citation: FIN § 5325

text:
Notwithstanding that no response or claim has been filed pursuant to Section 5322, in all cases where property is forfeited pursuant to this article and, where necessary, sold by the Department of General Services or local governmental entity, the money forfeited or the proceeds of sale shall be distributed by the state or local governmental entity as follows:

(a) To the bona fide or innocent purchaser, conditional sales vendor, or holder of a valid lien, mortgage or security interest, if any, and from the balance of any forfeited funds to any victim of a crime enumerated in Section 5320 committed by the defendant, up to the amount of his or her interest in the property or proceeds, when the court declaring the forfeiture orders a distribution to that person. The court shall endeavor to discover all such lienholders and protect their interests and may, at its discretion, order the proceeds placed in escrow for up to an additional 60 days to ensure that all valid claims are received and processed. The aggregate of all money distributed pursuant to this subdivision and all money received pursuant to a restitution order of a court shall not exceed the amount of the person’s interest in the property or proceeds.

(b) To the Department of General Services or local governmental entity for all expenditures made or incurred by it in connection with the sale of the property, including expenditures for any necessary repairs, storage, or transportation of any property seized under this article.

(c) The balance of forfeiture funds remaining after the obligations in subdivisions (a) and (b) have been satisfied shall be paid to the general fund of the state or local governmental entity, whichever prosecutes.

history: (History: Amended by Stats. 1992, Ch. 1280, Sec. 4. Effective January 1, 1993.)

article: 5. Criminal Forfeiture


kind: section

code: FIN

citation: FIN § 5330

text:
The commissioner may impose civil penalties on any savings association, and any institution-affiliated party as follows:

(a) Except as provided in subdivision (b) or in subdivisions (c) and (d), any savings association which, and any institution-affiliated party who, commits any of the following violations shall forfeit and pay a civil penalty of not more than five thousand dollars ($5,000) for each day during which the violation continues:

(1) Violation of any statute or regulation.

(2) Violation of any order issued by the commissioner.

(3) Violation of any condition imposed in writing by the commissioner in connection with the grant of any application or other request by the savings association.

(4) Violation of any written agreement between the savings association and the commissioner.

(b) Any savings association which, and any institution-affiliated party who, (1) commits any violation specified in subdivision (a), (2) recklessly engages in an unsafe or unsound practice in conducting the affairs of the savings association, or (3) breaches any fiduciary duty shall forfeit and pay a civil penalty of not more than twenty-five thousand dollars ($25,000) for each day during which the violation, practice, or breach continues if the violation, practice, or breach (1) is part of a pattern of misconduct, (2) causes or is likely to cause more than a minimal loss to the savings association, or (3), was committed by an institution-affiliated party and results in pecuniary gain or other benefit to that institution-affiliated party.

(c) Notwithstanding subdivisions (a) and (b), any savings association which, and any institution-affiliated party who, (1) knowingly commits any violation specified in subdivision (a), engages in any unsafe or unsound practice in conducting the affairs of the savings association, or breaches any fiduciary duty, and (2) knowingly or recklessly causes a substantial loss to the savings association or, in the case of an institution-related party, a substantial pecuniary gain or other benefit to the institution-related party results by reason of violation, practice or breach, shall forfeit and pay a civil penalty in an amount not to exceed the maximum amount determined under this subdivision for each day during which the violation, practice, or breach continues. The maximum daily amount of any civil penalty which may be assessed pursuant to this subdivision for any violation, practice, or breach described in the subdivision is as follows:

(1) In the case of any person other than a savings association, an amount not to exceed one million dollars ($1,000,000).

(2) In the case of any savings institution, an amount not to exceed the lesser of one million dollars ($1,000,000) or 1 percent of the total assets of the association.

(d) (1) Any penalty imposed under subdivisions (a), (b), or (c) may be assessed and collected by the commissioner by written notice.

(2) If, with respect to any assessment under paragraph (1) a hearing is not requested pursuant to subdivision (g) within the period of time allowed under subdivision (g), the assessment shall constitute a final and unappealable order.

(e) The commissioner may compromise, modify or remit any penalty which may be assessed or which has been assessed pursuant to subdivision (a), (b), or (c).

(f) In determining the amount of any penalty imposed under subdivision (a), (b), or (c), the commissioner shall take into account the appropriateness of the penalty with respect to all of the following:

(1) The size of financial resources and good faith of the savings association or other person charged.

(2) The gravity of the violation, practice, or breach.

(3) The history of previous violations, unsafe or unsound practices, or breaches of fiduciary duty.

(4) Such other matters as justice may require.

(g) The savings association or other person against whom any penalty is assessed under this section shall be afforded a departmental hearing if the association or person submits a request for a hearing within 20 days after the issuance of the notice of assessment.

(h) (1) If any savings association or institution-related party fails to pay an assessment after any civil monetary penalty assessed under this section has become final, the department shall recover the amount assessed by action in superior court.

(2) Notwithstanding any other provision of law, review under Section 8055 of the validity or appropriateness of any civil penalty assessed under this section shall be conducted solely pursuant to Section 1085 of the Code of Civil Procedure.

(i) All penalties collected under authority of this section shall be deposited in the Savings and Loan Account in the Financial Institutions Fund.

history: (History: Amended by Stats. 1996, Ch. 1064, Sec. 550. Effective January 1, 1997. Operative July 1, 1997.)

division: 2. SAVINGS ASSOCIATION LAW

article: 6. Civil Penalties

path: 2. SAVINGS ASSOCIATION LAW > 1. Short Title, General Definitions, and General Provisions > 6. Civil Penalties


citation: FIN § 5400

text:
(a) No funds from proposed stockholders, members, or organizers of any proposed association may be collected until a verified application for an organizing permit has been filed and a permit has been issued by the commissioner authorizing collection of funds, and then only in accordance with the terms of the permit.

(b) As used in this chapter, the term “organizer” means a person who agrees to contribute funds to a proposed association to be used for its organization expenses.

history: (History: Added by Stats. 1983, Ch. 1091, Sec. 2.)

article: 1. Organizing Permit

path: 2. SAVINGS ASSOCIATION LAW > 2. Corporate Organization and Corporate Changes > 1. Organizing Permit


citation: FIN § 5401

text:
The application for an organizing permit shall be in writing and shall be filed in the office of the commissioner. The application shall be executed and verified by the chairman of the organizers, who shall be elected by a majority vote of the organizers, and shall include the following:

(a) The names and addresses of the organizers of the proposed association and, to the extent known, its proposed directors and officers, together with the proposed amount of capital stock and savings accounts to be purchased and funds for organization expenses to be contributed by each.

(b) The proposed location of its office.

(c) A copy of any contract proposed to be used for the solicitation of subscriptions for stock and savings accounts and funds for its organization expenses.

(d) A copy of any advertisement, circular, or other written matter proposed to be used for soliciting stock and savings accounts subscriptions and funds for organization expenses.

(e) An itemized estimate of the organization expenses proposed to be incurred.

(f) A copy of the certificate of reservation of name issued under Section 5403. The name selected shall conform with the requirements of Article 4 (commencing with Section 5650).

(g) Any additional information that the commissioner may require by written instructions.

chapter: 2. Corporate Organization and Corporate Changes

article: 1. Organizing Permit


citation: FIN § 5402

text:
(a) The commissioner may impose conditions in an organizing permit concerning the deposit in escrow of funds collected pursuant to the permit, the manner of expenditure of the funds, and any other conditions deemed reasonable and necessary or advisable for the protection of the public, the subscribers, and the organizers.

(b) Contributions of organization expenses may be repaid to organizers on a pro rata basis by the association in amounts not to exceed its net income from operations after provision for statutory reserves.

history: (History: Amended by Stats. 1984, Ch. 287, Sec. 3. Effective July 6, 1984.)

article: 1. Organizing Permit


citation: FIN § 5403

text:
(a) Before filing an application for an organizing permit with the commissioner under Section 5400, an organizer shall file with the Secretary of State an application for a certificate of a reservation of the name for the proposed association in accordance with the provisions of Article 5 (commencing with Section 5650).

(b) The application filed with the Secretary of State shall recite the fact of the application to be filed under Section 5400 and the Secretary of State shall issue a certificate of reservation of name upon payment of any required fee.

(c) Notwithstanding the provisions of subdivision (c) of Section 201 of the Corporations Code, the name contained in the certificate of reservation of the name shall be reserved to the applicant until (1) the commissioner denies the petition for a certificate of authority, or (2) if a certificate of approval of articles of incorporation is issued, as long as it continues in effect, or (3) for a period of up to one year from the date when the certificate of reservation of the name is issued, whichever of these occurs first.

(d) The Secretary of State may, upon the request of the applicant and the approval of the commissioner, extend the reservation of the name for an additional six months.

history: (History: Amended by Stats. 1984, Ch. 868, Sec. 4.)

article: 1. Organizing Permit


citation: FIN § 5500

text:
Within 60 days after issuance of an organizing permit under Article 1 (commencing with Section 5400) any person may request authority to form a capital stock or mutual association by filing with the commissioner three copies of a petition for a certificate of authority and proposed articles of incorporation. The petition shall also be accompanied by three copies of proposed bylaws which shall make provisions for the following:

(a) Annual and special meetings of members or stockholders, and notice of meetings.

(b) Procedure for nomination of directors.

(c) Meetings of board of directors.

(d) Resignation and removal of directors.

(e) Compensation of directors.

(f) Officers.

(g) Execution of instruments.

(h) Evidence of savings accounts.

(i) Corporate seal.

(j) Fiscal year.

(k) Amendments.

(l) Disaster preparedness.

(m) Other matters, if any.

The petitioners shall submit with their petitions any applicable filing fee prescribed under Section 9001 and any statements, exhibits, maps, and other data that the commissioner may require by written instruction in a form which is sufficiently detailed and comprehensive to enable the commissioner to make a decision on the petition based on the criteria set out in Section 5502.

history: (History: Amended by Stats. 1988, Ch. 718, Sec. 1.5.)

path: 2. SAVINGS ASSOCIATION LAW > 2. Corporate Organization and Corporate Changes > 2. Petition for Certificate of Authority


citation: FIN § 5501

text: Upon receipt of a petition for a certificate of authority, the commissioner shall give written notice to each association that a petition for the issuance of a certificate has been made. The notice shall state the name of the proposed association, where the petitioners propose to establish the home office of the association, and if the commissioner determines that a hearing is to be held on the petition, the time and place of the hearing. The hearing shall be held 10 or more days after the mailing of the notice but in no event later than 60 days after the mailing of the notice. Any interested person may appear at the hearing in person or by agent or attorney, and orally or in writing show cause upon any relevant ground why a certificate should not be issued.

history: (History: Repealed and added by Stats. 1983, Ch. 1091, Sec. 2.)

article: 2. Petition for Certificate of Authority


text:
The articles of incorporation of each domestic association incorporated after January 1, 1984, shall include a statement that it is formed for each of the following purposes:

(a) To engage primarily in the specific business of a savings association and any other lawful activities not prohibited to a savings association by applicable laws and regulations.

(b) To encourage industry, frugality, home building, and the accumulation of savings. That statement shall add either “among its members” or “among its savings account holders” and may also add “and among others.”

(c) For the loaning of the money accumulated, with the interest and earnings thereon. The statement shall add either “to its members” or “to its savings account holders” and the statement may also add “and to others.”

(d) For the repayment subject to the provisions of this division and any act amendatory thereof or supplementary thereto of the savings and interest to each savings account holder whenever the savings account holder desires to withdraw the same, or when the association desires to repay the same.

(e) In the case of a stock association, for the purpose of issuing capital stock and savings accounts.

(f) In the case of a mutual association, for the purpose of accumulating capital by the issuance of savings accounts and to grant holders of savings accounts the right to be a member of the association with entitlement to one vote for each one hundred dollars ($100) of the withdrawal value of each savings account to be voted in person or by proxy to transact the business of the association.

(g) For any and all purposes specified in the Savings Association Law with all the rights, powers, privileges and immunities as set forth in that law.

The above provisions are in lieu of paragraph (1) of subdivision (b) of Section 202 of the Corporations Code and may be supplemented or modified with such provisions as the commissioner may approve.

history: (History: Amended by Stats. 1988, Ch. 718, Sec. 2.)


citation: FIN § 5502

text:
The commissioner shall not approve any petition for certificate of authority unless it is found from the data furnished with the petition, the evidence adduced at the hearing, if one is held, and official records, that the prerequisites of this division have been complied with and that:

(a) The character, responsibility, financial resources, and general fitness of the persons named in the petition warrant belief that the business of the proposed association will be honestly and efficiently conducted in accordance with the intent and purpose of this division and that the proposed association will have qualified full-time management.

(b) There is a public need for the proposed association and the business plan, and the anticipated volume of business of the proposed association indicates a profitable operation.


citation: FIN § 5503

text:
(a) The commissioner shall, within a reasonable time after the petition is filed, or within a reasonable time after the hearing, if one is held, either approve or deny the petition for a certificate of authority.

(b) If approved, the commissioner shall issue a certificate of approval of the articles of incorporation of the association and shall issue a notice of conditional approval of the petition for a certificate of authority. Upon satisfaction of all of the conditions in the notice, the commissioner shall execute and issue to the association a certificate of authority.

(c) If denied, upon written request of any petitioner, the commissioner shall provide the statutory reason for denial. Denial of the petition is a final decision and the petitioner shall not be entitled to any further administrative remedy. The petitioner shall discontinue the use of the reserved name and provide evidence to the commissioner that the Secretary of State has been notified to release the name reservation.

history: (History: Amended by Stats. 1987, Ch. 730, Sec. 2.)


citation: FIN § 5504

text: Upon issuance of a certificate of approval of articles of incorporation to a proposed association, the commissioner shall attach the original signed copy of the certificate of approval to the original signed copy of the articles and deliver it to the proposed association for filing with the Secretary of State. Corporate existence shall begin on the date of filing of the articles with the Secretary of State. Prior to the date the commissioner issues the association a certificate of authority, the activities of the association shall be limited to completing its organization activities and the association shall not open its office for transacting business with the public.


citation: FIN § 5505

text: The articles of incorporation of a proposed association shall not be filed in the office of the Secretary of State unless a certificate of approval of the articles of incorporation issued by the commissioner is attached thereto.


citation: FIN § 5506

text: Within 30 days after the corporate existence of an association begins, the directors of the association shall hold an organization meeting and shall elect officers pursuant to the provisions of this division and the bylaws. At the organization meeting, the directors shall take any other action that is appropriate in connection with the organization of the association. The commissioner may extend by order the time within which the organization meeting shall be held.


citation: FIN § 5600

text:
(a) The board of directors of an association which is in the process of organization shall select a financial institution within this state as a depository for stock, savings account and mutual capital certificate subscription funds.

(b) The financial institution shall assure the safekeeping of the subscription funds and the delivery of these funds to the association after the issuance of the certificate of authority and after the bonding of the officers. In the event of the failure to complete the organization of the association and to commence business, the financial institution shall insure the return of the amounts collected to the respective subscribers or their assigns, plus any earnings on the funds, less reasonable charges of the financial institution for services as depository of the funds.

path: 2. SAVINGS ASSOCIATION LAW > 2. Corporate Organization and Corporate Changes > 3. Postincorporation Organization of Associations


citation: FIN § 5601

text: Before a certificate of authority is issued, the capital of the association shall be paid into the association and, in the case of stock, shall be the sum of the par or initially stated value of all shares of capital stock, plus the initial paid-in surplus. The minimum required capital shall be established by regulations, or instructions, issued by the commissioner.

history: (History: Amended by Stats. 1984, Ch. 287, Sec. 3.5. Effective July 6, 1984.)

article: 3. Postincorporation Organization of Associations


citation: FIN § 5602

text: In addition to the minimum capital required, the commissioner may require that the consideration for the issuance of capital stock shall be sufficient to create a paid-in surplus in an amount satisfactory to the commissioner. The minimum capital and surplus may be used for the reserves required by law and for other purposes as may be permitted by the board of directors, provided that the par value or stated value of the stock subscribed shall be maintained as the permanent capital of the association, as required by Sections 5604 and 5605.


citation: FIN § 5603

text: In the case of a stock association, prior to issuance of a certificate of authority, the association shall file with the commissioner a statement in a form and with supporting data and proof that the commissioner may require, that verifies that the entire capital and paid-in surplus has been unconditionally paid in, that these funds are on deposit with the depository financial institution, and that all conditions contained in the notice of conditional approval of the petition for a certificate of authority have been met.


citation: FIN § 5604

text:
(a) In the case of a stock association, on or after the date the commissioner issues the association a certificate of authority, the association shall issue the capital stock necessary to satisfy the minimum capital requirements of Section 5601 and any additional capital stock approved for issuance by its board of directors, up to the amount authorized in its articles of incorporation, and shall issue no additional shares except as authorized in this division.

(b) The capital stock of an association, when issued, shall constitute permanent capital and shall not be retired or withdrawn except as provided in this division until all liabilities of the association have been satisfied in full, including the withdrawal value of all savings accounts, and until outstanding capital certificates have been retired.


citation: FIN § 5605

text:
(a) Any association that does not commence business within one year after the date of the issuance of its certificate of approval of articles of incorporation shall forfeit its certificate of approval of articles of incorporation, unless the commissioner, before the expiration of the one year period, shall have approved the extension of time within which it may commence business, upon a written application stating the reasons for delay. Upon forfeiture, the association’s certificate of approval of articles of incorporation shall expire. Amounts credited on savings accounts or paid in on capital stock, including any income earned on these funds, shall be returned on a pro rata basis to their respective subscribers.

(b) The commissioner shall immediately notify the Secretary of State of forfeiture under this section.

history: (History: Amended by Stats. 1986, Ch. 361, Sec. 3.)


citation: FIN § 5606

text:
(a) Prior to doing business in this state, an association shall obtain and maintain insurance of its savings accounts by the Federal Deposit Insurance Corporation.

(b) Prior to doing business in this state, a foreign savings association, as defined in Sections 10000 and 10010, shall maintain insurance of its savings accounts by the Federal Deposit Insurance Corporation.

(c) The commissioner may enforce any statutes pertaining to, or any regulations of, the Federal Deposit Insurance Corporation or the Office of Thrift Supervision insofar as those statutes and regulations apply to associations, and may enforce any and all other federal statutes and regulations applicable to associations.

history: (History: Amended by Stats. 1990, Ch. 1118, Sec. 22.)


citation: FIN § 5612

text: For the purposes of this article, “security” means any stock, subordinated debenture, warrant, or right or option to purchase any stock issued by an association.

history: (History: Added by Stats. 1988, Ch. 718, Sec. 4.)


citation: FIN § 5613

text:
(a) No association shall sell, except upon a sale for a delinquent assessment made in accordance with the provisions of the General Corporation Law, or offer for sale, or take subscriptions for, or issue any of its securities (except stock dividends), until the association has applied for and obtained from the commissioner a permit authorizing it to offer, sell or issue that security.

(b) Notwithstanding subdivision (a), an association may enter into agreements for the sale of securities with accredited investors (as defined in Section 230. 215 of the Securities Exchange Commission regulations) or persons approved by the commissioner prior to obtaining a permit pursuant to subdivision (a).

(c) The commissioner may, by regulation, instruction, or order exclude certain transactions from the operation of this section.

history: (History: Amended by Stats. 1988, Ch. 718, Sec. 5.)


citation: FIN § 5614

text:
(a) Except as provided in subdivision (b), no issued and outstanding stock of an association shall be sold or offered for sale to the public, nor shall subscriptions be solicited or taken for those sales, until the association or the selling stockholders have applied for and obtained from the commissioner a permit authorizing the sale of the capital stock.

(b) Subdivision (a) shall not apply to any of the following:

(1) An offering involving less than 10 percent of the issued and outstanding capital stock of an association and less than five hundred thousand dollars ($500,000).

(2) An offering made under a registration statement filed under the Securities Act of 1933.

(3) Any offering exempted by regulation, instruction, or order issued in writing by the commissioner.

history: (History: Amended by Stats. 1987, Ch. 730, Sec. 4.)


citation: FIN § 5615

text:
An application for a permit to sell securities shall be in writing, verified as provided in the Code of Civil Procedure for the verification of pleadings, and shall be filed in the office of the commissioner by the association or the selling stockholders. The application shall include the following:

(a) Regarding the association.

(1) The names and addresses of its officers.

(2) The location of its office.

(3) A balance sheet or statement of its financial condition as of a date within 90 days of the filing date.

(4) A copy of all minutes of any proceedings of its directors, shareholders, or stockholders relating to or affecting the issue of such securities.

(b) Regarding the offering.

(1) A brief description of the method by which the securities are to be offered for sale, including the offering price and the underwriting commissions and expense, if any.

(2) A copy of a prospectus or advertisement or other description of the securities prepared for distribution or publication in accordance with requirements prescribed by the commissioner.

(3) A copy of any contract concerning the sale of the securities.

(4) With respect to any permit issued pursuant to Section 5614, the names and addresses of the selling stockholders and of the officers of any selling corporation and the partners of any selling partnership.

(c) Such additional information as the commissioner may require.

(d) An application fee as prescribed by the commissioner pursuant to Section 9001.

history: (History: Amended by Stats. 1988, Ch. 718, Sec. 6.)


citation: FIN § 5616

text: Upon the filing of the application for a permit to sell securities, the commissioner shall examine the application and other papers and documents filed therewith, and he or she may make a detailed examination, audit, and investigation of the association and its affairs. If the commissioner finds that the proposed plan for the issue and sale of such securities is fair, just, and equitable, the commissioner shall issue to the applicant a permit authorizing it to issue and dispose of its securities in such amounts and for such considerations and upon such terms and conditions as the commissioner may provide in the permit. If the commissioner does not so find, the commissioner shall deny the application and notify the applicant in writing of his or her decision.

history: (History: Amended by Stats. 1988, Ch. 718, Sec. 7.)


citation: FIN § 5617

text: Every permit to sell securities shall recite in bold type that the issuance thereof is permissive only and does not constitute a recommendation or endorsement of the securities permitted to be issued.

history: (History: Amended by Stats. 1988, Ch. 718, Sec. 8.)


citation: FIN § 5618

text: The commissioner may amend, alter, or revoke any permit issued by the commissioner, or temporarily suspend the rights of the association under such permit.

history: (History: Added by Stats. 1984, Ch. 287, Sec. 10. Effective July 6, 1984.)


citation: FIN § 5620

text:
(a) A stock association may issue shares of common stock and preferred stock, with or without par value, and common and preferred stock may be divided into classes and the classes into series.

(b) Stock associations which have withdrawable shares outstanding as of the effective date of this section may continue to issue savings accounts in that form and the holders of these accounts shall have the same rights as they had before this section became law.

history: (History: Added by Stats. 1983, Ch. 1091, Sec. 2.)

article: 4. Issuance of Stock and Certificates

path: 2. SAVINGS ASSOCIATION LAW > 2. Corporate Organization and Corporate Changes > 4. Issuance of Stock and Certificates


citation: FIN § 5621

text:
(a) With the approval of the commissioner, a mutual association may amend its articles of incorporation to authorize the issuance of stock and may issue stock. Any amendment to the articles of incorporation and bylaws of an association which for the first time authorizes it to issue stock shall be approved by the vote or written assent of a majority of the total votes of members outstanding, except that the amendment shall require approval only of the commissioner and board of directors of an association if the commissioner finds that grounds exist for the appointment of a conservator for the association pursuant to subdivision (a) of Section 8225.

(b) An amendment to the articles of incorporation of an association pursuant to this section may include provisions with respect to the surplus, reserves, and undivided profits of the association and in that case the surplus, reserves, and undivided profits shall be retained and disposed of in accordance with those provisions.

(c) The corporate existence of a mutual association which amends its articles of incorporation pursuant to this section to authorize the issuance of stock and which issues stock shall continue to be, and the resulting stock association shall be deemed to be, a continuation of the mutual association. The Legislature finds and declares that Section 563b.41 (d)(3) of Title 12 of the Code of Federal Regulations sets forth the law of this state with regard to the continuity of corporate existence in mutual association to stock association conversions and that this section has reflected that law from the time of the original adoption of Section 563b.41 of Title 12 of the Code of Federal Regulations.

history: (History: Amended by Stats. 1989, Ch. 868, Sec. 2. Effective September 26, 1989.)

article: 4. Issuance of Stock and Certificates


citation: FIN § 5622

text:
Capital stock of a stock association shall be issued pursuant to the following requirements:

(a) Except for stock issued pursuant to a stock dividend, stock split, reverse stock split, reclassification of outstanding stock into stock of another class, exchange of outstanding stock for stock of another class or other change affecting outstanding stock or an employee stock option plan or a plan of merger, consolidation, conversion from a mutual to a stock association, or other type of reorganization that has been approved by the commissioner, the consideration for the issuance of capital stock shall be money paid, debts or securities canceled or tangible or intangible property actually received either by the association or by a wholly owned subsidiary. The par value or stated value of stock shall be maintained as the permanent capital of the association and any additional amount paid in shall be credited to paid-in surplus.

(b) The aggregate par value or stated value of all outstanding shares of capital stock shall be the permanent capital of the association and except as otherwise specifically provided by this division, capital stock shall not be retired until final liquidation of the association.

(c) No association shall reduce the par or stated value of its outstanding capital stock without first obtaining the written approval of the commissioner, and approval shall be withheld if the reduction would cause the par or stated value of outstanding capital stock to be less than the minimum required by this division or would result in less than adequate statutory net worth as the commissioner may determine under Section 6475.

(d) No association shall retire any part of its capital stock unless the retirement is approved by the commissioner.

(e) No association shall make loans secured by its capital stock.

(f) With the written approval of the commissioner, an association may purchase its capital stock or may contract with a stockholder for purchase of stock upon the stockholder’s death. However, the purchase shall not reduce the net worth accounts of the association, or any of them, to an amount less than required by applicable law. An association which agrees with a stockholder to purchase that stockholder’s capital stock upon death may purchase insurance upon the life of the stockholder to fund or partially fund the purchase.

history: (History: Amended by Stats. 1987, Ch. 1162, Sec. 6. Effective September 26, 1987.)

article: 4. Issuance of Stock and Certificates


citation: FIN § 5623

text: A mutual association may issue mutual capital certificates in accordance with regulations of the commissioner.

article: 4. Issuance of Stock and Certificates


citation: FIN § 5624

text: An association may issue net worth certificates in accordance with applicable regulations of the Office of Thrift Supervision or the Federal Deposit Insurance Corporation.

history: (History: Amended by Stats. 1990, Ch. 1118, Sec. 23.)

article: 4. Issuance of Stock and Certificates


citation: FIN § 5650

text: Notwithstanding the provisions of subdivision (a) of Section 201 of the Corporations Code and Division 1 of the Financial Code, the name of every association shall include either the words “savings association,” “savings and loan association,” “savings bank” or such other designation as the commissioner may approve. These words shall be preceded by an appropriate descriptive word or words approved by the commissioner.

history: (History: Amended by Stats. 1984, Ch. 868, Sec. 5.)

article: 5. Association Name, Office

path: 2. SAVINGS ASSOCIATION LAW > 2. Corporate Organization and Corporate Changes > 5. Association Name, Office


citation: FIN § 5651

text:
(a) No certificate of approval of articles of incorporation of a proposed association having the same name as an association in existence in this state on the date an application is filed under Section 5401, or a name so nearly resembling it as to be likely to deceive, shall be issued by the commissioner, except to an association formed by the reincorporation, reorganization, or consolidation of the association with other associations, or upon the sale of the property or franchise of an association. The commissioner may presume that the use of any word or words already adopted, appropriated, or used in its corporate name by any association then existing in this state, except the words “the,” “and,” “mutual,” “guarantee,” “building,” “loan,” “savings,” “association,” or “bank,” constitutes such similarity of names as to be likely to mislead the public.

(b) An association shall not adopt or change to a name that will result in unfair competition or public confusion, or be deceptive, scandalous, or otherwise unsuitable.

history: (History: Repealed and added by Stats. 1983, Ch. 1091, Sec. 2.)

article: 5. Association Name, Office


citation: FIN § 5652

text:
Except as otherwise authorized under existing law, no person, unless lawfully authorized to do business in this state under the provisions of this division and who is actually engaged in carrying on a savings association business, shall:

(a) Do business under any name or title that contains the following terms:

(1) “Savings association.”

(2) “Savings bank.”

(3) “Savings and loan association.”

(4) “Building and loan association.”

(5) “Building association.”

(6) Any combination employing either or both of the words “building,” or “loan,” with one or more of the words “saving,” “savings,” or words of similar import.

(7) Any combination employing one or more of the words “saving,” “savings,” or words of similar import with one or more of the words “association,” “bank,” “institution,” “society,” “company,” “fund,” “corporation,” or words of similar import.

Notwithstanding the provisions of this subdivision, use of the term “savings bank” in a name or title is not prohibited to any person regulated by the provisions of Division 1 (commencing with Section 99), Division 7 (commencing with Section 18000), or under procedures and regulations promulgated by the Comptroller of the Currency, Federal Reserve Board, Office of Thrift Supervision, Federal Housing Finance Board, or Federal Deposit Insurance Corporation. Any reference to the term “savings bank” in this division is not intended to apply to any person other than persons authorized to do business in this state under this division.

(b) Use any name or sign or circulate or use any letterhead, billhead, circular or paper whatever, or advertise or represent in any manner that indicates or reasonably implies that the business is the character or kind of business carried on or transacted by an association or is likely to lead any person to believe that the business is that of an association.

history: (History: Amended by Stats. 1996, Ch. 1064, Sec. 551. Effective January 1, 1997. Operative July 1, 1997.)

article: 5. Association Name, Office


citation: FIN § 5653

text: Upon application by the commissioner or any association, a court of competent jurisdiction may issue an injunction to restrain any person from violating or continuing to violate any of the provisions of Section 5652. Any person who violates any provision of Section 5652 shall be punished by a fine of not more than five thousand dollars ($5,000), and each day of violation shall constitute a separate offense. The prohibitions of Section 5652 shall not apply to any corporation or association formed for the purpose of promoting the interests of thrift institutions, the membership of which is comprised of thrift institutions, their officers, or other representatives.

article: 5. Association Name, Office


citation: FIN § 5654

text:
(a) Without the prior approval of the commissioner, as provided in this division, no association shall do any of the following:

(1) Establish or maintain any office, other than its home office, which shall be in the location named in the certificate of authority.

(2) Change the location or designation of any office from its approved location or designation.

(3) Change its corporate name by amendment of its articles of incorporation and its certificate of authority. A change of name is subject to the same criteria as set out in Sections 5650 and 5651.

(4) Amend its articles of incorporation or bylaws.

(5) Establish or maintain a subsidiary.

(6) Acquire all or substantially all of the assets or savings account liabilities of a branch or branches of another financial institution.

(b) Applications for approval under this section shall be filed in the office of the commissioner, shall include information as prescribed by regulation or written instruction of the commissioner, and shall be accompanied by any filing fee prescribed by the commissioner pursuant to Section 9001.

(c) A public hearing may be held on applications filed under this section in accordance with procedures prescribed by law or by regulations adopted by the commissioner.

(d) No certificate of amendment or other certificate to amend the articles of incorporation of an association shall be filed in the office of the Secretary of State unless there is attached thereto the certificate of the commissioner approving the certificate.

(e) Applicants filing under this division shall publish notice as prescribed by the commissioner.

history: (History: Amended by Stats. 1988, Ch. 718, Sec. 9.)

article: 5. Association Name, Office


citation: FIN § 5655

text: No association shall advertise or hold itself out to the public as a bank. This subdivision shall not be construed to prohibit an association which is a savings bank from advertising or holding itself out to the public as a “savings bank.”

history: (History: Added by Stats. 1984, Ch. 287, Sec. 12. Effective July 6, 1984.)

article: 5. Association Name, Office


citation: FIN § 5700

text: A state association may convert itself into a federal association by following the procedure outlined in Sections 5701 through 5708.

article: 6. Conversions

path: 2. SAVINGS ASSOCIATION LAW > 2. Corporate Organization and Corporate Changes > 6. Conversions


citation: FIN § 5701

text: At any regular or special meeting called to consider the conversion of an association into a federal association, in the case of a stock association, the stockholders entitled to vote and any members entitled to vote, by an affirmative majority of the votes cast in person or by proxy; and in the case of a mutual association the members, by action on a proposal approved by the members, may resolve to convert the association into a federal association.

article: 6. Conversions


citation: FIN § 5702

text:
Any executor, administrator, guardian, conservator of a natural person or receiver, and any fiduciary or trustee, and any public corporation, political subdivision, public instrumentality, charitable institution, educational and eleemosynary institution, trust company or financial institution, and any insurance company or cemetery association may, without obtaining court approval:

(a) Vote in person or by proxy in favor of or against converting a state association into a federal association, or may approve or disapprove the determination to so convert.

(b) Exchange any stock, savings accounts, or other rights or claims, for securities issued by the federal association, and hold the securities as legal investments.

article: 6. Conversions


citation: FIN § 5703

text: Promptly after the meeting approving a conversion into a federal association, the association shall file in the office of the commissioner a certificate verified by the president or vice president and the secretary or assistant secretary of the association. The certificate shall contain a copy of the minutes of the meeting and a statement of the number of stockholders and members entitled to vote and the number voting to approve the determination to convert the association into a federal association. A like certificate shall be filed in the office of the Secretary of State.

article: 6. Conversions


citation: FIN § 5704

text: A certified copy of the certificate required by Section 5703 filed in the office of the Secretary of State is presumptive evidence of the holding of the meeting, the action taken at the meeting, and of the approval of stockholders and members.

article: 6. Conversions


citation: FIN § 5705

text: After the meeting of the stockholders and members, the association shall take any action necessary to make it a federal association, and promptly after receipt of the federal charter the association shall file in the office of the commissioner and in the office of the Secretary of State, a copy of the charter issued to it by the Office of Thrift Supervision or a certificate showing the organization of the association as a federal association certified by or on behalf of the Office of Thrift Supervision. Upon the filing of this instrument in the office of the Secretary of State the association ceases to be a state association and is a federal association.

history: (History: Amended by Stats. 1990, Ch. 1118, Sec. 25.)

article: 6. Conversions


citation: FIN § 5706

text: At the time the conversion into a federal association becomes effective the association ceases to be supervised by this state and all of the property of the association, including all of its right, title, and interest in and to all property of every kind and character immediately, by operation of law and without any conveyance, or transfer and without any further act or deed, is vested in the association under its new name and style as a federal association and under its new jurisdiction.

article: 6. Conversions


citation: FIN § 5707

text:
The converted federal association shall have, hold, and enjoy the property mentioned in Section 5706 in its own right as fully and to the same extent as the property was possessed, held, and enjoyed by it as a state association and the federal association shall continue to be responsible for all of the obligations of the converted state association to the same extent as though the conversion had not taken place. The federal association is merely a continuation of the state association under a new name and new jurisdiction and the revision of its corporate structure as is considered necessary for its proper operation under the new

jurisdiction.

article: 6. Conversions


citation: FIN § 5708

text: Where a copy of a charter of a federal association, issued by the Federal Home Loan Bank Board pursuant to the laws of the United States was filed with the Secretary of State prior to September 13, 1941, with the intent of converting a building and loan association organized and existing under the laws of this state into a federal association, those conversions are validated, legalized, ratified and confirmed.

article: 6. Conversions


citation: FIN § 5709

text: Any federal association may convert itself into an association by following the procedure set forth in Sections 5710 through 5718.

history: (History: Amended by Stats. 1984, Ch. 287, Sec. 12.5. Effective July 6, 1984.)

article: 6. Conversions


citation: FIN § 5710

text: At any regular or special meeting called to consider the action, the stockholders and members entitled to vote by an affirmative majority of the votes cast in person or by proxy, may resolve to convert a federal association into an association.

article: 6. Conversions


citation: FIN § 5711

text: Copies of the minutes of the proceedings of the meeting of the stockholders or members in which they vote to convert into an association, verified by the president or vice president and the secretary or an assistant secretary, shall be filed promptly after the meeting in the office of the commissioner, and, in duplicate, with the federal home loan bank of which the association is a member.

article: 6. Conversions


citation: FIN § 5712

text: The verified copies of the minutes of the meeting, when filed as required by Section 5711, are presumptive evidence of the holding and action of the meeting.

article: 6. Conversions


citation: FIN § 5713

text: After a meeting as provided for in Section 5710, the federal association shall take or cause to be taken such action as shall make it an association in the manner prescribed and authorized by this division. The directors elected at the meeting shall file the documents with applicable fees and take such proceedings as are required by this division in the case of the original incorporation of an association. The decision for approval or denial shall be issued in writing. No association incorporated by conversion from a federal association is required to comply with any of the provisions of law or any regulations promulgated by the commissioner relating to the minimum amounts of capital required to be subscribed in connection with the original incorporation of an association under this division.

history: (History: Amended by Stats. 1986, Ch. 361, Sec. 4.5.)

article: 6. Conversions


citation: FIN § 5714

text: The directors of an association converted from a federal association may insert in the articles of incorporation the following statement: “This association is incorporated by conversion from a federal savings and loan association. ”

article: 6. Conversions


citation: FIN § 5715

text: Promptly after the filing of the articles of incorporation with the Secretary of State, there shall be filed with the federal home loan bank of which the association is a member, two copies of the articles of incorporation, certified by the Secretary of State.

article: 6. Conversions


citation: FIN § 5716

text: Upon the filing of the articles of incorporation with the Secretary of State, the federal association ceases to be a federal association and is an association under the laws of this state. All of the property of the federal association, including all of its right, title, and interest in and to all property of every kind and character immediately, by operation of law and without any conveyance or transfer, and without any further act or deed, is vested in the association under its new name and style as an association and under its new jurisdiction.

article: 6. Conversions


citation: FIN § 5717

text: The converted association shall have, hold, and enjoy the property mentioned in Section 5716 in its own right as fully and to the same extent as the property was possessed, held and enjoyed by it as a federal association and the converted association continues responsible for all of the obligations of the converted federal association to the same extent as though conversion had not taken place. The association is merely a continuation of the federal association under a new name and new jurisdiction and such revision of its corporate structure as is considered necessary for its proper operation under the new jurisdiction.

article: 6. Conversions


citation: FIN § 5718

text: In the event stock is to be issued by the converted association, the commissioner may issue an organizing permit to the federal association or to the board of directors elected to serve after conversion, authorizing the association or the board of directors to take subscriptions to stock, to collect subscription payments and to impound the payments pending the issuance of stock, and authorizing the converted association to issue stock after the filing of its articles of incorporation with the Secretary of State. The commissioner may require that all stock to be initially issued be subscribed and fully paid. The commissioner may also issue a certificate of authority to the converted association to be effective upon filing of its articles of incorporation, and may also issue any other orders and permits necessary to authorize the association to continue business without interruption upon the filing of its articles of incorporation.

article: 6. Conversions


citation: FIN § 5750

text:
(a) Pursuant to a plan or agreement (referred to as “agreement” in this article) adopted by the board of directors and approved by the commissioner as fair, just and equitable, and as adequately protecting the interests of the association, its members, or stockholders, its savings account holders and the public, an association shall have the power to reorganize or to merge or consolidate with or transfer all or substantially all its assets to another association or federal association, or any other corporation, provided that the principal terms of the plan of the reorganization, merger, consolidation, or transfer shall, in the case of a stock association, be approved at an annual meeting or at any special meeting, or by the written consent of the stockholders voting on the action, by not less than a majority of the total number of votes eligible to be cast. In the case of a mutual association, if required by the commissioner, the principal terms of such a plan shall be approved by members representing not less than a majority of the voting power.

(b) In all cases the survivor association shall succeed to all the rights, obligations, and relations of the constituent associations.

(c) As a step in a plan of the reorganization, merger, consolidation, or transfer under this section, an interim corporation may be formed. As used in this section, “interim corporation” means a corporation formed to facilitate the acquisition of 100 percent of the voting stock of an existing association or other insured stock institution by or for a newly formed company or an existing savings and loan holding company or to facilitate any other transaction the commissioner may approve.

history: (History: Amended by Stats. 1987, Ch. 730, Sec. 5.)

path: 2. SAVINGS ASSOCIATION LAW > 2. Corporate Organization and Corporate Changes > 7. Power to Reorganize, Merge, Consolidate, or Transfer Assets


citation: FIN § 5751

text: At the sole discretion of the commissioner a public hearing may be held on applications filed under this article, in accordance with procedures established by the commissioner by regulation.

article: 7. Power to Reorganize, Merge, Consolidate, or Transfer Assets


citation: FIN § 5752

text: Applications filed under this article shall be accompanied by any applicable filing fee prescribed by the commissioner pursuant to Section 9001.


citation: FIN § 5753

text: The provisions of Chapter 13 (commencing with Section 1300) of Division 1 of Title 1 of the Corporations Code shall apply only to stockholders and shares of stock owned by them in the association being merged, or where assets are being transferred into a surviving association, or where a merger or transfer is approved under the provisions of this article by written consent of the stockholders.


citation: FIN § 5754

text: In a merger the agreement shall state any matters with respect to which the articles of the surviving association are deemed amended and the articles shall be amended accordingly, without any further proceedings, upon the effective date of the merger, but with respect to any amendments, the agreement shall meet the requirements of Section 907 of the Corporations Code in identifying any provisions to be amended, stricken, or added and shall set forth in full the wording of the provision as amended or added or the wording of the amended articles if they be amended in full.


citation: FIN § 5755

text:
When a merger or consolidation agreement has been approved by the directors and the stockholders or members of an association, the association shall mail notice of the approval to each of its stockholders or members at least 10 days before filing the certificate as provided in this section unless the consents of all stockholders or members entitled to vote have been solicited and received in writing.

After approval by the directors and stockholders or members has been given, the association shall prepare and submit to the commissioner for written approval a certificate in the form of an officers’ certificate (Section 173 of the Corporations Code) which shall set forth the following:

(a) An identification of the agreement of merger or consolidation by reference to names of parties and date.

(b) That the agreement was approved by the board of directors of the association.

(c) The total number of outstanding shares of each class of stock entitled to vote, or in the case of a mutual association the total value of accounts outstanding.

(d) That the principal terms of the agreement were approved by the vote or written consent of a number of shares of each class of stock which equaled or exceeded the vote required, or in the case of a mutual association that approval by the members was not required by the commissioner or that the principal terms of the agreement were approved by the vote or written consent of members holding a total value of accounts which equaled or exceeded the vote required.

(e) The percentage vote required of each class.

(f) That the agreement for merger or consolidation submitted to the commissioner for written approval and for filing with the Secretary of State concurrently with this certificate is the agreement hereinabove referred.

(g) Any additional matters that the commissioner may require.

history: (History: Amended by Stats. 1986, Ch. 361, Sec. 5.)


citation: FIN § 5756

text: Any amendment to a merger or consolidation agreement may be adopted, and the agreement so amended may be approved at the meeting of the stockholders or members of any of the associations or by written consent of the stockholders or members, in the same manner and by the same vote as the original agreement. If the agreement so amended is approved at a meeting or by written consent by the stockholders or members and by the board of directors of each of the associations by the vote or written consent required for approval of the original agreement, the agreement so amended shall be signed and acknowledged and shall have certified therewith the approval of the directors and of the stockholders or members in the same manner as provided for in the original agreement, and shall then constitute the merging or consolidating agreement.


citation: FIN § 5757

text: Notwithstanding any other provision of law, the approval of transactions under this article shall not be required by any borrowers or by holders of savings accounts in associations that issue stock.


citation: FIN § 5758

text:
The executed agreement, or an executed counterpart of it and the respective certificate of each constituent association or any other corporation and of the surviving association shall be filed with the Secretary of State. Neither the agreement nor any certificate shall be filed, however, unless the commissioner’s written approval is attached. The effective date of the merger or consolidation under this article shall be the date of the filing with the Secretary of State of the copy of the approved agreement of merger or consolidation. A copy of the approved agreement certified by the Secretary of State shall be filed with the commissioner.

If the resulting association is a federal association, the effective date of merger shall be the date the merger is effective under regulations of the Office of Thrift Supervision.

history: (History: Amended by Stats. 2006, Ch. 773, Sec. 47. Effective September 29, 2006.)


citation: FIN § 5759

text: An association may acquire all or at least 90 percent of the issued and outstanding stock of another association, or any other corporation, with the prior written approval of the commissioner upon conditions that the commissioner may impose as a step in a plan of merger to be approved by the commissioner. The acquisition of stock shall be upon terms as may be approved by the board of directors of the acquiring association and ratified by the vote or written consent of holders of a majority of the outstanding stock of each class of stockholders of the acquiring association.

history: (History: Amended by Stats. 1984, Ch. 868, Sec. 7.)


citation: FIN § 5760

text:
(a) Any association, owning all the outstanding stock of any corporation, may merge its wholly owned subsidiary corporation if the laws under which the subsidiary corporation exists permit a merger as this section provides. The association shall submit to the commissioner for approval a certificate of ownership in its name signed by its president or a vice president, and its secretary or an assistant secretary, which shall be verified by their affidavit, stating, in effect, that the matters set forth in the certificate are true of their own knowledge. The certificate shall set forth:

(1) That it owns all the outstanding stock of the merged corporation.

(2) A copy of the resolution adopted by its board of directors to merge the corporation, and to assume all of its obligations.

(3) The time and place of the meeting of the board of directors at which the resolution was adopted, and the vote by which it was adopted.

(b) If an association owns less than all the outstanding stock but at least 90 percent of the outstanding shares of stock of each class of a corporation or corporations, domestic or foreign, the merger of the subsidiary corporation or corporations into the parent association may be effected by resolutions adopted by the boards of the parent and each subsidiary corporation, and the filing of a certificate of ownership as provided in subdivision (d). The resolution of the board of the parent association shall provide for the merger, shall provide that the parent association assumes all the liabilities of each subsidiary corporation and shall set forth the securities, cash property or rights to be issued, paid, delivered or granted by the parent association upon surrender of each share of stock of each subsidiary corporation not owned by the parent association. The resolution of the board of each subsidiary corporation shall approve the fairness of the consideration to be received for each share of stock of the subsidiary corporation not owned by the parent association.

(c) Notwithstanding any other provision of law, in any merger pursuant to this section, the parent association may change its name regardless of whether the name so adopted is the same or similar to that of one of the disappearing associations. In this case the resolution shall provide for the amendment of articles to change the name.

(d) After adoption of the resolution or resolutions of merger, as provided under subdivision (b), the association shall submit to the commissioner for approval a certificate of ownership in its name signed by its president or a vice president, and its secretary or an assistant secretary, which shall be verified by their affidavit, stating, in effect, that the matters set forth in the certificate are true of their own knowledge. The certificate shall set forth:

(1) That the association owns at least 90 percent of the outstanding stock of the merged corporations.

(2) A copy of the resolution adopted by the association’s board of directors to merge the corporation, to assume all of its obligations, and including the resolution for a change of name if applicable.

(3) A copy of the resolution or resolutions adopted by the board of each subsidiary corporation, if required.

(4) The time and place of the meeting of the boards of directors of the parent and the subsidiary at which the resolutions were adopted, and the vote by which they were adopted.

(e) In the event all of the outstanding shares of stock of a subsidiary domestic corporation party to a merger effected under this section are not owned by the parent association immediately prior to the merger, the parent association shall, at least 20 days before the effective date of the merger, give notice to each stockholder of the subsidiary corporation that the merger will become effective on or after a specific date, which notice shall contain (1) a copy of the resolutions of the boards of directors of the parent and the subsidiary required by subdivision (b) above and (2) the information which must accompany the notice required by subdivision (a) of Section 1301 of the Corporations Code. The notice shall be sent by mail addressed to the stockholder at the address of the stockholder as it appears on the records of the corporation. The stockholder shall have the right to demand payment of cash for the shares of stock of the stockholder pursuant to the provisions of Chapter 13 (commencing with Section 1300) of Division 1 of Title 1 of the Corporations Code.

(f) If a merger authorized by this section is approved, the commissioner shall attach to the certificate written approval, and the certificate shall be filed with the Secretary of State. A copy of the approved certificate certified by the Secretary of State shall be filed with the commissioner. Thereupon, all of the estate, property, rights, privileges, and franchises of the merged corporation shall vest in and be held and enjoyed by the parent association as fully as the same were before held and enjoyed by the merged corporation, but subject to all the liabilities and obligations of the merged corporation and the rights of all creditors. The parent association shall not, however, thereby acquire the right to engage in any business or to exercise any right, privilege, or franchise of a kind which it could not lawfully engage in or exercise under the provisions of this division. The parent association shall be deemed to have assumed all the liabilities and obligations of the merged corporation, and shall be liable in the same manner as if it had itself incurred the liabilities and obligations.

(g) If the merged subsidiary is a domestic corporation, a copy of the certificate shall be filed in the office of the Secretary of State on behalf of the subsidiary corporation. If the merged subsidiary is a foreign corporation qualified for the transaction of intrastate business in this state there shall be filed in the office of the Secretary of State on behalf of the foreign subsidiary a certificate of surrender and right to transact intrastate business as provided in Section 2112 of the Corporations Code.

history: (History: Amended by Stats. 2006, Ch. 773, Sec. 48. Effective September 29, 2006.)


citation: FIN § 5761

text: The directors of an association may, in their discretion, abandon a transaction under this article, subject to the rights of third parties under any contracts relating thereto, without further action or approval by the stockholders or members of the association, at any time before the transaction has been completed.

history: (History: Added by Stats. 1983, Ch. 1091, Sec. 2.)


citation: FIN § 5762

text: The commissioner may adopt rules and regulations relating to any transaction regulated by this article.


citation: FIN § 5800

text:
For the purposes of this article the following words and phrases shall have the following meanings:

(a) “Savings and loan holding company” means any person that either, directly or indirectly, or acting in concert with one or more other persons:

(1) Owns, controls, or holds with power to vote, or holds proxies to vote:

(A) Where the association or savings and loan holding company has fewer than 500 stockholders or members, 25 percent or more of the outstanding voting capital stock of any capital stock association or savings and loan holding company or 25 percent or more of the total number of votes or proxies of votes eligible to be cast by the members of any mutual association located in this state.

(B) Where the association or savings and loan holding company has at least 500 stockholders or members, 10 percent or more of the outstanding voting capital stock of any capital stock association or savings and loan holding company or 10 percent or more of the total number of votes or proxies of votes eligible to be cast by the members of any mutual association located in this state.

(2) Controls in any manner, whether by the holding of proxies or otherwise, the election of a majority of the directors of any association or savings and loan holding company located in this state.

(b) Notwithstanding subdivision (a), an individual or group of individuals shall not be deemed to be a “savings and loan holding company” solely because an individual or group of individuals solicits, holds, or votes proxies in an association if, at the time of receiving the proxies, the individual or group of individuals serve as directors of the association and solicited or received the proxies pursuant to authorization by the board of directors of the association.

(c) “Subsidiary” of a person means any person, except an individual that is directly or indirectly owned, controlled, or otherwise held by that person to the extent or in the manner described in the preceding subdivision.

(d) “Completed application” means an application for acquisition of control of an association, as filed with the commissioner, together with any amendments by the applicant, additional information requested in writing by the commissioner, and accompanied by the applicable filing fee pursuant to Section 9001. If the additional required information is not received within 30 days of the date of the request, the commissioner may consider the application complete upon written notice to the applicant.

history: (History: Amended by Stats. 1987, Ch. 730, Sec. 6.)

path: 2. SAVINGS ASSOCIATION LAW > 2. Corporate Organization and Corporate Changes > 8. Holding Companies and Stock Acquisitions


citation: FIN § 5801

text:
(a) Except as provided in subdivision (b), no person may become a savings and loan holding company, or thereafter register under Section 5804, unless the commissioner approves a completed application. The application shall be in a form prescribed by the commissioner, contain the following information and any additional information that the commissioner may determine by regulation or by written instructions to be necessary or appropriate to preserve the public interest, the integrity of the state’s savings association system, and to protect the interests of savings account holders, borrowers, and stockholders resident in this state:

(1) The identity, experience, and financial and managerial resources of each acquiring person by whom or on whose behalf the application is made.

(2) The terms, conditions, and method of any proposed acquisition, including copies of all tender offers used or to be used in connection with any proposed acquisition of capital stock.

(3) The source, kind, and amount of the consideration used or to be used in making the acquisition, and, if any part of the consideration has been or is to be borrowed or otherwise obtained for the purpose of making the acquisition, a description of the transaction and the names of all participating persons.

(4) Any plans or proposals that any acquiring person may have to liquidate or convert the association or savings and loan holding company, to sell its assets or merge it with any company, to change the number of its employees in this state or the terms and conditions of their employment, or to make any other substantial change in its business, corporate structure, management or employees upon becoming a holding company.

(5) The names of those officers and directors that the acquiring person proposes to install in any change of managements, and for each of those officers and directors a financial statement, a description of experience in savings association related matters, and a statement as to whether the officer or director ever has been found guilty of misrepresentation, fraud, or financial misdealings.

(6) If any tender offer, request or invitation for tenders or other agreement to acquire control is proposed to be made by means of a registration statement under the federal Securities Act of 1933, as amended, or in circumstances requiring the disclosure of similar information under the federal Securities Exchange Act of 1934, as amended, or in an application filed with the Office of Thrift Supervision or Federal Deposit Insurance Corporation requiring similar disclosure, that registration statement or application may be filed with the commissioner in lieu of the requirements of this section.

(b) The commissioner may exempt any transaction from the operation of this section if the commissioner determines that regulation of the transaction is not necessary or appropriate.

history: (History: Amended by Stats. 1990, Ch. 1118, Sec. 27.)

article: 8. Holding Companies and Stock Acquisitions


citation: FIN § 5802

text:
The commissioner shall within 60 days after the date of filing of a completed application, unless good cause is shown why a decision to approve or deny could not be made within 60 days, approve the application with any conditions reasonably necessary or advisable in the public interest, or deny the application. The commissioner shall determine whether the following criteria are met, and if the criteria are not met, the application shall be denied:

(a) The acquisition, under any federal or state law, will not substantially lessen competition and will not in any manner be in restraint of trade or result in a monopoly, or be in furtherance of any combination or conspiracy to monopolize or attempt to monopolize the savings association business in any part of the state unless the commissioner finds that the anticompetitive effects of the proposed acquisition are clearly outweighed in the public interest in meeting the convenience and needs of the community that the association serves.

(b) The financial condition of any acquiring person will not jeopardize the financial stability of the association or the savings and loan holding company sought to be acquired and will not prejudice the interest of the savings account holders, borrowers, or stockholders of the association and is in the public interest.

(c) The plan or proposal under which the acquiring person intends to liquidate the savings association or the savings and loan holding company, to sell its assets or to merge it with any person or association, or to make any other major change in its business or corporate structure or management, is fair and reasonable to the association, its savings account holders, borrowers, and resident stockholders, and will not tend to impair the integrity of the state’s savings association system, and is in the public interest.

(d) The competence, experience, integrity, and resources of any acquiring person indicate that approval would be in the interest of the association, its savings account holders, borrowers, and resident stockholders and of the community that the association serves.

(e) The requirements of this article have been met.

(f) The acquisition would not violate state or federal law and the commissioner determines that approval is in the public interest.

(g) The applicant has provided all information requested by the commissioner.

history: (History: Amended by Stats. 1987, Ch. 730, Sec. 8.)


citation: FIN § 5803

text:
(a) After the decision under this article by the commissioner either approving or denying the application, upon the filing with the commissioner within 30 days after the date of the decision of a written request for a hearing by any person aggrieved by the decision, the commissioner shall hold a public hearing on the merits of the request, after which the decision shall be affirmed, modified, or reversed.

(b) The commissioner shall have authority to amend, suspend, or revoke an approval of the application for acquisition of control upon failure of the applicant to meet the conditions of the approval, or upon a finding that the approval was based on false statements, misrepresentations, or omission of material facts.

history: (History: Amended by Stats. 1987, Ch. 730, Sec. 9.)


citation: FIN § 5804

text:
(a) Within 60 days following approval, or a later date if extended by the commissioner, each savings and loan holding company shall register with the commissioner in a prescribed form which shall require information with respect to the financial condition, ownership, operations, management, and intercompany relationships of the savings and loan holding company and its subsidiaries, and related matters as the commissioner may deem necessary or appropriate.

(b) The registration shall automatically expire if the approval of the application for acquisition of control is

revoked or suspended or the person ceases to be a savings and loan holding company.

(c) The commissioner shall be notified in writing by a registered savings and loan holding company upon any change in its beneficial or legal ownership of stock of an association.

history: (History: Amended by Stats. 1987, Ch. 730, Sec. 10.)


citation: FIN § 5806

text: Each savings and loan holding company, which is not an individual, shall pay an initial and an annual registration fee of five hundred dollars ($500) if the registrant’s association subsidiaries have total assets of up to one hundred million dollars ($100,000,000) or one thousand dollars ($1,000) if the subsidiaries have total assets of one hundred million dollars ($100,000,000) or more. These fees shall be paid within 30 days following notice from the commissioner that payment is due.

history: (History: Amended by Stats. 1989, Ch. 868, Sec. 3. Effective September 26, 1989.)


citation: FIN § 5807

text: When a savings and loan holding company has satisfied the requirements of this article, the commissioner shall issue the holding company a certificate of registration, and shall send a copy to each association subsidiary in this state with respect to which the holding company has registered.

history: (History: Repealed and added by Stats. 1983, Ch. 1091, Sec. 2.)


citation: FIN § 5808

text:
No association that is a subsidiary in this state of any savings and loan holding company that does not have in effect a certificate of registration for that association as required by this article or whose holding company has failed to comply with (1) an order of a court made in respect to the provisions of this division or (2) an order of the commissioner under Section 8200, shall knowingly, without consent of the commissioner, do any of the following:

(a) Transfer or register stock or other securities on its books for or issue certificates to its holding company.

(b) Pay dividends on stock of which its holding company is the record or beneficial owner.

(c) Permit the voting of stock owned or controlled by its holding company.

(d) Make any other payments of any nature to its holding company.

(e) Enter into any agreement, contract, or transaction with its holding company.

history: (History: Amended by Stats. 1987, Ch. 730, Sec. 11.)


citation: FIN § 5809

text:
(a) The commissioner from time to time may require reports from any savings and loan holding company and its subsidiaries in a format deemed necessary or appropriate and relevant to the jurisdiction and responsibilities of the commissioner under this division. Any savings and loan holding company and its subsidiaries shall file reports and be subject to examination as required by the commissioner in the manner provided for associations in Article 3 (commencing with Section 8150) of Chapter 7.

(b) The cost of any examination may be assessed against each savings and loan holding company examined and the assessment shall be paid to the department.


citation: FIN § 5810

text: The commissioner shall have the enforcement powers with respect to savings and loan holding companies and their subsidiaries that are provided with respect to associations in Section 8200.

history: (History: Amended by Stats. 1987, Ch. 1162, Sec. 9. Effective September 26, 1987.)


citation: FIN § 5811

text: This article shall not apply to an acquisition of stock made pursuant to a plan or agreement of reorganization, merger, consolidation, or transfer of assets under Section 5750.


citation: FIN § 5850

text:
(a) An association may dissolve pursuant to the General Corporation Law (Division 1 (commencing with Section 100) of Title 1 of the Corporations Code).

(b) In the case of a mutual association, the required vote of members to elect voluntarily to wind up and dissolve shall be by members representing 50 percent or more of the voting power required to elect directors of the association.

(c) No certificate of election to dissolve or certificate of dissolution of an association shall be filed with the Secretary of State unless there is attached thereto the certificate of the commissioner approving the same.

article: 9. Dissolution

path: 2. SAVINGS ASSOCIATION LAW > 2. Corporate Organization and Corporate Changes > 9. Dissolution


citation: FIN § 5860

text: Notwithstanding any other provision of law, but subject to prior approval of the commissioner, any mutual association may reorganize so as to become a mutual holding company by causing a reorganized savings and loan association to be incorporated and organized as a stock association under this chapter, transferring to the reorganized stock association a substantial part of the assets of that mutual association and causing the reorganized stock association to assume all or a substantial part of the liabilities of the mutual association, including all of its savings account liabilities.

history: (History: Added by Stats. 1988, Ch. 718, Sec. 10.)

article: 10. Mutual Holding Companies

path: 2. SAVINGS ASSOCIATION LAW > 2. Corporate Organization and Corporate Changes > 10. Mutual Holding Companies


citation: FIN § 5861

text: Upon transfer of assets and assumption of liabilities pursuant to Section 5860, persons who prior thereto held savings accounts with, or other rights as creditors of, the mutual association with respect to accounts and liabilities transferred shall have such accounts and rights solely with respect to the reorganized stock association, and the corresponding liability or obligation of the mutual association to those persons shall be assumed by the reorganized stock association without a change in terms. Persons who had ownership, liquidation, or voting rights with respect to the mutual association shall continue to have those rights solely with respect to the mutual association in its reorganized form as a mutual holding company.

article: 10. Mutual Holding Companies


citation: FIN § 5862

text: A reorganization of a mutual association pursuant to this article shall be approved by the board of directors and by the members of the mutual association.

article: 10. Mutual Holding Companies


citation: FIN § 5863

text:
An application to the commissioner for approval of a reorganization under this article shall contain such relevant information as the commissioner may require. The commissioner may disapprove any proposed mutual holding company formation and refuse to issue a certificate of authority for the reorganized stock association only if within 60 days after the date of filing of a completed application he or she finds the following:

(a) The disapproval is necessary to prevent unsafe and unsound practices.

(b) The financial or managerial resources of the mutual association warrant disapproval.

(c) The mutual association fails to furnish the information required by the commissioner pursuant to this section.

(d) The mutual association fails to comply with the requirements of Section 5862.

article: 10. Mutual Holding Companies


citation: FIN § 5864

text: In connection with reorganization pursuant to the provisions of this article, a mutual association may, subject to the approval of the commissioner, retain capital assets at the holding company level to the extent that the capital exceeds adequate reserves as prescribed by state or federal law.

article: 10. Mutual Holding Companies


citation: FIN § 5865

text:
A mutual holding company shall be deemed to be a savings association continuing its organization under this division and may engage only in activities authorized for an association, but may not issue or accept savings accounts or other deposits and the provisions of subdivision (a) of Section 5606 requiring insurance of savings accounts by the Federal Deposit Insurance Corporation shall not be applicable. The articles of incorporation of the mutual holding company shall be amended to delete any inappropriate statements otherwise required by Section 5501.5 and shall include the following statement:

“This corporation is a mutual holding company organized under the California Savings Association Law (Article 10 (commencing with Section 5860) of Chapter 2 of Division 2 of the Financial Code).”

history: (History: Amended by Stats. 1990, Ch. 1118, Sec. 28.)

article: 10. Mutual Holding Companies


citation: FIN § 5866

text: Sections 5801, 5802, and 5803 shall not apply to a reorganization pursuant to this article.

article: 10. Mutual Holding Companies


citation: FIN § 5867

text: Notwithstanding any other provision of law, a reorganized stock association may exercise any and all powers, rights, and privileges of and be subject to all limitations not inconsistent with this article which are applicable to stock associations as provided in this division.

article: 10. Mutual Holding Companies


citation: FIN § 5868

text: A reorganized stock association shall have the power to issue additional amounts of capital stock to the mutual holding company of which it is a subsidiary and, in addition, to other persons an amount of capital stock and securities convertible into capital stock which in the aggregate does not exceed 49 percent of the issued and outstanding capital stock of that organized association. For the purposes of the 49 percent limitation, any issued and outstanding securities that are convertible into capital stock shall be considered issued and outstanding capital stock.

article: 10. Mutual Holding Companies


citation: FIN § 6000

text: An annual meeting of the members of each mutual association shall be held at a time and place fixed in the bylaws of the association.

chapter: 3. Corporate Administration

path: 2. SAVINGS ASSOCIATION LAW > 3. Corporate Administration > 1. Meetings of Members of Mutual Associations


citation: FIN § 6001

text: Special meetings of the members of a mutual association may be called at any time by the president or the board of directors, and shall be called by the president, a vice president, or the secretary upon the written request of members holding of record in the aggregate at least 10 percent of the outstanding savings deposits of the association. Such written request shall state the purposes of the meeting and shall be delivered at the principal office of the association addressed to the president.

article: 1. Meetings of Members of Mutual Associations


citation: FIN § 6002

text: Notice of each annual and special meeting shall be either published once a week for the two successive calendar weeks (in each instance on any day of the week) immediately prior to the week in which such meeting shall convene, in a newspaper printed in the English language and of general circulation in the city or county in which the principal office of the association is located, or mailed postage prepaid at least 15 days and not more than 45 days prior to the date on which such meeting shall convene to each of its members of record at the last address of the member appearing on the books of the association. Such notice shall state the name of the association, the place of the meeting, the time when it shall convene and, in the case of a special meeting, the purpose or purposes for which the meeting is called. A similar notice shall be posted in a conspicuous place in each of the offices of the association during the 14 days immediately preceding the date on which such meeting shall convene. Notice need not be given to any member who in person or by proxy, in writing, waives notice of such meeting.

history: (History: Amended by Stats. 1985, Ch. 983, Sec. 2.5. Effective September 26, 1985.)


citation: FIN § 6003

text: In the consideration of all questions requiring action by the members of a mutual association, each member shall be entitled to cast one vote for each one hundred dollars ($100), or fraction thereof, of the withdrawal value of his or her savings account or accounts. No member, however, shall be entitled to cast more than 1,000 votes nor shall votes be cumulated for the election of directors.

history: (History: Amended by Stats. 1984, Ch. 287, Sec. 14.7. Effective July 6, 1984.)


citation: FIN § 6004

text:
(a) In order that the association may determine the members entitled to notice of any meeting or to vote or entitled to receive any distribution or entitled to exercise any rights in respect of any other lawful action, the board of directors of the association may fix, in advance, a record date, which shall not be more than 60 or less than 10 days prior to the date of such meeting or more than 60 days prior to any other action, provided, however, that if the provisions hereof conflict with the provisions of any federal statute or regulation relating to fixing of record dates for associations, the provisions of the federal statute or regulation shall prevail.

(b) If no record date is fixed pursuant to subdivision (a) above:

(1) The record date for determining members entitled to notice of or to vote at a meeting of members shall be at the close of business on the business day next preceding the day on which notice is given or first published, or if notice is waived, at the close of business on the business day next preceding the date on which the meeting is held.

(2) The record date for determining members entitled to give consent to action in writing without a meeting, when no prior action by the board of directors has been taken, shall be the date on which the first written consent is given.

(3) The record for determining members for any other purpose shall be at the close of business on the day on which the board adopts the resolution relating thereto, or the 60th day prior to the date of such other action, whichever is later.

(c) A determination of members of record entitled to notice of or to vote at a meeting of members shall apply to any adjournment of the meeting unless the board fixes a new record date for the adjourned meeting.


citation: FIN § 6005

text: At any meeting of the members, voting may be in person or by proxy, provided that no proxy is eligible to be voted at any meeting unless it has been filed with the secretary of the association, for verification, prior to the meeting. Each proxy shall be in writing and when filed with the secretary, shall, unless otherwise specified in the proxy, continue in force from year to year until revoked by a writing delivered to the secretary or by a subsequent proxy executed by the member executing the prior proxy or as to any meeting by attendance at such meeting and voting in person by the person executing the proxy. A proxy is not revoked by the death or incapacity of the maker unless, before the vote is counted, written notice of such death or incapacity is received by the association. Section 604 of the Corporations Code does not apply to any mutual association.


citation: FIN § 6006

text: Any number of members present at a regular or special meeting of the members shall constitute a quorum. A majority of all votes cast at any meeting of members shall determine any question unless this division specifically provides otherwise.


citation: FIN § 6050

text:
(a) The register of stockholders or members, the books of account, and the minutes of an association shall be subject to inspection upon the written demand of any stockholder or member or group of stockholders or members at any reasonable time during usual business hours, for a proper purpose reasonably related to the stockholder’s or member’s interest. The right of inspection is limited to a stockholder, or member, or group of stockholders or members, who hold of record voting shares having a cost of not less than one hundred thousand dollars ($100,000), or who hold of record voting shares constituting not less than 1 percent of the outstanding voting shares, provided in either case, the stockholder, member, or group of stockholders or members, have been holders of record of the voting shares for at least six months before making the written demand. The right of inspection created by this subdivision shall extend to the records of each subsidiary of an association subject to this subdivision and includes the right to make extracts.

(b) Notwithstanding the right of inspection granted in subdivision (a), no stockholder, member, or group of stockholders or members, shall have the right to inspect or make extracts of any portion of any register, book, or minutes of an association containing any of the following:

(1) A list of depositors in or borrowers from the association.

(2) The addresses of depositors or borrowers from the association.

(3) Individual deposit or loan balances or records. “Records” for the purposes of this paragraph means confidential facts pertaining to personal financial information about an individual, including, but not limited to, an individual’s credit file and any loan application.

(4) Any data from which any of the information described in paragraphs (1) to (3), inclusive, could be reasonably constructed.

(c) Each association director shall have the right at any reasonable time to inspect all books, records, documents of every kind, and the physical properties of that association. The inspection may be made in person or by agent or attorney, and the right of inspection includes the right to make extracts. In the case of foreign associations the right of inspection extends only to books, records, documents, and property located in this state.

(d) Savings accountholders who are not stockholders, members, or directors of an association shall have no right of inspection under this section.

history: (History: Amended by Stats. 1991, Ch. 458, Sec. 1.)

path: 2. SAVINGS ASSOCIATION LAW > 3. Corporate Administration > 2. Access to Books and Records; Communication with Stockholders or Members; Derivative Actions


citation: FIN § 6051

text:
(a) If any member, members, stockholder or stockholders desire to communicate with other members or stockholders of an association about any question pending or to be presented for consideration at a meeting of the members or stockholders, the association shall furnish upon request a statement of the approximate number of members or stockholders of the association at the time of the request, and an estimate of the cost of forwarding the communication. The requesting member, members, stockholder or stockholders shall then submit the communication, together with a sworn statement that the proposed communication is not for any reason other than the business welfare of the association, to the commissioner. If after examination of the facts the commissioner finds it to be appropriate, truthful, and in the best interests of the association and the association’s members or stockholders, the commissioner shall execute a certificate setting out the facts and findings and shall forward the certificate together with the communication to the association and direct that the communication be prepared and mailed by the association to the members or stockholders upon the payment to it by those making the request of the expenses of preparation and mailing.

(b) If the commissioner finds the proposed communication to be inappropriate, untruthful, or contrary to the best interests of the association and its members or stockholders, the commissioner may deny or make other disposition of the request to communicate deemed proper and shall execute a certificate setting out facts and findings and deliver it to the party or parties making the request together with an order denying or making other disposition of the request.

article: 2. Access to Books and Records; Communication with Stockholders or Members; Derivative Actions


citation: FIN § 6052

text:
(a) No action may be instituted or maintained in the right of any association by any savings account holder who is not a stockholder or member of the association.

(b) An action may be instituted or maintained in the right of an association by a stockholder or member of that association only if all the following conditions exist:

(1) The plaintiff alleges in the complaint that the plaintiff was a registered stockholder or member at the time of the transaction or any part of it, or that the stock or membership devolved upon the plaintiff by operation of law from a holder who was a holder at the time of the transaction or any part of it.

(2) The plaintiff alleges in the complaint with particularity the efforts of the plaintiff to secure from the board of directors the desired action and alleges further that the plaintiff has either informed the association or its board of directors in writing of the ultimate facts of each cause of action against each defendant director or delivered to the association or its board of directors a true copy of the complaint which plaintiff proposes to file, and the reasons for the plaintiff’s failure to obtain the desired action or the reasons for not making an effort to secure the desired action from the association.

(3) The commissioner has determined, after a hearing upon at least 20 days’ written notice to the association and each of its directors, that the action is proposed in good faith and that there is a reasonable probability that the prosecution of the action will benefit the association and its stockholders or members.

(c) Subdivisions (c), (d), (e), and (f) of Section 800 of the Corporations Code apply to any actions under this section.


citation: FIN § 6053

text: In the case of an association which converts from a mutual association to a stock association, for a period of up to five years from the date of conversion, special meetings of the stockholders of a stock association may be called at any time by the president, or the board of directors, and shall be called by the president, vice president, or secretary upon the written request of stockholders holding of record in the aggregate at least 20 percent of the outstanding shares of the association, which request shall state the purpose of the meeting and shall be delivered at the principal office of the association addressed to the president. The date for any special meeting called by stockholders shall be set by the board of directors and shall be not less than 60 nor more than 90 days after the date of receipt of the request.

history: (History: Added by Stats. 1984, Ch. 868, Sec. 8.)


citation: FIN § 6100

text: Each association shall prepare and publish annually within the time prescribed by the commissioner in a newspaper of general circulation in the county in which its home office is located, and shall deliver to each member or stockholder upon request, a statement of its financial condition in the form prescribed or approved by the commissioner.

article: 3. Financial Statement Publication

path: 2. SAVINGS ASSOCIATION LAW > 3. Corporate Administration > 3. Financial Statement Publication