BANKING AND FINANCIAL INSTITUTIONS

2.59.2044 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 mutual association shall refund to the customer any unearned …

2.59.2045 METHOD OF PAYMENT OF FEES Except as provided in ARM 2.59.2043(1)(c)(ii), a mutual association 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 mutual association also offe…

2.59.2046 AFFIRMATIVE ELECTION TO PURCHASE AND ACKNOWLEDGMENT OF RECEIPT OF DISCLOSURES Before entering into a debt cancellation contract or debt suspension agreement, a mutual association shall obtain the customer's written affirmative election to purchase the contract and a wri…

2.59.2047 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 Appendix A revised as of January 1, 2010. The form must be adapted by the mutual association to include the disclosure…

2.59.2048 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, fami…

2.59.2051 NONCONFORMING LOANS AND EXTENSIONS OF CREDIT A loan or extension of credit within a mutual association'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 …

2.59.2052 U.S. TREASURY AND U.S. GOVERNMENT AGENCY ISSUES There is no dollar limit on a mutual association's investment in the following U.S. treasury securities: bonds; notes; or bills. There is no dollar limit on a mutual association's investment in U.S. treasury bonds and note…

2.59.2053 OTHER APPROVED QUASI-GOVERNMENT SECURITIES Certain other securities are approved for mutual association investment.There is no dollar limit on a mutual association's investment in: general services administration (participation certificates); maritime administration (bo…

2.59.2054 STATE, COUNTY, AND MUNICIPAL ISSUES Mutual associations may invest, without dollar limitation, in the general obligation of any state which is part of the United States of America. The obligations must be fully guaranteed as to the repayment of principal and interest. E…

2.59.2055 CORPORATE BONDS Mutual associations may invest up to 20% of their capital, per issuer, in corporate bonds. These bonds must be investment grade, i.e., rated in one of the four highest grades by a recognized national investment rating organization. Other rating services …

2.59.2056 MUTUAL FUNDS Under the authority of 32-2-908(1)(b), MCA, and subject to its restrictions, mutual associations may invest in mutual funds whose shares represent only those United States obligations listed in ARM 2.59.2052. Members must have a proportionate undivided inte…

2.59.2057 OTHER APPROVED INVESTMENTS Certain other instruments which may have investment characteristics are approved for state-chartered mutual associations. They are the following: mutual associations may invest, on a per issuer basis, in certificates of deposit (CDs) or deposi…

2.59.2058 DEBT SECURITIES FOR DEBTS PREVIOUSLY CONTRACTED Debt securities received by a mutual association in good faith, in satisfaction of debts previously contracted, are not subject to the limitations of the applicable provisions ofARM 2.59.2052through 2.59.2057, if the book …

2.59.2061 DEFINITIONS For purposes ofARM 2.59.2062 through 2.59.2066, the following definitions apply: "Commitment to lend or extend credit" includes, but is not limited to: undisbursed portions of operating, construction, or other lines of credit, up to limits established by a w…

2.59.2062 LEGAL LENDING LIMIT If no direct benefit is received or no common enterprise exists, the combined loans or extensions of credit to a commonly owned or controlled group of borrowers shall not exceed three times the mutual association's lending limit. Authorizing statute(…

2.59.2063 COMBINATIONS OR GUARANTEES Loans or extensions of credit to a person will be combined with loans or extensions of credit to one or more other persons when: proceeds of a loan or extension of credit are to be used for the direct benefit of the other person; or a common e…

2.59.2064 DIRECT BENEFIT A direct benefit exists when the proceeds of a loan or extension of credit to a person are deemed to be used to the advantage of another person.The amount of the loan will be attributed to the other person when the proceeds, or assets purchased with the p…

2.59.2065 COMMON ENTERPRISE A common enterprise occurs when two or more persons combine to acquire, operate, or control a business enterprise or property interest. Credit to a common enterprise includes: loans or extensions of credit to two or more persons when the loans or exten…

2.59.2066 EXCLUSIONS The following items will be excluded when calculating the amount of a person's total loans and extensions of credit: loans or extensions of credit, and participation in loans and extensions of credit, that have been sold, if: the loan, extension of credit, or…

2.59.2069 CREDIT EXPOSURE ARISING FROM DERIVATIVES AND SECURITIES FINANCING TRANSACTIONS For purposes of determining a mutual association's lending limit under 32-2-925, MCA, the mutual association's credit exposure arising from a derivatives transaction or a securities financing…

2.59.2101 DEFINITIONS For purposes of this subchapter, the following definitions apply: "Good standing" means the entity is not subject to a supervisory directive, corrective action order, conservatorship, or the equivalent, from a state or federal regulator, and has not had its …

2.59.2102 OUT-OF-STATE STATE-CHARTERED BANK OR NATIONAL BANK SEEKING TO EXERCISE FIDUCIARY POWERS IN MONTANA An out-of-state state-chartered or national bank that seeks to act as a fiduciary foreign trust company in Montana must provide: the Fiduciary Foreign Trust Company Applic…

2.59.2103 OUT-OF-STATE NONBANK TRUST COMPANIES SEEKING TO EXERCISE FIDUCIARY POWERS IN MONTANA A nonbank trust company that seeks to act as a fiduciary foreign trust company in Montana must provide: the Fiduciary Foreign Trust Company Application, October 30, 2023, version, which…

2.59.2201 DEFINITIONS The following definition applies to rules within this subchapter: “Depository bank” means a bank as defined in: 32-1-105, MCA; 32-1-106, MCA; 32-1-107, MCA, if the bank engages in one or more of the purposes set forth in 32-1-107(1), (7), or (9), MCA; or 32-…

2.59.2202 APPLICATION PROCEDURE FOR A CERTIFICATE OF AUTHORIZATION FOR A STATE-CHARTERED BANK The application for a proposed new depository bank to be located in Montana must submit the following forms, which are adopted and incorporated by reference, to the department: the Inter…

2.59.2203 APPLICATION CONTENTS In order to comply with 32-1-242, MCA, the applicant must submit: the purpose of the proposed bank; the proposed location of the initial principal place of business; the class or classes of stock proposed to be issued, the proposed offering price pe…

2.59.2204 PRO FORMA STATEMENT An operational projection must be submitted as part of the application for proposed new depository bank charters, in order to show that the new bank will remain solvent while meeting the requirements set forth in 32-1-240 through 32-1-245, MCA, and A…

2.59.2205 PERSUASIVE SHOWING OF REASONABLE PUBLIC NECESSITY AND DEMAND In determining whether reasonable public necessity and demand is established, the department must assess the needs of the community as a whole and determine whether the proposed new depository bank will promot…

2.59.2206 CAPITAL ADEQUACY OF A PROPOSED NEW DEPOSITORY BANK The applicant must provide reasonable assurances that the proposed new depository bank will have adequate initial paid-in capital sufficient to accomplish the following: establish an undivided profits account in an amou…

2.59.2207 FINGERPRINTING The department may require any person listed in 32-1-241, MCA, to submit to fingerprints for submission to the Federal Bureau of Investigation as well as a consent to a background check. Authorizing statute(s): 32-1-218, 32-1-241, MCA Implementing statute…

2.59.2208 A STATE BANK ORGANIZED FOR THE PURPOSE OF ASSUMING DEPOSIT LIABILITY OF ANY CLOSED BANK All provisions of 32-1-240 through 32-1-245, MCA, and ARM 2.59.2201 through 2.59.2209 are applicable. Prior to submitting a bid for the assets and liabilities of a closed bank, organ…

2.59.2209 FDIC INSURANCE REQUIRED To comply with 32-1-242, MCA, it has been determined by the department that it is in the public interest to require all commercial banks to be accepted by the Federal Deposit Insurance Corporation for the insurance of deposits. The department wil…

2.59.2210 INSTITUTION NAME The name of a financial institution may not contain any word or phrase that indicates or implies that the institution is organized for any purpose other than one or more of the purposes contained in the institution’s articles of incorporation. The name …

2.59.2302 A STATE BANK ORGANIZED FOR THE PURPOSE OF BEING A SHELL BANK For a bank organized solely for the purpose of merging with, or otherwise acquiring, an existing bank or savings association is referred to as a shell bank in this subchapter. A shell bank charter may only be …

2.59.2303 APPLICATION PROCEDURES An application to form a shell bank must be submitted to the department using the Shell Bank Charter Application form, April 30, 2025, version, located at banking.mt.gov. At least 30 days prior to the effective date of any merger or business conso…

2.59.2304 DEPARTMENT TO REVIEW APPLICATION The department must ensure that sufficient information has been submitted to determine whether: the character, financial responsibility, and general fitness of the owners and managers of the proposed bank command the confidence of the co…

2.59.2305 AUTHORITY TO REQUIRE ADDITIONAL INVESTIGATORY INFORMATION - FINGERPRINTING The department may investigate any person named in the application or in other documents submitted for filing. The department may require the person to provide additional information for the depa…

2.59.2306 DECISION OF DEPARTMENT; INCORPORATION The department’s approval of a shell bank must be specifically conditioned on: the department's approval of the subsequent merger; and the resulting bank being accepted for deposit insurance by the Federal Deposit Insurance Corporat…

2.59.2307 GROUNDS FOR DENYING AN APPLICATION The department may deny an application on a finding that any person named in the application to organize or in other documents submitted for filing: is insolvent, either in the sense that the person's liabilities exceed the person's as…

2.59.2308 ADDITIONAL REQUIREMENTS AFTER APPROVAL OF APPLICATION Following approval of the application, the incorporators must: file a signed original of the articles of incorporation with the department for filing with the Secretary of State and pay the filing fee; provide accept…

2.59.2309 POWERS OF A SHEL BANK BEFORE MERGER Prior to completing a merger, a shell bank may take only those corporate and fiduciary steps and actions reasonably incidental and necessary to facilitate and complete the merger. Such limitation does not preclude the department from …

2.59.2310 PROOF OF MERGER: REVOCATION OF CERTIFICATE OF AUTHORIZATION From the date a shell bank is authorized according to this rule, the parties to the shell bank merger agreement have six months in which to effect the merger with the existing bank or savings association. The m…

2.59.2401 DEFINITIONS The following definition applies to rules within this subchapter: “Nondepository trust company bank” means a bank as defined in 32-1-107, MCA, that engages in one or more of the purposes set forth in 32-1-107(2), (3), (4), (5), (6), or (8), MCA. Authorizing …

2.59.2402 CAPITAL ADEQUACY OF A NONDEPOSITORY TRUST COMPANY BANK The department may not issue a charter to a nondepository trust company bank having initial capital of less than $2 million. The department may, on a case-by-case basis, require additional capital, or the deposit of…

2.59.301 ADVERTISING "Advertising" or "advertisement" means any written or oral statement or depiction that includes terms or availability of loans or that is designed to create interest in a consumer loan product and is conveyed in any manner or medium including but not limited …

2.59.302 FEE DISCLOSURES – COMPUTATION OF INTEREST At the time of filing an application for initial license or a renewal license under the Montana Consumer Loan Act, the applicant shall file with the department a fee disclosure statement and a failure- or inability-to-pay disclos…

2.59.303 CREDIT INSURANCE A consumer loan licensee may not sell, solicit, or negotiate insurance or act as an insurance producer or insurance agency in this state unless licensed under Title 33, chapter 17, MCA. A consumer loan licensee holding an insurance producer or insurance …