Organization of Banks, Savings Banks,

HRS div. 2, tit. 22, ch. 412, art. 3, pt. II

in effect

HRS §412:3-200 Applicability of part

412:3-200. Applicability of part The provisions of this part shall govern the organization of Hawaii financial institutions that are banks, savings banks, savings and loan associations, trust companies, and depository financial services loan companies. L 1993, c 350, pt of §1

HRS §412:3-201 Application for preliminary approval to organize a financial institution

412:3-201. Application for preliminary approval to organize a financial institution (a) Three or more individuals, of whom at least three are residents of the State, or any company that seeks to become a financial institution holding company may file an application with the commissioner for preliminary approval to organize a Hawaii financial institution under this part. Banks seeking authority to engage in the trust business through a division or department of the bank, or through a subsidiary, shall apply for such authority under section 412:5-205. (b) The application shall contain the following information, unless waived by the commissioner: (1) The proposed name of the financial institution; (2) The specific location of its principal office, branches, agencies, and support facilities, and any lease agreements for such principal office, branches, agencies, and support facilities; (3) Financial statements, employment history, education, management experience, and other biographical information for all applicants, organizers, proposed executive officers, and directors of the financial institution; (4) The name and address of each proposed subscriber of capital stock in the financial institution; (5) The proposed capital plan, if capital has not been fully raised, that shall include: (A) A description of any stock options, debentures, and stock warrants offered or proposed to be offered to any person; and (B) Any stock option plan; (6) The proposed capital stock solicitation plan, if subscriptions for capital stock will be solicited, that shall include: (A) Information regarding the solicitation plan by which the applicant and the proposed financial institution propose to conduct the solicitation of subscribers; (B) Information regarding the classes of shares, respective quantities of shares for each class, and the subscription price of each class of stock; (C) A specimen subscription contract or purchase agreement and other related documents to be executed by subscribers; (D) Any underwriting agreement or other agreement for the purchase or distribution of the capital stock; (E) Any escrow agreements or other agreement for the holding of the purchase proceeds of the capital stock; (F) Proposed advertising materials; (G) If the offer and sale of the capital stock is subject to the Securities Act of 1933 and regulations thereunder, a copy of the registration statement most recently filed with the federal Securities and Exchange Commission or any other notices or other filings in lieu of registration required or permitted by that Act or regulation and any subsequent amendments thereto; (H) If the offer and sale of the capital stock is subject to chapter 485A, a copy of the registration or qualification statement most recently filed with the commissioner of securities and any subsequent amendments thereto; and (I) If the offer and sale of the capital stock is not subject to the Securities Act of 1933 or chapter 485A, whether exempted by law or regulation or otherwise, a copy of the most recent version of any prospectus, offering memorandum, offering circular, or other offering document proposed to be delivered to prospective subscribers to the capital stock, and any subsequent amendments thereto; (7) The financial institution's proposed policies concerning loans and concentrations of credit, asset and liability management, conflicts of interest, investments, community reinvestment, bank secrecy, anti-money laundering, and customer identification; (8) The financial institution's business plan for the first three years of operations; (9) Financial projections regarding the financial institution's profitability for the first three years of operations; (10) A market study or letters of support evidencing the need and advisability of granting authority to organize a financial institution; (11) Except for trust companies, evidence that the financial institution has applied for federal deposit insurance from the Federal Deposit Insurance Corporation or other appropriate federal deposit insurer; (12) Evidence that the financial institution has applied for fidelity bonds and other insurance appropriate to its size and operations, including the types and the amounts of coverage, and the respective deductible amounts, from insurance companies licensed in the United States; (13) Evidence that the proposed directors and executive officers of the financial institution have the financial ability, responsibility, and experience to engage in the business of a financial institution; (14) The employment agreements for all proposed executive officers of the financial institution; (15) The proposed articles of incorporation and bylaws of the financial institution; (16) A description of any existing or proposed service corporation, affiliate, or subsidiary; (17) Information necessary to conduct a criminal history record check in accordance with section 846-2.7 of each of the proposed directors and executive officers of the financial institution, accompanied by payment of the applicable fee for each record check to be conducted; and (18) Any other information that the commissioner may require. (c) The application shall be submitted in a form prescribed by the commissioner. The commissioner may accept application forms that are utilized by any federal regulatory agency in processing similar applications. The application shall be accompanied by an application fee assessed pursuant to section 412:2‑105.2. The application fee shall not be refundable. (d) The identity of each applicant and organizer, and any information that is not confidential, shall be available to the public. The applicant may request in writing that information be kept confidential. The applicant shall designate and separate any matter that the applicant claims is confidential and shall submit a separate statement providing the reasons and authority for the request for confidential treatment. The failure by the applicant to request confidential treatment and to designate and separate the confidential matter shall preclude any objection or claim for wrongful disclosure of the information. Information determined by the commissioner to be confidential, pursuant to an applicant's request or otherwise, shall not be available to the public. (e) The commissioner shall review the application, may conduct an examination of the proposed financial institution, and may interview any proposed director or executive officer. [L 1993, c 350, pt of §1; am L 2006, c 228, §15; am L 2007, c 9, §14; am L 2008, c 196, §3; am L 2016, c 149, §4]

HRS §412:3-202 Additional requirements for holding company

412:3-202. Additional requirements for holding company An applicant for the organization of a Hawaii financial institution that will be a subsidiary of a holding company shall furnish the commissioner with the following additional information regarding the holding company, unless waived by the commissioner: (1) If the holding company is a corporation, a certificate from the incorporating jurisdiction indicating that the corporation was properly organized under applicable corporate law, and that it is otherwise in good standing; (2) Its existing and proposed affiliates and subsidiaries, and the extent and nature of its control over the operations of the proposed financial institution; (3) Financial statements, employment history, education, management experience, and other biographical information for all of its executive officers and directors; (4) The name and address of each shareholder or each proposed subscriber of capital stock; (5) The proposed capital plan, if capital has not been fully raised, that shall include: (A) A description of any stock options, debentures, and stock warrants offered or proposed to be offered to any person; and (B) Any stock option plan; (6) The proposed capital stock solicitation plan, if subscriptions for capital stock will be solicited, that shall include: (A) Information regarding the solicitation plan by which the applicant and the proposed holding company propose to conduct the solicitation of subscribers; (B) Information regarding the classes of shares, respective quantities of shares for each class, and the subscription price of each class of stock; (C) A specimen subscription contract or purchase agreement and other related documents to be executed by subscribers; (D) Any underwriting agreement or other agreement for the purchase or distribution of the capital stock; (E) Any escrow agreements or other agreement for the holding of the purchase proceeds of the capital stock; (F) Proposed advertising materials; (G) If the offer and sale of the capital stock is subject to the Securities Act of 1933 and regulations thereunder, a copy of the registration statement most recently filed with the federal Securities and Exchange Commission or any other notices or other filings in lieu of registration required or permitted by that Act or regulation and any subsequent amendments thereto; (H) If the offer and sale of the capital stock is subject to chapter 485A, a copy of the registration or qualification statement most recently filed with the commissioner of securities and any subsequent amendments thereto; and (I) If the offer and sale of the capital stock is not subject to the Securities Act of 1933 or chapter 485A, whether exempted by law or regulation or otherwise, a copy of the most recent version of any prospectus, offering memorandum, offering circular, or other offering document proposed to be delivered to prospective subscribers to the capital stock, and any subsequent amendments thereto; (7) The articles of incorporation and bylaws of the holding company; (8) Evidence that it has or will have the financial ability, responsibility, and experience to engage in the business of a financial institution holding company; (9) The employment agreements for all executive officers of the holding company; and (10) Any other information that the commissioner may require. [L 1993, c 350, pt of §1; am L 2006, c 228, §16; am L 2007, c 9, §15]

HRS §412:3-203 Deferral of application requirements

412:3-203. Deferral of application requirements For good cause, the commissioner may defer specific application requirements until the filing of an application for a charter or license. L 1993, c 350, pt of §1; am L 2006, c 228, §17

HRS §412:3-204 Publication of notice

412:3-204. Publication of notice (a) Once the application to organize a Hawaii financial institution is complete and has been accepted by the commissioner, the applicant shall publish a notice at least once a week for three successive weeks in a newspaper of general circulation in each county in this State where the proposed financial institution intends to establish a principal office, branch, or agency. (b) The notice shall be in a form prescribed by the commissioner and shall state the fact that an application has been filed, the names of the applicant and organizers, the location of the financial institution's proposed places of business, and the amount of its proposed capital. The notice shall also state that within fifteen days after the last publication of the notice any person may file with the commissioner written comments on the application or a request for an informational and comment proceeding to present information and comments to the commissioner. Any request for an informational and comment proceeding shall be accompanied by a brief statement of the person's interest in the application, the matters to be discussed at the informational and comment proceeding, and the reasons why written comments will not suffice in lieu of an informational and comment proceeding. [L 1993, c 350, pt of §1; am L 2006, c 228, §18]

HRS §412:3-205 Informational and comment proceeding on application

412:3-205. Informational and comment proceeding on application (a) An informational and comment proceeding on the application shall not be mandatory and whether an informational and comment proceeding is held shall be within the commissioner's discretion, regardless of whether any person has requested one. (b) If the commissioner determines that an informational and comment proceeding is warranted, the commissioner shall notify the applicant and every person who has requested an informational and comment proceeding of the time, date, and place of the proceeding at least ten days prior to the proceeding. [L 1993, c 350, pt of §1]

HRS §412:3-206 Grant of preliminary approval to organize a financial institution

412:3-206. Grant of preliminary approval to organize a financial institution (a) Following the expiration of the time for the submission of written comments or the completion of an informational and comment proceeding, the commissioner shall issue a written decision and order on the application for preliminary approval to organize. If the commissioner approves the application, the applicant shall become an "applicant in organization", and may take all steps necessary to complete organization and file an application for a charter or license. (b) An application for preliminary approval to organize shall be approved only if the commissioner finds that: (1) The proposed activities of the financial institution will comply with the requirements of this chapter; (2) If the financial institution will be a subsidiary of a holding company, the holding company is or will be properly organized, in good standing, and financially sound, and is not or will not be engaging directly or indirectly through any subsidiary or affiliate in business prohibited by this chapter; (3) The qualifications, character, financial responsibility, experience, and general fitness of the proposed directors and executive officers of the financial institution and any holding company are such as will warrant public confidence and a belief that the business of the financial institution will be honestly and efficiently conducted. For purposes of this section, the commissioner may presume that in the absence of credible evidence to the contrary, a director, officer, or controlling person is of good character and sound financial standing. The presumption may be rebutted by evidence to the contrary, including without limitation a finding that the director, officer, or controlling person has: (A) Been convicted of, or has pleaded nolo contendere to, any crime involving an act of fraud or dishonesty; (B) Consented to or suffered a judgment in any civil action based upon conduct involving an act of fraud or dishonesty; (C) Consented to or suffered the suspension or revocation of any professional, occupational, or vocational license based upon conduct involving an act of fraud or dishonesty; (D) Wilfully made or caused to be made in any application or report filed with the commissioner, or in any proceeding before the commissioner, any statement that was at the time and in the light of the circumstances under which it was made false or misleading with respect to any material fact, or has wilfully omitted to state in any application or report any material fact that was required to be stated therein; or (E) Wilfully committed any violation of, or has wilfully aided, abetted, counseled, commanded, induced, or procured the violation by any other person of, any provision of this chapter or of any rule or order issued under this chapter; (4) The proposed operations of the financial institution will be conducted in a safe and sound manner; (5) The articles of incorporation of the financial institution comply in all respects with this chapter and chapter 414; and (6) The capital stock solicitation submission is complete and the solicitation will not affect the safety or soundness of the proposed financial institution or harm the public interest. (c) In granting preliminary approval to organize, the commissioner may impose any conditions and restrictions that are in the public interest, including but not limited to requiring the applicant to fulfill representations contained in its application and agreements made with the commissioner during the application process. (d) Upon the issuance of a written decision and order granting the application for preliminary approval to organize, the articles of incorporation may be delivered by the applicant in organization to the director of commerce and consumer affairs for filing and, if accepted for filing, the financial institution shall have corporate existence. Although the proposed financial institution may have corporate existence, it may not transact any financial institution business until it has received a financial institution charter or license under this article; provided that the financial institution may conduct any transaction that is incidental and necessary to prepare to do a financial institution business and obtain a charter or license. (e) The applicant and the proposed Hawaii financial institution shall not solicit subscriptions for the capital stock of the Hawaii financial institution until the written decision and order granting the application for preliminary approval to organize has been issued and the articles of incorporation have been accepted for filing by the director of commerce and consumer affairs. The approval shall not constitute a determination that the applicant has complied with chapter 485A or any other state or federal law. [L 1993, c 350, pt of §1; am L 2006, c 228, §19; am L 2007, c 9, §16]

HRS §412:3-207 Denial of preliminary approval to organize

412:3-207. Denial of preliminary approval to organize If the commissioner is not satisfied that the applicant meets all the criteria set forth for preliminary approval to organize, the commissioner shall issue a written decision denying the applicant's application. An applicant who is denied approval may request a hearing before the commissioner in accordance with chapter 91. Any final decision of the commissioner denying an applicant preliminary approval to organize may be appealed to the circuit court as provided in chapter 91. [L 1993, c 350, pt of §1]

HRS §412:3-209 Paid-in capital and surplus

412:3-209. Paid-in capital and surplus (a) Every financial institution existing or organized under the laws of this State shall at all times, and every applicant in organization shall before filing the final application for a charter or license under this part and at all times thereafter, have paid-in capital and surplus of not less than the following amounts for each type of institution specified below: Banks $5,000,000 Savings banks $3,000,000 Savings and loan associations $2,000,000 Trust companies $1,500,000 Depository financial services loan companies $1,000,000 (b) The initial paid-in capital and surplus of each financial institution shall be in money or in the form of such other property as may be authorized by the board of directors and approved in writing by the commissioner. [L 1993, c 350, pt of §1]

HRS §412:3-210 Repealed

412:3-210. Repealed Note L 2006, c 229, §6 purports to amend this section. L 2006, c 228, §49.

HRS §412:3-211 Time limit to complete organization

412:3-211. Time limit to complete organization (a) A proposed Hawaii financial institution shall obtain its required capital and surplus, complete its organization, and obtain a charter or license from the commissioner within one year from the date of issuance of the decision and order granting the application for preliminary approval to organize; provided that for good cause shown by the applicant in organization, the commissioner may by written order extend the deadline for a period not to exceed six months. (b) If the applicant in organization fails to meet the deadline set forth in subsection (a), the commissioner shall order the applicant in organization to dissolve the proposed Hawaii financial institution. [L 1993, c 350, pt of §1; am L 2006, c 228, §20]

HRS §412:3-212 Final application for charter or license

412:3-212. Final application for charter or license (a) After completing its organization of the Hawaii financial institution, the applicant in organization may file with the commissioner an application for a charter or license to engage in the business of a Hawaii financial institution. The application shall be in a form prescribed by the commissioner and, unless waived by the commissioner, shall contain the following information: (1) A sworn statement by the applicant in organization that it has complied with all requirements of law concerning the organization of the proposed financial institution, including but not limited to the requirement that the full amount of its required capital and surplus has been paid in or deposited in escrow under terms satisfactory to the commissioner; (2) The names and addresses of all common and preferred shareholders, and elected or appointed directors and executive officers of the proposed financial institution and any holding company of the financial institution, and the number of shares owned by each; (3) A description of any material changes that have occurred in the financial institution's organizers or the applicant in organization, its business plan, and its financial condition since the issuance of the preliminary approval to organize, accompanied by updated financial statements of the financial institution, any holding company of the financial institution, the applicant in organization, and all executive officers and directors of the financial institution and any holding company of the financial institution; (4) Evidence that all federal deposit insurance, fidelity bonds, and any other insurance, as represented in the application for preliminary approval to organize, have been or will be obtained and in effect prior to opening; (5) A description of the financial institution's disaster recovery policies and programs, security programs, and all vending contractors for electronic data processing and servicing that are or will be in effect prior to opening; and (6) Any other information that the commissioner may require. (b) The commissioner shall review the application, may conduct an examination of the financial institution, and may interview any proposed director or executive officer. (c) If the commissioner is satisfied that the financial institution and, if applicable, its holding company have fulfilled all the requirements of law and the grounds for preliminary approval, and that the financial institution is qualified to engage in the business of a financial institution, the commissioner shall issue a written decision and order approving the application. The order may restrict the payment of dividends for a period of up to three years, and may contain any other conditions and restrictions on the financial institution that are in the public interest, including but not limited to the divestment of any contractual arrangement with an affiliate or subsidiary involving any type of business not permitted under this chapter. Upon the satisfactory fulfillment by the financial institution and, if applicable, its holding company of the conditions in the written decision and order approving the application, the commissioner shall issue to the financial institution a charter or license to engage in the business of a financial institution under this chapter. [L 1993, c 350, pt of §1; am L 2006, c 228, §21; am L 2013, c 172, §14; am L 2016, c 149, §5]

Source: Hawaii State Legislature (capitol.hawaii.gov), via Internet Archive capturesURL: https://www.capitol.hawaii.gov/hrscurrent/Vol08_Ch0401-0429/HRS0412/HRS_0412-.htmFetched: 11/10/2026