North Dakota Administrative Code

The state banking board authorizes state banks to invest in investment securities or instruments in accordance with investment authorizations issued for national banks by the comptroller of the currency, subject to the same limitations or restrictions, if any. History: Effective …

The authority for state banks to invest in investment securities or instruments must be the date the investments are effective for national banks unless the state banking board shall otherwise direct within ninety days of the state banking board receiving notification of proposed…

This chapter is intended to establish minimum guidelines for the report of examining committee or examination by the board of directors, annual independent certified public accountant audit, or auditors of the bank holding company, or examination by internal audit control system …

Examinations conducted by the board of directors, its examining committee, or auditors of the bank holding company, or examination by an internal audit control system for its annual report, may include the following minimum procedures to comply with the report requirement of sect…

To establish requirements for a reciprocating state bank holding company making an application to acquire or organize a North Dakota state or national bank and demonstrating how they will meet the credit needs for business expansion of the local community or trade area in which t…

1. "Family farm" means agricultural real estate operated and owned or leased by a farmer, or other organization authorized to own or lease land used for farming or ranching under North Dakota Century Code chapter 10-06, where the majority of the labor necessary to operate the far…

Developmental loans include loans or investments made to residents of North Dakota in the Bank's trade area for the following purposes: 1. Operating loans for farmers and family farms; 1 2. Loans made to create or expand farm and nonfarm businesses; 3. Loans guaranteed by the sma…

The application by the reciprocating bank holding company must contain a statement demonstrating a commitment to meet credit needs of the existing or proposed trade area. The applicant's statement must include a commitment for a level of developmental loans by number and amount, …

Repealed effective September 29, 1995.

Repealed effective September 29, 1995.

Repealed effective September 29, 1995. 2

Failure to maintain the required level and percentage of developmental loans may constitute grounds for divestiture or cease and desist proceedings under North Dakota Century Code section 6-08.3-07. History: Effective August 1, 1991. General Authority: NDCC 6-01-04 Law Implemente…

Repealed effective September 29, 1995. 3

Any two or more banking institutions may consolidate or merge upon making application and subject to approval by the state banking board. An application to consolidate or merge is not required when a state-chartered banking institution is not the survivor. A banking institution p…

An original and ten copies of the application to consolidate or merge must be filed with the board. In lieu of an original application, the state banking board will accept a copy of the application submitted to the federal deposit insurance corporation. An application must contai…

Upon filing a completed application, the secretary of the board shall cause to be published notice of application for two successive weeks in the official newspaper of the county where the proposed 1 consolidated or merged banking institutions are located including the locations …

Notwithstanding section 13-02-13-03, an applicant may elect to publish joint federal and state notice of the application pursuant to the procedural requirements of federal law. Before publication, the applicant shall submit the proposed notice of application to the commissioner f…

When deciding whether to approve an application to consolidate or merge, the board shall examine and consider all relevant factors including: 1. Whether proper notification has been given to all shareholders; 2. Whether at least two-thirds of the shareholders have ratified the pl…

A public hearing by the board may be required on applications to merge or consolidate whenever the board or commissioner determines that it is in the public interest to hold such a hearing or whenever a bank or party's request for an opportunity to be heard is granted. Notice of …

"Key person" means the chairman of the board, the president, each vice president, the cashier, the secretary, the treasurer, or any other employee or director of a bank or bank holding company whose absence for an extended period of time would result in a significant loss of net …

Banks may purchase and hold an interest in individual or group life insurance policies on the life of its key persons, directors, and borrowers, and may purchase life insurance in connection with compensation and benefit plans for its officers, directors, and employees, subject t…

1. A bank is not authorized to purchase life insurance policies for the bank's own account as an investment. 2. Except as provided in subsections 3 and 4, the bank's purchase of life insurance policies underwritten by one company cannot exceed fifteen percent of the bank's tier 1…

Prior to purchasing a policy, the board of directors shall evaluate the financial condition and rating, if any, of the insurance company by acquiring adequate and current financial information. The board shall, on at least an annual basis, continue to evaluate the company's finan…

1. In purchasing life insurance for key person purposes, the bank's board of directors must adequately document in its minutes the basis for its insurable interest and the basis for the amount of insurance. The bank's board of directors must also document in its minutes the basis…

The state banking board or commissioner may waive any limitation or restriction in this chapter. History: Effective April 1, 1992; amended effective April 1, 2003. General Authority: NDCC 6-01-04 Law Implemented: NDCC 6-03-02, 6-03-38 3…

1. "Bank funds" means cash or any check whereby the drawer and drawee are the lending bank, including a cashier's check. 2. "Core banking activity" includes receiving deposits, paying checks, or lending money. 3. "Loan production office" means an office which is apart from the ma…

The commissioner may authorize the establishment of intrastate and interstate loan production offices by North Dakota state-chartered banks. In determining whether to approve the application for a loan production office, the commissioner shall take into consideration the followin…

Loan production offices may not be established when the establishment of such offices would impair the applicant bank's capital structure. There are no population or geographic restrictions applied to such offices in the state of North Dakota. This chapter does not prohibit the e…

Loan production offices are limited to the following activities: 1. Soliciting loans on behalf of a bank. 2. Assembling credit information. 3. Conducting property inspections and appraisals. 4. Securing title information. 5. Preparing applications for loans, including making cred…

A loan production office may not be established, or operated, by a state-chartered bank until after the bank has submitted a written application to the commissioner or board and received a certificate of authority to operate such office. The application must describe with regard …

The commissioner may revoke the certificate of authority for a loan production office where it has been determined a loan production office has engaged in any activity not specifically provided for in section 13-02-15-04. History: Effective May 1, 1993; amended effective July 1, …

A bank whose certificate of authority has been revoked may appeal the commissioner's decision for consideration of the board if the appeal is filed within fifteen days after receipt of notice of certificate revocation. Consideration of the board must occur within sixty days after…

A banking association receiving approval by the board to exercise trust powers may exercise trust powers at its main banking house, banking house or office, paying and receiving stations, and drive-in and walkup facility locations. Only one application is required for a banking a…

An original and ten copies of the application to exercise trust powers must be filed with the board. In lieu of an original application, the board may accept a copy of the application submitted to the federal deposit insurance corporation or federal reserve system. The applicant …

The applicant must demonstrate that the proposed trust committee and officers have experience commensurate with the trust powers being requested. Upon granting trust powers, the board may require the applicant to commit to a training program of trust schools and seminars acceptab…

Upon filing an application, the secretary of the board shall cause to be published notice of the application for two successive weeks in the official newspaper of the county of the main banking house, and all locations. The notice of application must also be sent by certified mai…

Notwithstanding section 13-02-16-04, an applicant may elect to publish joint federal and state notice of the application pursuant to the procedural requirements of federal law. Before publication, the applicant shall submit the proposed notice of application to the commissioner f…

A public hearing by the board may be required on an application for trust powers whenever the board or commissioner determines that it is in the public interest to hold such a hearing or whenever an interested party's request for an opportunity to be heard is granted. Notice of h…

Upon filing a completed application the secretary of the board shall cause to be published notice of application in the official newspaper of the county where the association, banking institution, or holding company is principally located. The notice must specify the name of the …

Upon filing a completed application, the bank shall cause to be published notice of application once a week for two successiveweeks in the official newspaper of the county where the facility is located. The notice must invite comments be sent to the board. Any person must submit …

An original and ten copies of the application to organize a trust company must be filed with the board. In lieu of an original application, the board will accept a copy of the application submitted to the federal deposit insurance corporation. The application must clearly indicat…

The applicant must demonstrate that the proposed trust committee and officers have experience commensurate with the trust powers being requested. Upon granting trust powers, the board may require the applicant to commit to a training program of trust schools and seminars acceptab…

The minimum equity capital for organization of a trust company is five hundred thousand dollars. The board may require additional equity capital whenever the proposed location of the trust company, the amount of fiduciary assets projected for the trust company, the amount of dire…

A notice of hearing on an application must be issued at least forty-five days prior to the hearing on an application. The notice of hearing must be published by the secretary of the board for two successive weeks in the official newspaper of the county where the proposed trust co…

This chapter applies to loans that are dependent primarily upon real estate security. History: Effective November 1, 1995. General Authority: NDCC 6-01-04 Law Implemented: NDCC 6-03-05

1. "Construction loan" means an extension of credit for the purpose of erecting or rehabilitating buildings or other structures, including any infrastructure necessary for development. 2. "Extension of credit" or "loan" means the total amount of any loan, line of credit, or other…

Except as provided in this section and section 13-02-20-04: 1. Loans secured by raw land may not exceed a sixty-five percent loan-to-value ratio. 2. Loans made for land development may not exceed a seventy-five percent loan-to-value ratio. 3. Construction loans for commercial, mu…

The loan-to-value ratios established in this chapter do not apply to loans that are insured or guaranteed, or where there is a commitment to insure or guarantee, in part or in full, or conditionally, by the United States, its instrumentalities, this state, or its instrumentalitie…

Exceptions may be made for the consideration of loan requests from credit worthy borrowers. However, any exceptions from the loan-to-value limits should not exceed, when aggregated with all other loans in excess of the loan-to-value limits, one hundred percent of total equity cap…

As used in this chapter, the terms "customer", "customer information", and "financial institution" have the same meaning as is given to them in North Dakota Century Code section 6-08.1-01. History: Effective June 1, 2004. General Authority: NDCC 6-01-04 Law Implemented: