Article 8. Holding Companies And Stock Acquisitions of California Financial Code >> Division 2. >> Chapter 2. >> Article 8.

For the purposes of this article the following words and phrases shall have the following meanings:
  (a) "Savings and loan holding company" means any person that either, directly or indirectly, or acting in concert with one or more other persons:
  (1) Owns, controls, or holds with power to vote, or holds proxies to vote:
  (A) Where the association or savings and loan holding company has fewer than 500 stockholders or members, 25 percent or more of the outstanding voting capital stock of any capital stock association or savings and loan holding company or 25 percent or more of the total number of votes or proxies of votes eligible to be cast by the members of any mutual association located in this state.
  (B) Where the association or savings and loan holding company has at least 500 stockholders or members, 10 percent or more of the outstanding voting capital stock of any capital stock association or savings and loan holding company or 10 percent or more of the total number of votes or proxies of votes eligible to be cast by the members of any mutual association located in this state.
  (2) Controls in any manner, whether by the holding of proxies or otherwise, the election of a majority of the directors of any association or savings and loan holding company located in this state.
  (b) Notwithstanding subdivision (a), an individual or group of individuals shall not be deemed to be a "savings and loan holding company" solely because an individual or group of individuals solicits, holds, or votes proxies in an association if, at the time of receiving the proxies, the individual or group of individuals serve as directors of the association and solicited or received the proxies pursuant to authorization by the board of directors of the association.
  (c) "Subsidiary" of a person means any person, except an individual that is directly or indirectly owned, controlled, or otherwise held by that person to the extent or in the manner described in the preceding subdivision.
  (d) "Completed application" means an application for acquisition of control of an association, as filed with the commissioner, together with any amendments by the applicant, additional information requested in writing by the commissioner, and accompanied by the applicable filing fee pursuant to Section 9001. If the additional required information is not received within 30 days of the date of the request, the commissioner may consider the application complete upon written notice to the applicant.

(a) Except as provided in subdivision (b), no person may become a savings and loan holding company, or thereafter register under Section 5804, unless the commissioner approves a completed application. The application shall be in a form prescribed by the commissioner, contain the following information and any additional information that the commissioner may determine by regulation or by written instructions to be necessary or appropriate to preserve the public interest, the integrity of the state's savings association system, and to protect the interests of savings account holders, borrowers, and stockholders resident in this state:
  (1) The identity, experience, and financial and managerial resources of each acquiring person by whom or on whose behalf the application is made.
  (2) The terms, conditions, and method of any proposed acquisition, including copies of all tender offers used or to be used in connection with any proposed acquisition of capital stock.
  (3) The source, kind, and amount of the consideration used or to be used in making the acquisition, and, if any part of the consideration has been or is to be borrowed or otherwise obtained for the purpose of making the acquisition, a description of the transaction and the names of all participating persons.
  (4) Any plans or proposals that any acquiring person may have to liquidate or convert the association or savings and loan holding company, to sell its assets or merge it with any company, to change the number of its employees in this state or the terms and conditions of their employment, or to make any other substantial change in its business, corporate structure, management or employees upon becoming a holding company.
  (5) The names of those officers and directors that the acquiring person proposes to install in any change of managements, and for each of those officers and directors a financial statement, a description of experience in savings association related matters, and a statement as to whether the officer or director ever has been found guilty of misrepresentation, fraud, or financial misdealings.
  (6) If any tender offer, request or invitation for tenders or other agreement to acquire control is proposed to be made by means of a registration statement under the federal Securities Act of 1933, as amended, or in circumstances requiring the disclosure of similar information under the federal Securities Exchange Act of 1934, as amended, or in an application filed with the Office of Thrift Supervision or Federal Deposit Insurance Corporation requiring similar disclosure, that registration statement or application may be filed with the commissioner in lieu of the requirements of this section.
  (b) The commissioner may exempt any transaction from the operation of this section if the commissioner determines that regulation of the transaction is not necessary or appropriate.

The commissioner shall within 60 days after the date of filing of a completed application, unless good cause is shown why a decision to approve or deny could not be made within 60 days, approve the application with any conditions reasonably necessary or advisable in the public interest, or deny the application. The commissioner shall determine whether the following criteria are met, and if the criteria are not met, the application shall be denied:
  (a) The acquisition, under any federal or state law, will not substantially lessen competition and will not in any manner be in restraint of trade or result in a monopoly, or be in furtherance of any combination or conspiracy to monopolize or attempt to monopolize the savings association business in any part of the state unless the commissioner finds that the anticompetitive effects of the proposed acquisition are clearly outweighed in the public interest in meeting the convenience and needs of the community that the association serves.
  (b) The financial condition of any acquiring person will not jeopardize the financial stability of the association or the savings and loan holding company sought to be acquired and will not prejudice the interest of the savings account holders, borrowers, or stockholders of the association and is in the public interest.
  (c) The plan or proposal under which the acquiring person intends to liquidate the savings association or the savings and loan holding company, to sell its assets or to merge it with any person or association, or to make any other major change in its business or corporate structure or management, is fair and reasonable to the association, its savings account holders, borrowers, and resident stockholders, and will not tend to impair the integrity of the state' s savings association system, and is in the public interest.
  (d) The competence, experience, integrity, and resources of any acquiring person indicate that approval would be in the interest of the association, its savings account holders, borrowers, and resident stockholders and of the community that the association serves.
  (e) The requirements of this article have been met.
  (f) The acquisition would not violate state or federal law and the commissioner determines that approval is in the public interest.
  (g) The applicant has provided all information requested by the commissioner.

(a) After the decision under this article by the commissioner either approving or denying the application, upon the filing with the commissioner within 30 days after the date of the decision of a written request for a hearing by any person aggrieved by the decision, the commissioner shall hold a public hearing on the merits of the request, after which the decision shall be affirmed, modified, or reversed.
  (b) The commissioner shall have authority to amend, suspend, or revoke an approval of the application for acquisition of control upon failure of the applicant to meet the conditions of the approval, or upon a finding that the approval was based on false statements, misrepresentations, or omission of material facts.

(a) Within 60 days following approval, or a later date if extended by the commissioner, each savings and loan holding company shall register with the commissioner in a prescribed form which shall require information with respect to the financial condition, ownership, operations, management, and intercompany relationships of the savings and loan holding company and its subsidiaries, and related matters as the commissioner may deem necessary or appropriate.
  (b) The registration shall automatically expire if the approval of the application for acquisition of control is revoked or suspended or the person ceases to be a savings and loan holding company.
  (c) The commissioner shall be notified in writing by a registered savings and loan holding company upon any change in its beneficial or legal ownership of stock of an association.

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

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

No association that is a subsidiary in this state of any savings and loan holding company that does not have in effect a certificate of registration for that association as required by this article or whose holding company has failed to comply with (1) an order of a court made in respect to the provisions of this division or (2) an order of the commissioner under Section 8200, shall knowingly, without consent of the commissioner, do any of the following:
  (a) Transfer or register stock or other securities on its books for or issue certificates to its holding company.
  (b) Pay dividends on stock of which its holding company is the record or beneficial owner.
  (c) Permit the voting of stock owned or controlled by its holding company.
  (d) Make any other payments of any nature to its holding company.
  (e) Enter into any agreement, contract, or transaction with its holding company.

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

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

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