Banking Code of 1965

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Text of Banking Code of 1965

AN ACT Relating to and regulating the business of banking and the exercise by corporations of fiduciary powers; affecting persons engaged in the business of banking and corporations exercising fiduciary powers and affiliates of such persons; affecting the shareholders of such persons and the directors, trustees, officers, attorneys and employes of such persons and of the affiliates of such persons; affecting national banks located in the Commonwealth; affecting persons dealing with persons engaged in the business of banking, corporations exercising fiduciary powers and national banks; conferring powers and imposing duties on the Banking Board, on certain departments and officers of the Commonwealth and on courts, prothonotaries, clerks and recorders of deeds; providing penalties; and repealing certain acts and parts of acts. TABLE OF CONTENTS Chapter 1 General Provisions Section 101. Section 102. Section 103. Short Title Definitions Declaration of Purposes; Standards for Exercise of Power and Discretion by Department 104. Rules of Construction 105. Persons Authorized to Engage in Business of Receiving Deposits and Money for Transmission 106. Corporations Authorized to Act as Fiduciary 107. Accounting Rules; Accounting and Bookkeeping Services 108. Retention of Records and Admissibility of Copies in Evidence 109. Advertisements 110. Notices 111. Emergency Powers 112. Acquisitions, and Offers to Acquire, Shares of Banks, Bank and Trust Companies, Trust Companies and National Banks 112.1.Prohibition Against Certain Acquisitions 113. Legal Holidays 114. Limitation on Deposit of Commonwealth Funds 115. Bank and Savings and Loan Holding Companies 115.1. Mutual Holding Companies 116. Authorization of Reciprocal Interstate Banking (Repealed) 117. Authorization of Reciprocal Interstate Operations of Savings Banks (Repealed) Chapter 2 General Statement of Powers of Incorporated Institutions; By-Laws

Section Section

Section Section Section Section Section Section Section

Section Section Section Section Section Section Section

Section 201. Section 202.

Section 203.

Section 204. Section 205. Section 206.

General Corporate Powers of Incorporated Institutions Additional Powers of Incorporated Institutions Related to Conduct of Business Additional Powers Related to Conduct of Business of Incorporated Institutions Other Than Trust Companies Adoption and Contents of By-Laws Persons Bound by By-Laws; Execution of Instruments Interested Directors and Shareholders; Quorum Chapter 3 Banking Powers

Section Section Section Section Section Section

301. 302. 303. 304. 305. 306.

Section 307. Section 308. Section 309. Section 310. Section 311. Section Section Section Section 312. 313. 314. 315.

Section 316.

Section 317.

Section 318. Section 319. Section 320. Section 321. Section 322.

Application of Chapter Deposits General Lending Powers Direct Leasing of Personal Property Participations Limits on Indebtedness of One Customer (Including Purchased Paper) Investment Securities (Other Than Stock) Acceptances Installment Loans (Including Revolving Credit Plans) Real Estate Loans Transactions With Respect to Shares of Corporate Stock and Capital Securities Pledges For Deposits Bonds and Suretyship Borrowings Miscellaneous and Incidental Banking Powers Authorizing Certain Loans for Commercial, Business, Professional, Agricultural or Nonprofit Purposes Including Revolving Credit Plans Authorizing Monthly Interest Loans for Individuals, Partnerships and Other Unincorporated Entities Alternate Basis for Interest Charges by Institutions Charging Interest at Rates Permitted Competing Lenders Notice of Annual Fees and Refunds on Credit Cards of Affiliate Banks Authorization of Fees for Revolving Credit Plans Extensions of Credit to Individuals, Partnerships and Unincorporated Associations

Chapter 4 Fiduciary and Other Representative Powers Section 401. Section 402. Section 403. Section 404. Section 405. Section 406. Section 407. Section 408. Application of Chapter Powers to Act as Fiduciary and in Other Representative Capacities Actions Required, Permitted or Prohibited in Fiduciary Capacity Collective Investment Funds Investment in Undivided Interests in a Real Estate Loan or a Single Security Title Insurance Provisions Applicable to Trust Companies Transfer of Fiduciary Accounts Chapter 5 Savings Bank Powers Section 501. Section 502. Section Section Section Section 503. 504. 505. 506. Application of Chapter Additional Powers Related to Conduct of Business of Savings Banks Deposits Investments Real Estate Loans Lending Powers; Direct Leasing of Personal Property Participations Managing Agent Accounts and Collective Investment Funds for Such Accounts Surplus Liability for Unlawful Distributions Borrowings and Subordinated Securities Deposits of Excess Cash Conditional Powers of Savings Banks Bonds and Suretyship Chapter 6 Rules Concerning Deposits, Safe-Deposit Agreements and Money Received for Transmission Section 601. Section 602. Section 603. Section 604. Section 605. Section 606. Section 607. Section 608. Section 609. Section 610. Application of Chapter Deposits-Receipts, Notice of Rules and Binding Effect of Statements Minors' Deposits and Safe-Deposit Agreements Joint Deposits Tentative Trusts Adverse Claims to Deposits and Property Held in Safe-Deposit Money Received for Transmission Agreements Concerning Safe-Deposit Death or Incompetence of Donor of Power of Attorney Deposits by an Institution

Section 507. Section 508. Section Section Section Section Section Section 509. 510. 511. 512. 513. 514.

Section 611.

Compliance with Federal Law Regarding Availability of Withdrawal of Items Deposited Chapter 7 Reserves

Section 701. Section 702. Section 703. Section 704. Section 705.

Application of Chapter Definitions for Purpose of Reserve Requirement Requirement of Reserve Fund Composition of Reserve Fund Notice to Department of Deficiency in Reserve Fund Chapter 8 Names Application of Chapter Names Permitted to Be Used Change of Name of an Institution Reservation of Name Prohibition of Adoption, Use or Advertisement of Certain Names, Titles and Descriptions Effect of Chapter Chapter 9 Offices

Section Section Section Section Section

801. 802. 803. 804. 805.

Section 806.

Section Section Section Section Section Section

901. 902. 903. 904. 905. 906.

Section 907. Section 908.

Application of Chapter Authorized Offices Change of Location of Office Authorization of New Branches Approval of Branch by Department Minimum Financial Requirements for Establishment of Branch (Repealed) Branches Outside Pennsylvania Branches Acquired from the Receiver of a Closed Institution or from an Institution in Danger of Closing Chapter 10 Incorporation

Section Section Section Section Section Section Section

1001. 1002. 1003. 1004. 1005. 1006. 1007.

Section 1008. Section 1009.

Application of Chapter Incorporators Prohibition of Promoters' Fees Articles of Incorporation Application for Approval by Department Advertisement Approval of Proposed Institution by Department Issuance of Certificate of Incorporation Effect of Filing of Articles in Department of State and of Certificate of Incorporation

Section 1010. Section 1011.

Certificate of Authorization to Do Business Organization Meetings Chapter 11 Capital, Surplus, Expense Fund and Capital Securities

Section Section Section Section Section

1101. 1102. 1103. 1104. 1105.

Application of Chapter Minimum Capital Surplus Expense Fund Capital Securities Chapter 12 Shares and Shareholders

Section Section Section Section Section Section Section Section Section Section Section Section Section Section Section Section Section Section Section Section Section Section

1201. 1202. 1203. 1204. 1205. 1206. 1207. 1208. 1209. 1210. 1211. 1212. 1213. 1214. 1215. 1216. 1217. 1218. 1219. 1220. 1221. 1222.

Application of Chapter Classes of Shares Consideration for Shares Payment of Subscriptions and Default in Payment of Subscriptions for Shares Share Certificates Issuance of Fractional Shares or Scrip Liability of Subscribers and Shareholders Preemptive Rights of Shareholders Meetings of Shareholders Notice of Meetings of Shareholders Quorum of and Action by Shareholders Voting Rights of Shareholders Election of Directors; Cumulative Voting Voting by Fiduciaries and Pledgees Voting by Joint Holders of Shares Voting Shares Held by Incorporated Institutions and Other Corporations Determination of Shareholders of Record Voting Lists Voting Trusts Judges of Elections Informal Action by Shareholders Rights of Dissenting Shareholders Chapter 13 Dividends and Distributions to Shareholders; Redemption or Acquisition of Preferred Shares

Section Section Section Section

1301. 1302. 1303. 1304.

Section 1305. Section 1306.

Application of Chapter Cash Dividends Distributions of Shares of Institution Liability For Unlawful Dividends and Distributions Distribution Upon Reduction of Capital Redemption and Acquisition of Redeemable

Shares; Statement of Reduction of Authorized Shares Chapter 14 Directors or Trustees; Officers, Employes and Attorneys Section 1401. Section 1402. Section 1403. Section 1404. Section 1405. Section 1406. Section 1407. Section Section Section Section 1408. 1409. 1410. 1411. Application of Chapter Board of Directors or Trustees; Honorary and Advisory Positions Number, Qualifications and Eligibility of Directors or Trustees Term of Office of Directors or Trustees; Vacancies; Classification of Directors Method of Action by Board of Directors or Trustees or Executive or Other Committee Oaths of Directors or Trustees Audits and Reports by Directors or Trustees; Accountants; Internal Auditors Remo