Section 3. Section 117 of the act, amended or added December 18, 1986 (P.L.1702, No.205) and May 18, 1988 (P.L.399, No.65), is amended to read:
Section 117. Authorization of [Regional,] Reciprocal
Interstate Operations of Savings Banks
(a) Definitions for purpose of section--The following words and phrases when used in this section shall have, unless the context clearly indicates otherwise, the following meanings:
(i) "Acquire"--to acquire (as defined in section
112(a)(i)) five percent or more of the voting stock of an
entity and shall also mean a merger or consolidation or a
purchase of assets and an assumption of liabilities, other
than in the regular course of business.
(ii) "Bank holding company"--the same meaning as that
term has under the Bank Holding Company Act of 1956, 12
U.S.C. § 1841(a).
(iii) "Branch"--an office which performs the functions
described in section 102(h).
(iv) "Control"--the power, directly or indirectly, to
direct the management or policies of an entity or to vote
twenty-five percent or more of any class of voting securities
of an entity.
(v) "Entity"--any corporation, partnership, association
or similar organization, including banks and thrift
institutions.
(vi) "Foreign association"--a savings and loan
association or building and loan association located in and
organized and operating under the laws of a state other than
Pennsylvania and a Federal association, as defined in 12
U.S.C. § 1462(d), that is located in a state other than
Pennsylvania.
(vii) "Foreign savings bank"--a savings bank located in
and organized and operating under the laws of a state other
than Pennsylvania.
(viii) "Foreign thrift institution"--a foreign savings
bank or a foreign association.
(ix) "Foreign thrift institution holding company"--an
entity which controls one or more foreign thrift institutions
and is located in a state other than Pennsylvania.
[(vi)] (x) "Pennsylvania savings bank"--a savings bank
as defined in section 102(x).
[(vii)] (xi) "Pennsylvania savings bank holding
company"--an entity which controls one or more Pennsylvania
savings banks and is located in Pennsylvania.
[(viii)] (xii) "Region"--the States of Delaware,
Indiana, Kentucky, Maryland, New Jersey, Ohio, Virginia and
West Virginia, and the District of Columbia.
[(ix)] (xiii) "Regional association"--a savings and loan
association or building and loan association located in and
organized and operating under the laws of a state in the
region and a Federal association, as defined in 12 U.S.C. §
1462(d), that is located in the region.
[(x)] (xiv) "Regional savings bank"--a savings bank
located in and organized and operating under the laws of a
state in the region.
[(xi)] (xv) "Regional thrift institution"--a regional
savings bank or a regional association.
[(xii)] (xvi) "Regional thrift institution holding
company"--an entity which controls one or more regional
thrift institutions and is located in a state in the region.
[(xiii)] (xvii) "Savings and loan holding company"--as
defined in 12 U.S.C. § 1730a(a)(1)(D).
[(xiv)] (xviii) "State"--includes the District of
Columbia.
[(xv)] (xix) State in which an entity is "located"--
(A) with regard to a thrift institution, the state
in which its deposits are largest; and
(B) with regard to a thrift institution holding
company, a savings bank holding company, a savings and
loan holding company or a bank holding company, the state
in which the total deposits of its subsidiaries,
including commercial banks, are largest.
Provided, that an entity or its legal successor that is
located in Pennsylvania on the effective date of this
legislation shall be deemed thereafter to be located in
Pennsylvania regardless of the location of its deposits or
the deposits of its subsidiaries if said entity has not been
either acquired by an entity located outside of Pennsylvania
or a party to a merger or consolidation transaction in which
the holders of its voting shares immediately prior to the
transaction held less than fifty percent of the voting shares
of any class of stock in the entity surviving after, or
resulting from, the merger or consolidation.
(b) Acquisitions by [regional] foreign thrift institutions and [regional] foreign thrift institution holding companies--A [regional] foreign thrift institution or [regional] foreign thrift institution holding company may acquire a Pennsylvania savings bank or a Pennsylvania savings bank holding company if:
(i) the law of the state where the acquiring thrift
institution or thrift institution holding company is located
and the law of the state where any savings and loan holding
company or bank holding company which directly or indirectly
owns or controls the power to vote five percent or more of
its shares is located satisfies, in each case, the
reciprocity requirement of subsection (d);
(ii) the acquiring thrift institution or thrift
institution holding company and any savings and loan holding
company or bank holding company which directly or indirectly
owns or controls the power to vote five percent or more of
its shares is, in each case, located in a state in the region
or in Pennsylvania, except that the requirement of location
in the region or in Pennsylvania will not be applicable to an
acquisition consummated after March 4, 1990; and
(iii) approval has been received from the department.
When considering a proposed acquisition by a [regional]
foreign thrift institution or a [regional] foreign thrift
institution holding company, the department shall give
specific attention to the effect of the acquisition on the
availability, in this Commonwealth, of those banking and
basic transaction account services set forth in subsections
(i) and (j).
(c) Branching by [regional] foreign savings banks--
(i) A [regional] foreign savings bank may, with the
prior written approval of the department, maintain as a
branch any office acquired as part of an acquisition effected
under this section or section 114 of the Savings Association
Code of 1967.
(ii) A [regional] foreign savings bank may establish and
maintain branches in this Commonwealth if:
(A) the state in which it is located and the state
in which any savings and loan holding company or bank
holding company which directly or indirectly owns or has
the power to vote five percent or more of its shares is
located satisfies, in each case, the reciprocity
requirement of subsection (d);
(B) the savings bank and any savings and loan
holding company or bank holding company which directly or
indirectly owns or controls the power to vote five
percent or more of its shares is, in each case, located
in a state in the region or in Pennsylvania, except that
the requirement of location in the region or in
Pennsylvania will not be applicable with respect to a
branch established after March 4, 1990; and
(C) the branch is approved by the department in the
same manner and subject to the same conditions as are
applicable to de novo branches of Pennsylvania savings
banks under sections 904 and 905.
(d) Reciprocity requirement--
(i) The law of another state is reciprocal under this
section to the extent the department determines it to be so.
The department's determination under this subsection shall
include, but is not limited to:
(A) with regard to acquisitions, whether the law of
that other state authorizes Pennsylvania savings banks
and Pennsylvania savings bank holding companies to
acquire [regional] foreign thrift institutions and
[regional] foreign thrift institution holding companies
located in that state on terms and conditions reasonably
equivalent to those applicable to acquisitions by
[regional] foreign thrift institutions and [regional]
foreign thrift institution holding companies of
Pennsylvania savings banks or Pennsylvania savings bank
holding companies and whether the law of that other state
imposes conditions on the acquisition by Pennsylvania
savings banks or Pennsylvania savings bank holding
companies of [regional] foreign thrift institutions or
[regional] foreign thrift institution holding companies
located in that state that are substantially more onerous
than those imposed on the same acquisitions by thrift
institutions or thrift institution holding companies
located in that state; and
(B) with regard to branching, whether the law of
that other state authorizes Pennsylvania savings banks to
establish or maintain branches in that state on terms and
conditions reasonably equivalent to those applicable to
the establishment or maintenance of branches in
Pennsylvania by savings banks located in that state, and
reasonably equivalent to those applicable to the
establishment and maintenance of branches in that state
by a savings bank located in that state.
(ii) The department need not determine that the law of
another state fails to meet the reciprocity requirement of
this subsection solely by reason of the fact that that law
does not allow Pennsylvania savings banks or Pennsylvania
savings bank holding companies to engage in a particular type
of branching or acquisition, or imposes conditions on such
branching or acquisition that are substantially more onerous
than those imposed on the same activities of savings banks or
savings bank holding companies located in that state.
However, in such circumstances, the department shall find
reciprocity only after imposing on the savings banks and
savings bank holding companies located in that state
conditions and limitations on branching and acquisitions in
Pennsylvania substantially similar to those imposed on
branching and acquisitions in that state by Pennsylvania
savings banks and savings bank holding companies.
(iii) The department may determine that the law of
another state is not reciprocal regarding a particular type
of branching or acquisition if the law of that other state
does not allow all Pennsylvania savings banks or,
alternatively, all Pennsylvania savings bank holding
companies to engage on equal terms with each other in the
particular type of branching or acquisition.
(e) Authority of the department--In addition to the powers granted elsewhere in this section and in other provisions of Pennsylvania law, the department is authorized to impose any conditions or requirements it deems appropriate, in light of the purposes of this act, on thrift institutions and thrift institution holding companies acquired or operating directly or indirectly in Pennsylvania under this section. Such conditions or requirements include, but are not limited to, provisions for examinations, reports and the payment of fees. The department may accept examinations and other reports of Federal and state regulators and may enter into agreements with Federal and state regulators for the exchange of information, including examination reports.
(f) Change in circumstances--If a [regional] foreign thrift institution or [regional] foreign thrift institution holding company [located in another state] which has acquired a Pennsylvania savings bank or Pennsylvania savings bank holding company or has established a branch in Pennsylvania under this section shall have a change of circumstances so that it no longer satisfies the conditions of subsections (b) and (c) (either by reason of a change in the place in which it is located or by reason of acquisition by a savings and loan holding company or a bank holding company located in a state which does not satisfy the conditions of subsections (b) and (c) of five percent or more of its voting shares, or the power to vote those shares), said [regional] foreign thrift institution or [regional] foreign thrift institution holding company shall divest each Pennsylvania savings bank, savings bank holding company and branch it has acquired or established prior to entering into a voluntary combination which causes such change of circumstances or within one year (or such longer period of not more than an additional year as the department may allow in writing) after the occurrence of an event, other than a voluntary combination, which causes the change in circumstances.
(g) Effect of invalidity--The purpose of this section is solely to authorize reciprocal[, regional] interstate operations by savings banks and associations, and this section shall not be construed to authorize any acquisition or the establishment of any branch by any entity located in another state except as expressly provided in this section. In the event that any limitation on the geographical location of entities granted acquisition or branching powers by this section is held to be invalid by a final order of a court which is not subject to further review or appeal, the authorization of this section shall terminate immediately. Any acquisition or branch establishment consummated pursuant to this section prior to such termination shall not be affected thereby.
(h) Acquisitions in other states by Pennsylvania savings banks and Pennsylvania savings bank holding companies--A Pennsylvania savings bank or Pennsylvania savings bank holding company which proposes to acquire a thrift institution or thrift institution holding company located in another state shall file an application for approval by the department in such form and upon payment of such fee as the department shall prescribe and shall supplement such application with such additional information as the department may reasonably request. The department shall conduct such investigation as it deems necessary to determine whether to approve or disapprove the application. The investigation shall include consideration of the effects the proposed acquisition would have on the availability, in this Commonwealth, of those banking services and basic transaction account services set forth in subsections (i) and (j). Within sixty days after receipt of the application or within a longer period, not in excess of thirty days, after receipt from the applicant of additional information requested by the department, the department shall approve or disapprove the proposed acquisition and give written notice of its decision to the applicant. In approving an acquisition under this section, the department may place conditions upon such approval and incorporate such terms and agreements as are deemed necessary to effect the purposes of this act.
(i) Availability of banking services--The department shall have the authority to assure that interstate thrift acquisitions authorized by this section will not diminish reasonable availability of banking services to all segments of the public and economy of this Commonwealth, with special emphasis on economic development and the financing of enterprises to the end that employment opportunities will be either increased or, where there is the prospect of reduction, retained. Upon receipt of an application for approval of an acquisition by an institution or company located in another state under subsection (b) or approval of an acquisition in another state by a Pennsylvania savings bank or savings bank holding company under subsection (h), the department shall review the credit practices and policies of each Pennsylvania savings bank or savings bank holding company which is involved in the proposed transaction. Such review shall determine the overall performance of such company or institution in providing credit and financial services to individuals and business enterprises in the communities which it serves in the light of its role as a thrift institution, its resources, its capital and its income, the particular needs of such communities, competition and alternative sources of credit. With respect to individuals, there shall be a review of consumer loans, residential mortgages, home improvement loans and student loans, particularly to residents of low-income and moderate-income neighborhoods. With respect to business enterprises, there shall be a review of extensions of credit and investments intended to promote economic development and creation, or retention where there is the prospect of reduction, of employment opportunities, including, without limitation, Small Business Administration and other small business loans, industrial development loans, financing of employe stock option plans and leveraged buyouts of businesses by employes, financing of nonprofit community development projects, loans and investments intended to maintain existing businesses and to encourage economic expansion and job opportunities, and loans and investments to promote participation by businesses in this Commonwealth in international trade and to increase exports. The review by the department shall also include all other activities of the institution or company deemed to be suitable to its particular circumstances and the communities served. If the department determines that the overall performance of the institution or company has not been materially deficient and that it justifies the conclusion that the institution or company does and will provide suitable credit and financial services to its communities, it may approve the application without imposing any terms or conditions but otherwise may impose such terms and conditions as it deems appropriate to improve such overall performance over a stated period of time. The department shall, from time to time, review the continuing overall performance of each such institution or company after an acquisition and, if it finds that its overall performance has not continued to be satisfactory, shall issue such order to the applicant as it deems appropriate.
(j) Availability of basic transaction account services--The department shall have the authority to assure that thrift institution holding companies and thrift institutions that become part of interstate banking organizations by reason of acquisitions requiring approval under this section make basic transaction account services available to the public. For this purpose the department shall obtain, from all sources available to it or through such studies as it may commission, adequate information to determine:
(i) The needs of the public and, in particular,
individuals with low or moderate income, for a basic checking
or other transaction account.
(ii) The principal characteristics that such an account
should have, such as the number of checks, deposits and other
items for which a minimum charge may be made, the amount or
rate of such minimum charge and the forms of identification
that may be required for opening and using such an account.
(iii) The existing availability of basic accounts with
some or all of such principal characteristics currently
offered by depository institutions, including applicants
under this section, in separate communities of this
Commonwealth. An applicant shall, at the request of the department, supply information to the department with respect to such accounts offered by the applicant and by each institution which is a subsidiary of the applicant. The department may approve an application prior to the time it has acquired the information required by this section, but the applicant and each institution which is a subsidiary of the applicant shall be subject, both before and after an approval of the acquisition under this section, to requirements imposed by the department, from time to time, to assure to the public, in the communities served by the institution, the continuing availability of the basic transaction account services which the department has determined the public needs.
(k) Advisory Commission--For the purpose of advising the department in the conduct of its functions under subsections (i) and (j), the advisory commission established by section 116(k) is empowered and directed to provide information, opinions and recommendations as to guidelines the department may establish, from time to time, for the purpose of determining the overall performance of an institution or company under subsection (i) and the availability of basic transaction account services under subsection (j). All decisions and determinations made under this section shall be made by the department. In evaluating an application which would result in an interstate acquisition or an interstate branch, the department shall consider the following regulatory criteria:
(i) capital adequacy;
(ii) asset quality;
(iii) management ability and effectiveness;
(iv) earnings quantity and quality;
(v) liquidity;
(vi) ability to meet the needs of the community;
(vii) effect of the transaction upon competition;
(viii) existence of insider transactions;
(ix) adequacy of all disclosures relating to the
transactions; and
(x) resistance to external economic and financial
conditions. The department shall not approve the application for any such interstate acquisition or interstate branch, unless the evaluation determines that all of the institutions involved in the transaction are in compliance with all relevant regulatory criteria. These regulatory criteria shall apply to all interstate acquisition and interstate branch applications involving the following institutions: a Pennsylvania savings bank, a Pennsylvania savings bank holding company, a foreign association, a foreign savings bank, a foreign thrift institution or a foreign thrift institution holding company.