Title XXV, Business and Financial Institutions

(1) Any five (5) or more natural persons may organize a corporation for the purpose of obtaining a charter to transact business as a: (a) Bank; (b) Trust company; or (c) Combined bank and trust company. (2) The board of directors of a bank, trust company, or combined bank and tru…

(1) Before filing and recording the articles of incorporation or amendments to the articles of incorporation of a proposed or existing bank, trust company, or combined bank and trust company, as provided under the general corporation or limited liability laws of this state, the o…

election or reelection -- Oath to be filed with commissioner and subject to review -- Duty of officer or director. (1) A newly chartered state bank or trust company shall not transact any banking or trust business until each director of the institution executes, in writing, an oa…

Preferred capital stock. (1) (a) The minimum capital stock of any newly chartered state bank or trust company shall be five million dollars ($5,000,000). Additional capital may be required depending upon an investigation of the application, at the discretion of the commissioner. …

Contents of report. (1) At least sixty (60) days prior to a change occurring in the outstanding voting stock of any state bank, trust company, or bank holding company that owns or controls a state bank, which will result in control, or in a change in the control, of the bank, tru…

standards. (1) A bank may do any or all of the following: (a) Hold personal property that has been transferred to it as collateral for the payment of any debt; (b) Acquire and hold title to real estate if: 1. The real estate is necessary or appropriate for the transaction of legi…

banks -- Administrative regulation or order. (1) Except as provided in subsection (3) of this section, the commissioner may, by administrative regulation or order, authorize banks to engage in any banking activity in which the banks could engage in were they operating as national…

Section not applicable to deferred deposit transactions or title pledge lending. (1) As used in this section, a CAMELS rating means a system of rating used by examiners of financial institutions to rate the institutions in six (6) categories: capital adequacy, asset quality, mana…

(1) It is hereby declared to be the policy of the Commonwealth of Kentucky that the investment of funds, by a bank chartered under the laws of Kentucky or a national banking association having its principal office in Kentucky, in real and personal property as now or hereafter pro…

Property deemed collateral. Subject to such limitations and conditions as the commissioner may from time to time prescribe by general regulations, any bank or trust company organized under the laws of this state may purchase, hold, and become the owner and lessor of personal prop…

fiduciary obligations. Funds held in a fiduciary capacity shall be invested under the order of the court, or in such manner as may be provided by law for the investment of other trust funds, and the capital stock shall be primarily liable for the obligations of the corporation in…

(1) With the approval of the commissioner a bank or trust company may, at any time, by resolution of its board of directors, which resolution shall have been approved at a stockholders' meeting by two-thirds (2/3) of the outstanding capital stock of the bank, issue and sell its c…

charter. (1) Notwithstanding any other provisions of law, any bank doing business in the Commonwealth, whether state or nationally chartered, may purchase for its own account shares of a bank or bank holding company which owns or controls such a bank provided: (a) The stock of su…

- Consolidation -- Transfer of fiduciary account to affiliate. (1) Except as provided in subsection (2) of this section, a bank may amend its articles of incorporation or reorganize to permit it to engage in a trust business. (2) A bank that acts as a fiduciary under the authorit…

outside of this state by trust company -- Rights, privileges, obligations, and liabilities of selling trust company. (1) A trust company: (a) May, at its trust office or offices in Kentucky or any other state or foreign country, act as a fiduciary and engage in other trust busine…

activities -- Fiduciary-related activities limited by reciprocity -- Evidence and notice to be provided to commissioner. (1) An out-of-state trust company may do any or all of the following, to the extent permitted under this section: (a) Conduct trust business in this state, inc…

association to state bank or merger or consolidation with state bank. (1) A national banking association may convert into, or merge or consolidate with, a state bank under a state charter in the manner provided by federal law. (2) In the case of each conversion: (a) A written pla…

(1) A state bank may convert into, or merge or consolidate with, a national banking association under the charter of a national banking association in the manner provided by federal law and without approval of any state authority. (2) The franchise of a state bank as a state bank…

in principal office or branch location. (1) Except as provided in KRS 286.3-820, state banks may exercise the following powers necessary to carry on the business of banking at their principal office or a branch: (a) Discounting and negotiating notes, drafts, bills of exchange, an…

Commissioner's approval -- Scope of activities. (1) Except as set forth in subsection (7) of this section, with prior approval of the commissioner and upon compliance with the requirements of this section, any state bank may agree to receive deposits, renew time deposits, close l…

Any bank may accept for payment at a future date drafts or bills of exchange drawn upon it by its customers, issue letters of credit authorizing the holders thereof to draw drafts upon it or its correspondents at sight or on time, and accept or discount acceptances.

(1) (a) A bank, or any of its branches or other offices: 1. May, at its option, either close or remain open for business on any day or during any hours of the week if the days of the week and the hours during which an office of the bank will remain open are conspicuously posted i…

(1) As used in this section, unless the context requires otherwise: (a) "Commissioner" means the commissioner of financial institutions and any other person lawfully exercising the powers of the commissioner. (b) "Officers" means the person or persons designated by the board of d…

Any bank or trust company organized under the laws of this state may: (1) Be appointed and act as guardian of infants, executors, administrator or curator of estates of decedents, guardian or conservator of persons adjudged mentally disabled, receiver or trustee for persons or es…

fiduciary or custodian for fiduciary -- Accounting and crediting of deposits. (1) Notwithstanding any other provision of law, any bank, when acting as a fiduciary or when holding securities as custodian for a fiduciary, is authorized to deposit, or arrange for the deposit, with t…

to extend credit -- Exception. Notwithstanding the provisions of any other law, a bank may take, receive, reserve, and charge on money due or to become due on any contract or other obligation in writing, where the original principal amount is fifteen thousand dollars ($15,000) or…

As used in KRS 286.3-219 and 286.3-220: (1) "Life beneficiary" means a beneficiary who is a current permissible or mandatory recipient of income or principal from the trust, or, if more than one (1), the beneficiary or beneficiaries of the oldest generation; (2) "Remainder benefi…

(1) A corporate trustee administering a trust may continue the term of a portion of the trust so long as the period of the continuation does not extend beyond the term allowable under KRS 381.224, 381.225, and 381.226 that is applicable to the trust. (2) Subject to KRS 381.224, 3…

on bonds -- Ability to serve as trustee of multiple trusts with common or nonidentical beneficiaries. (1) When acting as a fiduciary or in any other capacity in which the duties, powers, liabilities, rights, and compensation are regulated by law, or under the control or supervisi…

capacity. (1) Any bank or trust company when acting as executor, administrator, guardian, conservator, agent, or trustee, whether alone or jointly with an individual or individuals, may with the consent of the individual fiduciary or fiduciaries, if any (who are hereby authorized…

(1) Any trust company or bank empowered to act as a fiduciary under the laws of this state and subject to examination by state or federal banking authorities may establish and maintain one (1) or more common trust funds for the collective investment of funds held in any fiduciary…

Circumstances when no gain or loss to be recognized. (1) Common trust funds shall not be considered as an entity for income or other tax purposes, nor shall investment in such fund make taxable any property which is otherwise exempt therefrom; and for purposes of taxation, the st…

(1) A trust company or bank empowered to act as a fiduciary under the laws of this state, and subject to examination by either state or federal banking authorities, may: (a) Set apart, in a separate real estate mortgage investment fund, real estate mortgages, which conform to the…

(1) To provide for losses that might occur in an investment fund established by a trust company or bank under KRS 286.3-240, such trust company or bank may reserve from the interest collected on the mortgages held in the fund, not over one-half of one percent (0.5%) per annum on …

If any trust company or bank, having established an investment fund as provided in KRS 286.3-240, determines that there is an apparent loss in such fund, over and above the account to be reserved to cover such loss, then the trust company or bank shall at once proceed to liquidat…

debts of fiduciary. (1) In making real estate mortgage loans for the purpose of investing trust funds, a trust company or bank empowered to act as a fiduciary may make such mortgage loans in its individual name, and in connection with such loans may prosecute all suits and forecl…

investing institution -- Fee. (1) Notwithstanding any other law, a bank empowered to act as a fiduciary or a trust company, to the extent that it exercises investment discretion as a fiduciary, custodian, managing agent, or otherwise with respect to the investment and reinvestmen…

(1) When an instrument, under which a bank empowered to act as a fiduciary or trust company acts, reserves in the grantor, or vests in an advisory or investment committee or in one (1) or more other persons, any power, including, but not limited to, the authority to direct the ac…

(1) Notwithstanding the provisions of any other law, a bank empowered to act as a fiduciary or trust company, when investing, reinvesting, purchasing, acquiring, exchanging, selling, and managing property held in a fiduciary capacity, shall act as a prudent investor would, in lig…

(1) Except as provided in subsection (2) of this section: (a) Subject to paragraph (b) of this subsection, a bank or trust company shall not permit any person to become indebted to it or become obligated as guarantor or surety to it in an amount exceeding twenty percent (20%) of …

In the case of obligations to banks and trust companies, the limitations and restrictions of KRS 286.3-280 shall not apply to: (1) Obligations of the United States or of the State of Kentucky; (2) Obligations guaranteed as to principal and interest by the United States or the Sta…

Each bank organized under the laws of this state and authorized to receive deposits shall keep on hand at all times legal reserves as mandated by the board of governors of the Federal Reserve System.

Insurance Corporation. (1) Any bank organized under the laws of this state may subscribe for and own stock of the federal reserve bank within the federal reserve district where it is located and may take any steps necessary to become a member of that federal reserve bank. (2) Any…

against closed banks. Whenever any banking institution which is a member of, or whose deposits are insured by, the Federal Deposit Insurance Corporation, has been closed and the Federal Deposit Insurance Corporation pays or makes available for payment the insured deposit liabilit…

Security not required if deposit insured. (1) A bank may, subject to statutory or charter limitations, pledge a portion of its assets or provide surety bonds as may be required by law as collateral security for government deposits made with it by or under the authority of the Uni…

(1) (a) Except as provided in subsection (2) of this section, the board of directors of any state bank or trust company may declare a dividend of so much of the net profits as they deem appropriate. (b) The net profits referenced in paragraph (a) of this subsection shall be compu…

(1) Every bank shall retain its business records for such periods as are or may be prescribed by or in accordance with the terms of this section. (2) Each bank shall retain permanently the minute book of meetings of its stockholders and directors, its capital stock ledger and cap…

When any deposit is made by a minor, in his name, the bank may pay to him the amount deposited.

branches -- Joint examination and enforcement actions. (1) Every state bank, branch of an out-of-state state bank, or trust company doing business under the laws of this state shall be subject to inspection by the commissioner or by an examiner appointed by the commissioner. Exam…

financial condition of bank or trust company. In undertaking the examination of any bank or trust company, neither the Commonwealth of Kentucky, the commissioner, nor any examiner employed by the Commonwealth shall become liable to any depositor, investor, or other obligor of sai…