USA Law and Practice Contributed by: Edward P. O’Keefe, Neil T. Bloomfield, John A. Stoker and Kathryn (Kate) G. Wellman, Moore & Van Allen, PLLC
process before applying for a charter. The organ - isers will also designate a person for the OCC to contact with questions during the application process. The OCC provides both a preliminary approval for the organisers to continue their efforts and a final approval before the bank can open for business. Once preliminary approval has been obtained, the organisers can complete any remaining man - agement hires, continue raising capital, and oth - erwise prepare for opening, including developing internal risk management and operating systems and adopting a written insiders’ policy address - ing code of conduct and conflicts of interest. At least 60 days before the bank’s proposed opening and before final OCC approval may be issued, the bank must notify the OCC that organisational efforts have been completed and request that the OCC conduct a pre-opening examination. For at least the first three years of its operation, the bank is required to receive a non-objection from the OCC before making any significant change to its business plan. The OCC must also review the bank’s hiring of new executive officers and election of new directors for at least the first two years of the bank’s operations. Powers and Authorities The powers and authorities of national banks are set out in legislation (including the National Bank Act) and through the OCC’s regulations and interpretive letters, including requirements for when the bank must file a notice to, or receive approval from, the OCC prior to engaging in a new activity. State-chartered Banks The application and licensing process for a state-chartered bank are governed by state law.
The powers and authorities of a state bank are governed by state and federal law and by the regulations of its primary federal regulator (either the Federal Reserve Board or FDIC). Many states also have provisions in their banking laws, sometimes referred to as wild card provisions, providing state banks with the same powers and authorities as national banks. 3. Changes in Control 3.1 Requirements for Acquiring or Increasing Control Over a Bank A person or entity (a “person”) controls a bank if it would, directly or indirectly, have the power to either (i) direct the management or policies of the bank; or (ii) vote 25% or more of any class of the bank’s voting securities. A rebuttable pre - sumption of control exists if the person, directly or indirectly, has the power to vote 10% or more of any class of a bank’s voting securities if: (i) the securities are subject to registration under the Securities Exchange Act of 1934; or (ii) immedi - ately after the transaction, no other shareholder would own or have the power to vote a greater percentage of the class. The agencies also con - sider whether the person is acting in concert with others. A 90-day after-the-fact notice requirement applies in circumstances where control is acquired due to circumstances beyond the per - son’s control, such as acquiring control through inheritance, a redemption of the bank’s voting securities, or by acquisition of the securities in satisfaction of a debt. Some acquisitions of con - trol are exempt from the notice requirements of the Change in Bank Control Act (CBCA), includ - ing transactions subject to approval under or transactions described in the BHCA. Under the BHCA, approval of the Federal Reserve Board is
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