Title 5 — Title 5

(a) The proposed incorporators of a bank shall execute and acknowledge an application for a permit in writing in the form prescribed by the superintendent and shall file the same in the office of the State Banking Department, which application shall be signed by all of the incorp…

No bank shall engage in the banking business until it shall have received from the superintendent a permit to transact a banking business. Any person who shall hereafter transact any business as an officer or agent of any bank hereafter incorporated, before such bank is authorize…

of Permit. The superintendent shall, before issuing his permit to any bank to commence business under the application provided for in Section 5-5A-1, examine or cause an examination to be made in order to ascertain whether the requisite capital of such bank has been paid in cash.…

All banks now or hereafter operating under the laws of this state shall be members of the Federal Deposit Insurance Corporation or such other agency as may be created to insure the deposits of such bank. History: (Acts 1980, No. 80-658, §5-5-12.)

(a) The Banking Board shall from time to time fix the amount of the fee for filing an application for a new bank, and for: (1) Establishment of a branch of an existing bank; (2) Conversion of a national bank to a state bank; (3) A merger of two or more existing banks; (4) Establi…

(a) No bank hereafter organized under the laws of Alabama shall have total initial capital accounts actually paid in of less than $800,000.00. (b) The superintendent may require a higher amount of capital accounts and where the bank will have no significance except as a means of …

Any bank shall with the consent of the superintendent have power and authority to increase or decrease its authorized capital in the manner provided for a corporation under the business corporation laws of this state. History: (Acts 1980, No. 80-658, §5-5-15.)

No bank shall issue capital notes or capital debentures except with the prior written approval of the superintendent under such conditions as he may impose. History: (Acts 1980, No. 80-658, §5-5-16.)

Certificate of Incorporation. A bank may amend its certificate of incorporation in the manner provided by the laws governing business corporations. No proposed amendment of a certificate of incorporation of a bank is valid unless approved in writing by the superintendent and may …

Corporations formed for the purpose of doing business as a bank may: (1) Discount bills, notes or other evidences of debt; (2) Receive and pay out deposits, with or without interest, pay checks, and impose charges for any services; (3) Receive on special deposit money, bullion or…

Regulated Financial Institution. In addition to all other rights and powers provided under this title, banks and trust companies chartered by this state and supervised by the superintendent and banks or trust companies chartered by any other state which are doing business or prop…

(a) A bank which is not a member of the Federal Reserve System shall maintain at all times a reserve fund in an amount fixed by resolution of the Banking Board. The amount of the required reserve for each day shall be computed on the basis of average daily deposits covering such …

Before a bank can become incorporated under the laws of Alabama, a notice of intention to organize such bank shall be published once a week for three successive weeks in the newspaper designated by the superintendent. Such notice shall specify the names of the proposed incorporat…

(a) Alabama banks may establish a branch or office for the transaction of the banking business within the State of Alabama upon prior approval of the superintendent. Alabama banks may establish a branch or office for the transaction of a banking business in any state other than A…

Every bank shall transfer to surplus each year at least 10 percent of its net earnings until the surplus of such bank shall be equal to at least 20 percent of its capital, and it shall be unlawful for such bank to declare or pay a dividend in excess of 90 percent of the net earni…

(a) No bank shall make a loan to any one person which, when combined with all other loans to such person, would cause total loans to that person to exceed: (1) Ten percent of the capital accounts of the bank, if such loans are not secured, or (2) Twenty percent of the capital acc…

(a) Banks, insurance companies and savings and loan associations are authorized: (1) To make such loans and advances of credit and purchases of obligations representing loans and advances of credit as are eligible for insurance and to obtain such insurance; and (2) To make such l…

Involving Shipment of Goods - Authority. Any bank in Alabama may accept drafts or bills of exchange drawn upon it, having not more than six months’ sight to run, exclusive of days of grace, which grew out of transactions involving the importation or exportation of goods or which …

Involving Shipment of Goods - Limitations. No bank shall accept, whether in a foreign or domestic transaction, for any one person, company, firm or corporation, to an amount equal at any time in the aggregate to more than 10 percent of its paid up and unimpaired capital and surpl…

Capital Stock of Other Banks. No bank shall make a loan taking its own stock as security therefor or directly or indirectly purchase shares of its own stock, except in pursuance of provisions of law for reducing its capital stock. No bank shall subscribe for or own capital stock …

No bank may pledge assets as security for deposits, except any bank is authorized to pledge acceptable assets as security for deposits of trust funds deposited by its trust department and of public funds, heretofore or hereafter deposited, by the United States or any agency or go…

Notwithstanding any provision of law of this state or of any political subdivision of the state or any agency or governmental instrumentality of such subdivision requiring security for deposits in the form of collateral, surety bond or in any other form, security for such deposit…

Affidavit of Proposed Stockholders; Submission of Proposed Certificate of Incorporation; Disclosure to Stockholders. After the notice of intention to incorporate has been published, the parties named as proposed incorporators in the published notice of the proposed corporation sh…

Machine or Other Instrumentality, Transaction Fees, Disclosure; Limitation on Contractual Fee Restrictions, Intent of Limitation, Applicability. (a) Any bank may lawfully receive deposits or paychecks or sight drafts and transact any other business on any legal holiday, excepting…

A bank shall be liable for and chargeable with deposits received and other business transacted on a legal holiday the same as if such deposit were received or business transacted on a legal banking day and shall have the same protection for payment of checks or sight drafts and b…

(a) Any bank or any branch or branches thereof may close on any one business day of each week and shall have this right even though there shall fall in such week a holiday as established in Section 1-3-8. If the superintendent should determine that an emergency should exist, he m…

Any bank shall pay all checks drawn on it and transmitted in a cash letter at par and shall make no charge for the payment of such checks the first time presented to it for payment. History: (Acts 1980, No. 80-658, §5-5-33.)

Money and Assets in Bank, Etc. It shall be lawful for any party of whom a bond, undertaking or other obligation is required to agree with his surety or sureties for the deposit of any or all money and assets for which he and his surety or sureties are or may be held responsible w…

Days. In the case of certificates of deposit issued for more than 90 days which are automatically renewable, a bank shall send within a reasonable period, but in no event less than five days before the next maturity, a written notice to the last known address of record. History: …

A minor may make, in her or his own name, a deposit in any bank, and such deposit may be general or special, and shall be paid only to such minor, or upon his or her order, and not to the parents or guardians of such minor, and such payment shall be valid as against the minor chi…

When Bond Required. Whenever a person shall die leaving deposits in a bank not exceeding $5,000.00 in the aggregate, the bank may in its discretion discharge itself from liability thereafter by paying the deposits to the surviving spouse of the deceased or, if there is none, to t…

When Payment Prohibited. No payment shall be made pursuant to Section 5-5A-38 by the bank before the lapse of 60 days from the date of the death of the deceased, and no payment shall be made by the bank under this section if letters testamentary or of administration have been iss…

and Executive Officers and Necessity for Banks. The superintendent shall ascertain whether the character and general fitness of the persons named as proposed incorporators, proposed stockholders and proposed executive officers in the affidavit and in the proposed certificate of i…

Whenever any deposit shall be made in any bank by any person in trust for another and no other or further notice of the existence and terms of a legal and valid trust shall have been given in writing to and received by the bank, in the event of the death of the trustee, such depo…

One; More Than Two Persons with Provision for Survivorship. (a) Any deposit heretofore or hereafter made in any bank in the names of two or more persons payable to any of such persons, upon the death of either of said persons, may be paid by the bank to the survivors jointly, irr…

Notice to any bank of an adverse claim to a deposit standing on its books to the credit of any person shall not be effectual to cause said bank to recognize said adverse claimant unless said adverse claimant shall also either procure a restraining order, injunction or other appro…

A bank shall disclose financial records of its customers pursuant to a lawful subpoena, summons, warrant or court order issued by or at the request of any state agency, political subdivision, instrumentality, or officer or employee thereof and served upon the bank. No bank, direc…

(a) No person, acting directly or indirectly or through or in concert with one or more persons, may acquire control of a state bank or of any corporation or other entity having control of a state bank, unless an application is filed with the superintendent for review of the propo…

Any person or persons whose business it is, either as individuals, agents or officers of banks, to receive checks, drafts and demands, when the same are not entitled to days of grace, upon any bank, and who receives the same, for collection and retains the same for an unreasonabl…

Any person who shall willfully and maliciously make, circulate or transmit to another or others any false, libelous or slanderous statement, rumor or suggestion written, printed or by word of mouth which is directly or by inference derogatory to the financial condition, or affect…

If the directors or officers of any bank knowingly and willfully violate or knowingly and willfully permit any of the officers, agents, or employees of the bank to violate any of the provisions of this title, each and every director or officer engaging in such knowing and willful…

Proposed Bank; Investigation of Objections. Any bank doing business in the community or any reputable citizen in the community may file with the superintendent an objection to the incorporation of the proposed bank, provided that the superintendent may refuse to accept objections…

Authorizing Filing of Certificate of Incorporation. If the superintendent shall be satisfied from his investigation that the character and general fitness of the persons named as stockholders and executive officers are such as to command the confidence of the community in which s…

Incorporation. The official or officials designated by the business corporation laws to file certificates of incorporation shall, upon the certificate of incorporation being duly signed by the incorporators and proof being duly made as required by law of the payment of subscripti…

from Refusal to Banking Board. If the superintendent is of the opinion from his investigation that the character and general fitness of the persons named as stockholders or executive officers are such as not to command the confidence of the community in which such bank is propose…

Nothing in this chapter shall be construed to prevent the Circuit Court of Montgomery County, as provided by law, from reviewing and reversing either the action of the Banking Board in granting or refusing a charter or permitting the organization of a new bank or the action of th…