Ohio Administrative Code
Title 1301:1 - Division of Financial Institutions: Banks
Chapter 1301:1-2 - Computation of Capital
Section 1301:1-2-02 - Trust company capital
Universal Citation: OH Admin Code 1301:1-2-02
Current through all regulations passed and filed through September 16, 2024
(A) In evaluating the adequacy of a trust company's capital, the superintendent of financial institutions shall consider all of the following:
(1) The nature and
volume of the trust company's business, including whether the trust company is
primarily engaged in trust business or primarily engaged in banking business;
(2) The amount, nature, quality,
and liquidity of the trust company's assets;
(3) The amount and nature of the trust
company's liabilities, including those that are not presently due or are
contingent;
(4) The amount and
nature of the trust company's fixed costs;
(5) The history of and prospects for the
trust company to earn and retain income;
(6) The quality of the trust company's
operations;
(7) The quality of the
trust company's management;
(8)
The nature and quality of the trust company's ownership;
(9) The nature, terms, and extent of the
trust company's insurance coverage, including deductibles, limitations, and
exclusions;
(10) If the trust
company is a corporation organized under the laws of another state or country
and authorized to accept and execute trusts in that state or country, the
assessment of the trust regulatory authority of that state or country, if any,
of the adequacy of the trust company's capital;
(11) Any other factor the superintendent
finds to be relevant under the circumstances.
(B)
(1)
Except as provided in paragraph (B)(2) of this rule, if a trust company is
engaged only in trust business, all of the following apply:
(a)
(i) The
trust company shall maintain capital in the amount the superintendent
determines after considering the factors listed in paragraph (A) of this rule
and, except as provided in paragraph (B)(1)(a)(ii) of this rule, the amount
shall be not less than $3,000,000 not including the trust company's fixed
assets or any assets the trust company has pledged to any person other than the
treasurer of state of the state of Ohio pursuant to section
1111.04
of the Revised Code.
(ii) Only a
trust company that demonstrates extraordinary circumstances to the
superintendent warranting the conclusion its capital is adequate may maintain
capital of less than $3,000,000, not including the trust company's fixed assets
or any assets the trust company has pledged to any person other than the
treasurer of state of the state of Ohio pursuant to section
1111.04
of the Revised Code. A conclusion by the superintendent under this provision
that a trust company's capital is adequate does not preclude the superintendent
subsequently concluding the trust company's capital is no longer adequate and
requiring the trust company to maintain a higher level of capital.
(b) If a trust company is newly
organized, the trust company's minimum capital shall include an amount the
superintendent finds likely to be sufficient to absorb the trust company's
operating losses until the trust company can reasonably be expected to have
income sufficient to cover its operating costs.
(c) The trust company shall invest its
minimum capital only in the following:
(i)
Bonds, bills, notes, or other debt securities of the United States or for which
the full faith and credit of the United States is pledged for payment of
principal and interest;
(ii)
Bonds, notes, or other debt securities issued by this state, or any other state
of the United States, that are the direct obligation of the issuer and for
which the full faith and credit of the issuer is pledged to provide payment of
the principal and interest;
(iii)
Bonds, notes, or other debt securities of any county, municipal corporation,
township, school district, improvement district, sewer district, or other
subdivision of this state or any other state of the United States that are the
direct obligation of the county or the subdivision issuing them and for which
the full faith and credit of the issuing county or subdivision is pledged to
provide payment of principal and interest;
(iv) Bonds or other debt obligations issued
or guaranteed by agencies or instrumentalities of the United States, regardless
of the guarantee of payment of principal and interest by the United States;
(v) Subject to conditions and
restrictions the superintendent may prescribe, bonds, debentures, and other
debt securities issued by any country or multinational organization that are
the direct obligation of the issuing country or multinational organization and
for which the full faith and credit of the issuing country or multinational
organization is pledged to provide payment of principal and interest;
(vi) Bankers' acceptances of the
kinds described in divisions (B) and (C) of section
1109.17
of the Revised Code;
(vii) Subject
to conditions and restrictions the superintendent may prescribe, bonds,
debentures, and other debt securities and obligations of any state or political
subdivision of a state, a public corporation, or governmental agency that are
payable solely out of anticipated revenues, commonly referred to as revenue
bonds;
(viii) As defined and
restricted by the superintendent, marketable obligations evidencing the
indebtedness of any corporation in the form of bonds, notes, debentures, or
equipment trust certificates, commonly referred to as investment securities;
(ix) Other bonds, debentures, and
debt securities that are permissible investments for national banks that the
superintendent may approve for investments by banks;
(x) Deposits insured by the federal deposit
insurance corporation;
(xi)
Registered investment companies whose investments consist solely of investments
listed in paragraphs (B)(1)(c)(i) to (B)(1)(c)(x) of this rule;
(xii) In the case of a newly organized trust
company, to the extent authorized by the superintendent, transaction account
deposits in federally insured depository institutions in excess of the federal
deposit insurance limit.
(2) If the trust company is a corporation
organized under the laws of another state or country and authorized to accept
and execute trusts in that state or country and the trust company's trust
business is regulated by an authority of that state or country, the
superintendent may determine the trust company's capital is adequate even if
the trust company's capital is less than otherwise allowed by paragraph
(B)(1)(a) of this rule and is invested other than otherwise required by
paragraph (B)(1)(c) of this rule.
(C) If a trust company is engaged primarily in the banking business, the superintendent shall determine the adequacy of the trust company's capital principally with regard to the trust company's banking business giving additional consideration to the risk posed by the trust company's trust business.
(D) If a trust company is not engaged primarily in the banking business and is not engaged only in the trust business, the superintendent may apply to the trust company's capital any of the restrictions and requirements applicable to the capital of a trust company engaged only in trust business by paragraph (B) of this rule.
Five Year Review (FYR) Dates:
05/20/2015 and
05/20/2020
Promulgated
Under:
119.03
Statutory Authority:
1121.03
Rule Amplifies:
1111.05
Prior Effective Dates:
12/15/00
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