The rules in this Chapter provide guidance and requirements for associations and others seeking Board or Commissioner approval for association activities. This Chapter also sets forth the supervisory and regulatory requirements, procedures and standards for a variety of bank and trust company activities, powers and issues, as well as defining and clarifying various terms and provisions of the Code. This Chapter provides specific and general guidance for the general administration of the Code, and in appropriate cases, grants or clarifies.

85:25-3-2. Definitions [Back]

As used in this Chapter, reference to all definitions set forth in the Code are hereby adopted as definitions applicable to this Chapter. The following words and terms when used in this Chapter shall have the following meaning, except where the context clearly indicates otherwise:

"Administrative Procedures Act" means Title 75, Chapter 8, Section 301 to 325, Oklahoma Statutes Annotated, as the same now exists or may be amended.

"Applicant" means a party commencing a proceeding either in the form of an Application or Complaint; and includes the terms "plaintiff", "complainant" and "petitioner".

"Association" means a savings and loan association and shall be understood to also include savings banks.

"Attorney" means a licensed attorney currently admitted to practice before the Supreme Court of Oklahoma, or an attorney currently licensed to practice in another state who is granted permission to appear in a proceeding in this state. No attorney who is not currently licensed to practice in Oklahoma shall be permitted to appear except in association with an attorney so licensed to practice in Oklahoma who shall also appear in the proceeding. An attorney licensed to practice in a state permitting attorneys of this state to practice before its state courts without local counsel may appear without association of local counsel.

"Board" and "Commissioner" means respectively the Oklahoma State Savings and Loan Board and the Oklahoma Bank Commissioner, who presides as Chairman of the Board.

"The Code" means the Oklahoma Savings and Loan Code of 1970, 18 O.S. §381.1, et seq. as has been amended or may hereafter be amended.

"Department" means the Oklahoma State Banking Department.

"Intervenor" means a party not an applicant or named respondent who obtains permission to enter the proceeding. An intervenor opposing an application will thereafter be deemed a respondent.

"Order" means that which is required or ordered to be done, or not to be done and shall be generally reserved for the requirement or directive portion of an official order or decisions of a proceeding; or the promulgation of rules, regulations, and requirements in matters in which the Board or Commissioner acts.

"Party" means a party of record and any other party deemed by the Commissioner to have an interest in the subject matter, and entitled to appear therein as a party of record. "Party of record" includes any party named a party in a pleading, or who, after being deemed interested by the Commissioner, makes formal appearance either in person or by an attorney at any stage of the proceeding whether or not seeking affirmative relief.

"Protestant" means a party who, upon grounds of private or public interest, resists an application or any relief sought thereby. A protestant is governed by the rules applicable to a respondent.

"Record" or "Formal record" means any proceeding which shall consist of:

(A) Preliminary exhibits, including pertinent pleadings, notices and proof of publication.

(B) Transcript of proceedings at all hearings.

(C) Depositions, stipulations, interrogatories and answers, written testimony, offers of proof, and similar matters.

(D) Exhibits, together with attachments, appendices and amendments thereto.

(E) Exceptions and motions subsequent to the hearing.

(F) Orders or Recommendations of the Board or Commissioner, together with findings of fact and conclusions of law.

(G) The Board or Commissioner may order included in the record any other instruments or matters relevant to issues.

"Respondent" means a party against whom relief is sought in a proceeding, or who appears in opposition to relief sought by the applicant, and includes the term "Defendant".

85:25-3-3. Application for new charter [Back]

In addition to all of the information required in an application for a new charter under the Code, the application shall contain information showing:

(1) The character, financial responsibility, business experience and standing in the community of the prospective incorporators;

(2) The character, financial responsibility, savings and loan experience, and business qualifications of the proposed managing officer;

(3) That conditions in the community or market area in which the new savings and loan association will transact business afford reasonable promise of a successful operation;

(4) That the incorporators and the proposed managing officer have the capability, both financial and managerial, to establish and maintain this association;

(5) The projected and proposed annual budget for the association during its first three years of operation.

85:25-3-4. Minimum number of members for chartering a mutual association [Back]

For chartering purposes, the Board may require such minimum number of members for a proposed mutual association as in their opinion may be necessary to supply adequate diversification.

85:25-3-5. Offering circular use in chartering process [Back]

If any stock of the proposed stock savings and loan association is offered to other than the incorporators, it shall be offered by an Offering Circular only, the contents of which must be approved by the Commissioner. Any subscription taken for the stock, other than the incorporators, shall contain a statement that the subscriber has been furnished an Offering Circular.

85:25-3-6. Trusteed stock [Back]

Trusteed stock may be reserved for management in an amount as may be permitted by the Board. The Application should disclose and specify the disposition of this stock.

85:25-3-7. Disclosure of contracts with the proposed association [Back]

Any contract with management or with the directors or officers of the proposed capital stock institution, including proposed fees to be paid to directors, should be disclosed at the time application for authority to organize is made.

85:25-3-8. Limitation on de novo association ownership [Back]

No person or group of persons acting in concert may own more than 10% of the stock of a de novo association per person without prior approval of the Board.

85:25-3-9. Application for establishing or relocating a branch office or detached facility[Back]

(a) Generally.

(1) An association desiring to establish or relocate either a branch pursuant to Section 381.24a, or a detached facility pursuant to Section 381.24b, of the Savings and Loan Code, shall submit to the Commissioner the original and two copies of an application for certificate to maintain and operate a branch or detached facility on a form prescribed by the Commissioner.

(2) The application shall be executed by the applicant’s president or vice-president, and attested by the applicant’s cashier or secretary.

(3) An application fee as set forth in these rules shall accompany each application.

(4) Applicants are urged to submit their applications, as necessary, to the Federal Deposit Insurance Corporation (if an insured association) and/or the Office of Thrift Supervision, if applicable, at the same time the application is submitted to the Commissioner.

(5) The term "application," as used in this section, shall be understood to refer to an application to establish or relocate a branch or detached facility.

(b) Notice of application.

(1) The applicant shall publish a Notice of Application in a newspaper of general circulation in the community in which the applicant proposes to establish or relocate the branch or detached facility.

(2) The Notice shall state that an application has been mailed or delivered on or before the date of the Notice, and the Notice shall contain the name of the applicant and the subject matter of the application.

(3) The application shall be mailed or delivered to the Commissioner on or before the day the Notice is published. A statement containing the date of publication and the name and address of the newspaper in which the notice was published shall be furnished with the application.

(c) Protest period. Within ten (10) days after the notice by publication as described in (b) of this Section, any interested person desiring to protest the approval of the application shall submit to the Commissioner a written protest, which shall include both the specific facts and specific legal authority pursuant to which such protestant requests that the application be disapproved. Failure to include such specifics may result in the protest being returned to the protestant or disregarded for lack of specifics.

(d) Investigation. The Commissioner may request additional information from the applicant and any protestant, and conduct such investigation as the Commissioner deems appropriate. No special emphasis will be placed on an appraisal of economic and competitive conditions.

(e) Effect of protest/nonprotest. At the earlier of receipt by the Commissioner of a written protest requesting a hearing before the Commissioner or the expiration of the Protest Period prescribed by this Section, the Commissioner shall:

(1) Upon receipt of such written protest, notify the Applicant and each protestant of the receipt of the protest and of the date, time and place of the hearing on the Application and protest(s) before the Commissioner; or

(2) Upon receipt of such written protest and if the Applicant’s latest completed examination reflects a Uniform Financial Institutions Composite "CAMELS" rating of "1" or "2" and the Applicant is not subject to supervisory action by the Department such as a Memorandum of Understanding, Cease and Desist Order, or similar action, the Commissioner may proceed without a hearing pursuant to subsection (g) of this Section; or

(3) If no such written protest is received, proceed pursuant to subsection (g) of this Section.

(f) Applicant request for hearing. The Applicant may in the application or at any time prior to expiration of the Protest Period prescribed by this Section, request in writing that the Application be submitted to the Commissioner for a hearing for approval/disapproval of the Application. In such event, the Commissioner shall proceed according to subsection (e)(1) of this Section.

(g) Commissioner approval. In the event an Application is not protested in writing within the protest period prescribed by this section, and unless the Applicant requests a hearing either by having so stated in the Application or by subsequent written request, the Commissioner may consider the Application, grant approval and issue the Certificate of Authority to establish and operate or to relocate a branch or detached facility without a hearing.

(h) Notice of intent to recommend denial. In the event the Commissioner, based on his investigation prior to a hearing, determines not to approve the application, the Commissioner shall mail to the applicant by overnight mail or telefacsimile (fax) a written notice of intent to recommend denial, including the reasons for such negative recommendation and the date, time and place of the hearing on the Application. Within ten (10) days after receipt of such notice, the applicant shall notify the Commissioner of its intent to withdraw its application or to proceed with a hearing on the application.

(i) Hearing. In the event a hearing is set by the Commissioner, such hearing shall be conducted as follows:

(1) Time limit. The applicant shall be limited to 30 minutes to present testimony and arguments at the hearing, and the protestants as a group shall be limited to 30 minutes to present testimony and arguments. Additional time may be granted by the Commissioner upon good cause shown.

(2) Transcript. A transcript may be made of each hearing of an application. The Commissioner may arrange for a court reporter to be present to record the proceedings. All expenses of the reporter, including the furnishing of the original and two (2) copies of the transcript to the Commissioner, shall be borne by the protestants or if no protest has occurred, by the applicant.

(3) Procedure. The order of presentation, appearance of witnesses and presentation of evidence for hearings of applications shall be as directed by the Commissioner at the hearing. Three (3) copies of all documentary evidence shall be furnished to the Commissioner prior to the hearing as directed by the Commissioner.

(4) Decision of the Commissioner. Within twenty (20) days after the conclusion of the hearing of an application, the Commissioner shall issue an order approving or disapproving the application, and shall promptly mail a copy of the order to the applicant and to each protestant.

(5) Criteria. No special emphasis will be placed by the Commissioner on an appraisal of economic and competitive conditions. The Commissioner, at his discretion, may consider the following factors in arriving at its decision:

(A) Financial condition and history of the applicant. The current asset condition of the applicant, its compliance with applicable laws and regulations, and its investment in fixed assets are primary areas of consideration. The applicant’s aggregate fixed asset investment, including lease obligations, must be reasonable in relation to its projected earnings capacity and capital.

(B) Adequacy of capital structure. Capital earnings and retention of earning should be sufficient to support the applicant’s current level of operations as well as the proposed expansion.

(C) Future earnings prospect. The applicant’s earnings potential will be evaluated in terms of the ability of overall earnings to absorb the anticipated expenses resulting from the establishment and operation of the proposed branch or facility.

(D) Quality of management. The applicant’s management must have demonstrated ability to operate the association in a sound manner, and must display the degree of depth necessary to permit the establishment of the proposed branch or facility.

(E) Legal limitations. Statutory requirements on the establishment of branches and detached facilities.

(F) Insiders. Any financial or other business arrangement, direct or indirect, involving the proposed branch or facility and bank insiders which involve terms and conditions more favorable to insiders than would be available in a comparable transaction with unrelated parties.

(j) Conditions. The Commissioner’s approval of an application shall be subject to any condition deemed by the Commissioner to be relevant to the criteria set forth in (i)(5) of this Section.

(k) Commencement of business. The applicant shall commence business at the branch or facility within eighteen (18) months of Commissioner approval. Extensions of time within which to commence business may be granted by the Commissioner only upon good cause shown.

(l) Reapplication. In the event an application is disapproved by the Commissioner, the applicant may submit a new application following a change of the circumstances which were the basis for the initial disapproval.

(m) Judicial review. The decision of the Commissioner approving or disapproving an application may be appealed to the Oklahoma Supreme Court by any party directly affected and showing aggrievement, from other than mere increase in competition, resulting from the Commissioner’s decision.

[Source: Amended at 17 Ok Reg 1707, eff 5-25-2000]

85:25-3-10. Branch office operations [Back]

All branch offices shall be subject to direction from the home office and there shall be maintained at the home office all general accounting records, including control records of all business transacted at branch offices.

85:25-3-11. Branch office closing [Back]

(a) A savings and loan may elect to discontinue a branch office with the approval of the Commissioner. In order to gain approval, the savings and loan must:

(1) submit a resolution of its board of directors authorizing the closing;

(2) post a notice of the closing at both the branch location and the main office of the savings and loan for thirty (30) days prior to the closing. Said notice shall state the effective date of the closing and indicate the location of the savings and loan's closest office;

(3) submit an affidavit stating that the notice posting requirement has been met;

(4) either publish notice of the closing once a week for two weeks in a legal newspaper in general circulation in the community where the branch is located or furnish written notice to depositors and safe deposit box holders at the branch to be closed; and

(5) submit a copy of the proof of publication or written notice.

(b) The Commissioner shall approve the branch closing absent grievous and compelling reasons for denial.

85:25-3-12. Loan production offices [Back]

An Oklahoma association may utilize employees or agents of the association to originate loans at locations other than the main office or a branch of the association, provided that the loan decision is made at the main office or a branch office of the association.

85:25-3-13. Agencies [Back]

All agents of associations shall be subject to direction from the home office. All loans originated at agencies shall be approved at the home office. Without prior approval of the Board, no service corporation or agency owned by or representing a savings and loan association shall directly or indirectly through brokers or others:

(1) Receive applications for, or deposits to, savings accounts or investment securities of any kind at any place within this State;

(2) Assert or imply directly or indirectly or by means of the mail, television, radio, newspapers, magazines or other media that it is an agent or representative with whom savings accounts and investments may be discussed;

(3) Distribute any of its advertising material concerning savings accounts within this state.