Oklahoma Administrative Code
Title 85 - State Banking Department
Chapter 10 - Supervision, Regulation, and Administration of Banks, Trust Companies, and the Oklahoma Banking Code
Subchapter 11 - Substantive Guidelines and Restrictions
Section 85:10-11-9 - Operating subsidiaries

Universal Citation: OK Admin Code 85:10-11-9

Current through Vol. 42, No. 7, December 16, 2024

(a) A bank or trust company may purchase for its own account not less than 50% of the voting shares or interest in a corporation or other entity to perform functions that the bank is empowered to perform directly, subject to the prior written approval of the Commissioner and subject to the provisions of this section.

(1) The bank must own not less than 50% of the stock of the subsidiary, and the bank must control 50% of the voting regarding the management and activities of the subsidiary.

(2) No officer, director or shareholder of the bank or officer, director or shareholder of the bank's holding company may otherwise have a direct or indirect pecuniary interest in the operating subsidiary.

(3) The subsidiary's operations must be limited to those functions which the parent bank is permitted to perform.

(4) The subsidiary's operations may be performed only at a location at which the bank would be authorized to engage in such operations.

(5) All transactions between the parent bank and the operating subsidiary are subject to any limitations and restrictions applicable under the laws of the State of Oklahoma and the United States.

(6) All provisions of the banking laws, rules and regulations applicable to the operations of the parent bank shall be equally applicable to the operations of the subsidiary.

(7) Unless otherwise provided by statute or regulation, pertinent book figures of the parent bank and its operating subsidiary shall be consolidated for the purpose of applying applicable statutory limitations, including, but not limited to Sections 220, 409, 410, 414, 802, 803, 805 and 806 of the Banking Code.

(8) Each operating subsidiary shall be subject to examination and supervision by the Commissioner in the same manner and to the same extent as the parent bank. If the Commissioner shall ascertain that the subsidiary is created or operated in violation of the Code or Board rules, or that the manner of operation is detrimental to the business of the parent bank and/or its depositors, he may order the bank to dispose of all or any part of such subsidiary upon such terms as the Commissioner may deem proper.

(b) The bank shall request in writing the approval of the Commissioner to own and operate such a subsidiary. The request shall include a brief description of the subsidiary and its operations. The bank shall attach to the request a copy of the proposed certificate of incorporation and bylaws of the subsidiary or other similar organizational documentation in the case of a non corporate entity.

(c) The request with attachments shall be accompanied by a fee in the amount set forth in rule 85:10-3-21. If the Commissioner approves the request and attached documents, the bank shall file the necessary organizational documents with the Oklahoma Secretary of State (if the subsidiary is an Oklahoma organization) and return one certified copy to the Department, and forward necessary copies to the Federal Deposit Insurance Corporation or the Federal Reserve System.

(d) Notwithstanding the restrictions of subsection (a) of this section, minority interests (less than 50%) in corporations, partnerships, limited liability entities, and other business ventures are permitted, if the Commissioner first determines that:

(1) the activities of the entity are part of or incidental to banking,

(2) the bank must be able to prevent the entity from engaging in activities not part of or incidental to banking,

(3) the investment must not subject the bank to open ended liability, and

(4) the investment must be convenient and useful to the bank's business and not a passive investment.

(e) Prior to disposition or dissolution of an operating subsidiary, the parent bank shall notify the Commissioner.

Amended at 10 Ok Reg 1969, eff 5-27-93; Amended at 14 Ok Reg 3559, eff 8-1-97 (emergency); Amended at 15 Ok Reg 2952, eff 7-15-98; Amended at 25 Ok Reg 1064, eff 5-25-08

Disclaimer: These regulations may not be the most recent version. Oklahoma may have more current or accurate information. We make no warranties or guarantees about the accuracy, completeness, or adequacy of the information contained on this site or the information linked to on the state site. Please check official sources.
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