Title 26, BANKS AND BANKING

26-101. Title. This act, comprising chapters 1, 2, 3, 4, 5, 6, 7, 8, 9, 10, 11, 12, 14, 15, 16, 17, 18, 26, 32, 33, 34, 35 and 36, title 26, Idaho Code, as such chapters may be hereafter amended, shall be known as the "Idaho Bank Act" and shall be applicable to all corporations, …

26-102. Purpose of the act. The purposes of this act are to provide for: (1) Safe and prudent conduct of the banking business for the benefit of depositors and shareholders. (2) Maintenance of public confidence in banks. (3) An opportunity for banks to remain competitive with eac…

26-103. Construction against implicit repeal. This act being a general act intended as a unified coverage of its subject matter, no part of it shall be deemed to be impliedly repealed by subsequent legislation if such construction can reasonably be avoided.

26-104. Severability. If any provision of this act or the application thereof to any person or circumstances is held invalid, the invalidity does not affect other provisions or applications of this act which can be given effect without the invalid provision or application, and to…

26-105. Effect of act on existing banks. The powers, privileges, duties and restrictions heretofore conferred and imposed upon any bank now existing and doing business under the laws of this state, are hereby abridged, enlarged or modified as each particular case may require to c…

26-106. Definitions. As used in this act, unless the context or subject matter otherwise requires: (1) "Bank" means any person engaged in soliciting, receiving or accepting money or its equivalent on deposit as a regular business whether or not such deposit, however evidenced, is…

26-107. Sections applicable to national banks. The provisions of sections 26-215, 26-301 through and including 26-309, 26-311, 26-712, 26-713, 26-714, 26-1203, 26-1206, 26-1207, 26-1208, 26-1209, 26-1601 through 26-1605, 26-2601 through 26-2612, and 26-3801 through 26-3806, Idaho…

26-201. General corporation laws applicable. Except as otherwise provided herein, the general business corporation laws of this state shall apply to all corporations organized and operating under the bank act. In the event of any conflict between the provisions of the bank act an…

26-202. Authorization necessary to do business. It shall be unlawful for any person to engage in or transact any banking business in this state except by means of a corporation duly organized for that purpose and chartered under the bank act. Corporations organized to engage in a…

26-203. Articles of incorporation — Form. Proposed articles of incorporation of a banking corporation shall be in a form acceptable to the director, and must be submitted to the director for approval as to form and content before the same are filed for record in the offices of th…

26-204. Articles of incorporation — Amendment. Any proposed amendment to the articles of incorporation of a bank shall, before the same is adopted, be submitted to the director for his approval as to form and content. In addition to the articles of amendment to be filed with the …

26-205. Incorporation — Capital structure required. (1) Every banking corporation hereafter organized must have common stock, surplus and undivided profits paid up in unhypothecated cash of not less than the following amounts: (a) In cities, and communities the population of whic…

26-206. Preferred stock. (1) Subject to the provisions of the bank act, and by and with the approval and consent of the director, any bank now or hereafter incorporated under the laws of this state may issue such part of its capital as is approved by the director as preferred sto…

26-207. Bylaws. Every banking corporation formed under the bank act must, within thirty (30) days after the issuance of its certificate of incorporation, adopt a code of bylaws as provided in the Idaho Business Corporations Act. A copy of all bylaws and of any subsequent amendmen…

26-208. Place of meetings. Regular or special meetings of the board of directors or the executive committee may be held for the transaction of any business of the bank at any place within or outside of the state of Idaho. Unless restricted by the articles of incorporation or byla…

26-209. Time of annual meeting. An annual meeting of stockholders of a bank shall be held each year at the time and in the manner indicated in the bylaws.

26-210. Stockbook. A book shall be provided and kept by every bank in which shall be entered the names and residences of the stockholders thereof, the number of shares held by each, the time when such person became a stockholder, and also all transfers of stock, stating the time …

26-211. Stock-transfers. (1) The shares of stock of a bank shall be deemed personal property and shall be transferred on the books of the bank in such manner as the bylaws thereof shall direct. (2) All transfers of voting securities of a bank by sale, gift or otherwise shall be r…

26-212. Right of examination by stockholder. No stockholder of any bank who is not a director shall have the right to inspect the books and records of such bank showing its transactions with any of its customers but any such stockholder shall have the right to inspect, during bus…

26-213. Board of directors — Election, meetings, duties, liabilities, oath, removal — Officers — Election and bond. (1) The affairs, business and property of a bank shall be managed and controlled by a board of not less than five (5) directors, who shall be elected by the stockho…

26-214. Power of banks to grant options to purchase or sell shares of its stock to its employees. (1) Any bank may grant options to purchase, sell or enter into agreements to sell, shares of its stock to its employees whether or not such transactions qualify for special tax treat…

26-215. Federal reserve — Membership. Any bank shall have the power to subscribe to the capital stock and become a member of a federal reserve bank. Any bank incorporated under the laws of this state which is or which becomes a member of a federal reserve bank is, by the bank act…

26-216. Custodial accounts. A bank is authorized to act as custodian or fiduciary, and may receive reasonable compensation for so acting, under any written trust instrument or custodial agreement in connection with a tax-advantaged savings plan authorized under the Internal Reven…

26-217. Banks empowered to comply with requirements for federal deposit insurance. Any banking institution now or hereafter organized under the laws of this state is hereby empowered, on the authority of its board of directors, or a majority thereof, to enter into such contracts,…

26-301. Branch — Requirements. No bank shall maintain any branch except as provided for in this act. Any bank organized and chartered under the laws of Idaho may, upon written application to and with the approval of the director, establish and operate one (1) or more branches for…

26-302. establishment of loan production offices authorized. A bank may, after providing notice to the director, establish and maintain one (1) or more loan production offices at any location in the state of Idaho. (1) A loan production office when so established may conduct any …

26-303. Section concerning branch banks unaffected. The sections of this chapter relating to loan production offices and mobile or temporary facilities shall not be construed to modify or repeal section 26-301, Idaho Code, and the terms "loan production office," "mobile facility"…

26-305. Responsibilities of bank. Any bank establishing a loan production office or mobile or temporary facility shall be responsible for all transactions of the loan production office or mobile or temporary facility, and for keeping accounts and books covering all business trans…

26-306. Mobile or temporary facility. Mobile facilities or temporary facilities may be established with the approval of the director and under such conditions as the director may establish.

26-309. Customer-bank communication terminal. A bank may make available for use by its customers one (1) or more electronic devices or machines through which the customer may communicate to the bank a request to withdraw money either from his account or from a previously authoriz…

26-311. Branches following relocation. Notwithstanding any other provision of law, a bank that relocates its main office from another state into Idaho pursuant to 12 U.S.C. 30, 12 U.S.C. 36, and section 26-1101, Idaho Code, shall continue to be authorized to establish and operate…

26-401. Definitions. As used in this section: "Invest" includes any advance of funds to a bank service corporation, whether by the purchase of stock, the making of a loan, or otherwise, except a payment for rent earned, goods sold and delivered, or services rendered prior to the …

26-402. Investment in service corporation. No limitation or prohibition otherwise imposed by any provision of the laws of the state of Idaho exclusively relating to banks shall prevent or prohibit any two (2) or more banks from investing not more than ten percent (10%) of the pai…

26-403. Banks jointly holding stock — Effect of withdrawal by one bank. If stock in a bank service corporation has been held by two (2) banks, and one (1) of such banks ceases to utilize the services of the corporation and ceases to hold stock in it, and leaves the other as the s…

26-404. Duty of bank service corporation not to discriminate — Burden of proof. Whenever a bank, referred to in this section as an "applying bank," subject to examination by either the department of finance of the state of Idaho, or a federal bank supervisory agency, applies for …

26-405. Prohibited activities. No bank service corporation may engage in any revenue producing activity other than the performance of bank services for banks and, to an extent not exceeding one-half (1/2) of its total activity, the performance of similar services for persons or o…

26-501. Definitions. As used in this chapter, unless the context otherwise requires: (1) "Bank" shall mean any bank chartered under this act. (2) "Company" shall mean any corporation, business trust, association, or similar organization but shall not include: (a) An individual; o…

26-502. Approval of bank holding company. Every bank holding company hereafter formed shall register with the department of finance and receive the approval of the director to become a bank holding company. The director shall approve an application to form a bank holding company …

26-503. Approval to acquire a bank — Requirements — Approval to commence action or acquire a company. (1) A bank holding company shall apply to the department of finance and receive the approval of the department of finance prior to acquiring a bank. The application shall include…

26-505. Director of finance — Reports — Requirements. The director may require reports made under oath to be filed in the department of finance to keep it informed as to the operation of any bank holding company. The director may make examinations of each bank holding company and…

26-506. Change in control. All transfers of a major portion of the outstanding stock or trust certificates of a bank holding company by sale, gift, or otherwise shall be approved by the director prior to such transfer. For the purposes of this section, a major portion of the outs…

26-507. Violation — Penalty. Any person who willfully violates any provision of this chapter shall be guilty of a felony.

26-601. Reserve. Every bank organized under the laws of this state and authorized to receive deposits shall comply with the reserve requirements of the Federal Reserve act.

26-602. Diminution of reserve. (1) When the reserve of any bank falls below the amount required by section 26-601, Idaho Code, for any reporting period, the bank shall immediately restore its reserve to the amount required by section 26-601, Idaho Code, and in addition: (a) If a …

26-604. Dividends — Surplus. No dividend shall be declared or paid by any bank until a surplus equal to twenty percent (20%) of the paid-in capital stock of such bank has been built up. Thereafter, the board of directors of any bank may declare a dividend of so much of its net pr…

26-701. Investment of funds — Certain loans prohibited. No bank shall employ its moneys, directly or indirectly, in trade or commerce, by buying and selling goods, chattels, wares and merchandise, except to the extent national banks are so authorized if approved by the director. …

26-702. Bank stock. (1) Except as provided in subsection (2) of this section, no bank shall accept as collateral, nor make any loans or discounts on the security of nor purchase any shares of its own capital stock. No bank shall purchase the shares of any other bank wherever orga…

26-703. Real estate loans. Any bank may make real estate loans secured by liens upon improved real estate, including improved farm land and improved business and residential properties, as are consistent with safe and sound banking practices. A loan secured by real estate within …

26-704. Determination of limits of loans and investments of banks. For the purpose of determining limitations on loans and investments the following items are to be disregarded: (1) The sale of excess reserve funds by one (1) bank to another bank; (2) The purchase of securities b…

26-705. Loans to one person. (1) The total loans and extensions of credit by a bank to a person outstanding at one (1) time, shall at no time exceed twenty percent (20%) of the capital structure of such bank. (2) "Borrower" means a person who is named as a borrower or debtor in a…