TITLE XXXV
BANKS AND BANKING; LOAN ASSOCIATIONS; CREDIT UNIONS

Chapter 396
REGULATION, CONSERVATION, AND REORGANIZATION UNDER DIRECTION OF THE BANK COMMISSIONER

Section 396:1

396:1 Regulation. – The bank commissioner upon the application of the board of trustees or directors of any institution under his supervision, may regulate the time, amount, and manner of payment and withdrawal of all classes of deposits; the reception of all classes of deposits; the investment of assets within statutory limits; the amount of reserve without limitation otherwise imposed; the borrowing of money; the pledge of assets; the valuation of assets; the collection and payment of accounts; the payment of dividends; the employment and compensation of personnel; the retirement of shares; and any other business of such institution, whenever and during such time and to the extent that he deems such action necessary for the protection of its depositors and other creditors. Regulations hereunder shall be by written order signed by the commissioner and filed in his office. Copies thereof signed by the commissioner shall be served as hereinafter provided. The commissioner may change, cancel, or terminate any such orders from time to time as he deems the interest of such depositors or creditors require.

Source. 1933, 114:1. RL 317:1.

Section 396:2

396:2 Notice. – Notice of any order of the commissioner made hereunder shall be sufficient if served on the treasurer or cashier or other person in charge of the business of the institution affected and on one other officer or a trustee or director thereof, but any order relating to the withdrawal, payment, or reception of deposits shall, in addition thereto, be posted in that part of the institution commonly used by its depositors. Any person may serve such notice. The commissioner may give such further notice of any such order as he deems desirable. Notice of any such order relating to the payment of accounts other than deposits may be given creditors by registered mail and a return receipt signed by or for a creditor shall be sufficient evidence of receipt thereof.

Source. 1933, 114:1. RL 317:2.

Section 396:3

396:3 Violation of Orders. – It shall be unlawful for any such institution or officer, trustee, director, or employee thereof having notice or knowledge of any such order to violate the provisions thereof.

Source. 1933, 114:1. RL 317:3.

Section 396:4

396:4 Limitation of Actions. – No right of action by or for any party in interest, including persons under disability, shall lie at law or in equity for the recovery of any money or property in excess of that which may be paid or delivered by such institution under any such order. The assets of an institution, under regulation as to payment of money, shall not be subject to attachment or trustee process against it as a principal defendant. No mandatory or restraining court order shall be made against the commissioner or institution under his regulation hereunder or its conservator, officers, trustees, directors, or employees, except as provided in RSA 396:8.

Source. 1933, 114:1. RL 317:4.

Section 396:5

396:5 Conservator. – Whenever the commissioner shall deem it necessary in order to conserve the assets of any institution under his supervision for the benefit of the depositors and other creditors thereof, he may appoint a conservator of such institution and require of him such bond and security as the commissioner deems proper. The conservator's appointment shall be recorded in the office of the secretary of state and a copy thereof shall be placed in the corporate records of the institution affected. The conservator, under the direction of the commissioner, shall take possession of the books, records, and assets of every description of such institution and take such action as may be necessary to conserve its assets and to manage, direct, and control the business of the institution if any part of its business is to be continued or resumed.

Source. 1933, 114:1. RL 317:5.

Section 396:6

396:6 Powers and Duties. – The conservator shall have all the powers which could otherwise be exercised by the officers, trustees, and directors of such institution and whatever powers are necessary to carry out the provisions of this chapter, and he shall be subject to all the duties otherwise imposed upon them as extended or limited by this chapter, and by regulations promulgated by the commissioner under the provisions of RSA 396:1. The appointment of a conservator shall not affect any regulation hereunder in force at the time of his appointment nor the right of the commissioner to make further regulations hereunder. The compensation and expense of the conservator and his assistants and the other expense of the institution shall be paid from its assets upon order of the commissioner and shall be a lien thereon prior to any other lien. No officer, trustee, director, or stockholder shall be liable for any act of a conservator or in any respect for any result of conservatorship nor shall they be liable for any act of omission during the time that a conservator remains in possession of such institution.

Source. 1933, 114:1. RL 317:6.

Section 396:7

396:7 Removal. – The commissioner may remove a conservator at pleasure. He shall terminate such appointment when he deems the interest of the depositors and other creditors no longer requires conservatorship and permit such institution to resume the transaction of its business subject to such terms, conditions, restrictions, and limitations as he may prescribe. If at any time the commissioner deems it in the interest of depositors and other creditors to liquidate any institution under his supervision, whether under regulation or conservatorship or not, he may proceed under the provisions of RSA 395, and the appointment of a conservator of such institution may be vacated or continued by order of court thereunder.

Source. 1933, 114:1. RL 317:7.

Section 396:8

396:8 Review and Appeal. – Any party in interest may apply in writing to the commissioner at any time for a change, cancellation, or termination of any order of regulation, appointment of conservator, or payment of compensation or expense during conservatorship, and the commissioner shall take such action thereon as he deems the interests of depositors and other creditors require. Any such party aggrieved by the action of the commissioner or his refusal or neglect to act on such application within 14 days from the date of such application may appeal within the next 7 days from said order by petition to the superior court. Upon hearing, after such notice as the court may prescribe, the burden of proof shall be upon the petitioner to show that such order is clearly unreasonable or unlawful, and such order shall be deemed to be prima facie lawful and reasonable and shall not be set aside or vacated except for errors of law unless the court by a clear preponderance of the evidence before it finds that such order is unjust or unreasonable. No appeal shall lie to orders of court made in connection therewith unless taken within 7 days from the date thereof. The commissioner shall have the right of such appeal. Upon such appeal any 2 justices of the supreme court, without hearing, may stay any order of the superior court to the extent that such order of the commissioner shall continue in effect pending final decision of the supreme court. The superior court shall have the right to issue injunctions to prevent multiplicity of proceedings for change, cancellation, or termination of orders of the commissioner made under the provisions of this chapter, or to prevent undue interference with the regulation, conservation, or reorganization thereunder and to issue mandatory or restraining orders against the commissioner, a conservator, officer, trustee, director, or employee of an institution under the supervision of the commissioner for violation of law or lawful order. No other right of injunction or mandatory order shall lie against the commissioner or any person acting under his direction or control or orders made by him under the provisions of this chapter.

Source. 1933, 114:1. RL 317:8.

Section 396:9

396:9 Preferred Stock or Shares. – Notwithstanding any other provision of law the stock or shareholders of any institution under the supervision of the commissioner, with or without conservatorship, having capital stock or shares, including certificates of ownership of capital, surplus and undivided profits or guaranty or special funds may by majority vote of said stock or shares, with the approval of the commissioner, issue such additional stock or shares as the needs of such institution require. Such additional stock or shares may be of such classes of preference over other stock or shares as to dividends, retirement, and distribution in liquidation, and such classes may be of such par value as the commissioner shall determine. No dividends on stock or shares issued and outstanding at the time of the first issue of preferred stock or shares hereunder shall be declared or paid until all preferred stock or shares issued hereunder shall have been retired unless such preferred stock or shares shall otherwise provide. No filing fee or franchise tax shall be assessed upon or on account of any preferred stock or shares issued under the provisions of this chapter. Such preferred stock or shares may be given voting rights, shall not be subject to assessment, and the owners thereof shall not be liable for any debts, contracts, or engagements of the issuing institution. Each share of each class shall be equal in all respects to every other share of the same class. No preferred stock or share shall be issued until the par value thereof shall have been paid in by cash, other assets approved by the commissioner, or charged against the deposit of the purchaser in the issuing institution. One class of such preferred stock or shares may be set aside for sale to depositors and other creditors of the institution in proportion to their deposits or undisputed claims. Notice of such right to purchase shall be given each depositor and other creditor by mail postpaid addressed at his or its last known post-office address. Such notice may be waived in writing. Any unpurchased stock or shares of such class remaining after 90 days after such notice or waiver may be sold, with the approval of the commissioner, without further restriction as to purchaser. Notwithstanding any other provision of law, any trustee, guardian, conservator, or other fiduciary, administrator, and executor or other legal representative may purchase stock or shares of such preferred class to the extent of the amount standing to their credit in the issuing institution or their claim against the same but such purchase shall be made only through charge against their deposit in or claim against such institution. The commissioner may call meetings of stock or shareholders at any time for the purpose of taking action on a proposal to issue a class or classes of preferred stock or shares. Notice of any meeting of stock or shareholders for that purpose called by the commissioner or otherwise legally called shall be sufficient if sent by registered mail to each stock or shareholder at his address as it appears on the records of the institution 14 days at least before the day of said meeting and the commissioner may send such notice. Such notice may be waived. Whenever any preferred stock or shares shall have been authorized under the provisions of this section, the charter, articles of association or agreement, and bylaws of the institution affected shall be construed to have been amended to give effect to such change. Notwithstanding any other provision of law any institution, under the supervision of the commissioner, by majority vote of its stock or shares, or by majority vote of corporation members if a mutual savings bank, with the approval of the commissioner, may issue preferred creditors certificates. The commissioner may approve such issue when it appears to him that the needs of the institution or bank cannot otherwise be met or reasonably anticipated. Such preferred creditors certificates shall be of such amounts and on such terms as the commissioner shall determine. They shall not be issued at discount nor for satisfaction of existing obligations. They shall be issued only for cash for the purpose of raising new capital or money. They shall constitute a holder thereof a preferred creditor of the issuing institution or bank.

Source. 1933, 114:1. RL 317:9.

Section 396:10

396:10 Federal Benefits. – Notwithstanding any other provision of law, any institution under the supervision of the commissioner is authorized to exercise, with his approval, such power and do any and all things necessary to avail itself of the benefits of any act of Congress granting powers to or conferring benefits on such institutions now or hereafter adopted, without limiting or impairing in any way the authority of the commissioner under the laws of this state.

Source. 1933, 114:1. RL 317:10.

Section 396:10-a

396:10-a Open-Bank Assistance. – If an institution is reorganized in an open-bank assistance transaction under 12 U.S.C. section 1823(c) or as it may be amended from time to time, no agreement, claim, counterclaim or defense involving the institution prior to its reorganization shall thereafter be valid against the institution, or any transferee or assignee thereof, if such agreement, claim, counterclaim or defense would not have been valid under 12 U.S.C. section 1823(e) or as it may be amended from time to time or any other applicable federal law against the Federal Deposit Insurance Corporation, or any successor federal agency, in its capacity as a receiver, if the institution had been closed pursuant to RSA 395 or any other federal or state law instead of having been reorganized.

Source. 1991, 251:7, eff. June 10, 1991.

Section 396:11

396:11 Reorganization. – A majority of the stock or shareholders of any institution under the supervision of the commissioner by stock or share vote, or a majority of the corporation members of a mutual savings bank, may submit to the commissioner at any time a plan for reorganization of such institution or bank. Such plan shall be in writing and shall be signed by the applicants. If such plan does not provide for the reduction or deferring of payment of the amount standing to the credit of any depositor or for the reduction of the amount or deferring of payment due any other creditor, said plan shall become effective upon approval of the commissioner. If such plan does provide for such reduction or deferment, it must be accompanied by the written assent of the owners of at least 2/3 in amount of the total deposits and other liabilities so affected. The commissioner, if he approves the plan, shall file it with the superior court in the county in which is located the office and principal place of business of the institution affected together with a petition for its allowance. The commissioner shall also file with said petition a statement of the condition of such institution including his valuation of its assets. He shall file with said plan the written assent of depositors, other creditors and stock or shareholders or members of a mutual savings bank corporation who have agreed to its provisions. The court after such notice to depositors, creditors, and stock or shareholders or corporation members whose assent is not so filed, as may be ordered, shall upon hearing make such orders thereon as the facts warrant and shall approve such plan with such changes therein as are approved by the commissioner as justice and equity shall require. No appeal shall lie to such orders and approval unless taken within 30 days from the date thereof. If no appeal is so taken, or upon the dismissal of such appeal if taken, such approval shall become final and the reorganization plan thereunder effective forthwith, and all parties in interest shall forever be bound by the provisions thereof. Such reorganization plan shall provide for the issue to each depositor of a negotiable non-interest bearing certificate showing the amount of deficit charged to his account. The issuing institution with the approval of the commissioner, by majority stock or share vote or by majority vote of corporation members if a mutual savings bank, may redeem such certificates in whole or proportionately in part after all preferred stock or shares, issued under the provisions of this chapter, has or have been retired, or provision for such retirement approved by the superior court or assented to in writing by the owners of such stock or shares has been made; but such certificates shall not otherwise be deemed to be a liability of such institution. No dividend shall be declared or paid and no distribution in liquidation shall be made on any stock or shares of the issuing institution, except on preferred stock or shares issued under the provisions of this chapter, until such certificates have been redeemed in full, or provision for such redemption, approved by the commissioner, has been made.

Source. 1933, 114:1. RL 317:11.

Section 396:12

396:12 Retirement, Restoration. – Notwithstanding any other provision of law the stock or shareholders of any institution authorized by RSA 396:9 to issue preferred stock or shares, with or without conservatorship and with or without authorized issue of preferred stock or shares, with the approval of the commissioner, may, by majority stock or share vote, reduce the amount of its capital or its guarantee or other special fund, in which shares of ownership have been issued, through the retirement of stock or shares or the reduction of par or face value thereof. Any such reduction may by like vote and approval be restored in whole or proportionately in part from future earnings or profits when the capital fund and surplus is not or will not thereby be impaired. No retirement of stock or shares or reduction in par value thereof hereunder shall operate to relieve the owner thereof of any liability attaching to the ownership of such stock or shares so retired or reduced in par value.

Source. 1933, 114:1. RL 317:12.

Section 396:13

396:13 Other Powers Not Limited. – The provisions of this chapter shall not be construed to limit any other power conferred by law upon the bank commissioner.

Source. 1933, 114:2. RL 317:13.