Montana Administrative Code

2.59.2013 SEMIANNUAL ASSESSMENT The department invoices mutual associations for semiannual assessments every June and December. The assessment is based on each institution's total assets provided in its previous March and September call reports. The fee is calculated based on the…

2.59.2014 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…

2.59.2017 MERGER APPLICATION The application to merge one or more mutual associations located in Montana or to merge two or more mutual associations doing business in this state must be in the following form: the resolution or an authentic copy of the resolution, authorizing the …

2.59.2018 MERGER APPLICATION PROCEDURES An application to merge one or more mutual associations located in Montana pursuant to 32-2-827, MCA, must be on the form in ARM 2.59.2017. The application to merge must be filed with the department. The election and acknowledgment informat…

2.59.202 EXAMINATION AND SUPERVISORY FEE (ANNUAL) (REPEALED) Authorizing statute(s): 32-2-110, MCA Implementing statute(s): 32-2-110, MCA History: NEW, 1985 MAR p. 776, Eff. 6/28/85; TRANS, from Commerce, 2001 MAR p. 1178; REP, 2022 MAR p. 230, Eff. 2/12/22.

2.59.2021 MUTUAL ASSOCIATIONS - DIRECT LEASING OF PERSONAL PROPERTY Under authority granted by 32-2-824, MCA, the department permits state mutual associations to engage in the business of direct leasing of personal property under the following regulations: A mutual association ma…

2.59.2022 RETENTION OF MUTUAL ASSOCIATION RECORDS Records of customer accounts, as defined in (7), must be held in accordance with 32-2-950, MCA. The publication "Mutual Savings and Loan Association Record Retention Periods - Appendix A to ARM 2.59.2022" (Appendix A) establishes …

2.59.2023 FORM TO REPORT DIRECTORS AND OFFICERS Mutual associations shall use the List of Officers and Directors form dated July 9, 2021, which is located on the department's website at banking.mt.gov to report the directors and officers elected at the annual meeting and the boar…

2.59.2026 DEFINITIONS For purposes of this subchapter, the following definitions apply: "Branch" means a banking house, other than the main banking house, maintained and operated by a mutual association doing business in the state and at which deposits are received, checks are pa…

2.59.2027 APPLICATION PROCEDURE FOR APPROVAL TO ESTABLISH A NEW BRANCH An existing state-chartered mutual association that does not meet the criteria in shall file with the department an application for approval to establish and operate a new branch. Applications shall be submitt…

2.59.2028 REVIEW PROCEDURE FOR APPLICATIONS FOR APPROVAL TO ESTABLISH A NEW BRANCH The department shall process applications for new branches in the order in which they are received. If an application is incomplete, the department shall notify the applicant by e-mail. An applicat…

2.59.2029 PROCEDURE FOLLOWING APPROVAL OF AN APPLICATION TO ESTABLISH A NEW BRANCH A mutual association must open an approved branch within 18 months of the date of branch approval. Upon written request by the applicant and a finding of good cause by the department, the 18-month …

2.59.2030 BRANCHES A mutual association organized under the laws of this state that is a qualifying institution, as set forth in (2), may establish a branch in Montana upon summary notice and approval by the department. The notice shall be given using the Request for Summary Appr…

2.59.2031 MONTANA MUTUAL ASSOCIATIONS BRANCHING OUTSIDE MONTANA In order for a mutual association organized under the laws of this state to request approval for a branch outside of Montana, the mutual association must submit copies of all required regulatory filings or notices re…

2.59.2032 MUTUAL ASSOCIATIONS ORGANIZED OUTSIDE OF MONTANA BRANCHING INTO MONTANA Mutual associations organized under the laws of a state other than Montana or of a national mutual association must submit copies of all required regulatory filings or notices required by the home s…

2.59.2033 CLOSURE OR RELOCATION OF A BRANCH A Montana state-chartered mutual association that desires to relocate or close a branch temporarily or permanently shall give notice to its customers using the customer Notice of Relocation of Mutual Association Branch form (relocation …

2.59.2034 TEMPORARY EMERGENCY CLOSURE OF BRANCH A mutual association that closes a branch under the authority of 32-2-1032(1), MCA, for 48 hours or less shall notify the department using the Temporary Emergency Branch Closure form dated July 9, 2021, located on the department's w…

2.59.2035 EMERGENCY CLOSURE OF BRANCH A mutual association that closes a branch under the authority of 32-2-1032, MCA, for more than 48 hours shall notify the department using the Emergency Branch Closure form dated July 9, 2021, located on the department's website at banking.mt.…

2.59.2036 LOAN PRODUCTION OFFICE ACTIVITIES A loan production office may conduct any of the following activities, which shall not, individually or collectively, cause the loan production office to be considered a branch: solicit loans on behalf of the mutual association or a bran…

2.59.2037 LOAN PRODUCTION OFFICE A mutual association that desires to establish a loan production office in this state shall provide written notice to the department of its intent to do so at least 30 days prior to opening the loan production office using the Notice of Intent to …

2.59.2040 DEFINITIONS "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 finance charge and any remainder is subtracted from, or any deficie…

2.59.2041 DEBT CANCELLATION AND DEBT SUSPENSION PROGRAMS – REQUIREMENTS A mutual association offering debt cancellation contracts and/or debt suspension agreements shall: manage the risks associated with debt cancellation contracts and debt suspension agreements in accordance wit…

2.59.2042 REQUIRED DISCLOSURES A mutual association shall provide the following disclosures to the mutual association's customer: notice of the prohibited acts or practices contained in ARM 2.59.2043; the fee applicable to the contract and any payment options; the refund policy; …

2.59.2043 PROHIBITED ACTS OR PRACTICES A mutual association 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 contra…

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…