CHAPTER 112

FORMERLY

SENATE BILL NO. 207

AN ACT TO AMEND TITLE 5 OF THE DELAWARE CODE RELATING TO BANKS AND OTHER FINANCIAL INSTITUTIONS, AND TO AMEND SECTION 379 OF TITLE 8 OF THE DELAWARE CODE RELATING TO BANKING POWERS.

BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF DELAWARE (two-thirds of all members elected to each house thereof concurring therein):

Section 1. Amend subparagraph e. of subsection (7) of § 101, Title 5 of the Delaware Code, by inserting the words "foreign bank limited purpose branch or between the word "A" and the words "foreign bank agency".

Section 2. Amend subsection (7) of §101, Title 5 of the Delaware Code, by adding a new subparagraph f. thereto, as follows:

"f. A resulting branch in this state of an out-of-state bank (as defined in § 795 of this tide, and also including branch offices in this state of an out-of-state bank, as defined in § 795 of this title)."

Section 3. Amend subsection (12) of §101, Title 5 of the Delaware Code, by deleting the reference to "§ 1404" and inserting in lieu thereof a reference to "§ 1404(a)".

Section 4. Amend §101, Title 5 of the Delaware Code, by adding a new subsection (20) at the end thereof, as follows:

"(20) 'Foreign bank limited purpose branch' means an office in this State of a foreign bank that is exercising the powers authorized by § 1404(b) of this title."

Section 5. Amend subsection (b) of § 127, Title 5 of the Delaware Code, by inserting after the first sentence and before the existing second sentence thereof the sentence: "Notwithstanding the foregoing sentence, the supervisory assessment on branches in this State of out-of-state banks (as defined in §795 of this title) shall be based on assets calculated as the greater of subsections (i)(2)(i) or (i)(3)(i) of §1101 of this title.", and by deleting from the existing fourth sentence of that subsection the amount "$300" and by inserting in lieu thereof the amount and words "$500 when the examination is conducted within the State and $1000 when the examination is conducted outside the State", and by inserting in the existing seventh sentence of that subsection the words "and retained" after the word "acquired" and before the words "a bane, and by inserting in the existing seventh sentence of that subsection the words "any or all of the conditions in Subchapter I of" after the words "pursuant to and before the words "Chapter 8".

Section 6. Amend § 751, Title 5 of the Delaware Code, by amending the title of that section to read "Acquisition or sale of assets, assumption of liabilities, consolidation and merger; Commissioner's approval; title to property."

Section 7. Amend subsection (a) of §751, Title 5 of the Delaware Code, by deleting the words "shall merge or consolidate with any other bunk or trust company or take over any substantial portion of the assets of and/or assume the liabilities, in whole or in part, of any other bank or trust company (whether said other bank or trust company is then doing business or has ceased to do business or has surrendered its charter or has dissolved)", and inserting in lieu thereof the words "shall merge or consolidate with, sell any substantial portion of its assets to, or take over any substantial portion of the assets and/or assume the liabilities, in whole or in part, of any other bank or trust company, savings bank, national bank, federal savings association (as defined in the Home Owners' Loan Act, 12 U.S.C § 1461 et seq.) or out-of-state bank (as defined in § 795 of this title) (whether any of the foregoing is then doing business or has ceased to do business or has surrendered its charter or has dissolved)".

Section 8. Amend subsection (a) of §761, Title 5 of the Delaware Code, by redesignating existing subparagraph (16) as new subparagraph (17) thereof, and adding thereto a new subparagraph (16) as follows:

"(16) Authorize an affiliated insured depository institution (as those terms are defined in §796 of this chapter) to engage in the authorized agency activities provided in §796A of this chapter."

Section 9. Amend subsection (e) of §767, Title 5 of the Delaware Code, by deleting the reference to "§ 803(4)" from the text of that subsection and inserting in lieu thereof a reference to "§ 803(a)(4)" .

Section 10. Amend paragraph (3) of subsection (b) of §769, Title 5 of the Delaware Code, by deleting the words "an out-of-state" and inserting in their place the word "a".

Section 11. Amend subsection (b) of §769, Title 5 of the Delaware Code, by deleting the words "out-of-state" from both places in which they appear in the first sentence in the paragraph following paragraph (3) of that subsection, and by deleting from that sentence the word "an" following the words "bank subsidiary of and inserting in lieu thereof the word "a".

Section 12. Amend subsection (a) of §771, Title 5 of the Delaware Code, by inserting therein the words "or in any other state of the United States of America" after the words "its possessions" and before the words "or in foreign countries".

Section 13. Amend §793, Title 5 of the Delaware Code, by deleting the entire text of that section and inserting in lieu thereof the following:

"(a) Any bank formed under Chapter 10 of this title, upon filing with the Commissioner an application in such form as the Commissioner shall from time to time prescribe, submitted and sworn to by the directors of the bank, may become a bank which shall be deemed as having been formed under and which shall be governed by the provisions of Chapter 7 of this title.

(b) Upon a determination that the applicant(s) have satisfied the requirements of subsection (a) of this section, the Commissioner shall issue a certificate certifying such compliance and ordering and approving the conversion of the bank, which certificate shall be duly filed with the Secretary of State. A certified copy of such filing shall constitute the certificate authorizing commencement of business pursuant to § 733 of this title. From and after such filing, the bank shall be governed by the provisions of Chapters 7 and 8 of this title and any other law of this State regulating banks generally and shall not be subject to any provision of Chapter 10 of this title or any regulation promulgated thereunder.

(c) The resulting bank shall pay to the Commissioner a fee of $5,750 for use of the State upon approval of the conversion. In addition, the resulting bank shall pay to the Commissioner an investigation fee of $1,150 which shall not be refundable and which shall be submitted with the application."

Section 14. Amend Subchapter VI, Title 5 of the Delaware Code, by adding thereto a new §793A as follows:

"§ 793A. Conversion of credit card institution on or after September 29, 1997.

(a) Any credit card institution formed under Chapter 15 of this title, upon filing with the Commissioner an application in such form as the Commissioner shall from time to time prescribe, submitted and sworn to by the directors of the credit card institution, may become a bank which shall be deemed as having been formed under and which shall be governed by the provisions of Chapter 7 of this title.

(b) Upon a determination that the applicant(s) have satisfied the requirements of subsection (a) of this section, the Commissioner shall issue a certificate certifying such compliance and ordering and approving the conversion of the credit card institution, which certificate shall be duly filed with the Secretary of State. A certified copy of such filing shall constitute the certificate authorizing commencement of business pursuant to § 733 of this title. From and after such filing, the credit card institution shall become a bank governed by the provisions of Chapters 7 and 8 of this title and any other law of this State regulating banks generally and shall not be subject to any provision of Chapter 15 of this title or any regulation promulgated thereunder.

(c) The resulting bank shall pay to the Commissioner a fee of $5,750 for use of the State upon approval of the conversion. In addition, the resulting bank shall pay to the Commissioner an investigation fee of $1,150 which shall not be refundable and which shall be submitted with the application."

Section 15. Amend Chapter 7, Title 5 of the Delaware Code, by adding a new Subchapter VII, as follows:

"Subchapter VII. Merger or Consolidation with Out-Of-State Banks

§ 795. Definitions.

As used in this subchapter:

(1) 'Bank' means a Delaware state bank, out-of-state state bank, Delaware national bank or out-of-state national bank.

(2) 'Bank holding company' has the meaning specified in the Bank Holding Company Act of 1956, as amended, 12 U.S.C. § 1841 et seq.

(3) 'Branch office' has the meaning specified in § 770 of this chapter.

(4) 'Delaware bank' means a Delaware national bank or a Delaware state bank.

(5) 'Delaware national bank' means a national banking association created under the National Bank Act (12 U.S.C. § 21 et seq.) that is located in this State.

(6) 'Delaware state bank' means a bank (as defined in § 101(1) of this title) chartered under the laws of this State.

(7) 'Existing Delaware bank' means (i) a Delaware state bank whose initial Delaware charter (whether or not subsequently amended or converted to a national charter) bears an effective date not less than 5 years prior to the effective date of the merger of such bank with an out-of-state bank, (ii) a Delaware national bank whose authorization to conduct a banking business in Delaware pursuant to the National Bank Act bears an effective date not less than 5 years prior to the effective date of the merger of such bank with an out-of-state bank, (iii) a building and loan association which has become a Delaware state bank pursuant to § 794 of this title and whose initial Delaware charter or authorization to conduct a building and loan business in Delaware bears an effective date not less than 5 years prior to the effective date of the merger of such building and loan association with an out-of-state bank, (iv) a consumer credit bank which has become a Delaware state bank pursuant to § 793 of this title and whose initial Delaware charter or authorization to operate as a consumer credit bank in Delaware bears an effective date not less than 5 years prior to the effective date of the merger of such consumer credit bank with an out-of-state bank, or (v) a credit card institution which has become a Delaware state bank pursuant to § 793A of this title and whose initial Delaware charter or authorization to operate as a credit card institution in Delaware bears an effective date not less than 5 years prior to the effective date of the merger of such credit card institution with an out-of-state bank.

(8) 'Located in this State' means, with respect to a state-chartered bank, a bank created under the law of this State and, with respect to a national banking association, a bank whose organization certificate identifies an address in this State as the place at which its discount and deposit operations are to be carried out.

(9) 'Merger' includes merger, consolidation and the purchase or sale of all or substantially all assets.

(10) 'Merging bank' means a bank that is a party to a merger.

(11) National bank' means a Delaware national bank or an out-of-state national bank.

(12) 'Out-of-state bank' means an out-of-state state bank or an out-of-state national bank.

(13) 'Out-of-state state bank' means a bank, as defined in the Bank Holding Company Act of 1956, as amended (12 U.S.C. § 1841 et seq.), that is chartered under the laws of any of the United States other than this State.

(14) 'Out-of-state national bank' means a national bank association created under the National Bank Act (12 U.S.C. § 21 et seq.) that is not located in this State.

(15) 'Resulting' with respect to a bank means the bank resulting from a merger, and with respect to a branch means the branch office(s) of the bank resulting from a merger.

§ 795A. Purpose.

It is the express intent of this subchapter to permit interstate branching by merger under § 102 of the Riegle-Neal Interstate Banking and Branching Efficiency Act of 1994, Public Law No. 103-328, in accordance with the provisions set forth in this subchapter.

§ 795B. Authority for interstate branch offices.

(a) The place of business or main office and all branch offices of a merging bank may continue as branch offices, or one of them may be designated as the place of business or main office, of the resulting bank.

(b) A resulting bank that is an out-of-state state bank may open additional branch offices in this State in such manner as the Commissioner shall prescribe by regulation.

(c) Nothing in this subchapter shall be deemed to permit interstate branching either through the original establishment of a branch office in this State by an out-of-state bank or through acquisition of a branch office in this State by an out-of-state bank, without merger with a Delaware bank as provided in this subchapter.

§ 795C. Merger with resulting Delaware national bank.

(a) Delaware banks may merge with or into out-of-state banks to form a resulting Delaware national bank. The action to be taken by a merging Delaware bank that is a Delaware state bank and its rights and liabilities and those of its stockholders shall be the same as those prescribed for national banks at the time of the action by the laws of the United States and not by the laws of this State, except that a vote of the holders of two thirds of each class of voting stock of a Delaware state bank shall be required for the merger, and that upon the merger of a Delaware state bank into a resulting Delaware national bank the rights of dissenting stockholders of the merging Delaware state bank shall be the same as those specified in § 788 of this title.

(b) Upon the completion of the merger of a Delaware bank that is a Delaware state bank with or into out-of-state banks to form a resulting Delaware national bank, the certificate and charter of any such merging Delaware state bank shall automatically terminate.

(c) A resulting Delaware national bank shall be considered the same business and corporate entity as each merging bank with all the property, rights, powers, duties and obligations of each merging bank, except as affected by the federal law and by the charter and bylaws of the resulting bank.

§ 795D. Merger with resulting Delaware state bank.

(a) Upon written approval by the State Bank Commissioner, out-of-state banks may be merged with or into Delaware banks to result in a Delaware state bank in the same manner as that prescribed in §§ 784, 788, 789, 790, 791 and 792 of this chapter and as prescribed in

subsection (b) of this section; provided that the action by a national bank shall be taken in the manner prescribed by and subject to limitations and requirements imposed by the laws of the United States, which shall also govern the rights of its dissenting stockholders; and further provided that the action by an out-of-state state bank shall be taken in the manner prescribed by and subject to limitations and requirements imposed by the laws of the state under whose laws such out-of-state state bank is chartered, which shall also govern the rights of its dissenting stockholders.

(b) Following the approval of the merger agreement both in substance and form by the Commissioner, in the same manner as that prescribed in § 784, the procedure for a merger which is to result in a Delaware state bank and the legal effect of any such merger (except as regards the rights to payment for their shares of dissenting stockholders of any merging bank that is a Delaware state bank) and the manner of making and effecting the same shall be as prescribed in Chapter I of Title 8 for the merger or consolidation of domestic and foreign corporations.

§ 795E. Merger with resulting out-of-state national bank.

(a) Existing Delaware banks may merge with or into out-of-state banks to form a resulting out-of-state national bank. The action to be taken by a merging existing Delaware bank that is a Delaware state bank and its rights and liabilities and those of its stockholders shall be the same as those prescribed for national banks at the time of the action by the laws of the United States and not by the laws of this State, except that a vote of the holders of two thirds of each class of voting stock of a Delaware state bank shall be required for the merger, and that upon the merger of a Delaware state bank into a resulting out-of-state national bank the rights of dissenting stockholders of the merging Delaware state bank shall be the same as those specified in § 788 of this title.

(b) Upon the completion of the merger of an existing Delaware bank that is a Delaware state bank into a resulting out-of-state national bank, the certificate and charter of any such merging Delaware state bank shall automatically terminate.

(a) A resulting out-of-state national bank shall be considered the same business and corporate entity as each merging bank with all the property, rights, powers, duties and obligations of each merging bank, except as affected by the federal law and by the charter and bylaws of the resulting bank.

§ 795F. Merger with resulting out-of-state state bank.

(a) Existing Delaware banks may be merged with or into out-of-state banks to result in an out-of-state state bank; provided that written approval by the State Bank Commissioner is required for any such merger of an existing Delaware bank that is a Delaware state bank, which shall be in the same manner as that prescribed in §§ 784, 788, 789, 790, 791 and 792 of this chapter and as prescribed in subsection (b) of this section; further provided that the action by a national bank shall be taken in the manner prescribed by and subject to limitations and requirements imposed by the laws of the United States, which shall also govern the rights of its dissenting stockholders; and further provided that the action by an out-of-state state bank shall be taken in the manner prescribed by and subject to limitations and requirements imposed by the laws of the state under whose laws such out-of-state state bank is chartered, which shall also govern the rights of its dissenting stockholders.

(b) Following the approval of the merger agreement both in substance and form by the Commissioner, in the same manner as that prescribed in § 784, the procedure for a merger involving a Delaware state bank which is to result in an out-of-state state bank and the legal effect of any such merger (except as regards the rights to payment for their shares of dissenting stockholders of any merging bank that is a Delaware state bank) and the manner of making and effecting the same shall be as prescribed in Chapter I of Title 8 for the merger or consolidation of domestic and foreign corporations.

§ 795G. Authority for emergency mergers.

Notwithstanding any other provision in this title, the Commissioner may approve the merger of a Delaware state bank with an out-of-state bank upon determining that the merging Delaware state bank is in default or in danger of default; provided, however, that the merging Delaware state bank has not been caused to be in default or in danger of default for the specific purpose of engaging in a merger pursuant to this section. For purposes of this section, the term in danger of default' with respect to a Delaware state bank means that, in the opinion of the Commissioner, the Delaware state bank is not likely to be able to meet the demands of its depositors or pay its obligations in the normal course of business and there is no reasonable prospect that it will be able to meet such demands or pay such obligations without assistance, or the Delaware state bank has incurred or is likely to incur losses that will deplete all or substantially all of its capital and there is no reasonable prospect that its capital will be replenished without assistance. The procedure for an emergency merger in accordance with this section with a resulting Delaware national bank, Delaware state bank, out-of-state national bank or out-of-state state bank shall be the same as provided in § 795C, § 795D, § 795E and § 795F of this subchapter, respectively.

§ 795H. Concentration limits; approval of Commissioner.

The Commissioner may approve a merger, in accordance with §§ 795C, 795D, 795E, 795F and 795G of this subchapter, even though the resulting bank (including all insured depository institutions, as defined in the Federal Deposit Insurance Act at 12 U.S.C. § 1813(c), which would be affiliates of the resulting bank), upon consummation of the transaction, would control 30 percent or more of the total amount of deposits of insured depository institutions in this State. In determining whether to approve a merger pursuant to this section, the Commissioner shall consider the convenience and needs of the public of this State.

§ 795I. Powers.

(a) An out-of-state state bank which establishes and maintains one or more branch offices in this State under this subchapter may conduct any activities at such branch office or offices that are authorized under the laws of this State for Delaware state banks.

(b) A Delaware state bank may conduct any activities at any brunch office outside this State that are permissible for a bank chartered by the state where such branch office is located, except to the extent such activities are expressly prohibited by the laws of this State.

§ 795J. Examinations; periodic reports; cooperative agreements; regulations; fees.

(a) The Commissioner may make such examinations of any branch office in this State of an out-of-state state bank as the Commissioner may deem necessary to determine whether such branch office is operating in compliance with the laws of this State and to ensure that the branch office is being operated in a safe and sound manner. The provisions of this title shall apply to such examinations.

(b) The Commissioner may require periodic reports regarding any out-of-state state bank that maintains a branch office in this State and from any bank holding company that controls such out-of-state state bank, for the purpose of ensuring continuing compliance with the provisions of this title. Such reports shall be provided by such out-of-state state bank or by the regulatory authority having primary responsibility for such out-of-state state bank.

(a) The Commissioner may enter into cooperative agreements with the appropriate regulatory authorities for the periodic examination of any branch office in this State of an out-of-state state bank or of any branch office in another state of a Delaware state bank, and may accept reports of examination and other records from such authorities in lieu of conducting his own examination. The Commissioner may enter into joint actions with other regulatory authorities with respect to such branch offices or may take such actions independently to carry out his responsibilities to assure the safety and soundness of any bank or branch office in this State and to assure compliance with applicable Delaware banking laws.

(d) Each out-of-state state bank that maintains one or more branch offices in this State may be assessed and, if assessed, shall pay supervisory and examination fees in accordance with the laws of this State and regulations of the Commissioner.

§ 795K. Enforcement.

If the Commissioner determines that a branch office maintained by an out-of-state state bank in this State is being operated in violation of any provision of the laws of this State, or that such branch office is being operated in an unsafe and unsound manner, the Commissioner shall have the authority to take all such enforcement actions as if the branch office were a Delaware state bank.

§ 795L. Regulations.

The Commissioner may promulgate regulations to carry out his responsibilities under this subchapter.

§ 795M. Notice of subsequent merger, etc.

An out-of-state state bank that maintains a branch office in this State established pursuant to this subchapter shall give at least thirty (30) days' prior written notice (or, in the case of an emergency transaction, such shorter notice as is consistent with applicable state and federal law) to the Commissioner of any merger or other transaction that would cause a change of control with respect to such out-of-state state bank or any bank holding company that controls such bank, with the result that an application would be required to be filed pursuant to the Change in Bank Control Act of 1978, as amended, 12 U.S.C. § 1817(j), or the Bank Holding Company Act of 1956, as amended, 12 U.S.C. § 1841 et seq., or any successor statutes thereto.

§ 795N. Other mergers or consolidations with out-of-state banks not permitted.

Except as otherwise provided in this subchapter or by applicable law of the United States, no Delaware bank may merge with or into any out-of-state bank."

Section 16. Amend Chapter 7, Title 5 of the Delaware Code, by adding a new Subchapter VIII, as follows:

"Subchapter VIII. Bank Agencies

§ 796. Definitions.

As used in this subchapter:

(1) 'Affiliate has the meaning specified in § 2(k) of the Bank Holding Company Act of 1956, as amended, 12 U.S.C. § 1841(k).

(2) 'Bank holding company' has the meaning specified in § 2(a) of the Bank Holding Company Act of 1956, as amended, 12 U.S.C. § 1841(a).

(3) 'Branch office' has the meaning specified in § 770 of this chapter and also includes a foreign branch office as specified in § 771 of this chapter.

(1) 'Insured depository institution' has the meaning specified in 12 U.S.C. § 1813(c). § 796A. Authorized agency activities.

(a) Any bank may, upon compliance with the requirements of this section, agree to receive deposits, renew time deposits, close loans, service loans, receive payments on loans and other obligations, and perform such other services as may receive the prior approval of the Commissioner, as an agent for any affiliated insured depository institution. For purposes of this subsection (a): the term 'receive deposits' means the taking of deposits to be credited to an existing account and is not meant to include the opening or origination of new deposit accounts at an affiliated institution by the agent institution; the term 'service loans' means that agent banks may perform ministerial functions for the principal bank making a loan, including such activities as providing loan applications, assembling documents, providing a location for returning documents necessary for making the loan, providing loan account information (such as outstanding loan balances) and receiving payments, but not including such loan functions as evaluating applications or disbursing loan funds; and the term 'close loans' does not include the making of a decision to extend credit or the extension of credit.

(b) A bank that proposes to enter into an agency agreement under this section shall file with the Commissioner, at least 30 days before the effective date of the agreement:

(1) A notice of intention to enter into an agency agreement with an affiliated insured depository institution;

(2) A description of the services proposed to be performed under the agency agreement; and

(3) A copy of the agency agreement.

(c) If any proposed service is not specifically designated in subsection (a) of this section, and has not previously been approved in a regulation issued by the Commissioner, the Commissioner shall decide whether to approve the offering of such service within 30 days after receipt of the notice required by subsection (b); provided, that if the Commissioner requests additional information after reviewing such notice, the time limit for the Commissioner's decision shall be 30 days after receiving such additional information. In deciding whether to approve, either by regulation or order, any proposed service that is not specifically designated in subsection (a), the Commissioner shall consider whether such service would be consistent with applicable federal and State law and the safety and soundness of the principal and agent institutions. The Commissioner shall give appropriate notice to the public of each approval, by regulation or order, of any proposed service pursuant to this subsection (c).

(d) Any proposed service subject to subsection (c) shall be deemed approved if the Commissioner takes no action on the notice required by subsection (b) within the time limits specified in subsection (e).

(e) A bank may not under an agency agreement:

(1) Conduct any activity as an agent that it would be prohibited from conducting as a principal under applicable State or federal law; or

(2) Have an agent conduct any activity that the bank as principal would be prohibited from conducting under applicable State or federal law.

(f) The Commissioner may order a bank or any other institution subject to the Commissioner's enforcement powers to cease acting as an agent or principal under any agency agreement that the Commissioner finds to be inconsistent with safe and sound banking practices.

(g) Notwithstanding any other provision of the law of this State, a bank acting as an agent for an affiliated insured depository institution in accordance with this section shall not be considered to be a branch office of that institution.

§ 796B. Regulations.

The Commissioner may promulgate regulations to carry out his responsibilities under this subchapter."

Section 17. Amend Subchapter 1 of Chapter 8, Title 5 of the Delaware Code, by amending the title of that subchapter to read "Acquisition of Stock in New Banks in Delaware before September 29, 1995".

Section 18. Amend subsection (2) of §801 of Title 5 of the Delaware Code, by deleting the

text of that subsection in its entirety and inserting in lieu thereof the words "Out-of-state bank holding company has the meaning specified in the Bank Holding Company Act of 1956, as amended (12 U.S.C. § 1841 et seq.)."

Section 19. Amend §802, Title 5 of' the Delaware Code, by inserting in the text thereof the words "before September 29, 1995" after the words "located in this State".

Section 20. Amend §803, Title 5 of the Delaware Code, by amending the title of that section to read "Requirements for bank acquisitions before September 29, 1995".

Section 21. Amend §803, Title 5 of the Delaware Code, by redesignating all of the existing text as subparagraph (a) thereof.

Section 22. Amend §803, Title 5 of the Delaware Code, by adding new subsections (6) and (c) at the end thereof, as follows:

"(b) The provisions of subsection (a) of this section apply only to banks first acquired pursuant to this subchapter before September 29, 1995. Subsequent acquisitions of such banks shall not affect the application of the provisions of subsection (a) of this section, except as provided in subsection (c) of this section.

(c) Notwithstanding subsection (a) of this section, any bank described in subsection (a) of this section may file an application with the Commissioner for the waiver of any or all of the conditions specified in subsections (a)(I), (a)(2), (a)(3) and (a)(4) of this section, except as otherwise provided in this title. Such application shall contain such information as the Commissioner may by regulation require, shall be accompanied by a fee of $6,000 payable to the Office of the State Bank Commissioner, and shall be approved by the Commissioner upon finding that the applicable provisions of law have been complied with. In determining whether to approve an application pursuant to this subsection (c), the Commissioner shalt consider the convenience and needs of the public of this State."

Section 23. Amend subsection (a) of §804, Title 5 of the Delaware Code, by inserting therein the words "before September 29. 1995" after the words "this title" and before the words "shall file an application".

Section 24. Amend §804. Title 5 of the Delaware Code, by adding a new subsection (c) thereto, as follows:

"(e) No application shall be filed pursuant to this section on or after September 29, 1995."

Section 25. Amend §805, Title 5 of the Delaware Code, by inserting the words "and holds" after the word "acquires", and by inserting the words "upon the Commissioner's request" after the word "Commissioner".

Section 26. Amend §806. Title 5 of the Delaware Code, by inserting the words 0, including, but not limited to, rules, regulations, and orders" before the words "for the following purposes".

Section 27. Amend §825. Title 5 of the Delaware Code, by inserting the words "upon the Commissioner's request" after the words "shall file with the Commissioner".

Section 28. Amend §841 of Title 5 of the Delaware Code, by deleting the words "of 1987" from the text thereof.

Section 29. Amend subsection (1) of §842, Title 5 of the Delaware Code, by inserting after the words "'Bank' shall mean" and before the colon ":" the words "a 'bank' as defined in Section 2(c) of the Bank Holding Company Act of 1956, as amended, 12 U.S.C. § 1841(e), that is".

Section 30. Amend §842, Title 5 of the Delaware Code, by deleting existing subsections (5) and (8) thereof in their entirety, and by redesignating existing subsections (4), (6), (7) and (9) as new subsections 15), (6), (7) and (8), respectively.

Section 31. Further amend §842, Title 5 of the Delaware Code, by adding a new subsection (4) thereto, as follows:

"(4) 'Bank holding company' has the meaning specified in the Bank Holding Company Act of 1956, as amended (12 U.S.C. § 1841 et seq.),"

Section 32. Amend §843, Title 5 of the Delaware Code, by deleting the text of that section in its entirety, and inserting in lieu thereof the following:

"(a) An out-of-state bank holding company or subsidiary thereof may acquire or retain ownership or control of an existing bank or bank holding company located in Delaware that owns or controls an existing bank; provided that the out-of-state bank holding company makes application under and at all times complies with all regulations, decrees, cooperative agreements and orders duly promulgated by the Commissioner with respect to both the implementation of this subchapter generally, and the operations of such bank holding company and the existing bank which it acquires specifically.

(b) The Commissioner may approve an acquisition, in accordance with subsection (a) of this section, even though the out-of-state bank holding company, or any subsidiary thereof, that acquires an existing bank or bank holding company located in Delaware that owns or controls an existing bank, would control, together with any affiliated insured depository institution (as defined in the Federal Deposit Insurance Act at 12 U.S.C. § 1813(c)), 30 percent or more of the total amount of deposits of insured depository institutions in this State. In determining whether to approve an acquisition pursuant to this subsection (b), the Commissioner shall consider the convenience and needs of the public of this State.

(c) Except as otherwise provided in this title or by applicable law of the United States, no out-of-state bank holding company or subsidiary thereof may acquire or retain ownership or control of a bank or bank holding company located in Delaware."

Section 33. Amend subsection (a) of Section 843 of Title 5 of the Delaware Code, effective September 29, 1997 (as provided in Section 81 of this Act), by deleting the words "an existing bank or bank holding company located in Delaware that owns or controls an existing bank" and inserting in lieu thereof the words "a bank or bank holding company located in Delaware", by deleting the word "existing" after the words "bank holding company and the" and before the word "bank", and by inserting at the end of that subsection the words "; and further provided that, except as otherwise provided in this title, no out-of-state bank holding company or any subsidiary thereof may acquire or retain ownership or control of either a bank located in Delaware created before September 29, 1995 that is not an existing bank or a bank holding company that owns or controls such bunk".

Section 34. Amend subsection (b) of §843, Title 5 of the Delaware Code, effective September 29, 1997 (as provided in Section 81 of this Act), by deleting the words "an existing bank or bank holding company located in Delaware that owns or controls an existing bank" and inserting in lieu thereof the words "a bank or bank holding company located in Delaware.

Section 35. Amend subsection (a) of §844, Title 5 of the Delaware Code, effective September 29. 1997 (as provided in Section 81 of this Act), by deleting the words "an existing' from both places in which they appear in the first sentence and inserting in both such places in lieu thereof the word "a".

Section 36. Amend subsection (b) of §844, Title 5 of the Delaware Code, effective September 29, 1997 (as provided in Section 81 of this Act), by deleting the words "an existing" from the first sentence and inserting in lieu thereof the word "e.

Section 37. Amend subsections (b)(1), (b)(2), (b)(3) and (c) of §844, Title 5 of the Delaware Code, effective September 29, 1997 (as provided in Section 81 of this Act), by deleting the word "existing" from each and every place in which such word appears therein.

Section 38. Amend §845, Title 5 of the Delaware Code, effective September 29, 1997 (as provided in Section 81 of this Act), by deleting existing subsection (3) thereof in its entirety, and redesignating existing subsections (4) and (5) as new subsections (3) and (4), respectively.

Section 39. Amend §846, Title 5 of the Delaware Code, by deleting the entire text of that section and inserting in lieu thereof the following:

"Upon the Commissioner's determination that an out-of-state bank holding company is in violation of the requirements of this subchapter or any order, regulation, ruling, cooperative agreement or decree issued or entered into by the Commissioner or any order of a court of competent jurisdiction, or is otherwise operating a bank in an unsafe and unsound manner, the Commissioner shall have the authority to order such out-of-state bank holding company or subsidiary thereof to remedy such violation by a date certain, or to cease and desist from operating in an unsafe and unsound manner, in default of which the Commissioner shall have the authority to order such out-of-state bank holding company or subsidiary thereof to divest itself of any shares or assets of any bank located in this State. The procedure governing such divestiture, and the authority of the Commissioner to enforce an order directing the same, shall be the same as provided in § 807(b) through (d) of this title."

Section 40. Amend §847, Title 5 of the Delaware Code, by deleting the phrase ", existing" from the title thereof.

Section 41. Further amend §847, Title 5 of the Delaware Code, by deleting the words "§ 843(c) and" and the word "existing" from the text of existing subsection (a) thereof.

Section 42. Further amend §847, Title 5 of the Delaware Code, by deleting subsection (b) thereof in its entirety, and by deleting the subsection designation "(a)" from the remaining provisions of that section.

Section 43. Amend subsection (a) of §852, Title 5 of the Delaware Code, by deleting the words "1, II, and III" and inserting in lieu thereof the words "I, II,III and IV".

Section 44. Amend §854, Title 5 of the Delaware Code, by inserting the words "upon the Commissioner's request" after the word "Commissioner".

Section 45. Amend §904, Title 5 of the Delaware Code, by deleting existing subsection (b) thereof in its entirety, and by redesignating existing subsections (c) and (d) as new subsections (b) and (c) thereof, respectively.

Section 46. Amend §905, Title 5 of the Delaware Code, by adding the words ", federal savings associations and out-of-state banks" after the words "Reports by national banks" in the title thereof.

Section 47. Further amend §905, Title 5 of the Delaware Code, by inserting the words ", out-of-state banks (as defined in § 795 of this title) having one or more branch offices in this State, and federal savings associations (as defined in the Home Owners' Loan Act, as amended, 12 U.S.C. § 1461 et seq.)" after the words "National banks" and before the words "doing business".

Section 48. Amend Chapter 9, Title 5 of the Delaware Code, by deleting §919 thereof in its entirety.

Section 49. Amend Chapter 10, Title 5 of the Delaware Code, by adding thereto a new §1024, as follows:

"§ 1024. Prohibition against new consumer credit banks on or after September 29, 1995.

Notwithstanding any other provision of this chapter, no consumer credit bank shall be formed under this chapter on or after September 29, 1995."

Section 50. Amend §1039, Title 5 of the Delaware Code, by designating the existing text thereof as subsection (a) of that section, and adding a new subsection (b), as follows:

"(b) A consumer credit bank created under this chapter may merge or consolidate with other banks by converting to a bank as provided in § 793 of this title, and then merging or consolidating with other banks as provided in Subchapters VI. and VII. of Chapter 7 of this title."

Section 51. Delete § 1056, Title 5 of the Delaware Code.

Section 52. Amend the first paragraph of subsection (a) of §1101, Title 5 of the Delaware Code, by inserting between the word "principles" and the closed parenthesis ")" in the first sentence thereof the words ''; provided, however, that the income of subsidiary corporations of out-of-state banks (which for the purposes of this chapter has the same meaning as in § 795 of this title) that operate resulting branches (which for the purposes of this chapter has the same meaning as in § 795 of this title, and in addition shall also mean the branch offices in this state of out-of-state banks) in this State shall be consolidated with the income of such resulting branches only if such subsidiaries make the election provided for in subsection (f) of this section".

Section 53. Amend subparagraph (1) of subsection (a) of §1101, Title 5 of the Delaware Code, by inserting after the words "before taxes" and before the words and reduced by" the words "plus, in the case of a banking organization that is a resulting branch in this State of an out-of-state bank, the resulting branch imputed capital addback determined under subsection (i) of this section".

Section 54. Amend the last paragraph of subsection (a) of §1101, Title 5 of the Delaware Code, by adding the words "resulting branch in this State of an out-of-state bank, foreign bank limited purpose branch," before the words "foreign bank agency" at both places at which those words appear in that paragraph.

Section 55. Amend subsection (e) of §1101, Title 5 of the Delaware Code, by deleting the words "subsection (a)(1)b." as they appear in the second sentence and inserting in lieu thereof the words "subsection (a)".

Section 56. Amend subsection (f) of §1101, Title 5 of the Delaware Code, by deleting the words "subsection (a)(1)b." as they appear in the first sentence and by inserting in lieu thereof the words "subsection (a)".

Section 57. Further amend subsection (f) of §1101, Title 5 of the Delaware Code, by deleting from the first sentence thereof the words "directly by a bank holding company which also directly owns all the stock of a Delaware chartered banking organization or a national bank located in this State" and inserting in lieu thereof the words "by an out-of-state bank that operates a resulting branch in this State or, directly or indirectly, by a bank holding company that also directly or indirectly owns all the stock of a Delaware chartered banking organization, a national bank located in this State or an out-of-state bank that operates a resulting branch in this State", by deleting from the second sentence thereof the number "300" and inserting in lieu thereof the number "200", and by inserting at the end of that subsection the sentence When applicable, the income of such electing corporation shall be consolidated with the taxable income of the resulting branch in this State of an out-of-state bank in accordance with generally accepted accounting principles."

Section 58. Amend § 1101, Title 5 of the Delaware Code, by adding thereto a new subsection (i), as follows:

"(i) (1) The resulting branch imputed capital addback shall be the product of the greater of the products determined under subparagraphs (2) and (3) of this subsection (i) and the average of the monthly short-term applicable federal rates, as determined under §1274(d) of the Internal Revenue Code of 1986, as amended (26 U.S.C. § I274(d)), or any successor provisions thereto, and as published each month in the Internal Revenue Bulletin, for the twelve-month period preceding the date on which the resulting branch imputed capital addback is being determined.

(2) The product of (i) the deposits recorded on the books of the resulting branch in this State, and (ii) the minimum risk-based capital ratio (expressed as a decimal fraction) that a resulting branch in this State would be required to maintain, if it were a bank, in order to be deemed "adequately capitalized" pursuant to 12 C.F.R. Part 325.

(3) The product of (i) the value of that portion of the total risk-weighted assets (as defined in 12 C.F.R. Part 325) of the out-of-state bank operating the resulting branch in this State that are attributable to such resulting branch, and (ii) the minimum risk-based capital ratio (expressed as a decimal fraction) that a resulting branch in this State would be required to maintain, if it were a bank, in order to be deemed 'adequately capitalized' pursuant to 12 C.F.R. Part 325."

Section 59. Amend §1102, Title 5 of the Delaware Code, by inserting the words "(or out-of-state bank that operates a resulting branch in this State)" after the words "other proper officer of every banking organization" in the first sentence of that section, by inserting after the first sentence of that section the sentence "In the ease of an out-of-state bank that operates more than one resulting branch in this State, the statement setting forth the taxable income of such resulting branches shall set forth the information required by the State Bank Commissioner on a basis that consolidates such information for all resulting branches of such out-of-state bank in this State.", and by inserting the words "(or out-of-state bank that operates a resulting branch in this State)" after the words "proper officer of such banking organization" in the last sentence of that section.

Section 60. Amend §I104, Title 5 of the Delaware Code, by deleting from both subsections (a) and (c)(4) the words "bank, trust company and national bank" and inserting in lieu thereof the words "banking organization or federal savings bank not headquartered in this State but maintaining branches in this State".

Section 61. Amend subsection (a) of §1104, Title 5 of the Delaware Code, by adding at the end of that subsection the words "A resulting branch in this State of an out-of-state bank shall calculate estimated bank franchise tax liability with respect to the imputed capital addback provided in subsection (i) of § 1101 of this chapter by using the imputed capital addback for the preceding income year."

Section 62. Amend subparagraph (4) of subsection (c) of §1104, Title 5 of the Delaware Code, by adding to the end of that subparagraph the words '', or, with respect to a resulting branch in this State of an out-of-state bank, if the addition is attributable to the difference between the imputed capital addback provided in subsection (i) of § 1101 of this chapter for the current and preceding income years."

Section 63. Amend subsections (d) and (e) of §1104, Title 5 of the Delaware Code, by inserting the words "or federal savings bank not headquartered in this State but maintaining branches in this State after the words "banking organization" at each place where such words appear in those subsections.

Section 64. Amend Chapter 11, Title 5 of the Delaware Code, by adding new §§1111 and 1112 thereto, as follows:

"§ 1111. Period of limitation upon assessments.

(a) Except as otherwise provided in this section, the amount of tax imposed by this chapter shall be assessed within 3 years after the last day prescribed for filing the return or, if later, the date the return was filed.

(b) In the case of a false or fraudulent return with intent to evade tax or a failure to file a return, the tax may be assessed at any time.

(c) When, before the expiration of the time prescribed in subsection (a) of this section for the assessment of tax, both the Commissioner and the taxpayer have consented in writing to its assessment after such time, the taxpayer may be assessed at any time before the expiration of the period agreed upon. The period so agreed upon may be extended by subsequent agreements in writing made before the expiration of the period previously agreed upon.

§ 1112. Period of limitation on credit or refund.

Claim for a credit or refund of an overpayment of any tax imposed by this chapter shall be filed by the taxpayer with the Commissioner not later than 3 years from the last date prescribed for filing the return (including the time permitted in any agreements for the extension of time) or 2 years from the time the tax was paid, whichever of such periods is Inter, or if no return was filed by the taxpayer, not later than 2 years from the time the tax was paid."

Section 65. Amend Chapter 14, Title 5 of the Delaware Code, by changing the title of Subchapter I of that chapter from "Foreign Bank Agencies" to "Foreign Bank Limited Purpose Branches and Foreign Bank Agencies".

Section 66. Amend subsection (a) of §1403 of Title 5 of the Delaware Code, by inserting the words "foreign bank limited purpose branch or" before the words "foreign bank agency".

Section 67. Amend subsection (a)(7) of §1403 of Title 5 of the Delaware Code, by inserting the words "foreign bank limited purpose branch or" before the words "foreign bank agency".

Section 68. Amend subsection (c) of § 1403 of Title 5 of the Delaware Code, by inserting the words "foreign bank limited purpose branch or" before the words "foreign bank agency".

Section 69. Amend subsection (c)(2) of §1403 of Title 5 of the Delaware Code, by inserting the words "foreign bank limited purpose branch or" before the words "foreign bank agency" at both places at which those words appear in that subsection.

Section 70. Amend subsection (e)(4) of §1403 of Title 5 of the Delaware Code, by inserting the words "foreign bank limited purpose branch or" before the words "foreign bank agency".

Section 71. Amend § 1404 of Title 5 of the Delaware Code, by redesignating existing subsection (b) as new subsection (a)(3) thereof, and adding a new subsection (b), as follows:

"(b) A foreign bank holding a certificate of authority pursuant to this subchapter may establish and maintain a foreign bank limited purpose branch in this State at the location stated therein and may engage in the activities of a foreign bank agency permitted in subsection (a) of this section and, in addition, may accept such deposits as would be permissible for a corporation organized under section 25A of the Federal Reserve Act (12 U.S.C. § 611 et seq.)."

Section 72. Amend subsection (a) of § 1405, Title 5 of the Delaware Code, by inserting the words "foreign bank limited purpose branch or before the words "foreign bank agency" at all places where such words appear in the first and last sentences of that subsection, and by inserting the words "foreign bank limited purpose branch or foreign bank" before the word "agency" in the second sentence of that subsection.

Section 73. Amend subsection (b) of §1406 of Title 5 of the Delaware Code, by inserting the words "foreign bank limited purpose branch or before the words "foreign bank agency" at all places where such words appear in that subsection, and by inserting the words "foreign bank limited purpose branch or foreign bank" before the word "agency" in the second sentence of that subsection.

Section 74. Amend subsection (2) of §I407 of Title 5 of the Delaware Code, by inserting the words "foreign bank limited purpose branches or" before the words "foreign bank agencies".

Section 75. Further amend subsection (2) of § 1407 of Title 5 of the Delaware Code, by inserting the words ''§ 1404(a)(3) and" before the words "§ 1404(b)".

Section 76. Amend subsection (b) of § 1410 of Title 5 of the Delaware Code, by inserting the words "foreign bank limited purpose branch or" before the words "foreign bank agency".

Section 77. Amend Part 11, Title 5 of the Delaware Code, by adding a new Chapter 15 thereto, as follows:

"CHAPTER 15. CREDIT CARD INSTITUTIONS.
Subchapter 1. General Provisions.

§ 1501. Scope; construction.

This chapter provides for the creation of credit card institutions, chartered under the laws of this State, that engage only in credit card operations, do not accept demand deposits or deposits that the depositor may withdraw by check or similar means for payment to third parties or others, do not accept any savings or time deposit of less than $100,000, maintain only one office that accepts deposits, and do not engage in the business of making commercial loans, and are excepted from the definition of 'bank' in the Bank Holding Company Act of 1956, as amended, 12 U.S.C. § 1841 et seq.

§ 1502. Applicability of other laws.

A corporation formed under and pursuant to this chapter shall be known as a 'credit card institution', shall be subject to regulation by the State Bank Commissioner to the same extent as a bank organized under Chapter 7 of this title, and shall be deemed and held to be subject to this title, and to any other general statute of this State making provision for the regulation of banks, where any of the foregoing are not inconsistent with the express provisions of this chapter.

§ 1503. Taxation.

Every corporation created under and pursuant to this chapter, and every corporation whose charter or certificate of incorporation is amended under this chapter, shall be subject to the same taxation which shall be fixed by the laws of this State for banks and trust companies.

§ 1504. Reserved power of State to amend or repeal chapter.

This chapter may be amended or repealed at the pleasure of the General Assembly, but such amendment or repeal shall not take away or repeal any remedy against any corporation established under this chapter, or its officers, for any liability which shall have been previously incurred. This chapter and all amendments thereof shall be part of the charter or certificate of incorporation of every corporation formed under this chapter.

§ 1505. Corporate name.

No corporation formed under this chapter shall use the words 'savings' or 'trust' in its title or name.

Subchapter II. Formation.

§ 1510. Incorporators.

Any person, partnership, association or corporation, singly or jointly with others, and without regard to his (her)(its) or thcir residence, domicile or state of incorporation, may, upon the execution of written articles of association and upon compliance with this chapter, form a corporation, with the powers conferred by this chapter.

§ 1511. Articles of association; contents and execution.

(a) The articles of association of a credit card institution shall be executed by the incorporator(s), shall be acknowledged and shall set forth the intention of forming a corporation under this chapter, and shall specifically state:

(1) The name by which the corporation shall be known;

(2) The purpose for which it is formed;

(3) The city or town where its single place of business in this State open to the public will be located;

(4) The amount of its capital stock, and the number of shares into which it is to be divided;

(5) The number of its directors, which shall not be less than 5;

(6) Whether or not the corporation is to have perpetual existence, and if not, the time when its existence is to cease;

(7) Whether the private property of the stockholders shall be subject to the payment of corporate debts, and if so, to what extent.

(b) The articles of association may also contain other provisions defining, limiting and regulating the powers of the corporation, the powers and duties of the directors and the powers of the stockholders, if such provisions are consonant with the object, purpose and provisions of this chapter and are not in conflict with this Code or any other general statute of this State relating to banks.

§ 1512. Notice of intention to incorporate; publication.

Notice of the intention of the incorporator(s) to form a credit card institution shall be given to the State Bank Commissioner, and a notice in such form as the Commissioner shall approve shall be published at least once a week, for 3 successive weeks, in 1 or more newspapers designated by the Commissioner, at least 1 of which newspapers shall be published M the county where it is proposed to establish the office of the credit card institution. The published notice shall specify the name of the incorporator(s) organizing the credit card institution, the name of the proposed corporation, the city or the town where it is to be located, and the amount of its capital stock.

§ 1513. Application for certificate of public convenience and advantage.

Within 60 days after the third publication of the notice of intention to incorporate but not before the expiration of 30 days from the date of the third publication, the incorporator(s) shall apply to the State Bank Commissioner for a certificate that public convenience and advantage will be promoted by the establishment of the credit card institution.

§ 1514. Determination of public convenience.

Upon the application for a certificate that public convenience and advantage will be promoted by the establishment of the credit card institution, the State Bank Commissioner shall consider and determine whether public convenience and advantage would be promoted by the establishment of the credit card institution, and whether the terms and provisions of the articles of association and the proposed corporation's location and plan of operation are in compliance with this chapter, and shall issue or refuse to issue a certificate in accordance with such determination. In making such determination, the State Bank Commissioner shall consider, in addition to such other matters as the Commissioner may deem relevant, the experience of the incorporator(s) in the credit card business and with respect to the acceptance and administration of time deposits, and, if applicable, the quality of management and past financial performance. If the Commissioner refuses to issue a certificate, no further proceedings shall be had, but the application may be renewed after I year from the date of the refusal. If the Commissioner issues the certificate, the incorporator(s) shall hold the first meeting and follow the procedure prescribed by § 1515 of this title.

§ 1515. Organizational meeting; notice; proceedings.

At the organizational meeting or at any adjournment thereof, the incorporator(s) shall appoint a temporary secretary, adopt bylaws and elect, in such matter as the bylaws may determine, directors, a president, a secretary, and such other officers as the bylaws may prescribe. All the officers so elected shall be sworn to the faithful performance of their duties. The temporary secretary shall make and attest a record of the proceedings until the secretary has been chosen and sworn, including a record of such choice and qualification.

§ 1516. Articles of organization -- Contents.

The president and a majority of the directors elected at the organizational meeting shall make, sign and make oath to, a certificate (hereinafter called 'articles of organization') setting forth: A true copy of the articles of association; the name of the subscriber(s) thereto; the name, residence and post-office address of each of the officers of the corporation; and the date of the first meeting and the successive adjournments thereof, if any.

§ 1517. Same -- Approval.

The articles of organization, together with the records of the proposed corporation, shall be submitted to the State Bank Commissioner. The Commissioner shall examine the same, and may require such amendment thereof or such additional information as the Commissioner may consider proper or necessary. If the Commissioner finds that the provisions of law have been complied with, the Commissioner shall endorse the Commissioner's approval upon the articles of organization.

§ 1518. Same -- Filing.

The articles of organization with the endorsement of the State Bank Commissioner shall, within 30 days after the date of the endorsement, be filed M the office of the Secretary of State.

§ 1519. Certificate of incorporation.

(a) Upon the filing of the articles of organization as required by § 1518 of this title, the Secretary of State shall issue a certificate of incorporation in the following form:

'STATE OF DELAWARE

Be it known that whereas (the name of the incorporator(s)) has (have) executed articles of association with the intention of forming, pursuant to the provisions of Chapter 15 of Title 5 of the Delaware Code, a corporation under the name of (the name of the corporation), for the purpose (the purpose declared in the articles of association), with a capital stock of (the amount fixed in the articles of association), and having its sole place of business in the State of Delaware M (the city or town where its place of business will be located) and has (have) complied with the statutes of this State in such case made and provided, as appears from the articles of organization of the corporation, duly approved by the State Bank Commissioner and on file in this office, now therefore, I (the name of the Secretary of State), Secretary of State of Delaware, do hereby certify that (the name of the incorporator(s)), his(her)(its)(their) successors and assigns, is (are) legally organized and established as, and is (are) hereby made, an existing corporation under the name of (name of the corporation), with the powers, rights and privileges, and subject to the limitations, duties and restrictions which by law appertain thereto.

Witness my official signature hereunto subscribed, and the Great Seal of the State of Delaware hereunto affixed. this day of in the year (the date of the filing of the articles of organization).'

(a) The Secretary of State shall sign the certificate of incorporation and cause the Great Seal of the State to be thereto affixed and shall deliver the same to the corporation together with a certified copy of the articles of organization and the endorsement of the State Bunk Commissioner thereon, upon payment of the costs and charges thereof. A certified copy of the certificate shall be kept on file in the office of the Secretary of State with the articles of organization, and the certificate together with the articles of organization and endorsement thereon of the State Bank Commissioner shall be recorded in the office of the recorder of deeds for the county in which the place of business of the corporation is to be located.

(b) The certificate or a copy thereof duly certified by the Secretary of State, together with a certified copy of the articles of organization and the endorsement thereon of the State Bank Commissioner, accompanied with the certificate of the recorder of deeds for the county wherein the some is recorded under his hand and seal of his office, stating that the certificate and articles of organization have been recorded in the office of the recorder, or a copy of the record duly certified by the recorder, shall be evidence in all courts of this State.

§ 1520. Commencement of corporate existence.

Upon the issuance of the certificate of incorporation by the Secretary of State and the recording of the certificate and articles of organization as provided in § 1519 of this title, the incorporator(s) named in the certificate, his (her)(its)(their) successors and assigns shall from the date of the certificate be and constitute a body corporate, for the purposes and by the name set forth in the certificate, subject to dissolution or the revocation or forfeiture of the franchise under this chapter or under this Code or any other statute of this State relating to the dissolution of or to the revocation or forfeiture of the charter or franchise of banks or trust companies; but the corporation shall not have the right to do any business until it has secured from the State Bank Commissioner of this State the certificate provided for in § 1521.

§ 1521. Certificate authorizing transaction of business.

A certified copy of the certificate of incorporation and of the articles of organization and the endorsement of the approval of the State Bank Commissioner shall be filed with the State Bank Commissioner; and when the whole capital stock has been issued, the president and the cashier or treasurer of the corporation shall certify the names and addresses of the stockholders and the number of shares owned by them. Upon receipt of such certification, the Commissioner shall cause an examination to be made of the method of payment of the capital stock and if, after the examination, it appears that the whole capital stock stated in the articles of association has been paid in cash, and that all requirements of this Code and any other applicable law have been complied with, the Commissioner shall issue a certificate authorizing the corporation to begin the transaction of business. No corporation shall begin the transaction of business until a certificate has been granted authorizing it to do so.

§ 1522. Revocation of charter for failure to commence business within 6 months.

Every corporation created under this chapter shall within 6 months from the date of its incorporation be actively engaged in the business for which it was created or its certificate of incorporation and corporate franchise shall be deemed and held to be revoked.

§ 1523. Fees.

(a) The following fees shall be collected by and paid to the Secretary of State, for the use of the State: For making and issuing the certificate of incorporation, $10; for making the certified copy of the articles of organization, $10; for making the certified copy of the certificate of incorporation to be kept on file in the office of the Secretary of State and for tiling and indexing the same and the articles of organization in said office, $5; for supplying any additional certified copy of the certificate of incorporation or articles of organization requested by the corporation, $5.

(b) Before issuing the certificate authorizing the corporation to begin the transaction of business, the State Bank Commissioner shall collect from the corporation, for the use of the State, the sum of $5,750. In addition, the applicant shall pay an investigation fee of $1,150 which shall not be refundable and shall be submitted with the application.

Subchapter III. Conduct of Internal Corporate Affairs.

§ 1530. Bylaws.

A corporation established under this chapter may adopt bylaws for the proper management of its affairs, and may establish regulations controlling the assignment and transfer of its shares. The first set of bylaws shall be adopted at the organizational meeting, as provided in § 1515 of this title, but thereafter the power to make, alter or repeal bylaws shall be in the stockholders, provided that any corporation may, in the articles of association, confer that power upon the directors.

§ 1531. Directors.

(a) The business of every corporation organized under this chapter shall be managed by a board of directors. The number of directors which shall constitute the whole board shall be such as may be specified in the articles of association, but in no case shall the number be less than 5. The bylaws shall prescribe how many directors shall constitute a quorum for the transaction of business.

(b) The directors elected at the organizational meeting, as provided in § 1515 of this title, shall hold office until the succeeding annual meeting of the stockholders and until their successors have been duly chosen and qualified, and thereafter shall be elected at the annual meeting of the stockholders or at an adjournment of the annual meeting. Vacancies in the board of directors shall be filled by a majority of the remaining directors, though less than a quorum, and the directors so chosen shall hold office until the next annual election and until their successors shall be duly elected and qualified.

(c) Every director shall be sworn to the faithful performance of his or her duties.

§ 1532. Stockholders' meetings.

(a) Meetings of stockholders (except the meeting of incorporators referred to in § 1515 of this title) shall be held at such place either within or without this State as may be designated by or in the manner provided in the bylaws or if not so designated, at the office of the corporation in this State. The bylaws shall fix the time of the annual meeting and may provide for special or called meetings of stockholders.

(b) Any meeting of the stockholders may be adjourned and at such adjourned meeting, any business may be transacted that could have been acted on at the meeting which was adjourned.

§ 1533. Voting rights of stockholders.

Each stockholder shall at every meeting of the stockholders be entitled to I vote in person or by proxy for each share of the capital stock held by such stockholder on all issues on which such stockholder is entitled to vote. No stock shall be voted which shall have been transferred on the books of the corporation within 20 days next preceding the stockholders meeting.

§ 1534. Par value of capital stock; payment for and issuance thereof; increase and reduction in such stock,

The capital stock shall be divided into shares of a stated par value. No business shall be transacted by the corporation until the whole amount of its capital stock is subscribed for and actually paid in, in cash. No stock shall be issued by any corporation until the par value thereof shall be fully paid in, in cash. Any corporation may, subject to the approval of the State Bank Commissioner, increase or reduce its capital stock in the manner hereinafter provided.

§ 1535. Stockholders' liability.

The private property of the stockholders shall not be subject to the payment of the corporate debts unless expressly otherwise provided in the articles of association.

§ 1536. Dividends.

The directors of a credit card institution may declare dividends on common or preferred stock of so much of the net profits of the corporation as they shall judge expedient; but the corporation shall, before the declaration of a dividend from the net profits, carry 50% of its net profits of the preceding period for which the dividend is paid to its surplus fund until the same shall amount to 50% of its capital stock; and thereafter shall carry 25% of its net profits of the preceding period for which the dividend is paid to its surplus fund until the same shall amount to 100% of its capital stock.

§ 1537. Amendment of charter or certificate of incorporation.

(a) Credit card institutions created by or under this Code shall hereafter amend their charters or certificates of incorporation by and under this section.

(a) Any credit card institution created under this chapter may, from time to time, when and as desired, amend its charter or certificate of incorporation by addition to its corporate powers and purposes, or diminution thereof, or both (provided such additional corporate power or purpose be such as is authorized or contemplated under any of the provisions of this chapter); or by increasing or decreasing its authorized capital stock (provided that such increase or decrease be expressly approved by the State Bank Commissioner); by changing the number or par value of its shares of stock; or by changing its corporate title (provided that the words "savings" or "trust" shall not be used in the amended title); and by increasing or decreasing its number of directors (provided that in no case shall the whole number of directors be less than 5). Any or all such changes or alterations may be effected by 1 certificate of amendment. No amendment shall contain a provision which would not have been lawful and proper to insert in an original certificate of incorporation granted or issued under this chapter.

(e) The procedure for amendment and the manner of making and effecting the same shall be as prescribed in Chapter 1 of Title 8 for the amendment of the certificate of incorporation of a corporation having a capital stock. No certificate of amendment shall be received or flied by the Secretary of State or be deemed or held to be effective unless and until the proposed certificate of amendment shall have been submitted to the State Bank Commissioner and shall have been approved both in substance and in form by said Commissioner.

(d) Notwithstanding any of the provisions of this section, a credit card institution created under this chapter may adopt such amendments to its certificate of incorporation as are necessary to permit such credit card institution to comply with the provisions governing the conversion of a credit card institution charter pursuant to § 793A of this title.

§ 1538. Merger and consolidation -- Authorized; procedure.

Subject to § 1539 of this title, no corporation created under this chapter may merge or consolidate with any other corporation or entity except that any 2 or more corporations created under this chapter may merge or consolidate into a single corporation which shall be any 1 of the merging or consolidating credit card institutions. The procedure for the merger or consolidation of such corporations and the legal effect of any such merger or consolidation and the manner of making and effecting the same shall be as prescribed in Chapter 1 of Title 8 for the merger or consolidation of 2 or more corporations organized under that chapter. No agreement of merger or consolidation of corporations created under this chapter shall be received or filed by the Secretary of State or be deemed or held to be effective unless and until the proposed agreement of merger or consolidation shall have been submitted to the State Bank Commissioner and shall have been approved both in substance and in form by the State Bank Commissioner.

§ 1539. Same -- Acquisition of assets and assumption of liabilities; Commissioner's approval; title to property.

(a) No corporation organized under this chapter shall merge or consolidate with any other such corporation and no one shall take over any substantial portion of the assets of and/or assume a substantial portion of the liabilities, in whole or in part, of any such corporation (whether such corporation is then doing business or has ceased to do business or has surrendered its charter or has dissolved) unless and until such action shall be approved by the State Bank Commissioner.

(b) The Commissioner may require that the Commissioner be furnished with such information as to the assets and liabilities and as to the condition of the credit card institutions concerned as the Commissioner deems necessary or proper to determine whether to give or withhold the Commissioner's approval.

(c) The State Bank Commissioner shall refuse approval whenever in the Commissioner's opinion the transaction will weaken any credit card institution concerned.

(d) No title to any property shall pass where the transaction is in violation of this section. Subchapter IV. Powers, Conditions and Prohibitions.

§ 1541. Powers and limitations.

(a) Any corporation formed under this chapter may engage only in the business of credit card operations and accepting deposits of money, as described in this section. in engaging in such business, such corporations may exercise only the powers described below:

(1) To sue and be sued. complain and defend in any court of law or equity;

(2) To make, hold, purchase, mortgage or lease such real or personal property as is necessary for the conduct of its business;

(3) To borrow money;

(4) To accept savings or time deposits of money in an amount not less than $100,000; provided that such deposits shall be insured by the Federal Deposit Insurance Corporation such that the credit card institution qualifies as an insured depository institution, as defined in the Federal Deposit Insurance Act at 12 U.S.C. § 1813(c);

(5) To engage in credit card operations by extending credit to any natural person or persons, the proceeds of which are used primarily for personal, family or household purposes, and to take security interests of any kind in property of any type to secure such loans or credits; provided, however, that a loan or credit card account in the name of not more than 2 natural persons shall be deemed to be primarily for personal, family or household purposes;

(6) To create and, except for directors' qualifying shares, to own all of the capital stock of I or more subsidiary corporations that engage only in activities permitted by this chapter, provided that no subsidiary corporation of a corporation organized under this chapter may accept deposits.

(b) No credit card institution shall possess or exercise any power:

(1) To act as a fiduciary of any sort including, but not limited to, an executor, administrator, guardian, conservator, trustee by will or other instrument, receiver or attorney-in-fact;

(2) To make commercial loans or extend credits to any corporation or to any natural person or persons when the proceeds of such loan or credit is to be used for business purposes of such individuals; provided, however, that a credit card account in the name of not more than 2 natural persons shall be deemed to be primarily for personal, family or household purposes;

(3) To accept demand deposits or deposits that the depositor may withdraw by check or similar means for payment to third parties or others;

(4) To do any business prohibited by § 767 of this title or any business not authorized by subsection (a) of this section.

§ 1542. Office in State.

Every credit card institution shall have a single office in this State that accepts deposits. At such office, the corporation shall maintain such records and books of accounts as the State Bank Commissioner may by regulation require and shall employ such persons as it may require to review and act upon applications for extensions of credit permitted by § 1541 of this title.

§ 1543. Revocation of authority to transact business.

(a) Upon determining that any corporation organized under this chapter is engaging in any activity not permitted by § 1541 of this title or has more than 1 office that accepts deposits, the State Bank Commissioner may issue an order to such corporation requiring it to take such steps by a date certain as the Commissioner determines are necessary to cure such violation.

(b) Upon determining that any corporation organized under this chapter has failed to timely comply with any order issued under subsection (a) of this section, the State Bank Commissioner shall, by order effective no earlier than 10 nor later than 30 days after issuance, revoke such corporation's authority to transact business in this State. Upon the effective date of such order, and so long is such order has not been suspended or set aside pursuant to subsection (c) of this section or withdrawn by the State Bank Commissioner, such corporation shall cease all business activity of any kind in this State, but shall maintain a registered office in this State for the purpose of accepting service of legal process.

(c) The Court of Chancery of the State shall have exclusive original jurisdiction of any judicial review of an order issued under subsection (b) of this section, any other provision of law notwithstanding. Such review may be sought by the corporation affected at any time within 1 year of the date of such order. Review of such order shall be de novo and such order will be specifically enforced by the Court of Chancery upon a final determination that at the time of its issuance the order was valid in all respects. The Court of Chancery may, in the exercise of its equitable jurisdiction in appropriate cases, suspend the operation of an order issued under subsection (b) of this section while judicial review of such order proceeds. An order issued under subsection (a) of this section shall not be subject to judicial review.

§ 1544. Merger with or conversion into national bank.

No corporation established under this chapter may merge with or convert into a national bank, except as otherwise provided pursuant to § 793A of this title."

Section 78. Amend subsection (a) of §379 of Title 8 of the Delaware Code, by inserting before the period at the end of that subsection the words ", except as otherwise provided in subchapter VII of Chapter 7 of Title 5".

Section 79. Sections 1-5, 7-13, 15-32 and 38-78 of this Act are effective as of September 29, 1995.

Section 80. Section 6 of this Act is effective as of January 1, 1996.

Section 81. Sections 14 and 33-37 of this Act are effective as of September 29, 1997.

Section 82. If any provision of this Act or the application of any section or part thereof to any person or circumstance is held invalid, such invalidity shall not affect other provisions or applications of this Act that can be given effect without the invalid provision or application; provided, however, that if any court of competent jurisdiction issues a final order, that by lapse of time or otherwise is no longer subject to appeal, invalidating the provisions in Section 15 of this Act that relate to an "existing Delaware bank" with respect to the age required of such bank that is either a state or national bank in order to be a party to a merger pursuant to the provisions of Section 15 of this Act, then, in such event, Sections 33-37 of this Act shall become invalid, except that any transaction that has been lawfully consummated pursuant to Sections 33-37 of this Act before such invalidity shall be unaffected by such invalidity.

Approved June 28, 1995