Title 51A, BANKS AND BANKING

For purposes of § 51A-12-2.3 , a derivative transaction is any transaction that is a contract, agreement, swap, warrant, note, or option that is based in whole, or in part, on the value of any interest in, or any quantitative measure or the occurrence of any event relating to int…

A loan or other extension of credit to a customer, the proceeds of which the customer intends to place in a partnership in which he is a partner or a corporation in which he is a stockholder, is not required to be combined with obligations of the partnership or corporation for th…

For the purposes of § 51A-12-2 , the discount of bills of exchange drawn in good faith against actual existing values, and the discount of commercial paper actually owned by the person negotiating the same shall not be considered as money borrowed. Source: SL 1909, ch 222 , art 2…

The maximum amount of loans by a bank to its executive officers, its directors, and its shareholders who individually own more than ten percent of the capital stock of the bank or its parent bank holding company, shall be set by rules promulgated by the commission pursuant to cha…

The issuing officer, the chief executive or managing officer and the board of directors of a bank shall be held personally liable for all excessive loans, until they are in compliance, including overdrafts which could create excess. Such liability shall remain in effect for so lo…

For the purpose of determining whether a loan is within the loan limits established by this chapter, that portion of a loan described in subdivisions (1), (2) and (3) of this section may not be considered as part of the loan: (1) That portion of a loan which is secured by a certi…

Every bank shall keep such books and accounts as the director may require for the purpose of showing the true condition of the bank, and shall keep accurate, convenient, and complete records of such transactions and accounts in permanent form. Any bank which fails or refuses to o…

Every bank shall make a report to the director at least once during each calendar year at such times as the director shall require, on forms which he shall prescribe. The director may require additional special reports as frequently as the director deems necessary. The director m…

Any bank failing to make and transmit to the director any report as required by this title, is subject to a civil penalty of fifty dollars for each day during which such failure continues; and if any bank fails or refuses to pay such penalty, the director shall institute proceedi…

Only summary examinations and reports shall be required with respect to fiduciary activities which are subject to court accountings. Source: SL 1969, ch 11 , § 11.5; SDCL, § 51-25-5.

Every bank shall retain and preserve its bank records and supporting documents for a period of time set forth in rules issued by the commission. Source: SL 1969, ch 11 , § 11.6; SL 1970, ch 265 , § 59; SL 1988, ch 377 , § 155; SDCL, § 51-25-6.

A bank authorized under this title may merge or consolidate with another state bank, national bank or savings and loan association organized pursuant to 12 U.S.C. § 1464 as amended as of January 1, 1990. The provisions of §§ 51A-2-16 and 51A-3-7 to 51A-3-12 , inclusive, govern ap…

A bank may purchase the assets and assume the liabilities of another state bank, national bank or savings and loan association organized pursuant to 12 U.S.C. § 1464 as amended as of January 1, 1990. The provisions of §§ 51A-2-16 and 51A-3-7 to 51A-3-12 , inclusive, govern such a…

Any bank may make application for reorganization as a national bank under the laws of the United States. The bank shall forward to the director a copy of a resolution of the board of directors to convert to a national bank. In the event such bank secures a certificate from the co…

Any national bank, federal savings association, or federal savings bank that desires to take the necessary steps to effect dissolution as a national bank, a federal savings association or a federal savings bank with the federal regulatory authority having jurisdiction may make ap…

If a bank has been merged or consolidated with another bank or the bank's assets have been purchased and the bank's liabilities assumed by another bank, in any instance other than an emergency, within thirty days thereafter, the directors of the bank shall institute proceedings t…

If the director, pursuant to § 51A-15-21 , or if the commission deems it necessary that a state bank, national bank, or savings and loan association organized pursuant to 12 U.S.C. § 1464 as amended as of January 1, 1990, be merged, consolidated, or its assets purchased and its l…

The provisions of §§ 47-1A-1107 to 47-1A-1107.4 , inclusive, and §§ 47-1A-1302 to 47-1A-1331.2 , inclusive, apply when establishing the valuation of shares of bank stock owned by dissident shareholders. Source: SL 1984, ch 317 ; SL 1988, ch 377 , § 162; SDCL, § 51-26-7; SL 2005, …

Any bank may file an application with the commission to voluntarily liquidate and dissolve. Such application may be approved by the commission upon finding: (1) The proposal to liquidate and dissolve has been approved by a vote of two - thirds of the outstanding voting stock at a…

A bank may, at any time prior to the director's cancellation of its charter, revoke its intention to voluntarily liquidate under § 51A-15-1 , if it receives approval of its action upon an affirmative vote of at least two - thirds of the voting shares of the bank. Written evidence…

After a hearing with three days' oral or written notice to a majority of the members of the board of directors, the director may, with the consent of a majority of the members of the commission, suspend all activities and take possession of the business and property of a bank if …

"Insolvent" means incapable of meeting the demands of creditors or having liabilities which exceed assets. Source: SL 1982, ch 336 , § 1; SDCL, § 51-27-10.1.

No bank may receive any deposit when insolvent. No officer, director or employee who knows, or in the proper performance of his duty should know, of such insolvency may receive or authorize the receipt of such deposit. Any person violating this section shall be guilty of a Class …

The director shall suspend the activities and take possession pursuant to § 51A-15-11 or 51A-15-21 by posting upon the premises a notice reciting that all activities shall be suspended and that the director is assuming possession pursuant to this chapter and the time, not earlier…

When the director has taken possession he shall be vested with the full and exclusive power of management and control, including the power to assess outstanding capital stock, continue or to discontinue the business, to stop or to limit the payment of its obligations, to employ a…

The circuit court shall have original jurisdiction over all proceedings brought under this chapter. The venue of such proceedings shall be in the county in which the bank's principal place of business is located. Source: SL 1909, ch 222 , art 2, § 25; SL 1915, ch 102 , art 2, § 2…

At any time after the commencement of a proceeding under this chapter, the director may apply to the court for an order changing the venue to any other county of this state in which he deems that such proceeding may be most economically and efficiently conducted. Source: SL 1970,…

The director may appoint the Federal Deposit Insurance Corporation as receiver for a bank of which he has taken possession. Upon filing with the court an order of appointment of the receiver and a certificate indicating the acceptance by the Federal Deposit Insurance Corporation,…

The Federal Deposit Insurance Corporation may liquidate, reorganize, merge, or consolidate the bank in such manner as is permitted by the laws of the United States or by this chapter, possessing all rights, powers, duties, and obligations of the commission and director as therein…

Upon approval by the commission, pursuant to § 51A-15-1 , a bank shall forthwith cease to do business, shall have only the powers necessary to effect an orderly liquidation and shall proceed to pay its depositors and creditors and to wind up its affairs. Source: SL 1969, ch 11 , …

When the director has caused the suspension and taken possession of a bank, there shall be a postponement until six months after the commencement of such possession actions of the date upon which any period of limitation fixed by a statute or agreement would otherwise expire on a…

If, in the opinion of the director, an emergency exists which will result in serious losses to the depositors and creditors, he may suspend all activities and take possession of a bank without the consent of a majority of the members of the commission. Source: SL 1969, ch 11 , § …

Within three days after the director has suspended and taken possession of the property and business of a bank, that bank may apply to the circuit court to enjoin further proceedings. The court, after requiring the director to show cause why further proceedings should not be enjo…

Proceedings under chapter 51A-15 are exempt from the provisions of chapters 1-25 and 1-26 . Source: SL 1982, ch 336 , § 6; SDCL, §§ 51-27-15.1, 51-27-40.

If the director of the Division of Banking determines to reorganize a bank he shall enter an order proposing a reorganization plan. A copy of the plan shall be sent to each depositor and creditor who will not receive payment of his claim in full under the plan together with notic…

No judgment, lien or attachment may be executed upon any asset of the bank while it is in possession of the director. Upon the election of the director or receiver in connection with a liquidation or reorganization: (1) Any lien or attachment, other than an attorney's or mechanic…

With the approval of the commission, the director may borrow money in the name of the bank in his possession and may pledge its assets as security for the loan. Source: SL 1933, ch 54 , § 1; SDC 1939, § 6.0629; SDCL, § 51-14-25; SL 1969, ch 11 , § 13.9; SDCL, § 51-27-18.

All necessary and reasonable expenses of the director's suspension and taking possession of a bank and of its reorganization or liquidation shall be paid from the assets thereof. Source: SL 1911, ch 256 , § 15; SL 1915, ch 102 , art 1, § 14; SL 1917, ch 140 , § 4; RC 1919, § 8930…

No plan of reorganization may be prescribed under this chapter unless, in the opinion of the director or receiver: (1) The plan is feasible and fair to all classes of depositors, creditors and stockholders; (2) The face amount of the interest accorded to any class of depositors, …

Whenever in the course of reorganization supervening conditions render a plan of reorganization unfair or its execution impractical, the director may modify the plan or liquidate the bank. Any such action shall be taken by order upon reasonable notice. Source: SL 1969, ch 11 , § …

Within thirty days of the approval, a notice of voluntary liquidation shall be: (1) Mailed to the last known post - office address of each depositor, creditor, person interested in funds held as a fiduciary, lessee of a safe deposit box or bailor of property; (2) Posted conspicuo…

In liquidating a bank the director or receiver may exercise any power thereof but he may not, without the approval of the circuit court: (1) Sell any asset of the bank having an appraised value in excess of five thousand dollars; (2) Compromise or release any claim which exceeds …

Within six months of the commencement of involuntary liquidation, the director or receiver may by his election terminate any executory contract for services or advertising to which a bank is a party or any obligation of a bank as a lessee. A lessor who receives sixty days' notice…

As soon after the commencement of involuntary liquidation as is practicable, the director or receiver shall take the necessary steps to terminate all fiduciary positions held by a bank and take such action as may be necessary to surrender all property held by such bank as a fiduc…

The right of any agency of the United States insuring deposits of a bank in liquidation, to be subrogated to the rights of depositors upon payment of their claim shall not be less extensive than the law of the United States requires as a condition of the authority to issue such i…

As soon after commencement of liquidation by the director or receiver as practicable, he shall proceed as in § 51A-15-3 relating to voluntary liquidation by banks, except that no notice need be sent relating to fiduciary accounts as therein mentioned. Source: SL 1969, ch 11 , § 1…