Title 4, Economic Resources

Interest on Accounts. A bank may maintain deposit accounts and pay interest on balances therein at rates which need not be uniform. Source: PL 3-104, § 601.

Payment of Items. So long as the balance in any account subject to withdrawal by or upon the order of a depositor equals or exceeds the amount of any item presented for payment, a bank may select from items which in the aggregate exceed the balance, the items to be paid in any or…

Transactions Outside Regular Banking Hours or on Holidays. Nothing in any law of the Commonwealth shall in any manner whatsoever affect the validity of or render void or voidable, the payment, certification, or acceptance of a check or other negotiable instrument or any other tra…

Deposit of Minor; School or Institutional Deposits. (a) A bank may operate a deposit account in the name of a minor or in the names of two or more persons, one or more of whom are minors, with the same effect upon its liability as if the minors were of full age. (b) Subject to su…

Deposits in Two Names. (a) When a deposit has been made or shall hereafter be made, in any bank in the names of two persons, payable to either, or payable to either or survivor, the deposit, or any part thereof, or any interest or dividend thereon, may be paid to either of the pe…

Deposits in Trust. (a) Whenever any deposit is made in any bank by any person in trust for another, and no other or further notice of the existence and terms of a legal and valid trust has been given in writing to the bank; in the event of the death of the trustee, the same, or a…

Final Adjustment of Statement of Account. (a) When a statement of account has been rendered by a bank to a depositor accompanied by vouchers, if any, which are the basis for debit entries in such account, or the depositor’s passbook has been written up by the bank showing the con…

Adverse Claim to Bank Deposit. Notice to any bank of an adverse claim to a deposit standing on its books to the credit of any person shall not be effectual to cause the bank to recognize the adverse claimant unless the adverse claimant shall also either procure a restraining orde…

Powers of Attorney. (a) A bank may continue to recognize the authority of an attorney authorized in writing to operate, in whole or in part, the account of a depositor, until it receives written notice of the revocation of his authority. (b) Written notice of the death or adjudic…

Payment from Account When no Executor or Administrator has Qualified. (a) Where no executor or administrator of a deceased depositor has qualified and given notice of his or her qualifications to a bank, the bank may in its discretion and at any time after 30 days from the death …

Transmitting Money: Foreign Exchange. (a) Any bank may accept money for transmissions and may transmit money. (b) Any bank may buy and sell foreign exchange to the extent necessary to meet the needs of customers. Source: PL 3-104, § 611.

Dormant and Inactive Accounts and Unclaimed Funds. (a) A bank account shall be considered inactive as follows: (1) A savings account shall be considered inactive if no deposits or withdrawals are made to/from the account for a period of twenty-four months since the last transacti…

Disclosure Requirement. (a) Each retail bank shall comply with the federal Truth in Lending Act (15 U.S.C. §§ 1601 et seq.) and all laws obligatory on the Commonwealth. (b) Reporting. Banks operating in the CNMI shall prepare a report to the CNMI Treasurer and the Department of C…

Fees and Other Charges. Fees and other charges assessed by a retail bank for depositor and other customer services shall be made available to the depositor or customer. Source: PL 3-104, § 614.

Definitions. As used in this article: (a) “Lessee” means a person contracting with a lessor for the use of a safe deposit box. (b) “Lessor” means a bank, trust company, or subsidiary renting safe deposit facilities, and includes a safe deposit company organized and operating unde…

Authority to Engage in Leasing Safe Deposit Facilities: Subsidiary Company. (a) Subject to such regulations as the director may prescribe, a bank, trust company or safe deposit company may maintain and lease safe deposit boxes and may accept property or documents for safekeeping …

Access by Fiduciaries. Where a safe deposit box is made available by a lessor to one or more persons acting as fiduciaries, the lessor may, except as otherwise expressly provided in the lease or the writings pursuant to which such fiduciaries are acting, allow access thereto as f…

Effect of Lessee’s Death or Incompetence. Where a lessor without knowledge of the death or of an adjudication of legal incompetence of the lessee, deals with his agent pursuant to a written power of attorney signed by the lessee, the transaction binds the lessee’s estate and the …

Lease to Minor. A bank may lease a safe deposit box to, and in connection therewith deal with, a minor with the same effect as if leasing to and dealing with a person of full legal capacity. Source: PL 3-104, § 624.

Search Procedure on Death. A lessor shall permit the person named in a court order for the purpose, or if no order has been served upon the lessor, the spouse, a parent, an adult descendant or a person named as an executor in a copy of a purported will produced by him, to open an…

Adverse Claims to Contents of Safe Deposit Box. (a) An adverse claim to the contents of a safe deposit box, or to property held in safekeeping, is not sufficient to require the lessor to deny access to its lessee unless: (1) The lessor is directed to do so by a court order issued…

Special Remedies for Nonpayment of Rent. (a) If the rental due on a safe deposit box has not been paid for one year, the lessor may send a notice by registered mail to the last known address of the lessee stating that the safe deposit box will be opened and its contents stored at…

Qualification and Fiduciary Powers: Deposit of Securities. (a) It is unlawful for a bank to act as fiduciary unless it is authorized by its charter to exercise trust powers and has qualified by depositing with the director evidences of indebtedness acceptable to the director whic…

Fiduciary Bond or Oath Excused. No oath or bond shall be required of a bank to qualify upon appointment as a fiduciary, unless the instrument creating a fiduciary position expressly otherwise provides. Source: PL 3-104, § 631.

Identification and Segregation of Fiduciary Assets; Investment and Deposit of Cash; Nominee for Securities. (a) A bank holding any asset as a fiduciary shall: (1) Segregate all such assets from any other assets of the bank and from the assets of other trusts, except as may be exp…

Investment of Funds Held as Fiduciary. A bank acting as fiduciary shall have the same investment powers as an individual fiduciary under like circumstances. Source: PL 3-104, § 633.

Common Trust Funds. A bank or trust company may create one or more common trust funds in which individuals may participate and invest. Source: PL 3-104, § 634.

Loans. (a) A bank may lend at a lawful rate of interest on the security of the personal obligation of the borrower. (b) A retail bank may lend on the security of tangible and intangible personal property subject to regulations issued by the director. (c) A retail bank may lend at…

Investments. (a) In addition to other investments expressly authorized by this division, a retail bank may purchase (or discount): (1) Obligations which satisfy the requirements of this division for loans and are acquired in full. (2) Obligations of the United States, or states o…

Acceptances. (a) Retail banks may accept: (1) A draft which has not more than six months sight to run, exclusive of days of grace, and is drawn to finance the purchase of goods with maturity in accordance with the original terms of purchase, or is secured by shipping documents tr…

Diversification of Loans and Investments. The director may issue regulations on the diversification of loans and investments. Source: PL 3-104, § 643. Commission Comment: With respect to the reference to the “director” of the Department of Commerce and Labor, see Executive Order …

Acquisition of Property to Satisfy or Protect Previous Loan. A bank may take property of any kind to satisfy or protect a loan previously made in good faith and in the ordinary course of business. Property acquired in satisfaction of a loan shall be held subject to the following …

Acquisition of Banking Premises and Equipment. (a) A bank may acquire real estate and equipment and improve real estate to be used in the transaction of its business in the Commonwealth and may rent any space so acquired in a building in excess of its present actual need. (b) The…

Sale of Assets in Ordinary Course. A bank may sell any asset in the ordinary course of business, or, with the approval of the director, in any other circumstance, but the sale of all or substantially all of the assets of a bank or of a department thereof shall be governed by regu…

Borrowing. A bank may borrow money and issue evidence of indebtedness, subject to such regulations as the director may issue. Source: PL 3-104, § 647. Commission Comment: With respect to the reference to the “director” of the Department of Commerce and Labor, see Executive Order …

Pledge of Assets. A bank may pledge its assets to: (a) Enable it to act as agent for the sale of obligations of the United States. (b) Secure borrowed funds. (c) Secure deposits. Source: PL 3-104, § 648.

Indorsement and Signature Guaranty. (a) A bank may assume secondary liability as an endorser of a negotiable or nonnegotiable instrument which it owns or has received for collection or that of the guarantor of the genuineness of a signature. (b) A guaranty of the signature means …

Parties, Events, and Interests. (a) Capacity to Insure. Any person capable of making a contract may be an insurer, subject to the restrictions imposed by this division. (b) Events Subject of Insurance. Except as provided in this section, any contingent or unknown event, whether p…

The Policy. (a) Contents. The written instrument in which a contract of insurance is set forth is the policy and it shall contain the information required herein: (1) The parties between whom the contract is made; (2) A description of the property, life or interest insured; (3) T…

Premiums. (a) Accrual of Premium. The insurer is entitled to payment of the premium as soon as the subject matter insured is exposed to the peril insured against. (b) Right to Return of Premium. Unless the insurance contract otherwise provides, a person insured is entitled to a r…

Rates. (a) [Repealed.] (b) Standards. An insurer in making rates, and the commissioner in approving them, shall apply the standards described in this section: (1) Rates shall not be excessive or inadequate, as herein provided, nor shall they be unfairly discriminatory; (2) No rat…

Loss. (a) Peril Not Insured Against: Rescue Efforts. An insurer is liable: (1) Where the thing insured is rescued from a peril insured against and which would otherwise have caused a loss if in the course of the rescue, the thing is exposed to a peril not insured against, and whi…

Double Insurance. (a) Double Insurance. Double insurance exists when the same person is insured by several insurers separately in respect to the same subject, interest and risk. (b) Double Insurance: Contribution. In case of double insurance, the several insurers are liable to pa…

Reinsurance. (a) A contract of reinsurance is one by which an insurer procures a third person to insure him against loss or liability by reason of the original insurance. (b) No admitted insurer shall reinsure with any other insurer who has not been previously admitted in the Com…

Disposition of Funds. All fees and costs collected pursuant to this division shall be payable to the Commonwealth Treasury and shall be credited to the General Fund. Source: PL 3-107, § 31.

General Penalties. Violation of any provision of this division for which a penalty is not otherwise provided shall be a misdemeanor punishable by a fine of not more than $1,000 if the offender is other than an individual person, and by a fine of not more than $500 or imprisonment…