Montana Code Annotated 2021



Part 1. General Provisions -- Definitions


32-1-109. Definitions. As used in this chapter, unless the context requires otherwise, the following definitions apply:

(1) "Acquire" means:

(a) the direct or indirect purchase or exchange of stock;

(b) the direct or indirect purchase of assets and liabilities; or

(c) a merger.

(2) "Acquiring party" means the person acquiring control of a bank through the purchase of stock.

(3) "Affiliate" has the meaning given in 12 U.S.C. 1841(k).

(4) "Bank holding company" means a bank holding company or a financial holding company registered under the federal Bank Holding Company Act of 1956, as amended, regardless of where the entity is located or has its headquarters.

(5) "Board" means the state banking board provided for in 2-15-1025.

(6) "Branch" means:

(a) in the case of a bank, a banking house, other than the main banking house, maintained and operated by a bank doing business in the state and at which deposits are received, checks are paid, or money is lent. The term does not include a satellite terminal, as defined in 32-6-103, a loan production office, or the office of an affiliated depository institution acting as an agent under 12 U.S.C. 1828.

(b) in the case of a trust company, any office at which trust services are provided.

(7) "Capital", "capital stock", and "paid-in capital" mean that fund for which certificates of stock are issued to stockholders.

(8) "Consolidate" and "merge" mean the same thing and may be used interchangeably in this chapter.

(9) "Control" means:

(a) ownership of, authority over, or power to vote, directly or indirectly, 25% or more of any class of voting security;

(b) authority in any manner over the election of a majority of directors; or

(c) power to exercise, directly or indirectly, a controlling influence over management and policies.

(10) "Demand deposits" means all deposits, the payment of which can legally be required when demanded.

(11) "Department" means the department of administration provided for in Title 2, chapter 15, part 10.

(12) "Depository institution" means a bank or savings association organized under the laws of a state or the United States.

(13) "Division" means the division of banking and financial institutions of the department.

(14) "Doing business in this state" means located in this state or having a physical branch bank location in this state.

(15) "Headquarters" means the state in which the activities of a bank holding company or a company controlling the bank holding company are principally conducted within the meaning of the federal Bank Holding Company Act of 1956, as amended.

(16) "Insured depository institution" means a bank or savings association in which the deposits are insured by the federal deposit insurance corporation.

(17) "Loan production office" means a staffed facility, other than a branch, that provides lending-related services to the public, including loan information and applications.

(18) "Located in this state" means:

(a) in the case of a bank, that the bank is either organized under the laws of this state or is a federally chartered bank whose organizational certificate identifies an address in this state as the principal place at which the business of the federally chartered bank is conducted; and

(b) in the case of a bank holding company, that the entity, partnership, or trust is organized under the laws of this state.

(19) "Main banking house" means the designated principal place of business of a bank.

(20) "Net earnings" means the excess of the gross earnings of a bank over expenses and losses chargeable against those earnings during any 1 year.

(21) "Principal shareholder" means a person who directly or indirectly owns or controls, individually or through others, more than 10% of any class of voting stock.

(22) "Profit and loss account" or "profit and loss" means that account carried on the books of the bank into which all earnings accounts and recoveries are closed, thus exhibiting "gross earnings", and against which all loss and other disbursement items are charged, revealing "net earnings", which are then properly closed to "undivided profits accounts" or "undivided profits", out of which dividends are paid and reserves set aside.

(23) "Regional banking organization" means a bank organized in this state that is owned by an entity with consolidated total assets between $10 billion and $50 billion and that has subsidiaries operating in one or more states but not nationwide.

(24) "Savings association" means a savings association or savings bank organized under the laws of the United States or a building and loan association, savings and loan association, or similar entity organized under the laws of a state.

(25) "Shell bank" means a bank organized solely for the purpose of, and that does not conduct any banking business prior to, acquiring control of, merging with, or acquiring all or substantially all of the assets of an existing bank or savings association.

(26) (a) "Service provider" means an individual or person that provides one or more of the following services to a depository institution:

(i) data processing services;

(ii) activities supporting financial services, including but not limited to lending, funds transfer, fiduciary activities, trading activities, and deposit taking;

(iii) internet-related services, including but not limited to web services and electronic bill payments, mobile applications, system and software development and maintenance, and security monitoring; and

(iv) activities related to the business of banking.

(b) The term does not include:

(i) an individual or person that provides telecommunications service, internet access service, internet transport services, voice over internet protocol service, or other internet protocol-enabled service; or

(ii) a general audience internet or communications platform.

(27) "Subsidiary" means a company 25% or more of whose voting shares or equity interests are owned and controlled by a bank.

(28) "Surplus" means a fund paid in or created under this chapter by a bank from its net earnings or undivided profits that, when set apart and designated as surplus, is not available for the payment of dividends and cannot be used for the payment of expenses or losses so long as the bank has undivided profits.

(29) "Tier 1 leverage ratio" means the ratio of tier 1 capital to average total assets as defined in 12 CFR 628.10(c)(4).

(30) "Time deposits" means all deposits, the payment of which cannot legally be required within 7 days.

(31) "Undivided profits" means the credit balance of the profit and loss account of a bank.

History: En. Sec. 5, Ch. 89, L. 1927; re-en. Sec. 6014.9, R.C.M. 1935; amd. Sec. 1, Ch. 431, L. 1975; R.C.M. 1947, 5-109; amd. Sec. 2, Ch. 274, L. 1981; amd. Sec. 1, Ch. 483, L. 1983; amd. Sec. 2, Ch. 75, L. 1985; amd. Sec. 1, Ch. 322, L. 1989; amd. Sec. 5, Ch. 395, L. 1993; amd. Sec. 2, Ch. 117, L. 1997; amd. Sec. 2, Ch. 100, L. 1999; amd. Sec. 1, Ch. 36, L. 2001; amd. Sec. 75, Ch. 483, L. 2001; amd. Sec. 1, Ch. 49, L. 2013; amd. Sec. 7, Ch. 75, L. 2019.