Title 53, Financial Institutions

(1) An officer with discretionary authority shall discharge the duties of an officer under that authority: (a) In good faith; (b) With the care an ordinarily prudent person in a like position would exercise under similar circumstances; and (c) In a manner the officer reasonably b…

(1) The board of directors of a banking institution shall hold regular meetings. The Director of the Department of Consumer and Business Services may specify by rule, in accordance with ORS 183.315, 183.330, 183.335 and 183.341 to 183.410, the minimum frequency with which a board…

The board of directors shall designate an officer of the banking institution to prepare and submit to the board at every meeting or to a committee of not less than three members of the board of directors a report, in such detail as the board may direct, of the loans and investmen…

(1) The Director of the Department of Consumer and Business Services may call a meeting of the board of directors of any banking institution by mailing a notice of the meeting to each director. The notice shall state the purpose of the meeting and designate the time and place whe…

Subject to ORS 707.705, any vacancy in the board of directors may be filled by the remaining directors for the unexpired term at a regular meeting after the vacancy occurs or as otherwise provided in the bylaws of the institution or Oregon stock savings bank. [Amended by 1985 c.7…

(1) After a charter has been issued to a banking institution, the board of directors shall elect a chief executive officer who shall also be a director, a president who also may be the chief executive officer, at least one vice president, and a cashier or secretary, and may appoi…

(1) Before a person first takes office as director, president or chief executive officer of a banking institution, the name of the person shall be submitted to the Director of the Department of Consumer and Business Services, with any information about the person that the directo…

(1) For any reason specified in subsection (2) of this section, the Director of the Department of Consumer and Business Services by order may direct the board of directors of a banking institution to remove a director or officer of the banking institution. (2) The director may is…

An officer or director of a banking institution shall not, as an officer or director, willfully do any act which is expressly forbidden by the Bank Act or omit to perform any duty imposed upon the officer or director by the Bank Act. [Amended by 1973 c.797 §94; 1997 c.631 §102]

Every official communication directed by the Director of the Department of Consumer and Business Services or any examiner to a banking institution or to any officer of a banking institution, relating to an investigation or examination conducted by the Department of Consumer and B…

(1) If an officer or director of a banking institution has reason to believe that a person has violated any provision of law that has resulted or could result in loss to the banking institution and for which criminal prosecution is provided, the officer or director shall give the…

The board of directors of a banking institution shall annually appoint an examining or audit committee composed solely of not fewer than three outside directors of the banking institution or not fewer than three other individuals who the Director of the Department of Consumer and…

As used in ORS 707.744 to 707.764: (1) “Director” means an individual who is or was a director of a banking institution or an individual who, while a director of a banking institution, is or was serving at the banking institution’s request as a director, officer, partner, trustee…

(1) Except as provided in subsection (4) of this section, a banking institution may indemnify an individual made a party to a proceeding because the individual is or was a director against liability incurred in the proceeding if: (a) The conduct of the individual was in good fait…

Unless limited by its articles of incorporation, a banking institution shall indemnify a director who was wholly successful, on the merits or otherwise, in the defense of any proceeding to which the director was a party because of being a director of the banking institution again…

(1) A banking institution may pay for or reimburse the reasonable expenses incurred by a director who is a party to a proceeding in advance of final disposition of the proceeding if: (a) The director furnishes the banking institution a written affirmation of the director’s good f…

Unless the banking institution’s articles of incorporation provide otherwise, a director of the banking institution who is a party to a proceeding may apply for indemnification to the court conducting the proceeding or to another court of competent jurisdiction. On receipt of an …

(1) A banking institution may not indemnify a director under ORS 707.746 unless authorized in the specific case after a determination has been made that indemnification of the director is permissible in the circumstances because the director has met the standard of conduct set fo…

Unless a banking institution’s articles of incorporation provide otherwise: (1) An officer of the banking institution is entitled to mandatory indemnification under ORS 707.748 and is entitled to apply for court-ordered indemnification under ORS 707.754, in each case to the same …

A banking institution may purchase and maintain insurance on behalf of an individual against liability asserted against or incurred by the individual who is or was a director, officer, employee or agent of the banking institution or who, while a director, officer, employee or age…

(1) The indemnification and provisions for advancement of expenses provided by ORS 707.744 to 707.762 shall not be deemed exclusive of any other rights to which directors, officers, employees or agents may be entitled under the banking institution’s articles of incorporation or b…

(1) Except as otherwise limited in the Bank Act or the articles of incorporation of an institution, an institution shall have: (a) Perpetual duration and succession in its corporate name, unless a limited period of duration is stated in its articles of incorporation; (b) The powe…

(1) Notwithstanding any provision of the Bank Act to the contrary, Oregon commercial banks may: (a) Engage as principal or agent in activities in which national banks may engage as principal or agent and acquire and retain investments that national banks may acquire and retain, s…

(1) Institutions may invest, without regard to any limitation based on tier 1 capital, in: (a) Obligations of the United States, including those of its agencies and instrumentalities; (b) Obligations of public housing agencies issued pursuant to the United States Housing Act of 1…

(1) An institution may not invest any of the institution’s assets in the capital stock of any other corporation or in a membership interest in any limited liability company, except: (a) In the capital stock of the Federal Reserve Bank. (b) In stock or a membership interest the in…

(1) An institution may carry fully paid and nonassessable capital stock of or membership interest in any other corporation or limited liability company as an asset, if: (a) The institution’s board of directors applies in writing to the Director of the Department of Consumer and B…

As used in ORS 708A.135 to 708A.145, unless the context requires otherwise, “invest” includes any advance of funds to a bank service corporation, whether by the purchase of stock, the making of a loan or otherwise, but does not include a payment for rent earned, goods sold and de…

An Oregon commercial bank may invest not more than 10 percent of its capital in a bank service corporation. An Oregon commercial bank shall not invest more than five percent of its total assets in a bank service corporation. [1997 c.631 §122]

A bank service corporation shall not unreasonably discriminate in the provision of any services authorized under ORS 708A.130 to 708A.145 against any financial institution that does not own stock in the bank service corporation on the basis of the fact that the nonstockholding fi…

(1) A bank service corporation may perform any of the following services for financial institutions: (a) Check and deposit sorting and posting; (b) Computing and posting interest and other credits and charges; (c) Preparing and mailing checks, statements, notices and similar item…

(1) As provided in this section: (a) A banking institution may invest its capital in a community development corporation. (b) A banking institution may organize a community development corporation as a wholly owned subsidiary of the banking institution and invest its capital in t…

(1) If the Director of the Department of Consumer and Business Services approves, and subject to rules the director adopts in accordance with ORS 183.310, 183.315, 183.330, 183.335 and 183.341 to 183.410, an institution may invest not more than 10 percent, in the aggregate, of th…

A banking institution may, subject to the approval of the Director of the Department of Consumer and Business Services, acquire and continue to hold a membership in or the fully paid stock of a limited liability company or corporation that is created to establish and operate ATM …

(1) An Oregon commercial bank may subscribe to the capital stock and become a member of a Federal Reserve Bank. (2) An Oregon commercial bank that is a member of a Federal Reserve Bank is subject to supervision and examination under the laws of this state. The Federal Reserve Boa…

An institution may, with the approval of the Director of the Department of Consumer and Business Services, purchase, sell, issue, underwrite and deal in securities to the same extent national banks may do so. [1997 c.631 §129]

An institution may purchase, hold, convey, sell or lease: (1) The real estate and improvements thereto in which the business of the institution is carried on, including, with its offices, other space in the same building to rent as a source of income. (2) Furniture, fixtures, vau…

An Oregon commercial bank may acquire and lease personal property at the request of a lessee that wishes to lease the personal property upon terms that require paying rents. Rents may include residual values, the payment of which a responsible third party guarantees. [1997 c.631 …

Institutions may purchase the vendor’s interest in bona fide contracts covering the sale of real estate that comply with the requirements of ORS 708A.270. [1997 c.631 §133]

(1) An Oregon commercial bank may accept drafts or bills of exchange drawn upon it having not more than six months’ sight to run, exclusive of days of grace, that grow out of transactions involving the importation or exportation of goods, or that grow out of the domestic shipment…

(1) An institution shall promptly dispose of real and personal property that the institution may not own or hold under the Bank Act. (2) An institution shall sell or exchange real estate that the institution acquires in accordance with ORS 708A.175 (3) and (4) for other real esta…

(1) Except as provided in subsection (2) of this section, the validity of an institution’s action may not be challenged on the grounds that the institution lacks or lacked power to act. (2) An institution’s power to act may be challenged: (a) In a proceeding by a stockholder agai…

Except as specifically limited by the Bank Act and other applicable law, Oregon commercial banks have the general power to loan money upon terms and conditions that are consistent with safe and sound banking practices. [1997 c.631 §138; 2015 c.244 §42]

(1) Except as otherwise provided in this section, the rate of interest or the amount of other charges that a financial institution may contract for and receive for a loan or use of money is not subject to limitation. (2) If a borrower repays before maturity a loan that an Oregon …

An Oregon commercial bank may not accept the Oregon commercial bank’s own capital stock as collateral unless taking the Oregon commercial bank’s own stock as collateral is necessary to prevent loss upon an indebtedness previously contracted in good faith. If the indebtedness is n…

An Oregon commercial bank may not accept or hold as loan collateral in the aggregate more than 25 percent of the capital stock of any other insured stock institution. [1997 c.631 §141; 2015 c.244 §45]

(1) With respect to any loans secured primarily by real estate, an Oregon commercial bank shall maintain a file containing such appraisal, evidence of merchantable title and insurance as may be required by the Director of the Department of Consumer and Business Services. (2) All …

(1) An Oregon bank shall file a notice with the Director of the Department of Consumer and Business Services within 30 days after establishing a loan production office in this state or in another state. The notice must include: (a) The name of the Oregon bank and the address of t…

As used in ORS 708A.290 to 708A.375, the term “capital,” when referring to an Oregon commercial bank, means tier 1 and tier 2 capital, as applicable and as reported in the bank’s Consolidated Report of Condition and Income (Call Report) filed under 12 U.S.C. 1817(a)(3), as of the…

Except as provided in ORS 708A.300 to 708A.375, the loans and other obligations of a person to an Oregon commercial bank outstanding at any time shall not exceed 15 percent of the Oregon commercial bank’s capital. Any loan made or other obligation acquired in accordance with ORS …

In addition to obligations permitted under ORS 708A.295, an Oregon commercial bank may make loans to or acquire other obligations of a person, not to exceed 10 percent of its capital, if: (1) The loans or obligations are fully secured by readily marketable collateral having a mar…