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Code of Criminal Procedure

Title 6. Banks and Banking

Chapter 1. General Provisions

Tit. 6, Art. 1. Short title

This Act shall be known and may be cited as the "Louisiana Banking Law."

Amended by Acts 1972, No. 747, §1; Acts 1984, No. 719, §1, eff. Jan. 1, 1985.

Tit. 6, Art. 2. General definitions

As used in this law:

(1)  "Bank" means any state bank or any national bank.

(2)   "Branch" or "branch office" means any manned office of a bank, including a branch of an out-of-state bank, other than an automated teller machine, electronic fund transfer terminal, point of sale terminal, or similar device or terminal.

(3)  "Business of banking" or "banking business" means lending money, and either receiving deposits, or paying checks anywhere within this state.

(4)  "Commercial lender" means any person not otherwise subject to regulation or required to be licensed under the laws of this state who takes assignment of or defers payment of any obligation for any domestic corporation, foreign corporation, partnership in commendam formed pursuant to the laws of this state, foreign limited partnership, or a partnership in which all of the partners are either corporations, foreign limited partnerships, partnerships in commendam or partnerships comprised of corporations, foreign limited partnerships, or partnerships in commendam, or ordinary partnerships or any other person entering into obligations for commercial or business purposes.

(5)  "Commissioner" means the commissioner of financial institutions.

(6)  "Credit union" means a financial institution organized in accordance with the provisions of R.S. 6:641 et seq. or in accordance with similar provisions of the laws of the United States.

(7)(a)  "Electronic financial terminal" means an electronic information processing device other than a telephone which is established to do either or both of the following:

(i)  Capture the data necessary to initiate financial transactions.

(ii)  Through its attendant support system store or initiate the transmission of the information necessary to consummate a financial transaction.

(b)  The term includes without limitation point-of-sale terminals, merchant-operated terminals, cash-dispensing machines, and automated teller machines.

(8)  "Financial institution" means any person organized to engage in the business of banking pursuant to the laws of the United States or any person organized to engage in the business of banking pursuant to this Title.

(9)  "Gross negligence" means a reckless disregard of, or a carelessness amounting to indifference to the best interests of the corporation or the shareholders thereof, and involves a substantial deviation below the standard of care expected to be maintained by a reasonably careful person under like circumstances.

(10)  "Mutual state bank" means a form of state bank organized under the provisions of Chapter 3 of this Title.

(11)  "National bank" means any corporation organized under the provisions of the National Banking Act (12 U.S.C. 1 et seq.).

(12)  "Person", unless the context requires limiting the use thereof to only natural persons, means any natural or juristic person.

(13)  "Savings and loan association" means a financial institution organized under the provisions of Chapter 9 of this Title or a financial institution formed pursuant to 12 U.S.C. 1461 et seq., including homesteads, building and loan associations, savings and loan associations, state chartered savings banks insured by the Federal Deposit Insurance Corporation, or societies, including both capital stock and mutual associations organized under the laws of this state or such institutions or federal savings banks organized under the laws of the United States.

(14)  "State bank" means any corporation organized under the provisions of Chapter 3 of this Title.

(15)  "Temporary scholastic branch" means a branch opened by a state or federally chartered financial institution on a college or university campus without the necessity of obtaining a certificate of authority from the commissioner, provided that the services offered at the facility are only on a temporary basis during registration and for an additional period of up to seven days per year.

(16)  "Trust company" means a corporation or a limited liability trust company organized under this Chapter or organized under the laws of the United States, including a trust company organized under the laws of this state before June 27, 2003, or an entity chartered to act as a fiduciary that is neither a depository institution nor a foreign bank.

(17)  "Unsafe and unsound practice or condition" means the inability of a financial institution to meet its withdrawal requests, the violation of the institution's articles of incorporation, or the violation of any law or any regulation governing that institution.

Amended by Acts 1976, No. 498, §1; Acts 1984, No. 719, §1, eff. Jan. 1, 1985; Acts 1985, No. 716, §1; Acts 1985, No. 359, §2, eff. July 9, 1985; Acts 1986, No. 163, §1; Acts 1992, No. 650, §1, eff. July 2, 1992; Acts 1995, No. 354, §1, eff. June 16, 1995; Acts 1997, No. 42, §2; Acts 1997, No. 929, §1; Acts 2008, No. 124, §1.

Tit. 6, Art. 3. Effect on existing banks

The certificates of authority of state banks existing at the time of the effective date of this law shall continue in full force and effect, but all state banks and to the extent applicable all banks shall thereafter be operated in accordance with the provisions of this law; and, any state bank by filing an application to amend its articles of incorporation with the commissioner shall thereafter be subject to the provisions of this law.

Amended by Acts 1976, No. 498, §1; Acts 1984, No. 719, §1, eff. Jan. 1, 1985.

Tit. 6, Art. 4. Employment reference;  release of certain information

A.  A bank, savings and loan association, trust company, or credit union may provide to any other such financial institution a written employment reference which may include information reported to federal banking regulators pursuant to federal law and regulations involving a theft, embezzlement, misappropriation, or other defalcation.  Where the written employment reference contains such information and where a copy of the written employment reference is sent to the employee in question at the last known address of such employee, a bank, savings and loan association, trust company, or credit union shall not be liable for providing such an employment reference unless the information provided is false and the financial institution providing the false information does so with knowledge and malice.

B.  The provisions in Subsection A of this Section are supplemental to and shall not preclude or limit a bank, savings and loan association, trust company, or credit union from being governed by the provisions of R.S. 23:291.

Acts 1989, No. 249, §1; Acts 2008, No. 124, §1.

Tit. 6, Art. 5. Public policy

A.  It is the declared public policy of the state of Louisiana to encourage and to foster the development of financial institutions under a dual chartering system of the state and federal governments.  In order to carry out this policy, the office of financial institutions is authorized and requested to use its resources in the promotion and development of the dual chartering system under the laws of Louisiana.

B.  It is further declared that in the event that the Congress of the United States enacts legislation authorizing de novo interstate branch banking which is optional for the states, it shall be the declared public policy of the state of Louisiana to choose not to be subject to provisions of such Act.

Acts 1990, No. 203, §1, eff. July 3, 1990; Acts 1993, No. 960, §1.

Chapter 2. Office of Financial Institutions

Part I. General Provisions

Tit. 6, Art. 101. Establishment of office;  commissioner

A.  There is hereby created the Office of Financial Institutions as a state agency, within the office of the governor.  It shall have supervisory and regulatory jurisdiction over all financial institutions and other persons as provided by this Title, and such other jurisdiction as is conferred on the office or commissioner in other legislation.  The commissioner of the Office of Financial Institutions shall have exclusive supervisory and regulatory jurisdiction and authority over Louisiana state-chartered financial institutions and other financial entities regulated by the Office of Financial Institutions, and the state legislature shall have exclusive lawmaking authority, except for rulemaking authority, regarding the supervision and regulation of the same.  The provisions of this Subsection are subject to and do not supersede the provisions of Part IV, Interstate Banking, of Chapter 6 of Title 6 of the Revised Statutes of 1950.  The provisions of this Subsection shall not apply to any litigation pending on August 15, 2003.

B.  The chief officer of the office of financial institutions shall be the commissioner of financial institutions. The commissioner shall be appointed by the governor, shall be submitted to the Senate for confirmation, and shall have five years of active experience as one of the following:

(1)  An accountant with a degree in accounting from an accredited institution or a certified public accountant authorized to practice in Louisiana.

(2)  An attorney licensed to practice law within this state.

(3)  A certified licensed agent, broker, or principal who is registered as such pursuant to R.S. 51:701 et seq. or under the Securities and Exchange Act of 1934.

(4)  An officer of an institution regulated by the Office of Financial Institutions or shall be a person who possesses at least fifteen years of active experience as a state or federal financial institutions regulator.  The commissioner shall have been active in such major policymaking function and actively employed by the state or federal financial institutions regulatory authority within the previous five years of the appointment.

C.  The commissioner shall also serve as commissioner of securities.

D.  The commissioner shall receive a salary set and determined by the governor payable monthly on the commissioner's own authorization.

E.  The commissioner qualifies by taking and filing the necessary oath of office.  He shall serve for a term of four years from the date of his induction and until his successor qualifies.

Acts 1984, No. 719, §1, eff. Jan. 1, 1985; Acts 1999, No. 344, §1, eff. June 16, 1999; Acts 2001, No. 8, §2, eff. July 1, 2001; Acts 2001, No. 9, §1, eff. July 1, 2001; Acts 2003, No. 521, §1; Acts 2003, No. 869, §1.

Tit. 6, Art. 102. Officers and employees;  post-employment restriction

A.  The commissioner may appoint a deputy commissioner of financial institutions who shall be subject to applicable civil service laws, rules, and regulations.  In the absence of the commissioner, the deputy commissioner of financial institutions shall exercise any of the powers conferred by law on the commissioner.

B.  The commissioner may also appoint one or more chief examiners within the office of financial institutions who shall have such authority as the commissioner may delegate over specific areas within the jurisdiction of the office.  The chief examiners as well as all employees other than the commissioner shall be subject to applicable civil service laws, rules, and regulations.

C.  The commissioner may employ a principal assistant, a private secretary, and such other examiners and employees as may be necessary for the efficient operation of the office.  The commissioner may delegate to any officer or employee of the office such powers as he may deem appropriate and may designate any officer or employee of the office to perform any of his duties.  The commissioner and such employees as he may designate may administer an oath to any person whose testimony may be required in the investigation of the affairs of financial institutions and other entities subject to the jurisdiction of the office of financial institutions.

D.(1)  Each officer and employee, including the commissioner, shall be prohibited for a period of two years following the termination of his employment with the office of financial institutions from:

(a)  Assisting another person for compensation in a particular transaction or in an appearance in connection with a particular transaction for which the officer or employee had responsibility to effectively direct the action of the office of financial institutions at any time during his employment and which involves the office of financial institutions; or

(b)  Rendering on a contractual basis to or for the office of financial institutions any service which the officer or employee rendered to the office of financial institutions during his employment there.

(2)  However, the provisions of Paragraph (1) of this Subsection shall not apply to post-employment work done for or with a federally chartered agency regulating financial institutions or their holding companies.

(3)  A legal entity in which a former officer or employee of the office of financial institutions is an officer, director, trustee, partner, or employee shall be prohibited for a period of two years following the termination of his employment, from assisting another person for compensation in a particular transaction or in an appearance in connection with a particular transaction for which such officer or employee had responsibility to effectively direct the action of the office of financial institutions at any time during his employment and which involves the office of financial institutions.  This restriction shall not apply to a legal entity which is a federally chartered agency regulating financial institutions or their holding companies.  Subject to the provisions of Paragraphs (1), (2) and (4) of this Subsection, such a legal entity may continue to participate in particular transactions commenced prior to termination of the employment of the former officer or employee of the office of financial institutions.

(4)  No former officer or employee shall share in any compensation received by another person for assistance which such former officer or employee is prohibited from rendering by this Subsection.

(5)  Notwithstanding any other law to the contrary, this Subsection shall be applicable to each officer and employee of the office of financial institutions and shall be the sole controlling provision on post-employment restrictions.

Acts 1984, No. 719, §1, eff. Jan. 1, 1985; Acts 1986, No. 452, §1.

Tit. 6, Art. 103. Records of the Office of Financial Institutions

A.  Except as provided in Subsections B and H, all records of the Office of Financial Institutions shall be kept strictly confidential within the office, and such records and reports shall not be subject to subpoena or other legal process except as provided for in Subsection H.

B.  The commissioner, in his sole discretion, may disclose or cause the employees of the Office of Financial Institutions to disclose:

(1)  Information about a particular financial institution to that institution.

(2)  Information about any financial institution to any other financial institution regulatory authority.

(3)  Information about a financial institution, upon resolution of the board of directors of that institution, that is being considered for merger or acquisition to the proposed merger or acquisition partner.

(4)  Information about a financial institution that is in an impaired, unsafe, or unsound condition to another institution that has under consideration the merger or acquisition of that institution when the information is necessary to enable that institution to prepare a merger or acquisition after notification to the impaired institution by the commissioner.

(5)  The public portion of an application for a certificate of authority to organize a new state bank or additional branch office.

(6)  Information to the state treasurer or to the legislative auditor concerning any failure by a financial institution to secure public funds when such security is required by law, regulation, or contract.

(7)  Information obtained under the provisions of R.S. 15:587(A) to any financial institution.

(8)(a)  Information about a certified public accountant, real estate appraiser, or attorney to their respective boards and associations.

(b)  Information about a particular financial institution to the commissioner of insurance when that financial institution is affiliated with an insurance company or other entity licensed and regulated by the commissioner of insurance.

(9)  Information submitted pursuant to R.S. 6:124.

(10)  Confidential information or records of either the Office of Financial Institutions or financial institutions and other supervised entities chartered or licensed in accordance with Title 6 of the Louisiana Revised Statutes of 1950, produced by discovery or introduced into evidence as part of an administrative hearing conducted in accordance with the Administrative Procedure Act, and notwithstanding any other provision of law to the contrary, such records shall remain confidential and shall not be deemed public.

(11)  Statistical information compiled by the Office of Financial Institutions, provided the information does not reveal the identity of any person or entity which is the source of that information.

(12)  Any action taken by the commissioner of the Office of Financial Institutions and any legal grounds upon which such action is based relative to the fitness of any person to receive, or to continue to hold any license the issuance of which requires the approval of the commissioner of the Office of Financial Institutions.

(13)  The status of, and any action taken by the commissioner of the Office of Financial Institutions regarding, any application any person is required to file with the commissioner, or the Office of Financial Institutions.

(14)  Any action taken by the commissioner of the Office of Financial Institutions to deny, suspend, or revoke a license, order refunds, impose civil money penalties, or enter into a consent agreement against any person pursuant to the enforcement powers of the commissioner authorized in R.S. 6:121.1, or otherwise authorized by law.

(15)  Guidance, advisory opinions and interpretations issued by the Office of Financial Institutions from time to time, provided that any names or other identifying information contained within the original of such issuances, shall be excised from any text or summary, unless those parties who would be identified, consent in writing to such disclosure.

(16)  Information that may be obtained in connection with any online licensing system, as provided for in R.S. 6:1088.1, to other regulatory agencies that utilize the same system and to third-party providers of the system.

(17)  Records of the Office of Financial Institutions, other than criminal history record information provided to the office by a state or federal law enforcement agency, concerning any person subject to its jurisdiction when such records are requested by another state or federal agency having authority to license or investigate such entity or person.

C.  Records made by the office shall be retained by the office for seven years, except those records that pertain to the internal business operations of the office.

D.  A copy of any document on file with the office which is declared public by the laws of this state or by regulation of the commissioner and is certified by the commissioner as being a true copy may be introduced in evidence as if it were the original.  The commissioner shall establish a schedule of fees for copies of those documents.

E.(1)  Copies of agency records and reports of examination of financial institutions which from time to time may be left with such financial institutions by the Office of Financial Institutions shall be:

(a)  Kept strictly confidential by all persons.

(b)  In whatever form, the property of the Office of Financial Institutions.

(c)  Obtainable only from the Office of Financial Institutions by the procedures established pursuant to Subsection H.

(d)  Deemed a privileged communication under applicable state law and Federal Rule of Evidence 501 and shall not be admissible in evidence in any court action or proceeding except pursuant to subpoena of a court of record.

(e)  For the purposes of this Title and Titles 9, 44, and 51 of the Louisiana Revised Statutes of 1950, read in pari materia with R.S. 44:4.

(2)  The board of directors of a financial institution may, by resolution, authorize the disclosure of information contained in its report of examination to attorneys, CPA's, and consultants employed by the financial institution, agents of a licensed banker's blanket bond company for the purpose of obtaining blanket bond coverage, and to prospective directors of the financial institution.  Such a person, if not covered by a written code of professional conduct provided for by Louisiana law, shall enter into a written confidentiality agreement with the financial institution establishing his status and affirming that he will not disclose any information that he has obtained from the report of examination other than for the purposes expressly provided for in the agreement.

F.(1)  Any information disclosed by the commissioner or employees of the Office of Financial Institutions to any person pursuant to Paragraphs B(1) through (4), (6), and (8) of this Section and any information received by the commissioner from any other financial institution regulatory authority shall be kept strictly confidential by all persons and all such information, in whatever form, shall not be subject to subpoena or other legal process.

(2)(a) It shall be unlawful for any person, including current and former employees of the Office of Financial Institutions, who receives information pursuant to Subsection B of this Section to disclose such information to anyone other than a state or federal bank regulatory agency without authority from the commissioner of the Office of Financial Institutions.

(b)  Anyone who is found guilty of violating Subparagraph (2)(a) of this Subsection shall be fined not more than five hundred dollars or imprisoned for not more than ninety days, or both.

G.  Office of Financial Institutions employees or officers, or employees of financial institutions or licensed lenders, or members of the public making good faith criminal referrals to either federal, state, or local law enforcement officials shall not be liable to retaliatory lawsuits by those individuals suspected of the commission of a crime.

H.  Notwithstanding any other provision of law to the contrary, except for documents or information of other federal or state regulatory and law enforcement agencies in the possession of the Office of Financial Institutions, any federal or state district court within the state of Louisiana may order the Office of Financial Institutions to disclose information and produce documents belonging to the Office of Financial Institutions, which are relevant to claims or disputes at issue in a lawsuit, including but not limited to any writings, records, accounts, letters, letter books, photographs, reports of examination, work papers of examiners, loan write-ups, line sheets, handwritten notes, loan classification documents, or other applicable materials of the Office of Financial Institutions, subject to all of the following conditions:

(1)  The person seeking any such information or documents shall file a motion in a federal or state district court in the state of Louisiana having jurisdiction over the subject matter.

(2)  The motion shall specifically set forth a concise summary of the claims or disputes at issue in the suit or proceeding and shall describe the information and documents sought to be produced or disclosed by the Office of Financial Institutions.

(3)  The person seeking such information or documents shall provide a copy of any motion, pleadings, or documents relating to the motion to the Office of Financial Institutions prior to any hearing or proceeding relating to the request for disclosure of information or documents in the possession of the Office of Financial Institutions to allow the office a reasonable period of time within which to respond to such filing in an adequate manner, but in no event fewer than ten days prior to such scheduled hearing date.

(4)  When no other source is available, and upon a showing of good cause and substantial need, the court may order the disclosure and production of such information or documents sought by the motion.

(5)  In the event the court orders the disclosure and production of such information or documents, the court shall enter a protective order limiting the disclosure and production of any such information or documents to any of the following:

(a)  The person requesting the information or documents.

(b)  Any other party to the lawsuit or proceeding.

(c)  The state or federal district court and any duly authorized officials thereof.

(d)  Any witness who testifies under oath during a deposition, hearing, or trial.

(e)  Any attorney for any such party or witness.

(f)  Any other person as deemed necessary and appropriate by the court.

(6)  Any such protective order shall require any person to whom any such information or documents are disclosed or produced to hold such information or documents strictly confidential and prohibit the dissemination or disclosure of any such information or documents to any other person except as authorized by the court.

(7)  The private financial records of clients of open or closed financial institutions in the custody of the Office of Financial Institutions shall remain confidential under this Section and R.S. 44:4.  If a civil litigant seeks access via court order to the financial records of clients of financial institutions for purposes of litigation, those records must be subpoenaed from the client of the financial institution.  The procedure in R.S. 6:333 shall be used for open and closed financial institutions.

I.  Persons injured by negligent or intentional disclosure of confidential or privileged communications covered by this Title or Titles 9, 44, or 51 of the Louisiana Revised Statutes of 1950 shall have a civil cause of action under Civil Code Article 2315 et seq.

J.  Notwithstanding any other provision of law to the contrary, including but not limited to R.S. 49:956(8)(c), there shall be no liability on the part of, and no cause of action of any nature shall arise against, the Office of Financial Institutions or its agents or employees, for any good faith release or disclosure of information or for statements made in good faith in any administrative hearings or in any reports or communications concerning safety or soundness, other regulatory issues, and the supervision and regulation of all entities under the jurisdiction of the Office of Financial Institutions.

Acts 1984, No. 719, §1, eff. Jan. 1, 1985; Acts 1985, No. 359, §1, eff. July 9, 1985; Acts 1986, No. 800, §1, eff. July 10, 1986; Acts 1987, No. 103, §1; Acts 1987, No. 810, §2; Acts 1991, No. 199, §1, eff. July 2, 1991; Acts 1991, No. 961, §1, eff. July 24, 1991; Acts 1992, No. 113, §1, eff. Sept. 1, 1992; Acts 1992, No. 144, §1; Acts 1993, No. 282, §1, eff. Oct. 1, 1993; Acts 1993, No. 837, §1, eff. July 1, 1993; Acts 1995, No. 1084, §§1, 2, eff. June 29, 1995; Acts 1997, No. 366, §1; Acts 2001, No. 915, §1, eff. June 26, 2001; Acts 2004, No. 587, §1, eff. June 29, 2004; Acts 2006, No. 456, §1, eff. June 15, 2006; Acts 2007, No. 36, §1, eff. June 18, 2007; Acts 2008, No. 220, §1, eff. June 14, 2008; Acts 2011, No. 136, §1.

NOTE:  See Acts 1993, Nos. 282 and 837, for apparent conflicts in R.S. 6:103(E).

Part II. Powers and Duties of the Commissioner

Tit. 6, Art. 121. Regulatory powers;  promulgation of rules and regulations

A.  The commissioner shall have in addition to those powers specifically enumerated in this Title any power necessary and appropriate to perform his duties under this Title as well as any power necessary and appropriate to prevent or terminate any condition which he may reasonably deem to create an emergency relative to a particular financial institution or financial institutions in general.  Such power may include, but shall not be limited to, the granting of temporary lending authority to a financial institution, taking into account that institution's current net operating income and whether it has such negative undivided profits that might render the bank unable to make a loan as provided in R.S. 6:415(A)(1), (2), or (3) or to make a purchase or sell as provided in R.S. 6:303(A) and (B).  In granting such temporary lending authority, the amount of which shall be at the discretion of the commissioner, the commissioner shall be guided by safety and soundness of the financial institution.

B.(1)  The commissioner shall have the power to enact and promulgate rules and regulations as may be necessary or appropriate to implement the provisions of this Title.  The commissioner in making rules and regulations pursuant to this power shall consider among other matters the impact any such rule or regulation will have on the dual banking system as well as the impact any such rule or regulation will have on the public interest in the business of banking.  The commissioner may also consider the regulations of the Comptroller of the Currency, the Federal Reserve Board, the Federal Deposit Insurance Corporation, and the Office of Thrift Supervision to allow financial institutions organized under the laws of this state to offer services consistent with services offered by financial institutions organized under the laws of the United States.

(2)  Notwithstanding any other provision of this Title, the commissioner shall not authorize any bank, bank holding company, subsidiary, or employee thereof to engage in any insurance activity except an insurance activity authorized by R.S. 6:242. However, any bank which was engaged as a general insurance agent or broker on January 1, 1984, may continue to be so engaged.

(3)  The commissioner of financial institutions shall make a report to the legislature no later than March first of each year indicating what actions have been taken by financial institutions in this state to assist economically disadvantaged urban and rural communities, minorities, and small businesses.

(4)  The commissioner of financial institutions may promulgate such rules as are necessary to carry out the regulatory function of this office, including but not limited to the organization, administration, and supervision of mutual state banks as defined by R.S. 6:2(10).

C.  All regulations enacted and promulgated under this Section shall be subject to the provisions of R.S. 49:951 through R.S. 49:953 and R.S. 49:954.1, and prior to the promulgation of any such rule or regulation the commissioner shall give each financial institution organized under this Title affected by the rule or regulation written notification of the content of such rule or regulation and the date and time of any public hearing held pursuant to the above Sections.  The commissioner shall provide notice at least ten days prior to the adoption of such rule or regulation, but the failure of a particular financial institution to receive notice thereof shall not affect the validity of such rule or regulation.

Acts 1984, No. 719, §1, eff. Jan. 1, 1985; Acts 1988, No. 935, §1, eff. July 26, 1988; Acts 1989, No. 130, §1, eff. June 22, 1989; Acts 1990, No. 611, §1, eff. July 19, 1990; Acts 1993, No. 851, §1; Acts 1995, No. 681, §1; Acts 1997, No. 929, §1; Acts 1997, No. 1475, §1, eff. July 15, 1997.

Tit. 6, Art. 121.1. Enforcement powers of commissioner

A.  The commissioner may, in his discretion, conduct such investigations and hearings as he deems necessary to ascertain possible violations of this Title or any rule, regulation, or order promulgated or issued thereunder.  Such hearings shall be private unless the commissioner, in his sole discretion and after considering the views of the person afforded the hearing, determines that a public hearing is necessary to protect the public interest.  If the commissioner determines that a public hearing is necessary to protect the public interest, the confidentiality provisions of this Title and the Administrative Procedure Act, R.S. 49:950 et seq., shall not apply.

B.  Any person who is engaged in or is engaging in or is about to engage in any act or practice which is prohibited by this Title or any rule, regulation, or order promulgated or issued thereunder, or any person who has failed to act or is failing to act or is about to fail to act under any affirmative duty imposed by this Title or any rule, regulation, or order promulgated or issued thereunder shall be subject to appropriate action by the commissioner.  Such action shall include but shall not be limited to the issuance of orders assessing civil money penalties, entering into compliance agreements, seeking injunctive relief from a court of competent jurisdiction, or any combination thereof.

C.  The commissioner may report egregious violations to the attorney general or to the district attorney of the appropriate parish, who may institute the proper proceedings to enjoin the violation and enforce the penalties provided herein.

D.  In addition to the enforcement powers of the commissioner authorized in this Title and any other Title of the Louisiana Revised Statutes of 1950, he shall also have those enforcement powers authorized by Subsections A, B and C of this Section with respect to any person subject to licensing, registration, or regulation by the commissioner.

Acts 1990, No. 266, §1, eff. July 4, 1990; Acts 2006, No. 460, §1, eff. June 15, 2006.

Tit. 6, Art. 121.2. Authority to obtain criminal history record information

            A. As used in this Section:

            (1) "Bureau" means the Louisiana Bureau of Criminal Identification and Information of the office of state police within the Department of Public Safety and Corrections.

            (2) "Criminal history record information" means information collected by state and federal criminal justice agencies or individuals consisting of identifiable descriptions and notations of arrests, detentions, indictments, bills of information, or any formal criminal charges, and disposition arising therefrom, including sentencing and criminal correctional supervision and release, but does not include intelligence for investigatory purposes, nor does it include any identification information which does not indicate involvement of the individual in the criminal justice system.

            (3) "FBI" means the Federal Bureau of Investigation of the United States.

            (4) "Licensure" means any charter, license, or registration which the commissioner is authorized to issue.

            B. The commissioner shall have the authority to:

            (1) Request and obtain state or FBI criminal history record information, or both, on any person listed on any application, registration, or renewal filed with the Office of Financial Institutions.

            (2) Require any person listed on any application, registration, or renewal, to submit two full sets of fingerprints, in a form and manner prescribed by the commissioner, as a condition of the commissioner's consideration of his application, registration, or renewal unless:

            (a) The Office of Financial Institutions is in possession of criminal history record information obtained from the bureau in conjunction with any previous application, registration, or renewal.

            (b) The criminal history record information is dated within five years of the date of the application, registration, or renewal being considered.

            (3) Charge and collect from any person listed on any application, registration, or renewal, in addition to all other applicable fees and costs, such amount as may be incurred by the commissioner in requesting and obtaining criminal history record information on the person.

            (4) Promulgate rules and regulations necessary to the administration and implementation of this Section.

            C. In accordance with the provisions and procedures prescribed in this Section, the commissioner may request and obtain state or FBI criminal history record information, or both, from the bureau relative to any person whose fingerprints he has obtained pursuant to this Section for the purpose of determining that person's suitability and eligibility for licensure, registration, or renewal.

            D. Upon the commissioner's submission of a person's fingerprints and such other identifying information as may be required, the bureau shall conduct a search of the state or FBI's criminal history record information, or both as requested by the commissioner, relative to the person and report the results of its search to the commissioner within sixty days after receipt of any such request. The bureau may charge the commissioner a reasonable processing fee for conducting and reporting the results of any such search. The commissioner is hereby authorized to pay such processing fee.

            E. Any and all state or national criminal history record information obtained by the commissioner from the bureau which is not already a matter of public record shall be deemed nonpublic and confidential information restricted to the exclusive use of the commissioner, his employees, agents, and attorneys in evaluating the applicant's eligibility or disqualification for licensure. No such information or records related thereto shall, except with the written consent of the applicant or by any order of a court of competent jurisdiction, be released or otherwise disclosed by the commissioner to any other person or agency.

            F. The authority set forth in this Section applies to all persons seeking licensure, registration, or approval by the commissioner to operate as any of the following:

            (1) A state bank pursuant to R.S. 6:201 et seq.

            (2) A trust company pursuant to R.S. 6:571 et seq.

            (3) A credit union pursuant to R.S. 6:641 et seq.

            (4) A savings and loan association pursuant to R.S. 6:702 et seq.

            (5) A currency exchange service or check-casher pursuant to R.S. 6:1001 et seq.

            (6) A sale of checks or money transmission business pursuant to R.S. 6:1031 et seq.

            (7) A mortgage broker, mortgage lender, mortgage servicer, or mortgage loan originator pursuant to R.S. 6:1081 et seq.

            (8) A savings bank pursuant to R.S. 6:1161 et seq.

            (9) A licensed lender pursuant to R.S. 9:3510 et seq.

            (10) A loan broker pursuant to R.S. 9:3572.1 et seq.

            (11) A pawnbroker pursuant to R.S. 37:1781 et seq.

            (12) A salesman or investment adviser representative pursuant to R.S. 51:701 et seq.

            (13) A Louisiana capital company pursuant to R.S. 51:1925 et seq.

            (14) A Louisiana business and industrial development company pursuant to R.S. 51:2392 et seq.

            (15) A bond for deed escrow agent pursuant to R.S. 6:414 and LAC 10:XV.901 et seq.

            (16) A repossession agency and repossession agent pursuant to R.S. 6:965 et seq. and LAC 10:XV.1301 et seq.

            Acts 1995, No. 1083, §1, eff. June 29, 1995; Acts 2006, No. 236, §1, eff. June 2, 2006; Acts 2007, No. 376, §1, eff. July 10, 2007; Acts 2019, No. 13, §1, eff. May 24, 2019.

Tit. 6, Art. 121.3. Guidance by commissioner;  advisory opinions

A.  Advisory opinions and interpretations of the office shall not be considered rules requiring compliance with the rulemaking process under the Louisiana Administrative Procedure Act.

B.  This Section shall only have prospective application.

Acts 1997, No. 58, §1.

Tit. 6, Art. 121.4. Addition of directors and executive officers of troubled state-chartered institutions and holding companies

A.  If a state-chartered financial institution or holding company whose lead institution is state chartered is in troubled condition as defined by Subsection D of this Section, such financial institution or holding company may file an application with the commissioner of financial institutions seeking permission to add one or more new directors or employ one or more new executive officers.  The addition of a new director or employment of a new executive officer shall be allowed only with permission of the commissioner.

B.  An application form may be developed by the commissioner, or the commissioner may accept a standardized form utilizing the criteria established by the appropriate federal regulator of the institution or holding company.  The application must be filed at least thirty days prior to the proposed effective date of the addition of the director or employment of the executive officer.

C.  The commissioner shall issue a written notice approving or disapproving the addition or employment of any new officers or directors not later than forty-five days following the date the application was filed with the commissioner.  However, this period of time may be extended for a reasonable period of time upon a showing of good cause by the commissioner that additional information is required for a determination to be made upon the application.  The commissioner shall give written notice of his reasons for any extension.

D.  For purposes of this Section, "troubled condition" means that a state-chartered financial institution or holding company meets any one of the following criteria:

(1)  Has a composite rating, as determined in its most recent report of examination, of 4 or 5 under the Uniform Financial Institutions Rating Systems (UFIRS).

(2)  Is subject to a proceeding initiated by the appropriate state or federal insurer for termination or suspension of deposit insurance.

(3)  Is subject to a cease and desist order or written agreement issued by either the commissioner or the appropriate federal regulatory agency that requires action to improve the financial condition of the financial institution or holding company, or is subject to a proceeding initiated by the commissioner or the appropriate federal regulatory agency, which contemplates the issuance of an order that requires action to improve the financial condition of the financial institution or holding company, unless otherwise informed in writing by the commissioner.

(4)  Is informed in writing by the commissioner or the appropriate federal regulatory agency that it is in troubled condition for purposes of the requirements of this Subsection on the basis of its most recent report of condition, report of examination, or other information available to the commissioner.

E.  The commissioner may adopt rules to prescribe conditions under which the prior notice requirement of Subsection A of this Section may be waived in the event of extraordinary circumstances.  Such waivers shall not affect the authority of the commissioner to issue notices of disapproval of such additions or employment of such individuals within thirty days after each such waiver.

F.  The commissioner shall issue a notice of  disapproval with respect to an application submitted pursuant to this Section, if the competence, experience, character, or integrity of the individual with respect to whom such notice is submitted indicates that it would not be in the best interests of the depositors of the institution or in the best interests of the public to permit the individual to be employed by or associated with the state-chartered financial institution or holding company.

Acts 2001, No. 628, §1, eff. June 22, 2001.

Tit. 6, Art. 121.5. Application containing false information or misrepresentations

It shall be unlawful for any person to knowingly submit an application for a financial institution charter, license, registration, or notification, or any other document to the commissioner which contains false information or misrepresentations regarding any applicant's personal or business background information, for the purpose of deceiving the commissioner into granting a charter, license, registration, or notification to the applicant.  Any person who violates this Section is guilty of a misdemeanor, and upon conviction may be fined not less than one thousand dollars nor more than two thousand five hundred dollars, or sentenced to imprisonment not exceeding one year, or both.

Acts 2001, No. 531, §1, eff. June 21, 2001.

Tit. 6, Art. 121.6. Authority of the commissioner;  nondepository institutions;  emergencies

A.  In addition to any other powers specifically authorized, the commissioner is authorized to waive, suspend, or delay compliance with all or part of any statute it is the duty of the commissioner to administer or enforce with respect to a nondepository institution, if he reasonably deems compliance with such statute is impossible or impractical as a result of conditions created during a declared state of emergency or as a result of conditions the commissioner reasonably deems to create an emergency.

B.  For the purposes of this Section, the term "nondepository institutions" shall mean those persons or entities required by statute to be certified, licensed by, or registered with the commissioner, other than financial institutions as defined in R.S. 6:2.

C.  This Section shall apply to emergencies declared by the governor or the commissioner on or after August 29, 2005.

Acts 2005, 1st Ex. Sess., No. 33, §1, eff. Nov. 29, 2005.

Tit. 6, Art. 121.7. Return of payment;  imposition of fee

The commissioner is authorized to impose a fee of twenty-five dollars on any person who submits a payment with an instrument or other method of payment and which payment is returned unpaid, refused, or declined.

Acts 2006, No. 232, §1, eff. June 2, 2006.

Tit. 6, Art. 121.8. Licensing systems

A.  Notwithstanding any other law to the contrary, the commissioner shall have the authority to take all action regarding the utilization of an electronic database licensing system or systems with respect to any person subject to licensure by him, in his discretion as he deems necessary and appropriate, including but not limited to those contained within the Louisiana S.A.F.E. Residential Mortgage Lending Act, R.S. 6:1081, et seq.; provided, however, that any action taken pursuant to this Section shall not authorize the creation of an online system which shall be utilized to restrict or limit the authority of licensees to offer loans which are statutorily authorized.

B.  For the purposes of this Section, the term "licensure" shall mean licensing, registration, regulation, and notification of all persons by the commissioner, except financial institutions as defined in R.S. 6:2(8).

Acts 2011, No. 10, §1.

Tit. 6, Art. 122. Power to issue cease and desist orders

A.(1)  The commissioner shall have the power to issue cease and desist orders to prevent or terminate an unsafe or unsound practice or condition or a violation of any Section of this Title or any regulation or order of the commissioner issued pursuant to this Title whenever he knows or has reasonable cause to believe that such practice exists or is likely to occur.

(2)  Before issuing a cease and desist order, the commissioner shall send by registered mail a notice containing a statement of the facts constituting the grounds for issuance of the cease and desist order and fixing a time and place at which a meeting with the alleged violator or violators, whether they be a financial institution, its officers, directors, stockholders, employees, or any combination thereof, will be held to determine whether an order to cease and desist therefrom should be issued.  If the violator fails to appear at the meeting, it shall be deemed to have consented to the issuance of a cease and desist order.  In the event of such consent or if after the meeting the commissioner should find that the grounds specified in the notice have been established, the commissioner may issue an order to cease and desist from the violation or practice.  Such order may require the violator to cease and desist from any such violations or practice and to further take affirmative action to correct the conditions resulting from such violation or practice.

B.  Any order issued pursuant to this Section shall become effective upon service thereof in person or by registered mail on the violator, and shall remain effective except to the extent modified, stayed, terminated, or set aside by action of the commissioner or of the district court of the judicial district in which the state bank is domiciled.

C.  The commissioner may apply to the district court in the parish of domicile of the violator for the enforcement of any order issued pursuant to this Section and such court shall have the jurisdiction and power to order and require compliance therewith.

D.  All proceedings other than judicial proceedings pursuant to this Section shall be exempt from the Public Records Act as provided in R.S. 44:4.

Acts 1984, No. 719, §1, eff. Jan. 1, 1985.

Tit. 6, Art. 123. Visitation and examination of state financial institutions

A.(1)  The commissioner either in person or through an employee appointed by him shall visit and examine each financial institution chartered by his office on a recurring schedule consonant with the use to the fullest extent possible of the resources of the office in accordance with good examination practice.  On every examination, inquiry shall be made as to the quality of the assets and the condition and resources of the financial institution, and may be made into the mode of conducting business and managing its affairs, the action of its directors, the investment and disposition of its funds, the safety and prudence of its management, the compliance with the requirements of its articles of incorporation and this Title in the administration of its affairs, and other matters as the commissioner may determine.

(2)  The commissioner, in like manner, may examine any financial institution under his jurisdiction whenever in his judgment its condition and management is in such condition as to render an examination of its affairs necessary and expedient.  Such an examination, at the commissioner's discretion and upon good cause shown, may include an examination of the affairs of all of the affiliates of the financial institution as shall be necessary to fully disclose the relations between the financial institution and its affiliates and the effect of such relations upon the affairs of the financial institution.  The officers, directors, and employees of every state financial institution shall answer under oath interrogatories concerning their bank as may be required by the commissioner or any other examiner during the course of an examination.

B.(1)  If a state bank is a member of the Federal Reserve System or its deposits are insured by the Federal Deposit Insurance Corporation, the commissioner may accept in lieu of any visitation and examination required by this Section examinations and reports thereof made pursuant to the Federal Reserve Act or statutes of the United States authorizing Federal Deposit Insurance.  If a state savings and loan association is insured by the Federal Deposit Insurance Corporation, the commissioner may accept in lieu of his own examination an examination made pursuant to statutes of the United States.

(2)  The commissioner may accept supervisory reports and other information from any state, federal, or foreign supervisory agency, or from any financial institution doing business or domiciled in the state which is subject to the jurisdiction of any state, federal, or foreign supervisory agency, which in the commissioner's opinion evidences a good faith effort on the part of the affected financial institution to comply with the provisions of the Louisiana Consumer Credit Law, R.S. 9:3510 et seq.

C.  For the purposes of this Section, the following terms shall have the following meanings:

(1)  "Affiliate" means any company that controls the financial institution, any company that is controlled by the company that controls the financial institution, any subsidiary of the financial institution, any company controlled by a common shareholder who beneficially or otherwise controls the financial institution or any company that controls the financial institution, any company in which a majority of its directors are also a majority of the directors of the financial institution or the company that controls the financial institution, any company that is sponsored or advised on a contractual basis by the financial institution or any subsidiary or affiliate of the financial institution, or any investment company in which the financial institution or any affiliate of the financial institution is an investment advisor.

(2)  "Control" means owning, controlling, or having the power to vote, directly or indirectly, twenty-five percent or more of any class of voting securities; or controlling in any manner the election of a majority of the directors or trustees; or after notice and opportunity for hearing, the commissioner determines that such company or shareholder, directly or indirectly, exercises a controlling influence over the management or policies of the other company.  No company shall be deemed to own or control another company by virtue of its ownership of shares in a fiduciary capacity unless a trustee controls twenty-five percent or more of the voting shares of a company for the benefit of shareholders who control twenty-five or more of the voting shares of a financial institution or its holding company or the ownership or control of one company by another through a business trust creates an affiliate relationship.

Acts 1984, No. 719, §1, eff. Jan. 1, 1985; Acts 1985, No. 360, §1, eff. July 9, 1985; Acts 1993, No. 883, §1, eff. Oct. 1, 1993; Acts 1999, No. 261, §1.

Tit. 6, Art. 124. Call reports;  statement of financial condition

Four times a year, at the end of each calendar quarter, the commissioner shall require each state bank, savings and loan association, and savings bank to report to him, in the manner prescribed, its current financial condition.

Acts 1984, No. 719, §1, eff. Jan. 1, 1985; Acts 1985, No. 359, §1, eff. July 9, 1985; Acts 1991, No. 199, §1, eff. July 2, 1991; Acts 1992, No. 64, §1, eff. Sept. 1, 1992; Acts 1993, No. 883, §1, eff. Oct. 1, 1993; Acts 1997, No. 47, §1.

Tit. 6, Art. 124.1. Community reinvestment rating;  acceptance of public funds

A.  The legislature hereby finds and declares that:

(1)  Regulated financial institutions are obligated to demonstrate that their deposit facilities serve the convenience and needs of the communities in which they are chartered to do business.

(2)  The convenience and need of communities include the need for credit services  as well as deposit services.

(3)  Regulated financial institutions have a continuing and affirmative obligation to help meet the credit needs of the local communities in which they are chartered.

(4)  Since 1977, the federal Community Reinvestment Act (12 U.S.C. §2901 et seq.) has required that each financial institution receive an annual rating indicating the degree to which the institution has met such community credit needs.

B.  Each financial institution shall include in its statement of condition required by R.S. 6:124, at a minimum, a single sentence, printed in boldface type, which states its most recent rating received pursuant to the federal Community Reinvestment Act.  Notwithstanding any other provision of R.S. 6:124 to the contrary, such rating need not be included in the financial institution's statement of condition to be submitted to the office of financial institutions.

C.  Repealed by Acts 2013, No. 32, §2.

Acts 1992, No. 776, §1; Acts 1993, No. 509, §1, eff. April 1, 1994; Acts 1994, 3rd Ex. Sess., No. 61, §1, eff. July 6, 1994; Acts 1997, No. 65, §1; Acts 2002, 1st Ex. Sess., No. 162, §1, eff. April 26, 2002; Acts 2013, No. 32, §2.

Tit. 6, Art. 125. Reports of financial condition

Upon their request, the commissioner shall report to the governor, any statewide elected officials, or any member of the legislature on the condition of the state-chartered financial institutions under his jurisdiction.

Acts 1984, No. 719, §1, eff. Jan. 1, 1985; Acts 1999, No. 261, §1.

Tit. 6, Art. 126. Assessments on financial institutions;  disposition of fees;  creation of special fund

A.  Every financial institution subject to the jurisdiction of the office of financial institutions shall be assessed by the commissioner as provided by law or regulation.  The commissioner shall have the authority to promulgate regulations affecting assessments and fees levied upon financial institutions and to amend existing regulations to change assessments periodically as he deems necessary and appropriate.

B.(1)  Subject to the exceptions contained in Article VII, Section 9 of the Constitution of Louisiana, all monies, funds, proceeds, and fees received or collected by the commissioner under the provisions of Titles 6, 9, and 51 of the Louisiana Revised Statutes of 1950 and any other provision of law, as well as all regulations promulgated thereunder, shall be deposited immediately upon receipt into the state treasury and shall be credited to the Bond Security and Redemption Fund.

(2), (3), and (4)  REPEALED BY ACTS 1992, No. 984, §18.

Acts 1984, No. 719, §1, eff. Jan. 1, 1985; Acts 1985, No. 766, §1; Acts 1986, No. 465, §1, eff. July 1, 1986; Acts 1992, No. 232, §1, eff. Sept. 30, 1992; Acts 1992, No. 984, §18.

Tit. 6, Art. 127. Retention of records of financial institutions;  microfilm

A.  The commissioner may by regulation prescribe periods of time for the retention of records by any financial institution subject to his supervision.  Records of any financial institution, including records of financial institutions not subject to the commissioner's supervision, that have been retained for the periods so prescribed may thereafter be destroyed, and no liability shall thereby arise against, or attach to, the financial institution destroying them.  In any legal action in which any such records may be called in question or demanded of any financial institution or any officer, employee, or other agent thereof, a showing that the periods so prescribed have elapsed shall be a sufficient defense for the failure to produce them by reason of their destruction.

B.  Any records required to be retained pursuant to this Section or regulations promulgated hereunder may be reproduced by any photographic, photostatic, microfilm, microcard, or miniature or microphotographic process, or by any mechanical or electronic recording or re-recording, electronic or optical imaging, chemical process, or other process or technique which accurately reproduces the original or forms or creates a durable medium for accurately  reproducing the original record.

C.  Except as otherwise provided in R.S. 13:3733.1, each reproduction shall be treated for all purposes as if it were the original record, item, document, or instrument.

Acts 1984, No. 719, §1, eff. Jan. 1, 1985; Acts 1991, No. 283, §1; Acts 1995, No. 1093, §1; Acts 1997, No. 39, §1; Acts 1999, No. 123, §1, eff. June 9, 1999.

Tit. 6, Art. 128. Financial institutions' holidays;  regulations

A.  Repealed by Acts 1995, No. 1248, §2, eff. June 29, 1995.

B.  Whenever it is customary or desirable to observe a day or part of a day as a holiday, any financial institution may, at its option, close for business any or all of its branches or offices, provided that:

(1)  Its board of directors adopts a resolution signifying its intention to close, written notice of which shall be sent to the commissioner; and

(2)  Prior notice of at least three business days shall be provided by the posting of notices or by publication in one issue of a newspaper of general circulation published in the parish in which the office to be closed is located or through other means of notification.

C.(1)  The commissioner may issue regulations establishing additional holidays for financial institutions governed by this Title.

(2)  The commissioner may authorize a financial institution to take a holiday or holidays if an emergency arises.  Permission to take such a holiday or holidays may be requested by telephonic or facsimile communication with the office of the commissioner.

D.  Nothing contained in any law of this state shall in any manner whatsoever affect the validity of, or render void or voidable the payment, certification, or acceptance of a check or other negotiable instrument or any other transaction by a financial institution in Louisiana because done on any holiday, if the payment, certification, acceptance, or transaction could have validly been done on any other day.

E.  The provisions of this Section are comprehensive, and are intended to and shall be construed as constituting the entire and exclusive authority governing holidays of financial institutions in the state, notwithstanding the provisions of R.S. 1:55 or any other statute, rule, or regulation governing the same or similar subject matter.

Acts 1984, No. 719, §1, eff. Jan. 1, 1985; Acts 1986, No. 3, §1; Acts 1989, No. 132, §1, eff. June 22, 1989; Acts 1989, No. 245, §1; Acts 1991, No. 281, §1; Acts 1995, No. 1248, §2, eff. June 29, 1995; Acts 1997, No. 42, §1.

Tit. 6, Art. 129. Circulating rumor respecting condition of financial institution

Any employee of the office of financial institutions who makes, circulates, or transmits in violation of the policies of the office of financial institutions any written, printed, or spoken statement, rumor, report, or suggestion concerning the financial condition of any financial institution organized under the laws of this state shall be dismissed from the office.

Acts 1984, No. 719, §1, eff. Jan. 1, 1985.

Tit. 6, Art. 130. Relocation of main office

The commissioner shall promulgate rules and regulations providing for the establishment and relocation of bank offices.

Acts 1995, No. 1248, §1, eff. June 29, 1995.

Part III. Decisions and Review

Tit. 6, Art. 131. Applicability

This Part applies to the decision of the commissioner to:

A.  Grant a certificate of authority for:

(1)  The organization of a bank or savings and loan association.

(2)  The opening of a branch of an existing bank, trust company, or savings and loan association.

B.  Grant permission for:

(1)  A bank, trust company, or savings and loan association to convert from a national charter to a state charter.

(2)  The merger or consolidation of banks, trust companies, or savings and loan associations.

(3)  The transfer of assets of a bank, trust company, or savings and loan association.

(4)  The voluntary dissolution of a bank, trust company, or savings and loan association.

Acts 1986, No. 730, §1.

Tit. 6, Art. 132. Written decision;  reasons;  hearing

A.  A decision of the commissioner shall be in writing and mailed to the applicant and to any other person who had requested a copy thereof.

B.  The commissioner may, in his sole discretion, assign written reasons for his decision which shall be released only to the applicant.

C.  The commissioner shall not be required to grant a hearing to any person.

Acts 1986, No. 730, §1.

Tit. 6, Art. 133. Reconsideration of decision

A.  A person aggrieved by a decision of the commissioner may file an application for reconsideration by the commissioner.  An application for reconsideration must be received by the commissioner within fifteen days of his mailing of the original decision on the matter.  The right to apply for reconsideration does not automatically stay the decision or enforcement of the decision of the commissioner.

B.  An application for reconsideration shall be in writing, identify the decision for which reconsideration is requested, and must include all additional evidence or argument that the applicant wants considered.  No hearing or oral argument shall be allowed.

C.  The commissioner shall consider the application for reconsideration and render a decision, in writing, which shall be mailed to the applicant and to all persons who had requested a copy of the original decision.  The commissioner may, in his sole discretion, assign written reasons which shall be released only to the applicant.

Acts 1986, No. 730, §1.

Tit. 6, Art. 134. Judicial review;  venue;  effect

A.  A person aggrieved by a decision of the commissioner after the commissioner's decision upon reconsideration, may petition the court for judicial review of the decision.

B.  The petition for judicial review must be filed within thirty days of the mailing of the decision of the commissioner on the reconsideration of the original decision.

C.  A petition for judicial review shall be proper only in the district court of the judicial district in which the office of financial institutions is domiciled.

D.  Judicial review shall be by the court without a jury.

E.  The filing of the petition does not itself stay the decision or enforcement of the decision of the commissioner.  The commissioner may stay or the court may order a stay of the decision upon application of the aggrieved party and upon appropriate terms.

Acts 1986, No. 730, §1.

Tit. 6, Art. 135. Record filed with court

A.  Within thirty days of service of the suit upon the commissioner, he shall file a copy of the record of the application and reconsideration, certified by him, with the court.

B.  The record shall be confidential and for the in camera review of the court only.

Acts 1986, No. 730, §1.

Tit. 6, Art. 136. Basis for judicial review

A.  The review by the court shall be based solely upon the record.  No additional testimony or evidence may be introduced.

B.  The court may allow oral argument and accept written briefs.

Acts 1986, No. 730, §1.

Tit. 6, Art. 137. Judicial review;  test;  burden

A.  The review by the court shall be limited to whether the decision of the commissioner was arbitrary, capricious, or an abuse of discretion.

B.  The petitioner shall bear the burden of proof.

Acts 1986, No. 730, §1.

Tit. 6, Art. 138. Remand to the commissioner

Upon review, if the court finds the decision of the commissioner to be arbitrary, capricious, or an abuse of discretion, it shall remand the proceedings to the commissioner for action consistent with the court's orders.

Acts 1986, No. 730, §1.

Chapter 3. State Banks

Subchapter A. Organization and Operation of State Banks

Part I. Definitions

Tit. 6, Art. 201. Definitions

As used in this Chapter, unless the context requires otherwise:

(1)  "Articles" means the original articles of incorporation and all amendments thereto including those contained in merger agreements or, if restated, the latest restatement thereof except in those instances in which the context refers expressly to the original articles of incorporation only.

(2)  "Assets" means all of a state bank's property and rights of every kind.

(3)  "Capital" means the sum of capital stock, surplus, and undivided profits or, as to mutual state banks, as defined by R.S. 6:215(B).

(4)  "Capital stock" means the sum of the par value of the shares outstanding plus any amounts in excess of par value transferred from surplus to capital stock in respect of such shares less any part of such amounts transferred from capital stock to surplus as permitted by this Chapter.

(5)  "Certificate of stock" means a properly executed instrument evidencing the fact that the person therein named is the registered owner of the shares therein described.

(6)  "Fiduciary" means any person, firm, partnership, association, or state bank, including a usufructuary, who or which occupies a position of peculiar confidence toward any person, firm, association, partnership, trust, or estate.

(7)  "Insolvency" means that the assets of a state bank are insufficient to satisfy its obligations to its creditors and depositors.

(8)  "Issued shares" means outstanding shares.

(9)  "Net assets" means the excess of assets over liabilities.

(10)  "Stockholder" means the holder of record of one or more shares.

(11)  "Shares" means the units into which the stockholders' rights to participate in the control of the state bank, in its profits, or in the distribution of corporate assets are divided.

(12)  "Subscriber" means one who subscribes for shares in a state bank whether before or after incorporation.

(13)  "Surplus" means sums contributed by stockholders in excess of the par value of shares outstanding plus any amounts transferred from undivided profits pursuant to action by the board of directors.

(14)  "Total voting power" means the entirety of the voting power.

(15)  "Undivided profits" means paid-in or accumulated net income less distributions to stockholders and transfers to capital stock or surplus.

(16)  "Voting power" means the right vested by law or by the articles or the bylaws in the stockholder or in one or more classes of stockholder to vote in the determination of any particular question or matter coming before meetings of the stockholders.

(17)  "Voting power present" means that part of the voting power exercisable by the stockholders present in person or represented by proxy at the meeting at which the stockholders take action on a particular question or matter.

(18)  "Retained earnings" means the accumulated net income of the mutual state bank since its organization less all distributions to its members.

Acts 1984, No. 719, §1, eff. Jan. 1, 1985; Acts 1997, No. 929, §1.

Part II. Organization of State Banks

Tit. 6, Art. 211. Incorporation;  number of incorporators, application for certificate of authority, filing fee;  organization as a limited liability company

A.  Only those corporations which organize under the provisions of this Chapter shall be "state banks" under the laws of this state.

B.  One or more natural persons, the majority of whom must be domiciled in this state, desiring to incorporate and operate a state bank shall file with the commissioner an application for a certificate of authority to operate a state bank upon such form as the commissioner may from time to time prescribe and the articles of incorporation required by R.S. 6:213.  At the time of the filing of the application, the commissioner shall collect the filing fee required in R.S. 6:331.

C.  Notwithstanding Subsections A and B, a person may apply to the commissioner to obtain a certificate of authority to organize and operate as a financial institution under this Title as a limited liability company, if the company is formed to have perpetual existence, centralized management, limited liability, and free transferability of interests.  An existing financial institution may apply to the commissioner to change its certificate of authority and reorganize and operate as a limited liability company.  The commissioner may promulgate rules to clarify any organizational, operational, or other aspects of financial institutions which choose to operate as limited liability companies.

Acts 1984, No. 719, §1, eff. Jan. 1, 1985; Acts 2003, No. 361, §1.

Tit. 6, Art. 212. Corporate name

A.  The corporate name of a state bank shall include the word "bank" or a form of that word in any combination with other words.

B.  Nothing in this Section shall abrogate or limit the law as to unfair competition or unfair practice in the use of trade names nor derogate from the principles of law or the statutes of this state or of the United States with respect to the right to acquire and protect trade names.

C.  Repealed by Acts 1997, No. 64, §1.

Acts 1984, No. 719, §1, eff. Jan. 1, 1985; Acts 1995, No. 247, §1, eff. June 14, 1995; Acts 1997, No. 64, §1.

 

Tit. 6, Art. 213. Articles of incorporation, filing, form, content;  letter of acceptance for filing

            A.(1) The articles of incorporation or a multiple original thereof of a state bank shall be filed with the office of financial institutions. They may be delivered to the office of financial institutions in advance for filing as of any specified date and, if specified upon such delivery, as of any given time on such date within thirty days after the date of delivery.

            (2) The articles shall be upon a form acceptable to the commissioner. The articles of incorporation as originally filed with the commissioner shall contain the name and parish of domicile of the bank, the duration or a statement that the duration shall be perpetual, the classes of stock, the number of shares authorized, the par value of the shares, the names and addresses of the proposed incorporators, and the name, address, and occupation of each of the proposed directors. The parish of domicile of a bank shall be the parish in which the main office of the bank is located.

            B.(1) Notwithstanding the provisions of R.S. 6:291, the articles of incorporation may contain other provisions for the regulation of the business and the conduct of the affairs of the state bank including any provision authorized in Paragraphs (2) or (3) of this Subsection, but they shall not contain any provision which is in derogation of the provisions of this law or violates any other provision of the laws of this state or of the laws of the United States.

            (2)(a) The articles of incorporation of a bank or bank holding company may contain a provision that any of the following not claimed by the entitled shareholder despite reasonable efforts by the corporation to pay dividends or redemption price or deliver certificates for shares to the shareholder shall revert in full ownership to the corporation:

            (i) Cash.

            (ii) Property or share dividends.

            (iii) Shares issuable to shareholders in connection with a reclassification of stock.

            (iv) The redemption price of redeemed shares.

            (b) An obligation of the corporation to pay the dividend or the redemption price or issue the shares shall, in any event, exist for no less than one year after the dividend or redemption price became payable or after the shares became issuable.

            (c) The obligation of the corporation to pay the dividend or redemption price or issue the shares shall thereupon cease, but the board of directors may, at any time and for any reason satisfactory to the board, authorize either of the following:

            (i) Payment of the amount of any cash, property dividend, or redemption price, ownership of which has reverted to the corporation pursuant to a provision of the articles authorized by this Section, to the entity who would be entitled thereto had such reversion not occurred.

            (ii) Issuance of any shares, ownership of which has reverted to the corporation pursuant to a provision of the articles authorized by this Section, to the entity who would be entitled thereto had such reversion not occurred.

            (3)(a) The articles of incorporation of a bank or a bank holding company may contain a provision eliminating or limiting the personal liability of a director or officer to the corporation or its shareholders for monetary damages for breach of fiduciary duty as a director or officer, provided that the provision shall not eliminate or limit the liability of a director or officer for any of the following:

            (i) A breach of a duty of loyalty, which is imposed on a director or officer, to the bank, bank holding company, or its shareholders.

            (ii) Acts or omissions not in good faith or involving intentional misconduct or involving a knowing violation of law.

            (iii) Liability incurred pursuant to R.S. 12:1-833.

            (iv) Any transaction from which the director or officer derived an improper personal benefit.

            (b) For the purposes of this Paragraph, no provision shall eliminate or limit the liability of a director or officer for any act or omission that occurred prior to the date the provision becomes effective.

            C. When all fees and charges have been paid as required by law, the commissioner shall review the filed articles and, if the articles comply with the provisions of this law, shall issue a letter of acceptance for filing endorsed with the date and hour, if requested, of his acceptance. If the commissioner finds that the articles of incorporation violate any part of this law, he shall notify the proposed incorporators of such violation and shall require that the articles be amended to conform to the provisions of this Section.

            Acts 1984, No. 719, §1, eff. Jan. 1, 1985; Acts 1987, No. 261, §3, eff. July 3, 1987; Acts 1997, No. 965, §1; Acts 2001, No. 915, §1, eff. June 26, 2001; Acts 2015, No. 83, §1.

Tit. 6, Art. 214. Investigation into proposed state bank

When an application for a certificate of authority has been filed with the commissioner, he shall conduct an investigation to determine whether the public interest will be served by permitting the organization of the proposed state bank.  In making this investigation, the commissioner shall determine whether the character, financial responsibility, and general fitness of the persons named in the application as proposed incorporators, proposed directors, proposed stockholders, and proposed executive officers are such as to command the confidence of the community in which such bank is proposed to be located.  The commissioner shall also examine the need for additional banking facilities in the community where the bank is to be located and the ability of the community to support additional facilities.  The commissioner may consider such other facts and circumstances bearing on the proposed bank and its relation to the community as he may deem relevant.

Acts 1984, No. 719, §1, eff. Jan. 1, 1985.

Tit. 6, Art. 215. Capital requirements;  additional condition precedent

A.  The articles of incorporation of a state bank must provide for an amount of capital stock with which the state bank will begin business, which amount may not be less than five hundred thousand dollars.  The commissioner may require a greater amount of capital if he reasonably deems it necessary for the safe, sound, and proper operation of the state bank.

B.  The capital of a mutual state bank shall consist of its retained earnings and such other forms of equity deemed to be qualifying capital by the commissioner.

C.  One hundred percent of the capital stock shall be paid in full in cash or by contributions of the initial organizers to defray organizational expenses that may have been approved by the commissioner before a certificate of authority may be issued by the commissioner.

D.  This Section shall not apply to banks organized solely for the purpose of effecting a merger with an existing bank.

Acts 1984, No. 719, §1, eff. Jan. 1, 1985; Acts 1997, No. 929, §1; Acts 2001, No. 915, §1, eff. June 26, 2001.

Tit. 6, Art. 216. Certificate of authority;  issuance, refusal

A.  The commissioner shall issue a certificate of authority to transact banking business as a state bank only upon the fulfillment of the requirements of this Chapter.

B.  If the commissioner finds that the public interest will not be served by permitting the organization of the proposed state bank, that there is no need for additional banking facilities in the community where the bank is to be located, or that there is a lack of ability within that community to support additional banking facilities, he shall refuse to issue the certificate of authority.

C.  The commissioner shall not issue a certificate of authority until the proposed bank presents evidence to him that the deposits of the proposed bank will be insured by the Federal Deposit Insurance Corporation.

Acts 1984, No. 719, §1, eff. Jan. 1, 1985; Acts 1985, No. 359, §1, eff. July 9, 1985; Acts 1987, No. 107, §1.

Tit. 6, Art. 217. Effect of issuance of certificate of authority, filing requirements

A.  Upon the issuance of the certificate of authority, the bank shall be duly incorporated and the corporate existence shall begin as of the time when the articles were accepted for filing with the office of financial institutions, except that if the articles of incorporation are filed within five days exclusive of legal holidays after execution thereof, the bank shall be duly incorporated and the corporate existence shall begin as of the time of execution of the articles.

B.  Upon issuance of the certificate of authority the Office of Financial Institutions shall record the articles of incorporation and the certificate of authority and issue a certificate of incorporation which shall show the date on which corporate existence began.

C.  A multiple original of the articles,  a copy of the certificate of authority, and a copy of the certificate of incorporation shall be filed in the office of the recorder of mortgages of the parish of the main office of the bank within thirty days of the issuance of the certificate of authority.

Acts 1984, No. 719, §1, eff. Jan. 1, 1985; Acts 1999, No. 342, §3; Acts 1999, No. 860, §1, eff. July 2, 1999; Acts 2003, No. 17, §1, eff. May 23, 2003; Acts 2003, No. 60, §1, eff. May 23, 2003.

Tit. 6, Art. 218. Expenses of organization and financing

The charges and expenses of organization of a state bank and the expenses of and compensation for the sale and underwriting of its shares may not be paid or allowed by the state bank out of the consideration received by it in payment for its shares to the extent that such payment constitutes the bank's capital stock.  This restriction does not prohibit the payment, with approval of the commissioner, of reasonable charges and expenses out of surplus or undivided profits.

Acts 1984, No. 719, §1, eff. Jan. 1, 1985.

Tit. 6, Art. 219. Bylaws

A.  Except as specifically provided in this Chapter and unless the articles provide otherwise, the board of directors of a state bank may make and alter bylaws, including bylaws fixing directors' qualifications, number or term of office, or fixing their compensation, subject to the power of the stockholders to change or repeal any bylaws so made.

B.  The bylaws may contain any provision relating to the business of the state bank, the conduct of its affairs, its rights or powers, or the rights or powers of its stockholders, directors, or officers not inconsistent with law or the articles.

C.  No person not an officer or director, dealing with the state bank, shall be charged with constructive notice of the bylaws.

Acts 1984, No. 719, §1, eff. Jan. 1, 1985.

Tit. 6, Art. 220. Stockholders' agreements

A.(1)  Any lawful provision regulating the affairs of a state bank or the rights and liabilities of its stockholders which is not required to be set forth in the articles may be set forth in an agreement among all of the stockholders who would be entitled to vote on the provisions thereof if proposed as an amendment to the articles.

(2)  Such an agreement shall be binding on all persons who are at the time such agreement is made or who thereafter become stockholders of the state bank.  No other person dealing with the state bank shall be charged with constructive notice of such an agreement.

(3)  Such an agreement may be terminated or modified by amendment at any time in the manner, except that no amendment thereto need be filed or recorded except as provided in Subsection B of this Section, and by the vote which would be required for adoption of an amendment to the articles deleting or similarly modifying the provisions thereof if they had been set forth in the articles, or by such larger vote as may be specified in the agreement.

B.  A copy of each such agreement and of each amendment thereto or a certified copy of the minutes of the meeting at which the amendment was adopted by vote shall be filed in the state bank's main office and shall be open daily during business hours to the inspection of any stockholder or his attorney, agent, or legal representative.

Acts 1984, No. 719, §1, eff. Jan. 1, 1985.

Part III. Amendment and Restatement of Articles

Tit. 6, Art. 231. Method of amending articles generally

A.  A state bank may in the manner herein provided amend its articles in any respect to include or change any provision authorized by this Chapter or to omit any provision not required by this Chapter.

B.  Except as hereinafter provided in this Section, an amendment altering the articles may be adopted by two-thirds of the voting power present or by such larger or smaller vote, not less than a majority of the voting power present, as the articles may require, at an annual or special meeting of stockholders the notice of which sets forth the proposed amendment or a summary of the changes to be made thereby.

C.(1)  Prior to the adoption of the amendment, the proposed amendment shall be submitted to the commissioner for his approval.  The commissioner shall review the amendment, and if it is in a form acceptable to him, does not reduce capital stock below an amount necessary for the safe and sound operation of the bank, and does not violate any provisions of law or any regulation issued by him, he shall issue a letter of approval of the amendment.  No proposed amendments or restatement shall be valid unless a letter of approval has been issued by the commissioner.

(2)  If an amendment is adopted by the shareholders and the bank failed to comply with the prior notice requirements of Paragraph (1) of this Subsection, the bank shall submit after-the-fact notification to the commissioner, accompanied by the appropriate fee.  If the commissioner finds that the submission complies with this Subsection, absent the timely notification, he shall issue a letter of approval of the amendment.

D.(1)  If an amendment would adversely affect the rights of the holders of shares of any class or series, then, in addition to the vote required by Subsection B of this Section, the holders of each class or series of shares so affected by the amendment shall be entitled to vote as a class upon such amendment, whether or not by the terms of the articles such class or series is entitled to vote; and the vote of the holders of two-thirds, or such larger or smaller proportion not less than a majority as the articles may require, of the shares of each class or series so affected by the amendment, present or represented at the meeting, shall be necessary for the adoption thereof.

(2)  Except as otherwise provided in the articles, the rights of a stockholder shall not be considered adversely affected unless the amendment, otherwise than as permitted by the articles:

(a)  Alters or abolishes any preferential right of his shares having preferences;

(b)  Alters or abolishes any preemptive right in respect of his shares;

(c)  Creates or alters, other than to abolish, any restriction on transfer applicable to his shares;

(d)  Excludes or limits his right as a stockholder to vote on a matter, except as such right may be limited by voting rights of new shares then being authorized of an existing or new class; or

(e)  Alters or abolishes any right of his shares to receive dividends, except as such right may be affected by dividend rights of new shares then being authorized of an existing or new class.

E.(1)  In the event that the duration of a state bank as fixed in the articles may heretofore have expired or may hereafter expire without any action having been taken with reference thereto and without proceedings having been undertaken or instituted to dissolve and wind up the state bank, the articles may be so amended as to extend the duration of the state bank as specified in the articles in the same manner and with the same force and effect as if the articles had been amended prior to the expiration of the duration of the state bank as set forth in the articles, except that if the state bank's name is no longer available for use by it, its name shall be changed appropriately.

(2)  The declaration in the minutes of the meeting of the stockholders, at which the articles are amended by extending the duration of the state bank, that prior to the expiration of the duration of the state bank no action had been taken with reference thereto and that no proceedings had been undertaken or instituted to dissolve and wind up the state bank shall constitute prima facie evidence of those facts.

Acts 1984, No. 719, §1, eff. Jan. 1, 1985; Acts 2003, No. 55, §1, eff. May 23, 2003.

Tit. 6, Art. 232. Articles of amendment;  contents and filing

A.  After an amendment has been duly adopted as provided in R.S. 6:231, articles of amendment setting forth the amendment, the date and manner of adoption thereof, and the number of shares of each class or series represented at the meeting and voted for and against the amendment shall be executed in the state bank's name by the president, cashier, or any other person thereto authorized by resolution or consent of the stockholders.  If the articles of amendment are not executed by the president or cashier, a copy of the resolution or consent of stockholders authorizing the person who executed the article, certified a true copy by the secretary of the board, shall be annexed to the articles of amendment.  The articles of amendment shall be acknowledged by the president, cashier, or other authorized person who signed them or may instead be in the form of an authentic act.

B.  After an amendment has been duly adopted and executed as provided in Paragraph A of this Section, the articles of amendment shall be filed with the office of financial institutions.  Articles of amendment may be delivered to the commissioner for filing as of any specified date within thirty days after the date of delivery.  The articles of amendment shall be effective as of the date and, if requested, the hour of filing with the commissioner, except that if the articles of amendment were filed within three days, exclusive of legal holidays, after acknowledgment thereof or execution thereof as an authentic act, the amendment shall be effective as of the time of the acknowledgment or execution.

C.  The articles of amendment shall thereafter be filed for record in the office of the recorder of mortgages of the parish of domicile of the bank.

Acts 1984, No. 719, §1, eff. Jan. 1, 1985; Acts 1999, No. 342, §3; Acts 2003, No. 17, §1, eff. May 23, 2003; Acts 2003, No. 60, §1, eff. May 23, 2003.

Tit. 6, Art. 233. Restatement of articles

A.  On authorization of the board of directors, a state bank may execute and file restated articles.  Such restated articles shall contain the entire text of the original articles as amended by all amendments thereto except that names and addresses of incorporators and directors may be omitted, and may contain new amendments adopted by a method prescribed in R.S. 6:231 or 6:232, and shall recite:

(1)  That the restatement accurately copies the articles and all amendments thereto in effect at the date of the restatement without substantive change except as made by any new amendment or amendments contained in the restatement and indicate any such changes.

(2)  That each amendment has been effected in conformity with law.

(3) The date of incorporation and the date of the restatement.

(4) Such other information as may be required by R.S. 6:232 if the restatement contains any new amendment.

B.  The restated articles shall be executed, filed, and recorded in the manner provided for articles of amendment in R.S. 6:232 and shall be effective when filed with the commissioner as of the date and, if endorsed on the restated articles, the hour of filing with him.

C.  Upon effectiveness of the restated articles, the original articles and all amendments thereto shall be superseded, and the restated articles shall be deemed to be the articles of incorporation of the state bank.

Acts 1984, No. 719, §1, eff. Jan. 1, 1985; Acts 1985, No. 359, §1, eff. July 9, 1985.

Tit. 6, Art. 234. Special amendment provisions

A.(1)  If authorized by the articles, the board may establish a series of shares of any class and may adopt an amendment to the articles fixing the preferences, limitations, and relative rights of the shares of any class, or establishing, and fixing variations in relative rights and preferences as between a series of any preferred or special class.  Unless otherwise provided in the articles, the number of shares of any such series to which such amendment applies may be increased, but not above the total number of authorized shares of the class, or decreased, but not below the number of shares thereof then outstanding, by an amendment likewise adopted by the board.  In case the number of such shares shall be decreased, the number of shares constituting the decrease shall resume the status of authorized but unissued shares.

(2)  When no shares of any such class or series are outstanding, either because none were issued or because no issued shares of any such class or series remain outstanding, the board may adopt an amendment eliminating from the articles any or all matters set forth in any amendment previously adopted by the board with respect to such class or series.  Unless otherwise provided in the articles, if no shares have been issued of a class or series established by an amendment to the articles adopted by the board, and there exists no binding commitment to issue any such shares of such class or series, the preferences, limitations, and relative rights thereof may be amended by a further amendment to the articles adopted by the board.

(3)  Prior to the adoption of an amendment by the board of directors in accordance with this Section, such amendment shall be submitted to the commissioner for approval in the same manner as provided for in R.S. 6:231.

B.  In case of an amendment pursuant to Subsection A of this Section, appropriate articles of amendment, reciting the relevant facts and the articles have been amended as provided in this Section shall forthwith be executed, acknowledged, and filed by the proper officers of the state bank in the manner provided in R.S. 6:232.

Acts 1997, No. 965, §1; Acts 2001, No. 915, §1, eff. June 26, 2001.

Part IV. Powers and Functions of State Banks

Tit. 6, Art. 241. General corporate powers

A.  A state bank may be organized to exercise the powers provided in this law and such other general powers as are appropriate to its purpose.

B.  A state bank shall, without specific mention thereof in its articles of incorporation, have all the powers conferred by this law and the following general corporate powers:

(1)  To have and enjoy succession by a corporate name to be selected by it and by that corporate name to contract and to appear as a natural person in all courts of justice and elsewhere.

(2)  To receive, hold, purchase, acquire, and convey by and under its corporate name any property including bonds, stocks, and securities of the United States of America, of any of the states, or of any corporation, board, or body, public or private, as may be necessary, proper, or convenient to the objects of the bank and to exercise in relation thereto all the direct and incidental rights of ownership.  State banks may lawfully purchase, acquire, hold, and convey, unless acting as trustee or agent, immovable property only in accordance with the provisions of this Chapter.

(3)  To make and use a corporate seal.

(4)  To name and appoint such officers and directors to administer the affairs of the state bank as it thinks necessary and proper, to establish the number and title of the directors or officers, and to fix the compensation of all persons in its employment.

(5)  To make bylaws for the proper management of the affairs of the state bank as may be necessary and proper and in conformity with the banking law set out in this Title and the articles of incorporation, and to repeal or amend the bylaws.

(6)  To accept and execute trusts or agencies of any description which may be committed or transferred with its consent to it by any person whomsoever or by any court of this state, of the United States of America, or of any state, territory, or possession thereof.

(7)  To invest the funds of persons of which such bank has been appointed tutor or curator in any common trust fund established by such bank under the provisions of R.S. 9:2128, such investments to be administered in conformity with that Section.

(8)  To become a member of the Federal Reserve Bank or the Federal Home Loan Bank and to purchase stock or securities thereof or deposit money therewith, and to comply with any other condition of membership or credit.

Acts 1984, No. 719, §1, eff. Jan. 1, 1985; Acts 1991, No. 340, §1, eff. July 6, 1991.

Tit. 6, Art. 242. Banking powers

A.  In addition to the general corporate powers conferred in R.S. 6:241 and the powers conferred by other provisions of the laws of this state, a state bank shall have the following banking powers and those incidental to the exercise of these powers:

(1)  To receive and pay out deposits, with or without interest, and pay checks.

(2)  To lend money at interest on a secured or unsecured basis and, pursuant to regulations issued by the commissioner, to vary from time to time the interest rate charged on loans according to the terms and conditions contained in the promissory note.  Such conditions shall not be deemed to rely upon the whim of the obligor so as to render them null nor shall such conditions destroy the negotiability of the promissory note.

(3)  To accept for payment at a future date drafts drawn upon it by its customers.

(4)  To issue letters of credit.

(5)  To discount and buy and sell promissory notes, bills of exchange and other evidences of indebtedness, gold and silver, and bonds of the United States, of this state, and of the several levee districts, parishes, school districts, drainage districts, road districts, and municipal corporations of this state, on which bonds there shall have been no default in the payment of interest for the lesser of the last five years or the existence of the bonds.

(6)(a)  To act as the agent for any insurance company authorized to do insurance business in this state by soliciting and selling insurance and to receive for services so rendered such lawful commissions or fees as may be agreed upon between the bank and the insurance company for which it is acting as agent.  The location of the insurance agency shall be the address shown on the license application submitted to the Department of Insurance pursuant to the provisions of the Louisiana Insurance Code, notwithstanding the conduct of insurance sales activities at other locations.

(b)  Notwithstanding any other law to the contrary, any bank which was engaged as a general insurance agent or broker on January 1, 1984, may continue to be so engaged.

(7)  To maintain and lease safe deposit boxes and to accept property or documents for safekeeping.

(8)  To subscribe to the capital stock and become a member of the Federal Reserve System and to comply with the rules and regulations thereof.

(9)  To obtain insurance from the Federal Deposit Insurance Corporation and to comply with the rules and regulations thereof.

(10)  To invest in mortgages, obligations, stocks, or other securities of the Federal National Mortgage Association, the Federal Home Loan Mortgage Corporation, the Student Loan Marketing Association, the Government National Mortgage Association, or any agency of the United States and to invest in bonds issued, assumed, or guaranteed by the African Development Bank.

(11)  To engage in the business of selling, issuing, or offering shares of stock and to be exempt from all provisions of the laws of this state, other than the provisions of this law, which provide for supervision, reporting, registration, or regulation in connection with the sale, issuance, or offering of securities, and the sale, issuance, or offering of any shares of stock shall be legal without any action or approval whatsoever on the part of any official other than the commissioner authorized to license, regulate, or supervise the sale, issuance, or offering of securities.  This exemption shall apply with the same force to any officer or employee of any bank when acting within the scope of his employment.  Nothing contained herein shall be construed to extend the powers of state banks to underwrite the sale of stock beyond that currently permitted either under the laws of this state or of the United States.

(12)  To make loans and advances of credit secured by mortgages insured by the Federal Housing Administration, the Veterans' Administration, and other similar federal agencies and to otherwise purchase and invest in obligations of those agencies.

(13)  To borrow money and to mortgage, pledge, hypothecate, or grant a security interest in any of its assets to secure such borrowings when authorized by resolution of the board of directors, which resolution specifies the maximum amount which may be borrowed.

(14)  To agree to repurchase securities sold by the state bank commonly referred to as repurchase agreements.

(15)  To enjoy such powers as may be accorded through regulations issued by the commissioner.

(16)  Notwithstanding any other provision of law to the contrary state-chartered banks are authorized to sell annuities to the same extent as federally chartered banks.  The commissioner of insurance shall license employees of banks or bank subsidiaries to fulfill the purposes of this Paragraph.

(17)  Notwithstanding any other provision of law to the contrary, to engage in the business of making and facilitating refund anticipation loans and to assess interest charges and fees in relation to such loans to the same extent as a state-chartered bank in any other state or a bank chartered under the laws of the United States.  For purposes of this Paragraph, the term "refund anticipation loan" means a loan whereby the creditor arranges to be repaid directly by the Internal Revenue Service from the anticipated proceeds of the debtor's income tax refund.

(18)  In furtherance of the Louisiana Community Development Financial Institutions Act and in low-income communities affected by Hurricanes Katrina and Rita, to make investments in Louisiana Community Development Financial Institutions to promote the public welfare such as developing housing, fostering economic growth and revitalization, and creating small businesses, including minority-owned businesses, provided that such investments do not expose a bank to unlimited liability and that a bank's aggregate investments made under this Paragraph shall not exceed the maximum amount allowed by federal law for investments in Community Development Financial Institutions.

B.  A state bank shall have the powers conferred by Subsection A without specific mention thereof in its articles of incorporation or certificate of authority.

C.(1)(a)  In addition to any other preexisting powers, a state bank shall have and possess such rights, powers, privileges, and immunities of a national bank or national bank branch domiciled in this state only if both of the following conditions are met:

(i)  The state bank notifies the commissioner in writing of its intent to exercise such rights, powers, privileges, and immunities.

(ii)  The commissioner does not raise an objection within forty-five days of receipt of the written notice of intent from the state bank.

(b)  The commissioner shall, upon request, notify the bank in writing as to the nature of his objection.

(2)  In the event of a conflict between this Subsection, or any rule or regulation promulgated hereunder, and any other provision of law, the provisions of this Subsection shall control.

D.(1)  Any state-chartered bank or trust company which desires to surrender trust or fiduciary powers shall file with the commissioner of financial institutions and the Federal Deposit Insurance Corporation, if applicable, a certified copy of the resolution of its board of directors signifying such desire.  Upon receiving the resolution the commissioner shall make an investigation and, if satisfied that the bank or trust company has been relieved of all duties as trustee, executor, administrator, registrar of stocks and bonds, assignee, receiver, curator of the property of minors or interdicts, or other fiduciary duties, whether under court, private, or other appointments previously accepted under any law, may, in his discretion, issue to such bank or  trust company a certificate that such bank or trust company is no longer authorized to exercise trust or fiduciary powers.  Upon the issuance of the commissioner's certificate, such bank or trust company shall not thereafter exercise any trust or fiduciary powers without paying a reapplication fee to be established by regulation and obtaining a new permit to exercise such powers.

(2)  The commissioner is authorized and empowered to promulgate such regulations, in conformity with R.S. 49:950 et seq., the Administrative Procedure Act, as he may deem necessary to enforce compliance with this Subsection.

E.(1)  If, in the opinion of the commissioner, a state chartered bank has unlawfully or unsoundly exercised, or has failed for a period of five consecutive years to exercise, the trust or fiduciary powers granted by R.S. 6:241(B)(6) and (7), or otherwise fails or has failed to comply with the duties of trustees as set forth in the Louisiana Trust Code, the commissioner may issue and serve upon the bank a notice of intent to revoke the authority of the bank to exercise trust or fiduciary powers.  The notice shall contain a statement of the facts constituting the alleged unlawful or unsound exercise of powers, or failure to exercise powers, or failure to comply, and shall fix a time and place at which a hearing will be held to determine whether an order revoking authority to exercise such powers should issue against the bank.

(2)  The revocation hearing shall be conducted in accordance with the Administrative Procedure Act.  The hearing shall be fixed for a date not earlier than thirty days nor later than sixty days after service of such notice by certified mail, return receipt requested.

(3)  If a duly authorized representative of the banks fails to appear at the hearing, it shall be conclusively presumed that the bank has consented to the issuance of the revocation order.  In the event that consent is by letter communicated to the commissioner, or consent is conclusively presumed as provided for in the preceding sentence, or if, upon the record made at the hearing, the commissioner shall find that the allegations specified in the notice of charges have been established by sufficient competent and relevant evidence, the commissioner may issue and serve upon the bank an order prohibiting it from accepting any new or additional trust accounts and revoking authority to exercise any and all powers granted by R.S. 6:241(B)(6) and (7).  Such order shall specify a reasonable time for the bank to expeditiously divest or terminate all previously accepted trust accounts.  The bank shall be held to the statutory duties of trustee for all previously accepted trust accounts until they have been divested or terminated.

(4)  A revocation order issued after a hearing on the merits or based on the conclusive presumption of consent arising from nonappearance at a scheduled hearing shall become effective not earlier than thirty days after service of such order upon the bank by certified mail, return receipt requested, and shall remain effective and enforceable except to the extent as it is stayed, modified, terminated, or set aside by action of a reviewing court or the commissioner.  A revocation order based on the affirmative, written communication of the bank to the commissioner, consenting to the revocation, shall become effective at the time specified in the bank's written consent to revocation.  If the written consent to revoke does not specify an effective date, the revocation order shall establish the revocation date as the date on which the commissioner receives the bank's communication.

(5)  Judicial review of a revocation order shall be in accordance with the Administrative Procedure Act.

Acts 1984, No. 719, §1, eff. Jan. 1, 1985.  Acts 1985, No. 359, §1, eff. July 9, 1985; Acts 1985, No. 784, §1; Acts 1988, No. 40, §1, eff. June 10, 1988; Acts 1989, No. 134, §1; Acts 1989, No. 397, §1, eff. June 30, 1989; Acts 1990, No. 611, §1, eff. July 19, 1990; Acts 1990, No. 637, §1; Acts 1990, No. 1079, §2, eff. Sept. 1, 1990; Acts 1993, No. 281, §1, eff. July 1, 1993; Acts 1993, No. 952, §1; Acts 1995, No. 355, §1, eff. Sept. 29, 1995; Acts 1995, No. 681, §1; Acts 1997, No. 606, §1; Acts 1997, No. 1475, §1, eff. July 15, 1997; Acts 2003, No. 573, §1, eff. June 27, 2003; Acts 2003, No. 665, §1, eff. June 27, 2003; Acts 2005, 1st Ex. Sess., No. 53, §1, eff. Jan. 21, 2006.

Tit. 6, Art. 243. Immovable property;  dealings

            A. A state bank may lawfully purchase, hold, and convey any immovable property:

            (1) Which is necessary for the proper transaction of its business.

            (2) Which has been mortgaged to it in good faith as security for loans.

            (3) Which has been conveyed to it in satisfaction of debts previously contracted bona fide in the course of its business.

            (4) Which it purchases at sales under judgment of mortgages held by it or in which it has an interest by being subrogated to rights according to Civil Code Article 1829.

            (5) Pursuant to participation in a shared appreciation loan or home equity conversion loan, including but not limited to reverse mortgages and shared appreciation mortgages, wherein the bank has a right to receive a share of the appreciation in value of the security property upon maturity of the loan. Such loans shall be authorized when any of the following exist:

            (a) The security property of the borrower is designed principally as a single-family residence.

            (b) The borrower is the owner and occupant of the security property.

            (c) The loan is authorized pursuant to the Alternative Mortgage Transaction Parity Act of 1982, 12 U.S.C. 3801 et seq., and regulations issued thereunder, or regulations issued by the office of financial institutions as provided in this Title.

            B. Except for property held pursuant to Paragraphs (A)(1) and (5) of this Section, a state bank shall not hold immovable property as an asset for a longer time than ten years, except as provided in Paragraph (E)(2) or (F)(1) of this Section. Any bank holding immovable property which is subject to the ten-year divestiture period shall enter the immovable property on its books in accordance with generally accepted accounting principles (GAAP).

            C.(1) For immovable property provided for in Paragraphs (A)(2), (3), and (4) of this Section, a state bank shall obtain, within a reasonable time before or after the property is acquired, a current appraisal of the fair market value of any such property and shall account for the property in accordance with generally accepted accounting principles (GAAP). For purposes of this Paragraph, a state bank may perform an evaluation in lieu of an appraisal for residential real estate valued at or below two hundred fifty thousand dollars and for commercial real estate valued at or below five hundred thousand dollars.

            (2) An additional appraisal shall be required for immovable property every third calendar year from the date the initial appraisal was obtained pursuant to Paragraph (1) of this Subsection. For purposes of this Paragraph, a state bank may perform an evaluation in lieu of an appraisal for residential immovable property valued at or below two hundred fifty thousand dollars and for commercial immovable property valued at or below five hundred thousand dollars.

            (3) Notwithstanding Paragraph (2) of this Subsection, for commercial immovable property valued above five hundred thousand dollars, an additional appraisal shall be required every second calendar year from the date the initial appraisal was obtained pursuant to Paragraph (1) of this Subsection.

            D.(1) The commissioner may require additional appraisals or evaluations of immovable property provided for in Paragraphs (A)(2), (3), and (4) of this Section, not more often than annually, if the commissioner determines either of the following to be true:

            (a) The appraisal or evaluation is necessary for safety and soundness reasons.

            (b) The appraisal or evaluation is necessary due to a material decline in the condition or market value of a specific property or local real estate market.

            (2) For purposes of this Subsection, the commissioner may require an appraisal for immovable properties of any value pursuant to this Section, regardless of the thresholds established in this Section.

             E.(1) A state bank may, at its option, select the method of valuation as provided for in Subsection C of this Section, or may reduce the value of the immovable property by at least one-tenth of the original book value each year that the property is held. The bank shall divest itself of that property within the ten-year period, regardless of which method of valuation is selected. The bank shall continue to apply this method consistently throughout the divestiture period.

            (2) The ten-year divestiture requirement shall not apply to immovable property which has been held by a state bank for more than five years as of January 1, 1980.

            (3) A bank which acquires the assets of a failed or failing bank shall be allowed ten years from the date it acquires the immovable property of the failed or failing bank within which to divest itself of such property. A bank shall value the acquired property in accordance with the requirements of Paragraph (1) of this Subsection. A bank shall establish the anniversary date to be the original acquisition date of the other immovable property as determined by the failed or failing institution or the date the bank acquires the other immovable property of the failed or failing institution. Once the anniversary date has been established, that date will remain as such for as long as the property is held by the bank.

            (4) Except as otherwise provided by rule or regulation promulgated by the commissioner, a state bank shall not exchange any property, whether movable or immovable, acquired in the course of its business as provided in Subsection A of this Section.

            F.(1) A state bank may hold immovable property in perpetuity, exempt from the divestiture requirements of this Section, if all of the following conditions are met:

            (a) The property is not being operated by the financial institution as an ongoing business.

            (b) The property has been written down to the value of one dollar on the books of the bank.

            (c) The property has been transferred into a subsidiary of the bank.

            (d) Written approval has been obtained from the commissioner.

            (2) Property held in perpetuity subject to Paragraph (1) of this Subsection shall also be exempt from the valuation requirements contained in Subsection C of this Section.

            Acts 1984, No. 719, §1, eff. Jan. 1, 1985; Acts 1985, No. 503, §1; Acts 1986, No. 55, §1; Acts 1989, No. 399, §1; Acts 1991, No. 340, §1, eff. July 6, 1991; Acts 1991, No. 789, §1; Acts 1992, No. 877, §1, eff. Sept. 1, 1992; Acts 1995, No. 1202, §1; Acts 1999, No. 860, §§1, 3, eff. July 2, 1999; Acts 2001, No. 544, §1, eff. June 21, 2001; Acts 2004, No. 40, §1; Acts 2012, No. 29,§§1,2; Acts 2016, No. 74, §1; Acts 2019, No. 16, §1; Acts 2019, No. 348, §1.

Tit. 6, Art. 244. Transfers by bank and other acts in contemplation of insolvency

A.  The following, when made with a view to prevent the application of the assets of any state bank in the preference of one creditor to another, shall be utterly null and void:

(1)  All transfers of the notes, bonds, bills of exchange, or other evidences of debt owing to such state bank, or of deposits to its credit.

(2)  All assignments of mortgages, sureties on real estate, or of judgments or decrees in its favor.

(3)  All deposits of money, bullion, or other valuable thing for its use, or for the use of any of its shareholders or creditors.

(4)  All payments of money to either its shareholders or creditors, made after the commission of an act of insolvency, or in contemplation thereof.

B.  No attachment, injunction, or execution shall be issued against such bank or its property before final judgment in any suit, action, or proceeding in any court.

Acts 1990, No. 528, §1.

Tit. 6, Art. 245. Changes in core business

A.  Whenever a state-chartered financial institution, or holding company thereof, intends to materially change its core business as conducted at the time of its last safety and soundness examination or filing pursuant to this Section, whichever is later, it shall provide notice to the commissioner at least forty-five days prior to implementation.

B.  If the commissioner does not raise an objection or defer his decision in writing, within forty-five days of receipt of the written notice of intent, the financial institution or holding company may proceed with its plans.

C.  The commissioner shall have the authority to promulgate or establish rules, regulations, notifications, filing procedures, instructions, and fees as he deems necessary to carry out the provisions of this Section.

Acts 2003, No. 570, §1, eff. June 27, 2003.

Part V. Shares

Tit. 6, Art. 251. Classes of shares;  fractional shares

A.  The shares of a state bank may be divided into classes with such designations, voting powers, preferences, dividend or other relative rights or restrictions, limitations, or qualifications as may be provided in the articles, with the prior approval of the commissioner.  The state bank may issue shares with optional or conversion rights according to the provisions of R.S. 6:254.  The state bank may issue shares of any preferred or special class in series with such designations of series and such variations in the relative rights and preferences as between series as fixed in the articles.

B.  All of the shares shall have a par value as provided in the articles.

C.  Except as provided in the articles and referred to in the certificate of stock, each share shall be in all respects equal to every other share.

D.(1)  Except as otherwise provided in the articles, a state bank may, but shall not be obliged to, issue certificates for fractional shares and by action of its board of directors may, but shall not be obliged to, issue in lieu thereof scrip in registered or bearer form which may be void if not exchanged for full shares within a limited time stated therein or may provide that after a limited time stated therein the aggregate shares represented by scrip will be sold for account of the holders thereof.

(2)  The holder of fractional-share certificates or scrip shall be entitled to receive a certificate for a full share upon the surrender, within any limited time stated therein, of fractional-share certificates or scrip aggregating a full share.  Unless otherwise provided in the articles, the holder of a fractional-share certificate shall, but the holder of scrip shall not, have all rights of a stockholder except voting rights.

Acts 1984, No. 719, §1, eff. Jan. 1, 1985.

Tit. 6, Art. 252. Issuance of shares;  consideration

A.  Shares shall be issued initially for such consideration expressed in dollars, not less than the par value thereof, as shall be fixed in the articles as approved by the commissioner.  All fully paid shares shall be nonassessable except as provided in R.S. 6:262.

B.  Shares issued in payment of a stock dividend, pursuant to exercise of conversion rights, or in a merger or consolidation as provided in the merger or consolidation agreement, shall be considered as fully paid when so issued.

C.  The consideration for shares issued otherwise than as stated in Subsection B of this Section shall be paid in cash before the shares are issued.  Cash consideration for shares may not be paid by the purchaser's note, secured or unsecured, or uncertified check; and in case of delivery of such a note or check in payment for shares, the shares shall not be issued until the note or check has been paid in full.

Acts 1984, No. 719, §1, eff. Jan. 1, 1985.

Tit. 6, Art. 253. Reservation of shares

A state bank shall reserve from its authorized but unissued shares sufficient shares to meet its issuance obligations under subscription rights, warrants, options, and conversion privileges.

Acts 1984, No. 719, §1, eff. Jan. 1, 1985.

Tit. 6, Art. 254. Convertible securities and stock-purchase rights

A.  Unless the articles provide otherwise and with prior notice to the commissioner, the board of directors of a state bank shall have authority, whether or not in connection with the issuance and sale of any of its shares or other securities, to create and issue rights and options in any form, granting to the holders thereof:

(1)  The right to convert, upon such terms and conditions as the state bank may deem expedient, shares or obligations into shares of any class; or

(2)  The right or option to purchase, upon such terms and conditions as it may deem expedient, shares of any class.

B.  No shares shall be issued pursuant to the exercise of option rights created independently of issuance and sale of shares or other securities unless the creation of such rights shall have been either:

(1)  Authorized or approved by the stockholders; or

(2)  If the optionee is neither a director nor the holder, directly or indirectly, of record or beneficially or both, of more than ten percent of the total voting power, authorized by vote of at least two-thirds of the directors in office.

C.  Such conversion or option rights shall be exercisable at such price as determined by the board of directors or by the stockholders by vote of a majority of the voting power present if the articles reserve to the stockholders the right to fix the consideration for issuance of the shares.

D.  Converted shares shall be cancelled.

Acts 1984, No. 719, §1, eff. Jan. 1, 1985; Acts 1997, No. 965, §1; Acts 2001, No. 915, §1, eff. June 26, 2001.

Tit. 6, Art. 255. Certificates of stock

A.  Shares must be represented by certificates of stock unless the issuing corporation is a participant in the Direct Registration System, or its successor, of the Depository Trust & Clearing Corporation, then shares need not be represented by certificates of stock.  Unless expressly provided elsewhere, the rights and obligations of shareholders are not affected regardless of whether the shares are represented by certificates of stock.

B.  At a minimum each share certificate shall state on its face:

(1)  The name of the issuing corporation and that the corporation is organized under the laws of this state.

(2)  The name of the person to whom issued.

(3)  The number and class of shares and the designation of the series, if any, the certificate represents.

C.  If the issuing corporation is authorized to issue different classes of shares or different series within a class, the designation, relative rights, preferences, and limitations applicable to each class and the variation in rights, preferences, and limitations determined for each series and the authority of its board of directors to determine variations for future series shall be summarized on the front or back of each certificate.  Alternatively each certificate may state conspicuously on its front or back that the corporation will furnish the shareholder this information on request in writing and without charge.

D.  Each share certificate shall be signed, either manually or in facsimile, by either:

(1)  Two officers designated in the bylaws.

(2)  The clerk and an officer designated in the bylaws.

(3)  The corporation's board of directors.

E.  A share certificate may bear the corporate seal or its facsimile.

F.  If the person who signed a share certificate pursuant to Subsection D no longer holds office when the certificate is issued, the certificate is nevertheless valid.

G.  Unless the articles of incorporation or bylaws provide otherwise, the board of directors of a corporation may authorize the issue of some or all of the shares of any or all of its classes or series of shares without certificates.  The authorization does not affect shares already represented by certificates until they are surrendered to the corporation.

H.  Within a reasonable time after the issue or transfer of shares without certificates, the corporation or its agent shall send the shareholder a written statement of the information required on certificates by Subsections B and C and, if applicable, R.S. 6:257.

Acts 1984, No. 719, §1, eff. Jan. 1, 1985; Acts 2005, No. 97, §1.

Tit. 6, Art. 256. Transfer of shares

A.  The transfer of certificates of stock and the shares represented thereby may be regulated by bylaws not inconsistent with the provisions of the articles or other provisions of the law.

B.  A state bank may employ a transfer agent to keep a share register and to record transfers of shares therein, and acts of the agent shall be binding on the state bank.  The duties and liabilities of the agent shall be such as may be agreed to by the state bank.

Acts 1984, No. 719, §1, eff. Jan. 1, 1985.

Tit. 6, Art. 257. Restriction on transfer of shares and other securities

A.  For purposes of this Section, "share" includes a security convertible into or carrying a right to subscribe or acquire shares.

B.  A corporation's articles of incorporation or bylaws, an agreement among shareholders or an agreement between shareholders and the corporation, may impose restrictions on the transfer or registration of transfer of shares of the corporation.  A restriction does not affect shares issued before the restriction was adopted unless the holders of the shares are parties to the restriction agreement or voted in favor of the restriction.

C.  A restriction on the transfer or registration of transfer of shares is valid and enforceable against the holder or a transfer1 of the holder if the restriction is authorized by this Section and its existence is noted conspicuously on the front or back of the certificate or is contained in the information statement required by R.S. 6:255(H).  Unless so noted, a restriction is not enforceable against a person who has no knowledge of the restriction.

D.  A restriction on the transfer or registration of transfer of shares is authorized for any of the following:

(1)  To maintain the corporation's status when it is dependent on the number or identity of its shareholders.

(2)  To preserve exemptions under federal or state securities law.

(3)  For any other reasonable purpose.

E.  A restriction on the transfer or registration of transfer of shares may do any of the following:

(1)  Obligate the shareholder first to offer the corporation or other persons, separately, consecutively, or simultaneously, an opportunity to acquire the restricted shares.

(2)  Obligate the corporation or other persons, separately, consecutively, or simultaneously, to acquire the restricted shares.

(3)  Require the corporation, the holders of any class of its shares or another person to approve the transfer of the restricted shares if the requirement is not manifestly unreasonable.

(4)  Prohibit the transfer of the restricted shares to designated persons or classes of persons if the prohibition is not manifestly unreasonable.

Acts 2005, No. 97, §1.

1As appears in enrolled bill.  Should be "transferee".

Part VI. Capital, Surplus, Dividends

Tit. 6, Art. 261. Accounting procedures

A.  Upon initial issuance of shares, that part of the consideration received therefor which is equal to the par value thereof shall be allocated to capital stock, and the remainder shall be allocated to surplus.

B.  Except as otherwise provided in R.S. 6:263 and 416, a state bank may transfer from or reduce its capital stock or surplus only in conformity with written permission of the commissioner.

C.  Repealed by Acts 2003, No. 570, §2, eff. June 27, 2003.

Acts 1984, No. 719, §1, eff. Jan. 1, 1985; Acts 1997, No. 966, §1; Acts 2001, No. 915, §1, eff. June 26, 2001; Acts 2003, No. 570, §2, eff. June 27, 2003.

Tit. 6, Art. 262. Impairment of capital;  special meeting;  notice to restore capital;  assessments against stockholders;  voluntary restoration

A.  If the commissioner believes after examination that the capital of any bank is impaired, he shall immediately call a special meeting of its board of directors, notify them of the result of the examination and of his findings thereon, certify to the amount of the impairment of capital as of the date of the examination which revealed the impairment, and shall then direct the deficient bank to make good the impairment of its capital within sixty days.

B.(1)  Upon receipt of the notice and upon authorization by majority vote of the board of directors, the board shall levy a special assessment against every stockholder of record for the amount required to remedy the impairment.  Notice of the assessment shall be sent by registered or certified mail to each stockholder at his place of residence as evidenced by the stockholder records of the bank.

(2)  Each stockholder shall have thirty days from the date the notice is sent to pay in full the amount of the assessment.  If, at the expiration of the thirty days, a stockholder has failed or refused to pay the required assessment, the stockholder may not be assessed personally, but the board of directors shall declare his stock to be in default and shall proceed to sell his shares.  The sale price shall not be less than the assessment levied on the stock.  Upon receipt of the sale price and payment of the assessment, the excess shall be paid over to the defaulting stockholder who shall thereupon surrender his stock certificate.

C.  Notwithstanding the provisions of Subsection B, the state bank may raise the necessary funds by other methods with prior approval of the commissioner.

D.  The commissioner may suspend the certificate of authority of the bank until the capital is restored if he finds that the capital is severely impaired or that the impairment results in an unsafe and unsound condition.

Acts 1984, No. 719, §1, eff. Jan. 1, 1985; Acts 1985, No. 359, §1, eff. July 9, 1985.

Tit. 6, Art. 263. Dividends;  stock purchased or redeemed;  capital surplus required

A.  The board of directors of a state bank may not declare or pay any dividends in cash or property for a period of two years from the issuance of its certificate of authority or as the commissioner may prescribe.  Thereafter, the board of directors of a state bank may declare or pay cash or property dividends on shares of its capital stock by complying with the provisions of this Section and the bank's articles of incorporation and bylaws.

B.  A state bank shall not declare or pay cash or property dividends, or purchase or redeem shares of its capital stock unless the bank has unimpaired surplus  that equals or exceeds fifty percent of the outstanding capital stock of the bank.  The bank's unimpaired surplus shall not be reduced below fifty percent as a result of the payment of any combination of cash or property dividends, or the purchase or redemption of any shares of its capital stock.

C.(1)  Prior approval of the commissioner shall be required if the total of all year-to-date cash or property dividends declared and paid by the state bank and amounts used by the state bank to redeem or purchase shares of its capital stock would exceed the total of the bank's year-to-date net income combined with its net  income from the immediately preceding year, after deducting all of the following:

(a)  Amounts paid or accrued for the payments of cash dividends.

(b)  The value of all property paid in dividends.

(c)  Amounts paid or accrued to redeem or purchase shares of the bank's capital stock over the calculation period.

(2)  Negative net income shall not be rounded to zero in the calculation.

D.  A state bank shall not purchase or redeem shares of its capital stock when its combined capital stock and unimpaired surplus accounts are less than, or such purchase or redemption would reduce its combined capital stock and unimpaired surplus accounts below, the aggregate amount payable on liquidation upon any issued shares which have a preferential right to participate in the assets in the event of liquidation and that remain after the purchase or redemption of any shares in connection therewith.

E.  Shares of a state bank's capital stock acquired pursuant to R.S. 6:416(B) shall be canceled and thereby restored to the status of authorized and unissued shares upon the expiration of the period permitted under that Section unless prior to that date the stock had been disposed of by the state bank.

F.  Shares of a state bank's capital stock purchased or redeemed by the bank shall be deemed cancelled and thereby restored to the status of authorized and unissued shares unless the bank's articles, bylaws, or a resolution of the board of directors provides that such shares may be held as treasury stock following the purchase or redemption thereof.

Acts 1984, No. 719, §1, eff. Jan. 1, 1985; Acts 1986, No. 10, §1; Acts 1991, No. 232, §1, eff. July 2, 1991; Acts 1992, No. 231, §1, eff. Sept. 1, 1992; Acts 1997, No. 1003, §1; Acts 2001, No. 915, §1, eff. June 26, 2001; Acts 2003, No. 570, §1, eff. June 27, 2003; Acts 2010, No. 77, §1.

Part VII. Stockholders

Tit. 6, Art. 271. Stockholders' preemptive rights

A.  Stockholders shall have only such preemptive rights as may be provided in the articles.  If the articles provide simply that "stockholders shall have preemptive rights", then:

(1)  Each holder of shares having voting rights shall, upon issuance for cash of shares having voting rights, have a preemptive right, during a reasonable period to be fixed by the board of directors which need not exceed fifteen days after the giving or mailing of written notice to him of the terms and conditions on which such right is exercisable, to subscribe at such price and upon such terms as may be fixed in the manner provided in R.S. 6:252 for such proportion of the shares to be issued as the number of shares having voting rights held by him bears to the total number of shares having voting rights then outstanding.

(2)  A stockholder shall have no preemptive right to subscribe for shares:

(a)  Which are to be issued for consideration other than cash.

(b)  Which are to be issued to satisfy conversion or option rights.

(c)  Which are issued pursuant to an employee benefit plan.

(3)  Shares which have been offered to stockholders having a preemptive right at a price or upon terms duly fixed and which have not been subscribed for by them within the period fixed by the board of directors may thereafter, for one year following the end of such period, be issued, sold to, or subjected to rights or options in favor of, any other person or persons at a price not less than that at which they were offered to such stockholders.

Acts 1984, No. 719, §1, eff. Jan. 1, 1985.

Tit. 6, Art. 272. Stockholders' meetings

            A.(1) Unless otherwise provided in the articles or bylaws, stockholders' meetings may be held anywhere in this state.

            (2) At least one meeting of the stockholders shall be held in each calendar year for election of directors, if any are to be elected, but failure to hold the annual meeting shall not affect or vitiate the corporate existence of the state bank. If no annual stockholders' meeting is held for a period of eighteen months, any stockholder may call such a meeting to be held at the main office of the bank.

            B.(1) Special meetings of stockholders may be called at any time by the president, the board of directors, or in any manner provided for in the articles or bylaws.

            (2) At any time upon written request of any stockholder or stockholders holding in the aggregate one-fifth, or such lesser or greater proportion as may be fixed in the articles or in a bylaw adopted by the stockholders, of the total voting power, the secretary shall call a special meeting of stockholders to be held at the registered office at such time as the secretary may fix, not less than fifteen nor more than sixty days after the receipt of said request, and if the secretary shall neglect or refuse to fix such a time or to give notice of the meeting, the stockholder or stockholders making the request may do so.

            C. Adjournments of any annual or special meeting of stockholders may be taken without new notice being given unless a new record date is fixed for the adjourned meeting, but any meeting at which directors are to be elected shall be adjourned only from day to day until such directors shall have been elected.

            D.(1) Unless otherwise provided in the articles or bylaws and except as otherwise provided in this Chapter, the authorized person or persons calling a stockholders' meeting shall cause written notice of the time, place, and purpose of the meeting to be given to all stockholders entitled to vote at such meeting at least ten days and not more than sixty days prior to the day fixed for the meeting. Notice of the annual meeting need not state the purpose thereof, except as otherwise provided in this Chapter, if a specified action is to be taken at the meeting.

            (2) If such a written notice is placed in the United States mail, postage prepaid, and addressed to a stockholder at his last known address, notice shall be deemed to have been given him.

            (3) Notice of any stockholders' meeting may be waived in writing by any stockholder at any time; the written waiver need not specify the purpose of or the business to be transacted at the meeting; and such notice shall be deemed to have been given to or waived by all stockholders present or represented at any such meeting except any stockholder who, at the beginning of the meeting, objects to the transaction of any business because the meeting is not lawfully called or convened.

            (4) Notice need not be given to any stockholder with whom communication is made unlawful by any law of the United States of America or by any rule, regulation, proclamation, or executive order issued under any such law; and any action or meeting taken or held without notice to any such stockholder shall have the same force and effect as if notice had been given to him as otherwise required.

            (5) Notwithstanding any other provision of law to the contrary, the articles of incorporation or bylaws of a bank may authorize delivery of notices of meetings and other communications to stockholders by electronic transmission to the same extent and in the same manner as permitted for a Louisiana corporation in accordance with R.S. 12:1-141.

            E. At any meeting of the stockholders, a list of stockholders entitled to vote, arranged alphabetically and certified by the secretary of the board or by the agent of the state bank having charge of transfers of shares, showing the number and class of shares held by each stockholder on the record date for the meeting shall be produced on the request of any stockholder. This list shall be prima facie evidence of the ownership of shares in the state bank and of the right of the stockholders listed therein to vote.

            Acts 1984, No. 719, §1, eff. Jan. 1, 1985; Acts 2018, No. 88, §1.

Tit. 6, Art. 273. Quorum

A.  A stockholders' meeting properly called on due notice, if notice is required, may be organized for the transaction of business whenever a quorum is present.

B.  Except as otherwise provided in this Chapter or in the articles or bylaws:

(1)  The presence, in person or by proxy, of the holders of the majority of the total voting power shall constitute a quorum, except that in no event shall a quorum consist of less than one-fourth of the total voting power.

(2)  The stockholders present or represented at a duly organized meeting shall constitute a quorum and may continue to do business until adjournment notwithstanding the withdrawal of enough stockholders to leave less than a quorum as fixed in Subsection B(1) of this Section or in the articles or bylaws or the refusal of any stockholders present to vote.

(3)(a)  If a meeting cannot be organized because a quorum has not attended, those present may adjourn the meeting to such time and place as they may determine, subject however, to the provisions of R.S. 6:272(C).

(b)  In the case of any meeting called for the election of directors, those who attend the second of such adjourned meetings, although less than a quorum as fixed in Subsection B(1) of this Section or in the articles or bylaws, shall nevertheless constitute a quorum for the purpose of electing directors.

Acts 1984, No. 719, §1, eff. Jan. 1, 1985.

Tit. 6, Art. 274. Voting of stockholders

A.  Except as otherwise provided in the articles, each stockholder of record shall have the right at every stockholders' meeting to one vote for each share standing in his name on the books of the state bank.

B.  Cumulative voting is prohibited.

C.(1)  A stockholder shall have the right to cast his vote either in person or, subject to the following provisions, by proxy duly authorized in writing, signed by the stockholder, and filed with the secretary at or before the meeting.

(2)  The authority of the holder of a proxy to act shall not be revoked by the death of the stockholder who executed the proxy unless, before the authority is exercised, written notice of such death is received by the corporate officer responsible for maintaining the list of stockholders.

(3)(a)  A proxy shall be revocable at will unless otherwise validly provided by agreement or by any provision of the proxy.  The validity of every unrevoked proxy shall cease eleven months after the date of its execution unless some other definite period of validity shall expressly be provided therein, but in no case shall an outstanding proxy be valid for longer than three years.

(b)  The revocation of a proxy, if revocable, shall not be effective until written notice thereof has been given to the secretary of the board or unless a proxy of later date is filed with the secretary at or before the meeting.

(4)  A proxy regular on its face and signed in the name of a stockholder entitled to vote at the meeting shall be deemed valid unless challenged before it is voted, and the burden of proving invalidity shall be on the challenger.

(5)  When shares are registered in the names of two or more persons, other than fiduciaries, a proxy signed by any one or more of them shall be deemed valid unless the state bank receives written notice to the contrary from a nonsigning registered holder before the proxy is voted.

D.  A person whose shares are pledged shall be entitled to vote thereon unless and until such shares have been transferred on the books of the state bank to the pledgee, and thereafter the pledgee shall be entitled to vote thereon.

E.(1)  Any person in whose name shares are registered in a fiduciary capacity may, so far as concerns the state bank, vote the same in person or by proxy for all purposes and without the necessity of any authorization by a court or of any judicial or other proceeding provided in particular laws.  A legal representative, other than a receiver or trustee, may vote shares held by him, either in person or by proxy, without transfer of the shares into his name.

(2)  When shares are registered in the names of three or more fiduciaries, voting thereof shall be in accordance with the will of the majority of the fiduciaries unless the instrument or order appointing the fiduciaries directs that the shares shall be voted in some other way.  When, in any case, the fiduciaries are equally divided as to the manner of voting the shares registered jointly in their names, any court of competent jurisdiction may, upon petition filed by any of the fiduciaries or by any beneficiary, appoint an additional person to act with the fiduciaries in determining the manner in which the shares shall be voted on the particular questions as to which the fiduciaries are divided.

F.  Except as provided in Subsection G of this Section, a state bank owning shares in another corporation may vote the same by its president, cashier, any vice president, or by proxy appointed in writing by any of such officers unless some other person appointed by bylaws or resolution of the board of directors to vote the shares shall produce a certified copy of such bylaws or resolution, in which case the other person shall be entitled to vote the shares.

G.  Unissued shares shall be neither voted nor counted in calculating the voting power of stockholders of a state bank.

H.  Except as otherwise provided in the articles or bylaws or in other provisions of this Chapter, a majority of votes actually cast shall decide any matter properly brought before a stockholders' meeting organized for the transaction of business, except that directors shall be elected by plurality vote.

Acts 1984, No. 719, §1, eff. Jan. 1, 1985.

Tit. 6, Art. 275. Consent of stockholders

A.  Whenever by any provision of law, the articles, or the bylaws the affirmative vote of stockholders is required to authorize or constitute corporate action, the consent in writing to such corporate action signed by all of the stockholders having voting power on the particular question shall be sufficient for the purpose without necessity for a meeting of stockholders.

B.  If the articles provide that such consent may be signed by fewer than all of the stockholders having voting power on any question, the consent need be signed only by stockholders holding that proportion of the total voting power on the question that is required by the articles or by law, whichever requirement is higher.

C.  The consent, together with a certificate by the secretary of the board to the effect that the subscribers to the consent constitute all or the required proportion of the stockholders entitled to vote on the particular question, shall be filed with the records of proceedings of the stockholders.  If the consent is signed by fewer than all of the stockholders having voting power on the question, prompt notice shall be given to all of the stockholders of the action taken pursuant to the consent.

Acts 1984, No. 719, §1, eff. Jan. 1, 1985.

Tit. 6, Art. 276. Fixing record date

A.  For the purpose of determining stockholders entitled to notice of and to vote at a meeting, to receive a dividend, to receive or exercise subscription or other rights, or to participate in a reclassification of stock, or in order to make a determination of stockholders for any other proper purpose, the board of directors may fix in advance a record date for determination of stockholders for such purpose, such date to be not more than sixty days, or such shorter period as the bylaws may prescribe, and, if fixed for the purpose of determining stockholders entitled to notice of and to vote at a meeting, not less than ten days prior to the date on which the action requiring the determination of stockholders is to be taken.

B.  Except as the board may provide otherwise, if no record date is fixed for the purpose of determining stockholders entitled to notice of and to vote at a meeting, the close of business on the day before the notice of the meeting is mailed, or if notice is waived, the close of business on the day before the meeting shall be the record date for such purpose, or for any other purpose, the close of business on the day on which the board of directors adopts the resolution relating thereto shall be the record date for such purpose.

C.  A determination of stockholders entitled to notice of and to vote at a meeting shall apply to any adjournment thereof unless otherwise provided by the board of directors.

Acts 1984, No. 719, §1, eff. Jan. 1, 1985.

Tit. 6, Art. 277. Voting trusts

A.(1)  Two or more stockholders of a state bank may, pursuant to an agreement in writing, transfer their shares to any one or more natural persons having authority to act as trustees for the purpose of vesting in the transferees, as trustees, for a period not exceeding fifteen years and upon the terms and conditions stated in the agreement, all voting or other rights pertaining to such shares.

(2)  The voting trust agreement may stipulate that the time of the agreement may be extended under the same terms and conditions for an additional period not to exceed ten years from the date of expiration of the original agreement.  When the original agreement contains such a stipulation, it shall provide for the manner, method, time, and place for a meeting of all of the depositing stockholders to vote on the extension.  At least a majority in interest of all depositing stockholders, and a larger percentage if stipulated, must vote for extension if the original agreement is to remain effective beyond its original expiration date.

B.  Unless the agreement provides otherwise, any other stockholder may at any time transfer his shares to the same trustee or trustees upon the terms and conditions stated in the agreement and thereupon shall be bound by and shall have the benefits of all of the provisions of the voting trust agreement.

C.  The certificates of shares transferred to a trustee or trustees shall be surrendered and cancelled and new certificates therefor issued in the name of the trustee or trustees.  In the new certificates it shall appear that they are issued pursuant to the voting trust agreement.  In the entry of transfer on the records of the state bank, it shall be noted that the transfer is made pursuant to the agreement.

D.  The trustee or trustees shall execute and deliver voting trust certificates to the transferors.  Such voting trust certificates shall be transferable in the same manner and with the same effect as certificates of stock.

E.  The trustee or trustees shall possess all voting and other rights pertaining to the shares so transferred and registered in his or their names, subject to the terms and conditions of, and for the period specified in, the agreement.

F.  Unless otherwise provided in the agreement:

(1)  The trustee or trustees may vote in person or by proxy.

(2)  If there are two or more trustees, the manner of voting shall be determined as provided in R.S. 6:274(E).

(3)  Vacancies among the trustees shall be filled by the remaining trustee or trustees.

(4)  A trustee shall incur no responsibility as trustee except for his individual neglect or malfeasance.

G.  The trustee or trustees shall keep at a place available to holders of voting trust certificates correct and complete books and records of account relating to the trust, a record containing the names and addresses of all persons who are holders of voting trust certificates, the number and class of shares represented by each certificate held by them, and the dates when they became the owners thereof.  The record may be in written form or in any other form capable of being converted into written form within reasonable time.

H.  A duplicate of every voting trust agreement shall be filed in the main office of the state bank, and it and the record of voting trust certificate holders shall be subject to the same right of inspection by a stockholder of record or a holder of a voting trust certificate, in person or by agent or attorney, as are the records of the state bank under R.S. 6:279.

Acts 1984, No. 719, §1, eff. Jan. 1, 1985.

Tit. 6, Art. 278. Registered holder of shares

Except as otherwise provided in the articles or bylaws, a state bank and its directors, officers, and agents may recognize and treat a person registered on its records as the owner of shares, as the owner in fact thereof for all purposes, and as the person exclusively entitled to have and to exercise all rights and privileges incident to the ownership of such shares; and rights under this Section shall not be affected by any actual or constructive notice which the state bank or any of its directors, officers, or agents may have to the contrary.

Acts 1984, No. 719, §1, eff. Jan. 1, 1985.

Tit. 6, Art. 279. Inspection of books and records of state banks;  annual report to stockholders

A.  Every stockholder, except a business competitor of the state bank as described in Subsection C, who has been the holder of record of at least two percent of all outstanding shares of a state bank for at least six months shall have the right to examine, in person or by agent or attorney, at any reasonable time and for any proper and reasonable purpose, books showing the amount of common stock subscribed, the names and residences of owners of stock, the amount of stock owned by each of them, the amount of said stock paid and by whom, the last transfer of said stock with the date of transfer, the names and residences of its officers, the records of proceedings of the stockholders, of the directors, and of the committees of the board, and the articles of incorporation and bylaws of the bank.  Two or more stockholders, each of whom has been a holder of record of shares for the period aforesaid and whose aggregate holdings at least equal the percentage aforesaid, may join in such request and jointly exercise these rights.

B.  Every stockholder, except a business competitor of the state bank as described in Subsection C, who has been a holder of record of at least twenty-five percent of all of the outstanding shares of the bank for at least six months shall have the right to examine in person, by agent or attorney, at any reasonable time and for any proper and reasonable purpose, any and all of the books and records of the bank, except files and records relating to credit information, loan transactions, and deposit accounts of individual customers of the bank, which records shall be deemed confidential and shall not be subject to stockholder inspection.  Two or more stockholders, each of whom has been the holder of record of shares for at least six months and whose aggregate holdings equal at least twenty-five percent, may join in such request and jointly exercise these rights.

C.  In the case of stock held or acquired by a business competitor of the state bank, or held by or through an interposed person for a business competitor, or a person who owns stock or is otherwise interested in a corporation which is a business competitor, the business competitor must own at least forty percent of the outstanding stock of the bank for a period of six months before he may demand the rights and privileges set forth in Subsections A and B.

D.  A certified copy or a published copy of the bank's annual financial statement shall be made available to any stockholder upon request.

E.  The owner of shares of a bank holding company of which the state bank is a subsidiary in the amounts required in this Section shall afford the owner of such shares the corresponding rights of examination with regard to the state bank subsidiary as are provided herein.

Acts 1984, No. 719, §1, eff. Jan. 1, 1985; Acts 1986, No. 975, §1, eff. July 14, 1986; Acts 1987, No. 109, §1; Acts 1990, No. 226, §1, eff. July 3, 1990.

Part VIII. Directors, Officers, and Employees

Tit. 6, Art. 281. Board of directors;  powers, number, term

A.(1)  Subject to the provisions of its articles of incorporation and bylaws, all of the powers and duties of a state bank shall be vested in, and the business and affairs of the bank shall be managed by, a board of directors of not less than five nor more than thirty natural persons as established by the articles or bylaws.

(2)  The initial board of directors shall be those named in the articles accepted by the commissioner.

(3)  No amendments reducing the number of directors shall have the effect of shortening the term of any incumbent director.

(4)  Unless otherwise provided by the articles, the directors of a state bank shall hold office for one year or until their successors are chosen and qualified.  Except as otherwise provided in the articles or bylaws, a director may succeed himself.  No director shall be elected for a longer single term than five years.

B.  Except as provided in R.S. 6:282(C)(3), directors other than the initial directors named in the articles shall be elected by the stockholders.

C.  The number, qualifications, compensation, term of office, manner of election, time and place of meeting, and powers and duties of the directors may, subject to the provisions of this law and subject to regulations of the commissioner, be prescribed by the articles or the bylaws.

D.  The articles or bylaws may provide for the appointment of honorary, advisory, or emeritus members of the board of directors and prescribe the number of and compensation for those directors.  Any person appointed to such position need not satisfy the eligibility requirements provided in R.S. 6:282(A).  Honorary, advisory, or emeritus directors shall have no voting power on the board of directors.  Any listing of such honorary, advisory, or emeritus directors must distinguish those directors from the bank's board of directors or indicate their advisory status.

Acts 1984, No. 719, §1, eff. Jan. 1, 1985

Tit. 6, Art. 282. Board of directors;  eligibility, election, oath

A.  At least a majority of the board of directors shall be domiciliaries of Louisiana.

B.  Before entering upon his duties, each director elected or appointed shall take an oath that he will administer the affairs of the bank honestly and with that degree of diligence, care, judgment, and skill as provided in R.S. 6:291(B) and that he will not knowingly violate or permit to be violated any law applicable to the state bank, and shall further declare whether or not he is a domiciliary of the state of Louisiana.  This oath shall be subscribed to by the director taking and making it and shall be entered into the minutes of the next regular or special meeting of the board of directors.  The oath shall be retained in the records of the bank for examination by the commissioner.

C.(1)  The office of director shall become vacant if he dies or resigns.

(2)  The board of directors or the commissioner may declare vacant the office of a director:

(a)  If he is interdicted or adjudicated an incompetent.

(b)  If he is adjudicated a bankrupt.

(c)  If he becomes incapacitated by illness or other infirmity to perform his duties for a period of six months or longer.

(d)  If he ceases at any time to have the qualifications required by the articles, bylaws, or this Section.

(e)  If he is convicted of a felony.

(3)  The remaining directors, even though not constituting a quorum, may by a majority vote fill any vacancy on the board, including any vacancy resulting from an increase in the authorized number of directors or from failure of the stockholders to elect the full number of authorized directors, for an unexpired term, provided that the stockholders shall have the right, at any special meeting called for that purpose prior to such action by the board, to fill the vacancy.

D.(1)  The stockholders, by vote of a majority of the total voting power at any special meeting called for that purpose, unless the articles provide for a greater amount, may remove from office any one or more of the directors, notwithstanding that his or their terms of office may not have expired, and may forthwith at such meeting proceed to elect a successor for the unexpired term.

(2)  Whenever the holders of the shares of any class or series are entitled to elect one or more directors, the provisions of this Subsection shall apply, in respect of the removal of a director or directors so elected, and the election of a successor or successors, to the vote of the holders of the outstanding shares of that class or series or of those obligations, and not to the vote of the outstanding shares as a whole.

Acts 1984, No. 719, §1, eff. Jan. 1, 1985; Acts 1993, No. 276, §1, eff. Oct. 1, 1993; Acts 1997, No. 66, §1; Acts 2001, No. 637, §1, eff. June 22, 2001.

Tit. 6, Art. 283. Meetings of the board;  quorum, written consent

            A. The meetings of the board of directors may be held at such place, whether in this state or elsewhere, as a majority of the directors may from time to time appoint or as may be fixed in the call of the meeting.

            B.(1) Such notice of meetings of the board shall be given no less than five working days prior to the date of the meeting or such longer period as provided in the bylaws.

            (2) Directors present at a meeting shall be deemed to have received due notice or to have waived notice thereof. Notice of the meeting may be waived in writing at any time, and the waiver need not specify the purpose of or the business to be transacted at the meeting.

            (3) Notice need not be given to any director or member of a committee of the board of directors with whom communication is made unlawful by any law of the United States or by any rule, regulation, proclamation, or order issued under this law, and any action or meeting taken or held without notice to any such director or committee member shall have the same force and effect as if notice had been given to him as otherwise required.

            (4) Notwithstanding any other provision of law to the contrary, the articles of incorporation or bylaws of a bank may authorize or require delivery of notices of meetings and other communications to directors by electronic transmission to the same extent and in the same manner as permitted for a Louisiana corporation in accordance with R.S. 12:1-141.

            C.(1) If authorized by the articles of incorporation, the members of the board or its committees may participate in and hold meetings by means of:

            (a) Conference telephone or other similar means of communication; and

            (b) With respect to extensions of credit only, communication or contact by the chairman, chief executive officer, or their designee through the use of any oral, electronic, or written means of communication, including the use of telephone, telegraph, facsimile transmittal, or other means of communication, provided that:

            (i) No member objects to a meeting being held in this manner;

            (ii) The chairman, chief executive officer, or their designee certifies in writing the proposal to be acted upon, their good faith attempt to communicate the contents of such writing to all members eligible to vote to determine their position on the proposal, the affirmative or negative position taken by any member, and the objection of any member under Item (i) of this Subparagraph; and

            (iii) All actions taken pursuant to this Subparagraph or proposed pursuant to this Subparagraph, but not taken due to the lack of the necessary votes required for approval or the objection of a member under Item (i) of this Subparagraph, be evidenced by the filing of the written certification required under Item (ii) of this Subparagraph in the records of proceedings of the board or its committees, as applicable, for review at the next meeting of such board or committee.

            (2) Participation in a meeting pursuant to this Subsection shall constitute presence in person at such meeting except where the person participates for the sole, express purpose of objecting to the transaction of any business on the ground that the meeting is not lawfully called or convened or objects under the provisions of R.S. 6:283(C)(1)(b)(i).

            D. The number of directors necessary to form a quorum for the transaction of business shall be a simple majority or as fixed by the articles of incorporation or the bylaws, but a quorum shall never be less than one-third of the entire board. The acts of a majority, unless some greater number is fixed in the articles or bylaws, of the directors present shall constitute the acts of the entire board. If a quorum is present when the meeting is convened, the directors may continue to do business, taking action by a vote of the required vote of a quorum as fixed above, until adjournment notwithstanding the withdrawal or recusal of enough directors to leave less than a quorum.

            E. Any action that may be taken at a meeting of the board of directors or any committee thereof may be taken by a consent in writing signed by all of the directors or by all members of the committee, as the case may be, and filed with the records of proceedings of the board or committee.

            F. Voting of directors by proxy is prohibited.

            Acts 1984, No. 719, §1, eff. Jan. 1, 1985; Acts 1989, No. 162, §1; Acts 1995, No. 589, §1; Acts 1995, No. 623, §1; Acts 2018, No. 88, §1.

Tit. 6, Art. 284. Committees of the board of directors

The board of directors may designate one or more committees, each committee to consist of two or more of the directors of the bank, which to the extent provided by resolution or in the articles or bylaws shall have the powers of the board of directors in the management of the business and affairs of the bank.  Such committee or committees shall have such name or names as may be stated in the articles or bylaws or as may be determined, from time to time, by the board of directors.  Any vacancy occurring in any committee shall be filled by the board of directors, but the chairman may designate another director to serve on the committee pending action by the board.  Each such committee shall hold office during the term of the board constituting it unless otherwise ordered by the board.  The designation or delegation of authority to any committee shall not relieve the directors of any responsibility otherwise imposed on them by law.

Acts 1984, No. 719, §1, eff. Jan. 1, 1985.

Tit. 6, Art. 284.1. Compliance review committees;  privilege created

A.  A board of directors may create a compliance review committee for the purpose of establishing procedures for and engaging in self-evaluations, self-assessments, self-testing, and self-corrections with respect to compliance with applicable state and federal banking laws and regulations.

B.  Notwithstanding any other provision of law to the contrary, the results of any such self-evaluation, self-assessment, self-testing, or self-correction, and any notes, reports, or work product derived therefrom, whether prepared by internal personnel or outside attorneys, accountants, third-party service providers, or consultants, shall be deemed privileged for all purposes and shall not be subject to discovery and shall not be admissible as evidence, unless specifically agreed to by the FDIC-insured financial institution, holding company, subsidiary, or affiliate, in any private, public, or administrative civil action brought against the FDIC-insured financial institution, its holding company, subsidiaries, or affiliates alleging noncompliance with or violation of applicable state and federal banking laws and regulations.

Acts 1995, No. 589, §1; Acts 2012, No. 35, §1.

Tit. 6, Art. 285. Officers and agents;  election, powers, duties

A.  The board of directors shall elect a president or chief executive officer, a cashier or chief financial officer, and a secretary, who shall each be a different person, and shall elect a chairman of the board.  One or more vice presidents may be elected.  None of the officers except the president or chief executive officer and the chairman need be a director.  No person holding more than one office may sign in more than one capacity any instrument required by law to be signed by two officers.

B.  The board may elect and appoint such other officers and agents as may be necessary for the business of the state bank in the manner provided by the bylaws.

C.(1)  Every bank shall be deemed to have the following registered agents, who shall be the president or chief executive officer, the cashier or chief financial officer, and the secretary of the bank.  Service of citation or other legal process on a bank shall be made by personal service on any one of the named registered agents.  If the officer making service certifies that he is unable after diligent effort to have service made on the registered agents, then the service may be made on any officer of the bank at the main office of the bank.

(2)  Every bank may also designate a corporate agent for service of process.  However, if a corporate agent for service is so designated, service shall be made on such agent.  The commissioner shall be notified prior to the changing or renaming of such agent.

D.  The officers and agents shall have such rights and perform such duties in the management of the state bank as may be prescribed by the articles or bylaws or by the board of directors.

E.  Election or appointment of an officer shall not of itself create contract rights.  Any officer or agent may be removed by the board of directors with or without cause at any time, without prejudice, however, to the contract rights of the person so removed.

F.  Except as otherwise provided in the articles or bylaws or by resolution of the board, the president or chief executive officer, or cashier or chief financial officer, shall have the power in the name and on behalf of the state bank to authorize the institution, prosecution, or defense of any suit or other legal proceeding; and no exception of want of authority shall lie on the part of any other party.  Such persons shall have the authority in the state bank's name to direct the issuance of conservatory writs and to bond property in custodia legis, to execute bonds in connection with any legal proceedings, and to make affidavits required by law or rules of court.  Such acts shall have the same force and effect as an act of the state bank itself and be binding upon it.

Acts 1984, No. 719, §1, eff. Jan. 1, 1985; Acts 1991, No. 656, §1; Acts 1997, No. 42, §1; Acts 1999, No. 860, §1, eff. July 2, 1999; Acts 2001, No. 637, §1, eff. June 22, 2001; Acts 2003, No. 72, §1, eff. May 28, 2003.

Tit. 6, Art. 286. Indemnification of officers, directors, employees, and agents

A.(1)  Except as provided in Paragraph (4), a state bank may indemnify an individual made a party to a proceeding because he is or was a director against liability incurred in the proceeding if:

(a)  He conducted himself in good faith; and

(b)  He reasonably believed:

(i)  In the case of conduct in his official capacity with the state bank, that his conduct was in its best interests;

(ii)  In all other cases, that his conduct was at least not opposed to its best interests; and

(c)  In the case of any criminal proceeding, he had no reasonable cause to believe his conduct was unlawful.

(2)  A director's conduct with respect to an employee benefit plan for a purpose he reasonably believed to be in the interests of the participants in and beneficiaries of the plan is conduct that satisfies the requirement of Subparagraph (1)(b)(ii).

(3)  The termination of a proceeding by judgment, order, settlement, conviction, or upon a plea of nolo contendere or its equivalent is not of itself determinative that the director did not meet the standard of conduct described in this Section.

(4)  A state bank may not indemnify a director under this Section:

(a)  In connection with a proceeding by or in the right of the state bank in which the director was adjudged liable to the state bank; or

(b)  In connection with any proceeding charging improper personal benefit to him, whether or not involving action in his official capacity, in which he was adjudged liable on the basis that personal benefit was improperly received by him.

(5)  Indemnification permitted under this Section in connection with a proceeding by or in the right of the state bank is limited to reasonable expenses incurred in connection with the proceeding.

B.  Unless limited by its articles of incorporation, a state bank shall indemnify a director who was wholly successful, on the merits or otherwise, in the defense of any proceeding to which he was a party because he is or was a director of the state bank against reasonable expenses incurred by him in connection with the proceeding.

C.(1)  A state bank may pay for or reimburse the reasonable expenses incurred by a director who is a party to a proceeding in advance of final disposition of the proceeding if:

(a)  The director furnishes the state bank a written affirmation of his good faith belief that he has met the standard of conduct described in Subsection A;

(b)  The director furnishes the state bank a written undertaking, executed personally or on his behalf, to repay the advance if it is ultimately determined that he did not meet the standard of conduct; and

(c)  A determination is made that the facts then known to those making the determination would not preclude indemnification under this Section.

(2)  The undertaking required by Subparagraph (1)(b) must be an unlimited general obligation of the director but need not be secured and may be accepted without reference to financial ability to make repayment.

(3)  Determination and authorizations of payments shall be made in the manner specified in Subsection E.

D.  Unless limited by a state bank's articles of incorporation, a director of the state bank who is a party to a proceeding may apply for indemnification to the court conducting the proceeding or to another court of competent jurisdiction.  On receipt of an application, the court, after giving any notice the court considers necessary, may order indemnification if it determines that:

(1)  The director is entitled to mandatory indemnification under Subsection B, in which case the court shall also order the state bank to pay the director's reasonable expenses incurred to obtain court-ordered indemnification; or

(2)  The director is fairly and reasonably entitled to indemnification in view of all the relevant circumstances, whether or not he met the standard of conduct set forth in Subsection A or was adjudged liable as described in Paragraph A(4), but if he was adjudged so liable, his indemnification is limited to reasonable expenses incurred.

E.(1)  A state bank may not indemnify a director under Subsection A unless authorized in the specific case after a determination has been made that indemnification of the director is permissible in the circumstances because he has met the standard of conduct set forth in Subsection A.

(2)  The determination shall be made:

(a)  By the board of directors by a majority vote of a quorum consisting of directors not at the time parties to the proceeding;

(b)  If a quorum cannot be obtained under Subparagraph (2)(a), by majority vote of a committee duly designated by the board (in which designation directors who are parties may participate), consisting solely of two or more directors not at the time parties to the proceeding;

(c)  By special legal counsel selected by the board of directors or its committee in the manner prescribed in Subparagraph (2)(a) or (b) or, if a quorum of the board cannot be obtained under Subparagraph (2)(a) and a committee cannot be designated under Subparagraph (2)(b), selected by majority vote of the full board, in which selection directors who are parties may participate; or

(d)  By the stockholders, but shares held by directors who are at the time parties to the proceeding may not be voted on the determination.

(3)  Authorization of indemnification and evaluation as to reasonableness of expenses shall be made in the same manner as the determination that indemnification is permissible, except that if the determination is made by special legal counsel, authorization of indemnification and evaluation as to reasonableness of expenses shall be made by those entitled under Subparagraph (2)(c) to select counsel.

F.  Unless limited by a state bank's articles of incorporation:

(1)  An officer of the state bank who is not a director is entitled to mandatory indemnification under Subsection B and is entitled to apply for court-ordered indemnification under Subsection D in each case to the same extent as to a director;

(2)  The state bank may indemnify and advance expenses under this Section to an officer, employee, or agent of the corporation who is not a director to the same extent as to a director; and

(3)  A state bank may also indemnify and advance expenses to an officer, employee, or agent who is not a director to the extent, consistent with law, that may be provided by its articles of incorporation, bylaws, general or specific action of its board of directors, or contract.

G.  A state bank may purchase and maintain insurance on behalf of an individual who is or was a director, officer, employee, or agent of the state bank or who, while a director, officer, employee, or agent of the state bank, is or was serving at the request of the state bank as a director, officer, employee, or agent of another corporation, partnership, joint venture, trust, employee benefit plan, or other enterprise against liability asserted against or incurred by him in that capacity or arising from his status as a director, officer, employee, or agent, whether or not the state bank would have power to indemnify him against the same liability under Subsection A or B.

H.(1)  A provision treating a state bank's indemnification of or advance for expenses to directors that is contained in its articles, bylaws, a resolution of its stockholders or directors, or in a contract or otherwise is valid only if and to the extent the provision is consistent with this Section.  If articles of incorporation limit indemnification or advance for expenses, indemnification and advance for expenses are valid only to the extent consistent with the articles.

(2)  This Section does not limit a corporation's power to pay or reimburse expenses incurred by a director in connection with his appearance as a witness in a proceeding at a time when he has not been made a named defendant or respondent to the proceeding.

Acts 1984, No. 719, §1, eff. Jan. 1, 1985.

Tit. 6, Art. 287. Bond of officers and employees;  insurance fund

A.  Every state bank shall obtain and maintain a fidelity bond given by a surety company authorized to do business in Louisiana covering each officer and employee who has charge of or who handles cash or securities of the bank, before permitting any of them to enter upon the duties of their offices or employment.  This bond may be in the form of individual bonds on individual persons, a schedule fidelity bond, or a blanket bond covering all such persons.  The bond shall be in an amount determined by the board of directors of the bank, and may be required to be within guidelines set forth by the appropriate examining authority.

B.  In lieu of complying with the provisions of Subsection A, any state bank may establish a reserve fund to cover potential employee defalcations, provide its own fidelity bond from an insurance fund acceptable to the commissioner, or obtain an insurance policy from a surety company approved by the commissioner.

C.  Any state bank may, by resolution of its board of directors, make application to the commissioner of financial institutions to waive, for a stated period of time not to exceed one hundred eighty days, the requirement of obtaining and maintaining a fidelity bond as provided in Subsection A of this Section upon a showing to the commissioner that the bank is unable to pay the premium to purchase the fidelity bond insurance, or that the bank is unable to secure fidelity bond coverage.

Acts 1984, No. 719, §1, eff. Jan. 1, 1985; Acts 1985, No. 359, §1, eff. July 9, 1985; Acts 1988, No. 445, §1; Acts 1989, No. 263, §1, eff. June 26, 1989; Acts 1990, No. 608, §1.

Tit. 6, Art. 288. Interested directors;  quorum

A.  No contract or transaction between a state bank and one or more of its directors or officers, or between a state bank and any other person in which one or more of its directors or officers are directors or officers or have a financial interest, shall be void or voidable solely for this reason or solely because his or their votes were counted for such purpose, if:

(1)  The material facts as to his interest and as to the contract or transaction were disclosed or known to the board of directors or the committee, and the board or committee in good faith authorized the contract or transaction by a vote sufficient for such purpose without counting the vote of the interested director or directors;

(2)  The material facts as to his interest and as to the contract or transaction were disclosed or known to the stockholders entitled to vote thereon, and the contract or transaction was approved in good faith by vote of the stockholders; or

(3)  The contract or transaction was fair to the state bank as of the time it was authorized, approved, or ratified by the board of directors, committee, or stockholders.

B.  Common or interested directors may be counted in determining the presence of a quorum at a meeting of the board of directors or of a committee which authorized the contract or transaction.

Acts 1984, No. 719, §1, eff. Jan. 1, 1985.

Tit. 6, Art. 289. Loans to executive officers and employees

A.  No executive officer, director, or principal shareholder of any state bank shall borrow any of its funds, which term includes a line of credit, directly or indirectly for himself or for any corporation or other entity of which he has a related interest, in an amount that, when aggregated with the amount of all other loans to that person and to all other related interests of that person, exceeds the higher of twenty-five thousand dollars or five percent of the state bank's unimpaired capital and unimpaired surplus, unless the loan is in pursuance of a resolution of the board of directors passed prior to making the loan at a meeting at which the borrower was not present or participating.

B.  As used in this Section, the following terms shall have the following meanings:

(1)  "Director" means any director of a state bank, regardless of compensation, excluding advisory directors.

(2)  "Executive officer" means an employee who participates or has authority to participate in major policymaking functions of the state bank but does not include a director who is not also employed as an officer of the bank.

(3)  "Principal shareholder" means any person that directly or indirectly, or acting through or in concert with one or more persons owns, controls, or has the authority to vote more than ten percent of any class of voting securities of the bank or its parent company.  Voting securities owned or controlled by a member of a person's immediate family are considered to be held by that person.

(4)  "Related interest" of a person means a company that is controlled by an executive officer, director, or principal shareholder.

(5)  "Unimpaired capital and unimpaired surplus" means the state bank's Tier 1 and Tier 2 capital included in the bank's risk-based capital, based on the bank's most recent consolidated report of condition; and the balance of the bank's allowance for loan and lease losses not included in the bank's Tier 2 capital for purposes of the calculation of risk-based capital, based on the bank's most recent consolidated report of condition.  For purposes of this Paragraph, the definitions for Tier 1 and Tier 2 capital are the same as the definitions provided in 12 C.F.R. Pt. 325, Appendix A.

C.(1)  Notwithstanding any other provision of the law, no state bank may extend credit, which term includes granting a line of credit, to any of its executive officers, directors, or principal shareholders unless:

(a)  The extension of credit is made on substantially the same terms, including interest rates and collateral, as those prevailing at the time for comparable transactions by the bank with other persons who are not employed by the bank; or

(b)  The extension of credit is made under similar terms and conditions as offered to other bank employees and to the extent permitted under federal banking laws and regulations.

(2)  A bank may make loans to its other employees at rates permitted by Titles 6 and 9 of the Louisiana Revised Statutes of 1950, by R.S. 9:3500, or by any applicable provision of federal law.

Acts 1984, No. 719, §1, eff. Jan. 1, 1985; Acts 1999, No. 860, §1, eff. July 2, 1999; Acts 2004, No. 743, §3, eff. Jan. 1, 2005; Acts 2005, No. 231, §1, eff. June 29, 2005.

Tit. 6, Art. 290. Directors' examinations

Every twelve months the board of directors of every state bank shall examine or cause a committee of its members to examine said bank in accordance with the provisions prescribed by rule promulgated by the commissioner of financial institutions.

Acts 1984, No. 719, §1, eff. Jan. 1, 1985; Acts 1989, No. 514, §1, eff. Jan. 1, 1990; Acts 2001, No. 530, §1.

NOTE:  See Acts 2001, No. 530, §2, relative to effective date.

Part IX. Liability of Directors, Officers, Stockholders, and Subscribers

Tit. 6, Art. 291. Relation and liability of directors and officers to bank and bank holding company stockholders

            A. Bank and bank holding company officers and directors shall be deemed to stand in a fiduciary relation to their bank or bank holding company and its stockholders and shall discharge the duties of their respective positions in good faith and with that diligence, care, judgment, and skill as provided in Subsection B of this Section. Nothing herein contained shall derogate from any indemnification authorized by R.S. 6:286.

            B. A director or officer of a bank or bank holding company shall not be held personally liable to the corporation or the shareholders thereof for monetary damages unless the director or officer acted in a grossly negligent manner as defined in R.S. 6:2 or engaged in conduct which demonstrates a greater disregard of the duty of care than gross negligence, including intentional tortious conduct or intentional breach of his duty of loyalty.

            C. A director of a bank or bank holding company shall, in the performance of his duties, be fully protected in relying in good faith upon the records of the bank or bank holding company, and upon such information, opinions, reports, or statements presented to him, the bank or bank holding company, the board of directors, or any committee thereof by any of the bank's or bank holding company's officers or employees, or by any committee of the board of directors, or by any counsel, appraiser, engineer, or independent or certified public accountant selected with reasonable care by the board of directors or any committee thereof or any officer having the authority to make such selection, or by any other person as to matters the director reasonably believes are within such other person's professional or expert competence and which person is selected with reasonable care by the board of directors or any committee thereof or any officer having the authority to make such selection.

            D. The provisions of this Section shall not affect the right of incorporators or shareholders of banks or bank holding companies to include in articles of incorporation provisions as authorized by R.S. 6:213(B).

            E. Notwithstanding any other law to the contrary, the provisions of this Section shall be the sole and exclusive law governing the relation and liability of directors and officers to their bank or holding company or to the shareholders thereof or to any other person or entity, except that the provisions of R.S. 12:1-833 shall remain applicable to directors and officers of bank holding companies.

            F. Any person who unsuccessfully attempts to impose a higher standard of responsibility or liability than that provided by this Section may be liable for attorney fees incurred in the defense of such attempt and for damages.

            Acts 1984, No. 719, §1, eff. Jan. 1, 1985; Acts 1992, No. 650, §1, eff. July 2, 1992; Acts 1997, No. 42, §3; Acts 2015, No. 83, §1.

Tit. 6, Art. 292. Directors or stockholders not participating in unlawful act

A director or stockholder shall not be liable for the commission of a prohibited act if he was absent from the meeting of directors or stockholders, as the case may be, at which the action was authorized or if he was present or represented at such meeting and his dissent therefrom was either noted in the minutes of the meeting or filed promptly thereafter with the secretary of the board.

Acts 1984, No. 719, §1, eff. Jan. 1, 1985.

Tit. 6, Art. 293. Actions against directors and officers of banks and bank holding companies

A.  No action for damages against any director or officer of a bank or bank holding company for breach of the director's or officer's contract with the bank or bank holding company in the capacity of director or officer, or for breach of his duty as a director or officer, including, without limitation, action for gross negligence, but excluding any action covered by the provisions of Subsection B, shall be brought unless filed in a court of competent jurisdiction and proper venue within one year from the date of the alleged act, omission, or neglect, or within one year from the date that the alleged act, omission, or neglect is discovered or should have been discovered; however, even as to actions filed within one year from the date of such discovery, in all events such actions shall be filed at the latest within three years from the date of the alleged act, omission, or neglect.

B.  No action for damages against any director or officer of a bank or bank holding company for intentional tortious misconduct, or for an intentional breach of the director's or officer's duty of loyalty, or for acts or omissions in bad faith, or involving fraud, or a knowing and intentional violation of law, shall be brought unless filed in a court of competent jurisdiction and proper venue within two years from the date of the alleged act or omission, or within two years from the date the alleged act or omission is discovered or should have been discovered; however, even as to actions filed within two years from the date of such discovery, in all events such actions shall be filed at the latest within four years from the date of the alleged act or omission.

C.  The three-year period provided in Subsection A and the four-year period provided in Subsection B shall be deemed peremptive periods and shall not be subject to renunciation, interruption, or suspension except by timely suit filed in a court of competent jurisdiction and proper venue.

Acts 1992, No. 650, §1, eff. July 2, 1992.

Part X. Reserves

Tit. 6, Art. 301. Cash reserves

A.  For the purpose of the reserve requirements provided in this Section, the terms:

(1)  "Demand deposits" means the aggregate of deposits which can be required to be paid on demand or within less than fourteen days of demand; however, deposits made in the savings department of a state bank which are made on the condition that they may not be withdrawn except on notice shall not be considered demand deposits.

(2)  "Time deposits" means deposits which cannot be required to be paid within less than fourteen days.

(3)  "Net demand deposits" means demand deposits less cash items in transit and cash items in process of collection.

(4)  "Cash items in transit" means items in transit for collection.

(5)  "Cash items in process of collection" means items which are to be collected or credited within twenty-four hours.

B.  Every state bank shall at all times maintain a reserve fund in an amount fixed by regulation of the commissioner, provided the minimum and maximum reserve ratios fixed by the commissioner for net demand deposits and for time deposits shall be within the range of such ratios established for member banks of the Federal Reserve System or within the lower minimum and higher maximum for such ratios, if more than one range of ratios are established for member banks of the Federal Reserve System; but in no event shall the commissioner fix a reserve ratio on a particular type of deposit higher than the specific ratio prevailing for member banks of the Federal Reserve System located in the state of Louisiana.

C.  Until otherwise provided by regulation of the commissioner, every state bank shall at all times maintain reserves as follows:

(1)  Net demand deposits:

Amount of net demand

Reserve percentages

Deposits

 Applicable

First $2 million or less

8

percent

Over $2 million to $10 million

10

percent

Over $10 million to $100 million

12

percent

Over $100 million to $400 million

13

percent

Over $400 million

14

percent

(a)  Eight percent of its net demand deposits if its aggregate net demand deposits are $2 million or less.

(b)  $160,000 plus ten percent of its net demand deposits in excess of $2 million but less than $10 million.

(c)  $960,000 plus twelve percent of its net demand deposits in excess of $10 million if its aggregate net demand deposits are in excess of $10 million but less than $100 million.

(d)  $11,760,000 plus thirteen percent of its net demand deposits in excess of $100 million if its aggregate net demand deposits are in excess of $100 million but less than $400 million.

(e)  $50,760,000 plus fourteen percent of its net demand deposits in excess of $400 million.

(2)  Three percent of all time deposits.

D.  Notwithstanding reserve requirements provided by Subsections C and E of this Section or by regulation of the commissioner as authorized by Subsection B of this Section, every state bank which complies with the reserve requirements for member banks of the Federal Reserve System shall be deemed to be in full compliance with the reserve requirement of this Chapter.

E.(1)  Cash items in transit and cash items in process of collection shall not be included as part of the reserve fund.

(2)  Every state bank may include as a part of its required reserve fund an investment up to, but not exceeding, fifty percent of said required reserves, made in direct obligations of the United States government and backed by its full faith and credit, which mature within two years from the date of computation of the required reserve.  A portion of said fifty percent maximum, not to exceed one-half thereof, may be made in direct obligations of the state of Louisiana and backed by its full faith and credit, which mature within two years from the date of the computation of the required reserve.  Both types of securities shall be owned by the bank on the date of the reserve computation and not be subject to a pledge, right of repurchase, or in any way hypothecated.

F.  For the purpose of compliance with the reserve requirement of this Section, a bank may average its reserve of cash and due from banks over a semimonthly period as may be provided by regulation of the commissioner; and the average amount of cash and due from banks computed at the close of each semimonthly period shall determine whether or not the bank is meeting its reserve requirements.

Acts 1984, No. 719, §1, eff. Jan. 1, 1985.

Tit. 6, Art. 302. Depleted reserve;  notice, penalty

A.  Every state bank shall give written notice to the commissioner, in the manner prescribed by the commissioner for such notice, of any deficiency in the reserve fund required under the provisions of this Title within three business days after the close of any averaging period during which the deficiency occurs.

B.  In the event a reported deficiency in the reserve fund is not restored within a period satisfactory to the commissioner or if a deficiency in the reserve fund of which notice has not been given as required in this Section is discovered by or otherwise comes to the attention of the commissioner, the commissioner may assess a penalty of six percent per annum of the amount of the deficiency for the period it is not restored, which penalty shall be collected in the same manner as provided for assessments made by the commissioner under R.S. 6:331.

Acts 1984, No. 719, §1, eff. Jan. 1, 1985.

Tit. 6, Art. 303. Sale and purchase of excess reserves;  reports

            A.(1) A state bank may sell any of its excess reserves to any other bank or banks in an amount to each bank that is equal to twice the sum of the capital stock and the surplus of the vendor bank.

            (2) Notwithstanding any other provision of law to the contrary, a state bank may sell any of its excess reserves without limitation as to amount, to any other bank acting as agent, so long as the amount of cash reserves held by each individual bank acting as principal does not exceed the amount provided in Paragraph (1) of this Subsection.

            (3) The provisions of this Subsection shall not apply to the sale of excess reserves to the Federal Reserve Bank or any Federal Home Loan Bank.

            B. A state bank may purchase excess reserves from any other bank or banks on a day-to-day, unsecured basis in an amount equal to three times the sum of the capital stock and the surplus of the vendee bank.

            C. A state bank which sells or purchases reserves in excess of the amounts provided in the preceding Subsections or which purchases excess reserves from any other bank or banks for thirty continuous calendar days shall immediately report such sales or purchases to the commissioner.

            Acts 1984, No. 719, §1, eff. Jan. 1, 1985; Acts 1985, No. 359, §1, eff. July 9, 1985; Acts 1989, No. 129, §1, eff. June 22, 1989; Acts 2015, No. 155, §1.

Part XI. Deposits

Tit. 6, Art. 311. Types of accounts authorized to offer

State banks may offer any type of deposit accounts, interest-bearing or not, that are consistent with the provisions of this law, rules and regulations of the commissioner, or applicable rules and regulations of the Federal Deposit Insurance Corporation or the Federal Reserve System, except that in no case may any bank establish any interest-bearing account funded with deposited monies belonging to third persons identified in accordance with the provisions of R.S. 6:317 which allows the interest to be paid to any person other than the owner of the monies, in accordance with Civil Code Art. 510.

Acts 1984, No. 719, §1, eff. Jan. 1, 1985; Acts 1991, No. 546, §1.

Tit. 6, Art. 311.1. Powers of attorney, procuration, and mandate;  written notice of revocation

A.(1)  Notwithstanding any provision of law to the contrary, any federally insured financial institution presented with an original or certified true copy of a power of attorney, procuration, or mandate that is sufficient to authorize the named agent, representative, or mandatary to transact business in a deposit account, with a certificate of deposit, or with other funds on deposit, or sufficient to authorize access to a safe deposit box, may rely on the authority designated in the power of attorney, procuration, or mandate as being in full force and effect, unless an officer of the federally insured financial institution receives written notice that the power of attorney, procuration, or mandate has been revoked, modified, or terminated, and the institution has had reasonable opportunity to act on it.

(2)  For the purposes of this Section, "written notice" shall mean a court order or other writing indicating that the power of attorney, procuration, or mandate has been revoked, modified, or terminated, including a termination pursuant to Civil Code Article 3024.

B.  A federally insured financial institution shall not be liable for transactions or activity by an agent, representative, or mandatary occurring prior to the receipt of written notice and a reasonable opportunity to act on it.

Acts 2012, No. 323, §1; Acts 2014, No. 356, §3.

Tit. 6, Art. 312. Alternative deposits;  payment

A.  When a deposit is made in any bank under the names of two or more persons payable to any one of such depositors, that deposit or any part of it or any interest or dividend on it may be paid to any one of such depositors, whether the other depositor or depositors be living or not, and the receipt or acquittance of the person paid is a full release and discharge of the bank as to any heir, legatee, creditor, or other person having rights or claims to funds of such deceased depositor for any payment made; nor shall any bank paying any such depositor in accordance with the provisions of this Section thereby be liable for any estate, inheritance, or succession taxes that may be due this state.

B.(1)  When any such deposit is made in any bank under the names of two or more persons payable to any one of such depositors, if one of such depositors seeks to prevent payments from that account, that depositor must give written notice of his desire to prevent payment.  The notice must be signed by him and delivered to the bank.  After the receipt of such notice from one or more of such depositors, the bank may refuse to honor any check, draft, or demand upon the said deposit or* by any of the depositors, including the one or ones requesting the stopping of payment, unless all of the depositors upon the said account join in drawing such draft or check or demand for payment or other withdrawal of any of the funds.

(2)  In the event any bank has received a notice in writing as provided by this Subsection or a notice as provided in R.S. 10:4-403, such bank shall be relieved of responsibility to each and every one of the depositors upon the account or deposit in question for failure or refusal to honor any check or draft or demand for payment or other withdrawal unless the action is taken by all of the parties in whose names the account or deposit stands.

C.  The pledge to a bank of all or part of the deposits in the names of two or more persons, including but not limited to time accounts, savings accounts, or certificates of deposit, executed by a person upon whose signature withdrawals may be made, shall, unless the terms of the deposit provide specifically to the contrary, be a valid pledge to the bank of all the deposits pledged.

D.  Notwithstanding the provisions of R.S. 9:1513 and 1514, or any similar provision, the provisions of this Section establish the exclusive method for payment of funds from an alternative account.

E.  Notwithstanding any other law to the contrary, any federally insured financial institution may by contract prohibit or otherwise limit the pledge, assignment, collateral assignment, or granting of any other type of security interest in any deposit account maintained or established at such institution, including those deposit accounts evidenced by certificates of deposit issued by such institution.

Acts 1984, No. 719, §1, eff. Jan. 1, 1985; Acts 1988, No. 118, §1; Acts 1989, No. 137, §3, eff. Sept. 1, 1989; Acts 1993, No. 948, §1, eff. Jan. 1, 1994; Acts 2001, No. 128, §3, eff. July 1, 2001; Acts 2004, No. 42, §1.

*As appears in enrolled bill.

Tit. 6, Art. 313. Withdrawal of money or property deposited by or for minors

Any money or other property deposited by a minor or other person in the name of a minor with a bank may be withdrawn by the minor or other person in the manner and under the terms of the written instructions given at the time of the opening of the account or of the making of the deposit.

Acts 1984, No. 719, §1, eff. Jan. 1, 1985.

Tit. 6, Art. 314. Trust deposits;  death of depositor;  payment

            A. Upon the death of a depositor who has deposited a sum in any bank account evidencing an intention that upon the death of the depositor, the funds shall belong to one or more named beneficiaries of the depositor, the bank may pay the deposit, together with the dividends or interest accruing thereto, to the named beneficiaries for whom the deposit was made. The depositor shall give to the depository bank an affidavit in authentic form or an act under private signature executed in the presence of an officer or a branch manager of the depository bank and two additional persons, stating the names of one or more beneficiaries. The bank may conclusively rely on this affidavit or act for the disbursal of funds. Upon receiving a death certificate, the bank may disburse funds to the named beneficiaries.

            B. The title of such an account must include the terms "in trust for", "as trustee for", or "payable on death to", such beneficiary or beneficiaries. Such beneficiaries must be specifically named in the deposit account records of the bank.

            C. Repealed by Acts 2009, No. 499, §2.

            D.(1) When an account described in Subsection A of this Section is established by more than one depositor, the respective interests of each depositor shall be deemed equal to that of each other depositor, unless otherwise stated in the bank's deposit account records.

            (2) When an account described in Subsection A of this Section is established for more than one beneficiary, the respective interests of each shall be deemed equal to that of each other beneficiary, unless otherwise stated in the bank's deposit account records.

            E. No bank paying a beneficiary in accordance with this Section shall be liable to the estate or any heir of the decedent nor shall the account holder be liable for any estate, inheritance, or succession taxes which may be due the state, and delivery of the funds shall constitute a full and complete discharge of the bank for the payment or delivery so made and shall relieve the bank from all adverse claims thereto by a person claiming as a surviving or former spouse or a successor to such a spouse. No tax collector, creditor, heir, legatee, personal representative, or any other person shall have any right or cause of action against the financial institution on account of such payment, and R.S. 47:2410 shall not apply to such cases.

            F. The provisions of this Section shall apply notwithstanding the fact the decedent designates a beneficiary by last will and testament. The provisions of this Section shall not prohibit any right of forced heirship or the collation or collection of funds due any spouse, heir, legatee, creditor, or other person having rights or claims to funds of the deceased depositor.

            Acts 1984, No. 719, §1, eff. Jan. 1, 1985; Acts 1991, No. 535, §1; Acts 1999, No. 633, §1, eff. July 1, 1999; Acts 2009, No. 499, §§1 and 2; Acts 2016, No. 166, §1.

Tit. 6, Art. 315. Adverse claims to deposit;  procedure, indemnifying bond

A.  Notice to any bank of an adverse claim, including an adverse claim of ownership of, right to control, or access to funds, to a deposit standing on the books of the bank to the credit of any person does not require the bank to recognize the adverse claimant unless the notice is given pursuant to either a restraining order, injunction, or other appropriate process against the bank in an action instituted by the adverse claimant wherein the person to whose credit the deposit stands is made a party and served with summons, or the adverse claimant has executed to the bank, in form and with sureties acceptable to it, a bond indemnifying the bank against any liability, loss, damage, costs, and expenses on account of payment or of dishonor of the check or other order of the person to whose credit the deposit stands.  However, this Section does not apply where the person to whose credit the deposit stands is a fiduciary for the adverse claimant, and the facts constituting this relationship, as well as the facts showing reasonable cause of belief on the part of the claimant that his fiduciary is about to misappropriate the deposit, are made to appear by the affidavit of the claimant.

B.(1)  A bank shall be entitled to act and rely upon:

(a)  A restraining order, injunction, or other appropriate process;

(b)  An agreement of the parties concerning an adverse claim;

(c)  A bond indemnifying the bank against liability, as provided in Subsection A.

(2)  Unless the restraining order, injunction, or other appropriate process specifically provides to the contrary, a bank with notice of an adverse claim to a deposit as provided herein may terminate the deposit account and transfer the contested funds into the registry of the court issuing the restraining order, injunction, or other appropriate process, or into the registry of a court of competent jurisdiction located in the parish in which the bank is located.

(3)  No bank, acting in reliance upon this Section, shall be liable to the depositor, adverse claimant, or any other person or entity for nonpayment, termination of the deposit account, or for any other damage alleged to have been caused by the bank's reliance on this Section notwithstanding the final disposition of the adverse claim.

C.  Nothing in this Section shall impair the effect of a discharge to which a bank would be entitled under R.S. 10:3-603.

Acts 1984, No. 719, §1, eff. Jan. 1, 1985; Acts 1990, No. 530, §1, eff. July 18, 1990.

Tit. 6, Art. 315.1. Transfer of small deposits;  death of depositor;  affidavits required;  penalties

            A. Upon the death of a depositor who dies intestate and who has deposits standing in his name alone or jointly with a surviving spouse and heirs, if any, in any depository financial institution, such depository financial institution may pay a sum not to exceed twenty thousand dollars of such deposits to the surviving spouse and heirs, if any, or to the heirs, if there is no surviving spouse, upon receipt of an affidavit establishing jurisdiction and relationship. The affidavit shall also state that the deceased depositor left no will, that the total funds withdrawn do not exceed twenty thousand dollars from all depositories, and that such facts are true and correct.

            B. The depository financial institution may issue a draft in the amount that the deceased had on deposit payable to the surviving spouse and heirs named in the affidavit described in Subsection A of this Section.

            C. Receipt by the depository financial institution of the affidavit required in Subsection A of this Section shall be a full release and discharge of the depository financial institution in the transfer of the deposits as to anyone, including any heir, legatee, creditor, or other person having rights or claims to funds or property of the decedent, nor shall the depository financial institution be liable for any estate, inheritance, or succession taxes which may be due to the state.

            D. Any person who knowingly submits and signs a false affidavit as provided in this Section shall be fined not more than five hundred dollars, or imprisoned for not more than six months, or both.

            Acts 1990, No. 735, §1; Acts 1991, No. 535, §1; Acts 1997, No. 168, §1; Acts 2010, No. 26, §1; Acts 2018, No. 96, §1; Acts 2019, No. 188, §1.

Tit. 6, Art. 316. Pledge of deposit accounts;  rights and remedies

A.  Notwithstanding the provisions of Civil Code Articles 1893 et seq., compensation takes place by operation of law between funds held on deposit with any bank domiciled or having a branch office in this state and any loan, extension of credit, or other obligation incurred by the depositor in favor of the bank.  This compensation shall apply to those funds on deposit which the depositor has the right to withdraw on his request or endorsement alone, except funds deposited in an Individual Retirement Account or other type of tax-deferred account.  The funds to which this compensation applies shall be deemed to be pledged by the depositor in favor of the depository bank.

B.  The pledge of such deposit accounts need not be reflected in writing or comply with the requirements of Civil Code Art. 3158 or R.S. 9:4321, et seq.  Such a pledge shall instead be deemed for any and all purposes to constitute a statutory security interest arising by operation of law.  The ability of the depositor to withdraw funds from a deposit account at will shall not be deemed to adversely affect the validity of the pledge provided under this Section.

C.  In the event that the depositor should default under any loan, extension of credit or other direct or indirect obligation of any nature and kind whatsoever in favor of the depository bank, the bank shall have the right to apply any and all funds that the depositor then has on deposit with the bank or on which the bank has taken a security interest under Chapter 9 of the Louisiana Commercial Laws (R.S. 10:9-101, et seq.) towards the payment of the depositor's indebtedness or obligations, whether such payment satisfies the indebtedness or obligations in whole or in part.  The exercise of the bank's remedies under this Subsection shall not affect any other rights and remedies available to the bank following the depositor's default.

D.  The bank shall notify the depositor in writing within two business days following the exercise of the bank's remedies under Subsection C  of this Section.  Such notice shall be forwarded by registered or certified mail to the depositor's most current address reflected in the bank's records.  In the event that the bank mails such a notice to the depositor within the above time period, the bank shall have no liability to the depositor or to any other person or persons as a result of the bank's dishonor of checks or drafts drawn on the depositor's accounts with the bank.

E.  The rights and remedies afforded to banks under this Section shall be in addition to a depository bank's contractual rights of compensation or setoff as provided in customer notes and agreements and shall further be in addition to any other rights and remedies that a depository bank may have with regard to customer deposit accounts on which the bank may have a security interest subject to Chapter 9 of the Louisiana Commercial Laws.

F.  Notwithstanding the provisions of Civil Code Articles 1893 et seq., compensation or setoff shall occur by operation of law between any funds held on deposit with the bank and any and all loans, extensions of credit, or other obligations of the depositor incurred in favor of the bank, except that those funds held in any account designated as a trust account established on behalf of a person or persons other than the named depositor shall not be subject to compensation or setoff as provided in this Section.

Acts 1986, No. 451, §1; Acts 1989, No. 137, §3, eff. Sept. 1, 1989; Acts 1993, No. 825, §1; Acts 1999, No. 146, §1, eff. June 9, 1999.

Tit. 6, Art. 317. Ownership of deposited funds

A bank may conclusively rely on any application, agreement, or signature card used to establish a deposit account as establishing ownership of any and all funds and other credits deposited therein, and may consider and treat any and all funds on deposit in such an account as belonging to and the sole and exclusive property of the depositor or depositors named on the account application, agreement or signature card, unless otherwise notified or directed by such depositor or depositors.

Acts 1988, No. 915, §1.

Tit. 6, Art. 318. Letters of credit;  use by banks

In addition to other collateral for public funds deposits authorized by law, banks may also use letters of credit issued by the Federal Home Loan Bank.

Acts 2000, 1st Ex. Sess., No. 27, §1, eff. April 14, 2000.

Tit. 6, Art. 319. Public funds deposits

Notwithstanding any other law to the contrary, including, but not limited to, R.S. 33:2955 and R.S. 49:327, any bank, savings bank or savings and loan association, domiciled or having a branch in Louisiana, that receives public funds deposits may utilize, and public bodies may accept, any recognized system or program to provide FDIC insurance coverage and such funds shall be deemed and considered fully collateralized, provided that the recognized system or program satisfies the FDIC's requirements for agency pass-through deposit insurance coverage.  The total dollar amount of state funds received pursuant to the provisions of this Section by a bank, savings bank, or savings and loan association, domiciled or having a branch in Louisiana, must be maintained by that financial institution.

Acts 2005, No. 291, §1, eff. June 29, 2005.

Part XII. Safe Deposit and Safekeeping

Tit. 6, Art. 321. Access to safety deposit box leased by multiple persons

A.  When a safety deposit box is leased from any bank under the names of two or more persons with the right of access being given to any one of such persons, the survivor or survivors, whether or not the other or others are living, has and the bank may permit any of them to have free access to the safety deposit box, including the right to remove the contents thereof.  In such case, the entry of any such person or persons into the safety deposit box shall constitute a full release and discharge of the bank permitting such entry as to any heir, legatee, creditor, or other person having rights or claims to funds or property of the decedent.  No bank permitting entry into the safety deposit box in accordance with the provisions of this Section shall be liable for any estate, inheritance, or succession taxes which may be due this state.

B.  When any such safety deposit box is leased from any bank under the names of two or more persons with the right of access being given to any one of such persons, if one of such lessees seeks to prevent access by any of the lessees, the lessee seeking the denial of access must give notice in writing signed by him and delivered to the bank.

C.  After the receipt of such notice from one or more of such lessees, the bank may refuse to permit access to the safety deposit box by any of the lessees, including the one or ones requesting the denial of access, unless all of the lessees of the safety deposit box appoint in writing the person or persons to have access to the safety deposit box.

D.  If any bank has received a notice in writing as provided in Subsection B hereof, the bank shall be relieved of responsibility to each and every one of the lessees of the safety deposit box in question for failure or refusal to permit access thereto except where all of the lessees of the safety deposit box enter the box together or appoint in writing the person or persons to have access to the safety deposit box.

Acts 1984, No. 719, §1, eff. Jan. 1, 1985; Acts 1989, No. 357, §1; Acts 1995, No. 1248, §1, eff. June 29, 1995.

Tit. 6, Art. 322. Access to safety deposit box leased by corporation or unincorporated association

When a safety deposit box is leased from any bank under the name of either a corporation or an unincorporated association, with the right of access being given to a person or persons authorized by a resolution of the board of directors of the corporation or of the governing body of the unincorporated association, notwithstanding the death of any such person or persons, the bank may permit the person or persons authorized by a resolution of the board of directors of the corporation or of the governing body of the unincorporated association to have free access to the safety deposit box, including the right to remove the contents thereof.  In such case, the entry of any such authorized person or persons into the safety deposit box shall constitute a full release and discharge of the bank permitting such entry as to any heir, legatee, creditor, or other person having rights or claims to funds or property of the decedent.  No bank, savings bank, or trust company permitting entry into the safety deposit box in accordance with the provisions of this Section shall thereby be liable for any estate, inheritance, or succession taxes which may be due this state.

Acts 1984, No. 719, §1, eff. Jan. 1, 1985; Acts 1995, No. 1248, §1, eff. June 29, 1995.

Tit. 6, Art. 323. Access to safety deposit box leased by trust estate

When a safety deposit box is leased from any bank by a trust estate, whether in the name of the trust estate or the trustee or trustees thereof, with the right of access being given to the trustee or trustees designated in the instrument creating the trust estate or appointed in accordance with the provisions of R.S. 9:1721 et seq., notwithstanding the death of any such trustee or trustees and notwithstanding the termination of the trust, the bank may permit the trustee or trustees so designated or appointed to have free access to the safety deposit box, including the right to remove the contents thereof.  In such case, the entry of the trustee or trustees into the safety deposit box shall constitute a full release and discharge of the bank permitting such entry as to anyone, including any heir, legatee, creditor, or other person having rights or claims to funds or property of the decedent.  No bank permitting entry into said safety deposit box in accordance with the provisions of this Section shall thereby be liable for any estate, inheritance, or succession taxes which may be due this state.

Acts 1984, No. 719, §1, eff. Jan. 1, 1985; Acts 1995, No. 1248, §1, eff. June 29, 1995.

Tit. 6, Art. 324. Access to safety deposit box leased by a person or persons with designated agent or deputy

When a safety deposit box is leased from any bank under the name of a person or persons with the right of access being given to said person or persons and to an agent or agents or deputy or deputies appointed by said person or persons, notwithstanding the death of any of the agents or deputies, the bank may permit the person or persons under whose name the safety deposit box is leased or any surviving agents or deputies to have free access thereto including the right to remove the contents thereof.  In such case, the entry of any such person or persons into the safety deposit box shall constitute a full release and discharge of the bank, savings bank, or trust company permitting the entry as to any heir, legatee, creditor, or other person having rights or claims to funds or property of the decedent.  No bank, savings bank, or trust company permitting entry into the safety deposit box in accordance with the provisions of this Section shall thereby be liable for any estate, inheritance, or succession taxes which may be due this state.

Acts 1984, No. 719, §1, eff. Jan. 1, 1985; Acts 1995, No. 1248, §1, eff. June 29, 1995.

Tit. 6, Art. 325. Death of a customer and access and transfer of contents of safety deposit boxes, money, and other property by bank to succession representatives, legatees, or heirs;  authority

A.  For all purposes, a bank may deal with a safety deposit box or money, on deposit or otherwise, and any other property in a bank's possession titled in the name of a deceased customer in accordance with its contract with its deceased customer until the bank receives notice in writing specifically addressed to it of the death of  its customer.

B.(1)  Regardless of whether a bank receives written notice of the death of its customer and regardless of any prior action by a bank to freeze or restrict access and transactions related to its deceased customer's accounts or safety deposit box, upon receipt of letters testamentary, letters of administration, or letters of independent administration, issued by a court of competent jurisdiction, appointing an authorized succession representative, a bank may grant access to or allow the transfer of contents of a safety deposit box or money or other property titled in the name of the bank's deceased customer to the succession representative.

(2)  The letters appointing the succession representative shall constitute full and proper authority for allowing the succession representative to access, withdraw, or transfer money or property of the bank's deceased customer, and the bank shall have no liability related to such activity or transaction involving the deceased customer's safety deposit box or money or other property in the bank's possession.

(3)  The bank may continue to follow the direction of the authorized succession representative related to the safety deposit box or money or other property of its deceased customer, unless and until the bank receives a subsequent court order, issued by a court of competent jurisdiction, specifically naming and directing the bank to cease following the written direction of the succession representative, or the bank receives a subsequent court order, issued by a court of competent jurisdiction, limiting or terminating the authority of or replacing the succession representative.

C.  The judgment of possession recognizing and putting the legatees or heirs in possession of the bank's deceased customer's estate shall constitute full and proper authority for the bank holding a safety deposit box or money or other property titled in the name of its deceased customer to transfer those assets to the legatees or heirs entitled to such property under the judgment of possession.  When a bank makes such a transfer, the bank shall have full protection from any heir, legatee, creditor, or other person having any right or claim to money or other property of its deceased customer.  The bank shall have no liability related to any such transfer or transaction involving its deceased customer's safety deposit box or money or other property in the bank's possession.

D.  Conclusive proof to the bank of the letters testamentary, letters of administration, letters of independent administration of the succession representative, or judgment of possession and of the jurisdiction of the court rendering them shall result from copies thereof, duly certified when rendered by a court of this state, or certified according to the Acts of Congress when rendered by a court of any other state, or certified according to the law of the place when rendered by a court of any possession or dependency of the United States, or certified according to the law of the place with the genuineness of the certification attested by a consular agent of the United States when rendered by a court of any foreign country.

Acts 1984, No. 719, §1, eff. Jan. 1, 1985; Acts 2004, No. 42, §2; Acts 2013, No. 65, §1, eff. May 30, 2013.

Tit. 6, Art. 326. Transfer of contents of safety deposit boxes, money and other property by bank to legal representatives of minors or interdicts;  authority

A.  Upon proper authority and upon obtaining a receipt therefor, any bank may transfer the contents of a safety deposit box or any money and other property in its possession belonging to an interdict or a minor to the legal representative of such interdict or minor.  The letters issued to the legal representative by a court of competent jurisdiction shall constitute proper authority for making the transfer which, when so made and receipted for, shall be full protection to the bank.

B.  Conclusive proof to the bank of the letters and of the jurisdiction of the court rendering them shall result from copies thereof, duly certified when rendered by a court of this state, or certified according to the Acts of Congress when rendered by a court of any other state, or certified according to the law of the place when rendered by a court of any possession or dependency of the United States, or certified according to the law of the place with the genuineness of the certification attested by a consular agent of the United States when rendered by a court of any foreign country.

C.  The receipt to be obtained by the bank may be in any form, but it shall be signed by the legal representative and accompanied by a certified copy of the letters issued to the legal representative of the minor or interdict.

Acts 1984, No. 719, §1, eff. Jan. 1, 1985.

Tit. 6, Art. 327. Abandonment of safety deposit box

A.  A safety deposit box leased from any bank shall be deemed abandoned and the bank may remove the contents of such safety deposit box, if the rental therefor remains unpaid, all as provided under Subsection B of this Section, or pursuant to the terms of the safety deposit box contract, or as otherwise permitted by law.  Only the safety deposit box itself, and not the contents, may be deemed abandoned as provided herein.

B.  If the safety deposit box rental is delinquent for six months, the bank after sixty days' notice by mail addressed to the lessee at his address as shown on the safety deposit box contract may, if the rent is not paid within the time specified in said notice, open the box in the presence of two employees of the bank and a notary public who shall make an inventory of the contents of the box and place such contents in a sealed envelope or other container in the name of the lessee.  The bank shall then send notice to the administrator of the Uniform Unclaimed Property Act of 1997 for publication as provided by R.S. 9:161 that the safety deposit box has been abandoned and that the bank is holding the listed contents thereof.  Such notice shall include the lessee's name and last known address.

C.  After a bank has entered an abandoned safety deposit box and removed the contents thereof, it shall then hold such contents in the name of the lessee subject to a lien and privilege for the unpaid rent, the costs of opening the box and making the inventory of and storing its contents, and any other costs, expenses or other amounts as provided in the lease or by law.  If such amounts are not paid in full within one year from the date the safety deposit box became abandoned, the bank may sell all or any part of the contents by public, private, or judicial sale in accordance with Louisiana law and the terms of the safety deposit box contract.

D.  After a bank has entered an abandoned safety deposit box and removed the contents thereof, the bank may immediately re-lease the abandoned safety deposit box without accounting to the lessee, and need not apply any subsequent rental payments received therefor to the payment of any amounts owed by the former lessee.

Acts 1989, No. 357, §1; Acts 1997, No. 658, §2; Acts 2000, 1st Ex. Sess., No. 135, §1, eff. July 1, 2000.

Tit. 6, Art. 328. Access to safety deposit boxes by authorized persons;  security procedures

A bank shall establish reasonable security procedures to ensure that only authorized persons shall have access to safety deposit boxes.  Reasonable security procedures shall include but are not limited to comparing the signature of the person seeking access to a safety deposit box with the signatures on file with the bank of those persons authorized to have access to it, comparing the personal identification number provided by the person seeking access with the pre-assigned personal identification numbers of those persons authorized to have access, or requiring that the person seeking access present the key to the safety deposit box he seeks to enter.

Acts 1995, No. 1248, §1, eff. June 29, 1995.

Part XIII. Miscellaneous Provisions

Tit. 6, Art. 332. Attorney fiduciary accounts;  overdraft notification to office of disciplinary counsel

A.  A federally insured financial institution or its affiliate that maintains a fiduciary account for an attorney or law firm designated as a trust or escrow account, as mandated by Louisiana Supreme Court Rule XIX, may execute an agreement with the attorney or firm to authorize written or electronic notification to the office of disciplinary counsel, Louisiana Attorney Disciplinary Board, of an overdraft on such account.  Written or electronic notification to the office of disciplinary counsel may only be given after such federally insured financial institution or its affiliate has given notice to the offending attorney and five business days have passed from the date of such notice.

B.  A reasonable cost may be charged by the federally insured financial institution or its affiliate for such an overdraft notification service and shall be payable to the federally insured financial institution from the interest earnings on the trust account.

C.  The provisions of this Section shall not create any cause of action against a federally insured financial institution or its affiliate for the unintentional failure to provide overdraft notification to the office of disciplinary counsel, nor for the unintentional failure to otherwise comply with the provisions of this Section, nor provide a defense or remedy to any other party for any action against it.  No federally insured financial institution or its affiliates, including any of its directors, officers, employees, attorneys, accountants, or other agents, shall be civilly or criminally liable to any person, including any customer, for any disclosure or non-disclosure of financial records made in compliance with or as authorized by the provisions of this Section.

D.  No notification shall be made or sent under this Section where the overdraft is caused by charges applicable to the account that are imposed by a federally insured financial institution or are imposed through error by such institution.

Acts 2005, No. 249, §1.

NOTE:  Section 2 of Acts 2005, No. 249, provides that the Acts shall become effective six months following adoption of a final rule by the Louisiana Supreme Court requiring attorneys to utilize, in whole or in part, the overdraft notification services provided in R.S. 6:332 as enacted by this Act.

Tit. 6, Art. 333. Disclosure of financial records;  reimbursement of costs

            A. As used in this Section:

            (1) "Affiliate" means a bank's holding company, any subsidiary of a bank or its holding company, any insurer of or surety for the bank, or any attorney, accountant, auditor, or other agent for or of the bank or an affiliate. An affiliate shall include any person who performs services for or functions on behalf of the bank pursuant to a contractual agreement obligating such person to maintain the confidentiality of information received from the bank in the performance of its contract.

            (2) "Bank" means any state bank, national bank, or any entity organized to engage in the business of banking pursuant to the laws of any other state or the District of Columbia domiciled in, having its principal place of business in, or engaged in the business of banking in this state. "Bank" shall also mean a savings bank, a savings and loan association, a company issuing credit cards, or any other business offering credit.

            (3) "Consumer" means an individual who obtains or has obtained a financial product or service from a bank that is to be used primarily for personal, family, or household purposes, or for that individual's legal representative.

            (4) "Customer" means any person who has transacted, or is transacting, any business with a bank or who has used, or is using, any service of a bank, including but not limited to the following: any person who was or is indebted or otherwise obligated to the bank, whether directly or indirectly; any person who has provided, or is providing, any collateral security for any indebtedness or other obligation to the bank; any person who has had, or currently has, any funds on deposit at the bank; or any person for whom the bank is acting or has acted as a fiduciary.

            (5) "Disclosure" or "disclose" means and includes producing, providing access to, providing copies of, or giving testimony or making other oral or written statements pertaining to financial records.

            (6) "Disclosure demand" means a civil or criminal judicial, administrative, legislative, military courts-martial, juvenile, grand jury, arbitration, or medical review panel subpoena, summons, or order or notice of deposition, interrogatories, request for production or inspection of documents, request for admissions, or other discovery request lawfully directed or propounded to a bank or any affiliate.

            (7) "Financial record" means an original, duplicate, or copy of any memorandum, writing, datum, compilation, entry, print, analysis, review, committee minute, internal or external audit report, or other document or record held by, or otherwise in the possession or under the control of, a bank which pertains in any way to a past or current customer or to such customer's past or current relationship with the bank and all information contained therein or derived therefrom. Financial record shall not include "publicly available information".

            (8) "Government authority" means an agency, department, or commission of the United States or of any state thereof, or any officer, employee, or agent thereof.

            (9) "Person" means any individual, partnership, limited partnership, unincorporated association, joint stock company, corporation, limited liability company, limited liability partnership, state, city, county, municipality, or other governmental subdivision and their respective employees, boards, agencies, and departments.

            (10) "Publicly available information" means any information that a bank or any affiliate has a reasonable basis to believe is lawfully made available to the general public from any of the following:

            (a) Federal, state, or local government records.

            (b) Widely distributed media.

            (c) Disclosures to the general public that are required to be made by federal, state, or local law.

            (11) "Return date" means the date on which financial records are to be produced or disclosed, either as set forth in a disclosure demand or as such date may be extended by appropriate order or by agreement between the bank and the person requesting such financial records.

            (12) "Supervisory agency" means any entity which has statutory authority to examine the financial condition, business operations, records, or transactions of a bank, including but not limited to the following:

            (a) The Federal Deposit Insurance Corporation.

            (b) The Board of Governors of the Federal Reserve System.

            (c) The Comptroller of the Currency.

            (d) The Securities and Exchange Commission.

            (e) The secretary of the United States Treasury with respect to the Bank Secrecy Act.

            (f) The office of financial institutions.

            (g) The federal Office of Thrift Supervision.

            B. Notwithstanding any other provision of law to the contrary, except R.S. 9:151 et seq. and 3854(B)(2), R.S. 13:3921 et seq., Code of Civil Procedure Article 2411 et seq., R.S. 46:236.1.4, and R.S. 47:1676(D)(2) and 1677, no bank or its affiliate shall disclose any financial records to any person other than the customer to whom the financial records pertain, unless such financial records are disclosed:

            (1) In response to a disclosure demand in accordance with the provisions of Subsection C of this Section.

            (2) Pursuant to a written request or authorization for disclosure or waiver which meets the requirements of Subsection E of this Section.

            (3) As otherwise permitted or allowed by this Section.

            C. A bank may disclose financial records pursuant to a disclosure demand if each of the following conditions are met:

            (1) The disclosure demand is served on the bank's president, one of the bank's registered agents for service of process, or, if applicable, on the bank's counsel of record unless such service on such individuals is expressly waived by the bank.

            (2) Prior to the return date, the person requesting the issuance of the disclosure demand furnishes the bank with an affidavit certifying both of the following:

            (a) That such disclosure demand, or a certified copy thereof, has also been personally served upon each customer named in the disclosure demand to whom the financial records being sought pertain or upon such customer's counsel of record in accordance with Subsection D of this Section.

            (b) That such service was made at least fifteen business days prior to the return date.

            (3) The bank has not received written notice that a customer to whom the financial records pertain has taken legal action to enjoin or otherwise restrain the release of the financial records.

            D. Service of a disclosure demand, or certified copy thereof, on any customer shall be made by utilizing any applicable method for service of citation on said customer authorized by the Code of Civil Procedure, including Articles 1231 through 1265. However, any such service may be made by an individual who is not a party and who is at least eighteen years of age, rather than by the sheriff. Service on any customer's counsel of record shall be made by personal service in the office of such counsel of record on either his secretary, as defined in Code of Civil Procedure Article 1235(C), or any partner or office associate of such counsel of record. Service on a customer or on his counsel of record may be made within or without the state of Louisiana.

            E. A customer, or an attorney at law representing such customer, may authorize disclosure of the customer's financial records by providing the bank with a signed and dated statement which authorizes such disclosure, specifies the person to whom such financial records may be disclosed, and reasonably identifies the financial records which are authorized to be disclosed. Any such statement signed by an attorney at law stating or certifying that he represents a customer may, at the bank's discretion, be relied upon and shall constitute proper authority for disclosure pursuant to this Section.

            F. The following disclosures by a bank or any affiliate are hereby specifically authorized and, except as otherwise provided in this Subsection, nothing in this Section shall prohibit, restrict, or otherwise apply to:

            (1) The disclosure by a bank or any affiliate of any financial record to any person as an incident necessary to: obtaining or perfecting a guaranty, mortgage, lien, security interest, or other encumbrance; proving a claim in bankruptcy, otherwise collecting on, or enforcing its rights with respect to a debt owing either to the bank itself or to it in its role as a fiduciary; or procuring, making a claim on, or otherwise enforcing or exercising its rights with respect to any insurance pertaining or related to a debt owing either to the bank itself or to it in its role as a fiduciary, including single interest insurance.

            (2) The disclosure by a bank or any affiliate of any financial record to a supervisory agency in connection with the exercise of the supervisory agency's supervisory, regulatory, or monetary functions with respect to the bank or any affiliate of the bank.

            (3) The disclosure by a bank of any financial record to any affiliate of the bank.

            (4) The disclosure by a bank or any affiliate of financial records to any person to whom the bank has sold or participated, or may sell or may participate, in all or any part of one or more customer loans or other indebtedness or deposits to which such financial records pertain or to any person to whom the bank has granted, or may grant, one or more assignments, liens, security interests, or other encumbrances in or affecting one or more customer loans or other indebtedness to which such financial records pertain.

            (5) The disclosure by a bank or any affiliate, after the execution of a confidentiality agreement between the bank or its affiliate and the person to whom the financial records are to be disclosed, of financial records to any of the following:

            (a) Potential investors in the bank or any affiliate and their agents, in the case of a nonpublic offering, or investment banking firms and their agents, in the case of a public offering, in connection with an offering of debt or equity securities of the bank or any affiliate.

            (b) Holders of debt or equity securities issued by the bank or by any affiliate, and the agents of such holders, to the extent that such disclosure is required by law or by the terms of one or more agreements or instruments pertaining to such securities.

            (c) Any person and its agents in connection with the consideration or completion of mergers, consolidations, acquisitions, or sales of all or substantially all of the assets of the bank or of any affiliate.

            (6) The disclosure by a bank or any affiliate of financial records to a government authority or law enforcement agency or department in connection with a known or suspected criminal act against the bank or involving a bank officer or employee.

            (7) The disclosure by a bank or any affiliate of general credit information relating to the existence of accounts, promptness of payments, limits of credit, or other general information normally furnished to a credit reporting or rating agency or to another financial institution, including but not limited to another bank or savings and loan association, or to any other person who has made a request for the information and who has a legitimate business need for it in connection with a transaction or proposed transaction between the customer and such person. Unless the request is prompted by the customer, notice of the written request shall be given to the customer.

            (8) The disclosure by a bank or any affiliate of financial records to any person in connection with any authorization or approval of a specific extension of credit directly or indirectly by a credit card company or other person offering or extending credit or the exchange of information between the bank and such person as to the bank's experience with the customer.

            (9) The disclosure by a bank or any affiliate of financial records to any person having any ownership or joint interest in an account to which the financial records pertain, any person directly or indirectly obligated to the bank on an extension of credit to which the financial records pertain, or any person who has granted a mortgage, lien, security interest, or other encumbrance in favor of the bank or has otherwise provided security to the bank to secure an extension of credit to which the financial records pertain.

            (10) The disclosure by a bank or any affiliate of financial records to any legal representative, surviving spouse, heir, or legatee of a customer or to an attorney at law representing the same upon the bank's receiving written notice of the customer's death, interdiction, or other incapacity and upon the bank's receiving evidence satisfactory to it of proper authority which, in the case of a surviving spouse, heir, or legatee of a decedent, may be by affidavit executed by such person attesting to such relationship with the decedent.

            (11) The disclosure by a bank or any affiliate of financial records in situations governed by, pursuant to, and in accordance with the provisions of 12 U.S.C. 3401 et seq., 15 U.S.C. 6801 et seq., or pursuant to a search warrant issued in accordance with Title IV of the Code of Criminal Procedure.

            (12) The disclosure by a bank or any affiliate of financial records in situations governed by, pursuant to, and in accordance with the provisions of Title 31 of the United States Code.

            (13) The disclosure by a bank or any affiliate of financial records pursuant to a subpoena or court order issued in connection with proceedings before a federal or state grand jury in accordance with applicable federal or state law, rule, or regulation, or subpoena or court order issued in connection with a state criminal investigation pursuant to Code of Criminal Procedure Article 66.

            (14) The disclosure by a bank or any affiliate of data match information on an individual to the secretary of the Department of Children and Family Services, or his designee in the office of children and family services, child support enforcement section, for use in attempting to establish, modify, or enforce a child support obligation of such individual. Such disclosure to the department shall be limited to the name, record address, social security or taxpayer identification number, and an average daily account balance for the most recent thirty-day period, of a noncustodial parent who maintains an account at such institution and who owes past-due support as identified by the state by name and social security or taxpayer identification number. The disclosure authorization provided for in this Paragraph shall apply to all co-owners listed on the applicable account.

            (15) The disclosure by a bank or any affiliate of publicly available information.

            (16) The disclosure by a federally insured financial institution or any of its affiliates of financial records pursuant to R.S. 6:332.

            (17) A bank that makes agriculture loans that communicates information, either orally or in writing, in accordance with R.S. 3:3419.1.

            (18) The disclosure by a bank or any of its subsidiaries or affiliates of data match information on an account owner to the secretary of the Department of Revenue, and his designee in the office of debt recovery, for use in attempting to enforce a final tax or non-tax assessment or judgment against such individual or entity. Such disclosure to the department or office shall be limited to the name, record address, social security or taxpayer identification number, other identifying information, and an average daily account balance for the most recent thirty-day period, of a state tax or state non-tax debtor who maintains an account or is a customer at such institution and who purportedly owes a final state tax or state non-tax assessment or judgment. The disclosure authorization provided for in this Paragraph shall apply to all co-owners listed on the applicable account.

            G. A bank shall be given a reasonable period of time prior to the return date, and in no event less than fifteen business days prior thereto, in which to complete the action necessary to disclose financial records which are the subject of a request. Whether the bank is a party to litigation or not, prior to making any disclosure and notwithstanding any contrary provisions of this Section, R.S. 13:4521, Code of Civil Procedure Article 2411, or of any other law, the bank shall be reimbursed by the requesting person for the reasonable fees and costs incurred or to be incurred by the bank in the course of compliance with the request, including but not limited to document reproduction costs, research and processing costs, personnel costs, and travel expenses, whether any or all such costs are internal costs or are costs incurred by the bank in favor of a person acting on behalf of or performing services for the bank. If the bank and the requesting party disagree as to the amount of the fees and costs to be reimbursed to the bank under this Section, the bank need not produce the financial records, until the court or other appropriate body issuing the disclosure demand has fixed the amount to be paid to the bank upon a motion of any party or the bank. The court or other appropriate body, in its discretion, may order a contradictory hearing to fix the fees and costs to be reimbursed.

            H.(1) Unless the disclosure demand specifically provides otherwise, it shall be sufficient compliance therewith if the bank, on or before the return date or the first business day thereafter if the return date is not a business day for the bank, either deposits with an overnight courier service or sends by U.S. registered or certified mail copies of the financial records to be disclosed. When the financial records are disclosed in accordance with the provisions of this Subsection, the copies of said financial records shall be accompanied by a written certificate executed by a representative of the bank in substantially the following form:

"Date:_______________

I, ______________________, a representative of ___________________________ (Bank) do hereby certify that the document(s) attached to or accompanying this certificate, consisting of ______ page(s) is (are each) a true and correct copy of the original records represented thereby.

____________________________

Name

____________________________

Title

____________________________

Address

____________________________

Telephone Number"

            (2) When financial records are disclosed in accordance with the provisions of this Subsection, disclosure occurs when the financial records are deposited with the overnight courier service or in the U.S. mail, as applicable.

            I.(1) No bank or its affiliates, including any of its directors, officers, employees, attorneys, accountants, or other agents, shall be civilly or criminally liable to any person, including any customer, for any disclosure of publicly available information or for any disclosure of financial records made in compliance with or as authorized by the provisions of this Section. However, if the bank actually receives written notice that the customer has taken legal action to enjoin or otherwise restrain the disclosure of financial records, and the bank receives such written notice sufficiently in advance of disclosure so as to allow the bank a reasonable time to act on said notice, then the bank shall postpone disclosure of such financial records until such time as it is provided with satisfactory evidence that the disclosure of the financial records by it is permitted.

            (2) Notwithstanding any law to the contrary, all financial records prepared by or for the bank in connection with the bank's evaluation, analysis, or review of any loan or other extension of credit or of any collateral security therefor or reserve therefor shall be confidential and shall not be discoverable or admissible in evidence in any civil action pertaining to or arising out of any such loan, other extension of credit, or the collateral security therefor.

            Acts 1984, No. 719, §1, eff. Jan. 1, 1985; Acts 1989, No. 779, §1, eff. July 9, 1989; Acts 1990, No. 694, §1, eff. July 20, 1990; Acts 1990, No. 904, §1, eff. July 25, 1990; Acts 1991, No. 694, §1; Acts 1995, No. 709, §1; Acts 1995, No. 1094, §1; Acts 1997, No. 44, §1; Acts 1997, No. 1278, §1, eff. July 1, 1997; Acts 2001, No. 380, §1; Acts 2003, No. 639, §1, eff. June 27, 2003; Acts 2005, No. 249, §1; Acts 2006, No. 259, §1; Acts 2008, No. 532, §2; Acts 2010, No. 860, §2; Acts 2012, No. 255, §1; Acts 2013, No. 399, §1, eff. June 17, 2013; Acts 2014, No. 356, §3; Acts 2015, No. 215, §1; Acts 2019, No. 34, §1.

NOTE: Section 2 of Acts 2005, No. 249, provides that the Act shall become effective six months following adoption of a final rule by the Louisiana Supreme Court requiring attorneys to utilize, in whole or in part, the overdraft notification services provided in R.S. 6:332 as enacted by the Act. (Act 249 enacted Paragraph (F)(16))

Tit. 6, Art. 334. Foreclosure of mortgage

In the event of foreclosure by executory process of a mortgage on either movable or immovable property in favor of a supervised financial organization, the certificate of any officer thereof, under the seal of the supervised financial organization, certifying as to the amount due on the mortgage, the interest rate as applicable, and the maturity thereof by reason of the failure of the mortgagor, his assigns, or successors to comply with the obligations imposed on him by the act of the mortgage is authentic evidence of the facts recited in the certificate.

Acts 1984, No. 719, §1, eff. Jan. 1, 1985.

Tit. 6, Art. 335. Sharing of electronic financial terminals

A.  A financial institution may share an electronic financial terminal with other financial institutions, or with other nonfinancial institutions if such nonfinancial institution agrees in writing that its electronic financial terminal may be subject to examination by the commissioner.

B.  An agreement to share electronic financial terminals shall not prohibit, limit, or restrict the right of a financial institution to charge a customer a usage fee.

Acts 1993, No. 456, §1, eff. Oct. 1, 1993.

Tit. 6, Art. 336. Legal and regulatory compliance;  self-evaluations;  privilege of results

            A. It is the intent of the legislature to encourage FDIC-insured financial institutions, their holding companies, subsidiaries, and affiliates to engage in self-evaluations, self-assessments, self-testing, and self-corrections with respect to compliance with applicable state and federal banking laws and regulations. To that end, and notwithstanding any other law to the contrary, the results of any such self-determination, self-assessment, self-testing, or self-corrections, and any notes, reports, or work product derived therefrom, whether prepared by internal personnel or by outside attorneys, accountants, third-party service providers, or consultants, shall be deemed privileged for all purposes and shall not be subject to discovery and shall not be admissible as evidence, unless specifically agreed to by the FDIC-insured financial institution, its holding company, subsidiary, or affiliate, in any private, public, or administrative civil action brought against the FDIC-insured financial institution, holding company, subsidiaries, or affiliates alleging noncompliance with or violation of such applicable state and federal banking laws and regulations.

            B.(1) The submission by any FDIC-insured financial institution of any information to any federal banking agency or bureau, including but not limited to the Consumer Financial Protection Bureau, or to the commissioner of the office of financial institutions, or to any other state agency or department, for any purpose in the course of any supervisory, regulatory, or enforcement process of such agency, bureau, commissioner, or state agency or department, shall not be construed as waiving, destroying, or otherwise affecting any privilege the FDIC-insured financial institution may claim with respect to such information under federal or state law as to any person or entity other than such agency, bureau, commissioner, or state agency or department.

            (2) The provisions of Paragraph (1) of this Subsection shall not be construed as implying or establishing either of the following:

            (a) That any FDIC-insured financial institution waives any privilege applicable to information that is submitted or transferred under any circumstances to which Paragraph (1) of this Subsection does not apply.

            (b) That any FDIC-insured financial institution would waive any privilege applicable to any information by submitting the information to any federal banking agency or bureau or the commissioner of the office of financial institutions, but for the provisions of this Section.

            Acts 1995, No. 1084, §1, eff. June 29, 1995; Acts 2012, No. 35, §1.

Tit. 6, Art. 337. Duty of secured party upon payment of insurance claim for damage to mortgaged residential property

A.  If payment in settlement of a damage claim on residential property in which another person holds a mortgage is by check or draft, of an insurer, made payable jointly to the claimant and the person holding the mortgage, then such "settlement proceeds," as defined in Subsection C of this Section, shall be placed in escrow and shall earn interest payable to the claimant in accordance with the provisions of Subsection C of this Section.

B.  When the damaged property is replaced or otherwise repaired to the satisfaction of the claimant and the person holding the mortgage on the property, then any remaining balance in the escrow account shall be paid to the claimant together with all interest that accrued while the funds were in escrow.  The person holding the security interest in the property shall cooperate fully with the claimant and the claimant's insurer in releasing funds in a timely manner to replace or repair the damaged property.

C.  As used in this Section, "settlement proceeds" means funds paid on an insurance claim for damage to residential immovable property as a result of Hurricane Katrina or Hurricane Rita, and where the funds equal twenty-five thousand dollars or more.  These funds shall be held in escrow by the lender or loan servicer.  Interest shall accrue on settlement proceeds after being held in escrow for more than thirty days.  For purposes of this Subsection, compliance with Fannie Mae or Freddie Mac servicing guidelines for payment of interest on property damage claim funds held in escrow by the lender or loan servicer constitutes compliance with this Section.

D.  The provisions of this Section shall be applicable to state chartered federally insured financial institutions and their affiliates to the same extent that such provisions are applicable to federally chartered financial institutions.

Acts 2006, 1st Ex. Sess., No. 14, §1, eff. Feb. 23, 2006.

Tit. 6, Art. 338. Insurance settlement proceeds;  return of excess funds;  enforcement

A.  If a mortgage holder is presented with a jointly payable insurance proceeds check or draft for residential immovable property damage resulting from either Hurricane Katrina or Hurricane Rita, or both, which contains the mortgagor's endorsement, and the mortgage holder receives a written request from the borrower to release excess funds, then all mortgage holders shall have thirty days after receiving such request and such check or draft to provide their endorsements and return all excess funds provided for in Subsection B of this Section.

B.  The mortgage holder holding funds in escrow shall return to the mortgagor all funds considered to be excess funds.  For purposes of this Section, the term "excess funds" shall mean insurance funds in excess of the following:

(1)  All loan balances of any mortgage holder named as payee on the insurance claim check or draft calculated as of the thirtieth day following receipt of the request and check or draft as outlined in Subsection A of this Section; and

(2)  Six months of future accrued interest as calculated pursuant to the terms of the mortgage loans and calculated from the date of the payoff explained in Paragraph (B)(1) of this Section.

C.(1)  The commissioner may impose civil money penalties of up to one hundred fifty dollars per day of each day a mortgage holder subject to his jurisdiction fails to comply with the requirements of Subsection B of this Section.

(2)  Penalties shall be due and payable upon notice of their assessment to the mortgage holder, unless set aside after administrative hearing pursuant to the provisions of the Administrative Procedure Act.  The assessment of civil money penalties shall be final and definitive and subject to enforcement by the commissioner through judicial proceedings.

D.  The provisions of this Section shall be applicable to state-chartered federally insured financial institutions and their affiliates to the same extent that such provisions are applicable to federally chartered financial institutions.

E.  The commissioner shall have the power to enact and promulgate rules and regulations as may be necessary or appropriate to implement the provisions of this Section.

Acts 2006, 1st Ex. Sess., No. 21, §1, eff. April 1, 2006.

Subchapter B. Mergers, Consolidations, Liquidations, and Conversions

Part I. Mergers, Consolidations, and Share Exchanges

Tit. 6, Art. 351. Authorization for mergers, consolidations, and share exchanges

A.  Any two or more state banks, and any one or more state banks and any one or more national banks, may, upon approval of the commissioner if the surviving or consolidated bank will be a state bank, be:

(1)  Merged into one of the banks; or

(2)  Consolidated into a new bank.

B.  Notwithstanding any provision of this Title, or any other state law to the contrary, and upon prior written approval of the commissioner and the appropriate federal regulatory agencies, any one state bank may be merged or consolidated with a Louisiana bank holding company that owns all the issued and outstanding stock of the bank, with the resulting entity being the state bank, subject to the requirements for a bank merger or consolidation established by R.S. 6:352 et seq., as if the bank holding company were a state bank.  Any such merger or consolidation shall only be effected for the purposes of voluntarily liquidating or dissolving the bank holding company.

C.  With the approval of the commissioner and subject to the provisions of R.S. 6:352.1, all of the outstanding shares of one or more classes or series of capital stock of a state bank, savings bank, or an association, hereinafter referred to as a "financial institution", may be acquired by another bank, savings bank, or association, or a holding company or holding company in formation for any of the foregoing, hereinafter referred to as the "acquiring entity" in exchange for shares, obligations, or other securities of the acquiring entity or for cash or other property, in whole or in part, with the state financial institution and the acquiring entity remaining in existence upon consummation of the exchange.

D.  When, as a result of a merger or consolidation, a state bank relinquishes its state charter to the commissioner, it shall provide a copy of the executed agreement, not later than thirty days prior to the effective date of the merger or conversion, and pay a fee in an amount to be determined by the commissioner by rule.  Within thirty days after the issuance of the certificate of merger or consolidation, the relinquishing bank shall file the certificate and a certified copy of the agreement in accordance with the procedures established by R.S. 6:352(7).  A certified copy of the agreement shall also be filed in the parish where the state bank was domiciled, except that the certificate of merger shall be filed in the parish of domicile of the bank whose certificate of authority has been canceled.

Acts 1984, No. 719, §1, eff. Jan. 1, 1985; Acts 1988, No. 117, §1, eff. June 29, 1988; Acts 1993, No. 457, §1, eff. Jan. 1, 1994; Acts 2001, No. 876, §1, eff. June 26, 2001; Acts 2003, No. 57, §1, eff. May 23, 2003.

Tit. 6, Art. 352. Merger or consolidation procedure

Merger or consolidation may be effected only as a result of a joint agreement entered into, approved, and filed as follows:

(1)  The board of directors of each of the banks which desires to merge or consolidate may enter into a joint agreement signed by a majority of the directors of each prescribing the terms and conditions of merger or consolidation and the mode of carrying the same into effect and containing such other provisions as are deemed necessary.

(2)  The agreement must be approved by the stockholders of the banks involved which were not organized under the provisions of this law in the manner provided by the laws under which they were formed and by the stockholders of any state bank in the manner provided in Paragraph (3) of this Section.

(3)(a)  The agreement shall be submitted to the stockholders of each of the merging or consolidating banks at an annual or special meeting.  Each stockholder of each such bank shall be entitled to cast one vote as to the agreement for each share having voting power held by him of record on the record date for the meeting.

(b)  Written notice shall be given by each such bank to each stockholder of record entitled to vote at the meeting at least ten days and not more than sixty days prior to the day fixed for the meeting.  A copy or summary of the agreement shall be included in or enclosed with such notice, and the notice shall include, if applicable, the following statement: "Dissenting stockholders who comply with the procedural requirements of the Louisiana Banking Law will be entitled to receive payment of the fair cash value of their shares if the merger or consolidation is effected, upon approval by less than eighty percent of the bank's total voting power."

(c)  The agreement must be approved by the stockholders of each bank organized under the provisions of this law by vote of at least two-thirds of the voting power present or by such larger or smaller proportion not less than a majority of the voting power present as the articles may provide.

(4)  The stockholders shall have the right, exercisable by the vote required for approval of the agreement, to propose amendments to the agreement, and if such amendments be concurred in by the stockholders of all of the other parties to the agreement in each case by the vote required for approval of the agreement, the agreement so amended, when certified, signed, and acknowledged as provided in this Section, shall be considered the merger or consolidation agreement.

(5)  The fact that the agreement has been approved by the stockholders of each party thereto as hereinabove provided shall be certified on the agreement by the respective secretaries or assistant secretaries or cashiers or assistant cashiers, and the agreement, so approved and certified, shall be signed and acknowledged by the president or chief executive officer of each of the parties thereto.

(6)  If the merger agreement does not amend the articles of the surviving bank, and if the shares of such bank to be issued or delivered under the agreement do not exceed fifteen percent of the shares of such bank of the same class outstanding immediately prior to the effectiveness of the merger, approval of the agreement by such bank's stockholders shall not be required, and the secretary or assistant secretary or cashier or assistant cashier shall certify on the agreement that such approval is not required and the reasons therefor.

(7)(a)  The agreement, so adopted, certified, and acknowledged, shall be filed with the commissioner, who, after all fees and charges have been paid as required by law, shall record the same in his office, endorse thereon the date and, if requested, the hour of filing thereof with him, and issue a certificate of merger or consolidation, which shall recite the names of all the merging and consolidating banks, whether a merger or consolidation is involved, the name of the surviving or consolidated bank, the date and, if endorsed on the agreement, the hour of filing the agreement with him, and the effective time of the merger or consolidation, if stated in the agreement.  The agreement may be delivered to the commissioner in advance for filing as of any specified date and, if specified upon such delivery, as of any given time on such date within thirty days after the date of delivery.

(b)  A copy of the certificate of merger or consolidation certified by the commissioner as well as the merger or consolidation agreement shall, within thirty days after issuance of the certificate, be filed for record with the office of the recorder of mortgages in the parish of the surviving or consolidated bank's domicile.

(8)  Notwithstanding stockholder approval and at any time prior to the effectiveness of the merger or consolidation, the merger or consolidation may be abandoned pursuant to a provision for such abandonment, if any, contained in the agreement of merger or consolidation.

(9)  An agreement of merger or consolidation may provide that any consideration to be delivered to stockholders of any party to the consolidation or merger may consist of shares or secured or unsecured obligations of any corporation or bank, whether or not a party to the consolidation or merger, or cash or other consideration.

(10)  Except for any merger or consolidation in which the surviving or consolidated bank is a national bank, before issuing a certificate of merger or consolidation, the commissioner shall consider the financial and managerial resources and future prospects of the existing and proposed institutions and whether the convenience and needs of the community will be served.  If he finds that the public interest will not be served by permitting such merger or consolidation, he shall refuse to issue the certificate.

Acts 1984, No. 719, §1, eff. Jan. 1, 1985; Acts 1988, No. 117, §1, eff. June 29, 1988; Acts 2003, No. 577, §1, eff. June 27, 2003.

Tit. 6, Art. 352.1. Share exchange procedure

A.  With the approval of the commissioner, all of the outstanding shares of one or more classes or series of capital stock of a financial institution may be acquired by another bank, savings bank or association, or a holding company or holding company in formation for any of the foregoing, hereinafter referred to as the "acquiring entity", if the board of directors of each party to the transaction adopts a plan of exchange and the shareholders of the financial institution whose shares will be acquired approve the plan of exchange in the manner provided in Subsection E of this Section.

B.  The plan of exchange, accompanied by all fees and charges, shall be submitted to the commissioner for approval and shall set forth all of the following:

(1)  The name of the state financial institution whose shares will be acquired and the name of the acquiring entity.

(2)  The terms and conditions of the share exchange.

(3)  The manner and basis of exchanging the shares to be acquired for shares, obligations, or other securities of the acquiring entity, or for cash or other property in whole or part.

C.  The plan of exchange may set forth other provisions relating to the exchange.

D.  This Section does not limit the power of  an acquiring entity to acquire all or part of the shares of one or more classes or series of another state financial institution through a voluntary exchange or otherwise.

E.  After adopting a plan of exchange, the board of directors of the state financial institution whose shares will be acquired in the share exchange shall submit the plan of exchange for approval by its shareholders.  The financial institution shall give written notice to each shareholder, whether or not entitled to vote, of the annual or special meeting at which the plan of exchange will be voted on.  The notice shall include a statement that the purpose, or one of the purposes, of the meeting is to consider the plan of exchange and shall contain or be accompanied by a copy or summary of the plan of exchange, and the notice shall include, if applicable, the following statement:

"Dissenting shareholders who comply with the procedural requirements of the Louisiana Banking Law will be entitled to receive payment of the fair cash value of their shares if the share exchange is effected upon approval by less than eighty percent of the corporation's total voting power."

F.  Unless this Chapter, or the articles of the state financial institution whose shares are  to be acquired, require a greater vote or a vote by class or series, the plan of exchange to be authorized shall be approved by a vote of at least two-thirds of the voting power present of each class or series included in the share exchange, voting separately as a class, or by such larger or smaller vote, though not less than a majority of the voting power present, or of the total voting power of each class or series included in the share exchange, voting separately as a class, as the articles may require, at a meeting of shareholders of the state financial institution for which notice has been given in accordance with Subsection E of this Section.  When the articles specify the vote required to effect a merger of such institution but do not specify the vote required for a share exchange, the vote specified in the articles to effect a merger shall be the vote required to effect the share exchange.  It shall not be necessary for the shareholders of the acquiring entity to approve a share exchange, unless that entity's articles provide otherwise or provide expressly that a shareholder vote shall be required to approve a merger that under this Chapter would not otherwise be required to be approved by shareholders, in which case the share exchange shall be approved by the same vote as required to approve a merger.

G.  After a share exchange is authorized, and at any time before articles of share exchange are filed, the planned share exchange may be abandoned, subject to any contractual rights, without further shareholder action, in accordance with the procedure set forth in the plan of exchange, or if none is set forth, in the manner determined by the respective boards of directors.

H.(1)  After a plan of exchange is approved by the shareholders of the financial institution whose shares will be acquired, and the shareholders of the acquiring entity, if required, and after approval by the commissioner of the share exchange, the acquiring entity shall  deliver to its chartering agency articles of share exchange or such other documents required by law or regulation governing such acquiring entity.  A duplicate original of the articles of exchange or other document required to be filed with the chartering agency of the acquiring entity and a copy of any certificate or other document issued by such agency shall, within thirty days after issuance of the certificate or other document by the chartering agency, be filed for record with the commissioner and in the appropriate records of the parish of domicile of the financial institution whose shares have been acquired.

(2)(a)  If no document is required to be filed with the acquiring entity's chartering agency, after a plan of exchange is approved by the shareholders of the financial institution whose shares will be acquired, and the shareholders of the acquiring entity, if required, and after approval by the commissioner of the share exchange, the state financial institution whose shares are being acquired shall deliver to the commissioner for filing articles of exchange executed by the president and acknowledged by the secretary or cashier of the state financial institution, setting forth the following:

(i)  The plan of exchange.

(ii)  The designation, number of outstanding shares, and number of votes entitled to be cast by each class or series included in the share exchange.

(iii)  Either the total number of votes cast for and against the plan of exchange by each class or series entitled to vote, or the total number of votes cast for the plan of exchange by each class or series entitled to vote, and a statement that the number cast for the plan of exchange by each class or series entitled to vote was sufficient for approval by that class or series.

(b)  Upon receipt of the articles of share exchange, the commissioner, after all fees and charges have been paid as required by regulation, shall record the articles of share exchange in his office, endorse thereon the date, and, if requested, the hour of filing thereof with him, and issue a certificate of share exchange, which shall recite the names of the acquiring entity and of the financial institution whose shares were acquired, the date, and, if endorsed on the agreement, the hour of filing of the articles of share exchange with him, and the effective time of the share exchange.  The articles of share exchange may be delivered to the commissioner in advance for filing as of any specified date, and, if specified upon such delivery, as of any given time on such date within thirty days after the date of delivery.  Unless otherwise specified in the plan of exchange, the share exchange shall take effect on the date on which the articles of share exchange were delivered to the commissioner for filing.  A copy of the certificate of share exchange certified by the commissioner as well as the executed articles of exchange shall, within thirty days after issuance of the certificate, be filed in the appropriate records of the parish of the domicile of the financial institution whose shares have been acquired.

(3), (4)  Repealed by Acts 2003, No. 57, §2, eff. May 23, 2003.

I.  When a share exchange takes effect, the shares of the acquired financial institution are exchanged as provided in the plan of exchange, and the former holders of the shares are entitled only to the exchange rights provided in the plan of exchange or, if applicable, to those rights as established under R.S. 6:376.

Acts 2001, No. 876, §1, eff. June 26, 2001; Acts 2003, No. 17, §1, eff. May 23, 2003; Acts 2003, No. 57, §§1 and 2, eff. May 23, 2003; Acts 2003, No. 60, §1, eff. May 23, 2003.

Tit. 6, Art. 353. Consolidation;  articles of incorporation

A.  If the joint agreement is for a consolidation into a new bank to be formed under this law, articles of incorporation for the new bank shall be prepared in the manner and form prescribed by law except that:

(1)  The banks consolidating shall be named as the incorporators of the new bank.

(2)  The articles shall be signed by the president or chief executive officer and secretary or assistant secretary or cashier or assistant cashier of each of the banks, and the articles shall be acknowledged by the officers so signing the articles.

(3)  In addition to the provisions required by law to be contained therein, the articles shall state the shares, secured or unsecured obligations, cash, or other consideration to be delivered to the stockholders or members of each of the consolidating banks or the manner of converting shares thereof into securities of the new bank.

B.  The articles shall be filed and recorded and a certificate of incorporation issued as provided in this law.

Acts 1984, No. 719, §1, eff. Jan. 1, 1985.

Tit. 6, Art. 354. When merger or consolidation effective

A.  A merger shall be effective when the joint agreement has been recorded by the commissioner as of the time of filing of the agreement with the commissioner or as of any later effective time not more than thirty days after the date of filing stated in the agreement.

B.  A consolidation shall be effective when the joint agreement and the articles have been recorded in the office of the commissioner as of the time of filing of the agreement with the commissioner or as of any later effective time not more than thirty days after the date of such filing stated in the agreement.

Acts 1984, No. 719, §1, eff. Jan. 1, 1985.

Tit. 6, Art. 355. Effect of merger or consolidation

Upon the effectiveness of the merger or consolidation, the effect thereof shall be that:

A.  The several parties to the joint agreement shall be one bank which shall be:

(1)  In the case of merger, one of the constituent banks into which it has been agreed that the others shall be merged, and which shall survive the merger for that purpose.

(2)  In the case of consolidation, the new bank into which it has been agreed that the others shall be consolidated.

B.  The separate existence of the constituent banks shall cease except that of the surviving bank in the case of merger.

C.  The surviving or new bank shall possess all the rights, privileges, and franchises possessed by each of the former banks merged or consolidated.

D.  All of the property and assets of whatsoever kind or description of each of the constituent banks, all franchises and interests including appointments, designations, and nominations, and all other rights and interests as trustee, executor, administrator, registrar of stocks and bonds, guardian of estates, assignee, receiver, and in every other fiduciary capacity, all debts due on whatever account to any of the constituent banks including subscriptions for shares and other rights of action belonging to any of them shall be taken and be deemed to be transferred to and vested in the surviving or new bank without further act or deed, in the same manner and to the same extent as such rights, franchises, and interests would have been held or enjoyed by any one of the constituent banks whenever such matter comes into existence as a result of one of the nonsurviving constituent banks having been named in the act or document or other evidence that creates the right, interest, fiduciary relationship, or responsibility, such as a testament, trust indenture, or suspensively conditioned contract.

E.  The surviving or new bank shall be responsible for all of the liabilities and obligations of each of the banks merged or consolidated in the same manner as if such surviving or new bank had itself incurred such liabilities or obligations; but the liabilities of such constituent banks or of their stockholders, members, directors, or officers shall not be affected, nor shall the rights of the creditors thereof, or of any persons dealing with such banks, be impaired by such merger or consolidation; and any claim existing or action or proceeding pending by or against any of such constituent banks may be prosecuted to judgment as if such merger or consolidation had not taken place, or the surviving or new bank may be proceeded against or substituted in place of such constituent bank.

F.  In the case of a merger, the articles of the surviving bank shall be deemed amended to the extent of any changes therein stated in the merger agreement.

Acts 1984, No. 719, §1, eff. Jan. 1, 1985.

Part II. Conversions

Tit. 6, Art. 361. National bank converting into state bank

A.(1)  A national bank domiciled in this state which complies with the procedure prescribed by the laws of the United States for the conversion of a national bank into a state bank may be granted a certificate of authority by the commissioner if he finds that the requirements for the incorporation of a state bank have been met.

(2)  Any requirements that shares of stock must be paid in cash may be satisfied by the exchange of shares of stock of the new state bank for those of the converting national bank.  The procedures applicable to incorporation of a state bank may be modified to the extent made necessary by the difference between an ordinary incorporation and a conversion.

B.(1)  The national bank may apply for a certificate of authority by filing with the commissioner:

(a)  A certificate signed by its president and cashier and by a majority of the board of directors setting forth the corporate action taken in compliance with the provisions of the laws of the United States governing the conversion of a national bank into a state bank; and

(b)  The plan of conversion and the proposed articles of incorporation approved by the stockholders for the operation of the bank as a sta