may make himself or herself or his or her staff available to testify in criminal cases if subpoenaed. (Acts 1980, No. 80-658, §5-2-16; Act 2007-224, p. 284, §1.)

Ala. Code § 5-2A-15 Appointment, Etc., of Assistants and Employees Generally; Bond of Deputy Superintendent.

5-2A-15. Appointment, Etc., of Assistants and Employees Generally; Bond of Deputy Superintendent. (a) Subject to the provisions of Section 36-26-1, et seq., the superintendent may appoint or employ one or more deputy superintendents and such assistants, employees and attorneys as may be necessary to the efficient operation of the department. He shall fix their compensation in accordance with Section 36-26-1, et seq. and the pay plan of the State Personnel Department. All such assistants, employees and attorneys shall be subject to the provisions of the merit system. The superintendent shall, with the approval of the Governor, have authority to employ and discharge special counsel as he may deem necessary. (b) The Deputy Superintendent of Banks shall in the absence of the superintendent exercise any of the powers conferred by law on the superintendent and shall before entering upon the duties of his office execute to the State of Alabama a bond in the amount of $25,000.00 for the faithful performance of his duties. (Acts 1980, No. 80-658, §5-2-18.)

Ala. Code § 5-2A-16 Limitation of Liability of Superintendent, Members of Banking Board, or Employees.

5-2A-16. Limitation of Liability of Superintendent, Members of Banking Board, or Employees. Neither the superintendent, any member of the Banking Board nor any employee of the Banking Department shall be personally liable for any acts done in good faith while in the performance of his duties as provided by law. (Acts 1980, No. 80-658, §5-2-19.)

Ala. Code § 5-2A-17 Bank Examiners - Oath; Duties Generally.

5-2A-17. Bank Examiners - Oath; Duties Generally. Every examiner shall, before entering upon the discharge of his duties, take and file with the superintendent an oath faithfully to discharge his duties as examiner. Each examiner shall act under the direction of the superintendent and shall examine fully into the books, papers and affairs of each bank which he may be directed by the superintendent to examine. (Acts 1980, No. 80-658, §5-2-20.)

Ala. Code § 5-2A-18 Bank Examiners - Commission.

5-2A-18. Bank Examiners - Commission. The superintendent shall furnish to each examiner a commission under the signature of the superintendent and official seal of the State Banking Department, which commission the examiner shall exhibit to the bank, and to any officer or officers proposed to be examined as his authority for making the examination. (Acts 1980, No. 80-658, §5-2-21.)

Ala. Code § 5-2A-19 Bond of Examiners and Office Assistants.

5-2A-19. Bond of Examiners and Office Assistants. Before entering upon the duties of their respective offices, all examiners and office assistants shall execute to the State of Alabama a bond to be fixed and approved by the superintendent, for the faithful performance of their duties. (Acts 1980, No. 80-658, §5-2-22.)

Ala. Code § 5-2A-20 Assessment of Banks - When Payable; Amount; Disposition of Revenue.

5-2A-20. Assessment of Banks - When Payable; Amount; Disposition of Revenue. Each bank shall on the call of the superintendent pay to the State Banking Department an assessment fee based on the total resources of the bank as may be shown by its last report to the State Banking Department. The rate of such assessment shall be in an amount fixed by the superintendent and approved by the Banking Board and the assessment may be made more frequently than annually. All assessments and other fees or penalties collected pursuant to this title by the State Banking Department shall be paid into a special fund to be set up by the State Treasurer. The special fund shall be used to pay the salaries of the officials and employees and the expenses of the State Banking Department, including the purchase of equipment, vehicles, and supplies necessary for the examination and supervision of banks, and all moneys deposited therein are hereby appropriated for that purpose. The expenses of all examiners of the State Banking Department shall be paid according to regulations promulgated by the superintendent, and the State Banking Department and its several bureaus and divisions are hereby exempt from the provisions of Sections 36-7-20 and 36-7-22. It is provided, however, that nothing in this section shall be construed to mean that all salaries of the officials and employees and expenses of operating and equipping the State Banking Department shall come from the special fund. No other assessment or license of any kind shall be levied against or collected from any bank or banking institution, except the ordinary taxes assessed against property in general, and except as may be specifically provided for in this code. (Acts 1980, No. 80-658, §5-2-3; Act 2007-224, p. 284, §1.)

Ala. Code § 5-2A-21 Assessment of Banks - Fees for Failure to Pay Assessment; Proceedings for Collection of Assessment.

5-2A-21. Assessment of Banks - Fees for Failure to Pay Assessment; Proceedings for Collection of Assessment. Each bank failing to make payments of assessments on call made by the superintendent within 30 days after receiving notice from the superintendent of the amount of the assessment, shall pay to the state $100.00 for each day after such 30-day period. Such sum, together with the amount due from the bank, may be collected by civil action from the bank in the name of the state against the bank, and the Attorney General shall represent the superintendent in proper proceedings to enforce the collection of the assessment, together with the amount provided in this section. (Acts 1980, No. 80-658, §5-2-4.)

Ala. Code § 5-2A-22 Independent Audits; Minimum Standards; Advisory Committee; Report in Lieu of Audit.

5-2A-22. Independent Audits; Minimum Standards; Advisory Committee; Report in Lieu of Audit. The board of directors of each state bank shall at least once in each calendar year have an audit made of its books and affairs, including any accounts held in a fiduciary capacity, by independent auditors approved by the superintendent. These may be separate audits. “Independent auditors” shall include the audit staff of a correspondent bank or the audit staff of a bank holding company, or auditors or accountants who are not employees of the bank. The superintendent shall by regulation establish minimum standards for audits and reports, which shall include such matters as he shall require. To assist in promulgating minimum standards for audits and reports, the superintendent shall appoint an advisory committee of no less than six members. Membership of the committee shall consist of auditors, as qualified in Chapters 1A through 12A of this title, who regularly perform audits in banks chartered under the laws of Alabama. A majority of the committee shall be comprised of individuals who are certified internal auditors, chartered bank auditors, or certified public accountants. The committee shall meet at the call of the superintendent. The advice of this committee shall not be binding on the superintendent and the members shall serve without compensation. A report of the audit shall be signed by the person making it, and such signed copy shall be submitted to the board of directors and retained in the bank. If any bank has a system of internal audit approved by the Superintendent of Banks, no such independent audit shall be required, and in lieu thereof the auditor or comptroller of the bank shall submit to its board of directors an annual summary of the same matters, which shall be retained in the bank. Such report shall also set forth the degree of compliance with the approved audit system. (Acts 1980, No. 80-658, §5-2-17.)

Ala. Code § 5-2A-23 Legal Counsel.

5-2A-23. Legal Counsel. The Attorney General without additional compensation shall render to the State Banking Department such legal services as the superintendent may request. The district attorney in each county in this state, when requested by the superintendent, shall as a part of his or her official duty and without compensation, represent the superintendent in any civil action that the superintendent may desire to bring, or that may be brought against the superintendent under the provisions of Chapters 1A through 13B and Chapter 20 of this title, in his or her respective circuit or county. (Acts 1980, No. 80-658, §5-2-23; Acts 1995, No. 95-115, p. 134, §70.)

Ala. Code § 5-2A-24 Examination of Small Loan Companies; Fees.

5-2A-24. Examination of Small Loan Companies; Fees. The Superintendent of Banks may at any reasonable time cause an examination to be made of any small loan company, finance company, and other individual or person holding any license from the State Banking Department at the licensee’s place of business of the records and transactions of such licensee to determine compliance with the laws of Alabama. Each licensee shall pay to the State Banking Department the actual cost of each examination, the amount of which shall be reasonably prescribed under uniform and equitable rules and regulations promulgated by the Superintendent of Banks. All such fees shall be paid into the special fund set up by the State Treasurer pursuant to Section 5-2A-20, and used in the supervision and examination of licensees. (Acts 1980, No. 80-444.)

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