BANKING AND FINANCIAL INSTITUTIONS

2.59.1001 MERGER APPLICATION The application to merge one or more banks located in Montana or to merge two or more banks doing business in this state must be in the following form: An application fee of $2,000 plus $200 for each bank involved in the merger must be paid to the dep…

2.59.1002 MERGER APPLICATION PROCEDURES An application to merge one or more banks located in Montana pursuant to 32-1-370, MCA, must be on the form in ARM 2.59.1001. An application to merge any two or more banks doing business in this state pursuant to 32-1-371, MCA, must be on t…

2.59.101 BANKS - RESERVE REQUIREMENTS No bank shall act as a reserve bank unless: the bank has unimpaired paid-up capital and surplus of at least $1,000,000. For purposes of this rule, "unimpaired paid-up capital and surplus" shall mean the aggregate of the bank's capital stock a…

2.59.102 BANKS - DIRECT LEASING OF PERSONAL PROPERTY Under authority granted by 32-1-362 , MCA, the department hereby permits state banks of Montana to engage in the business of direct leasing of personal property under the following regulations: A bank may purchase personal prop…

2.59.103 RETENTION OF BANK RECORDS (REPEALED) Authorizing statute(s): 32-1-491, MCA Implementing statute(s): 32-1-491, MCA History: NEW, 1983 MAR p. 1458, Eff. 10/14/83; REP, 1994 MAR p. 1137, Eff. 4/29/94; TRANS, from Commerce, 2001 MAR p. 1178.

2.59.104 SEMIANNUAL ASSESSMENT Thedepartment invoices banks, investment companies, and trust companiesfor semiannual assessments every June and December. The assessment is based on eachinstitution's total assets provided in its previous March and September call reports. The fee i…

2.59.105 INVESTMENT SECURITIES (REPEALED) Authorizing statute(s): 32-1-433, MCA Implementing statute(s): 32-1-433, MCA History: NEW, 1989 MAR p. 2196, Eff. 12/22/89; REP, 1994 MAR p. 1137, Eff. 4/29/94; TRANS, from Commerce, 2001 MAR p. 1178.

2.59.106 INVESTMENT IN CORPORATE STOCK Ownership of stock in a bank service corporation is subject to the following conditions: The department adopts the definition of bank service corporation in 12 USC 1861 (a corporation organized to perform services authorized by this Act, all…

2.59.107 INVESTMENTS OF FINANCIAL INSTITUTIONS (REPEALED) Authorizing statute(s): 32-1-424, MCA Implementing statute(s): 32-1-424, MCA History: NEW, 1993 MAR p. 2776, Eff. 11/25/93; TRANS, from Commerce, 2001 MAR p. 1178; REP, 2002 MAR p. 901, Eff. 3/29/02.

2.59.108 LIMITATIONS ON LOANS (REPEALED) Authorizing statute(s): 32-1-432, MCA Implementing statute(s): 32-1-432, MCA History: NEW, 1993 MAR p. 2776, Eff. 11/25/93; AMD, 1996 MAR p. 2161, Eff. 8/9/96; TRANS, from Commerce, 2001 MAR p. 1178; AMD, 2014 MAR p. 675, Eff. 4/11/14; REP…

2.59.109 LOANS TO A MANAGING OFFICER, OFFICER, DIRECTOR, OR PRINCIPAL SHAREHOLDER OF A BANK The definitions of capital and unimpaired surplus are as follows: "Capital" shall mean the aggregate of the bank's outstanding capital stock account(s) minus any deficit balance existing i…

2.59.110 FEES FOR THE APPROVAL OF POINT-OF-SALE TERMINALS (REPEALED) Authorizing statute(s): 32-6-401, MCA Implementing statute(s): 32-6-305, MCA History: NEW, 1994 MAR p. 1143, Eff. 4/29/94; REP, 1998 MAR p. 2478, Eff. 9/11/98; TRANS, from Commerce, 2001 MAR p. 1178.

2.59.1101 APPLICATION PROCEDURE FOR APPROVAL TO ESTABLISH A NEW BRANCH BANK An existing state-chartered bank that does not meet the criteria in ARM 2.59.904(2) must file with the department an application for approval to establish and operate a new branch bank. Applications must …

2.59.1102 REVIEW PROCEDURE FOR APPLICATIONS FOR APPROVAL TO ESTABLISH A NEW BRANCH BANK The department must process applications for new branch banks in the order in which they are received. If an application is incomplete, the department will notify the applicant by e-mail. An a…

2.59.1103 PROCEDURE FOLLOWING APPROVAL OF AN APPLICATION TO ESTABLISH A NEW BRANCH BANK A bank must open an approved branch within 18 months of the date of branch bank approval. Upon written request by the applicant and a finding of good cause by the department, the 18-month peri…

2.59.111 RETENTION OF BANK RECORDS Records of customer accounts, as defined in (7), must be held in accordance with 32-1-491, MCA. The publication "Bank Record Retention Periods - Appendix A to ARM 2.59.111" (Appendix A) establishes the minimum period for retention of bank record…

2.59.112 UNDERWRITING OF SECURITIES Banks are permitted to underwrite issues of investment securities if the following conditions are met: No banks having unimpaired capital and surplus of less than $5,000,000 shall underwrite or otherwise participate as principal in the marketin…

2.59.113 INVESTMENTS BY BANKS TO PROMOTE THE PUBLIC WELFARE The department incorporates by reference the Office of the Comptroller of the Currency Code of Federal Regulations (12 CFR Part 24.1 through 24.7, 1996 edition) that implement 12 USC 24, which authorizes national banks t…

2.59.114 TRUST COMPANY EXAMINATION FEES (REPEALED) Authorizing statute(s): 32-1-218, MCA Implementing statute(s): 32-1-211, 32-1-214, MCA History: NEW, 2004 MAR p. 1947, Eff. 8/20/04; REP, 2021 MAR p. 328, Eff. 3/27/21.

2.59.115 ADOPTION OF EXAMINATION PROCEDURE The department adopts the revised Uniform Financial Institution Rating System as one of its examination procedures. The edition adopted is the December 19, 1996, edition as published in the Federal Register at 61 Fed. Reg. 67021. It may …

2.59.116 DEFINITIONS The following definitions apply to ARM 2.59.117 through 2.59.124: "Actuarial method" means the method of allocating payments made on a debt between the amount financed and the finance charge. Under this method, a payment is applied first to the accumulated fi…

2.59.117 DEBT CANCELLATION AND DEBT SUSPENSION PROGRAMS – REQUIREMENTS A bank offering debt cancellation contracts and/or debt suspension agreements shall: manage the risks associated with debt cancellation contracts and debt suspension agreements in accordance with bank safety a…

2.59.118 REQUIRED DISCLOSURES A bank shall provide the following disclosures to the bank's customer: notice of the prohibited acts or practices contained in ARM 2.59.119; the fee applicable to the contract and any payment options; the refund policy; whether the customer is barred…

2.59.119 PROHIBITED ACTS OR PRACTICES A bank is prohibited from engaging in any of the following acts or practices: extending credit or altering the terms or conditions of an extension of credit conditioned upon the customer entering into a debt cancellation agreement or debt sus…

2.59.120 REFUNDS OF FEES UPON TERMINATION OR PREPAYMENT OF COVERED LOAN If a debt cancellation contract or debt suspension agreement is terminated, including, for example, when the customer prepays the covered loan, a bank shall refund to the customer any unearned fees paid for t…

2.59.1201 ADOPTION OF STANDARDIZED FORMS AND PROCEDURES OF THE NMLS The NMLS Policy Guidebook dated September 27, 2021, isadopted by reference and available on the NMLS website at mortgage.nationwidelicensingsystem.org/slr/common/policy/Pages/default.aspx . Except as provided in …

2.59.1202 TRANSITION (REPEALED) Authorizing statute(s): 31-1-221, 31-1-223, MCA Implementing statute(s): 31-1-221, 31-1-223, MCA History: NEW, 2014 MAR p. 2446, Eff. 10/10/14; REP, 2016 MAR p. 2411, Eff. 12/24/16.

2.59.1203 LICENSE RENEWALS The renewal period begins November 1. Every renewal applicant shall apply for renewal through the NMLS. Licensees shall use the NMLS renewal process to request renewal of their license. Licensees shall submit their renewal applications by December 1 of …

2.59.1204 INITIAL LICENSE APPLICATION THROUGH NMLS (REPEALED) Authorizing statute(s): 31-1-221, 31-1-223, MCA Implementing statute(s): 31-1-221, 31-1-223, MCA History: NEW, 2014 MAR p. 2446, Eff. 10/10/14; REP, 2022 MAR p. 228, Eff. 2/12/22.

2.59.1205 AMENDMENTS (REPEALED) Authorizing statute(s): 31-1-223, MCA Implementing statute(s): 31-1-223, MCA History: NEW, 2014 MAR p. 2446, Eff. 10/10/14; REP, 2022 MAR p. 228, Eff. 2/12/22.

2.59.1206 LICENSE SURRENDER (REPEALED) Authorizing statute(s): 31-1-223, MCA Implementing statute(s): 31-1-223, MCA History: NEW, 2014 MAR p. 2446, Eff. 10/10/14; REP, 2022 MAR p. 228, Eff. 2/12/22.

2.59.1207 FEES (REPEALED) Authorizing statute(s): 31-1-223, MCA Implementing statute(s): 31-1-223, MCA History: NEW, 2014 MAR p. 2446, Eff. 10/10/14; REP, 2022 MAR p. 228, Eff. 2/12/22.

2.59.1208 REINSTATEMENT OF EXPIRED LICENSES Upon expiration of a license issued under 31-1-221, MCA, due to nonrenewal by the renewal date, the former licensee shall immediately cease from engaging in the activities for which the license was issued. The department may reinstate a…

2.59.121 METHOD OF PAYMENT OF FEES Except as provided in ARM 2.59.119(1)(c)(ii), a bank may offer a customer the option of paying the fee for a debt cancellation contract or a debt suspension agreement in a single payment, provided the bank also offers the customer a bona fide op…

2.59.122 AFFIRMATIVE ELECTION TO PURCHASE AND ACKNOWLEDGMENT OF RECEIPT OF DISCLOSURES Before entering into a debt cancellation contract or debt suspension agreement, a bank shall obtain the customer's written affirmative election to purchase the contract and a written acknowledg…

2.59.123 DISCLOSURE FORMS The department adopts as a model, but not as a requirement, the Comptroller of the Currency's model short form disclosure at 12 CFR 37 App A revised as of January 1, 2010. The form must be adapted by the bank to include the disclosures required under ARM…

2.59.124 GUARANTEED ASSET PROTECTION (GAP) FEATURE A GAP waiver or agreement is a type of debt cancellation contract. A debt cancellation contract with a GAP feature offered in connection with an extension of credit for the purchase of titled personal property for personal, famil…

2.59.125 DEFINITIONS APPLICABLE TO DERIVATIVE TRANSACTIONS AND SECURITIES FINANCING TRANSACTIONS The following definitions apply to rules within this subchapter: "Bank" or "state bank" has the same meaning as "eligible state bank" in (10). "Borrower" means: a person who is named …

2.59.126 ELIGIBLE STATE BANK'S PERMISSIBLE DERIVATIVE TRANSACTIONS An eligible state bank as defined in ARM 2.59.125 may engage in any derivative transaction if the bank has a written policy approved by its board of directors that: identifies the types of derivative transactions …

2.59.127 LENDING LIMITS APPLICABLE TO DERIVATIVE TRANSACTIONS For purposes of 32-1-432, MCA, derivative transactions and securities financing transactions must be included in the calculation of lending limits. The calculation of credit exposure arising from derivative transaction…

2.59.128 NONCONFORMING LOANS AND EXTENSIONS OF CREDIT A loan or extension of credit within a bank's legal lending limit when made will not be deemed a violation but will be treated as nonconforming if the loan or extension of credit is no longer in conformity with the bank's lend…

2.59.129 CREDIT EXPOSURE ARISING FROM DERIVATIVES AND SECURITIES FINANCING TRANSACTIONS For purposes of determining a bank's lending limit under 32-1-432, MCA, the bank's credit exposure arising from a derivatives transaction or a securities financing transaction entered by a ban…

2.59.130 CHANGE IN CONTROL An applicant filing under 32-1-378(1)(b), MCA, must use the Application for Change in Control form, April 30, 2025, version, which is located at banking.mt.gov. An applicant or other person subject to this rule must notify the department immediately of …

2.59.131 REPORT OF DECLARATION AND PAYMENT OF DIVIDEND – DIVIDEND APPROVAL REQUEST FORM (REPEALED) Authorizing statute(s): 32-1-211, 32-1-218, MCA Implementing statute(s): 32-1-211, 32-1-232, 32-1-452, MCA History: NEW, 2020 MAR p. 1698, Eff. 9/12/20; AMD, 2021 MAR p. 328, Eff. 3…

2.59.132 CONFLICTS OF INTEREST For purposes of 32-1-212, MCA, the following definitions apply: "Interested in" means the commissioner or deputy commissioner: is an officer, director, or employee of a supervised entity or an individual or person owning or controlling a supervised …

2.59.133 OATHS OF DIRECTORS (REPEALED) Authorizing statute(s): 32-1-211, 32-1-322, MCA Implementing statute(s): 32-1-211, 32-1-322, MCA History: NEW, 2020 MAR p. 1698, Eff. 9/12/20; REP, 2022 MAR p. 234, Eff. 2/12/22.

2.59.134 CONVERSION OF A NATIONAL BANK TO A STATE BANK Upon conversion: the resulting state bank has all the rights and property of the converted bank and all the debts and liabilities of the converted bank in the same manner as if the resulting state bank itself had incurred the…

2.59.135 FORM TO REPORT DIRECTORS AND OFFICERS Banks must file the List of Officers and Directors form, June 29, 2020, version, located on the department's website at banking.mt.gov to report the directors and officers elected at the annual meeting and the board meeting to the de…

2.59.136 FOREIGN FIDUCIARY TRUST COMPANY (REPEALED) (REPEALED) Authorizing statute(s): 32-1-1007, MCA Implementing statute(s): 32-1-1002, 32-1-1007, MCA History: NEW, 2020 MAR p. 1698, Eff. 9/12/20; REP, 2024 MAR p. 1058, Eff. 5/11/24.

2.59.137 PARITY WITH NATIONAL BANKS (REPEALED) Authorizing statute(s): 32-1-211, 32-1-362, MCA Implementing statute(s): 32-1-211, 32-1-362, MCA History: NEW, 2020 MAR p. 1698, Eff. 9/12/20; REP, 2022 MAR p. 234, Eff. 2/12/22.