Chapter 1. Department of Banking and Consumer Finance

§§ 81-1-1 through 81-1-53. Repealed.

Repealed by Laws, 1980, ch. 312, § 40, eff from and after March 21, 1980.

[Codes, 1942, §§ 5153, 5162-5189; Laws, 1934, ch. 146; 1936, ch. 165; 1944, ch. 260, §§ 1-3; 1946, ch. 396, § 1; 1948, ch. 206, §§ 1-3; 1952, ch. 181, §§ 1-3; 1956, ch. 146; 1958, chs. 162-164, 166; 1966, chs. 240, 242-246, 445 §§ 10-12; 1970, chs. 269, 520; 1971, ch. 388; 1972, ch. 406, § 1]

Editor’s Notes —

Function of Department of Bank Supervision transferred to Department of Banking and Consumer Finance, see §§81-1-57 et seq.

§ 81-1-54. Repealed.

Repealed by Laws, 2001, ch. 410, § 1, eff from and after July 1, 2001.

[Laws, 1979, ch. 301, § 50; Laws, 1982, ch. 303, § 1; Laws, 1990 Ex Sess, ch. 46, § 32; Laws, 1993, ch. 442, § 1; Laws, 1994, ch. 622, § 2; Laws, 1997, ch. 497, § 1, eff from and after July 1, 1997.]

Editor’s Notes —

Former §81-1-54 provided for the repeal of §§81-1-57 through81-1-117.

§ 81-1-55. Repealed.

Repealed by Laws, 1980, ch. 312, § 40, eff from and after March 21, 1980.

[En Laws, 1978, ch. 310, § 1]

§ 81-1-57. Definitions.

  1. For the purposes of this chapter, the following words shall have the following meanings, unless the context otherwise requires:
    1. “Department” shall mean the Department of Banking and Consumer Finance established in Section 81-1-59.
    2. “Commissioner” shall mean the Commissioner of Banking and Consumer Finance as provided for in Section 81-1-61.
    3. “Board” shall mean the State Board of Banking Review established in Section 81-3-12.
  2. Wherever the following words appear in Title 81 of the Mississippi Code of 1972, or in any other laws of the State of Mississippi, they shall be construed to have the following meanings:
    1. “Department of Bank Supervision” or “department,” when referring to the Department of Bank Supervision, shall be construed to mean the Department of Banking and Consumer Finance.
    2. “State Comptroller” or “comptroller,” when referring to the office of State Comptroller of Banks, shall be construed to mean the Commissioner of Banking and Consumer Finance.
    3. “State Banking Board,” “banking board” or “board,” when referring to the State Board of Banking Review or the State Banking Board, shall be construed to mean the State Board of Banking Review.

HISTORY: Laws, 1980, ch. 312, § 2; reenacted, Laws, 1982, ch. 303, § 2; Laws, 1990 Ex Sess, ch. 46, § 1; Laws, 1993, ch. 442, § 2; Laws, 1994, ch. 622, § 3; reenacted without change, Laws, 1997, ch. 497, § 2; reenacted without change, Laws, 2001, ch. 410, § 2, eff from and after July 1, 2001.

Amendment Notes —

The 2001 amendment reenacted the section without change.

§ 81-1-59. Department of banking and consumer finance.

The Department of Banking and Consumer Finance is hereby created, and it is solely charged with the execution of all laws relating to corporations, carrying on a banking business in the State of Mississippi. The office of the Department of Banking and Consumer Finance shall be in the City of Jackson, Mississippi, and the Secretary of State shall provide suitable quarters therefor.

HISTORY: Laws, 1980, ch. 312, § 3; reenacted, Laws, 1982, ch. 303, § 3; Laws, 1990 Ex Sess, ch. 46, § 2; Laws, 1993, ch. 442, § 3; Laws, 1994, ch. 622, § 4; reenacted without change, Laws, 1997, ch. 497, § 3; reenacted without change, Laws, 2001, ch. 410, § 3, eff from and after July 1, 2001.

Amendment Notes —

The 2001 amendment reenacted the section without change.

Cross References —

State-chartered banks having and possessing the rights, powers, privileges, immunities, duties and obligations of a national bank having its principal place of business in this state, irrespective of any conflict with the provisions of this section, see §81-5-1(9).

Provision defining the term “Department” for purposes of Chapter 8 (“Regional Banking Institutions”) of this title, see §81-8-1.

JUDICIAL DECISIONS

1.-10. [Reserved for future use.]

11. Under former §81-1-1.

1.-10. [Reserved for future use.]

11. Under former § 81-1-1.

State Banking Act of 1914 held to be an exercise of police power and applicable to bank chartered by special prior act. Bank of Oxford v. Love, 111 Miss. 699, 72 So. 133, 1916 Miss. LEXIS 374 (Miss. 1916), aff'd, 250 U.S. 603, 40 S. Ct. 22, 63 L. Ed. 1165, 1919 U.S. LEXIS 1782 (U.S. 1919).

RESEARCH REFERENCES

Am. Jur.

10 Am. Jur. 2d, Banks and Financial Institutions § 104.

CJS.

9 C.J.S., Banks and Banking §§ 11-15.

§ 81-1-61. Commissioner of Banking and Consumer Finance; qualifications; term of office; vacancies.

The management, control and direction of the department shall be vested in the Commissioner of Banking and Consumer Finance, who shall be directly responsible for the proper functioning of the department. The commissioner shall be a banker who possesses not less than ten (10) consecutive years of active banking experience of which five (5) years’ experience were performed in a major policy-making function as an executive officer, or shall be a person who possesses fifteen (15) years of active experience as a state or federal financial institutions examiner. The commissioner shall have been active in such major policy-making function or actively employed by the state or federal financial institutions regulatory authority within the previous five (5) years of his appointment. The commissioner shall be appointed by the Governor, with the advice and consent of the Senate, for a term of office of four (4) years, commencing on the day of appointment or on July 1 of the year in which the Governor is inaugurated, whichever comes first. The commissioner shall serve until his successor is appointed and qualified, but in no event shall he serve past the July 1 occurring after the end of the term of the Governor who appointed him, unless he shall be reappointed by the new Governor. If, for any cause, a vacancy occurs in the office of the commissioner, the Governor shall make the appointment for the unexpired term.

The commissioner shall be of good moral character, thoroughly understanding the theory and practice of banking, and must be a qualified elector of the State of Mississippi. The commissioner shall not be an officer, director or employee of any banking corporation during his entire term as commissioner, effective from the time of his appointment.

The commissioner may be removed by the Governor for good cause, but only after notice and a hearing.

HISTORY: Laws, 1980, ch. 312, § 4; reenacted, Laws, 1982, ch. 303, § 4; Laws, 1990 Ex Sess, ch. 46, § 3; Laws, 1993, ch. 442, § 4; Laws, 1993, ch. 587, § 1; reenacted and amended, Laws, 1994, ch. 622 § 5; reenacted without change, Laws, 1997, ch. 497, § 4; reenacted without change, Laws, 2001, ch. 410, § 4, eff from and after July 1, 2001.

Amendment Notes —

The 2001 amendment reenacted the section without change.

Cross References —

Duty of the Commissioner of Banking and Consumer Finance to disseminate current discount rates and indices and to record maximum permissible finance charges, see §75-17-33.

State-chartered banks having and possessing the rights, powers, privileges, immunities, duties and obligations of a national bank having its principal place of business in this state, irrespective of any conflict with the provisions of this section, see §81-5-1(9).

Provision defining the term “Commissioner” for purposes of Chapter 8 (“Regional Banking Institutions”) of this title, see §81-8-1.

RESEARCH REFERENCES

Am. Jur.

10 Am. Jur. 2d, Banks and Financial Institutions § 104.

CJS.

9 C.J.S., Banks and Banking §§ 11-15.

§ 81-1-63. Deputy commissioner; duties; qualifications; dismissal.

The commissioner shall appoint a deputy commissioner, with the approval of the board, who shall perform such duties as may be required of him by the commissioner. If the office of the commissioner is vacant or if the commissioner is absent or unable to act, the deputy commissioner shall be the acting commissioner. The deputy commissioner shall have five (5) years’ experience as a bank officer or employee, or three (3) years’ experience as a bank president or managing officer of a bank, or five (5) years’ experience as a state or federal bank examiner.

Copies of papers in the office of the department may be certified by the deputy commissioner, with the seal of the department affixed thereto, with like effect as though certified by the commissioner. The commissioner shall be responsible for all acts of the deputy commissioner, and may dismiss him at his pleasure, with the reasons therefor to be reported to the board within ten (10) days of the dismissal.

HISTORY: Laws, 1980, ch. 312, § 5; reenacted, Laws, 1982, ch. 303, § 5; Laws, 1990 Ex Sess, ch. 46, § 4; Laws, 1993, ch. 442, § 5; reenacted and amended, Laws, 1994, ch. 622, § 6; reenacted without change, Laws, 1997, ch. 497, § 5; reenacted without change, Laws, 2001, ch. 410, § 5, eff from and after July 1, 2001.

Amendment Notes —

The 2001 amendment reenacted the section without change.

§ 81-1-65. Employment of state banking examiners and other assistants; qualifications; compensation; removal; fingerprinting of all employees and applicants as condition of employment; limited use of criminal history record checks.

The commissioner shall employ such assistants, to be known as state banking examiners, as may be necessary for the efficient operation of the department, to aid him in the discharge of the duties and responsibilities imposed upon him by law. The minimum qualifications for such employment shall be possession of a bachelor’s degree from a recognized college or university, or three (3) years’ experience as a bank examiner, bank officer or employee, small loan company officer or employee, or other consumer finance officer or employee and such other qualifications set out for banking examiners in the plan for the state personnel system. However, notwithstanding any provisions to the contrary, any person who is serving as a state banking examiner in the former Department of Bank Supervision on March 21, 1980, shall be qualified to serve as a state banking examiner in the department. The state bank examiners shall not, directly or indirectly, be connected with any banking business in Mississippi or elsewhere during their respective terms of office, after four (4) months from the time of qualifying as an examiner.

The commissioner may employ such additional employees as may be necessary to carry out those duties and responsibilities imposed upon him by law, who shall possess such qualifications set out for their particular position in the plan for the state personnel system.

No examiner or other employee related by consanguinity or affinity to the commissioner within the third degree computed according to the civil law shall be employed by him.

The examiners and all other persons employed by the commissioner under the provisions of this section shall be compensated as provided in the compensation plan for the state personnel system, unless otherwise provided by law. The compensation for such employees shall be payable monthly out of the funds of the department.

The commissioner shall be responsible for all acts of the examiners and the other employees. Any examiner or other employee may be dismissed only in accordance with the laws, rules and regulations applicable to the state personnel system.

As a condition of employment with the department, the commissioner shall require all employees and applicants for employment with the department to be fingerprinted to determine their suitability for employment as examiners or assistants as needed. If no disqualifying record is identified at the state level, the Department of Public Safety shall forward the fingerprints to the Federal Bureau of Investigation (FBI) for a national criminal history record check. The Department of Banking and Consumer Finance shall pay all of the costs in connection with the criminal history record check procedure. These record checks shall not be used by the Department of Banking and Consumer Finance for any purpose other than to determine suitability for employment with the department.

HISTORY: Laws, 1980, ch. 312, § 6; reenacted, Laws, 1982, ch. 303, § 6; Laws, 1990 Ex Sess, ch. 46, § 5; Laws, 1993, ch. 442, § 6; reenacted and amended, Laws, 1994, ch. 622, § 7; reenacted without change, Laws, 1997, ch. 497, § 6; reenacted without change, Laws, 2001, ch. 410, § 6; Laws, 2007, ch. 430, § 1, eff from and after passage (approved Mar. 22, 2007.).

Amendment Notes —

The 2001 amendment reenacted the section without change.

The 2007 amendment added the last paragraph.

Cross References —

Prohibition against practice of nepotism, generally, see §§25-1-53,25-1-55.

Salaries and compensation of public officers and employees, generally, see §§25-3-3 et seq.

Compensation of examiners for special examinations or other special services, see §81-1-93.

Department maintenance fund, see §81-1-107.

State-chartered banks having and possessing the rights, powers, privileges, immunities, duties and obligations of a national bank having its principal place of business in this state, irrespective of any conflict with the provisions of this section, see §81-5-1(9).

RESEARCH REFERENCES

ALR.

Validity, construction, and effect of state constitutional or statutory provision regarding nepotism in the public service. 11 A.L.R.4th 826.

CJS.

9 C.J.S., Banks and Banking §§ 11-15.

§ 81-1-67. Oath of office and bond.

The commissioner and the deputy commissioner each shall, before entering upon the discharge of their respective duties, take and subscribe the constitutional oath of office and shall execute to the State of Mississippi a bond in the sum of Fifty Thousand Dollars ($50,000.00) with a surety company authorized to do business in this state, to be delivered to and approved by the Treasurer of the State of Mississippi.

The state bank examiners shall, before entering upon the discharge of their duties, take and subscribe the constitutional oath of office and shall execute to the State of Mississippi a bond in the sum of Twenty Thousand Dollars ($20,000.00) with a surety company authorized to do business in this state, to be delivered to and approved by the Treasurer of the State of Mississippi.

These bonds shall, by the terms thereof, be payable to the state, and shall be liable to the state in actions brought by the Attorney General on behalf of the state, and shall also be liable in actions brought by anyone aggrieved by breach thereof. The bonds shall be conditioned for the faithful and impartial performance of the duties of the particular office for which the bond was given, for the faithful and proper handling and accounting for all funds, and for the payment of all damages and costs which may accrue under provisions of law.

HISTORY: Laws, 1980, ch. 312, § 7; reenacted, Laws, 1982, ch. 303, § 7; Laws, 1990 Ex Sess, ch. 46, § 6; Laws, 1993, ch. 442, § 7; Laws, 1994, ch. 622, § 8; reenacted without change, Laws, 1997, ch. 497, § 7; reenacted without change, Laws, 2001, ch. 410, § 7, eff from and after July 1, 2001.

Amendment Notes —

The 2001 amendment reenacted the section without change.

Cross References —

Oath of office, see MS Const Art. 14, § 268.

Persons authorized to administer oaths, see §11-1-1.

Person before whom oath of office may be taken, see §25-1-9.

Surety bonds of state officials, generally, see §25-1-13.

§ 81-1-69. Salaries of commissioner and deputy commissioner.

The salaries of the commissioner and the deputy commissioner shall be fixed by the Legislature, and shall be payable monthly out of the funds of the department.

HISTORY: Laws, 1980, ch. 312, § 8; reenacted, Laws, 1982, ch. 303, § 8; Laws, 1990 Ex Sess, ch. 46, § 7; Laws, 1993, ch. 442, § 8; Laws, 1993, ch. 587, § 2; Laws, 1994, ch. 622, § 9; reenacted without change, Laws, 1997, ch. 497, § 8; reenacted without change, Laws, 2001, ch. 410, § 8, eff from and after July 1, 2001.

Amendment Notes —

The 2001 amendment reenacted the section without change.

Cross References —

Department Maintenance Fund, see §81-1-107.

§ 81-1-71. Reimbursement of travel expenses; annual audit.

The commissioner, all examiners and any employee required to travel shall be allowed expenses incident to the discharge of their official duties while away from their places of residence, and mileage for each mile necessarily traveled in the discharge of their official duties, as provided in Section 25-3-41. Such expenses shall be paid out of the department funds upon vouchers approved by the commissioner, and each voucher for expenses shall be accompanied by an itemized statement of the same.

The State Department of Audit shall make an annual audit of the books and records having to do with receipts and expenditures of funds of the department. The chief inspector shall file a copy of his report with the commissioner and the Governor, and insofar as is practicable, the commissioner shall incorporate the exhibits and schedules of receipts and disbursements for each year in his annual report to the Legislature.

HISTORY: Laws, 1980, ch. 312, § 9; reenacted, Laws, 1982, ch. 303, § 9; Laws, 1987, ch. 328; Laws, 1990 Ex Sess, ch. 46, § 8; Laws, 1993, ch. 442, § 9; Laws, 1994, ch. 622, § 10; reenacted without change, Laws, 1997, ch. 497, § 9; reenacted without change, Laws, 2001, ch. 410, § 9, eff from and after July 1, 2001.

Editor’s Notes —

This section was derived in part from former §81-5-15 (Codes, 1942, § 5167; Laws, 1934, ch. 146; 1948, ch. 206, § 2; 1952, ch. 181, § 2; 1956, ch. 146; 1958, ch. 243, § 1; 1966, ch. 445, § 11; 1970, ch 269, § 1).

Amendment Notes —

The 2001 amendment reenacted the section without change.

Cross References —

Department of Audit, generally, see §§7-7-201 et seq.

Department Maintenance Fund, see §81-1-107.

Annual report to Legislature, see §81-1-113.

§ 81-1-73. Seal of Department of Banking and Consumer Finance; sealed documents to be used in evidence; certified copies.

The department shall have a seal which shall be in the form of a circle with the image of an eagle, with thirteen (13) stars over the head, in the center, and about the margin at the bottom shall appear the words “State of Mississippi”; and about the margin at the top shall appear the words “Department of Banking and Consumer Finance.”

Every certificate and other official paper executed by the department under authority of law and sealed with the seal of office shall be used as evidence in all courts, investigations and proceedings authorized by law, and may be recorded in the same manner and with like effect as a deed. All copies of papers in the office of the department, certified by the commissioner, or certified by an examiner of the department, and bearing the seal shall be accepted in all matters equally and with like effect as the original. No original papers, except with the consent of the commissioner, shall at any time be removed from the files of the department, and for every purpose, a copy of such original, certified as above set out, is hereby made the equivalent of such original.

HISTORY: Laws, 1980, ch. 312, § 10; reenacted, Laws, 1982, ch. 303, § 10; Laws, 1990 Ex Sess, ch. 46, § 9; Laws, 1993, ch. 442, § 10; Laws, 1994, ch. 622, § 11; reenacted without change, Laws, 1997, ch. 497, § 10; reenacted without change, Laws, 2001, ch. 410, § 10, eff from and after July 1, 2001.

Editor’s Notes —

This section was derived from former §81-1-3 (Codes, 1942, § 5163; Laws, 1934, ch. 146).

Amendment Notes —

The 2001 amendment reenacted the section without change.

Cross References —

Recording of instruments, see §89-5-25.

§ 81-1-75. Furniture, fixtures, equipment and department expenses.

The department shall be supplied with all necessary office furniture, fixtures and equipment, which shall be purchased by the commissioner and paid for out of the department maintenance fund on voucher signed by the commissioner. All necessary postage, stationery, expressage, books, telephone and telegraph messages, printing expenses and all premiums on bonds and all other office expenses of the department shall be allowed and paid for in the same manner as the office equipment and fixtures.

HISTORY: Laws, 1980, ch. 312, § 11; reenacted, Laws, 1982, ch. 303, § 11; Laws, 1990 Ex Sess, ch. 46, § 10; Laws, 1993, ch. 442, § 11; Laws, 1994, ch. 622, § 12; reenacted without change, Laws, 1997, ch. 497, § 11; reenacted without change, Laws, 2001, ch. 410, § 11, eff from and after July 1, 2001.

Editor’s Notes —

This section was derived from former §81-1-17 (Codes, 1942, § 5168; Laws, 1934, ch. 146).

Amendment Notes —

The 2001 amendment reenacted the section without change.

Cross References —

Department Maintenance Fund, see §81-1-107.

§ 81-1-77. Borrowing money from or indorsing notes to state banks by officers or employees of department prohibited; penalties.

No officer or employee of the department shall be permitted to borrow money from any state bank directly or indirectly or to indorse any note to any state bank. Any such officer or employee who borrows any money from any state bank or indorses any note to any state bank and any officer or employee of any state bank who makes any such loan to any officer or employee of the department or accepts the indorsement of any officer or employee of the department on any note to any state bank shall be guilty of a misdemeanor and, upon conviction of such offense, shall be imprisoned for not more than six (6) months in the county jail, or fined not more than One Thousand Dollars ($1,000.00), or both. Each renewal of any loan or indorsement forbidden by this section shall constitute a separate offense.

HISTORY: Laws, 1980, ch. 312, § 12; reenacted, Laws, 1982, ch. 303, § 12; Laws, 1990 Ex Sess, ch. 46, § 11; Laws, 1993, ch. 442, § 12; Laws, 1994, ch. 622, § 13; reenacted without change, Laws, 1997, ch. 497, § 12; reenacted without change, Laws, 2001, ch. 410, § 12, eff from and after July 1, 2001.

Editor’s Notes —

This section was derived from former §81-1-19 (Codes, 1942, § 5170; Laws, 1934, ch. 146).

Amendment Notes —

The 2001 amendment reenacted the section without change.

Cross References —

Imposition of standard state assessment in addition to all court imposed fines or other penalties for any misdemeanor violation, see §99-19-73.

RESEARCH REFERENCES

ALR.

Construction and application of 18 USCS § 213 punishing acceptance of loan or gratuity by bank examiner. 19 A.L.R. Fed. 340.

§ 81-1-79. Attorney general as legal adviser; special counsel.

The Attorney General shall advise the department on all legal matters. However, in case of litigation involving the department, or in the event of necessity for legal assistance in connection with the administration of the department, the commissioner may, with the consent and approval of the Attorney General, employ special counsel to assist in handling the same.

HISTORY: Laws, 1980, ch. 312, § 13; reenacted, Laws, 1982, ch. 303, § 13; Laws, 1990 Ex Sess, ch. 46, § 12; Laws, 1993, ch. 442, § 13; Laws, 1994, ch. 622, § 14; reenacted without change, Laws, 1997, ch. 497, § 13; reenacted without change, Laws, 2001, ch. 410, § 13, eff from and after July 1, 2001.

Editor’s Notes —

This section was derived from former §81-1-21 (Codes, 1942, § 5171; Laws, 1934, ch. 146, § 11; 1944, ch. 260, §§ 1-3).

Amendment Notes —

The 2001 amendment reenacted the section without change.

Cross References —

Powers and duties of Attorney General, generally, see §§7-5-1 et seq.

§ 81-1-81. Examination of banks [Subsection (2) repealed effective July 1, 2022].

  1. It shall be the duty of the commissioner to apportion the work of examining banks among the examiners in such a way that each bank, under the provisions of law, shall be examined at least once during an eighteen-month period and more often, if necessary, in the discretion of the commissioner, at irregular intervals and without prior notice. However, neither the commissioner nor any examiner shall examine one (1) bank twice in succession unless the commissioner, for cause, so determines. In the event the commissioner’s office, because of workload or other good sufficient cause, is unable to conduct an examination of a bank as provided for in this section, the commissioner is hereby authorized to accept the examination of any state bank performed by the Federal Deposit Insurance Corporation or the Federal Reserve Bank in lieu of the examination provided for in this section. However, in no case shall the commissioner be authorized to accept any such examination of any state bank performed by either the Federal Deposit Insurance Corporation or the Federal Reserve Bank for any two (2) consecutive eighteen-month periods.
  2. The commissioner may join an examination and/or issue a joint report of examination with the Federal Reserve Bank of any bank holding company, including any foreign-owned bank holding company, with more than One Billion Dollars ($1,000,000,000.00) in assets that owns a Mississippi state-chartered bank. The commissioner shall not perform an examination independent of the Federal Reserve Bank. The commissioner may accept any examination report of a bank holding company performed solely by the Federal Reserve Bank in lieu of conducting a joint examination. Further, the commissioner may join in related supervisory orders issued by the Federal Reserve Bank. There shall be no cost to a bank or a bank holding company as a result of the commissioner’s participation in a joint examination of a bank holding company as authorized by this subsection. The provisions of this subsection (2) shall stand repealed on July 1, 2022.

HISTORY: Laws, 1980, ch. 312, § 14; reenacted, Laws, 1982, ch. 303, § 14; Laws, 1990 Ex Sess, ch. 46, § 13; Laws, 1993, ch. 442, § 14; Laws, 1994, ch. 622, § 15; Laws, 1995, ch. 308, § 10; reenacted without change, Laws, 1997, ch. 497, § 14; reenacted without change, Laws, 2001, ch. 410, § 14; Laws, 2016, ch. 336, § 1, eff from and after passage (approved Apr. 5, 2016).

Editor’s Notes —

This section was derived from former §81-1-23 (Codes, 1942, § 5174; Laws, 1934, ch. 146; 1936, ch. 165; 1946, S.B. 2520, § 1; 1966, ch. 245, § 1).

Amendment Notes —

The 2001 amendment reenacted the section without change.

The 2016 amendment added (2).

Cross References —

Examination of credit unions by commissioner of banking and consumer finance, see §81-13-17.

Out-of-state trust institution examinations, see §81-27-2.301.

RESEARCH REFERENCES

Am. Jur.

10 Am. Jur. 2d, Banks and Financial Institutions §§ 108, 1192, 1194.

CJS.

9 C.J.S., Banks and Banking § 28.

§ 81-1-83. Powers and duties of officer making examination.

At each examination, the commissioner or an examiner may examine the cash, bills, collaterals and securities, books of account, the condition and affairs of the bank, the mode of conducting and managing the affairs of the bank, the action of its directors, and the investment of the funds of the bank. The commissioner or an examiner shall have power to examine the directors and all other persons under oath as to the value of all collaterals, securities and other assets of the bank. Any officer of a bank refusing to the commissioner or examiner any of the papers, securities, the books of account or cash of a bank shall subject such bank to liquidation as provided by law.

The commissioner or an examiner may call for statements from all correspondent banks and all other persons or corporations showing a balance on the books of the bank at each examination.

The commissioner, examiners, or any other employee of the department shall not reproduce a copy of any information in the possession of any bank pertaining to the names of the stockholders of such bank or the amount of shares owned by such stockholders, nor shall the commissioner, examiners or any other employee of the department remove such stockholder information from the confines of the bank, any provision contained herein to the contrary notwithstanding.

HISTORY: Laws, 1980, ch. 312, § 15; reenacted, Laws, 1982, ch. 303, § 15; Laws, 1990 Ex Sess, ch. 46, § 14; Laws, 1993, ch. 442, § 15; Laws, 1994, ch. 320, § 1; reenacted and amended, Laws, 1994, ch. 622, § 16; reenacted without change, Laws, 1997, ch. 497, § 15; reenacted without change, Laws, 2001, ch. 410, § 15, eff from and after July 1, 2001.

Editor’s Notes —

This section was derived from former §81-1-25 (Codes, 1942, § 5175; Laws, 1934, ch. 146; 1966, ch. 246, § 1).

Amendment Notes —

The 2001 amendment reenacted the section without change.

Cross References —

Insolvent banks, generally, see §§81-9-1 et seq.

Out-of-state trust institution examinations, see §81-27-2.301.

JUDICIAL DECISIONS

1.-10. [Reserved for future use.]

11. Under former §81-1-25.

1.-10. [Reserved for future use.]

11. Under former § 81-1-25.

Officers’ and directors’ contract to pay all bank’s losses, to prevent assessment against stockholders, held not contrary to public policy nor statute; nor did such contract prevent banking department from exercising statutory powers. Love v. Dampeer, 159 Miss. 430, 132 So. 439, 1931 Miss. LEXIS 62 (Miss. 1931).

Superintendent of banks, under former statute, became entitled to all legal rights and equities of bank in liquidation, and could sue thereon for benefit of depositors, creditors, and stockholders. Love v. Dampeer, 159 Miss. 430, 132 So. 439, 1931 Miss. LEXIS 62 (Miss. 1931).

RESEARCH REFERENCES

ALR.

Construction and application of 18 USCS § 213 punishing acceptance of loan or gratuity by bank examiner. 19 A.L.R. Fed. 340.

Am. Jur.

10 Am. Jur. 2d, Banks and Financial Institutions §§ 108, 1192, 1194.

CJS.

9 C.J.S., Banks and Banking §§ 11-15.

§ 81-1-85. Witnesses’ attendance may be compelled; penalty for false statements.

The commissioner or an examiner shall have the authority to issue subpoenas for witnesses and compel their attendance before him in any and all matters connected with the duties of his office, and for failure to attend or testify, witnesses may be fined by him for contempt. He may invoke the process of the appropriate chancery court to compel such testimony and the production of all necessary papers, and orders therefor may be had either in termtime or vacation upon two (2) days’ notice to the opposite party.

Sheriffs, constables and marshals holding commissions in this state shall serve, and be entitled to regular fees for serving such subpoenas. For failing to execute or return such process they shall be liable for the same penalties prescribed by law for failure to execute any like process issued by the courts of this state.

The commissioner or an examiner shall have the authority to administer oaths and to examine under oath the officers, agents, clerks, employees and stockholders of any bank, or any other person touching the matters into which he is directed to examine by law. Any person who willfully makes any false statement under oath in such examination shall be deemed guilty of perjury, and upon conviction thereof shall be punished as provided by law. If any officer, agent, clerk or stockholder of any bank, when under oath, willfully misrepresents in any manner to the commissioner, an examiner, or his assistant, the condition of the bank, or any of its property, or purposely misleads the commissioner or any examiner, or makes false statements regarding the condition of the bank, or any part of its business, such person shall be deemed guilty of a misdemeanor and upon conviction thereof in any court of competent jurisdiction, shall be fined not less than One Thousand Dollars ($1,000.00) nor more than Two Thousand Five Hundred Dollars ($2,500.00) or imprisoned in the county jail not less than six (6) months nor more than one (1) year, or by both such fine and imprisonment.

HISTORY: Laws, 1980, ch. 312, § 16; reenacted, Laws, 1982, ch. 303, § 16; Laws, 1990 Ex Sess, ch. 46, § 15; Laws, 1993, ch. 442, § 16; Laws, 1994, ch. 622, § 17; reenacted without change, Laws, 1997, ch. 497, § 16; reenacted without change, Laws, 2001, ch. 410, § 16, eff from and after July 1, 2001.

Editor’s Notes —

This section derived from former §81-1-27 (Codes, 1942, § 5176; Laws, 1934, ch. 146).

Amendment Notes —

The 2001 amendment reenacted the section without change.

Cross References —

Subpoenas for witnesses, generally, see §13-3-93.

Liability of sheriff for failure to serve process, see §19-25-37.

Fees of sheriffs, see §25-7-19.

Fees of constables and marshals, see §25-7-27.

Prohibition on false statements by bank officials and penalty therefor, see §81-1-101.

Procedures for approval of certificate of incorporation, see §81-3-13.

Trust company formation hearings, power to compel attendance of witnesses and transcription, see §81-27-4.103.

Statutory penalty for perjury, see §97-9-61.

Imposition of standard state assessment in addition to all court imposed fines or other penalties for any misdemeanor violation, see §99-19-73.

RESEARCH REFERENCES

Am. Jur.

81 Am. Jur. 2d, Witnesses §§ 20-25.

CJS.

98 C.J.S., Witnesses § 26.

§ 81-1-87. Testimony to be taken by stenographer; compensation of stenographer.

The commissioner or an examiner, in all cases where the testimony of witnesses is to be preserved, shall have the right to have the case taken down and transcribed by a stenographer, and the stenographer so employed shall be duly sworn. The stenographer’s certificate that the transcript of such evidence is correct, together with the official certificate of the commissioner or examiner that he has read the same and that it is, in his opinion, correct, shall entitle such transcript, or a certified copy thereof, to be received in evidence as relevant, material and competent. Such stenographer shall be paid at the same rates as that then currently in effect for similar duties performed by the chancery court reporter for the county in which the testimony of the witnesses is to be taken and preserved. The stenographer shall be paid out of the department maintenance fund on voucher approved by the commissioner or examiner employing such stenographer, accompanied with an itemized statement of services rendered.

HISTORY: Laws, 1980, ch. 312, § 17; reenacted, Laws, 1982, ch. 303, § 17; Laws, 1990 Ex Sess, ch. 46, § 16; Laws, 1993, ch. 442, § 17; Laws, 1994, ch. 622, § 18; reenacted without change, Laws, 1997, ch. 497, § 17; reenacted without change, Laws, 2001, ch. 410, § 17, eff from and after July 1, 2001.

Editor’s Notes —

This section was derived from former §81-1-29 (Codes, 1942, § 5177; Laws, 1934, ch. 146; 1966, ch. 240, § 1).

Amendment Notes —

The 2001 amendment reenacted the section without change.

Cross References —

Department Maintenance Fund, see §81-1-107.

Trust company formation hearings, power to compel attendance of witnesses and transcription, see §81-27-4.103.

§ 81-1-89. Records of proceedings; commissioner authorized to disclose certain information to and establish information sharing and exchange program with any government regulatory counterpart to the department.

  1. The commissioner, examiners and all employees of the department shall keep as records of their office proper books showing all acts, matters and things done by them. Except when required in legal proceedings or as authorized under subsection (2) of this section, none of them shall disclose to any person, official or otherwise, any fact or information obtained in the course of the performance of their duties, except so far as it may be incumbent upon them under the law, to report to the commissioner, or to make public records and publish the same. The commissioner may provide to members of the public the information authorized under Section 81-1-100 without being in violation of this section.
  2. The commissioner may disclose to any federal, state or foreign government regulatory counterpart to the department any and all information contained during the course of his official duties as regulator and/or licensor of all financial entities charged to him by statute on December 31, 2005, as well as any others established by statute after that date. The commissioner may establish by agreement an information sharing and exchange program with the same governmental entities to promote and help reduce duplicative and burdensome filings, examinations and any other regulatory requirements by which each party maintains the confidentiality of information that is considered confidential under applicable state and federal statutes.

HISTORY: Laws, 1980, ch. 312, § 18; reenacted, Laws, 1982, ch. 303, § 18; Laws, 1990 Ex Sess, ch. 46, § 17; reenacted and amended, Laws, 1993, ch. 442, § 18; reenacted, Laws, 1994, ch. 622, § 19; reenacted without change, Laws, 1997, ch. 497, § 18; reenacted without change, Laws, 2001, ch. 410, § 18; Laws, 2006, ch. 404, § 1, eff from and after passage (approved Mar. 15, 2006.).

Editor’s Notes —

This section was derived from former §81-1-31 (Codes, 1942, § 5178; Laws, 1934, ch. 146).

Amendment Notes —

The 2001 amendment reenacted the section without change.

The 2006 amendment, in (1), substituted “Except when required in legal proceedings or as authorized under subsection (2) of this section, none of them shall disclose to any person, official or otherwise” for “None of them shall disclose to any person, official or otherwise, except when required in legal proceedings”; and added (2).

Cross References —

Furnishing copies of published reports by banks, see §81-1-99.

State-chartered banks having and possessing the rights, powers, privileges, immunities, duties and obligations of a national bank having its principal place of business in this state, irrespective of any conflict with the provisions of this section, see §81-5-1(9).

§ 81-1-91. Past due paper; certain items to be charged off.

In all bank examinations no bank shall be allowed credit in excess of its sound value for a note or security of which the principal and interest is over twelve (12) months past due; nor for any bond in excess of the real value thereof; nor for any stock of its own held more than twelve (12) months; nor for any unsecured overdrafts that may have existed for a greater period than thirty (30) days next preceding it, except that the period shall be ninety (90) days for unsecured overdrafts upon which interest is being charged if the bank has a written policy authorizing such overdrafts for not more than ninety (90) days. Only such overdrafts shall be considered as secure as are advanced against products or actual existing values evidenced by warehouse receipts or bills of lading, against bills of exchange drawn in good faith against actual existing values, or against funds on deposit by the depositor whose account is overdrawn, and who has pledged those funds as security f or such overdraft, and in making up the statement of the condition of such bank any such item shall be charged off (but if desired a note shall be appended giving details thereof). But the discretion of the commissioner or examiner may be exercised in cases of estates in litigation or administration, and in pending suits, if the security affected thereby is ample, in the opinion of the commissioner or examiner making such examination.

HISTORY: Laws, 1980, ch. 312, § 19; reenacted, Laws, 1982, ch. 303, § 19; Laws, 1984, ch. 325; Laws, 1990 Ex Sess, ch. 46, § 18; Laws, 1993, ch. 442, § 19; Laws, 1994, ch. 622, § 20; reenacted without change, Laws, 1997, ch. 497, § 19; reenacted without change, Laws, 2001, ch. 410, § 19, eff from and after July 1, 2001.

Editor’s Notes —

This section was derived from former §81-1-33 (Codes, 1942, § 5179; Laws, 1934, ch. 146).

Amendment Notes —

The 2001 amendment reenacted the section without change.

§ 81-1-93. Special examinations and special services; cost and expenses.

The commissioner may make special examinations or render special services to banks, either at the request of banks desiring same, or at his own instance. The commissioner shall have discretion to decide whether any examinations or services are sufficiently urgent, out of routine, or extraordinary to be denominated special examinations or services. When any special examination or services are rendered and so denominated by the commissioner he shall charge the bank so examined or served the cost based on the average daily cost of all examiners of the department plus actual and necessary expenses. The bank so receiving such special examination or services shall pay the per diem and expenses of each appointed examiner performing the work to the commissioner, who in turn will pay the amount into the department maintenance fund and disburse to the examiner directly the amount of his services. An examiner who is on the state payroll may perform such services but the funds so derived from his services shall be paid into the department maintenance fund, and no examiner shall be allowed to draw from a salary and expenses from both the bank and the state.

HISTORY: Laws, 1980, ch. 312, § 20; reenacted, Laws, 1982, ch. 303, § 20; Laws, 1990 Ex Sess, ch. 46, § 19; reenacted, Laws, 1993, ch. 442, § 20; Laws, 1994, ch. 622, § 21; reenacted without change, Laws, 1997, ch. 497, § 20; reenacted without change, Laws, 2001, ch. 410, § 20, eff from and after July 1, 2001.

Editor’s Notes —

This section was derived from former §81-1-35 (Codes, 1942, § 5180; Laws, 1934, ch. 146; 1971, ch. 388, § 1).

Amendment Notes —

The 2001 amendment reenacted the section without change.

Cross References —

Compensation of examiners, generally, see §81-1-65.

Department Maintenance Fund, see §81-1-107.

§ 81-1-95. New statement may be ordered after finding of material changes or errors.

If, upon the completion of any examination, the commissioner or an examiner finds that the last public statement of the bank is materially wrong, or that the condition of the bank has materially changed since the last public statement, he may order the bank to publish a new statement based upon the findings of his examination. For failure to promptly publish such statement, the bank shall be liable for a penalty of Five Hundred Dollars ($500.00) for which suit shall be brought by the commissioner for the use of the department if not paid within ten (10) days.

HISTORY: Laws, 1980, ch. 312, § 21; reenacted, Laws, 1982, ch. 303, § 21; Laws, 1990 Ex Sess, ch. 46, § 20; Laws, 1993, ch. 442, § 21; Laws, 1994, ch. 622, § 22; reenacted without change, Laws, 1997, ch. 497, § 21; reenacted without change, Laws, 2001, ch. 410, § 21, eff from and after July 1, 2001.

Amendment Notes —

The 2001 amendment reenacted the section without change.

Cross References —

Statements or reports by banks, generally, see §81-1-97.

§ 81-1-97. Call reports by banks; attestation.

The commissioner shall call upon each state bank for the reports required in this section. Such calls shall be made by the commissioner in writing by letter or other similar means of written communications for the same dates and as often as calls are issued by the Comptroller of the Currency for the United States for reports from national banks. The commissioner shall prescribe the forms for such reports. The reports shall be sworn to by either the president, vice president or cashier of the bank making them, attested by not less than two (2) of the board of directors, and shall exhibit in detail, under appropriate heads, the total resources and total liabilities of the bank on the day specified by the commissioner. Banks shall transmit to the department such call reports within a time limitation established by regulation by the commissioner; however, such time limitation cannot exceed that set by the Federal Deposit Insurance Corporation for state insured banks. For any failure or delay in furnishing this report, the president, vice president or cashier of any such bank, so in default, and the members of the board of directors of the bank refusing to attest the report, shall be subject to an administrative fine, which may be imposed by the commissioner, of Fifty Dollars ($50.00) a day for each day while in such default.

HISTORY: Laws, 1980, ch. 312, § 22; Laws, 1982, ch. 303, § 22; Laws, 1982, ch. 342, § 1; Laws, 1990 Ex Sess, ch. 46, § 21; Laws, 1993, ch. 442, § 22; Laws, 1994, ch. 320 § 10; reenacted and amended, Laws, 1994, ch. 622, § 23; Laws, 1995, ch. 308, § 1; reenacted without change, Laws, 1997, ch. 497, § 22; reenacted without change, Laws, 2001, ch. 410, § 22, eff from and after July 1, 2001.

Editor’s Notes —

This section was derived from former §81-1-39 (Codes, 1942, § 5182; Laws, 1934, ch. 146; 1978, ch. 308, § 1).

Amendment Notes —

The 2001 amendment reenacted the section without change.

Cross References —

Furnishing copies of statements by department, see §81-1-99.

Penalty for false statements, see §81-1-101.

State-chartered banks having and possessing the rights, powers, privileges, immunities, duties and obligations of a national bank having its principal place of business in this state, irrespective of any conflict with the provisions of this section, see §81-5-1(9).

Imposition of standard state assessment in addition to all court imposed fines or other penalties for any misdemeanor violation, see §99-19-73.

RESEARCH REFERENCES

ALR.

Application of requirement that newspaper be locally published for official notice publication. 85 A.L.R.4th 581.

Am. Jur.

10 Am. Jur. 2d, Banks and Financial Institutions §§ 108, 1192, 1194.

CJS.

9 C.J.S., Banks and Banking § 28.

§ 81-1-99. Copy of call reports to be furnished on request; fee; penalties relating to issuance of reports and fees therefor.

A copy of the call reports of any bank shall be furnished to any person or corporation requesting the same for a reasonable fee prescribed by the commissioner, which shall be collected by the commissioner and shall be paid into the department maintenance fund. If the commissioner fails or refuses to furnish copies of the report when so requested and tendered the proper fee; or if he fails to account for any such fees received by him; or if any person other than the commissioner, deputy commissioner, an examiner, or assistant furnishes any copy of such bank report to anyone, whether for a consideration or without consideration, such person shall be guilty of a misdemeanor and shall be fined not less than Fifty Dollars ($50.00) or be imprisoned not more than one (1) month in the county jail, or both. However, this section shall not be construed to prevent any officer of the bank from furnishing to anyone a statement of such bank.

HISTORY: Laws, 1980, ch. 312, § 23; reenacted, Laws, 1982, ch. 303, § 23; Laws, 1990 Ex Sess, ch. 46, § 22; Laws, 1993, ch. 442, § 23; Laws, 1994, ch. 622, § 24; Laws, 1995, ch. 308, § 2; reenacted without change, Laws, 1997, ch. 497, § 23; reenacted without change, Laws, 2001, ch. 410, § 23, eff from and after July 1, 2001.

Editor’s Notes —

This section was derived from former §81-1-41 (Codes, 1942, § 5183; Laws, 1934, ch. 146).

Amendment Notes —

The 2001 amendment reenacted the section without change.

Cross References —

State-chartered banks having and possessing the rights, powers, privileges, immunities, duties and obligations of a national bank having its principal place of business in this state, irrespective of any conflict with the provisions of this section, see §81-5-1(9).

Imposition of standard state assessment in addition to all court imposed fines or other penalties for any misdemeanor violation, see §99-19-73.

§ 81-1-100. Public availability of certain sections of federal evaluations of banks.

  1. The commissioner shall obtain each year from the appropriate federal financial supervisory agency or agencies the public sections of the written evaluations prepared pursuant to 12 USCS Section 2906 of the Community Reinvestment Act, as amended (12 USCS Section 2901 et seq.), of each state bank and national bank located in Mississippi and each bank holding company that controls any bank located in Mississippi. Once each year the commissioner shall publish in some newspaper having a general circulation in the state a statement that the public section of the written evaluation prepared pursuant to 12 USCS Section 2906 of the Community Reinvestment Act, as amended (12 USCS Section 2901 et seq.), of each such bank and bank holding company is maintained in the office of the commissioner and will be made available for inspection to any person upon request during business hours, and that copies of all or part of any evaluation will be furnished to any person upon request for a reasonable copying fee prescribed by the commissioner.
  2. For the purposes of this section, the term “appropriate federal financial supervisory agency” shall have the same meaning as the definition in 12 USCS Section 2902.

HISTORY: Laws, 1993, ch. 442, § 24; reenacted, Laws, 1994, ch. 622, § 25; reenacted without change, Laws, 1997, ch. 497, § 24; reenacted without change, Laws, 2001, ch. 410, § 24, eff from and after July 1, 2001.

Amendment Notes —

The 2001 amendment reenacted the section without change.

Cross References —

Disclosures under this section are expressly excepted from the prohibitions of §81-1-89.

Federal Aspects—

Community Reinvestment Act, see 12 USCS § 2901 et seq.

§ 81-1-101. False statement of bank official; penalty.

Any officer, director, cashier, agent, clerk or stockholder of any bank, other than a national bank, doing business in the State of Mississippi, who willfully and knowingly subscribes to or makes any false report or any false statement or entry in the books of such bank, or who knowingly subscribes or exhibits any false writing or paper with the intent to deceive any person as to the condition of such bank shall be fined not more than One Thousand Dollars ($1,000.00) or imprisoned in the Penitentiary not more than three (3) years, or both.

HISTORY: Laws, 1980, ch. 312, § 24; reenacted, Laws, 1982, ch. 303, § 24; Laws, 1990 Ex Sess, ch. 46, § 23; Laws, 1993, ch. 442, § 25; Laws, 1994, ch. 622, § 26; reenacted without change, Laws, 1997, ch. 497, § 25; reenacted without change, Laws, 2001, ch. 410, § 25, eff from and after July 1, 2001.

Editor’s Notes —

This section was derived from former §81-1-43 (Codes, 1942, § 5184; Laws, 1934, ch. 146).

Amendment Notes —

The 2001 amendment reenacted the section without change.

Cross References —

State-chartered banks having and possessing the rights, powers, privileges, immunities, duties and obligations of a national bank having its principal place of business in this state, irrespective of any conflict with the provisions of this section, see §81-5-1(9).

JUDICIAL DECISIONS

1.-10. [Reserved for future use.]

11. Under former §81-1-43.

1.-10. [Reserved for future use.]

11. Under former § 81-1-43.

Indictment charging bank officials with publishing false statement as to bank’s condition held demurrable because allegations were too general. State v. Cahn, 171 Miss. 458, 158 So. 202, 1934 Miss. LEXIS 282 (Miss. 1934).

Statute prohibiting bank officials from publishing false statement as to bank’s condition covers many different kinds of acts, and indictment thereunder should select particular act and give specific information apprising accused of nature of crime. State v. Cahn, 171 Miss. 458, 158 So. 202, 1934 Miss. LEXIS 282 (Miss. 1934).

RESEARCH REFERENCES

ALR.

What constitutes a “material” fact for purposes of 18 USCS § 1001, relating to falsifying or concealing facts in matter within jurisdiction of United States department or agency. 49 A.L.R. Fed. 622.

Am. Jur.

10 Am. Jur. 2d, Banks and Financial Institutions §§ 446 et seq.

CJS.

9 C.J.S., Banks and Banking §§ 777, 778.

§ 81-1-103. Investigation of proposed federal cease and desist, suspension or removal orders to state chartered banks.

If the commissioner receives notice from the United States or any agency or instrumentality thereof having authority to issue cease and desist, removal or suspension orders to state-chartered banks supervised by the department, of its intention to issue any such cease and desist, removal or suspension order to any state-chartered bank, then the commissioner is hereby authorized and empowered to investigate the act, cause or basis asserted for the issuance of such proposed order.

If such investigation shall disclose, in the opinion and judgment of the commissioner, that the act, cause or basis complained of has occurred, and that it is detrimental to the safety and welfare of the depositors or stockholders of the bank and contrary to the public interest, and if the act, cause or basis complained of shall not be remedied immediately, then the commissioner may give notice to the board of directors of the bank of the charges together with his concurrence or exceptions thereto and the remedies for the same. Failure of the board of directors to comply with the requirements of the commissioner within thirty (30) days from the date of notice shall render the board of directors in default thereupon. Thereafter the commissioner may remove any officer, director or other person responsible for the noncompliance, or he may notify the appropriate federal agency or instrumentality to proceed under the federal statute or regulation.

HISTORY: Laws, 1980, ch. 312, § 25; reenacted, Laws, 1982, ch. 303, § 25; Laws, 1990 Ex Sess, ch. 46, § 24; Laws, 1993, ch. 442, § 26; Laws, 1994, ch. 622, § 27; reenacted without change, Laws, 1997, ch. 497, § 26; reenacted without change, Laws, 2001, ch. 410, § 26, eff from and after July 1, 2001.

Editor’s Notes —

This section was derived from former §81-1-44 (Codes, 1942, § 5191.5; Laws, 1972, ch. 406, § 1).

Amendment Notes —

The 2001 amendment reenacted the section without change.

Cross References —

State-chartered banks having and possessing the rights, powers, privileges, immunities, duties and obligations of a national bank having its principal place of business in this state, irrespective of any conflict with the provisions of this section, see §81-5-1(9).

§ 81-1-105. Injunction against commissioner by bank.

The commissioner may be enjoined in chancery court by any bank for abuse or misuse of any discretion or duty imposed upon him by the provisions of Title 81 of the Mississippi Code of 1972, or any other laws of the state.

HISTORY: Laws, 1980, ch. 312, § 26; reenacted, Laws, 1982, ch. 303, § 26; Laws, 1990 Ex Sess, ch. 46, § 25; Laws, 1993, ch. 442, § 27; Laws, 1994, ch. 622, § 28; reenacted without change, Laws, 1997, ch. 497, § 27; reenacted without change, Laws, 2001, ch. 410, § 27, eff from and after July 1, 2001.

Editor’s Notes —

This section was derived from former §81-1-45 (Codes, 1942, § 5185; Laws, 1934, ch. 146).

Amendment Notes —

The 2001 amendment reenacted the section without change.

Cross References —

State-chartered banks having and possessing the rights, powers, privileges, immunities, duties and obligations of a national bank having its principal place of business in this state, irrespective of any conflict with the provisions of this section, see §81-5-1(9).

§ 81-1-107. Assessment against banks for maintenance fund.

Every bank organized under the laws of this state engaging in the business of a commercial bank, trust company or any combination thereof, is assessed for each year the sum of Seventy-five Dollars ($75.00) and every such corporation whose total assets exceed One Hundred Thousand Dollars ($100,000.00) shall further pay in addition to the minimum assessment of Seventy-five Dollars ($75.00), Fifty Cents (50¢) for each One Thousand Dollars ($1,000.00) or fraction thereof of assets in excess of One Hundred Thousand Dollars ($100,000.00). All money accruing from such assessment shall be used for the maintenance of the department.

The commissioner shall, during the month of January in each year, or as soon thereafter as practicable, prepare a statement of the assessments due under this section based upon the total assets of each such corporation, as shown by its last report, which shall be paid as called for by the commissioner. He shall send to each such corporation a statement of the amount due by it, which shall specify how the same shall be payable. The assessment shall be due and payable in accordance with the statement so furnished and the installments thereof shall be paid within ten (10) days after the date fixed for their payment. Such assessment shall constitute a lien on the assets of each bank until paid. Any such corporation failing to make payment within ten (10) days as herein provided shall be liable to a penalty of ten percent (10%) of the amount in default for each day thereafter. All assessments and penalties provided in this section shall be payable to the commissioner and when collected by him shall be delivered to the State Treasurer to be placed to the credit of the maintenance fund of the department. The commissioner shall give a receipt for all money received by him and shall take a receipt from the State Treasurer for all money delivered to him. In making any call for the assessment levied by this section the commissioner shall estimate the cost of maintaining the department for the current year, and if the assessments hereby levied shall appear to produce more than such estimate, he shall reduce accordingly the Fifty Cents (50¢) per One Thousand Dollars ($1,000.00) of assets assessment provided in this section. The cash balance remaining in the maintenance fund of the department at the end of any one (1) fiscal year shall be credited to and reduce the assessments of the following fiscal year on a pro rata basis.

HISTORY: Laws, 1980, ch. 312, § 27; reenacted, Laws, 1982, ch. 303, § 27; Laws, 1990 Ex Sess, ch. 46, § 26; Laws, 1993, ch. 442, § 28; reenacted and amended, Laws, 1994, ch. 622, § 29; reenacted without change, Laws, 1997, ch. 497, § 28; reenacted without change, Laws, 2001, ch. 410, § 28, eff from and after July 1, 2001.

Editor’s Notes —

This section is derived from former §81-1-47 (Codes, 1942, § 5186; Laws, 1934, ch. 146; 1936, ch. 165).

Amendment Notes —

The 2001 amendment reenacted the section without change.

Cross References —

Additional fee for special examination or other special services, see §81-1-93.

Disbursement of maintenance fund, see §81-1-109.

§ 81-1-109. Disbursements from department maintenance fund.

All moneys paid out of the department maintenance fund shall be paid by the Treasurer upon warrants issued by the State Fiscal Officer, which warrants shall be issued by the State Fiscal Officer upon a voucher approved by the commissioner except in the payment of salaries and expenses, and warrants shall be issued by the State Fiscal Officer therefor upon a voucher approved by the Governor.

HISTORY: Laws, 1980, ch. 312, § 28; reenacted, Laws, 1982, ch. 303, § 28; Laws, 1990 Ex Sess, ch. 46, § 27; Laws, 1993, ch. 442, § 29; reenacted and amended, Laws, 1994, ch. 622, § 30; reenacted without change, Laws, 1997, ch. 497, § 29; reenacted without change, Laws, 2001, ch. 410, § 29, eff from and after July 1, 2001.

Editor’s Notes —

This section is derived from former §81-1-49 (Codes, 1942, § 5187; Laws, 1934, ch. 146).

Section7-7-2, as added by Laws, 1984, chapter 488, § 90, and amended by Laws, 1985, chapter 455, § 14, Laws 1986, chapter 499, § 1, provided, at subsection (2), that the words “state auditor of public accounts,” “state auditor”, and “auditor” appearing in the laws of the state in connection with the performance of auditor’s functions transferred to the state fiscal management board, shall mean the state fiscal management board. Thereafter, Laws, 1989, chapter 532, § 2, amended §7-7-2 to provide that the words “State Auditor of Public Accounts,” “State Auditor” and “Auditor” appearing in the laws of this state in connection with the performance of Auditor’s functions shall mean the State Fiscal Officer. Subsequently, Laws, 1989, ch. 544, § 17, codified as §27-104-6, provides that wherever the term “State Fiscal Officer” appears in any law it shall mean “Executive Director of the Department of Finance and Administration”.

Amendment Notes —

The 2001 amendment reenacted the section without change.

§ 81-1-111. Forms and record books to be supplied.

For the purpose of carrying into effect the provisions of Title 81 of the Mississippi Code of 1972, the commissioner shall provide the necessary forms. All reports received by the commissioner shall be preserved by him in the department. The State Treasurer is authorized to provide forms and record books for the office of the commissioner, and such forms and record books shall be paid for upon order of the commissioner out of the department maintenance fund.

HISTORY: Laws, 1980, ch. 312, § 29; reenacted, Laws, 1982, ch. 303, § 29; Laws, 1990 Ex Sess, ch. 46, § 28; Laws, 1993, ch. 442, § 30; Laws, 1994, ch. 622, § 31; reenacted without change, Laws, 1997, ch. 497, § 30; reenacted without change, Laws, 2001, ch. 410, § 30, eff from and after July 1, 2001.

Editor’s Notes —

This section is derived from former §81-1-51 (Codes, 1942, § 5187; Laws, 1934, ch. 146).

Amendment Notes —

The 2001 amendment reenacted the section without change.

Cross References —

Department Maintenance Fund, see §81-1-107.

§ 81-1-113. Annual report to legislature.

The commissioner shall make a full report as required by law of other state officers, to the Legislature at each regular session thereof, of the proceedings in and work of the department and of all charters issued and all banks closed for insolvency or voluntarily liquidated. He shall submit with each report such recommendations with reference to the department as he may consider appropriate. The report shall show fully, separately, and in detail the work done and the expenses incurred by the commissioner and each examiner.

HISTORY: Laws, 1980, ch. 312, § 30; reenacted, Laws, 1982, ch. 303, § 30; Laws, 1990 Ex Sess, ch. 46, § 29; Laws, 1993, ch. 442, § 31; Laws, 1994, ch. 622, § 32; reenacted without change, Laws, 1997, ch. 497, § 31; reenacted without change, Laws, 2001, ch. 410, § 31, eff from and after July 1, 2001.

Editor’s Notes —

This section is derived from former §81-1-53 (Codes, 1942, § 5189; Laws, 1934, ch. 146; 1970, ch. 520, § 1).

Amendment Notes —

The 2001 amendment reenacted the section without change.

Cross References —

Duty to incorporate exhibits and schedules of receipts and disbursements for each year into annual report, see §81-1-71.

§ 81-1-115. Fees for filing documents and issuing certificates.

  1. The department shall charge and collect for:
    1. Filing articles of incorporation of banking corporations and credit unions, and issuing a certificate of incorporation, a minimum fee of Five Hundred Dollars ($500.00) up to a maximum fee of Two Thousand Five Hundred Dollars ($2,500.00), as fixed by the commissioner.
    2. Filing articles of merger when the resulting bank or credit union is a state bank or credit union, a minimum fee of Five Hundred Dollars ($500.00) up to a maximum fee of Two Thousand Five Hundred Dollars ($2,500.00), as fixed by the commissioner.
    3. Filing an application for conversion from a national bank, state or federal thrift, or credit union to a state bank or credit union, a minimum fee of Five Hundred Dollars ($500.00) up to a maximum fee of Two Thousand Five Hundred Dollars ($2,500.00), as fixed by the commissioner.
    4. Filing an application for a branch bank or credit union, a minimum fee of Two Hundred Fifty Dollars ($250.00) up to a maximum fee of One Thousand Five Hundred Dollars ($1,500.00), as fixed by the commissioner.
    5. Filing an application for a Loan Production Office (LPO), a minimum fee of Fifty Dollars ($50.00) up to a maximum fee of Five Hundred Dollars ($500.00), as fixed by the commissioner.
    6. Filing an application for an electronic terminal, a minimum fee of Two Hundred Fifty Dollars ($250.00) up to a maximum fee of One Thousand Five Hundred Dollars ($1,500.00), as fixed by the commissioner.
    7. Filing an application to establish out-of-state branch offices by in-state banks and credit unions, a minimum fee of Five Hundred Dollars ($500.00) up to a maximum fee of One Thousand Five Hundred Dollars ($1,500.00), as fixed by the commissioner.
    8. Filing an application to establish in-state branch offices by an out-of-state bank or credit union, a minimum fee of Five Hundred Dollars ($500.00) up to a maximum fee of One Thousand Five Hundred Dollars ($1,500.00), as fixed by the commissioner.
    9. Filing an application to establish a branch of a foreign bank, a minimum fee of Five Hundred Dollars ($500.00) up to a maximum fee of Two Thousand Five Hundred Dollars ($2,500.00), as fixed by the commissioner.
  2. The commissioner shall publish a schedule of fees applicable to all banks within his jurisdiction.

HISTORY: Laws, 1980, ch. 312, § 31; reenacted, Laws, 1982, ch. 303, § 31; Laws, 1990 Ex Sess, ch. 46, § 30; Laws, 1993, ch. 442, § 32; Laws, 1994, ch. 622, § 33; Laws, 1997, ch. 542, § 1; reenacted and amended, Laws, 1997, ch. 497, § 32; reenacted without change, Laws, 2001, ch. 410, § 32, eff from and after July 1, 2001.

Joint Legislative Committee Note —

Section 1 of ch. 542, Laws, 1997, effective from and after passage (approved April 10, 1997) amended this section. Section 32 of ch. 497, Laws, 1997, reenacted and amended this section, effective July 1, 1997. As set out above, this section reflects the language of Section 32 of ch. 497, Laws, 1997, pursuant to Section 1-3-79 which provides that whenever the same section of law is amended by different bills during the same legislative session, the amendment with the latest effective date shall supersede all other amendments to the same section taking effect earlier.

Editor’s Notes —

This section is derived from former §81-1-55 (Laws, 1978, ch. 310, § 1).

Amendment Notes —

The 2001 amendment reenacted the section without change.

Cross References —

Credit Unions, see §§81-13-1 et seq.

§ 81-1-117. Transfer of functions.

Upon March 21, 1980, the Department of Bank Supervision and the office of State Comptroller, as created by Section 81-1-1, and the State Banking Board, as created by Section 81-3-13, are hereby abolished. The functions, duties and responsibilities of the Department of Bank Supervision, the office of State Comptroller and the State Banking Board shall be assumed by the Department of Banking and Consumer Finance, the Commissioner of Banking and Consumer Finance, and the State Board of Banking Review, respectively, as provided in this chapter. All assets, funds, contractual rights and obligations, records, equipment and property rights which are now vested in the Department of Bank Supervision, the office of State Comptroller and the State Banking Board are hereby vested in the Department of Banking and Consumer Finance, the Commissioner of Banking and Consumer Finance, and the State Board of Banking Review, respectively.

HISTORY: Laws, 1980, ch. 312, § 1; reenacted, Laws, 1982, ch. 303, § 32; Laws, 1990 Ex Sess, ch. 46, § 31; Laws, 1993, ch. 442, § 33; reenacted and amended, Laws, 1994, ch. 622, § 34; reenacted without change, Laws, 1997, ch. 497, § 33; reenacted without change, Laws, 2001, ch. 410, § 33, eff from and after July 1, 2001.

Amendment Notes —

The 2001 amendment reenacted the section without change.

§ 81-1-119. Notice of charges; temporary cease and desist order.

  1. If any person or state bank is engaging in, or has engaged in, or is about to engage in, any unsafe or unsound practice, or unfair and discriminatory practice, in conducting the bank’s business, or violation of any other law, rule, regulation, order or condition imposed in writing by the commissioner, the commissioner may issue a notice of charges to such person or institution. A notice of charges shall specify the acts alleged to sustain a cease and desist order, and state the time and place at which a hearing shall be held. A hearing before the commissioner on the charges shall be held no earlier than seven (7) days, and no later than fifteen (15) days, after issuance of the notice. The charged institution is entitled to a further extension of seven (7) days upon filing a request with the commissioner. The commissioner may also issue a notice of charges if he has reasonable grounds to believe that any person or bank is about to engage in any unsafe or unsound business practice, or any violation of this chapter, or any other law, rule, regulation or order. If, by a preponderance of the evidence, it is shown that any person or bank is engaged in, or has been engaged in, or is about to engage in, any unsafe or unsound business practice, or unfair and discriminatory practice or any violation of this chapter, or any other law, rule, regulation or order, a cease and desist order shall be issued which shall be permanently binding upon the person or institution until terminated by the commissioner.
  2. If any person or state bank is engaging in, has engaged in, or is about to engage in any unsafe or unsound practice, or unfair and discriminatory practice, in conducting the bank’s business, or any violation of any law, rules, regulation, order or condition imposed in writing by the commissioner, and the commissioner has determined that immediate corrective action is required, the commissioner may issue a temporary cease and desist order without prior notice. A temporary cease and desist order shall be effective immediately upon issuance for a period of fifteen (15) days, and may be extended once for a period of fifteen (15) days. Such an order shall state its duration on its face and the words “Temporary Cease and Desist Order.” A hearing before the commissioner shall be held within the time that the order remains effective, at which time a temporary order may be dissolved or made permanent.

HISTORY: Laws, 1996, ch. 400, § 1; brought forward, Laws, 1997, ch. 497, § 34; brought forward, Laws, 2001, ch. 410, § 34, eff from and after July 1, 2001.

Amendment Notes —

The 2001 amendment brought the section forward without change.

§ 81-1-121. Bank violation; civil penalty.

  1. Except as otherwise provided, any bank which is found to have violated any provision of Chapters 1 through 9, Title 81, Mississippi Code of 1972, may be ordered to pay a civil penalty not to exceed Twenty Thousand Dollars ($20,000.00). Any bank which is found to have violated or failed to comply with any cease and desist order issued under the authority of this chapter may be ordered to pay a civil penalty not to exceed Twenty Thousand Dollars ($20,000.00) for each day that the violation or failure to comply continues.
  2. To enforce the provisions of this section, the commissioner is authorized to assess such penalty and to appear in a court of competent jurisdiction and to move the court to order payment of the penalty. Prior to the assessment of the penalty, a hearing shall be held by the commissioner.
  3. Nothing in this section shall prevent anyone damaged by a state bank from bringing a separate cause of action in a court of competent jurisdiction.

HISTORY: Laws, 1996, ch. 400, § 2; brought forward, Laws, 1997, ch. 497, § 35; brought forward, Laws, 2001, ch. 410, § 35, eff from and after July 1, 2001.

Amendment Notes —

The 2001 amendment brought the section forward without change.

§ 81-1-123. Director, officer or employee violation; civil penalty.

  1. Any person, whether a director, officer or employee, who is found to have violated any provision of Chapters 1 through 9, Title 81, Mississippi Code of 1972, whether willfully, or as a result of gross negligence, gross incompetency or recklessness, may be ordered to pay a civil penalty not to exceed Five Thousand Dollars ($5,000.00) per violation. Any person who is found to have violated or failed to comply with any cease and desist order issued under the authority of this chapter may be ordered to pay a civil penalty not to exceed Five Thousand Dollars ($5,000.00) per violation for each day that the violation or failure to comply continues.
  2. To enforce the provisions of this section, the commissioner is authorized to assess such penalty, to appear in a court of competent jurisdiction and to move the court to order payment of the penalty. Prior to the assessment of the penalty, a hearing shall be held by the commissioner.
  3. Nothing in this section shall prevent anyone damaged by a director, officer or employee of a state bank from bringing a separate cause of action in a court of competent jurisdiction.

HISTORY: Laws, 1996, ch. 400, § 3; brought forward, Laws, 1997, ch. 497, § 36; brought forward, Laws, 2001, ch. 410, § 36, eff from and after July 1, 2001.

Amendment Notes —

The 2001 amendment brought the section forward without change.

§ 81-1-125. Commissioner to issue orders for supervisory control with regard to banks.

  1. Whenever the commissioner determines that a solvent bank is conducting its business in an unsafe or unsound manner, or in any fashion which threatens the financial integrity or sound operation of the bank, the commissioner may serve a notice of charges on the bank, requiring it to show why it should not be placed under supervisory control. Such notice of charges shall specify the grounds for supervisory control, and set the time and place for a hearing. A hearing before the commissioner pursuant to such notice shall be held within fifteen (15) days after issuance of the notice of charges.
  2. If, after the hearing provided above, the commissioner determines that supervisory control of the bank is necessary to protect the bank’s members, customers, stockholders or creditors, or the general public, the commissioner shall issue an order taking supervisory control of the bank.
  3. If the order taking supervisory control becomes final, the commissioner may appoint an agent to supervise and monitor the operations of the bank during the period of supervisory control. During the period of supervisory control, the bank shall act in accordance with such instructions as may be given by the commissioner, directly or through his supervisory agent, and shall not fail to act, except when to do so would violate an outstanding cease and desist order.
  4. Within one hundred eighty (180) days of the date the order taking supervisory control becomes final, the commissioner shall issue an order approving a plan for the termination of supervisory control. The plan may provide for:
    1. The issuance by the bank of capital stock;
    2. The appointment of one or more officers and/or directors;
    3. The reorganization, merger or consolidation of the bank;
    4. The dissolution and liquidation of the bank;
    5. Other such measures as determined by the commissioner.

      The order approving the plan shall not take effect until thirty (30) days after issuance during which time period an appeal may be filed in a court of competent jurisdiction.

  5. All costs of this proceeding shall be paid by the bank.
  6. For the purpose of this section, an order shall be deemed final if:
    1. No appeal is filed within the specific time allowed for the appeal; or
    2. All judicial appeals are exhausted.
  7. If a bank is insolvent, the provisions of Chapter 9 of Title 81, Mississippi Code of 1972, shall apply.

HISTORY: Laws, 1996, ch. 400, § 4; brought forward, Laws, 1997, ch. 497, § 37; brought forward, Laws, 2001, ch. 410, § 37, eff from and after July 1, 2001.

Amendment Notes —

The 2001 amendment brought the section forward without change.

§ 81-1-127. Commissioner to issue notice of charges to employee who has participated in any violation.

  1. If, in the commissioner’s opinion, any director, officer or employee of any bank has participated in, or consented to, any violation of any law, rule, regulation or order, or any unsafe or unsound business practice in the operation of any bank, or any insider loan not specifically authorized by law, or any repeated violation of, or failure to comply with, any bank’s bylaws, the commissioner may serve a written notice of charges upon such director, officer or employee and the bank, stating his intent to remove such director, officer or employee. Such notice shall specify the alleged conduct of such director, officer or employee and shall state the place for a hearing before the commissioner. A hearing shall be held no earlier than fifteen (15) days, but no later than thirty (30) days, after the notice of charges is served. If, after the hearing, the commissioner determines that the charges asserted have been proven by a preponderance of the evidence, the commissioner may issue an order removing the director, officer or employee in question. Such an order shall be effective upon issuance and may include the entire board of directors or all of the officers of the bank.
  2. If it is determined that any director, officer or employee of any bank has knowingly participated in, or consented to, any violation of any law, rule, regulation or order, or engaged in any unsafe or unsound business practice in the operation of any bank, or any repeated violation of, or failure to comply with, any bank’s bylaws, and that as a result, a situation exists requiring immediate corrective action, the commissioner may issue an order temporarily removing such person or persons pending a hearing. Such an order shall state its duration on its face and the words “Temporary Order of Removal” and shall be effective upon issuance for a period of fifteen (15) days. Such order may be extended once for a period of fifteen (15) days. A hearing must be held within ten (10) days of the expiration of a temporary order, or any extension thereof, at which time a temporary order may be dissolved or converted to a permanent order.
  3. Any removal pursuant to subsection (1) or (2) of this section shall be effective in all respects as if such removal has been made by the board of directors and the members or stockholders of the bank in question.
  4. Without the prior written approval of the commissioner, no director, officer or employee permanently removed pursuant to this section or otherwise removed by a federal agency of proper authority shall be eligible to be elected, reelected or appointed to any position as a director, officer or employee of that bank, nor shall such director, officer or employee be eligible to be elected to or retain a position as a director, officer or employee of any other state bank, bank subsidiary, bank holding company or any other entity regulated by the department.
  5. The commissioner may promulgate rules or regulations and/or cooperate with any other state or federal administrative agencies in order to enforce the prohibitions of this section.

HISTORY: Laws, 1996, ch. 400, § 5; brought forward, Laws, 1997, ch. 497, § 38; brought forward, Laws, 2001, ch. 410, § 38; Laws, 2014, ch. 359, § 1, eff from and after July 1, 2014.

Amendment Notes —

The 2001 amendment brought the section forward without change.

The 2014 amendment inserted “or otherwise removed by a federal agency of proper authority” in (4); added (5).

§ 81-1-129. Appeal of cease and desist order.

Any person or state bank against whom a cease and desist order is issued or a fine is imposed may have such order or fine reviewed by a court of competent jurisdiction. Except as otherwise provided, an appeal may be made only within thirty (30) days of the issuance of the order or the imposition of the fine, whichever is later.

HISTORY: Laws, 1996, ch. 400, § 6; brought forward, Laws, 1997, ch. 497, § 39; brought forward, Laws, 2001, ch. 410, § 39, eff from and after July 1, 2001.

Amendment Notes —

The 2001 amendment brought the section forward without change.

§ 81-1-131. Fines and penalties; reimbursement.

No person who is fined or penalized for a violation of any criminal provision of this chapter shall be reimbursed or indemnified in any fashion by the bank for such fine or penalty.

HISTORY: Laws, 1996, ch. 400, § 7; brought forward, Laws, 1997, ch. 497, § 40; brought forward, Laws, 2001, ch. 410, § 40, eff from and after July 1, 2001.

Amendment Notes —

The 2001 amendment brought the section forward without change.

§ 81-1-133. Cumulative penalties, fines and remedies.

All penalties, fines and remedies provided by this chapter shall be cumulative.

HISTORY: Laws, 1996, ch. 400, § 8; brought forward, Laws, 1997, ch. 497, § 41; brought forward, Laws, 2001, ch. 410, § 41, eff from and after July 1, 2001.

Amendment Notes —

The 2001 amendment brought the section forward without change.

§ 81-1-135. Consumer industry licensees required to participate in multistate licensing system.

  1. The Legislature finds that a uniform multistate administration of a multistate licensing system for consumer industry licensees regulated by the Department of Banking and Consumer Finance is consistent with both the public interest and the provisions of law regulating those licensees; therefore, the Commissioner of Banking and Consumer Finance may require consumer industry licensees to participate in a multistate licensing system.
  2. Nothing in this section shall authorize the commissioner to require any person exempt from licensure under the provisions of law regulating consumer industry licensees to participate in the multistate licensing system.
  3. The commissioner may establish, by rule, regulation or order, requirements as necessary, including, but not limited to:
    1. Background checks for:
      1. Criminal history through fingerprint or other databases;
      2. Civil or administrative records;
      3. Credit history; or
      4. Any other information as deemed necessary by the multistate licensing system.
    2. The payment of fees to apply for or renew licenses through the multistate licensing system.
    3. The setting or resetting as necessary of renewal or reporting dates; and
    4. Requirements for amending or surrendering a license or any other such activities as the commissioner deems necessary for participation in the multistate licensing system.
  4. Any person engaged in activity that requires licensure pursuant to this section shall utilize the multistate licensing system for application, renewal, amendment, surrender and any other activity as the commissioner may require, and shall pay all applicable charges to utilize the multistate licensing system.
  5. The commissioner is authorized to establish relationships or contacts with the multistate licensing system or other entities designated by the multistate licensing system to collect and maintain records and process transaction fees or other fees related to licensees.

HISTORY: Laws, 2011, ch. 443, § 1, eff from and after July 1, 2011.

§ 81-1-137. Financial literacy programs for the public.

The department may establish programs for the education of the public with respect to financial literacy, any provision of this title, or any industry regulated by the department. The department and the Office of Consumer Protection under its authority to establish programs for the education of the public under Section 75-24-21 may coordinate their efforts for the education programs authorized for the department under this section.

HISTORY: Laws, 2014, ch. 359, § 3, eff from and after July 1, 2014.

Chapter 3. Incorporation and Organization of Banks

§ 81-3-1. Definition of words “bank,” “corporation,” “eligible bank,” as used in title.

Whenever the word “bank” is used in any statute, unless the context clearly shows that it is intended to be limited in its application to a particular character of bank, it shall include trust companies, savings banks, branches of banks and trust companies, and all other institutions subject to the provisions of this title. The term “corporation,” when used in this title, or “trust company” when used in this title, shall be construed and held to embrace every character of bank, branch bank, trust company or any branch thereof, which is subject to the jurisdiction of the Department of Banking and Consumer Finance. The term “eligible banks,” when used in this title, means an institution which is well capitalized as defined by regulations of the Federal Deposit Insurance Corporation, has examination ratings of two (2) or higher, has Community Reinvestment Act (CRA) ratings of satisfactory or higher, and has no supervisory enforcement actions pending.

HISTORY: Codes, 1942, § 5154; Laws, 1934, ch. 146; Laws, 1997, ch. 542, § 2, eff from and after passage (approved April 10, 1997).

Cross References —

Acceptance of letters of credit under the Mississippi Superconducting Super Collider Act, see §57-67-37.

Mississippi Major Economic Impact Act, application of section to, see §57-75-21.

Use of words “bank,” “banking,” “bankers,” “trust company,” see §81-3-3.

State-chartered banks having and possessing the rights, powers, privileges, immunities, duties and obligations of a national bank having its principal place of business in this state, irrespective of any conflict with the provisions of this section, see §81-5-1(9).

RESEARCH REFERENCES

ALR.

Wills: what constitutes “bank,” “checking,” or “savings” account, within meaning of bequest. 31 A.L.R.4th 688.

Am. Jur.

10 Am. Jur. 2d, Banks and Financial Institutions §§ 1, 2, 3.

CJS.

9 C.J.S., Banks and Banking § 3.

§ 81-3-3. Use of words “bank,” “banking,” “bankers,” “trust company,” etc.; supervision and assessment of banks.

Every banking corporation organized under the laws of this state shall include the word “bank” or “banking” in its name. No corporation hereafter organized shall include in its name the words “bank,” “banker,” “bankers,” “banking” or “trust company,” or any of them, or any combination thereof, or any words of similar import, unless such corporation shall, by the express provisions of its charter, be limited solely to the doing of a banking or trust business, or a combination of banking and trust business as contemplated in this chapter; and all such corporations shall be incorporated and organized under and pursuant to the terms of this chapter providing for the incorporation of banking corporations and not otherwise.

Every corporation organized under the laws of this state for the purpose of conducting or carrying on a commercial banking business, or the business of a savings bank, or trust company, or the exercise of trust powers as defined in this title, or any combination thereof, shall be subject to supervision by the department of bank supervision and the state comptroller, and to assessments for the maintenance of said department as provided by law.

HISTORY: Codes, 1942, § 5155; Laws, 1934, ch. 146; Laws, 1958, ch. 161.

Editor’s Notes —

Section 81-1-57 provides that wherever the words “Department of Bank Supervision” or “department” are used when referring to the Department of Bank Supervision, they shall be construed to mean the Department of Banking and Consumer Finance.

Cross References —

Creation of department of banking and consumer finance, see §81-1-59.

Definition of word “bank,” see §81-3-1.

State-chartered banks having and possessing the rights, powers, privileges, immunities, duties and obligations of a national bank having its principal place of business in this state, irrespective of any conflict with the provisions of this section, see §81-5-1(9).

State trust company organization requirements, see §81-27-4.101 et seq.

§ 81-3-5. Incorporation of banks.

Five or more persons of full age and of good moral and sound business character may organize themselves into a banking corporation. Banking corporations may be created for the purpose of conducting and carrying on a bank and trust company business, such trust company business to be limited as herein provided, and to establish offices of loan and deposit to be known as savings banks, or to establish banks having departments for carrying on all of the above classes of business; and said banking corporations may, under the provisions of the banking laws of Mississippi, establish branch banks and branch offices within territorial limitations as hereinafter provided in Chapter 7 of this title. No private individual, or partnership, or association of persons other than a corporation shall be allowed to conduct any type of banking business within this state.

HISTORY: Codes, 1942, § 5156; Laws, 1934, ch. 146.

Cross References —

State-chartered banks having and possessing the rights, powers, privileges, immunities, duties and obligations of a national bank having its principal place of business in this state, irrespective of any conflict with the provisions of this section, see §81-5-1(9).

Formation of corporations to hold bank assets, see §81-5-29.

RESEARCH REFERENCES

Am. Jur.

10 Am. Jur. 2d, Banks and Financial Institutions §§ 120-181, 109-116, 159.

CJS.

9 C.J.S., Banks and Banking §§ 33, 34.

§ 81-3-7. Articles of incorporation.

The articles of incorporation of every banking corporation shall be signed and acknowledged before an officer authorized by the laws of this state to take acknowledgments and shall specify:

The name assumed by such corporation which shall be in no material respect similar to the name of any other corporation organized under the laws of this state.

The county and city, town or village where such corporation will be domiciled and conduct its business.

The nature of its business, whether that of a commercial bank, savings bank, trust company or any combination thereof.

That the amount of capital stock shall be divided into shares of not less than One Dollar ($1.00) each.

The names and places of residence of the stockholders and the number of shares held by each of them.

The period for which the corporation is organized which shall not exceed ninety-nine (99) years, but which may be renewed for additional periods of ninety-nine (99) years each, as set out in Section 81-3-15.

The articles of incorporation shall be executed in triplicate, and after the proper incorporation fee has been paid, and the articles approved by the Secretary of State, the State Comptroller, the Attorney General and the Governor, one (1) copy shall be filed in the office of the Secretary of State and recorded there as required by law; one (1) copy in the office of the Department of Bank Supervision and one (1) copy filed for record in the office of the chancery clerk of the county in which the banking corporation is domiciled, and then returned to said banking corporation and kept in its files.

Every banking corporation shall adopt appropriate bylaws to govern its operation, which shall harmonize with the provisions of its articles of incorporation and the laws of the state. Every banking corporation shall designate a person to serve as president and a person to serve as cashier.

When the period of existence of a banking corporation heretofore created for a period of fifty (50) years shall expire, if such banking corporation shall continue to do business thereafter for a period of ninety (90) days, the same shall operate as an acceptance of an extension of the life of such banking corporation to a full period of ninety-nine (99) years from the date of the original charter thereof, and such banking corporation shall continue in existence as a de jure corporation as fully and completely as if the charter thereof had been thus amended prior to the end of the original period of fifty (50) years.

HISTORY: Codes, 1942, § 5157; Laws, 1934, ch. 146; Laws, 1936, ch. 165; Laws, 1954, ch. 167; Laws, 1979, ch. 406; Laws, 1994, ch. 320, § 2, eff from and after July 1, 1994.

Editor’s Notes —

Section 81-1-57 provides that wherever the words “Department of Bank Supervision” or “department” are used when referring to the Department of Bank Supervision, they shall be construed to mean the Department of Banking and Consumer Finance.

Section 81-1-117 abolished the office of state comptroller, and provided that the functions, duties and responsibilities would be assumed by the commissioner of banking and consumer finance.

Cross References —

Filing fee for articles of incorporation, see §81-1-115.

Procedures for approval of certificate of incorporation, see §81-3-13.

State-chartered banks having and possessing the rights, powers, privileges, immunities, duties and obligations of a national bank having its principal place of business in this state, irrespective of any conflict with the provisions of this section, see §81-5-1(9).

Articles of incorporation of savings associations, see §81-12-25.

State trust company organization requirements, see §81-27-4.101 et seq.

JUDICIAL DECISIONS

1. In general.

2. Invalidity of charter as defense.

1. In general.

Where a state banking board adopted a motion that a certain bank offer to the proponents of a new bank who have sought authority to incorporate in such town, 49 per cent of the presently outstanding capital stock of the certain bank at book value as of a certain date, and where the board recommended charter for new bank within 30 days if no agreement could be arrived at, the order was invalid as a conditional order, offer or judgment beyond the board’s jurisdiction and power and the state banking department was the only legal entity authorized to make a final determination. Oliphant v. Carthage Bank, 224 Miss. 386, 80 So. 2d 63, 1955 Miss. LEXIS 504 (Miss. 1955).

Where the state banking board entered a nunc pro tunc order granting a certificate of authority to incorporate a new bank in a certain town if the present bank in the town did not sell or offer to sell to the proponents of the new bank, 49 per cent of the presently outstanding capital stock, within 30 days from the previous order recommending the incorporation, the nunc pro tunc order was invalid on the ground that there was no notice to the present bank of the board’s meeting at which the order was made. Oliphant v. Carthage Bank, 224 Miss. 386, 80 So. 2d 63, 1955 Miss. LEXIS 504 (Miss. 1955).

2. Invalidity of charter as defense.

In suit by minority stockholders against directors for losses resulting from their negligence, directors cannot plead invalidity of charter. Boyd v. Applewhite, 121 Miss. 879, 84 So. 16, 1920 Miss. LEXIS 128 (Miss. 1920).

RESEARCH REFERENCES

Am. Jur.

3A Am. Jur. Legal Forms 2d, Banks §§ 38:29 et seq. (formation; bylaws and rules).

3B Am. Jur. Legal Forms 2d, Banks §§ 38:21, 38:22.

Law Reviews.

1979 Mississippi Supreme Court Review: Corporate & Commercial Law. 50 Miss. L. J. 741.

§ 81-3-9. Number of directors; payment for capital stock; increases in authorized but unissued capital stock.

Every banking corporation shall have at least five (5) directors, and before transacting any business its entire capital stock shall be paid in full in cash except as herein otherwise provided.

Any banking corporation, with the approval of the state comptroller, by amendment to its articles of incorporation approved by the affirmative vote of stockholders owning two-thirds (2/3) of the capital stock of the banking corporation entitled to vote, at a meeting setting forth the purpose thereof, may authorize an increase in the capital stock of the banking corporation in the category of authorized but unissued capital stock, either with or without preemptive rights, provided that the total authorized amount of such authorized but unissued capital stock shall not exceed fifteen percent (15%) of the amount issued and outstanding capital stock of such banking corporation entitled to vote on the amendment authorizing such authorized but unissued capital stock. Authorized but unissued capital stock may be issued, from time to time, as stock dividends or for such other purposes and considerations as may be approved by the stockholders, the board of directors of the banking corporation and by the state comptroller.

HISTORY: Codes, 1942, § 5158; Laws, 1934, ch. 146; Laws, 1979, ch. 407, eff from and after July 1, 1979.

Editor’s Notes —

Section 81-1-117 abolished the office of state comptroller and provided that the functions, duties and responsibilities would be assumed by the commissioner of banking and consumer finance.

Cross References —

Amendment of articles of incorporation, generally, see §81-3-15.

State-chartered banks having and possessing the rights, powers, privileges, immunities, duties and obligations of a national bank having its principal place of business in this state, irrespective of any conflict with the provisions of this section, see §81-5-1(9).

JUDICIAL DECISIONS

1. In general.

A bank was not authorized, under former Banking Act (§ 3786, Code 1930), to accept a note in payment of a subscription for its capital stock, on the theory that a promissory note was commercial paper, and that the capital of a bank might be in commercial paper. Merchants Bank & Trust Co. v. Walker, 192 Miss. 737, 6 So. 2d 107, 1942 Miss. LEXIS 15 (Miss. 1942).

A statutory provision (Code 1942, § 5327) that a note, obligation or security given or transferred by a subscriber for stock in any corporation should not be taken or held as payment for capital stock of the company was applicable to a note given to a bank in payment for shares of its capital stock, which had been authorized and issued after the corporation was organized and became a going concern. Merchants Bank & Trust Co. v. Walker, 192 Miss. 737, 6 So. 2d 107, 1942 Miss. LEXIS 15 (Miss. 1942).

§ 81-3-11. Capital stock and surplus required.

  1. No banking corporation shall be permitted to operate in the State of Mississippi under the provisions of this chapter unless it has the minimum capital of Two Million Dollars ($2,000,000.00) or any additional amounts required by the supervising federal regulatory agencies. However, this requirement of capital shall not apply to banks in operation in this state before July 1, 1994. At any time that the commissioner finds that an operating bank has an insufficient amount of capital, it shall be his duty to call upon such bank to restore the capital to an amount to be determined to be adequate to safeguard the depositors of the bank.
  2. For the purpose of strengthening its capital structure, every banking corporation organized under the laws of this state shall, except as otherwise provided herein, at the close of business each year set aside to the credit of a separate surplus account, to be denominated on its books “Earned Surplus,” an amount not less than twenty-five percent (25%) of its net earnings, after providing for the payment of dividends on its preferred stock, if any, until the “Earned Surplus” account on its books shall amount to a sum equal to three (3) times the total of its common and preferred stock. However, any bank having at the close of the business year a ratio of total deposits to total capital, surplus and earned surplus not in excess of a ratio of Ten Dollars ($10.00) of deposits to One Dollar ($1.00) of total capital (such deposits to be the average of the deposits shown by all of the calls for the business year and such capital to include all stock, surplus and earned surplus) shall be required to set aside twenty-five percent (25%) of its earnings only to the extent necessary to cause its “Earned Surplus” account to equal its total capital. When such ratio of total deposits to total capital of any bank at the close of business any year does not exceed that specified above and the “Earned Surplus” account is equal to or more than the amount of its total capital, then such bank shall not be required to set aside twenty-five percent (25%) of its earnings for that year to the credit of its “Earned Surplus” account, but may so set aside any part of its earnings until its “Earned Surplus” account is equal to three (3) times its total capital. The net earnings of every bank set aside to its “Earned Surplus” account shall be exempt from all state, county, municipal, levee district and other ad valorem taxes. Every national banking association doing business in this state which shall comply with the provisions hereof, shall be entitled to the same exemption from taxation on its earned surplus and to the same rights and privileges hereby given to state banks.

    “Earned Surplus” as referred to in this chapter shall be construed to mean only the earned surplus account as shown on the books of the bank on the effective date of this chapter and such earnings as may thereafter be credited to such account. Surplus actually carried on the books of the bank on April 2, 1934, shall remain taxable, and if charged off for any purpose other than to transfer it to taxable common stock, it shall be restored either out of the earned surplus account or from earnings. But if the state comptroller, or in the case of a national bank, the comptroller of the currency, shall determine that on April 2, 1934, there were actually existing losses among the assets of a bank and that the surplus shown on the books of such bank was not actually worth the amount at which it was then being carried, he may issue his certificate to the bank showing the actual value of its surplus on April 2, 1934, and the bank may reduce the amount thereof to the actual value as shown by such certificate and shall not be required to restore it.

    The paid-in surplus of any bank derived from sale of shares of its capital stock after January 1, 1961, shall be considered as earned surplus in an amount not to exceed the common stock and shall be treated as earned surplus for the purpose of ad valorem taxation.

    In rendering the annual statement required by section 27-35-35, Code of 1972, banks may exclude from the value of their shares the total “earned surplus” as shown on their books, and such earned surplus shall not be taken into consideration by the assessing officers or equalizing authority, in arriving at the amount of the personal assessment.

HISTORY: Codes, 1942, § 5159; Laws, 1934, ch. 146; Laws, 1944, ch. 254; Laws, 1948, ch. 204, § 1; Laws, 1966, ch. 241, § 1; Laws, 1968, ch. 256, § 1; Laws, 1994, ch. 320, § 8, eff from and after July 1, 1994.

Editor’s Notes —

Section 81-1-117 abolished the office of state comptroller and provided that the functions, duties and responsibilities would be assumed by the commissioner of banking and consumer finance.

Cross References —

Tax assessment of banks, see §§27-35-9,27-35-11,27-35-35.

State-chartered banks having and possessing the rights, powers, privileges, immunities, duties and obligations of a national bank having its principal place of business in this state, irrespective of any conflict with the provisions of this section, see §81-5-1(9).

Issuance of preferred stock, see §81-5-23.

Capital of credit unions, see §81-13-35.

JUDICIAL DECISIONS

1. In general.

Bank’s “capital stock and surplus” is aggregate true value of its assets, including lands and personal property; bank’s “capital stock and surplus” for taxation is difference between aggregate true value of realty and total true value of assets, including land and personalty. Board of Sup'rs v. Riverside Bank, 158 Miss. 653, 131 So. 80, 1930 Miss. LEXIS 97 (Miss. 1930).

RESEARCH REFERENCES

ALR.

Validity, construction, and effect of statutory provisions concerning capital requisites of state incorporation of bank. 79 A.L.R.3d 1190.

Am. Jur.

10 Am. Jur. 2d, Banks and Financial Institutions §§ 285 et seq.

§ 81-3-12. State board of banking review; members; appointment; compensation; ineligibility to consider certain matters; meetings and hearings.

  1. There is created the State Board of Banking Review, which shall be composed of five (5) members appointed by the Governor as provided in this section, one (1) of whom shall be from the First Supreme Court District, one (1) of whom shall be from the Second Supreme Court District, one (1) of whom shall be from the Third Supreme Court District, and two (2) of whom shall be from the state at large. The members appointed from the state at large shall be designated as representatives of the banks and shall be active executive officers or directors of state chartered banks with actual practical experience of at least five (5) years therein. The members appointed from each Supreme Court District shall be persons knowledgeable in economic affairs and of recognized ability in a trade or business, with at least three (3) years’ actual experience therein, but shall not presently be officers or directors in any banking corporation, shall not have been officers or directors in any banking corporation for the past five (5) years immediately prior to their appointment to the board, shall not become officers or directors of any banking corporation while serving on the board, and shall not be the beneficial owner, directly or indirectly, of five percent (5%) or more of the capital stock in any banking corporation; such persons shall be designated representatives of borrowers and depositors. Each member shall be eligible for reappointment at the discretion of the Governor. The board shall elect from its number a chairman and a vice chairman. Each member of the board shall be a citizen of the United States, a resident of the State of Mississippi and a qualified elector therein, of integrity and sound and nonpartisan judgment. Each member shall qualify by taking the oath of office and shall hold office until his successor is appointed and qualified.
  2. On March 21, 1980, the board shall be appointed as follows: The Governor shall appoint one (1) member from the Third Supreme Court District for a term of one (1) year, one (1) member from the Second Supreme Court District for a term of two (2) years, one (1) member from the First Supreme Court District for a term of three (3) years, one (1) member from the state at large for a term of four (4) years, and one (1) member from the state at large for a term of five (5) years. Upon the expiration of the foregoing terms, members shall be appointed by the Governor for terms of five (5) years. The Governor shall fill any vacancy in the above terms by appointment of a member for the unexpired term. All appointments shall be with the advice and consent of the Senate.
  3. The members of the board shall serve without compensation except that members shall be paid their actual and necessary expenses in connection with the performance of their duties as members of the board, including mileage, as authorized in Section 25-3-41, plus a per diem as is authorized by law while engaged in the performance of such duties. Such expenses, mileage and per diem allowance shall be paid out of the maintenance fund of the Department of Banking and Consumer Finance.
  4. If an application for authority to establish a bank, branch bank or branch office be filed with the commissioner for consideration from any municipality or county of which the member of the board who is a representative of the banks is a resident, or if such application is filed from any county in which the member’s bank has a branch bank or branch office, such member shall be ineligible to serve in consideration and determination of such application, and the commissioner shall certify such fact to the Governor who shall thereupon appoint another banker from the same geographical location as the member who is ineligible to serve on the board in the place and stead of such member during consideration of such application.
  5. In addition to its other duties and powers, the board may adopt reasonable rules or regulations, consistent with applicable provisions of law, concerning the conduct of board meetings and hearings and all formal and informal board procedures relating to such meetings and hearings. The board shall have authority, with respect to its hearings or meetings, to determine the order and form in which evidence may be presented and to impose reasonable time limitations on presentation of evidence.

HISTORY: Laws, 1980, ch. 312, § 32; Laws, 1980, ch. 560, § 28; reenacted, Laws, 1982, ch. 302, § 1; Laws, 1983, ch. 319; Laws, 1990 Ex Sess, ch. 46, § 33; Laws, 1993, ch. 442, § 34; reenacted and amended, Laws, 1994, ch. 622, § 35; reenacted without change, Laws, 1997, ch. 497, § 42; reenacted without change, Laws, 2001, ch. 374, § 1, eff from and after July 1, 2001.

Amendment Notes —

The 2001 amendment reenacted the section without change.

Cross References —

Supreme Court districts, see §9-3-1.

For provision authorizing uniform per diem compensation for officers and employees of state boards, commissions and agencies, see §25-3-69.

Department of Banking and Consumer Finance Maintenance Fund, see §81-1-107.

Board decisions regarding formation of new trust companies, see §81-27-4.103.

RESEARCH REFERENCES

ALR.

What is “branch bank” within statutes regulating establishment of branch banks. 23 A.L.R.3d 683.

§ 81-3-13. Certificate to incorporate and organize.

  1. Before any bank may be organized and formed, the prospective incorporators shall give notice to the Commissioner of Banking and Consumer Finance of their desire to engage in banking and apply for a certificate of authority to incorporate, and shall at the time file with the commissioner a copy of the proposed articles of incorporation, duly sworn to by one (1) of the prospective incorporators. The commissioner shall promptly give consideration to the application and make an examination of the proposed articles of incorporation to determine if they meet all requirements of law. The commissioner shall then make an investigation of the number of parent banks, branch banks, branch offices and branch facilities, and location thereof then serving the area in which the proposed new bank is to be located, the ratio of capital funds to total deposits therein, the record of earnings and condition of existing banks and what effect, if any, a new unit bank would have on them, the number of previous bank failures in the area and their liquidation record and banking history generally in the area, the population of the area wherein the proposed bank will be located and relation to number of banks operating therein, reasonable prospects of growth of the area and its financial resources and whether the same are static, progressive or retrogressive, expectation of profitable operation of the proposed new bank, and the morals and business character of the prospective incorporators and such further investigation to determine whether the public necessity requires that the proposed new bank should be chartered and permitted to operate.

    When the commissioner has completed the examination and made his investigation, he shall record his findings in writing and shall draw up his recommendations to the State Board of Banking Review, established in Section 81-3-12. At the request of the chairman, he shall thereupon, in writing, call a meeting of the board to give consideration to his findings and recommendations, such call to be issued at least ten (10) days in advance of the meeting. Such meetings shall be held within one hundred twenty (120) days from the date on which the prospective incorporators gave notice to the commissioner of their desire to engage in banking, applied for a certificate of authority to incorporate, and filed with the commissioner a copy of the proposed articles of incorporation. The commissioner shall at the same time give notice of the meeting of the board to the prospective incorporators of the proposed new bank and to any and all other interested persons and shall extend to them an invitation to be heard in writing or in person by the board.

    The board, at its meeting, shall consider the findings and recommendations of the commissioner and shall hear such oral testimony as he may wish to give, and shall also receive information and hear testimony from the prospective organizers of the proposed bank and from any and all other interested persons bearing upon the public necessity for the organization and operation of the new bank.

    After considering the record submitted to it by the commissioner and his oral testimony and considering such other information and evidence, either written or oral, which has come before it, the board shall decide if it has before it sufficient information and evidence upon which it can dispose of the application to form the new bank. If it is determined that evidence and information is not sufficient, then the board shall order the commissioner to secure such additional information and evidence as it may prescribe or shall request from the prospective incorporators and from other interested persons. The board shall thereupon set a date for a future meeting to be held before the expiration of the aforementioned one hundred twenty (120) day time limit and shall give to the prospective incorporators and other interested persons notice of such meeting, and shall recess the meeting then being held until such future date. The board shall have and is hereby vested with the power to compel attendance of witnesses just as is the commissioner or examiner as provided for in Section 81-1-85, and all testimony given before said board shall be taken down and transcribed by a stenographer in the manner prescribed in Section 81-1-87.

    If the board, or a majority thereof, shall determine that it has before it sufficient evidence and information upon which to base a decision, then it shall render a written opinion and decision in the matter within sixty (60) days after the conclusion of the final board hearing. If its decision is favorable, then the board shall order the commissioner to give to such prospective incorporators a certificate under his hand and official seal of the Department of Banking and Consumer Finance authorizing the prospective incorporators to proceed to incorporate and organize as is provided in Section 81-3-7.

    When a certificate of incorporation is sought in order to effect the acquisition of an insolvent bank sold pursuant to the provisions of Chapter 9, Title 81, Mississippi Code of 1972, any constraints of time imposed by this subsection shall not apply if the commissioner determines that an emergency exists which requires expedition of the procedure for granting a certificate in order to protect the interests of the public and the interests of depositors and creditors of the insolvent bank.

  2. Appeal from unfavorable decision of State Board of Banking review. If the decision of the board, or a majority thereof, is unfavorable to the organization of the proposed new bank, it shall render a written opinion and decision giving its reason for rejection within sixty (60) days after the conclusion of the final board hearing in the matter, and the commissioner shall so advise the prospective incorporators, giving them a copy of the written decision and opinion of the board. If the prospective incorporators be aggrieved at the unfavorable decision of the board in denying a certificate authorizing them to proceed with the incorporation of the proposed new bank and the organization thereof, they shall have the right of appeal to the chancery court of the county in which the proposed bank shall be located, which appeal shall be taken and perfected within sixty (60) days from the date of the denial of such certificate. The denial of said certificate by the board shall be construed as a judicial finding and appealable as such. All such appeals shall be taken, perfected, heard and determined either in termtime or vacation, and such appeals shall be heard and disposed of promptly by the court. Appeals from the board shall be taken and perfected by the filing of a bond in the sum of Two Hundred Fifty Dollars ($250.00), with two (2) sureties, or with a surety company qualified to do business in Mississippi as surety, conditioned to pay the costs of the appeal, the bond to be approved by the clerk of the chancery court, and such bond shall be payable to the state and may be enforced in its name as other judicial bonds filed in the chancery court, and judgment may be entered upon such bonds and process and execution shall issue upon such judgments as provided by law in other cases. Appeals may be taken from the chancery court to the Supreme Court in the manner now provided by law. Upon approval of the bond by the clerk of the chancery court the clerk shall give notice to the commissioner of the appeal from the decision of the board, and it thereupon shall be the duty of the commissioner to promptly transmit to the clerk of the chancery court in which the appeal is pending the original or a certified copy of the application, proposed charter of incorporation, and his findings or decision thereon together with the opinion and decision of the board, including a transcript of pleadings and testimony, both oral and documentary, which shall be docketed by the clerk and shall be tried by the court. In perfecting such appeals, the provisions of law respecting notice to reporters and allowance of bills of exception, now or hereafter in force respecting appeals from the chancery court to the Supreme Court shall be applicable thereto. If the prospective incorporators of the proposed new bank shall prevail, a decree shall be entered requiring the issuance by the commissioner of the certificate authorizing applicants to incorporate and organize in the same manner as if the application therefor had been approved by the board, and the costs therein incurred shall be paid by the commissioner out of the maintenance fund of the Department of Banking and Consumer Finance. If, however, the action of the board be affirmed by the court, a decree shall be entered to that effect taxing costs of the proceedings to the applicants. The commissioner or the applicants shall have the right of appeal from the decision of the chancery court. During the time the cause is pending in the office of the commissioner or before the board or the court, the commissioner shall not issue a certificate to a subsequent applicant to incorporate and organize a new bank or authorize any bank then existing to establish a branch bank, or branch office within the area wherein the proposed new bank is to be domiciled, and neither shall he consent to the removal of the domicile of an existing bank from another place into the area where the proposed new bank will be domiciled. A cause shall not be considered as pending in the office of the commissioner or before the board if the prospective incorporators or their representative have only given notice to the commissioner of their desire to engage in banking and apply for a certificate of authority to incorporate, but have not filed with the commissioner a copy of the proposed articles of incorporation and other documents required by statute or administrative regulation.

    If the decision of the board, or a majority thereof, is favorable to the organization of the proposed bank, it shall in like manner as above render a written opinion and decision within sixty (60) days after the conclusion of the final board hearing on the matter, and an appeal in the manner herein set forth shall be available to any interested organizations, person or persons who have participated in the proceedings and feel aggrieved by the decision of the board.

  3. Certificate to begin business. When a bank has been incorporated and the capital stock thereof has been paid in full, the incorporators shall notify the commissioner of such fact, whereupon the commissioner himself or through an examiner shall make a special examination of the proposed new bank and, finding the capital stock to have been paid in full, he shall under his hand and seal of the Department of Banking and Consumer Finance issue to the bank a certificate authorizing it to commence business, and when such business has been commenced the bank shall notify the commissioner to that effect. Upon completion of such special examination, the bank shall pay to the Department of Banking and Consumer Finance as an assessment an amount sufficient to reimburse for the actual costs and expenses incurred during such special examination. The commissioner or examiner shall give a receipt therefor in duplicate, and the assessment shall be turned over by the Department of Banking and Consumer Finance to the State Treasurer for credit to the maintenance fund of the Department of Banking and Consumer Finance. The proposed new bank shall not transact any business except as is necessarily preliminary to its incorporation and organization until it has been authorized by the commissioner to begin business. However, in the event the board shall reject any application for a certificate of convenience and necessity, all costs incurred by this board in making a survey or holding a hearing on such application shall be borne by the petitioners.
  4. Expiration of certificate to incorporate and organize a bank. Notwithstanding the foregoing and any other provision of law to the contrary, if a bank has not been established and is not in operation within two (2) years from the date of the certificate to incorporate and organize such bank or within two (2) years from the date upon which any appellate litigation with respect to such certificate has been concluded, the certificate shall expire. Provided, however, the State Board of Banking Review may extend for good cause shown said two-year period a maximum number of two (2) times for periods not exceeding six (6) months each. This provision shall in no way affect certificates issued prior to March 21, 1980.

HISTORY: Codes, 1942, § 5160; Laws, 1934, ch. 146; Laws, 1948, ch. 203, § 1; Laws, 1954, ch. 162; Laws, 1972, ch. 317, § 1; Laws, 1979, ch. 340, § 2; Laws, 1980, ch. 312, § 33; Laws, 1985, ch. 328; Laws, 1995, ch. 308, § 3, eff from and after passage (approved March 8, 1995).

Cross References —

Fee for issuance of certificate of incorporation, see §81-1-115.

State-chartered banks having and possessing the rights, powers, privileges, immunities, duties and obligations of a national bank having its principal place of business in this state, irrespective of any conflict with the provisions of this section, see §81-5-1(9).

JUDICIAL DECISIONS

1. Generally.

2. Investigation and report.

3. Findings of fact.

4. “Necessity.”

5. Orders.

6. Scope of judicial review.

1. Generally.

A certain amount of expertise in the field of banking and reasonable latitude in the exercise of sound judgment must be accorded the banking board in the performance of its specialized duties. First Nat'l Bank v. Martin, 238 So. 2d 856, 1970 Miss. LEXIS 1514 (Miss. 1970).

The state banking board is an administrative body, and not an inferior judicial tribunal. First Nat'l Bank v. Martin, 238 So. 2d 856, 1970 Miss. LEXIS 1514 (Miss. 1970).

The purpose of this section [Code 1942, § 5160] is not to deter competition or foster monopoly, but to guard the public against imprudent banking. Planters Bank v. Garrott, 239 Miss. 248, 122 So. 2d 256, 1960 Miss. LEXIS 283 (Miss. 1960).

2. Investigation and report.

Where the state banking board’s reason for refusing the request of an objecting bank for the right to examine the report or the examiner who made the investigation for the comptroller on an application for a new bank was that the report was prepared for the benefit of the comptroller as a basis on which his finding and recommendations were made to the banking board as required by statute, the board’s statement negated the assumption by the objecting bank that the board had before it and did in fact consider evidence that was not introduced at the hearing before the board. Britton & Koontz First Nat'l Bank v. Biglane, 285 So. 2d 181, 1973 Miss. LEXIS 1287 (Miss. 1973).

It is apparent from Code 1942, § 5160 that the legislature intended for the comptroller to make an investigation in sufficient depth to determine whether in his opinion a bank should be chartered, although there is no opposition to the application. Britton & Koontz First Nat'l Bank v. Biglane, 285 So. 2d 181, 1973 Miss. LEXIS 1287 (Miss. 1973).

Code 1942, § 5160 does not contemplate that the reports of those employed by the comptroller to assist in his investigation on the application of a proposed bank should be a part of the evidence in a hearing before the board. Britton & Koontz First Nat'l Bank v. Biglane, 285 So. 2d 181, 1973 Miss. LEXIS 1287 (Miss. 1973).

Proper procedure requires that a copy of the report and recommendation of the comptroller in respect to the application for a new bank be furnished to interested parties at the outset of the hearing before the state banking board so that the interested parties will have an opportunity to rebut the same by evidence. Britton & Koontz First Nat'l Bank v. Biglane, 285 So. 2d 181, 1973 Miss. LEXIS 1287 (Miss. 1973).

3. Findings of fact.

In denying an application for a certificate to incorporate and organize a new bank, the banking board is not required to make an express or specific detailed findings of the facts, for under this section [Code 1942, § 5160] it was only required that the board render a written opinion and decision giving its reasons for rejection. First Nat'l Bank v. Martin, 238 So. 2d 856, 1970 Miss. LEXIS 1514 (Miss. 1970).

The state banking board is not required to make express findings of fact in support of its conclusion that public necessity warranted the granting of leave to establish a new bank. Planters Bank v. Garrott, 239 Miss. 248, 122 So. 2d 256, 1960 Miss. LEXIS 283 (Miss. 1960).

4. “Necessity.”

Banking board’s approval of application to incorporate new bank and trust company was supported by substantial evidence and applicants met their burden of showing of public necessity where no new unit bank had come to the area since 1944, there were only three unit banks in the area and each was enjoying a steady growth of capital and deposits, and the area itself was growing at an unusual rate. Hancock Bank v. Gaddy, 328 So. 2d 361, 1976 Miss. LEXIS 1800 (Miss. 1976).

The word “necessity” as used in this section [Code 1942, § 5160] means a substantial obvious need justifying the chartering of a new bank in view of the disclosed relevant circumstances, and mere convenience is not sufficient to satisfy the statutory requisite of “necessity”. First Nat'l Bank v. Martin, 238 So. 2d 856, 1970 Miss. LEXIS 1514 (Miss. 1970).

The burden of showing “public necessity” rested upon the parties applying for the certificate to organize a new bank. First Nat'l Bank v. Martin, 238 So. 2d 856, 1970 Miss. LEXIS 1514 (Miss. 1970).

In determining whether “necessity” warrants the granting of application for lease to establish a new bank, mere convenience is not of itself sufficient, but may be taken into consideration. Planters Bank v. Garrott, 239 Miss. 248, 122 So. 2d 256, 1960 Miss. LEXIS 283 (Miss. 1960).

An application for leave to establish a new bank should not be denied because existing banking facilities are giving adequate service. Planters Bank v. Garrott, 239 Miss. 248, 122 So. 2d 256, 1960 Miss. LEXIS 283 (Miss. 1960).

5. Orders.

Where a state banking board adopted a motion that a certain bank offer to the proponents of a new bank who have sought authority to incorporate in such town, 49 per cent of the presently outstanding capital stock of the certain bank at book value as of a certain date, and where the board recommended charter for new bank within 30 days if no agreement could be arrived at, the order was invalid as a conditional order, offer or judgment beyond the board’s jurisdiction and power and the state banking department was the only legal entity authorized to make a final determination. Oliphant v. Carthage Bank, 224 Miss. 386, 80 So. 2d 63, 1955 Miss. LEXIS 504 (Miss. 1955).

Where the state banking board entered a nunc pro tunc order granting a certificate of authority to incorporate a new bank in a certain town if the present bank in the town did not offer to sell or sell to the proponents of the new bank, 49 per cent of the presently outstanding capital stock, within 30 days from the previous order recommending the incorporation, the nunc pro tunc order was invalid on the ground that there was no notice to the present bank of the board’s meeting at which the order was made. Oliphant v. Carthage Bank, 224 Miss. 386, 80 So. 2d 63, 1955 Miss. LEXIS 504 (Miss. 1955).

6. Scope of judicial review.

On appeal from an order based upon a factual finding by a trier of facts, such as the banking board, the supreme court accepts the evidence which supports or tends to support the conclusion upon which the order is based, together with all inferences favorable to it which reasonably may be drawn from the evidence. First Nat'l Bank v. Martin, 238 So. 2d 856, 1970 Miss. LEXIS 1514 (Miss. 1970).

The findings of the banking board are prima facie correct, and the chancery court cannot substitute its judgment for that of the board and disturb its findings where there is any substantial basis in the evidence for such findings, or where the ruling of the board is not capricious or arbitrary. First Nat'l Bank v. Martin, 238 So. 2d 856, 1970 Miss. LEXIS 1514 (Miss. 1970).

This section [Code 1942, § 5160] fully provides what the transcript on appeal must contain. Hernando Bank v. Davidson, 250 Miss. 23, 164 So. 2d 403, 1964 Miss. LEXIS 447 (Miss. 1964).

Where the appellant did not raise the question of improper notice at the hearing before the banking board, and was silent on the subject of notice until the case was advanced to the appellate court, appellant failed to preserve the technical error complained of for review and was estopped from raising the question of notice on appeal. Hernando Bank v. Davidson, 250 Miss. 23, 164 So. 2d 403, 1964 Miss. LEXIS 447 (Miss. 1964).

A decision of the banking board will not be reversed on appeal where only technical errors are committed, but in order for there to be reversible error there must be a clear showing that the error complained of is substantially prejudicial to the appellant and the public. Hernando Bank v. Davidson, 250 Miss. 23, 164 So. 2d 403, 1964 Miss. LEXIS 447 (Miss. 1964).

Failure of the state banking board to require witnesses testifying upon the hearing of an application for leave to organize a new bank, that they had been told that officers of the existing bank used the granting of loans to further their personal and political interests, to disclose the names of their informants, held not prejudicial error. Planters Bank v. Garrott, 239 Miss. 248, 122 So. 2d 256, 1960 Miss. LEXIS 283 (Miss. 1960).

On an application to the state banking board for leave to organize a new bank, the findings of the state comptroller showing the results of his investigation of the application should be filed and made available to the interested parties as part of the record during the hearing; but failure to do so may be waived. Planters Bank v. Garrott, 239 Miss. 248, 122 So. 2d 256, 1960 Miss. LEXIS 283 (Miss. 1960).

Judicial review of a determination of the state banking board under this section is limited to the question of procedural due process, and the question whether the determination is supported by substantial evidence. Planters Bank v. Garrott, 239 Miss. 248, 122 So. 2d 256, 1960 Miss. LEXIS 283 (Miss. 1960).

RESEARCH REFERENCES

ALR.

Validity, construction, and effect of statutory provisions concerning capital requisites of state incorporation of bank. 79 A.L.R.3d 1190.

Am. Jur.

10 Am. Jur. 2d, Banks and Financial Institutions §§ 180, 181.

Law Reviews.

1979 Mississippi Supreme Court Review: Corporate & Commercial Law. 50 Miss. L. J. 741.

§ 81-3-14. Repealed.

Repealed by Laws, 2001, ch. 374, § 2, eff from and after July 1, 2001.

[Laws, 1979, ch. 301, § 49; Laws, 1980, ch. 312, § 39; Laws, 1982, ch. 302, § 2; Laws, 1990 Ex Sess, ch. 46, § 34; Laws, 1993, ch. 442, § 35; reenacted, 1994, ch. 622, § 36; Laws, 1997, ch. 497, § 43, eff from and after July 1, 1997.]

Editor’s Notes —

Former §81-3-14 provided for the repeal of §81-3-12.

§ 81-3-15. Renewals and amendments of charters.

The charter or articles of incorporation of banking corporations heretofore created or that may hereafter be created, may be renewed or amended in the following manner:

The stockholders in a special or regular meeting, shall first, by a vote of a majority in amount of all stock outstanding, adopt a resolution setting forth the proposed renewal or amendment, subject to the approval of the state comptroller. Three copies of such resolution duly certified by the president or vice-president of such bank shall be forwarded to the state comptroller for his approval, together with the fee required by statute. If the proposed amendment is approved by the state comptroller, he shall attach his certificate of approval to each of the copies and forward all three copies to the Attorney General for his approval, and shall forward the fee required by statute to the Secretary of State. If and when approved by the Attorney General, all three copies of said amendment shall be forwarded to the Governor for his approval, and when approved by him shall be forwarded by the Governor to the Secretary of State. The Secretary of State shall retain one copy and file and record the same in his office. He shall forward one copy thereof to the state comptroller, who shall retain and file the same in his office. The remaining copy shall be returned to the bank, and the bank shall immediately record the same in the office of the chancery clerk of the county in which the bank is domiciled. Said copy after being so recorded, shall be returned to the bank and retained by it in its files. It shall not be necessary to publish such renewal or amendment.

HISTORY: Codes, 1942, § 5161; Laws, 1934, ch. 146.

Editor’s Notes —

Section 81-1-117 abolished the office of state comptroller, and provided that the functions, duties and responsibilities would be assumed by the commissioner of banking and consumer finance.

Cross References —

Articles of incorporation, generally, see §81-3-7.

State-chartered banks having and possessing the rights, powers, privileges, immunities, duties and obligations of a national bank having its principal place of business in this state, irrespective of any conflict with the provisions of this section, see §81-5-1(9).

RESEARCH REFERENCES

CJS.

9 C.J.S., Banks and Banking § 42.

§ 81-3-17. Ownership by holding company.

  1. Subject to the prohibitions provided in Section 81-5-28, Mississippi Code of 1972, but notwithstanding any other provision of law, any bank may simultaneously with its incorporation provide for its ownership by a holding company.
  2. Subject to the prohibitions provided in Section 81-5-28, Mississippi Code of 1972, but notwithstanding any other provision of law, any bank may reorganize its ownership to provide for ownership by a holding company upon adoption of a plan of reorganization by a favorable vote of not less than two-thirds (2/3) of the members of the board of directors of the bank and approval of such plan of reorganization by the holders of not less than a majority of the issued and outstanding shares of stock of the bank. The plan of reorganization shall provide that (a) the resulting ownership shall be vested in a Mississippi corporation; (b) all stockholders of the stock bank shall have the right to exchange shares; (c) the exchange of stock shall not be subject to state or federal income taxation; (d) stockholders not wishing to exchange shares shall be entitled to dissenters’ rights as provided under Section 79-4-13.01 et seq., Mississippi Code of 1972; and (e) the plan of reorganization is fair and equitable to all stockholders.

HISTORY: Laws, 1997, ch. 542, § 10, eff from and after passage (approved April 10, 1997).

RESEARCH REFERENCES

Am. Jur.

54 Am. Jur. 2d, Monopolies, Restraints of Trade, and Unfair Trade Practices §§ 709-711 et seq.

CJS.

9 C.J.S., Banks and Banking § 5, 7 et seq.

Chapter 5. General Provisions Relating to Banks and Banking

General Provisions

§ 81-5-1. General regulations.

  1. All banking corporations are prohibited, either through their officers or as a banking agency, from participating, directly or indirectly, in the operation of any underwriting syndicate which handles securities for resale. However, this inhibition shall not apply to bonds issued by federal, state, county or other governmental agencies.
  2. The executive officers of banking corporations now existing or hereafter organized under the laws of the State of Mississippi are prohibited from owning stock in private banking houses or other agencies engaged in the business of underwriting securities for resale.
  3. The Commissioner of Banking and Consumer Finance is authorized, empowered and directed to promulgate rules and regulations, relative to withdrawals of deposits from savings banks, trust companies and other banking institutions, and the commissioner may, in cases of emergency, declare bank holidays and do any and all things necessary to insure, protect and conserve the resources of such banks.
  4. All state banking corporations are prohibited from making loans to state, county, municipal and district governmental agencies, unless such loans are made in strict compliance with legal enactments and regulations which govern, and such banking corporations are further prohibited from transferring funds from one state, county, municipal or district account to another unless authorized by warrant issued by proper authority, and such banking corporations are prohibited from discounting state, county, municipal, district or other public certificates and warrants, but such certificates and warrants may be used as collateral to guarantee the payment of notes or other obligations.
  5. The board of directors of any banking corporation created under the laws of this state may, at its option, require any or all employees of such to file with the board of directors a sworn financial statement semiannually or more often if it so desires.
  6. Any bank may, at its option, pay all checks drawn on it with currency or valid exchange drawn on a bank in a reserve city not more than five hundred (500) miles distant from such bank; but each depositor is entitled to have his checks paid each day in currency to the total extent of ten percent (10%) of his deposit if it exceeds One Thousand Dollars ($1,000.00) and at least One Hundred Dollars ($100.00) each day if his balance is over One Hundred Dollars ($100.00) and less than One Thousand Dollars ($1,000.00), and may demand his entire balance in currency at any time if One Hundred Dollars ($100.00) or less.
  7. All state banking corporations may purchase for the account of their customers bonds, stocks and other securities, and such banking corporations may charge for their service in connection with the handling of such transactions only actual expenses plus the usual broker’s fees allowed for similar service by national banks.
  8. Any state bank may purchase, lease or otherwise acquire automatic data processing computers and related machinery and equipment, and such bank may utilize and operate such computers, machinery and equipment in performing for itself, its customers or any other bank such services as may be desired, including, but not limited to, check and deposit sorting and posting, computation and posting of interest and other credits and charges, preparation and mailing of checks, statements, notices and similar items, or any other clerical, bookkeeping, accounting, statistical or similar functions performed by and for a bank. Corporations may be organized under the laws of the State of Mississippi for the purpose of owning and operating, by purchase, lease or otherwise, such computers, related machinery and equipment as aforesaid, and such corporations may perform for any bank those services as above mentioned; and stock of such corporations shall be legal investments for state banks to the same extent that stock of bank service corporations is eligible for acquisition by national banks under the provisions of the Bank Service Corporation Act, Public Law 87-856, 76 Stat. 1132.
  9. In addition to other powers, a state-chartered bank shall have and possess such of the rights, powers, privileges, immunities, duties and obligations of a national bank having its principal place of business in this state as may be prescribed by the State Board of Banking Review by general regulation under the circumstances and conditions set out therein. In the event of a conflict between the provisions of this subsection (9) and the provisions of any other act or acts, directly or indirectly, governing or regulating the activities of state-chartered banks, the provisions of this subsection (9) shall control, and insurance activities of all banks, their subsidiaries, affiliates, branches, officers and employees doing business in this state shall be governed by the provisions of Title 83, Mississippi Code of 1972, only to the extent that Title 83, Mississippi Code of 1972, applies to national banks in Mississippi.
    1. The purpose of this subsection (10) is to provide for parity among Mississippi chartered or domiciled banks extending open-end credit in this state, as well as to promote the retention of existing financial services within the state by encouraging Mississippi chartered or domiciled banks to continue their open-end credit operations in this state, rather than relocating those operations to other states with interest rates, fees and credit terms that may not be available under Mississippi law and exporting such interest rates, fees and credit terms back to Mississippi under the most favored lender doctrine of federal law.
    2. For the purpose of this subsection, “open-end credit account” means an arrangement between a creditor and a customer in which:
      1. The creditor permits the customer to obtain credit advances on a pre-authorized basis;
      2. The creditor reasonably contemplates repeated transactions;
      3. The creditor assesses interest on the outstanding unpaid balance of the customer’s account; or
      4. The amount of credit that may be extended to the customer, up to any limit set by the creditor, is made available to the extent that any unpaid balance is repaid.
    3. A Mississippi chartered or domiciled bank that seeks to use the provisions of this subsection shall set forth in the records of the bank the rates and fees to be charged, the state where the rates and fees are permissible and the identity of one or more of the financial institutions.
    4. Notwithstanding any other provision of law to the contrary, Mississippi chartered or domiciled banks offering open-end credit may assess finance charges, credit service charges and fees and charges that are material to the determination of the interest rate in connection with open-end accounts at rates and amounts that are equal to or are less than the amounts that financial institutions domiciled in other states are permitted to impose and collect when extending credit to Mississippi customers as a result of the most favored lender doctrine of federal law.
    5. Notwithstanding any other provision of law to the contrary, for purposes of this subsection and Title 12, Sections 85, 1831d and 1730g of the United States Code, as applicable to the exportation of interest rates and any fees and charges that are material to their determination, any interest rates, finance charges, credit service charges and other fees and charges, in amount, as well as manner and method of computation, imposed by Mississippi chartered or domiciled banks under this subsection shall be authorized by Mississippi law.
    6. Notwithstanding any other provision of law to the contrary, any interest, finance charges, credit service charges or other fees or charges that are adopted from another state by a Mississippi chartered or domiciled bank, including those that are otherwise permissible in an amount under Mississippi law, may be assessed, accrued, earned or changed in the same manner or method as permitted under the law of the state from which they have been adopted, regardless of whether such manner or method is material to the determination of the interest rate under the law of that state.
    7. For purposes of this subsection, Mississippi chartered or domiciled banks may impose interest, finance charges, credit service charges or other fees and charges from one or more open-end credit accounts offered by financial institutions in other states in connection with a single open-end credit account.

HISTORY: Codes, 1942, § 5224; Laws, 1934, ch. 146; Laws, 1936, ch. 165; Laws, 1954, ch. 164; Laws, 1966, ch. 252, § 1; Laws, 1982, ch. 486; Laws, 1983, ch. 342, § 1; Laws, 1988, ch. 543, § 2; Laws, 1988, ch. 576; Laws, 1991, ch. 345, § 1; Laws, 1995, ch. 307, § 1; Laws, 1997, ch. 305, § 1; Laws, 2006, ch. 412, § 1, eff from and after July 1, 2006; Laws, 2018, ch. 354, § 2, eff from and after July 1, 2018; Laws, 2019, ch. 431, § 1, eff from and after passage (approved March 29, 2019).

Amendment Notes —

The 2006 amendment deleted former (7), which read: “No loan in excess of Twenty-five Thousand Dollars ($25,000.00) shall be made by any state banking corporation except on approval of a loan committee selected by a majority of the board of directors. Such committee shall require of all such prospective borrowers a financial statement in connection with all unsecured loans in excess of Twenty-five Thousand Dollars ($25,000.00)”; and redesignated former (8) through (10) as present (7) through (9).

The 2018 amendment added (9)(a) through (g).

The 2019 amendment, effective March 29, 2019, redesignated former (9)(a) through (g) as (10)(a) through (g); substituted “this subsection (10)” for “this subsection (9)” in (10)(a); inserted “in the records of the bank” in (10)(c); and made a minor punctuation change.

Cross References —

Legal holidays, see §3-3-7.

Acceptance by banks of checks payable to state agency, see §27-105-37.

Acceptance by banks of checks payable to county, municipality, political subdivision or body politic, see §27-105-369.

Commercial paper under the Uniform Commercial Code, see §§75-3-101 et seq.

Bank deposits and collections under the Uniform Commercial Code, see §§75-4-101 et seq.

Functions of commissioner of banking and finance generally, see §§81-1-61 et seq.

Loans by savings and loan associations, see §§81-12-157,81-12-159,81-12-161.

Multistate, state and limited liability trust institutions, see §81-27-1.001 et seq.

Federal Aspects—

The Bank Service Corporation Act referred to herein is codified at 12 USCS § 1861 et seq.

RESEARCH REFERENCES

ALR.

Corporation’s power to enter into partnership or joint venture. 60 A.L.R.2d 917.

Power of savings bank or similar institution to provide checking facilities or negotiable orders of withdrawal (NOW) to customers. 64 A.L.R.3d 1314.

Maintenance of computer terminal in retail store for purpose of effecting transfer of funds between financial institution and its depositors as conduct of banking business by store. 73 A.L.R.3d 1282.

Bank’s liability for breach of implied contract of good faith and fair dealing. 55 A.L.R.4th 1026.

Am. Jur.

10 Am. Jur. 2d, Banks and Financial Institutions §§ 1, 2, 3.

41 Am. Jur. Trials 683, Computer Research for the Trial Lawyer.

49 Am. Jur. Trials 281, Liability for Mishandled Computer Information.

CJS.

9 C.J.S., Banks and Banking §§ 5, 7 et seq.

§ 81-5-2. Private corporation laws; application to state banks.

All the provisions of law relating to private corporations operating in this state which are not inconsistent with this chapter or Chapters 1 and 3 of Title 81, Mississippi Code of 1972, or with the proper business of depository institutions, shall be applicable to all state banks.

HISTORY: Laws, 1998, ch. 392, § 1, eff from and after passage (approved March 17, 1998).

§ 81-5-3. Bank not to permit use of its name.

It shall be unlawful for any bank or corporation liable to taxation on its capital stock to permit any person to use its name in taking promissory notes, mortgages or deeds or trust, or to permit such instruments to indicate on their face that they are payable to such bank or corporation when the money to secure which such instruments are taken is not actually advanced or is not intended to be advanced by such bank or corporation, and it shall be unlawful for any person to use the name of such bank or corporation in making loans of money. Any such bank or corporation or individual violating the provisions of this section shall be liable to a penalty of twenty-five per cent of the amount of such loan, to be recovered by the state.

HISTORY: Codes, 1942, § 5190; Laws, 1934, ch. 146.

Cross References —

State-chartered banks having and possessing the rights, powers, privileges, immunities, duties and obligations of a national bank having its principal place of business in this state, irrespective of any conflict with the provisions of this section, see §81-5-1(9).

JUDICIAL DECISIONS

1. In general.

Loan by person in name of bank to avoid taxation held not void; statutory penalty is exclusive. Simmons v. Calloway, 138 Miss. 669, 103 So. 350, 1925 Miss. LEXIS 72 (Miss. 1925).

§ 81-5-5. Local and regional banks for farm loans authorized.

Local and regional banks for the purpose of making and floating loans upon farms in the State of Mississippi may be established under any legislation enacted or to be enacted by Congress and in such manner as may be provided by Congress and any bonds representing loans on farms and bearing a rate of interest of six per cent or less per annum, shall be exempt from all state and other taxation.

HISTORY: Codes, 1942, § 5278; Laws, 1934, ch. 146.

Cross References —

State-chartered banks having and possessing the rights, powers, privileges, immunities, duties and obligations of a national bank having its principal place of business in this state, irrespective of any conflict with the provisions of this section, see §81-5-1(9).

RESEARCH REFERENCES

ALR.

Bank’s liability, under state law, for disclosing financial information concerning depositor or customer. 81 A.L.R.4th 377.

CJS.

9 C.J.S., Banks and Banking §§ 701, 702.

§ 81-5-7. Preservation of old records.

    1. Each bank shall retain permanently the minute books of meetings of its stockholders and directors, its capital stock ledger and capital stock certificate ledger or stubs, its general ledger, its daily statements of condition, its general journal, its investment ledger, its copies of bank examination reports, and all ledger sheets showing unpaid balances in favor of depositors.
    2. The Commissioner of Banking and Consumer Finance shall from time to time prescribe by order and so notify each bank, a classified list of such other records which shall be preserved and the length of time therefor.
      1. Actions at law and administrative proceedings in which the production of bank records might be necessary or desirable.
      2. State and federal statutes of limitation applicable to such actions or proceedings.
      3. The availability of information contained in bank records from other sources.
      4. Such other matters as the commissioner shall deem pertinent in order that his regulations will require banks to retain their records for as short a period as is commensurate with the interests of bank customers and shareholders and of the people of this state in having bank records available.

      Prior to issuing any such regulation, the commissioner shall consider:

    3. Any state bank may dispose of any record which has been retained for the period prescribed by or in accordance with the terms of this section for retention of records of its class, and shall thereafter be under no duty to produce such record in any action or proceeding.
    4. Any state bank may cause any or all records at any time in its custody to be reproduced in a format of storage commonly used, whether electronic, imaged, magnetic, microphotographic, or otherwise, and any reproduction so made shall have the same force and effect as the original thereof and be admitted in evidence equally with the original.
    5. To the extent that they are not in contravention of any law of the United States, the provisions of this section shall apply to all banks doing business in this state.
  1. No liability shall accrue against any bank destroying any records held for the period of time as provided in subsection (1) of this section, and in any cause or proceeding in which any such records or files may be called in question or be demanded of the bank or any officer or employee thereof, a showing that such records or files have been destroyed in accordance with the terms of this section shall be sufficient reason for the failure to produce them.

HISTORY: Codes, 1942, § 5278-01; Laws, 1944, ch. 258, §§ 1, 2; Laws, 1952, ch. 184, §§ 1, 2; Laws, 2000, ch. 335, § 1, eff from and after passage (approved Apr. 16, 2000.).

Editor’s Notes —

Section 81-1-117 abolished the office of state comptroller, and provided that the functions, duties and responsibilities would be assumed by the commissioner of banking and consumer finance.

Amendment Notes —

The 2000 amendment substituted “Commissioner of Banking and Consumer Finance” for “state comptroller of banks” in (1)(b); substituted “reproduced in a format of storage . . . microphotographic, or otherwise, and” for “reproduced by the microphotographic process and” in (1)(d); substituted “subsection (1) of this section” for “paragraph 1 hereof” in (2); and substituted “commissioner” for “comptroller” throughout the section.

Cross References —

State-chartered banks having and possessing the rights, powers, privileges, immunities, duties and obligations of a national bank having its principal place of business in this state, irrespective of any conflict with the provisions of this section, see §81-5-1(9).

Record keeping – savings associations, see §81-12-95.

Record keeping – credit unions, see §81-13-73.

Record keeping – savings banks, see §81-14-153.

§ 81-5-9. Banks shall become members of the Federal Deposit Insurance Corporation.

All banking corporations organized under the laws of the State of Mississippi shall become members of Federal Deposit Insurance Corporation or any other similar agency created by the laws of the United States to insure or guarantee deposits in banks. Such banks are empowered to enter into such contracts, incur such obligations and generally to do and perform all such acts and things as may be necessary or appropriate in order to take advantage of all memberships, grants, rights, or privileges which may at any time be available to banking institutions or their depositors, creditors, or stockholders by virtue of the act of Congress, and amendments thereto, providing for the establishment of Federal Deposit Insurance Corporation and the insurance of deposits in banks, or any other act, resolution or amendment passed by Congress to aid, regulate or safeguard banking institutions and their depositors, including any substitutions therefor; and banks are authorized to subscribe for and acquire any stock, debentures, bonds or other types of securities of the Federal Deposit Insurance Corporation.

HISTORY: Codes, 1942, § 5191; Laws, 1934, ch. 146; Laws, 1936, ch. 165; Laws, 1994, ch. 320, § 3, eff from and after July 1, 1994.

Cross References —

Acceptance by commissioner of banking and consumer finance of examination performed by Federal Deposit Insurance Corporation, see §81-1-81.

State-chartered banks having and possessing the rights, powers, privileges, immunities, duties and obligations of a national bank having its principal place of business in this state, irrespective of any conflict with the provisions of this section, see §81-5-1(9).

Appointment of Federal Deposit Insurance Corporation as receiver, see §81-9-73.

RESEARCH REFERENCES

CJS.

9 C.J.S., Banks and Banking § 708.

§ 81-5-11. State banks may become members of Federal Reserve Bank.

Any bank or trust company incorporated under the laws of Mississippi shall have power to subscribe to the capital stock and become a member of a Federal Reserve bank created and organized under the act of congress of the United States approved December 23, 1913, and known as the Federal Reserve Act and its amendments.

HISTORY: Codes, 1942, § 5283; Laws, 1934, ch. 146.

Cross References —

State-chartered banks having and possessing the rights, powers, privileges, immunities, duties and obligations of a national bank having its principal place of business in this state, irrespective of any conflict with the provisions of this section, see §81-5-1(9).

RESEARCH REFERENCES

CJS.

9 C.J.S., Banks and Banking § 684.

§ 81-5-13. Federal Reserve Act requirements must be observed.

Any bank or trust company, incorporated under the laws of Mississippi, which shall become a member of a Federal Reserve bank, shall comply with the reserve requirements of the Federal Reserve Act and its amendments, and the compliance of such bank or trust company therewith shall be in lieu of, and shall relieve such bank or trust company from, compliance with the provisions of the laws of this state relating to the maintenance of reserves.

HISTORY: Codes, 1942, § 5284; Laws, 1934, ch. 146.

Cross References —

State-chartered banks having and possessing the rights, powers, privileges, immunities, duties and obligations of a national bank having its principal place of business in this state, irrespective of any conflict with the provisions of this section, see §81-5-1(9).

§ 81-5-15. Officers and employees of banks to furnish fidelity bond; insurance.

Every active officer and employee of any bank or trust company in this state shall furnish a fidelity bond to the bank by which he is employed for the faithful performance of his duties, executed by some surety company authorized to do business in the State of Mississippi, as surety. The conditions of such bond, whether the instrument so describes the conditions or not, shall be that the principal shall protect the obligee against any loss or liability that the obligee may suffer or incur by reason of the acts of dishonesty of the principal or by reason of the violation of any of the provisions of the banking laws of Mississippi. The amount of such bond shall be fixed by the board of directors, subject, however, to approval of the state comptroller and the same shall be inspected upon the examination of the bank or trust company.

Every banking corporation shall provide adequate insurance protection and indemnity against robbery and burglary and other similar insurable losses. Whenever any bank refuses or fails to comply with this requirement the state comptroller may contract for such protection and indemnity and add the cost thereof to the assessment otherwise payable by such bank for the support of the department of bank supervision.

HISTORY: Codes, 1942, § 5192; Laws, 1934, ch. 146; Laws, 1936, ch. 165.

Editor’s Notes —

Section 81-1-57 provides that wherever the words “state comptroller” of “comptroller” are used when referring to the office of state comptroller of banks, they shall be construed to mean the commissioner of banking and consumer finance.

Section 81-1-117 abolished the office of state comptroller, and provided that the functions, duties and responsibilities would be assumed by the commissioner of banking and consumer finance.

Cross References —

State-chartered banks having and possessing the rights, powers, privileges, immunities, duties and obligations of a national bank having its principal place of business in this state, irrespective of any conflict with the provisions of this section, see §81-5-1(9).

JUDICIAL DECISIONS

1. Dishonesty.

Financial institution bond’s criteria for covering loan-related losses were consistent with this section in defining dishonesty as requiring intent to cause loss to the bank and requiring receipt of a financial benefit outside the employee’s normal compensation; thus, absent evidence that a former employee who approved allegedly improper transactions received any financial benefit other than normal commissions or intended to share in loan proceeds, the bank could not recover on the bond. Renasant Bank v. St. Paul Mercury Ins. Co., 882 F.3d 203, 2018 U.S. App. LEXIS 2903 (5th Cir. Miss. 2018).

§ 81-5-17. Bank stock; transfer and use as collateral.

The shares of stock of banks shall be deemed personal property, and shall be transferred on the books of the bank in such manner as the by-laws thereof shall direct, and as required by law. But no bank shall accept as collateral, or be the purchaser of, its own stock, except in cases where the taking of such collateral, or such purchase, shall be necessary to prevent loss upon a debt previously contracted in good faith, and in such cases, unless full payment of such debt is made, such stock shall be sold by the bank within twelve months from the date it was acquired.

HISTORY: Codes, 1942, § 5193; Laws, 1934, ch. 146.

Cross References —

State-chartered banks having and possessing the rights, powers, privileges, immunities, duties and obligations of a national bank having its principal place of business in this state, irrespective of any conflict with the provisions of this section, see §81-5-1(9).

Stock transfer record, see §81-5-19.

JUDICIAL DECISIONS

1. In general.

2. Lien on stock.

1. In general.

This section [Code 1942, § 5193] held a valid regulation of banks. Planters' Bank v. J. Eskind & Sons, 134 Miss. 696, 99 So. 148, 1924 Miss. LEXIS 289 (Miss. 1924).

2. Lien on stock.

Bank cannot acquire lien on its own stock by stock certificate provision so as to defeat assignee’s lien. Bank of Pontotoc v. Robinson, 136 Miss. 409, 101 So. 561, 1924 Miss. LEXIS 154 (Miss. 1924).

This section [Code 1942, § 5193] prohibits lien on stock to secure debt of stockholder to the bank except to prevent loss of previous debt. Bank of Pontotoc v. Robinson, 136 Miss. 409, 101 So. 561, 1924 Miss. LEXIS 154 (Miss. 1924).

RESEARCH REFERENCES

ALR.

Validity of restrictions on alienation or transfer of corporate stock. 61 A.L.R.2d 1318.

Right or duty of corporation to refuse to transfer stock on presentation of properly indorsed certificate, because of conflicting rights or claims of one other than transferee. 75 A.L.R.2d 746.

Am. Jur.

10 Am. Jur. 2d, Banks and Financial Institutions §§ 298, 302 et seq., 616.

CJS.

9 C.J.S., Banks and Banking §§ 58-61, 245.

§ 81-5-19. Stock; record of transfer of to be kept.

A book shall be provided and kept by every bank, in which shall be entered the names and residences of the stockholders thereof, the number of shares held by each, the time when such person became a stockholder, and also all transfers of stock, stating the time when made, the number of shares and by whom transferred. In all actions, suits and proceedings, such book shall be prima facie evidence of the facts therein stated.

HISTORY: Codes, 1942, § 5194; Laws, 1934, ch. 146.

Cross References —

State-chartered banks having and possessing the rights, powers, privileges, immunities, duties and obligations of a national bank having its principal place of business in this state, irrespective of any conflict with the provisions of this section, see §81-5-1(9).

JUDICIAL DECISIONS

1. In general.

Bank issuing second certificate of stock without surrender of first is liable to subsequent purchaser of first certificate for value without notice. People's Bank v. Lamar County Bank, 107 Miss. 852, 66 So. 219, 1914 Miss. LEXIS 150 (Miss. 1914).

RESEARCH REFERENCES

ALR.

Validity of restrictions on alienation or transfer of corporate stock. 61 A.L.R.2d 1318.

Right or duty of corporation to refuse to transfer stock on presentation of properly indorsed certificate, because of conflicting rights or claims of one other than transferee. 75 A.L.R.2d 746.

§ 81-5-21. Stock of other banks not to be owned.

No part of the stock of any bank except regional reserve banks shall be owned by a state bank. In cases where such stock is taken as collateral and the purchase thereof shall be necessary to prevent loss upon a debt previously contracted in good faith, then in such cases such stock shall be sold by the bank within twelve months from the time it was acquired, unless the consent of the state comptroller is obtained in writing extending such period. A violation of this section by any bank shall subject it to liquidation and forfeiture of charter.

HISTORY: Codes, 1942, § 5195; Laws, 1934, ch. 146; Laws, 1936, ch. 165.

Editor’s Notes —

Section 81-1-57 provides that wherever the words “state comptroller” or “comptroller” are used when referring to the office of state comptroller of banks, they shall be construed to mean the commissioner of banking and consumer finance.

Section 81-1-117 abolished the office of state comptroller, and provided that the functions, duties and responsibilities would be assumed by the commissioner of banking and consumer finance.

Cross References —

State-chartered banks having and possessing the rights, powers, privileges, immunities, duties and obligations of a national bank having its principal place of business in this state, irrespective of any conflict with the provisions of this section, see §81-5-1(9).

JUDICIAL DECISIONS

1. In general.

Acquisition by bank of stock of another bank held a mere ultra vires act of which only state could complain. People's Bank v. Lamar County Bank, 107 Miss. 852, 66 So. 219, 1914 Miss. LEXIS 150 (Miss. 1914).

RESEARCH REFERENCES

Am. Jur.

10 Am. Jur. 2d, Banks and Financial Institutions § 613.

CJS.

9 C.J.S., Banks and Banking § 247.

§ 81-5-23. Preferred stock; issuance authorized.

Banks may, with the approval of the state comptroller, and by a vote of stockholders owning a majority of the stock of such bank, upon not less than five (5) days’ notice, given by registered mail, pursuant to action taken by their boards of directors, issue preferred stock of one or more classes in such amount and with such par value as shall be approved by the said comptroller, and may make such amendments to their charters as may be necessary for this purpose; but, in the case of a newly organized bank which has not yet issued common stock, the requirement of notice to and vote of stockholders shall not apply.

The holders of such preferred stock shall be entitled to receive such cumulative dividends at a stipulated rate and shall have such voting and conversion rights and such control of management, and such stock shall be subject to retirement in such manner and upon such conditions as may be provided in the charter, with the approval of the state comptroller. The holders of such preferred stock shall not be held individually responsible as such holders for any debts, contracts or engagements of such bank, and shall not be liable for assessments to restore impairments in the capital of such bank as provided by law with reference to the holders of common stock.

Preferred stock issued by any bank in this state shall be exempt from all state, county, municipal, levee district, and other ad valorem taxes so long as the same shall be held by an agency of the federal government.

The acts of any board of directors of any banking corporation organized and operating under the laws of the State of Mississippi, insofar as such acts pertain to the issuance of preferred stock which may have heretofore been issued, are hereby in all particulars validated.

No dividend shall be declared or paid on common stock until the cumulated dividends on the preferred stock shall have been paid in full; and, if the corporation is placed in either voluntary or involuntary liquidation, no payment shall be made to the holders of the common stock until the owners of the preferred stock shall have been paid in full the par value of such preferred stock plus all accumulated dividends.

HISTORY: Codes, 1942, § 5215; Laws, 1934, ch. 146; Laws, 1966, ch. 251, § 1; Laws, 1980, ch. 414, eff from and after July 1, 1980.

Editor’s Notes —

Section 81-1-57 provides that wherever the words “state comptroller” or “comptroller” are used when referring to the office of state comptroller of banks, they shall be construed to mean the commissioner of banking and consumer finance.

Section 81-1-117 abolished the office of state comptroller, and provided that the functions, duties and responsibilities would be assumed by the commissioner of banking and consumer finance.

Cross References —

State-chartered banks having and possessing the rights, powers, privileges, immunities, duties and obligations of a national bank having its principal place of business in this state, irrespective of any conflict with the provisions of this section, see §81-5-1(9).

RESEARCH REFERENCES

ALR.

Validity of cancelation of accrued dividends on preferred corporate stock. 8 A.L.R.2d 893.

Rights of preferred stockholders as to past or accumulated dividends in going concern. 27 A.L.R.2d 1073.

Am. Jur.

10 Am. Jur. 2d, Banks and Financial Institutions §§ 28 et seq., 308, 328.

§ 81-5-25. Investments in stock of small business investment companies.

Shares of stock issued by small business investment companies, incorporated in this state and licensed under the provisions of the Small Business Investment Act of 1958, Public Law 699, 85th Congress, and any amendments thereto, shall be legal investments for state chartered banks and trust companies, to the same extent that shares of small business investment companies are eligible for purchase by national banks under the provisions of said Small Business Investment Act of 1958, and any amendments thereto.

HISTORY: Codes, 1942, § 5224.7; Laws, 1962, ch. 178, eff from and after passage (approved May 22, 1962).

Cross References —

State-chartered banks having and possessing the rights, powers, privileges, immunities, duties and obligations of a national bank having its principal place of business in this state, irrespective of any conflict with the provisions of this section, see §81-5-1(9).

§ 81-5-27. Liability of stockholders.

The stockholders of every bank shall be individually liable, actually and ratably, and not for one another, for the benefit of the depositors in said bank at the amount of their stock at the par value thereof, and in addition to said stock. However, persons holding stock as executors, administrators, guardians or trustees shall not be personally liable as stockholders, but the assets and funds in their hands constituting the trust shall be liable to the same extent as the testator, intestate, ward, or person interested in such trust fund would be, if living or competent to act. Persons holding stock as collateral security shall not be personally liable as stockholders, but the person pledging such stock shall be deemed the stockholder and liable under this section. Such double liability may be enforced in a suit at law or in equity by the receiver of any bank in process of liquidation. Such suit, however, shall be brought within six years from the date the bank went into liquidation and not thereafter. Such double liability shall not apply, however, to stock in any bank organized, after April 2, 1934, nor to stock in any bank open for business on April 2, 1934, provided such bank is a member of the Federal Deposit Insurance Corporation, or any other similar agency created by the laws of the United States.

HISTORY: Codes, 1942, § 5280; Laws, 1934, ch. 146; Laws, 1936, ch. 166.

Cross References —

State-chartered banks having and possessing the rights, powers, privileges, immunities, duties and obligations of a national bank having its principal place of business in this state, irrespective of any conflict with the provisions of this section, see §81-5-1(9).

Release of double liability in event of liquidation by depositors, see §81-9-51.

JUDICIAL DECISIONS

1. In general.

2. Double liability, generally.

3. Set-off of deposits against liability.

4. Persons subject to liability.

5. Transfer of stock or settlement.

6. Persons entitled to benefit.

7. Accrual of liability.

8. Action to enforce liability.

9. —Parties.

10. —Limitations.

11. Miscellaneous.

1. In general.

Imposition of stockholders’ double liability was not invalid as impairing the obligation of contract, where the power to amend or repeal was reserved by the legislature. Pate v. Bank of Newton, 116 Miss. 666, 77 So. 601, 1917 Miss. LEXIS 343 (Miss. 1917).

2. Double liability, generally.

Statute which repealed provision of former statute with respect to double liability of stockholders of insolvent state bank and re-enacted it verbatim with certain stated exceptions held to have continued double liability theretofore existing in force, where it was clear from terms of statute that it was intended to include within the terms of double liability all those classes which were not excluded by its terms. Rather v. Moore, 179 Miss. 78, 173 So. 664, 1937 Miss. LEXIS 8 (Miss. 1937).

Law imposing liability on stockholders of insolvent bank must be strictly construed. Thompson v. Person, 177 Miss. 63, 170 So. 694, 1936 Miss. LEXIS 256 (Miss. 1936); Gift v. Love, 164 Miss. 442, 144 So. 562, 1932 Miss. LEXIS 252 (Miss. 1932); Mellott v. Love, 152 Miss. 860, 119 So. 913, 1929 Miss. LEXIS 201 (Miss. 1929).

Double liability is imposed by the statute upon stockholders or banks whether incorporated before or after the Banking Act was passed, but this liability does not extend to deposits which were actually made before the passage of the act (Laws 1914, c 124). Pate v. Bank of Newton, 116 Miss. 666, 77 So. 601, 1917 Miss. LEXIS 343 (Miss. 1917).

This section [Code 1942, § 5280] held not an injustice to stockholders. Pate v. Bank of Newton, 116 Miss. 666, 77 So. 601, 1917 Miss. LEXIS 343 (Miss. 1917).

3. Set-off of deposits against liability.

Shareholders of an insolvent bank could set off the amount due them by the bank under a trust agreement against their liability to the Superintendent of Banks. Anderson v. Love, 169 Miss. 237, 153 So. 369 (Miss. 1934).

4. Persons subject to liability.

Where bank stockholder sold stock to sister prior to bank failure and subsequent examination showed bank was solvent, seller held not subject to statutory double liability as stockholder notwithstanding there was no transfer on stock book of bank and that statute makes stock book prima facie evidence of ownership, in view of rule of strict construction of double liability statute. Thompson v. Person, 177 Miss. 63, 170 So. 694, 1936 Miss. LEXIS 256 (Miss. 1936).

Where other assets received by infant legatees along with bank stock exceeded stockholder’s liability on such stock, assets in hands of infants’ respective guardians held liable for amount of stockholder’s liability on bank’s failure. Carlisle v. Love, 170 Miss. 621, 155 So. 197, 1934 Miss. LEXIS 153 (Miss. 1934).

No stockholder’s liability rested on guardian or ward where orders relating to investment of ward’s funds in bank stock were invalid and ward, aged twenty, repudiated investment. Carlisle v. Love, 170 Miss. 621, 155 So. 197, 1934 Miss. LEXIS 153 (Miss. 1934).

Father who transferred his bank stock to himself as trustee for his infant children held liable as stockholder on bank’s suspension during minority of such infants, though examination after such transfer showed that bank was solvent. Carlisle v. Love, 170 Miss. 621, 155 So. 197, 1934 Miss. LEXIS 153 (Miss. 1934).

To justify application of personal deposit of heirs in discharge of deceased’s bank stock liability, superintendent of banks must show heirs were personally liable therefor. Love v. Hooker, 168 Miss. 94, 150 So. 917, 1933 Miss. LEXIS 200 (Miss. 1933).

Evidence did not show heirs were personally liable for deceased’s bank stock liability so that court properly refused to permit superintendent of banks to apply their personal deposit in discharge of deceased’s liability. Love v. Hooker, 168 Miss. 94, 150 So. 917, 1933 Miss. LEXIS 200 (Miss. 1933).

Minor stockholder disaffirming purchase after bank’s insolvency was not subject to statutory liability. Mellott v. Love, 152 Miss. 860, 119 So. 913, 1929 Miss. LEXIS 201 (Miss. 1929).

5. Transfer of stock or settlement.

Father who transferred his bank stock to himself as trustee for his infant children held liable as stockholder on bank’s suspension during minority of such infants, though examination after such transfer showed that bank was solvent. (§ 3803, Code 1930.) Carlisle v. Love, 170 Miss. 621, 155 So. 197, 1934 Miss. LEXIS 153 (Miss. 1934).

Superintendent of banks, seeking to enforce bank stockholder’s double liability, held not estopped by unauthorized approval of bank’s compromise settlement. Gift v. Love, 164 Miss. 442, 144 So. 562, 1932 Miss. LEXIS 252 (Miss. 1932).

Before bank went into liquidation, no compromise settlement could be made between bank, stockholder’s heirs, and testamentary trustee, which would result in defeating bank’s right to enforce double liability. Gift v. Love, 164 Miss. 442, 144 So. 562, 1932 Miss. LEXIS 252 (Miss. 1932).

That bank quitclaimed deceased stockholder’s land to heirs, in consideration of its stock, held not to preclude enforcement of double liability. Gift v. Love, 164 Miss. 442, 144 So. 562, 1932 Miss. LEXIS 252 (Miss. 1932).

Bank stockholder’s retransfer of stock to bank in satisfaction of a debt held not to release stockholder’s double liability until next examination of bank. (§ 3803, Code 1930.) Gift v. Love, 164 Miss. 442, 144 So. 562, 1932 Miss. LEXIS 252 (Miss. 1932).

6. Persons entitled to benefit.

Fees of auditors and a special master, in bank liquidation proceedings, were properly a part of the taxable costs involving the liquidation, and were entitled to preference upon distribution of the assets, first as against general assets and then as against any other funds in the hands of the receiver, including funds collected on stockholders’ liability. Taylor, Powell & Wilson v. Parker, 193 Miss. 514, 10 So. 2d 192, 1942 Miss. LEXIS 132 (Miss. 1942).

The stockholder’s liability is not a general asset of an insolvent bank, but is a special trust fund provided for the benefit of all depositors, and for them alone. Board of Levee Comm'rs v. Parker, 187 Miss. 621, 193 So. 346, 1940 Miss. LEXIS 227 (Miss. 1940).

Money paid by stockholders of insolvent bank under statute inures to benefit of all depositors of bank and not only to those whose deposits are guaranteed under § 36, c. United States Fidelity & Guaranty Co. v. Commercial Bank of Clarksdale, 156 Miss. 293, 125 So. 839, 1930 Miss. LEXIS 166 (Miss. 1930).

7. Accrual of liability.

Statutory liability of bank stockholder accrued at time bank became insolvent and closed. Gray v. Love, 173 Miss. 390, 161 So. 679, 1935 Miss. LEXIS 222 (Miss. 1935).

When bank became insolvent and closed, deceased stockholder’s double liability matured, standing in same class as other unsecured debts, and became charge on estate’s entire personalty and realty. Gift v. Love, 164 Miss. 442, 144 So. 562, 1932 Miss. LEXIS 252 (Miss. 1932).

The liability of the stockholder, as to a deposit, accrues with the making of the deposit, and not of the date of granting a charter to do business. Pate v. Bank of Newton, 116 Miss. 666, 77 So. 601, 1917 Miss. LEXIS 343 (Miss. 1917).

8. Action to enforce liability.

Superintendent of Banks need not formally declare bank in liquidation before suing stockholders for statutory liability, but need only make it reasonably appear that assets of bank will be insufficient to pay depositors. Anderson v. Love, 169 Miss. 237, 153 So. 369 (Miss. 1934).

That bank, without consideration, quitclaimed deceased bank stockholder’s land to heirs, pursuant to compromise settlement, and took bank stock in satisfaction of bank’s claim for loan held not to preclude superintendent of banks, after bank closed, from enforcing stockholder’s double liability against land quitclaimed. Gift v. Love, 164 Miss. 442, 144 So. 562, 1932 Miss. LEXIS 252 (Miss. 1932).

Single suit under double liability statute, being in the nature of accounting, is maintainable against all stockholders. Abbey v. Delta Bank & Trust Co., 139 Miss. 36, 103 So. 801, 1925 Miss. LEXIS 120 (Miss. 1925).

Stockholders’ double liability is a primary and not a secondary liability, and bank examiner can bring action against stockholders as soon as it is reasonably apparent that assets are insufficient to pay depositors. Pate v. Bank of Newton, 116 Miss. 666, 77 So. 601, 1917 Miss. LEXIS 343 (Miss. 1917).

9. —Parties.

Actions against stockholders of insolvent state bank for their double liability held maintainable, notwithstanding all the stockholders were not joined in one action, where plea raising question did not name any necessary stockholders omitted from bill. Rather v. Moore, 179 Miss. 78, 173 So. 664, 1937 Miss. LEXIS 8 (Miss. 1937).

Receiver of insolvent bank would not be required to join in suit against stockholders for their double liability those stockholders who had recognized and paid their obligations, and insolvent stockholders, irrespective of whether all stockholders liable should be joined in one suit. Rather v. Moore, 179 Miss. 78, 173 So. 664, 1937 Miss. LEXIS 8 (Miss. 1937).

Superintendent of banks could join all bank stockholders in suit to recover statutory liability. Anderson v. Love, 169 Miss. 237, 153 So. 369 (Miss. 1934).

Chancery court had jurisdiction over nonresident stockholder who was made party defendant to suit by superintendent of banks against all stockholders of bank to recover statutory liability from stockholders, absent contention that none of stockholders resided in county where suit was brought. Anderson v. Love, 169 Miss. 237, 153 So. 369 (Miss. 1934).

10. —Limitations.

Six-year period held applicable to stockholders of insolvent bank for double liability. Rather v. Moore, 179 Miss. 78, 173 So. 664, 1937 Miss. LEXIS 8 (Miss. 1937).

Stockholder’s double liability held not a penalty. Rather v. Moore, 179 Miss. 78, 173 So. 664, 1937 Miss. LEXIS 8 (Miss. 1937).

Where statutory liability of stockholder of bank accrued before death, but claim not probated, suit to recover after expiration of period for presenting claims held barred. Gray v. Love, 173 Miss. 390, 161 So. 679, 1935 Miss. LEXIS 222 (Miss. 1935).

11. Miscellaneous.

The executors of a deceased stockholder, not the defunct bank, were entitled to dividends up to the amount paid by the decedent in satisfaction of her double liability. Somerville v. Anderson, 202 Miss. 157, 30 So. 2d 686, 1947 Miss. LEXIS 254 (Miss. 1947).

Where a stockholder who had paid over the full amount of her stock in compliance with this section [Code 1942, § 5280] to trustees in charge of the assets of the old bank after its reorganization, and thereafter she traded her beneficial interest to such trustees for a farm, payment of liquidating dividends by the trustees was at least prima facie unauthorized. Somerville v. Anderson, 202 Miss. 157, 30 So. 2d 686, 1947 Miss. LEXIS 254 (Miss. 1947).

RESEARCH REFERENCES

Am. Jur.

4 Am. Jur. Pl & Pr Forms (Rev), Banks, Forms 11-13.

CJS.

9 C.J.S., Banks and Banking §§ 5-47 et seq.

Practice References.

Young, Trial Handbook for Mississippi Lawyers § 32:19.

§ 81-5-28. Bank holding companies; definitions; control of banks.

  1. As used in this section, unless the context clearly requires otherwise:
    1. “Bank” means any company that accepts deposits in Mississippi that are insured under the provisions of the Federal Deposit Insurance Act, 12 U.S.C. 1811 et seq., as amended; provided, however, that the term “bank” shall not include a company engaged solely in the trust business, all or substantially all of the deposits of which are in trust funds and are received in a bona fide fiduciary capacity.
    2. “Bank holding company” means any company which is a bank holding company under the provisions of the Federal Bank Holding Company Act of 1956, 12 U.S.C. 1841 et seq., as amended.
    3. “Company” has the meaning assigned in Section 2(b) of the Federal Bank Holding Company Act of 1956, 12 U.S.C. 1841(b), as amended.
    4. “Control” has the meaning assigned in Sections 2(a)(2) and (3) of the Federal Bank Holding Company Act of 1956, 12 U.S.C. 1841(a)(2) and (3), as amended, except that the reference therein to “the board” shall be deemed to refer to the Mississippi Commissioner of Banking and Consumer Finance.
  2. No bank holding company shall control a bank unless the bank is a bank as defined in Section 2(c) of the Federal Bank Holding Company Act of 1956, 12 U.S.C. 1841(c), as amended.
  3. No company that is not a bank holding company shall control a bank.
  4. The Mississippi Commissioner of Banking and Consumer Finance shall have the power to enforce the prohibitions of this section by seeking to enjoin any violation, by issuing cease and desist orders, by imposing administrative fines or penalties, and by any other remedies that are provided by law.

HISTORY: Laws, 1985, ch. 329, eff from and after passage (approved March 15, 1985).

Cross References —

State-chartered banks having and possessing the rights, powers, privileges, immunities, duties and obligations of a national bank having its principal place of business in this state, irrespective of any conflict with the provisions of this section, see §81-5-1(9).

Provision that, prior to approving acquisition of a Mississippi bank or bank holding company by a regional bank holding company, the Commissioner must determine that the acquisition will not result in a violation of this section, see §81-8-3.

Federal Aspects—

The Federal Deposit Insurance Act appears as 16 USCS §§ 1811 et seq.

The Federal Bank Holding Company Act of 1956 appears as 17 USCS §§ 1841 et seq.

RESEARCH REFERENCES

ALR.

Application to banks and banking institutions of antimonopoly or antitrust laws. 83 A.L.R.2d 374.

Right of trustee of land having interest therein to purchase on his own behalf in association with foreclosure by third-party lienor, in absence of express trust provision. 30 A.L.R.4th 732.

Construction and application of § 4(c)(8) of Bank Holding Company Act of 1956 (12 USCS § 1843(c)(8)), permitting bank holding companies to acquire shares in companies whose activities are closely related to banking. 31 A.L.R. Fed. 520.

Construction and application of “grandfather proviso” of § 4(a)(2) of Bank Holding Company Act (12 USCS § 1843(a)(2)). 35 A.L.R. Fed. 942.

Construction and application of Bank Holding Company Act that application for approval to acquire control of bank shall be deemed granted if Federal Reserve Board does not act on application within 91 days (12 USCS § 1842(b)). 38 A.L.R. Fed. 919.

Denial by Board of Governors of Federal Reserve System of application for bank merger, consolidation, or acquisition on anticompetitive grounds under § 3(c) of Bank Holding Company Act of 1956 (12 USCS § 1842(c)). 71 A.L.R. Fed. 438.

Am. Jur.

54 Am. Jur. 2d, Monopolies, Restraints of Trade, and Unfair Trade Practices §§ 709-711 et seq.

CJS.

9 C.J.S., Banks and Banking §§ 6, 7 et seq.

§ 81-5-29. Corporations may be formed to purchase, hold and own bank assets.

Corporations may be formed to purchase, hold and own bank assets. By and with the consent and approval of the Commissioner of Banking and Consumer Finance, corporations may be formed in this state for the purpose of purchasing, holding, owning, dealing in, lending on and borrowing on assets of banks, either open or in liquidation. From and after July 1, 2014, any proposed transfer of bank assets to be purchased, held or owned by a corporation authorized by this section shall be subject to the prior consent and approval of the commissioner. By and with the consent and approval of the commissioner, banks and receivers of banks may purchase any stock issued by such corporations, which shall have all the general corporate powers of corporations created under the general corporation laws of this state. By and with the consent and approval of the commissioner, banks may purchase and deal in any obligations of indebtedness issued by such corporations. In addition to general power to issue stock and borrow money, such corporation shall have specific power to issue stocks, common or preferred, to all agencies of the federal government, and to borrow money from and pledge assets to all such agencies. The commissioner shall have general supervision of the organization, operation and business of such corporation, and may issue and enforce regulations with reference thereto. The name of all such corporations shall include the words “bank securities corporation.”

HISTORY: Codes, 1942, § 5196; Laws, 1934, ch. 146; Laws, 1966, ch. 247, § 1; Laws, 2014, ch. 359, § 2, eff from and after July 1, 2014.

Amendment Notes —

The 2014 amendment substituted “Commission of Banking and Consumer Finance” for “state comptroller” in the second sentence; inserted the third sentence; and substituted “commissioner” for “state comptroller” in the remaining sentences.

Cross References —

Incorporation of banks, see §§81-3-5 et seq.

State-chartered banks having and possessing the rights, powers, privileges, immunities, duties and obligations of a national bank having its principal place of business in this state, irrespective of any conflict with the provisions of this section, see §81-5-1(9).

Ownership by bank of stock of other banks, see §81-5-21.

Prohibition against voting trusts, see §81-5-31.

§ 81-5-31. Voting trusts prohibited.

The transfer of any part of the stock of a state bank to trustees solely or primarily that they may vote the same at annual elections and stockholders’ meetings – “voting trusts” as they are generally known – is expressly prohibited. A violation of this section by any bank or banks shall constitute a breach of law, and subject any such bank or banks to liquidation and forfeiture of their respective charters; provided, however, that this section shall not apply to any stock owned by an agency of the federal government.

HISTORY: Codes, 1942, § 5197; Laws, 1934, ch. 146; Laws, 1966, ch. 248, § 1, eff from and after passage (approved April 11, 1966).

Cross References —

State-chartered banks having and possessing the rights, powers, privileges, immunities, duties and obligations of a national bank having its principal place of business in this state, irrespective of any conflict with the provisions of this section, see §81-5-1(9).

§ 81-5-33. Powers in regard to trusts.

Banks may accept and execute all such trusts and perform such duties of every description as may be committed to them by any person or corporation or that may be committed or transferred to them by order of any court of record. They may receive money in trust, take and accept by grant, assignment, transfer, devise or bequest, and hold any real or personal estate or trusts created according to the laws of this or any other state or of the United States, and execute those legal trusts in regard to the same, on such terms as may be directed or agreed upon. They may act as agent for the investment of money or the management of property for other persons, and as agent for persons and corporations for the purpose of issuing, registering, transferring or countersigning the certificates of stock, bonds or other evidences of debt of any corporation, association, municipality, state, county or public authority on such terms as may be agreed upon. They also may act as guardian for any minor or person with mental illness under the appointment of any court of record having jurisdiction of the person or estate of the minor or person with mental illness and may act as administrator or executor of the estate of any deceased person. They may act as agent or attorney in fact and as commissioner for the sale of property, both real and personal, and may act as assignee or receiver, or as trustee in mortgages or bond issues, or in any other fiduciary capacity authorized by law. They may accept trust funds or other property upon specially agreed terms and pay or deliver the same to the owners, beneficiaries or others, as the case may be, when and as the same should be paid or delivered according to the terms of the trust agreement under which it is held. Whenever under the laws of this or any other state or under the rule or order of any court, the execution of a bond for the protection of a private or court trust is required, a trust company shall be authorized to execute the bond for the protection of any trust or trust estate being administered by it.

Banking corporations created, organized and doing business under the laws of the State of Mississippi may exercise, without amendment of their charters, and under their charter authority to engage in the general business of banking, all or any of the foregoing powers. However, before any bank whose charter merely authorizes the exercise of general banking functions may exercise those powers, the previous written consent of the Commissioner of Banking and Consumer Finance shall be obtained.

Banks exercising any or all of those powers shall segregate all assets held in any fiduciary capacity from the general assets of the bank and shall keep a separate set of books and records showing in proper detail all transactions engaged in under the authority of this section or under the authority granted to them in their charter or otherwise. Those books and records shall be inspected and examined by the state bank examiners at each and every examination of the bank.

No bank shall receive in its trust department deposits of current funds subject to check or the deposit of checks, drafts, bills of exchange or other items for collection or exchange purposes. Funds deposited or held in trust by the bank awaiting investment or distribution shall be carried in a separate account and shall not be used by the bank in the conduct of its business, unless it first sets aside in the trust department United States bonds or bonds of the State of Mississippi or any subdivision of the state, the market value of which shall at all times be not less than ten percent (10%) in excess of the total funds so held, exclusive of the portion of funds insured by the Federal Deposit Insurance Corporation.

In the event of the failure or liquidation of the bank, the owners of the funds held in trust for investment or distribution shall have a prior lien on the bonds or other securities so set apart in addition to their claim against the assets of the bank.

In any case in which the laws of this state require that one acting as trustee, executor, administrator or in any fiduciary capacity must take an oath or make an affidavit, the president, vice president, cashier or trust officer of a bank may take the necessary oath or execute the necessary affidavit.

In making investments of trust funds, it shall be unlawful for any bank to purchase securities from itself or to purchase securities in which it may be interested, directly or indirectly. However, any bank, including a national bank, authorized to do business in this state in a fiduciary capacity may, unless prohibited or otherwise limited by the instrument governing the fiduciary relationship, in the exercise of its investment discretion or at the direction of another person authorized to direct the investment of funds held by the bank as fiduciary, invest and reinvest in the securities of, or other interests in, any open-end or closed-end management type investment company or investment trust registered under the Investment Company Act of 1940, 15 USCS Section 80a-1, et seq., as amended, notwithstanding that the banking institution or affiliate of the banking institution provides services to the investment company or investment trust, such as that of an investment advisor, custodian, transfer agent, registrar, sponsor, distributor, manager or otherwise, and receives reasonable remuneration for those services, so long as the total compensation paid by the trust or custodial estate as trustee’s fees and mutual fund fees is reasonable, taking into account the nature and extent of the trustee’s duties, the nature and extent of the services provided to the investment company or investment trust, and the total compensation, costs and fees that would otherwise be paid, directly or indirectly, by the trust or custodial estate if the investment were made in an investment company or investment trust for which the bank or its affiliates provided no services. With respect to any funds so invested, the banking institution shall make available by statement, prospectus or otherwise to all current income beneficiaries of an account the basis, expressed as a percentage of asset value or otherwise, upon which the remuneration is calculated. No bank shall lend to any officer, director or employee of the bank any funds held in trust by it, and any officer, director or employee making a loan, or to whom such a loan is made, shall be guilty of a felony and, upon conviction, may be fined not more than Five Thousand Dollars ($5,000.00) or imprisoned in the State Penitentiary for not more than five (5) years, or by both that fine and imprisonment, in the discretion of the court.

HISTORY: Codes, 1942, § 5198; Laws, 1934, ch. 146; Laws, 1936, ch. 165; Laws, 1992, ch. 347, § 1; Laws, 2008, ch. 442, § 21, eff from and after July 1, 2008.

Amendment Notes —

The 2008 amendment, in the fourth sentence of the first paragraph, substituted “or person with mental illness” for “or insane person” twice; in the second paragraph, divided the former first sentence into two sentences by substituting “foregoing powers. However, before” for “foregoing powers, but before,” and in the second sentence, substituted “banking functions may exercise” for “banking functions, shall exercise”; in the next-to-last paragraph, substituted “fiduciary capacity must take an oath” for “fiduciary capacity, shall take an oath”; and made minor stylistic changes.

Cross References —

Banks as depositories, see §§27-105-1 et seq.

Federally insured loans to veterans, see §35-3-19.

Investment in mortgages insured by Federal Housing Administration, see §§43-33-301 et seq.

Bonds of the Wavelands Regional Wastewater Management District as legal investments and securities, see §49-17-199.

Bonds of the Mississippi Gulf Coast Regional Wastewater Authority as legal investments and securities, see §49-17-339.

Investment in farm credit securities, see §75-69-9.

State-chartered banks having and possessing the rights, powers, privileges, immunities, duties and obligations of a national bank having its principal place of business in this state, irrespective of any conflict with the provisions of this section, see §81-5-1(9).

Multistate, state and limited liability trust institutions, see §81-27-1.001 et seq.

Power of bank to act as administrator, see §91-7-63.

Tennessee Valley Authority bonds and obligations as legal investments for banks, see §91-13-11.

Imposition of standard state assessment in addition to all court-imposed fines or other penalties for any felony violation, see §99-19-73.

Federal Aspects—

Investment Company Act of 1940, see 15 USCS §§ 80a-1 et seq.

JUDICIAL DECISIONS

1. In general.

Bank does not hold proceeds of draft in trust under Code 1906, § 4852 (see § 7881), which provides for retention of money on collection of draft with bill of lading attached. Alexander County Nat'l Bank v. Conner, 110 Miss. 653, 70 So. 827, 1915 Miss. LEXIS 98 (Miss. 1915).

OPINIONS OF THE ATTORNEY GENERAL

Section27-105-365 deals specifically with the handling of community hospital funds, it is controlling over the provisions of §81-5-33, which deals with bank trust funds in general, when dealing with a trust agreement for a community hospital. Galloway, September 27, 1995, A.G. Op. #95-0460.

RESEARCH REFERENCES

ALR.

Power and capacity of bank to take devise or bequest. 8 A.L.R.2d 454.

Retrospective application of statutes relating to trust investments. 35 A.L.R.2d 991.

Construction and application of statutes prohibiting or limiting loans to bank’s officers or directors. 49 A.L.R.3d 727.

Guardian’s authority, without seeking court approval, to exercise ward’s right to revoke trust. 53 A.L.R.4th 1297.

Am. Jur.

10 Am. Jur. 2d, Banks and Financial Institutions §§ 595 et seq., 617 et seq., 519.

CJS.

9 C.J.S., Banks and Banking §§ 223 et seq.

§ 81-5-34. Accounts of administrators, executors, guardians, trustees, and other fiduciaries.

Any bank, including a national bank, may accept accounts in the name of any administrator, executor, guardian, trustee or other fiduciary in trust for a named beneficiary or beneficiaries including the authority to exercise all rights and powers granted to a fiduciary under the Revised Uniform Fiduciary Access to Digital Assets Act created under Chapter 23, Title 91. Any such fiduciary shall have the power to make payments upon and to withdraw any such account, in whole or in part. The withdrawal value of any such account or other rights relating thereto may be paid or delivered, in whole or in part, to such fiduciary, without regard to any notice to the contrary, as long as such fiduciary is living. The payment or delivery to any such fiduciary or a receipt of acquittance signed by any such fiduciary to whom any such payment or any such delivery of rights is made shall be valid and sufficient release and discharge of any bank for the payment or delivery so made. Whenever a person holding an account in a fiduciary capacity dies, and no written notice of the revocation or termination of the trust relationship has been given to a bank and the bank has no notice of any other disposition of the trust estate, the withdrawal value of such account or other rights relating thereto may, at the option of a bank, be paid or delivered, in whole or in part, to the beneficiary or beneficiaries of such trust. Whenever an account shall be opened by any person describing himself in opening such account as trustee for another, and there is no other or further notice of the existence and terms of a legal and valid trust, then such description shall be given in writing to such bank. In the event of the death of the person so described as trustee, the withdrawal value of such account or any part thereof may be paid to the person for whom the account was thus stated to have been opened, and such account and all additions thereto shall be the property of such person, unless prior to payment the trust agreement is presented to the bank showing a contrary interest. When made in accord with this section, the payment or delivery to any such beneficiary, beneficiaries or designated person, or a receipt or acquittance signed by any such beneficiary, beneficiaries or designated person for any such payment or delivery, shall be valid and sufficient release and discharge of a bank for the payment or delivery so made. Trust accounts permitted by this section shall not be required to be acknowledged and recorded. When an account is opened in a form described in this section, the right set forth in Section 81-5-62 shall apply. No bank paying any beneficiary in accordance with the provisions of this section shall thereby be liable for any estate, inheritance or succession taxes which may be due this state. The term “accounts” or “account” as used in this section shall include, but not be limited to, any form of deposit or account, such as a savings account, checking account, time deposit, demand deposit or certificate of deposit, whether negotiable, nonnegotiable or otherwise.

HISTORY: Laws, 1984, ch. 326, § 1; Laws, 1988, ch. 484, § 1; Laws, 2017, ch. 419, § 20, eff from and after July 1, 2017.

Amendment Notes —

The 2017 amendment added “including the authority to exercise…Chapter 23, Title 91” at the end of the first sentence.

Cross References —

State-chartered banks having and possessing the rights, powers, privileges, immunities, duties and obligations of a national bank having its principal place of business in this state, irrespective of any conflict with the provisions of this section, see §81-5-1(9).

§ 81-5-35. State and national banks acting in fiduciary capacity not required to file bond; exception.

No state or national bank domiciled in this state and duly authorized by law to act in a fiduciary capacity shall be required to make or file any bond or other security for the faithful performance of its duty when acting as executor, administrator, guardian, conservator, trustee, or in any other fiduciary capacity, unless the instrument creating any such trust or the court having jurisdiction thereof shall specifically direct that such bond or other security shall be given for the performance of such trust and shall fix the amount thereof. The chancery court or chancellor in vacation, having jurisdiction over any such estate or trust existing at the time of the enactment of this statute may, in its discretion, cancel any such bond or release any such security and discharge the surety or sureties thereon. However, the retroactive effect of this section shall not apply to the release of any such bond or security or surety on any estate, guardianship, or trust on which a bond or security or surety was required as a result of the failure of a probated will to waive bond, security, or surety.

HISTORY: Codes 1942, § 5198.3; Laws, 1968, ch. 252, eff from and after passage (approved June 24, 1968).

Cross References —

State-chartered banks having and possessing the rights, powers, privileges, immunities, duties and obligations of a national bank having its principal place of business in this state, irrespective of any conflict with the provisions of this section, see §81-5-1(9).

§ 81-5-37. Uniform Common Trust Fund Law.

  1. Any bank or trust company qualified to act as a fiduciary in this state may establish common trust funds for the purpose of furnishing investments to itself as fiduciary, or to itself and others, as co-fiduciaries; and may, as such fiduciary or co-fiduciary, invest funds which it lawfully holds for investment in interests in such common trust funds, if such investment is not prohibited by the instrument, judgment, decree, or order creating such fiduciary relationship, and if, in the case of co-fiduciaries, the bank or trust company procures the consent of its co-fiduciary or co-fiduciaries to such investment.
  2. Unless ordered by a court of competent jurisdiction the bank or trust company operating such common trust funds is not required to render a court accounting with regard to such funds; but it may, by application to the chancery court, secure approval of such an accounting on such conditions as the court may establish.
  3. This section shall be so interpreted and construed as to effectuate the general purpose of making uniform the law of those states which enact the Uniform Common Trust Fund Act.
  4. This section may be cited as the Uniform Common Trust Fund Law.

HISTORY: Codes, 1942, § 5198.5; Laws, 1950, ch. 328, §§ 1-7.

Cross References —

State-chartered banks having and possessing the rights, powers, privileges, immunities, duties and obligations of a national bank having its principal place of business in this state, irrespective of any conflict with the provisions of this section, see §81-5-1(9).

Multistate, state and limited liability trust institutions, see §81-27-1.001 et seq.

Comparable Laws from other States —

Alabama Code, §§5-12A-1 through5-12A-15.

Arkansas Code Annotated, §§28-69-201,28-69-202.

Tennessee Code Annotated, §§35-4-101 through35-4-105.

Texas Property Code, §§ 113.171, 113.172.

RESEARCH REFERENCES

ALR.

Construction of Uniform Common Trust Fund Act. 64 A.L.R.2d 268.

Am. Jur.

Jurisdictions adopting Uniform Common Trust Fund Law, see Am. Jur. 2d Desk Book, Item No. 124.

§ 81-5-39. Banks may register securities held in fiduciary capacity in name of bank’s nominee.

Whenever any bank or trust company organized under the laws of this state or any national bank doing business in this state is acting as trustee, guardian, executor, administrator, or other fiduciary and has a nominee, whether an individual, a corporation or a partnership, in whose name stocks, bonds, debentures, or any other corporate securities in registered form, may be registered, it shall be lawful and any such fiduciary is hereby authorized to register any such securities in the name of such nominee without disclosure of the trust or other fiduciary relationship on the face of the instrument evidencing such securities or in the bond registry or on the books of the corporation issuing the same, provided that:

the books and records kept by the fiduciary and the accounts rendered by it shall clearly reflect the ownership of such securities by the fiduciary,

the securities registered in the name of the nominee shall at all times be retained in the possession of the fiduciary and the nominee shall have no access thereto except under the immediate supervision of the fiduciary, and

the fiduciary shall be personally liable for any loss to the trust or estate resulting from any act or neglect of such nominee with respect to any securities registered in the name of the nominee.

Whenever any such bank or trust company is acting jointly with others as trustee or executor of a trust or estate it shall be lawful by agreement with such other fiduciary to register the securities of such trust or estate in the name of such bank or trust company’s nominee; and in the event two such banks or trust companies shall be acting as co-fiduciaries it shall be lawful to register the securities of the trust or estate in the name of the nominee of either fiduciary or by agreement to register a proportionate part thereof in the name of the nominee of each fiduciary.

HISTORY: Codes, 1942, § 5279.5; Laws, 1956, ch. 144, eff July 1, 1956.

Cross References —

State-chartered banks having and possessing the rights, powers, privileges, immunities, duties and obligations of a national bank having its principal place of business in this state, irrespective of any conflict with the provisions of this section, see §81-5-1(9).

§ 81-5-40. Repealed.

Repealed by Laws, 1996, ch. 441, § 71, eff from and after May 1, 1997.

[Laws, 1979, ch. 420, § 1]

Editor’s Notes —

Former §81-5-40 was entitled: Licensing of foreign banking corporations to do business.

§ 81-5-41. Foreign investors may engage in certain activities without qualifying.

  1. Without excluding other activities within this state, or activities outside this state involving taking security of real estate located in this state, which may not constitute transacting or engaging in business in this state, any of the following, not organized under the laws of the State of Mississippi and which has no place of business within this state: a mutual savings bank or mutual savings fund society, or any national banking association now or hereafter organized under the laws of the United States of America, or any bank or trust company now or hereafter incorporated or organized under the laws of any state of the United States of America (including the District of Columbia,) or any insurance company, or any corporation all the capital stock of which (except directors’ qualifying shares) is owned by one or more such mutual savings banks, mutual savings fund societies, national banking associations, banks, trust companies or insurance companies, engaged in making or investing in loans secured by real estate or lending on the security of real estate, shall not be considered to be transacting or engaging in business in this state, by reason of carrying on in this state any one or more of the following activities:
    1. The acquisition or making of loans, or participation or interests therein, secured by deeds of trust, mortgages or mortgage notes on real property situated in Mississippi pursuant to commitment agreements or arrangements made prior to or following the origination or creation of said loans;
    2. The making directly or through or in participation with national or state banks having banking offices in this state or other Mississippi concerns engaged within this state in the business of making or servicing such loans, of loans secured by such mortgages or mortgage notes, or loans secured by assignments or pledges of obligations secured by such mortgages or mortgage notes;
    3. The ownership, modification, renewals, extensions, transfers or foreclosure of such loans, mortgages or mortgage notes, or the acceptance of substitute or additional obligators thereon;
    4. The maintenance of bank accounts in national or state banks having banking offices within this state in connection with the collection or servicing of such loans, mortgages or mortgage notes;
    5. The maintenance of depository or pledge-holder agreements or arrangements with national or state banks having banking offices within this state in connection with the taking of assignments or pledges of such loans, mortgages or mortgage notes;
    6. The making, collection and servicing of such loans, mortgages or mortgage notes directly or through a Mississippi concern engaged in the business within this state of servicing real estate loans;
    7. The taking of deeds to the mortgaged property for a reasonable period of time either in lieu of foreclosure or for the purpose of transferring title either to the Federal Housing Administration or to the Veterans Administration as the insurer or guarantor;
    8. The acquisition of title to real property for a reasonable period of time under foreclosure sale or from the owner in lieu of foreclosure;
    9. The management, rental, maintenance and sale, or the operating, maintaining, renting or otherwise dealing with, selling or disposing of real property acquired under foreclosure sale or by agreement in lieu thereof;
    10. The maintaining or defending of any actions or suits relating to such loans, deeds of trust, mortgages, mortgage notes, agreements or other arrangements or activities referred to herein or incidental thereto; and
    11. The physical inspection and appraisal of real property in Mississippi as security for mortgage notes or mortgages and negotiations for such loans.
  2. The acquisition or making of loans, or participations or interest therein, which are secured by mortgages or mortgage notes on real property located in this state and the doing of any or all the other acts or things with respect hereto enumerated in this section, by any such bank, trust company, or any other corporation when acting as fiduciary, trustee or agent of any trust, whether testamentary or inter vivos, including foundations and trusts established for the purpose of funding pension, profit-sharing or employee benefit plans, or by an endowed institution, foundation or eleemosynary corporation, or by any corporation chartered under the laws of another state as a group insurance and annuity association and engaged in the business of insurance, annuities, pensions and retirement plans for any group of persons, educational institutions and others, or by any corporation all the capital stock of which (except directors’ qualifying shares) is owned by one or more of the entities referred to above, shall likewise not be considered to be transacting or engaging in business in this state; and any such corporation, when so acting as fiduciary, trustee or agent, and any such trust, endowed institution, foundation, eleemosynary corporation or group insurance and annuity association shall be entitled to all the rights, privileges and exceptions set forth in this section.
  3. Nothing in this section shall be construed as limiting the benefits and application of this section to loans insured or guaranteed by the Federal Housing Administration, the Veterans Administration, or any other governmental agency or department, and the benefits of this section shall extend to and include, all loans or participations or interests therein, secured by mortgages or mortgage notes on real property situated in Mississippi, whether or not insured or guaranteed.
  4. No such corporation, institution or entity coming under the provisions of this section, and confining its business operations in Mississippi within the limits herein provided, shall be required to qualify to do business in this state by filing its charter in the Office of the Secretary of State or to pay any tax or fee required to be paid by corporations under any law of this state. However, such exemption shall not include: (a) Ad valorem taxes assessed against any real or personal property which such corporation, institution or entity may own in the State of Mississippi; (b) Mississippi income, franchise and privilege tax which may result from the sale, ownership or control after acquisition of such property by foreclosure, or acquisition in lieu of foreclosure, either by virtue of the value of the specific piece of property so foreclosed or to which title is taken in lieu of foreclosure, or by virtue of the rental or other income realized from said property.
  5. Any bank, trust company, mutual savings bank, pension fund, mutual savings fund society, mutual banking association, insurance company or any other type of organization defined in this section and investing funds in Mississippi may sue or be sued within this state in relation to such mortgages or deeds of trust on real properties, securities or debts and service of process may be performed by service upon any custodian or agent appointed within the state. If no such custodian or agent has been appointed, the Secretary of State shall be and he is hereby appointed and shall remain as the duly authorized agent of such organization upon whom such service of process may be had. In cases where such organization is sued, the venue of such action shall be in the county of the residence of the plaintiffs, or any of them, except where land is involved, in which case, venue shall be in the county in which the land, or any part of it, is located.

    The Secretary of State, upon the receipt of process by him on such organization, shall forthwith forward notice of the same by registered mail with return receipt requested to the post office address of such nonresident corporation, mutual savings bank or association and shall make a notation of said fact upon his process record to such effect.

  6. Nothing in this section shall be construed to permit any corporation to do business in violation of the Small Loan Law of the State of Mississippi nor of the laws of Mississippi governing the organization and operation of building and loan associations or societies, or savings and loan associations or societies, nor to limit the authority of corporations authorized to do unlimited business under the general laws of Mississippi, or to qualify to be so authorized.

HISTORY: Codes, 1942, § 5287.5; Laws, 1954, ch. 163, §§ 1-3 [¶¶ 1-3]; Laws, 1968, ch. 254, § 1; Laws, 1978, ch. 514, § 7; Laws, 1996, ch. 400, § 46, eff from and after passage (approved March 19, 1996).

Cross References —

Actions for damages against nonresidents, see §§11-11-11,13-3-57.

Small loan regulatory law, see §§75-67-101 et seq.

State-chartered banks having and possessing the rights, powers, privileges, immunities, duties and obligations of a national bank having its principal place of business in this state, irrespective of any conflict with the provisions of this section, see §81-5-1(9).

Small loan law, see §81-5-79.

RESEARCH REFERENCES

ALR.

Place where corporation is doing business for purposes of state venue statute. 42 A.L.R.5th 221.

§ 81-5-43. Out-of-state banking and trust associations and corporations may act as executors, administrators, trustees and guardians.

  1. Any out-of-state banking corporation, or banking association, or out-of-state trust corporation, or association, which has its principal office in another state, authorized to act as executor or administrator of estates of decedents or trustees under wills and voluntary trust agreements, and as guardian of minors or incompetent persons, in the state where it has its principal office, may apply and act in such capacities in this state in ancillary or original proceedings, if similar domestic corporations or associations having their principal office in this state, which are authorized in this state to so act, are permitted to act in like capacity with no greater responsibilities or requirements in the state where such out-of-state corporation or association has its principal office.
  2. No such corporation or association shall act in any such capacities until it shall have appointed in writing the Secretary of State of Mississippi, and his successor, as its service agent, upon whom all process in any suit or proceeding against it may be served, and in such writing shall agree that any process against it which shall be served upon such Secretary of State shall be of the same legal force and validity as if served on such corporation or association. Such appointment shall continue so long as any liability shall remain outstanding against the corporation or banking association pertaining to any such matters.
  3. The court having jurisdiction shall require such corporation or association to give bond for the performance of such trust, unless otherwise provided in the trust agreement or will, in which case the provisions of the statutes in such cases made and provided shall apply. However, no such corporation or association shall be required to give any bond for the performance of such trust where such corporation or association is not required to give bond for the performance of such trust under or by virtue of the laws of the state in which such corporation or association has its principal office.
  4. This section shall not prevent out-of-state banking corporations or banking associations or out-of-state trust corporations or associations from qualifying and acting in a fiduciary capacity in the State of Mississippi under wills or trust agreements heretofore executed, designating such out-of-state corporation or association as a fiduciary thereunder, nor shall this section prevent any such out-of-state corporation or association that has heretofore qualified as a fiduciary in the State of Mississippi from continuing to serve as a fiduciary in matters in which they have heretofore qualified in this state. This section shall not apply to trust agreements executed for the purpose of securing loans or guaranties thereof.
  5. For the purposes of this section, “out-of-state” means having the charter of incorporation issued by a state other than the State of Mississippi, or having its main office in a state other than the State of Mississippi; provided, however, this section shall not apply to an out-of-state national or state bank or out-of-state federal or state thrift which maintains a branch in Mississippi.

HISTORY: Codes, 1942, § 5198.7; Laws, 1956, ch. 145, §§ 1-5; Laws, 1962, ch. 174; Laws, 1996, ch. 400, § 47, eff from and after passage (approved March 19, 1996).

Cross References —

State-chartered banks having and possessing the rights, powers, privileges, immunities, duties and obligations of a national bank having its principal place of business in this state, irrespective of any conflict with the provisions of this section, see §81-5-1(9).

Executors and administrators generally, see §§91-7-35 et seq.

Guardianship generally, see §§93-13-1 et seq.

§ 81-5-45. Qualification and oath of directors; meetings; executive and auditing committee.

Every director of every state bank must be the owner, in his or her own right, of unencumbered stock therein to the amount of at least Two Hundred Dollars ($200.00) par value. He shall take and subscribe an annual oath that he will faithfully and diligently perform the duties of his office and will not knowingly violate or permit to be violated any provision of law. Such oath shall be immediately transmitted to the Department of Banking and Consumer Finance and filed in its office. Every executive officer, as defined in Regulation O promulgated by the Board of Governors of the Federal Reserve System, of every bank doing business under the laws of this state shall subscribe to a similar annual oath and immediately transmit the same to the Department of Banking and Consumer Finance. The board of directors of every banking corporation shall meet at least once each quarter in each calendar year and shall at such times consider generally the affairs of the bank. An executive and auditing committee selected by a majority of the board of directors shall meet at least in those months when the board of directors does not meet and shall at such times consider generally the affairs of the bank. However, if the board of directors of any bank meets every month, the executive and auditing committee of that bank shall meet at least two (2) times annually. The Commissioner of Banking and Consumer Finance, in his discretion, may prescribe such forms as he may deem necessary, which, when properly executed, shall reflect the activities of the board of directors or the executive and auditing committee. It shall be the responsibility of the board of directors and the executive and auditing committee at such meetings to complete the forms prescribed and furnished by the Department of Banking and Consumer Finance, and to file same in its office when required by the commissioner.

The results of the examinations by the board of directors and the executive and auditing committee shall be entered in the minutes of the bank.

HISTORY: Codes, 1942, § 5199; Laws, 1934, ch. 146; Laws, 1936, ch. 165; Laws, 1964, ch. 223; Laws, 1994, ch. 320, § 4; Laws, 1997, ch. 542, § 3, eff from and after passage (approved April 10, 1997).

Editor’s Notes —

The 1997 amendment inserted “officer, as defined in Regulation O promulgated by the Board of Governors of the Federal Reserve System,” in the third sentence.

Cross References —

State-chartered banks having and possessing the rights, powers, privileges, immunities, duties and obligations of a national bank having its principal place of business in this state, irrespective of any conflict with the provisions of this section, see §81-5-1(9).

Penalty for failure to perform duties or to conform to requirements of department of bank supervision, see §81-5-103.

Standard of care for bank directors established, see §81-5-105.

Directors of credit unions, see §81-13-27.

JUDICIAL DECISIONS

1. In general.

2. Liability of directors and officers.

3. Actions against directors and officers-parties.

4. —Pleading.

5. —Limitations.

1. In general.

Directors not examining books and securities to determine bank’s condition do not exercise ordinary care. Boyd v. Applewhite, 121 Miss. 879, 84 So. 16, 1920 Miss. LEXIS 128 (Miss. 1920).

General assignment for benefit of creditors by directors of bank without consent of stockholders held valid. Dodwell v. Rieves, 114 Miss. 4, 74 So. 770, 1917 Miss. LEXIS 4 (Miss. 1917).

2. Liability of directors and officers.

Executrix of negligent director cannot sue surviving negligent directors for gross negligence, since one negligent director may not sue his associate directors for gross negligence. Boyd v. Applewhite, 121 Miss. 879, 84 So. 16, 1920 Miss. LEXIS 128 (Miss. 1920).

Directors whose negligent supervision renders minority stock valueless cannot plead ignorance. Boyd v. Applewhite, 121 Miss. 879, 84 So. 16, 1920 Miss. LEXIS 128 (Miss. 1920).

Liability of directors for negligence is tortious, so that they may be sued jointly or severally. Boyd v. Applewhite, 121 Miss. 879, 84 So. 16, 1920 Miss. LEXIS 128 (Miss. 1920).

Cashier is liable for losses resulting from his tortious acts. Boyd v. Applewhite, 121 Miss. 879, 84 So. 16, 1920 Miss. LEXIS 128 (Miss. 1920).

3. Actions against directors and officers-parties.

Pledgee of stock may join in suit against directors for negligence. Boyd v. Applewhite, 121 Miss. 879, 84 So. 16, 1920 Miss. LEXIS 128 (Miss. 1920).

Some of depositors and stockholders may sue directors and officers of bank on behalf of all to recover losses through negligence and mismanagement, where bank is in hands of receiver and he refuses to bring suit. Ellis v. H. P. Gates Mercantile Co., 103 Miss. 560, 60 So. 649, 1912 Miss. LEXIS 201 (Miss. 1912).

Part of depositors may sue directors for deceit in inducing them to make deposits when directors knew bank was insolvent. Brotherhood of Locomotive Firemen v. Hand, 90 Miss. 893, 44 So. 161, 1907 Miss. LEXIS 112 (Miss. 1907).

4. —Pleading.

Declaration in suit against directors of bank to recover deposit on ground of wilful and negligent failure to perform their duties causing insolvency, held demurrable for failure to allege that receiver had been requested to bring suit and had refused. Hardin v. McKnight, 107 Miss. 73, 64 So. 965, 1914 Miss. LEXIS 51 (Miss. 1914).

5. —Limitations.

Suit by minority stockholders for loss from directors’ negligence is not governed by the 3-year statute of limitation. Boyd v. Applewhite, 121 Miss. 879, 84 So. 16, 1920 Miss. LEXIS 128 (Miss. 1920).

RESEARCH REFERENCES

Am. Jur.

10 Am. Jur. 2d, Banks and Financial Institutions §§ 329 et seq., 476.

3A Am. Jur. Legal Forms 2d, Banks § 38:63.

CJS.

9 C.J.S., Banks and Banking §§ 97 et seq.

§ 81-5-47. Directors may contract to sell stock while continuing to serve.

Any director of a bank or other banking corporation while serving in such capacity may enter into a contract or option providing for the sale of his or her stock at such time as he or she ceases, by death or otherwise, to be a director thereof.

HISTORY: Codes, 1942, § 5199.5; Laws, 1966, ch. 256, § 1, eff from and after passage (approved May 26, 1966).

Cross References —

State-chartered banks having and possessing the rights, powers, privileges, immunities, duties and obligations of a national bank having its principal place of business in this state, irrespective of any conflict with the provisions of this section, see §81-5-1(9).

§ 81-5-49. Interlocking directorates prohibited.

No person shall be permitted to be a director in more than one bank serving the same incorporated town or city doing business in this state. Any person holding a directorship in violation of this section shall be guilty of a misdemeanor, and upon conviction shall be fined not more than $100.00 and be ineligible to hold a directorship in any state bank within two years therefrom. This section shall not apply to savings banks and trust companies operated in connection with commercial banks doing business in the same building.

HISTORY: Codes, 1942, § 5200; Laws, 1934, ch. 146.

Cross References —

State-chartered banks having and possessing the rights, powers, privileges, immunities, duties and obligations of a national bank having its principal place of business in this state, irrespective of any conflict with the provisions of this section, see §81-5-1(9).

Imposition of standard state assessment in addition to all court imposed fines or other penalties for any misdemeanor violation, see §99-19-73.

RESEARCH REFERENCES

ALR.

Prohibition of interlocking directorates between competing corporations under Section 8 of Clayton Act (15 USCS § 19). 60 A.L.R. Fed. 129.

§ 81-5-51. Loans to directors and executive officers.

Loans aggregating fifteen percent (15%) of the unimpaired capital and unimpaired surplus may be made by any state bank to any director or executive officer thereof, as defined in Regulation O promulgated by the Board of Governors of the Federal Reserve System, less existing direct and indirect liabilities thereto, upon affirmative approval of a majority of all directors spread on the minutes of a directors’ meeting held before such loan is made, provided, such loan is made on substantially the same terms and conditions extended to other borrowers for comparable transactions. Any state bank may lend to any such director or executive officer thereof, upon affirmative approval of a majority of all directors spread on the minutes of a directors’ meeting held before such loan is made, not more than twenty percent (20%) of the unimpaired capital and unimpaired surplus of the bank, less the amount of existing direct and indirect liabilities, when secured; or when the portion thereof in excess of any amount loaned under the first provision hereof is secured by obligations of the United States government, the State of Mississippi, and the levee districts, counties, road districts, school districts, and municipalities of the State of Mississippi, obligations of any other state of the United States and other bonds of recognized character and standing, which are the subject of daily newspaper market quotations, provided such loan shall not exceed eighty percent (80%) of the market or par value (whichever is less) of the bonds or obligations offered as security. Any state bank may lend to any executive officer or director thereof upon affirmative approval of a majority of all directors spread on the minutes of a directors’ meeting held before such loan is made, such amount as is safe and proper, when secured by warehouse receipts or shippers’ order bills of lading representing actual existing values, provided the amount loaned shall not exceed eighty percent (80%) of the market value of the commodities representing the actual existing values, and loans of this nature shall be made payable on demand so that the security held therefor may be sold on any date and the proceeds thereof applied to the payment of the loan. However, a bank’s board of directors may, as shown in its minutes, give to a bank officer the authority to make secured or unsecured loans to an executive officer or director of such bank, without receiving the board’s prior approval, in an amount that, when aggregated with the amount of all other extensions of credit to that person and to all related interests of that person, does not exceed the greater of Twenty-five Thousand Dollars ($25,000.00) or five percent (5%) of the bank’s unimpaired capital and unimpaired surplus. However, no state bank shall extend credit to any director or executive officer thereof, in an amount that, when aggregated with all other extensions of credit to that person and to all related interests of that person, exceeds Five Hundred Thousand Dollars ($500,000.00) without documented prior affirmative approval of a majority of its directors.

Loans and discounts by a state bank to a director or executive officer thereof secured in full by funds on deposit in time or savings accounts with the lending bank to the credit of the borrower shall not be restricted to the fifteen percent (15%) or twenty percent (20%) limitations herein prescribed.

The limitations of this section shall not apply where an executive officer or director shall bona fide purchase from the bank at a reasonable price real or personal property acquired by the bank in payment of debts due the bank, provided such transactions are approved by a majority of the board of directors, such approval to be shown in their minutes; and, in cases where loans are made by branch banks, the sum total of loans made by any branch or branches and its parent bank to such executive officer or director shall be computed as against the total capital stock and surplus of the parent bank and its branch or branches. Loans heretofore made to executive officers or directors may be renewed or extended if in accord with sound banking practice.

HISTORY: Codes, 1942, § 5201; Laws, 1934, ch. 146; Laws, 1936, ch. 165; Laws, 1966, ch. 249, § 1; Laws, 1983, ch. 342, § 2; Laws, 1988, ch. 543, § 1; Laws, 1995, ch. 308, § 4; Laws, 1996, ch. 400, § 16, eff from and after passage (approved March 19, 1996).

Cross References —

State-chartered banks having and possessing the rights, powers, privileges, immunities, duties and obligations of a national bank having its principal place of business in this state, irrespective of any conflict with the provisions of this section, see §81-5-1(9).

JUDICIAL DECISIONS

1. In general.

2. Legality of loan.

3. —Subsequent approval of loan.

4. Liability, generally.

5. Liability on bond.

6. Actions.

1. In general.

Statute limiting loans by bank to its officers and employees and providing for civil and penal liability of directors, officers, and employees for violation thereof must be strictly construed. Little v. Newhouse, 169 Miss. 154, 152 So. 848, 1934 Miss. LEXIS 38 (Miss. 1934).

2. Legality of loan.

Renewal of original note without lending of new money held not “effecting of loan,” within statute prohibiting officers or employees of banking department from effecting loans from state bank. State v. Love, 170 Miss. 666, 150 So. 196, 1933 Miss. LEXIS 12 (Miss. 1933).

Offense of “borrowing money” or “effecting loan” from state bank, within statute prohibiting such loans by officers or employees of banking department, does not continue until loan is paid. State v. Love, 170 Miss. 666, 150 So. 196, 1933 Miss. LEXIS 12 (Miss. 1933).

3. —Subsequent approval of loan.

Subsequent approval by board of directors of loan to president did not cure illegality of loan not approved by board when made, as respects insurer’s liability on employee’s fidelity bond issued to bank. Fidelity & Deposit Co. v. Merchants' & Marine Bank, 169 Miss. 755, 151 So. 373, 154 So. 260, 1933 Miss. LEXIS 9 (Miss. 1933).

4. Liability, generally.

Bank directors who renewed loan were not civilly liable under statute making directors liable for excessive or dishonest “loans.” Little v. Newhouse, 169 Miss. 154, 152 So. 848, 1934 Miss. LEXIS 38 (Miss. 1934).

Executive officers of bank are liable to creditor damaged by loan to director, whether excessive or not, without consent of others required by statute. Little v. Newhouse, 164 Miss. 619, 145 So. 608, 1933 Miss. LEXIS 249 (Miss. 1933).

Directors and majority stockholders permitting excessive loans to directors are liable to minority stockholders for loss of their stock. Boyd v. Applewhite, 121 Miss. 879, 84 So. 16, 1920 Miss. LEXIS 128 (Miss. 1920).

Director sued for loss to stockholders from excessive loans to himself cannot plead that he did not act for the bank. Boyd v. Applewhite, 121 Miss. 879, 84 So. 16, 1920 Miss. LEXIS 128 (Miss. 1920).

Cashier making excessive and unauthorized loans to a director is liable for resulting losses. Boyd v. Applewhite, 121 Miss. 879, 84 So. 16, 1920 Miss. LEXIS 128 (Miss. 1920).

5. Liability on bond.

Employees’ fidelity bond, which provided for its termination upon discovery by bank of loss, terminated as to president when he loaned money to himself without approval of board of directors, if misappropriation was then known to cashier and vice president, and, if not, bond terminated when board subsequently approved loan. Fidelity & Deposit Co. v. Merchants' & Marine Bank, 169 Miss. 755, 151 So. 373, 154 So. 260, 1933 Miss. LEXIS 9 (Miss. 1933).

Employees’ fidelity bond, which provided for its termination upon discovery by bank of loss, terminated as to assistant cashier when executive officer of bank acquired knowledge that cashier obtained loan without approval of board of directors, and, if not, bond terminated when board subsequently approved loan. Fidelity & Deposit Co. v. Merchants' & Marine Bank, 169 Miss. 755, 151 So. 373, 154 So. 260, 1933 Miss. LEXIS 9 (Miss. 1933).

Loan by bank president to golf course partnership composed of his wife and others but in which he had no interest, though not approved by board of directors of bank, held not covered by bankers’ blanket bond. Fidelity & Deposit Co. v. Merchants' & Marine Bank, 169 Miss. 755, 151 So. 373, 154 So. 260, 1933 Miss. LEXIS 9 (Miss. 1933).

Bank had burden of proving that loan by its president to himself without approval of board of directors was made subsequent to time when bankers’ blanket bond became effective. Fidelity & Deposit Co. v. Merchants' & Marine Bank, 169 Miss. 755, 151 So. 373, 154 So. 260, 1933 Miss. LEXIS 9 (Miss. 1933).

Absent evidence as to what hour of day president made loan to himself without approval of board of directors of bank, surety held not liable therefor on bankers’ blanket bond which became effective at noon on same day. Fidelity & Deposit Co. v. Merchants' & Marine Bank, 169 Miss. 755, 151 So. 373, 154 So. 260, 1933 Miss. LEXIS 9 (Miss. 1933).

Loans by bank president to his partners for use in fishing partnership, not approved by board of directors of bank and evidenced by notes which were not signed by president as maker, held covered by employees’ fidelity bond insuring bank against pecuniary loss through fraud or dishonesty of its employees directly or in connivance with others. Fidelity & Deposit Co. v. Merchants' & Marine Bank, 169 Miss. 755, 151 So. 373, 154 So. 260, 1933 Miss. LEXIS 9 (Miss. 1933).

Loan by bank president to corporation wherein he was one of its three stockholders who determined to apply therefor, subsequently approved by board of directors of bank, held not covered by employees’ fidelity bond insuring bank against pecuniary loss through fraud or dishonesty of its employees directly or in connivance with others. Fidelity & Deposit Co. v. Merchants' & Marine Bank, 169 Miss. 755, 151 So. 373, 154 So. 260, 1933 Miss. LEXIS 9 (Miss. 1933).

Act of bank president in discounting notes owned by corporation wherein he was one of its three stockholders who determined to sell notes to bank whose board of directors subsequently approved such act held not covered by employees’ fidelity bond insuring bank against pecuniary loss through fraud or dishonesty of its employees directly or in connivance with others. Fidelity & Deposit Co. v. Merchants' & Marine Bank, 169 Miss. 755, 151 So. 373, 154 So. 260, 1933 Miss. LEXIS 9 (Miss. 1933).

6. Actions.

Complaint seeking to enforce bank directors’ liability held insufficient because not alleging facts showing where in loan to director was excessive or dishonestly made and names of directors knowingly permitting or making loan. Little v. Newhouse, 164 Miss. 619, 145 So. 608, 1933 Miss. LEXIS 249 (Miss. 1933).

Heirs should not be joined in action to enforce liability of deceased bank director, unless estate in executor’s hands is insufficient, and heirs have participated in distribution thereof. Little v. Newhouse, 164 Miss. 619, 145 So. 608, 1933 Miss. LEXIS 249 (Miss. 1933).

Complaint that notes representing loans in excess of one-fifth of bank’s capital made to director after his resignation, were either signed or delivered while he was director held not sufficient to show liability under Code 1906, § 922. Bramlette v. Joseph, 111 Miss. 379, 71 So. 643, 1916 Miss. LEXIS 307 (Miss. 1916).

RESEARCH REFERENCES

ALR.

Construction and application of statutes prohibiting or limiting loans to bank’s officers or directors. 49 A.L.R.3d 727.

Am. Jur.

10 Am. Jur. 2d, Banks and Financial Institutions §§ 450 et seq.

CJS.

9 C.J.S., Banks and Banking § 499.

§ 81-5-53. Limitation of liability when dealing with agents, trustees, etc.

A bank dealing, whether to its own benefit or otherwise, with, through or under any person, who is or may be an agent, trustee, guardian, executor, administrator, or other fiduciary, or a corporate officer, agent or employee, or a partnership member or representative, shall not be deemed to have notice of or be obligated to inquire as to any lack of or limitation upon the power of such person by reason in and of itself, either of the fact that such person has executed in his representative capacity and is himself the payee or indorsee of any check, bill, note or other promise or order, or of the use of descriptive words in connection with his deposit account or accounts, or in connection with any transfer, certificate or memorandum thereof, or in connection with any signature or indorsement of such person.

HISTORY: Codes, 1942, § 5202; Laws, 1934, ch. 146.

Cross References —

Commercial paper under the Uniform Commercial Code, see §§75-3-101 et seq.

Bank deposits and collections under the Uniform Commercial Code, see §§75-4-101 et seq.

State-chartered banks having and possessing the rights, powers, privileges, immunities, duties and obligations of a national bank having its principal place of business in this state, irrespective of any conflict with the provisions of this section, see §81-5-1(9).

Continuation of business by executor or administrator, see §91-7-173.

Delivery of property of ward to guardian, see §93-13-31.

Dealings in real estate by guardian, see §93-13-41.

JUDICIAL DECISIONS

1. In general.

2. Particular checks and deposits.

1. In general.

Bank is protected in dealings with fiduciaries unless bank has actual knowledge that fiduciary is improperly exercising or exceeding its authority; constructive knowledge or notice is insufficient. Collier v. Trustmark Nat'l Bank, 678 So. 2d 693, 1996 Miss. LEXIS 412 (Miss. 1996).

This section [Code 1942, § 5202], providing that bank need not inquire as to lack of or limitation on power of agent, executing check payable or indorsed to him or using descriptive words in connection with signature or indorsement thereon, is not inapplicable to principal’s signature forged by agent. Hart v. Moore, 171 Miss. 838, 158 So. 490, 1935 Miss. LEXIS 15 (Miss. 1935).

2. Particular checks and deposits.

Where check payable to attorney but showing on its face that another was real party for whom it was received, was indorsed by attorney in blank and delivered to local bank for collection, which in turn indorsed it generally and delivered it to collecting bank, such collecting bank was holder in due course for value without notice; fact that it was payable to attorney carrying no notice. First Nat'l Bank v. Bianca, 171 Miss. 866, 158 So. 478, 1935 Miss. LEXIS 9 (Miss. 1935).

Chancery court’s order, directing executrix to place money, held by her in trust for minor legatees, on time deposit in bank, which subsequently failed, and prohibiting it from permitting withdrawal thereof without court order, did not make bank coexecutor and trustee for minors, who were not entitled to preference over bank’s general creditors. Deposit Guaranty Bank & Trust Co. v. Merchants' Bank & Trust Co., 171 Miss. 553, 158 So. 136, 1934 Miss. LEXIS 273 (Miss. 1934).

Where depositor placed word “agent” after name, presumption was that money deposited was her money, and that fact did not authorize the bank to dishonor her check because garnishment writ had been served on bank by judgment creditor of depositor’s husband. Pascagoula Nat'l Bank v. Eberlein, 161 Miss. 337, 131 So. 812, 1931 Miss. LEXIS 231 (Miss. 1931).

Where a commissioner sold land under court order, and a check for the purchase price was given to him as such commissioner, bank with knowledge of fiduciary character of funds represented by such check was liable to beneficiaries of the trust for diversion where it credited the funds to commissioner’s individual account. Bank of Hickory v. McPherson, 102 Miss. 852, 59 So. 934, 1912 Miss. LEXIS 129 (Miss. 1912) but see Collier v. Trustmark Nat'l Bank, 678 So. 2d 693, 1996 Miss. LEXIS 412 (Miss. 1996).

RESEARCH REFERENCES

ALR.

Duties of collecting bank with respect to presenting draft or bill of exchange for acceptance. 39 A.L.R.2d 1296.

Bank’s right to apply third person’s funds, deposited in debtor’s name, on debtor’s obligation. 8 A.L.R.3d 235.

Duty of pledgee of commercial paper as to its enforcement or collection. 45 A.L.R.3d 248.

Am. Jur.

10 Am. Jur. 2d, Banks and Financial Institutions §§ 818 et seq.

§ 81-5-55. Name of depositors not to be disclosed.

  1. In no instance shall the name of any depositor, or the amount of his deposit, be disclosed to anyone, except to report to approved parties, such as credit bureaus, account verification services and others, the forcible closure of a deposit account due to misuse, such as fraud, kiting or chronic bad check writing or when required to be done in legal proceedings, for verification of public assistance in cases in which the Department of Human Services or the Division of Medicaid certifies that it has on file an effective written authorization from the depositor authorizing the disclosure of that information, for verification of the financial exploitation of a vulnerable person in cases in which the Attorney General submits a written authorization, or in case of insolvency of banks. The parties referred to in this section must be approved by the Commissioner of Banking and Consumer Finance and must satisfactorily demonstrate their reliability and credibility of their activities. Disclosure of depositor information to any affiliate or agent providing services on behalf of the bank shall not be considered disclosure of depositor information within the meaning of this section. The term “affiliate” means a corporation or business entity that controls, is controlled by or is under common control with the bank. The term “agent” means anyone who has an agreement, arrangement or understanding to transact business for the bank by the authority and on account of the bank, provided that the agreement binds the agent to the same degree of confidentiality of disclosure of bank records as the bank. Any violation of this provision shall be considered a misdemeanor and, upon conviction thereof, in any court of competent jurisdiction, the person shall be punished by a fine of not more than One Thousand Dollars ($1,000.00) or imprisoned in the county jail not more than six (6) months, or both, and in addition thereto, shall be liable upon his bond to any person damaged thereby.
  2. This section shall not be construed to prohibit the disclosure to the State Treasurer, State Auditor, Legislative Budget Office, Joint Legislative Committee on Performance Evaluation and Expenditure Review or the Department of Finance and Administration, of any information about any type of account or investment, including certificates of deposit, owned by any public entity of the State of Mississippi.
  3. This section shall not be construed to prohibit, or to impose liability for, the disclosure of information to:
    1. The Department of Human Services, the Child Support Unit of the Department of Human Services, the Division of Medicaid, or their contractors or agents, pursuant to Chapter 13 or Chapter 19, Title 43, Mississippi Code of 1972; or
    2. The Department of Revenue pursuant to Chapter 13, Title 85.

HISTORY: Codes, 1942, § 5279; Laws, 1934, ch. 146; Laws, 1984, ch. 327; Laws, 1985, ch. 525, § 32; Laws, 1987, ch. 326, § 2; Laws, 1997, ch. 542, § 4; Laws, 1997, ch. 588, § 146; Laws, 2001, ch. 603, § 13, Laws 2012, ch. 434, § 2; Laws, 2017, ch. 407, § 9, eff from and after July 1, 2017.

Joint Legislative Committee Note —

Section 4 of ch. 542, Laws of 1997, amended this section, effective from and after passage (April 10, 1997). Section 146 of ch. 588, Laws of 1997, effective July 1, 1997, also amended this section. As set out above, this section reflects the language of Section 146 of ch. 588, Laws of 1997, pursuant to Section 1-3-79 which provides that whenever the same section of law is amended by different bills during the same legislative session, the amendment with the latest effective date shall supersede all other amendments to the same section taking effect earlier.

Editor’s Notes —

Section7-7-2, as added by Laws of 1984, chapter 488, § 90, and amended by Laws of 1985, chapter 455, § 14, Laws of 1986, chapter 499, § 1, provided, at subsection (2) therein, that the words “state auditor of public accounts,” “state auditor”, and “auditor” appearing in the laws of the state in connection with the performance of auditor’s functions transferred to the state fiscal management board, shall be the state fiscal management board, and, more particularly, such words or terms shall mean the state fiscal management board whenever they appear. Thereafter, Laws of 1989, chapter 532, § 2, amended §7-7-2 to provide that the words “State Auditor of Public Accounts,” “State Auditor” and “Auditor” appearing in the laws of this state in connection with the performance of Auditor’s functions shall mean the State Fiscal Officer, and, more particularly, such words or terms shall mean the State Fiscal Officer whenever they appear. Subsequently, Laws of 1989, ch. 544, § 17, effective July 1, 1989, and codified as §27-104-6, provides that wherever the term “State Fiscal Officer” appears in any law it shall mean “Executive Director of the Department of Finance and Administration.”

Amendment Notes —

The 2001 amendment inserted “for verification of the financial exploitation of a vulnerable adult in cases wherein the Attorney General submits a written authorization” following “such information” in the first paragraph.

The 2012 amendment rewrote the first sentence in the first paragraph; in the second paragraph, inserted “the Division of Medicaid” preceding “or their contractors or agents, pursuant to” and “Chapter 13” thereafter and made minor stylistic changes.

The 2017 amendment designated the former first paragraph (1), the first sentence of the former second paragraph (2), and divided the second sentence of the former second paragraph into present (3) and (3)(a); deleted “In addition” from the beginning of (3); added (3)(b); and made minor stylistic changes.

Cross References —

Joint Legislative Committee on Performance Evaluation and Expenditure Review, see §§5-3-51 et seq.

State Treasurer, see §§7-9-1 et seq.

Bank expenses for disclosure of customer’s financial records, see §13-1-245.

Legislative Budget Office, see §27-103-101 et seq.

State-chartered banks having and possessing the rights, powers, privileges, immunities, duties and obligations of a national bank having its principal place of business in this state, irrespective of any conflict with the provisions of this section, see §81-5-1(9).

Imposition of standard state assessment in addition to all court imposed fines or other penalties for any misdemeanor violation, see §99-19-73.

RESEARCH REFERENCES

ALR.

Search and seizure of bank records pertaining to customer as violation of customer’s rights under state law. 33 A.L.R.5th 453.

Criminal liability for failure to report export or import of monetary instrument as required by provision of Currency and Foreign Transactions Reporting Act (31 USCS § 1101). 59 A.L.R. Fed. 438.

§ 81-5-56. Month and year checking account opened to be printed on face of checks.

From and after July 1, 1991, any financial institution offering checking accounts which accepts a new checking account shall require that there be printed on the face of each check for such new account the month and year in which the holder of the checking account first opened such account. Any account five (5) years of age or older may show an opening date of January 1986 if the date of actual opening is unavailable. The provisions of this section shall also apply to any additional checks ordered after July 1, 1991, for checking accounts which were in existence on March 15, 1991.

HISTORY: Laws, 1991, ch. 399 § 1, eff from and after passage (approved March 15, 1991).

RESEARCH REFERENCES

Am. Jur.

10 Am. Jur. 2d, Banks and Financial Institutions §§ 868 et seq.

CJS.

9 C.J.S., Banks and Banking §§ 332, 340-344, 360, 364-366.

§ 81-5-57. Excess deposits; limit and penalty.

No state bank shall receive and hold deposits continuously for more than twelve months in excess of twenty times its paid up capital, surplus, undivided profits and reserves, except by permission of the state comptroller. Such permission of the state comptroller shall be in writing executed in duplicate, and one copy thereof shall be delivered to and held by the bank and the other shall be kept on file in the office of the state comptroller. Any bank violating the provisions of this section shall be liable for $100.00 penalty for each day in which deposits are held contrary to the provisions hereof, payable upon demand by the state comptroller who shall bring suit therefor if not paid within ten days after demand. All penalties collected under this section shall be paid into the department of bank supervision maintenance fund.

HISTORY: Codes, 1942, § 5203; Laws, 1934, ch. 146; Laws, 1940, ch. 203; Laws, 1942, ch. 263; Laws, 1944, ch. 255, § 1.

Editor’s Notes —

Section 81-1-57 provides that wherever the words “state comptroller” or “comptroller”, when referring to the office of state comptroller of banks, shall be construed to mean the commissioner of banking and consumer finance.

Section 81-1-117 abolished the office of state comptroller, and provided that the functions, duties and responsibilities would be assumed by the commissioner of banking and consumer finance.

Cross References —

State-chartered banks having and possessing the rights, powers, privileges, immunities, duties and obligations of a national bank having its principal place of business in this state, irrespective of any conflict with the provisions of this section, see §81-5-1(9).

RESEARCH REFERENCES

Am. Jur.

10 Am. Jur. 2d, Banks and Financial Institutions §§ 697, 700, 712.

§ 81-5-59. Deposit of minors.

When any minor or other person under disability shall make a deposit in any bank in his or her name such bank may pay such money on a check or order of such person, the same as in other cases, and such payment shall be in all respects valid in law.

HISTORY: Codes, 1942, § 5204; Laws, 1934, ch. 146.

Cross References —

Death or incompetence of bank customer under the Uniform Commercial Code, see §75-4-405.

State-chartered banks having and possessing the rights, powers, privileges, immunities, duties and obligations of a national bank having its principal place of business in this state, irrespective of any conflict with the provisions of this section, see §81-5-1(9).

Leasing of safe deposit boxes to minors, see §81-5-61.

Minor’s accounts in savings associations, see §81-12-135.

Deposits of minors in credit unions, see §81-13-37.

§ 81-5-61. Safe deposit boxes; leasing to minors.

Any bank or other corporation maintaining safe deposit boxes for lease to the public may lease one or more of such boxes to a minor eighteen (18) years of age or older and in connection therewith deal with such minor with the same effect as if leasing to and dealing with a person of full capacity.

HISTORY: Codes, 1942, § 5204.5; Laws, 1966, ch. 255, § 1, eff from and after passage (approved May 6, 1966).

Cross References —

Definition of term “minor,” see §1-3-27.

State-chartered banks having and possessing the rights, powers, privileges, immunities, duties and obligations of a national bank having its principal place of business in this state, irrespective of any conflict with the provisions of this section, see §81-5-1(9).

§ 81-5-62. Accounts payable at death [Effective until January 1, 2020].

Accounts payable at death may be established under the following conditions:

An account in a bank, including a national bank, may be opened by any person or persons with directions to make such an account payable on the death of the person or persons opening such an account to the named beneficiary or beneficiaries. When an account is so opened, the bank shall pay any monies to the credit of the account from time to time to, or pursuant to the order of, the person or persons opening such an account during his or their lifetime in the same manner as if the account were in the sole name or names of such person or persons. The term “accounts” or “account” as used in this section shall include, but not be limited to, any form of deposit or account, such as a savings account, checking account, time deposit, demand deposit or certificate of deposit, whether negotiable, non-negotiable or otherwise.

If the named beneficiary or one (1) of the beneficiaries so named is an individual beneficiary and the individual beneficiary or beneficiaries survive the death of the person opening such an account, and the individual beneficiary or all of the individual beneficiaries so named are sixteen (16) years of age or over at the death of the person opening such an account, the bank shall pay the monies to the credit of the account, less all setoffs and charges, to the named individual beneficiary or beneficiaries or upon his or their order, as hereinafter provided, and such payment by the bank shall be valid, notwithstanding any lack of legal age of the named beneficiary or beneficiaries; provided, however, where such an account is opened or subsequently held by more than one (1) person, the death of one (1) of such persons shall not terminate the account and the account shall continue as to the surviving person or persons and the named beneficiary or beneficiaries subject to the provisions of paragraphs (c) through (j) of this section. For purposes of this section, the term “individual beneficiary” shall refer to a living person who is the named beneficiary of a payable on death account.

If the named individual beneficiary or all of the individual beneficiaries so named survive the death of the person or persons opening such an account and are under sixteen (16) years of age at such time, the bank shall pay the monies to the credit of the account, less all setoffs and charges:

When or after the named individual beneficiary becomes sixteen (16) years of age, to the named beneficiary or upon his order; or

When more than one (1) individual beneficiary is named, the bank shall pay to each individual beneficiary so named his proportionate interest in such account as each severally becomes sixteen (16) years of age; or

To the legal guardian of the named individual beneficiary, wherever appointed and qualified, or where more than one (1) beneficiary is named, the bank shall pay such individual beneficiary’s proportionate interest in such account to his legal guardian wherever and whenever appointed and qualified; or

In the event no guardian is appointed and qualified, payment may be made in accordance with the provisions of Section 93-13-211 et seq., in situations to which such section or sections are applicable.

Where the death of the person or persons opening such an account terminates the account under the provisions of paragraphs (b) and (c) of this section, and where one or more of the named individual beneficiaries are under sixteen (16) years of age and the remainder of the named individual beneficiaries are sixteen (16) years of age or over, the bank shall pay the monies, less all setoffs and charges, to:

The named individual beneficiaries sixteen (16) years of age or over at the time of termination of such account pursuant to paragraph (b) of this section; and

The named individual beneficiaries under sixteen (16) years of age at the time of termination of such account pursuant to paragraph (c) of this section.

If the named beneficiary or one (1) of the beneficiaries so named is a revocable trust, evidenced by a written trust agreement, which trust is still in existence at the death of the person opening such an account, the bank shall pay the monies to the credit of the account, less all setoffs and charges, to the trustee of the named revocable trust or upon his or their order, as hereinafter provided, upon being presented an affidavit by the trustee stating that the name of the trust, the names of the current trustees, and that the trust is still in existence at the time of presentment of the affidavit. Such payment by the bank shall be valid, notwithstanding any lack of actual authority by the trustee, and the bank shall be discharged and released to the same extent as if the bank had dealt with the personal representative of the decedent. Such bank shall not be required to see to the proper application of the monies or evidence thereof or to inquire into the truth of any statement presented in the affidavit by the trustee.

Where such account is opened or subsequently held by more than one (1) person, the bank, in the absence of any written instructions to the contrary which are consented to by the bank, shall accept payments made to such account and may pay any monies to the credit of such account from time to time to, or pursuant to the order of, either or any of such persons during their life or lives in the same manner as if the account were in the sole name of either or any of such persons.

When a person or persons open an account in a bank in the form set forth in paragraph (a) of this section, and makes a payment or payments to such account or causes a payment or payments to be made to such account, it shall be conclusively presumed that such person or persons intend to vest in the named beneficiary or beneficiaries a present beneficial interest in such payment so made and in the monies to the credit of the account from time to time, to the end that, if the named beneficiary or beneficiaries survive the person or persons opening such an account, all the right and title of the person or persons opening such an account in and to the monies to the credit of the account at the death of such person or persons, less all setoffs and charges, shall, at such death, vest solely and indefeasibly in the named beneficiary or beneficiaries subject to the conditions and limitations of paragraphs (b) through (j) of this section.

If the named individual beneficiary predeceases the person opening such an account, or if the named beneficiary is a revocable trust that is terminated, the present beneficial interest presumed to be vested in the named beneficiary pursuant to paragraph (g) of this section shall terminate at the death of the named individual beneficiary or upon the termination of the revocable trust named as a beneficiary. In such case, the personal representatives of the named individual beneficiary, the beneficiaries of the revocable trust, and all others claiming through or under the named beneficiary, shall have no right in or title to the monies to the credit of the account, and the bank shall pay such monies, less all setoffs and charges, to the person opening such an account or pursuant to his order in the same manner as if the account were in the sole name of the person opening such an account; provided, however, where such an account names more than one (1) beneficiary, the death of one (1) of the individual beneficiaries or the termination of a revocable trust beneficiary so named shall not terminate the account and the account shall continue as to the surviving beneficiary or beneficiaries subject to the provisions of paragraphs (b) through (j) of this section.

A bank which makes any payment pursuant to paragraphs (b) through (h) of this section, prior to service upon the bank of an order of court restraining such payment, shall, to the extent of each payment so made, be released from all claims of the person or persons opening such an account, the named beneficiary or beneficiaries, their legal representatives, and all others claiming through or under them.

When an account is opened in a form described in paragraph (a) of this section, the right of the named beneficiary or beneficiaries to be vested with sole and indefeasible title to the monies to the credit of the account on the death of the person or persons opening such an account shall not be denied, abridged or in anyway affected because such right has not been created by a writing executed in accordance with the law of this state prescribing the requirements to effect a valid testamentary disposition of property.

HISTORY: Laws, 1984, ch. 326, § 2; Laws, 1988, ch. 484, § 2; Laws, 2008, ch. 327, § 1, eff from and after July 1, 2008.

Amendment Notes —

The 2008 amendment rewrote (b); inserted “individual” preceding “beneficiary” and “beneficiaries” everywhere it appears in (c) and (d); in (d), deleted “to the credit of the trust” following “pay the monies” near the end of the introductory paragraph; added (e), and redesignated former (e) through (i) as present (f) through (j); substituted “paragraphs (b) through (j)” for “paragraphs (b) through (i)” in (g); rewrote (h); and substituted “paragraphs (b) though (h)” for “paragraphs (b) through (g) in (i).

Cross References —

State-chartered banks having and possessing the rights, powers, privileges, immunities, duties and obligations of a national bank having its principal place of business in this state, irrespective of any conflict with the provisions of this section, see §81-5-1(9).

§ 81-5-62. Accounts payable at death.

[Effective from and after January 1, 2020]

Accounts payable at death may be established under the following conditions:

An account in a bank, including a national bank, may be opened by any person or persons with directions to make such an account payable on the death of the person or persons opening such an account to the named beneficiary or beneficiaries. When an account is so opened, the bank shall pay any monies to the credit of the account from time to time to, or pursuant to the order of, the person or persons opening such an account during his or their lifetime in the same manner as if the account were in the sole name or names of such person or persons. The term “accounts” or “account” as used in this section shall include, but not be limited to, any form of deposit or account, such as a savings account, checking account, time deposit, demand deposit or certificate of deposit, whether negotiable, nonnegotiable or otherwise.

If the named beneficiary or one (1) of the beneficiaries so named is an individual beneficiary and the individual beneficiary or beneficiaries survive the death of the person opening such an account, and the individual beneficiary or all of the individual beneficiaries so named are sixteen (16) years of age or over at the death of the person opening such an account, the bank shall pay the monies to the credit of the account, less all setoffs and charges, to the named individual beneficiary or beneficiaries or upon his or their order, as hereinafter provided, and such payment by the bank shall be valid, notwithstanding any lack of legal age of the named beneficiary or beneficiaries; provided, however, where such an account is opened or subsequently held by more than one (1) person, the death of one (1) of such persons shall not terminate the account and the account shall continue as to the surviving person or persons and the named beneficiary or beneficiaries subject to the provisions of paragraphs (c) through (j) of this section. For purposes of this section, the term “individual beneficiary” shall refer to a living person who is the named beneficiary of a payable on death account.

If the named individual beneficiary or all of the individual beneficiaries so named survive the death of the person or persons opening such an account and are under sixteen (16) years of age at such time, the bank shall pay the monies to the credit of the account, less all setoffs and charges:

When or after the named individual beneficiary becomes sixteen (16) years of age, to the named beneficiary or upon his order; or

When more than one (1) individual beneficiary is named, the bank shall pay to each individual beneficiary so named his proportionate interest in such account as each severally becomes sixteen (16) years of age; or

To the legal guardian of the named individual beneficiary, wherever appointed and qualified, or where more than one (1) beneficiary is named, the bank shall pay such individual beneficiary’s proportionate interest in such account to his legal guardian wherever and whenever appointed and qualified; or

If no guardian is appointed and qualified, payment may be made in accordance with the provisions of Section 93-20-209 or 93-20-431 in situations to which such section or sections are applicable.

Where the death of the person or persons opening such an account terminates the account under the provisions of paragraphs (b) and (c) of this section, and where one or more of the named individual beneficiaries are under sixteen (16) years of age and the remainder of the named individual beneficiaries are sixteen (16) years of age or over, the bank shall pay the monies, less all setoffs and charges, to:

The named individual beneficiaries sixteen (16) years of age or over at the time of termination of such account pursuant to paragraph (b) of this section; and

The named individual beneficiaries under sixteen (16) years of age at the time of termination of such account pursuant to paragraph (c) of this section.

If the named beneficiary or one (1) of the beneficiaries so named is a revocable trust, evidenced by a written trust agreement, which trust is still in existence at the death of the person opening such an account, the bank shall pay the monies to the credit of the account, less all setoffs and charges, to the trustee of the named revocable trust or upon his or their order, as hereinafter provided, upon being presented an affidavit by the trustee stating that the name of the trust, the names of the current trustees, and that the trust is still in existence at the time of presentment of the affidavit. Such payment by the bank shall be valid, notwithstanding any lack of actual authority by the trustee, and the bank shall be discharged and released to the same extent as if the bank had dealt with the personal representative of the decedent. Such bank shall not be required to see to the proper application of the monies or evidence thereof or to inquire into the truth of any statement presented in the affidavit by the trustee.

Where such account is opened or subsequently held by more than one (1) person, the bank, in the absence of any written instructions to the contrary which are consented to by the bank, shall accept payments made to such account and may pay any monies to the credit of such account from time to time to, or pursuant to the order of, either or any of such persons during their life or lives in the same manner as if the account were in the sole name of either or any of such persons.

When a person or persons open an account in a bank in the form set forth in paragraph (a) of this section, and makes a payment or payments to such account or causes a payment or payments to be made to such account, it shall be conclusively presumed that such person or persons intend to vest in the named beneficiary or beneficiaries a present beneficial interest in such payment so made and in the monies to the credit of the account from time to time, to the end that, if the named beneficiary or beneficiaries survive the person or persons opening such an account, all the right and title of the person or persons opening such an account in and to the monies to the credit of the account at the death of such person or persons, less all setoffs and charges, shall, at such death, vest solely and indefeasibly in the named beneficiary or beneficiaries subject to the conditions and limitations of paragraphs (b) through (j) of this section.

If the named individual beneficiary predeceases the person opening such an account, or if the named beneficiary is a revocable trust that is terminated, the present beneficial interest presumed to be vested in the named beneficiary pursuant to paragraph (g) of this section shall terminate at the death of the named individual beneficiary or upon the termination of the revocable trust named as a beneficiary. In such case, the personal representatives of the named individual beneficiary, the beneficiaries of the revocable trust, and all others claiming through or under the named beneficiary, shall have no right in or title to the monies to the credit of the account, and the bank shall pay such monies, less all setoffs and charges, to the person opening such an account or pursuant to his order in the same manner as if the account were in the sole name of the person opening such an account; provided, however, where such an account names more than one (1) beneficiary, the death of one (1) of the individual beneficiaries or the termination of a revocable trust beneficiary so named shall not terminate the account and the account shall continue as to the surviving beneficiary or beneficiaries subject to the provisions of paragraphs (b) through (j) of this section.

A bank which makes any payment pursuant to paragraphs (b) through (h) of this section, prior to service upon the bank of an order of court restraining such payment, shall, to the extent of each payment so made, be released from all claims of the person or persons opening such an account, the named beneficiary or beneficiaries, their legal representatives, and all others claiming through or under them.

When an account is opened in a form described in paragraph (a) of this section, the right of the named beneficiary or beneficiaries to be vested with sole and indefeasible title to the monies to the credit of the account on the death of the person or persons opening such an account shall not be denied, abridged or in anyway affected because such right has not been created by a writing executed in accordance with the law of this state prescribing the requirements to effect a valid testamentary disposition of property.

HISTORY: Laws, 1984, ch. 326, § 2; Laws, 1988, ch. 484, § 2; Laws, 2008, ch. 327, § 1, eff from and after July 1, 2008; Laws, 2019, ch. 463, § 5, eff from and after January 1, 2020.

§ 81-5-63. Deposit in name of two or more persons; payments to successors of deceased depositors without administration; “successor” defined.

  1. When a deposit has been made or is hereafter made in the name of two (2) or more persons, payable to any one (1) of those persons, or payable to any one (1) of those persons or the survivor, or payable to any one (1) of those persons or to the survivor or survivors, or payable to the persons as joint tenants, the deposit or any part thereof or interest or dividends thereon may be paid to any one (1) of those persons, without liability whether one or more of those persons is living or not, and the receipt of acquittance of the person so paid shall be a valid and sufficient release and discharge to the bank for any payment so made. The making of a deposit in that form, or the making of additions thereto, shall create a presumption in any action or proceeding to which either the bank or any survivor is a party of the intention of all the persons named on the deposit to vest title to the deposit and the additions thereto and all interest or dividends thereon in the survivor or survivors.
    1. Any bank may pay to the successor of a deceased depositor, without necessity of administration, any sum to the credit of the decedent not exceeding Twelve Thousand Five Hundred Dollars ($12,500.00), without liability to any other persons, relatives or beneficiaries, and the receipt of acquittance of the person so paid shall be a valid and sufficient release and discharge to the bank for any payment so made. This section shall apply to all banking institutions, including national banks and postal savings banks within the state. The term “deposit” as used in this section shall include, but not be limited to, any form of deposit or account, such as a savings account, checking account, time deposit, demand deposit or certificate of deposit, whether negotiable, nonnegotiable or otherwise.
    2. For the purposes of this subsection, “successor” means the decedent’s spouse; or, if there is no surviving spouse of the decedent, then the adult with whom any minor children of the decedent are residing; or, if there is no surviving spouse or minor children of the decedent, then any adult child of the decedent; or, if there is no surviving spouse or children of the decedent, then either parent of the decedent; or, if there is no surviving spouse, children or parent of the decedent, then any adult sibling of the decedent.

HISTORY: Codes, 1942, § 5205; Laws, 1934, ch. 146; Laws, 1950, ch. 201; Laws, 1966, ch. 250; Laws, 1966, ch. 316, § 10-105; Laws, 1968, ch. 251, § 1; Laws, 1980, ch. 426, § 1; Laws, 1988, ch. 484, § 3; Laws, 1995, ch. 380, § 1; Laws, 2001, ch. 458, § 1; Laws, 2009, ch. 419, § 1, eff from and after passage (approved Mar. 23, 2009.).

Amendment Notes —

The 2001 amendment rewrote the section.

The 2009 amendment in (2)(a), deleted “as defined in Section 91-7-322(2)”; and added (2)(b).

Cross References —

Death or incompetence of bank customer under the Uniform Commercial Code, see §75-4-405.

State-chartered banks having and possessing the rights, powers, privileges, immunities, duties and obligations of a national bank having its principal place of business in this state, irrespective of any conflict with the provisions of this section, see §81-5-1(9).

Deposits in savings associations in the name of two or more persons, see §81-12-137.

Payment of indebtedness or delivery of personal property of decedent to decedent’s successor, see §91-7-322.

Payment of indebtedness or delivery of personal property of decedent to decedent’s successor, see §91-7-322.

JUDICIAL DECISIONS

1. In general.

2. Applicability.

3. Joint ownership of account.

4. —Presumption.

5. —Rebuttal of presumption.

6. —Survivorship rights.

7. Garnishment.

8. Setoff.

9. Undue influence.

1. In general.

A testator cannot, by will, dispose of property which he or she placed, during his or her lifetime, in a validly created joint tenancy account with rights of survivorship. A subsequent will does not destroy the joint tenancy and does not terminate that tenancy and divest the corpus of it into the estate of the testator. In re Will & Estate of Strange, 548 So. 2d 1323, 1989 Miss. LEXIS 431 (Miss. 1989).

This section [Code 1942, § 5205] does not limit right to create joint tenancy, with right of survivorship in personal property. Stewart v. Barksdale, 216 Miss. 760, 63 So. 2d 108, 1953 Miss. LEXIS 691 (Miss. 1953).

2. Applicability.

This section [Code 1942, § 5205] was inapplicable where a note was made payable to a husband and his wife, or the survivor of them. Vaughn v. Vaughn, 238 Miss. 342, 118 So. 2d 620, 1960 Miss. LEXIS 411 (Miss. 1960).

3. Joint ownership of account.

When three individuals jointly owned four certificates of deposit (CDs), and the word “or” was listed in between the owners’ names on the CDs, any one of the owners were entitled to treat the CDs as their own, pursuant to Miss. Code Ann. §81-5-63(1), and each had an equal right to withdraw the CDs; thus, the bank holding the CDs was not allowed to favor one owner over another. Epperson v. SOUTHBank, 2011 Miss. App. LEXIS 350 (Miss. Ct. App. June 14, 2011), rev'd, 93 So.3d 10, 2012 Miss. LEXIS 248 (Miss. 2012).

In a case where a certificate of deposit (CD) was jointly owned, a bank was properly found not liable when one owner unilaterally withdrew the funds for placement into another CD; either of the co-owners were able to withdraw the funds. DeJean v. DeJean, 982 So. 2d 443, 2007 Miss. App. LEXIS 730 (Miss. Ct. App. 2007), cert. denied, 981 So. 2d 298, 2008 Miss. LEXIS 236 (Miss. 2008).

Trustee was granted summary judgment against the debtors’ children for the value of the proceeds from certificates of deposit (CDs), pursuant to 11 U.S.C. § 550(a)(1), and avoided, pursuant to 11 U.S.C. § 548(a)(1)(B), the debtor wife’s transfers of the proceeds into bank accounts for the children because the CDs vested in the debtor, the designated payable on death beneficiary, when the owner died and the transfers were made within one year of the bankruptcy filing, were made while the debtors were insolvent, and were made for no consideration or less than reasonably equivalent value. Applewhite v. Akin (In re Akin), 366 B.R. 619, 2007 Bankr. LEXIS 1385 (Bankr. N.D. Miss. 2007).

Where a confidential relationship existed, the law governing inter vivos gifts, rather than testamentary dispositions, applied in determining the validity of the establishment of joint accounts, even though the beneficiary did not exercise control over the assets in the accounts until after the depositor’s death, and therefore proof of mental incompetence or an abuse of the confidential relationship was not required to raise a rebuttable presumption of undue influence accompanying the establishment of the joint accounts; thus, the beneficiary of the establishment of the joint accounts had the burden of proving, by clear and convincing evidence, the absence of undue influence. Madden v. Rhodes, 626 So. 2d 608, 1993 Miss. LEXIS 412 (Miss. 1993).

A person may make a gift in joint tenure by making a deposit of the subject of the gift in a bank in such a manner that it will stand to the credit of the donor and the donee as joint owners. Leverette v. Ainsworth, 199 Miss. 652, 23 So. 2d 798, 1945 Miss. LEXIS 285 (Miss. 1945).

Precise form is not essential to create a joint bank account with right of survivorship when formal deficiencies are supplied by definite proof. Leverette v. Ainsworth, 199 Miss. 652, 23 So. 2d 798, 1945 Miss. LEXIS 285 (Miss. 1945).

To create a joint bank deposit or account with right of survivorship, it must be either in the form of a deposit to the credit of depositor or another named person, or in similarity thereto, or else the intention to create a joint account for deposit must be well proved aliunde. Leverette v. Ainsworth, 199 Miss. 652, 23 So. 2d 798, 1945 Miss. LEXIS 285 (Miss. 1945).

Mere fact that bank account is made subject to the checks of two or more persons does not in itself constitute evidence of joint ownership. Leverette v. Ainsworth, 199 Miss. 652, 23 So. 2d 798, 1945 Miss. LEXIS 285 (Miss. 1945).

Deposit in bank to the credit of depositor or another named person raises a presumption under this section that the deposit was intended to be in joint ownership, and subject to withdrawal by either of the joint owners. Leverette v. Ainsworth, 199 Miss. 652, 23 So. 2d 798, 1945 Miss. LEXIS 285 (Miss. 1945).

Where proven facts sufficiently disclose a clear intention to create a right which embraces the essential elements of joint ownership and survivorship in respect to a particular bank deposit or account, the intention so proved will be given effect and the survivor will be held entitled to the fund. Leverette v. Ainsworth, 199 Miss. 652, 23 So. 2d 798, 1945 Miss. LEXIS 285 (Miss. 1945).

Transaction whereby depositor made a bank deposit to the credit of his mother but subject to check by the depositor at any time, did not create a joint account or deposit with right of survivorship in the absence of proof that the depositor clearly intended to create such an account, so that upon the depositor’s death the deposit belonged to his estate. Leverette v. Ainsworth, 199 Miss. 652, 23 So. 2d 798, 1945 Miss. LEXIS 285 (Miss. 1945).

4. —Presumption.

Section81-5-63 and §81-12-137, which deal, respectively, with joint deposits in a bank checking account and in a savings account in a savings association, create a presumption of joint tenancy ownership with the right of survivorship. On the other hand, such presumption does not apply to bank issued certificates of deposit held in the names of 2 or more persons, in the absence of express intent on the certificate to create such joint tenancy. Delta Fertilizer, Inc. v. Weaver, 547 So. 2d 800, 1989 Miss. LEXIS 366 (Miss. 1989).

A presumption arises that a bank account either in the name of “Mr. or Mrs. J. H. Barrow” or in the name of “Mr. or Mrs. J. H. Barrow, payable to the order of either or survivor” created joint ownership with the right of survivorship. Shearin v. Coleman, 201 Miss. 193, 28 So. 2d 841, 1947 Miss. LEXIS 384 (Miss. 1947).

Where deposit is made in name of two persons, payable to either, statutory presumption, in absence of evidence to the contrary, is sufficient to establish right to deposit in the survivor. In re Lewis' Estate, 194 Miss. 480, 13 So. 2d 20, 1943 Miss. LEXIS 89 (Miss. 1943).

5. —Rebuttal of presumption.

In an action by an administrator with will annexed against the daughter of the decedent to recover money in a joint bank account of the decedent and the daughter upon the grounds that the decedent was induced to create the joint account by undue influence and fraud practiced upon him by the daughter, and that the decedent did not have the mental capacity to create the account, the evidence sustained the chancellor’s findings contrary to the administrator’s contentions. Edwards v. Jefcoat, 230 Miss. 56, 92 So. 2d 342, 1957 Miss. LEXIS 344 (Miss. 1957).

The presumption created by this statute was not overcome by evidence that one of two persons in whose names certificates of deposit were issued in the alternative bequeathed a considerable cash legacy to another. Shearin v. Coleman, 201 Miss. 193, 28 So. 2d 841, 1947 Miss. LEXIS 384 (Miss. 1947).

6. —Survivorship rights.

Daughter was a joint owner of the funds at issue when the conservatorship for her father was established, and the formal transfer of the funds from joint accounts to conservatorship accounts did not destroy her survivorship interest in those funds; during the father’s life, the funds in the joint accounts were properly used to pay for his necessary care and living expenses, but the daughter retained her survivorship interest in the unused funds following his death. Jackson v. Touchstone (In re Addison), 242 So.3d 926, 2018 Miss. App. LEXIS 15 (Miss. Ct. App. 2018).

The joint owner of three certificates of deposit was entitled to them by right of survivorship where the decedent’s attorney in fact under a power of attorney placed the joint owner’s name on the certificates of deposit, the attorney in fact and the joint owner never shared a confidential relationship while the attorney in fact acted for the decedent, there was no evidence that the attorney in fact acted in bad faith, and the joint owner and the decedent did not share a confidential relationship until after the joint owner’s name was placed on the certificates of deposit. In re Dunn v. Reilly, 784 So. 2d 935, 2001 Miss. LEXIS 126 (Miss. 2001).

The 1988 amendment to this section, which created a conclusive presumption of survivorship, applied to certificates of deposit procured in 1986 and renewed in 1992. McNeil v. Hester, 753 So. 2d 1057, 2000 Miss. LEXIS 23 (Miss. 2000).

Certificates of deposit issued to the decedent and her son as joint tenants and a personal checking account registered jointly in her name and her son’s name did not pass under the decedent’s will, but passed pursuant to the banking documents, notwithstanding a prior will which instructed that her estate be shared by her children equally. Horn v. Horn (Estate of Huddleston), 755 So. 2d 435, 1999 Miss. App. LEXIS 16 (Miss. Ct. App. 1999).

Joint bank account in Mississippi was not product of the depositor’s business colleague’s undue influence, so as to overcome presumption that funds belonged to colleague, as survivor; although depositor and colleague had close relationship, colleague was not in position to exercise dominant influence over depositor when account was opened, and there was no showing that colleague did not act in good faith or that depositor did not act independently in his actions. Cantrell v. Pat O'Brien's Bar, La. App. 97-0545, 705 So. 2d 1205, 1998 La. App. LEXIS 8 (La.App. 4 Cir. 1998).

A certificate of deposit payable to the decedent and her heir, which was renewed by the decedent in 1981, created a right of survivorship in the heir. Estate of Stamper v. Edwards, 607 So. 2d 1141, 1992 Miss. LEXIS 544 (Miss. 1992).

Funds represented by a 1981 certificate of deposit made “payable on death” to the decedent’s heir did not constitute any part of the decedent’s estate, but rather, by reason of §81-5-63, the funds became vested in the heir upon the decedent’s death. Estate of Stamper v. Edwards, 607 So. 2d 1141, 1992 Miss. LEXIS 544 (Miss. 1992).

In a proceeding to determine the husband’s right to renounce his wife’s will, where a certificate of deposit in the bank was payable to the wife or the wife’s brother, upon the death of the wife, this deposit became the property of the brother, and was no portion of the wife’s estate. Myers v. Laird, 230 Miss. 675, 93 So. 2d 828, 1957 Miss. LEXIS 409 (Miss. 1957).

7. Garnishment.

A joint account should be garnishable only in proportion to the debtor’s ownership of the funds, as to which evidence is admissible to show what portion of the funds is actually owned by each depositor. Delta Fertilizer, Inc. v. Weaver, 547 So. 2d 800, 1989 Miss. LEXIS 366 (Miss. 1989).

8. Setoff.

Deposits in a savings account in the name of a customer or her nephew, who was the executor of her estate, were presumptively intended to be in joint ownership and subject to withdrawal by either of the joint owners pursuant to §81-5-63, and therefore the bank had a right to set off the balance in the account against the nephew’s debt to the bank where the nephew did not give notice to the bank that the funds were an asset of the estate of his deceased aunt rather than his alone as survivor, and some of the nephew’s dealings with the account prior to and after his aunt’s death concerned his individual interests unrelated in any way to his aunt. Graham v. Bank of Leakesville, Branch of First State Bank, 556 So. 2d 1079, 1990 Miss. LEXIS 41 (Miss. 1990).

9. Undue influence.

Reversion of certificates of deposit (CDs) to their status prior to amendments by the decedent’s adult child through a durable power of attorney was appropriate because the decedent and the adult child maintained a confidential relationship, failed to rebut the presumption of undue influence, and abused the adult child’s authority under the power of attorney by amending the parties to the CDs. Because the decedent retained an ownership interest in the CDs, neither the original conveyance, nor the subsequent transfers were inter vivos gifts. In re Estate of Johnson, 237 So.3d 698, 2017 Miss. LEXIS 457 (Miss. 2017).

RESEARCH REFERENCES

ALR.

Conflict of laws as to disposition of and relative rights to bank deposits in the names of more than one person. 25 A.L.R.2d 1240.

Parol evidence rule as applied to deposit of funds in name of depositor and another. 33 A.L.R.2d 569.

Imposition or declaration of constructive or resulting trust in United States savings bonds. 51 A.L.R.2d 163.

Effect of incompetency of joint depositor upon status and ownership of bank account. 62 A.L.R.2d 1091.

Appealability of order setting aside, or refusing to set aside, default judgment. 8 A.L.R.3d 1272.

Joint bank account as subject to attachment, garnishment, or execution by creditor of one of the joint parties. 11 A.L.R.3d 1465.

Creation of joint savings account or savings certificate as gift to survivor. 43 A.L.R.3d 971.

Bank’s right of setoff, based on debt of one depositor, against funds in account standing in names of debtor and another. 68 A.L.R.3d 192.

Liability of bank to joint depositor of savings account for amounts withdrawn by other joint depositor without presentation of passbook. 35 A.L.R.4th 1094.

Liability of bank to joint depositor for removal of name from account at request of other joint depositor. 39 A.L.R.4th 1112.

Nondrawing cosignor’s liability for joint checking account overdraft. 48 A.L.R.4th 1136.

Payable-on-death savings account or certificate of deposit as will. 50 A.L.R.4th 272.

Am. Jur.

10 Am. Jur. 2d, Banks and Financial Institutions §§ 604 et seq.

4 Am. Jur. Pl & Pr Forms (Rev), Banks, Forms 84, 114.

3A Am. Jur. Legal Forms 2d, Banks § 38:150 (deposit agreement-joint account payable to either joint tenant or survivor).

3B Am. Jur. Legal Forms 2d, Banks §§ 38:149, 38:150.

7 Am. Jur. Proof of Facts 2d 311, Ownership of Bank Deposit Made in the Names of Two or More Persons.

CJS.

9 C.J.S., Banks and Banking §§ 291, 292, 294, 295, 355.

Law Reviews.

1978 Mississippi Supreme Court Review: Commercial Law. 50 Miss. L. J. 41.

§ 81-5-64. Access to safe-deposit box upon death of sole lessee or last surviving co-lessee; definitions; order of priority; documentation required; rights and responsibilities of persons granted access; liability protections to financial institutions.

  1. Definitions.For purposes of this section, the following terms shall have the following meanings:
    1. “Financial institution” means any banking corporation, national bank, savings and loan association, credit union or postal savings bank operating in this state.
    2. “Safe-deposit box” means a storage container maintained in the vault area of a financial institution leased to a financial institution customer for the safekeeping of personal property that can be accessed with keys, pin numbers or some other security device.
    3. “Successor” means the decedent’s spouse; or if there is no surviving spouse of the decedent, then any adult child of the decedent; or if there is no surviving spouse or adult child of the decedent, then either parent of the decedent; or, if there is no surviving spouse, adult child or parent of the decedent, then any adult sibling of the decedent.
  2. Persons entitled to access in absence of probate or administration.At any time after one hundred eighty (180) days from the death of a sole lessee or the last surviving co-lessee of a safe-deposit box, a financial institution shall grant access in the following order of priority to a safe-deposit box that was leased by the lessee at the time of the lessee’s death:
    1. The personal representative named in the lessee’s will if an estate has not been opened.
    2. A successor of the deceased safe-deposit box lessee, without necessity of administration, if an estate has not been opened.
  3. Documentation required.A person seeking access to the safe-deposit box must provide the financial institution with the following:
    1. Reasonable proof of the lessee’s death;
    2. Reasonable proof of the identity of the person seeking access; and
    3. An affidavit meeting the requirements of subsection (5) of this section.
  4. Inventory.After presenting the financial institution with the items required by subsection (3) of this section, and within a reasonable time that allows the financial institution to comply, a person entitled to access to a safe-deposit box under subsection (2) of this section may exercise the following rights:
    1. The right to open the safe-deposit box in the presence of an employee of the financial institution along with one (1) other person who is either an officer of the financial institution or an attorney with an active bar license, after which an inventory of the contents of the safe-deposit box must be prepared by the person granted access and signed by:
      1. The person granted access to the safe-deposit box;
      2. The employee; and
      3. The third person who witnessed the inventory of the contents.

      A copy of the inventory may be retained by the financial institution as a business record.

    2. The right to remove the contents of the safe-deposit box, subject to the requirements and limitations of this section.
    3. The right to cancel the lease for the safe-deposit box after all contents of the safe-deposit box have been removed.
  5. Affidavit.An affidavit required by subsection (3)(c) of this section must contain the following information:
    1. The name of the person leasing the safe-deposit box and the date of the lessee’s death;
    2. The county in which the lessee was domiciled at the time of the lessee’s death;
    3. A statement that no application or petition for the appointment of a personal representative has been granted or is pending in any jurisdiction;
    4. A statement that the value of the entire estate of the decedent, wherever located, excluding all liens and encumbrances thereon, does not exceed Fifty Thousand Dollars ($50,000.00); and
    5. A statement under penalty of perjury that the affiant is qualified under subsection (2)(a) or (2)(b) of this section to obtain access to the safe-deposit box leased by the individual and the facts establishing the qualification.
  6. Responsibility of a person granted access.A person to whom access to a safe-deposit box is provided under this section is answerable and accountable to the administrator or executor of the estate of the decedent if one is subsequently opened. However, a financial institution that provides access to a safe-deposit box under this section is discharged and released from liability and responsibility for the contents held in the safe-deposit box to the same extent as if the financial institution had dealt with the personal representative or executor of the decedent. The financial institution is not required to:
    1. Inquire into the truth of any statement in an affidavit presented under this section; or
    2. Participate in the disposition of the assets held in the safe-deposit box or ensure that such assets are properly handled or disposed of.
  7. Prepayment of fees or cost.If a person granted access under this section does not have a key to the safe-deposit box and a financial institution requires the services of a locksmith or other contractor to gain access to a safe-deposit box, the financial institution may charge the person granted access a lost-key, drilling or similar fee, or require the person granted access to pay any cost associated with the services of a locksmith or other contractor necessary to gain access to the safe-deposit box. The financial institution shall have a reasonable amount of time to have the safe-deposit box drilled after payment of the required fee to allow the person granted access to access the safe-deposit box.
  8. Interim access.
    1. A person described in subsection (2) of this section shall be given access to a safe-deposit box before expiration of the required one-hundred-eighty-day period only to remove any will or burial instructions contained therein. The person must first meet all the requirements and conditions of subsection (4)(a) of this section concerning the persons required to be present and a full inventory of the contents of the safe-deposit box; but no other contents of the safe-deposit box may be removed until the one-hundred-eighty-day requirement of subsection (2) has been satisfied. The person given interim access to the safe-deposit box must immediately deliver all wills found and removed from the safe-deposit box to the clerk of the chancery court of the county in which the decedent was domiciled at the time of the decedent’s death; failure to do so shall subject the person to criminal liability under Section 97-9-77.
    2. The financial institution may make a complete copy of any document removed and delivered under the terms of this subsection (8) and place that copy, together with a copy of the inventory and supporting documentation noted with the date of delivery, in the safe-deposit box to remain there pending removal of the contents of the box as provided by this section or other law.
  9. Reliance on affidavit
    1. A financial institution that acts in reliance upon an affidavit described in subsection (5) of this section without knowledge that the representations contained therein are incorrect is not liable to any person for so acting. A financial institution that does not have actual knowledge that the facts contained in the affidavit described in subsection (5) of this section are incorrect may assume without inquiry the existence of the facts contained in the affidavit.
    2. A financial institution shall not be held liable for any costs, expenses, damages or attorney’s fees arising from a grant of access to, or delivery of, the contents held in a safe-deposit box when the access or delivery is under the provisions of this section.
  10. Affidavit form.A document substantially in the following form may be used as the affidavit prescribed in subsection (3)(c) and subsection (5) of this section.

    Click to view

SAFE-DEPOSIT BOX AFFIDAVIT The undersigned, after having been first duly sworn, hereby state(s) that: 1. The undersigned makes this affidavit under penalty of perjury pursuant to Section 81-5-64, Mississippi Code of 1972; 2. (“decedent”) died on the day of , 20 , and was domiciled in County; 3. At least one hundred eighty (180) days have elapsed since the death of the decedent; 4. The value of the entire estate of the decedent, wherever located, excluding all liens and encumbrances thereon, does not exceed Fifty Thousand Dollars ($50,000.00); 5. No application or petition for the appointment of a personal representative of the estate has been granted or is pending in any jurisdiction; 6. At his/her death, decedent was the last surviving lessee/sole lessee of safe-deposit box number located at . 7. The undersigned is qualified to obtain access to the safe-deposit box leased by the decedent as the successor as defined in Section 81-5-64, Mississippi Code of 1972: (Choose one) a. The decedent’s spouse; b. Or if there is no surviving spouse of the decedent, then any adult child of the decedent; c. Or if there is no surviving spouse or adult child of the decedent, then either parent of the decedent; or d. If there is no surviving spouse, adult child or parent of the decedent, then any adult sibling of the decedent. The undersigned hereby ask(s) the financial institution to allow access to the safe-deposit box of the decedent to allow for the cancellation of the rental contract and relinquishment of the contents contained therein. SIGNATURE AND ACKNOWLEDGMENT Date: Printed Name: Address: Telephone Number: This document was acknowledged before me on (Date) by (Name of Affiant). Signature of Notary (Seal, if any.) My commission expires:

HISTORY: Laws, 2018, ch. 423, § 1, eff from and after July 1, 2018.

§ 81-5-65. Accounts of deceased depositors to be reported; publicity of same.

It shall be the duty of every officer and employee of the department of bank supervision to report to the state comptroller the name of every person not known to be living who appears by the records of the bank to have a sum of money on deposit; provided this section shall only apply to deposits made five years or more prior to such report which have not been added to by further deposits or reduced by withdrawal. The state comptroller shall give publicity to any such fact in such manner as he may prescribe.

HISTORY: Codes, 1942, § 5206; Laws, 1934, ch. 146.

Editor’s Notes —

Section 81-1-57 provides that wherever the words “Department of Bank Supervision” or “department,” when referring to the Department of Bank Supervision, shall be construed to mean the Department of Banking and Consumer Finance.

Section 81-1-57 provides that wherever the words “state comptroller” or “comptroller,”when referring to the office of state comptroller of banks, shall be construed to mean the commissioner of banking and consumer finance.

Section 81-1-117 abolished the Department of Bank Supervision, and transferred its functions, duties and responsibilities to the Department of Banking and Consumer Finance.

Section 81-1-117 abolished the office of state comptroller, and provided that the functions, duties and responsibilities would be assumed by the commissioner of banking and consumer finance.

Cross References —

Death or incompetence of bank customer under the Uniform Commercial Code, see §75-4-405.

State-chartered banks having and possessing the rights, powers, privileges, immunities, duties and obligations of a national bank having its principal place of business in this state, irrespective of any conflict with the provisions of this section, see §81-5-1(9).

RESEARCH REFERENCES

ALR.

Bank’s right to apply or set off deposits against debt of depositor not due at time of his death. 7 A.L.R.3d 908.

Am. Jur.

1 Am. Jur. 2d, Abandoned, Lost and Unclaimed Property § 15.

§ 81-5-67. Settlement of adverse claims to deposits.

Notice to any bank doing business in this state 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 such adverse claimant unless such adverse claimant shall also either procure a restraining order, injunction or other appropriate process against the bank from a court of competent jurisdiction in a cause therein instituted by him wherein the person to whose credit the deposit stands is made a party and served with summons, or shall execute to the bank, in form, and with sureties, acceptable to it a bond, indemnifying it from any and all liability, loss, damage, costs, and expenses for and on account of the payment of such adverse claim or the dishonor of the check or other order of the person to whose credit the deposit stands on the books of the bank.

HISTORY: Codes, 1942, § 5207; Laws, 1934, ch. 146.

Cross References —

State-chartered banks having and possessing the rights, powers, privileges, immunities, duties and obligations of a national bank having its principal place of business in this state, irrespective of any conflict with the provisions of this section, see §81-5-1(9).

RESEARCH REFERENCES

ALR.

Construction, application, and effect of statute relating to notice to bank of adverse claim to deposit. 62 A.L.R.2d 1116.

Bank’s right to apply third person’s funds, deposited in debtor’s name, on debtor’s obligation. 8 A.L.R.3d 235.

Post-Sniadach status of banker’s right to set off bank’s claim against depositor’s funds. 65 A.L.R.3d 1284.

Special bank deposits as subject of attachment or garnishment to satisfy depositor’s general obligations. 8 A.L.R.4th 998.

Am. Jur.

10 Am. Jur. 2d, Banks and Financial Institutions §§ 765, 770.

4 Am. Jur. Pl & Pr Forms (Rev), Banks, Forms 111 et seq.

18 Am. Jur. Proof of Facts 2d 187, Circumstances Rebutting Presumption of Payment of Savings Account.

CJS.

9 C.J.S., Banks and Banking §§ 340, 446, 470, 471 et seq.

§ 81-5-69. Repealed.

Repealed by Laws, 1994, ch. 320, § 11, eff from and after July 1, 1994.

[Codes, 1942, § 5208; Laws, 1934, ch. 146; 1936, ch. 165; 1942, ch. 262; 1976, ch. 368]

Editor’s Notes —

Former §81-5-69 regulated the amount of interest paid by banks on deposits.

§ 81-5-71. Certifying checks.

No officer, clerk or employee of any bank shall certify to a check unless the amount thereof actually stands to the credit of the drawer on the books of the bank, and any person who shall wilfully violate this provision shall on conviction thereof, be deemed guilty of a misdemeanor and be punished by a fine not exceeding one thousand dollars. The amount of any check certified shall be at once charged to the drawer’s account and credited to certified check account, there to remain until said check is retired. Any such check so certified by a duly authorized person shall be a good and valid obligation of the bank in the hands of the holder.

HISTORY: Codes, 1942, § 5219; Laws, 1934, ch. 146.

Cross References —

State-chartered banks having and possessing the rights, powers, privileges, immunities, duties and obligations of a national bank having its principal place of business in this state, irrespective of any conflict with the provisions of this section, see §81-5-1(9).

Imposition of standard state assessment in addition to all court imposed fines or other penalties for any misdemeanor violation, see §99-19-73.

Certification of checks, see also §75-3-411.

RESEARCH REFERENCES

Am. Jur.

10 Am. Jur. 2d, Banks and Financial Institutions §§ 911-916.

CJS.

9 C.J.S., Banks and Banking §§ 384 et seq., 439.

§ 81-5-73. Repealed.

Repealed by Laws, 1997, ch. 542, § 11, eff from and after passage (approved April 10, 1997).

[Codes, 1942, § 5209; Laws, 1934, ch. 146; 1936, ch. 165; 1962, ch. 175; 1968, ch. 255, § 1]

Editor’s Notes —

Former §81-5-73 set forth the cash reserve requirements for banks.

§ 81-5-75. Authorization for payment of dividend.

No state bank shall declare or pay any dividend upon its common stock unless such bank has received written approval by the Commissioner of Banking and Consumer Finance. Directors declaring a dividend in violation of the provisions of this section shall be personally liable to the full amount of the dividend so declared and it shall be the duty of the commissioner, upon discovering the payment of any such dividend, to forthwith make demand upon the directors that the same be restored to the bank, and upon their failure so to do he shall cause suit to be brought against them in the chancery court of the county in which the bank is located, either in his name or in the name of the bank, to recover the same for the benefit of the bank.

HISTORY: Codes, 1942, § 5210; Laws, 1934, ch. 146; Laws, 1994, ch. 320, § 5, eff from and after July 1, 1994.

Cross References —

State-chartered banks having and possessing the rights, powers, privileges, immunities, duties and obligations of a national bank having its principal place of business in this state, irrespective of any conflict with the provisions of this section, see §81-5-1(9).

JUDICIAL DECISIONS

1. In general.

2. Statute of limitations.

1. In general.

Equity is the proper forum for an action by the receiver of an insolvent bank to recover a dividend disbursed in violation of statute, notwithstanding the right of action is given to creditors. Metzger v. Joseph, 111 Miss. 385, 71 So. 645, 1916 Miss. LEXIS 309 (Miss. 1916).

Where declarations in suit by a receiver to recover dividends paid by insolvent bank alleges receiver authorized by chancery court to bring such suit, it is not demurrable in circuit court on ground of want of jurisdiction. Kretschmar v. Stone, 90 Miss. 375, 43 So. 177, 1907 Miss. LEXIS 45 (Miss. 1907).

2. Statute of limitations.

Code 1906, § 923, imposing personal liability on directors for paying dividends when the corporation is insolvent, is not penal and, therefore, liability under such section is not governed by one-year statute of limitation applicable to penalties. Metzger v. Joseph, 111 Miss. 385, 71 So. 645, 1916 Miss. LEXIS 309 (Miss. 1916).

RESEARCH REFERENCES

CJS.

9 C.J.S., Banks and Banking § 62.

§ 81-5-77. Limit of loans and extensions of credit to single borrower.

The liability to a bank by a person, company, corporation or firm for all loans and extensions of credit, including in the liability of such person, company or firm, where a partnership, the liabilities of the several members thereof, shall not exceed twenty percent (20%) of the aggregate unimpaired capital and unimpaired surplus of the bank.

The following shall not be restricted to or considered as coming within the limitations of twenty percent (20%) prescribed in subsection (a):

Loans and discounts secured by warehouse receipts or shippers’ order bills of lading representing actually existing values, provided the amount of such loans and discounts shall not exceed eighty-five percent (85%) of the market value of the commodities representing the actually existing values.

Loans and discounts secured by bonds, certificates or notes constituting direct obligations of the United States government, or bonds fully guaranteed by the United States government, or by full faith and credit obligations of the State of Mississippi; however, the Commissioner of Banking and Consumer Finance shall from time to time determine and fix the maximum percentage of the par value of all such securities that may be loaned.

Loans and discounts to the extent that they are secured or covered by guaranties, or by commitments, or agreements to take over or purchase the same, made by any federal reserve bank, or by the United States, or any department, bureau, board, commission or establishment of the United States, including any corporation wholly owned directly or indirectly by the United States; provided that such guaranties, agreements or commitments are unconditional and are to be performed by payment within sixty (60) days after demand; provided, further, that the Commissioner of Banking and Consumer Finance is authorized to define the terms used in this section and may by regulation control the making of loans under this paragraph (iii).

Loans and discounts secured in full by funds on deposit in time or savings accounts with the lending bank to the credit of the borrower.

The limit on loans and extensions of credit applicable to any one (1) person, company, corporation, or firm under this section shall take into consideration credit exposure arising from derivative transactions between the bank and the party. For purposes of this section, the term “derivative transaction” includes 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, one or more commodities, securities, currencies, interest or other rates, indices, or other assets.

Any officer or director who approves or makes loans prohibited in this section shall be liable individually for the full amount of the principal and interest of any such loan or extension of credit. If the Commissioner of Banking and Consumer Finance discovers, in any examination of any open bank that there is a loss on any loan or extension of credit made in violation of this section, he shall make demand of all directors and officers approving or making such loan or extension of credit for payment of the entire unpaid balance on any such loan or extension of credit. Like demand shall be made and suit brought by the receiver of any bank in liquidation.

However, this section shall not apply to loans or extensions of credit to the State of Mississippi, or to any political subdivision thereof, nor to any levee district.

HISTORY: Codes, 1942, § 5211; Laws, 1934, ch. 146; Laws, 1936, ch. 165; Laws, 1944, ch. 253, § 1; Laws, 1975, ch. 361; Laws, 1980, ch. 328; Laws, 1995, ch. 308, § 5; Laws, 2013, ch. 303, § 1, eff from and after passage (approved Feb. 19, 2013.).

Amendment Notes —

The 2013 amendment added (c) and designated the first, second, next-to-last and last paragraphs as (a), (b), (d) and (e), respectively; redesignated former (a) through (d) as (i) through (iv); in (a), substituted “all loans and extensions of credit” for “money loaned”; added “in subsection (a)” at the end of (b); substituted “Commissioner of Banking and Consumer Finance” for “state comptroller” in (b)(ii) and (iii) and (d); substituted “discovers, in any examination” for “shall discover, in any examination” in (d); inserted “or extension of credit” everywhere it appears in (d) and (e); and made minor stylistic changes.

Cross References —

State-chartered banks having and possessing the rights, powers, privileges, immunities, duties and obligations of a national bank having its principal place of business in this state, irrespective of any conflict with the provisions of this section, see §81-5-1(9).

RESEARCH REFERENCES

Am. Jur.

10 Am. Jur. 2d, Banks and Financial Institutions § 413.

§ 81-5-79. Small loans.

Any bank or trust company heretofore or hereafter organized under any general or special law of this state and doing a banking business in this state and any national bank doing business in this state shall have power, in addition to such other powers as it may have, to make loans to any borrower or debtor in an amount not exceeding Five Thousand Dollars ($5,000.00) to be repaid in monthly installments and may charge interest thereon at not exceeding twelve percent (12%) per annum for the entire period of the loan, and aggregate the principal and interest for the entire period of the loan and divide same into monthly installments, and may take security therefor as for other loans.

A charge of Ten Dollars (10) in lieu of interest may be made on any loan payable in a single payment, and a charge of Fifteen Dollars ($15.00) in lieu of interest may be made on any loan payable in monthly installments.

No further interest or discount or service charge, or other charge by way of compensation for the use of such money, shall be made directly or indirectly on any such loan or discount by any such bank, trust company or national bank, made under the provisions of this section, in addition to the charges herein expressly provided for.

However, this section shall in no way repeal any of the other present usury statutes.

HISTORY: Codes, 1942, § 5212; Laws, 1940, ch. 204; Laws, 1958, ch. 167; Laws, 1980, ch. 492, § 3; Laws, 1982, ch. 468, § 3; Laws, 1984, ch. 501, § 3; Laws, 1986, ch. 510, § 13, eff from and after July 1, 1986.

Editor’s Notes —

Laws of 1980, ch. 492, §§ 6, 7, provide as follows:

“SECTION 6. The provisions of this act shall apply only to contracts, agreements, or evidences of indebtedness entered into on or after the effective date of this act, and shall not defeat, extinguish or render void any claim or defense existing with respect to contracts, agreements or evidences of indebtedness entered into prior to the effective date of this act.

“SECTION 7. This act shall not be construed as stating explicitly and by its terms that the State of Mississippi does not want the provisions of sections 501(a)(1), 511 and 521 through 523 of the Depository Institutions Deregulation and Monetary Control Act of 1980 to apply with respect to loans, mortgages, credit sales, and advances made in this state, and the preemption of state law provided by such sections shall remain in full force and effect in the State of Mississippi.”

Laws of 1982, ch. 468, § 6, provides as follows:

“SECTION 6. This act shall not be construed as stating explicitly and by its terms that the State of Mississippi does not want the provisions of Sections 501(a)(1), 511 and 521 through 523 of the Depository Institutions Deregulation and Monetary Control Act of 1980 to apply with respect to loans, mortgages, credit sales, and advances made in this state, and the preemption of state law provided by such sections shall remain in full force and effect in the State of Mississippi.”

Laws of 1984, ch. 501, § 6, provides as follows:

“SECTION 6. This act shall not be construed as stating explicitly and by its terms that the State of Mississippi does not want the provisions of Sections 501(a)(1), 511, and 521 through 523 of the Depository Institutions Deregulation and Monetary Control Act of 1980, as amended, to apply with respect to loans, mortgages, credit sales, and advances made in this state, and the preemption of state law provided by such sections, as amended, shall remain in full force and effect in the State of Mississippi.”

Laws of 1986, ch. 510, § 17, effective July 1, 1986, provides as follows:

“SECTION 17. This act shall not be construed as stating explicitly and by its terms that the State of Mississippi does not want the provisions of Sections 501(a)(1), 511, and 521 through 523 of the Depository Institutions Deregulation and Monetary Control Act of 1980, as amended, to apply with respect to loans, mortgages, credit sales, and advances made in this state, and the preemption of state law provided by such sections, as amended, shall remain in full force and effect in the State of Mississippi.”

Cross References —

Mississippi Business Tender Offer Law of 1980, see §§75-72-101 et seq.

Interest generally, see §§75-17-1 et seq.

Small loans, see §§75-67-101 et seq.

State-chartered banks having and possessing the rights, powers, privileges, immunities, duties and obligations of a national bank having its principal place of business in this state, irrespective of any conflict with the provisions of this section, see §81-5-1(9).

JUDICIAL DECISIONS

1. In general.

Modification by this section [Code 1942, § 5212] of the previous statute on the subject so as to allow banks to make charges on small loans did not impair the obligations of a contract but simply withdrew previous impediments and rendered it enforceable as made, where previous statute did not expressly make the contract void for usury. Deposit Guaranty Bank & Trust Co. v. Williams, 193 Miss. 432, 9 So. 2d 638, 1942 Miss. LEXIS 115 (Miss. 1942).

RESEARCH REFERENCES

ALR.

Bank’s liability to customer for imposing allegedly excessive service charges. 73 A.L.R.4th 1028.

Preemption Issues Under Depository Institutions Deregulation and Monetary Control Act. 28 A.L.R. Fed. 2d 467.

§ 81-5-81. Effect of third-party deposits to induce making of unsound loans.

The Federal Deposit Insurance Corporation, the Comptroller of the Currency, the Federal Reserve Bank, or the State Comptroller, Department of Bank Supervision, State of Mississippi, is hereby authorized to freeze any deposit which is made by any third party for the purpose of enticing any bank in the State of Mississippi, whether state or national, into making a loan which is unsafe and unsound and which does not mature prior to any attempt to withdraw such deposit so used to entice the making of said loan. This statute relates to deposits and loans which are not related in the customary function of business but are manipulated and procured by third parties (by whatever name known) for profit and the withdrawal or attempt to withdraw said deposit before said loan is sufficiently satisfied shall be sufficient authority for any state or federal supervising authority to act promptly on evidence presented to it or obtained by said agency. If any bank in the State of Mississippi shall be put into liquidation and such deposit and loan arrangements have made any contribution whatsoever to the insolvency of said bank, then the state or federal agency, the duly appointed liquidating agency or receiver, or the appropriate chancery court in charge of the liquidation of said bank shall have the right and duty to withhold any liquidating dividends or payments for said deposit or deposits until the loan or loans which the deposits have influenced are fully satisfied, and the liquidating agent or receiver shall have the right upon the approval of the chancery court to assign said loan or loans so influenced to the depositor or depositors in satisfaction of said deposit or deposits claimed against the assets of the bank in liquidation.

HISTORY: Codes, 1942, § 5287.9; Laws, 1971, ch. 390, § 1, eff from and after passage (approved March 19, 1971).

Editor’s Notes —

Section 81-1-57 provides that wherever the words “Department of Bank Supervision” or “department,” when referring to the Department of Bank Supervision, shall be construed to mean the Department of Banking and Consumer Finance. Section 81-1-117 abolished the Department of Bank Supervision, and transferred its functions, duties and responsibilities to the Department of Banking and Consumer Finance.

Section 81-1-57 provides that wherever the words “state comptroller” or “comptroller,” when referring to the office of state comptroller of banks, shall be construed to mean the commissioner of banking and consumer finance. Section 81-1-117 abolished the office of state comptroller, and provided that the functions, duties and responsibilities would be assumed by the commissioner of banking and consumer finance.

Cross References —

State-chartered banks having and possessing the rights, powers, privileges, immunities, duties and obligations of a national bank having its principal place of business in this state, irrespective of any conflict with the provisions of this section, see §81-5-1(9).

RESEARCH REFERENCES

ALR.

What constitutes violation of provisions of Bank Holding Company Act prohibiting tying arrangements (12 USCS § 1972(1)). 74 A.L.R. Fed. 578.

§ 81-5-83. Limit of borrowing power of banks.

No bank chartered and doing business under the laws of this state shall issue bills payable or be liable on rediscounts at any time to a total amount in excess of three times its capital and surplus. However, this limit may be exceeded by a bank with the consent and approval in writing, of the state comptroller. Any violation of this provision by a bank shall authorize the state comptroller to deal with it as a bank being operated in violation of the laws, provided, however, that this section shall in no wise impair any obligation of banks for payment of loans and rediscounts in excess of the limit herein provided, nor shall any bank owing money heretofore borrowed in excess of this limit be held to be acting in violation of the law as to such existing loans.

HISTORY: Codes, 1942, § 5213; Laws, 1934, ch. 146.

Editor’s Notes —

Section 81-1-57 provides that wherever the words “state comptroller” or “comptroller,” when referring to the office of state comptroller of banks, shall be construed to mean the commissioner of banking and consumer finance.

Section 81-1-117 abolished the office of state comptroller, and provided that the functions, duties and responsibilities would be assumed by the commissioner of banking and consumer finance.

Cross References —

State-chartered banks having and possessing the rights, powers, privileges, immunities, duties and obligations of a national bank having its principal place of business in this state, irrespective of any conflict with the provisions of this section, see §81-5-1(9).

RESEARCH REFERENCES

Am. Jur.

10 Am. Jur. 2d, Banks and Financial Institutions §§ 483, 484, 607, 608.

CJS.

9 C.J.S., Banks and Banking §§ 23, 243.

§ 81-5-85. Consolidation, conversion or merger of state or state and national banks, state or federal savings and loan associations and state-chartered banks, and state or federal savings banks and state-chartered banks.

Any two (2) or more state-chartered banks, or any national bank and any state-chartered bank, or any state or federal savings and loan association and any state-chartered bank, or any state or federal savings bank and any state-chartered bank, may, with the approval of the commissioner, consolidate with or merge into one (1) state-chartered bank, under the charter of the existing state bank, on such terms and conditions, as may be lawfully agreed upon, adopted and approved in a merger plan in accordance with Article 11, Chapter 4 of Title 79, Mississippi Code of 1972. Following receipt of the required corporate approvals and approval of the merger plan by the commissioner, the resulting amendments to charters of any state-chartered bank that is a party to the merger plan shall be approved and filed with other state officials in accordance with Section 81-3-15. The capital stock of such consolidated bank shall not be less than that required under the Mississippi banking laws for the organization of a bank in the place in which it is located. And all the rights, franchises and interests of the institutions so consolidated in and to every species of property, personal and mixed, and choses in action thereto belonging, shall be deemed to be transferred to and vested in such bank into which they are consolidated without any deed or other transfer, and the said consolidated bank shall hold and enjoy the same and all rights of property, franchises and interests in the same manner and to the same extent as were held and enjoyed by the institutions so consolidated therewith.

Any national bank, state or federal savings and loan association, or state or federal savings bank may apply for conversion into a state-chartered bank upon the affirmative vote of the shareholders owning at least two-thirds (2/3) of its capital stock outstanding, or of fifty-one percent (51%) or more of the total number of the members, at a meeting called by the directors, notice of which, specifying the purpose, shall be given the manner required by the bylaws, or in the absence of such bylaw, then by sending the notice to each shareholder of record by registered mail at least ten (10) days before the meeting. Upon such affirmative vote, the converting institution may apply for a certificate of authority by filing with the commissioner a certificate signed by its president and cashier which sets forth the corporate action herein prescribed and asserts that the institution has complied with the provisions of the laws of the United States. The converting institution shall also file with the commissioner the plan of conversion and the proposed amendments to its articles of incorporation as approved by the stockholders for the operation of the institution as a state bank. Upon receipt of the prescribed application, the commissioner shall examine all facts associated with the conversion. The expenses and cost incurred for such special examination shall be paid by the institution applying for permission to convert. The commissioner shall present his findings and recommendations to the State Board of Banking Review for consideration. Upon approval by the State Board of Banking Review, the commissioner shall issue a certificate of authority to the applicant allowing the conversion to proceed.

Any bank, savings and loan association or savings bank chartered by the State of Mississippi is hereby authorized to convert into, consolidate with, or merge with a national bank domiciled in the State of Mississippi, with the national bank charter surviving, without approval of the Department of Banking and Consumer Finance, the Commissioner of Banking and Consumer Finance, or any state authority whatsoever.

HISTORY: Codes, 1942, § 5214; Laws, 1934, ch. 146; Laws, 1978, ch. 316, § 1; Laws, 1995, ch. 308, § 6; Laws, 1997, ch. 542, § 5, eff from and after passage (approved April 10, 1997); Laws, 2018, ch. 354, § 1, eff from and after July 1, 2018.

Amendment Notes —

The 2018 amendment, in the first paragraph, substituted “adopted and approved in a merger plan in accordance with Article 11, Chapter 4 of Title 79, Mississippi Code of 1972” for “by a majority of the board of directors of each bank proposing to consolidate” in the first sentence and rewrote the second sentence, which read: “Such agreement shall be ratified and confirmed by the affirmative vote of the shareholders or members of each such institution owning at least two-thirds (2/3) of its capital stock outstanding, or of fifty-one percent (51%) or more of the total number of members, at a meeting to be held on call of the directors, notice of which specifying the purpose shall be given in the manner required by the bylaws, or in the absence of such bylaw then by sending such notice to each shareholder of record by registered mail at least ten (10) days prior to such meeting”; and in the second paragraph, substituted “notice of which, specifying the purpose, shall be given the manner required by the bylaws, or in the absence of such bylaw, then by sending the notice to each shareholder of record by registered mail at least ten (10) days before the meeting” for “subject to the manner previously described in this section.”

Cross References —

State-chartered banks having and possessing the rights, powers, privileges, immunities, duties and obligations of a national bank having its principal place of business in this state, irrespective of any conflict with the provisions of this section, see §81-5-1(9).

Mississippi Business Tender Offer Law of 1980, see Chapter 72 of Title 75.

JUDICIAL DECISIONS

1. In general.

The only authority that a bank has to operate is that which is contained in its charter, and when two or more banks consolidate, they become one bank and operate under the charter of one of the existing banks. Coahoma Bank & Trust Co. v. Bowen, 218 So. 2d 868, 1969 Miss. LEXIS 1627 (Miss. 1969).

RESEARCH REFERENCES

ALR.

Construction and application of 12 USCS §§ 214-214c authorizing conversion of national bank into, or its merger or consolidation with, state bank. 15 A.L.R. Fed. 817.

Denial by Board of Governors of Federal Reserve System of application for bank merger, consolidation, or acquisition on anticompetitive grounds under § 3(c) of Bank Holding Company Act of 1956 (12 USCS § 1842(c)). 71 A.L.R. Fed. 438.

Am. Jur.

10 Am. Jur. 2d, Banks and Financial Institutions §§ 191, 192 et seq., 238.

3B Am. Jur. Legal Forms 2d, Banks §§ 38:96 et seq.

CJS.

9 C.J.S., Banks and Banking §§ 156-163.

§ 81-5-87. Holding of real estate by bank.

Any banking corporation doing business in this state may purchase, hold and convey real estate for the following purposes and no others:

Such real estate as shall be necessary in which to transact the business of any such bank, including with its banking offices, premises in the same building to rent as a source of income, also such real estate and improvements necessary for the operation and conduct of its branch banks, branch offices, drive-in windows and parking facilities not connected to the main office, branch banks or branch offices. The book value of the bank’s real estate shall not exceed fifty percentum (50%) of its net capital funds as published by the last preceding call statement as of December 31, and this shall be without regard to population but subject to the approval of the state comptroller; however, the book value of such real estate and improvements shall be reduced each year the amount that is allowable for depreciation by the Internal Revenue Service until such book value shall be reduced to at least twenty-five percentum (25%) of the net capital funds as shown by its last published statement as of December 31. None of the facilities, main banking quarters, branch banks, branch offices, drive-in windows or parking facilities not connected to the main office, branch banks or branch offices shall be purchased or commenced without first having the approval of the state comptroller.

Such real estate as shall be purchased by or conveyed to such bank in satisfaction of or on account of debts previously contracted in the usual course of its business.

Such real estate as shall be purchased at sale under judgments, decrees or mortgages, or deeds of trust, foreclosure under securities held by such bank or under any security or lien which is a superior lien to that held by said bank.

Upon approval of the state comptroller, a bank may purchase additional real estate for future expansion or future new quarters but if said real estate is not developed for the purpose intended and purchased, the said real estate shall be disposed of within a period of five (5) years or reduced to a book value of one dollar ($1.00).

Any real estate acquired as provided in subsections (b) and (c) of this section shall be carried in the bank statement at such sound values as may be approved by the state comptroller, not to exceed its cost to the bank, and shall be sold within five years after the title thereto is acquired; unless the consent of the state comptroller is obtained in writing, extending such period; provided, however, no such extension shall be for more than five years. If any such real estate is not sold within the time herein limited, or within the time as extended by the state comptroller, it shall not thereafter be carried as a book asset of the bank in excess of one dollar ($1.00). It is not the purpose of other real estate acquired under subsections (b) and (c) of this section to be treated as part of the fifty percentum (50%) of net capital recited in the first paragraph of this section.

HISTORY: Codes, 1942, § 5216; Laws, 1934, ch. 146; Laws, 1936, ch. 165; Laws, 1952, ch. 182; Laws, 1970, ch. 271, § 1, eff from and after passage (approved April 3, 1970).

Editor’s Notes —

Section 81-1-57 provides that wherever the words “state comptroller” or “comptroller”, when referring to the office of state comptroller of banks, shall be construed to mean the commissioner of banking and consumer finance.

Section 81-1-117 abolished the office of state comptroller, and provided that the functions, duties and responsibilities would be assumed by the commissioner of banking and consumer finance.

Cross References —

State-chartered banks having and possessing the rights, powers, privileges, immunities, duties and obligations of a national bank having its principal place of business in this state, irrespective of any conflict with the provisions of this section, see §81-5-1(9).

Real estate holdings of insurance companies, see §83-19-55.

JUDICIAL DECISIONS

1. In general.

Good faith of bank in acquiring, pursuant to settlement of debt, 360 acres of land from vendee of patentees from state after tax sale thereof to state, would be presumed in view of provisions of banking law entitling a bank to own such real estate as should be purchased by or conveyed to the bank in satisfaction of or on account of debts previously contracted in the course of its business. Merchants & Mfgs. Bank v. State, 200 Miss. 291, 25 So. 2d 585, 1946 Miss. LEXIS 293 (Miss. 1946).

Bank’s conditional sale of realty to avoid statute directing charging off of realty held over five years was deemed bona fide for tax purposes. Board of Sup'rs v. Riverside Bank, 158 Miss. 653, 131 So. 80, 1930 Miss. LEXIS 97 (Miss. 1930).

RESEARCH REFERENCES

Am. Jur.

10 Am. Jur. 2d, Banks and Financial Institutions §§ 479, 481, 501, 502, 699-602.

3B Am. Jur. Legal Forms 2d, Banks § 38:141.

CJS.

9 C.J.S., Banks and Banking § 241.

§ 81-5-89. Limitations upon acceptances.

A state bank may accept drafts or bills of exchange drawn upon it having not more than six (6) months’ sight to run, exclusive of days of grace, which grew out of transactions involving the shipment of goods, provided shipping documents conveying or securing title are attached as security at the time of acceptance of such drafts and bills of exchange or which are secured at the time of acceptance by warehouse receipts or other such documents conveying or securing title covering readily marketable staples not subject to rapid deterioration.

No bank shall accept bills for any one person, company, firm or corporation to an amount equal at any time in the aggregate to more than ten per centum of its paid-up and unimpaired capital stock and surplus; and no such bank shall accept such bills to an amount equal at any time in the aggregate to more than one-half of its paid-up and unimpaired capital and surplus.

HISTORY: Codes, 1942, § 5217; Laws, 1934, ch. 146.

Cross References —

Definition and operation of acceptance of commercial paper, see §75-3-410.

Collection of documentary drafts under the Uniform Commercial Code, see §§75-4-501 et seq.

Confirmation of letter of credit, see §75-5-107.

Warehouse receipts and bills of lading generally, see §§75-7-601 et seq.

State-chartered banks having and possessing the rights, powers, privileges, immunities, duties and obligations of a national bank having its principal place of business in this state, irrespective of any conflict with the provisions of this section, see §81-5-1(9).

RESEARCH REFERENCES

ALR.

Bank’s liability to nonsigning payee for payment of check drawn to joint payees without obtaining endorsement by both. 47 A.L.R.3d 537.

§ 81-5-91. Repealed.

Repealed by Laws, 1998, ch. 392, § 3, eff from and after passage (approved March 17, 1998).

[Codes, 1942, § 5220; Laws, 1934, ch. 146; 1968, ch. 253, § 1, eff from and after July 1, 1970]

Editor’s Notes —

Former §81-5-91 related to par clearance of checks and allowed exchange to be charged on certain items.

§ 81-5-93. Clearinghouse associations authorized.

Banks or banking institutions in any municipality or county or counties in this state may organize and establish clearinghouse associations, composed of such banks and banking institutions as may become members thereof, by voluntary action for the purpose of effecting daily settlements and exchanges by and between the associate banks, the payment or settlements at such clearinghouse of daily balances between such members resulting from exchanges, payment of checks and other orders of money and for the purpose of making provision for the proper conduct and management of the banking operations of such municipality or county or counties, and of the members of such association. Such clearinghouse associations may or may not be incorporated. If incorporated, a clearinghouse association shall be organized as a corporation without capital stock and not organized for profit or gain and the stock thereof may be held by the member banks, each such member bank being entitled to hold not more than one (1) share therein.

HISTORY: Codes, 1942, § 5221; Laws, 1934, ch. 146; Laws, 1982, ch. 341, eff from and after July 1, 1982.

Cross References —

Bank deposits and collections under the Uniform Commercial Code, see §§75-4-101 et seq.

State-chartered banks having and possessing the rights, powers, privileges, immunities, duties and obligations of a national bank having its principal place of business in this state, irrespective of any conflict with the provisions of this section, see §81-5-1(9).

Powers of clearinghouse associations, see §81-5-95.

RESEARCH REFERENCES

Am. Jur.

10 Am. Jur. 2d, Banks and Financial Institutions §§ 962-988.

CJS.

9 C.J.S., Banks and Banking §§ 681-683.

§ 81-5-95. Powers of clearinghouse associations.

Clearinghouse associations, by the action of the members thereof, shall have the power to adopt and enact rules, regulations and bylaws providing: (a) for officers and business agents of such clearinghouse association, and for the maintenance of same; (b) for the conduct of the affairs and business of the association; (c) for the settlement of differences or controversies between members thereof relating to banking transactions; (d) for aid from such clearinghouse association or the members thereof to any bank or member which may become involved or embarrassed; (e) to collect dues and payments as fixed by the bylaws or regulations from members thereof, for any of the purposes of such association; (f) to advance moneys or loans to any member, on deposit of collateral or other securities; (g) to provide uniform charges for collections or orders, for uniform rates of exchange and discounts provided or required by the general laws of the State of Mississippi, and for service charged upon unprofitable accounts, and for handling checks drawn against insufficient funds; (h) and generally to have all other powers usual and customary for clearinghouse associations, to encourage a faithful and honest administration of banking trusts and public duties, to aid in the preservation of public credit and of confidence in the financial system and conditions of the State of Mississippi, and the business communities thereof. All rates, rules, regulations and bylaws promulgated must, before becoming effective, receive the approval of the state comptroller. Discretionary power is vested in the state comptroller to supervise all rates, rules, regulations and bylaws.

HISTORY: Codes, 1942, § 5222; Laws, 1934, ch. 146.

Editor’s Notes —

Section 81-1-57 provides that wherever the words “state comptroller” or “comptroller”, when referring to the office of state comptroller of banks, shall be construed to mean the commissioner of banking and consumer finance.

Section 81-1-117 abolished the office of state comptroller, and provided that the functions, duties and responsibilities would be assumed by the commissioner of banking and consumer finance.

Cross References —

Bank deposits and collections under the Uniform Commercial Code, see §§75-4-101 et seq.

State-chartered banks having and possessing the rights, powers, privileges, immunities, duties and obligations of a national bank having its principal place of business in this state, irrespective of any conflict with the provisions of this section, see §81-5-1(9).

RESEARCH REFERENCES

Am. Jur.

10 Am. Jur. 2d, Banks and Financial Institutions §§ 962-988.

CJS.

9 C.J.S., Banks and Banking §§ 681-683.

§ 81-5-97. Banking hours.

The commissioner of banking and consumer finance may, from time to time, adopt and promulgate rules regulating banking hours, and such rules shall have all the force and effect of law. In addition thereto, the commissioner may permit a bank to close its doors for business at such time or times during the week as the commissioner determines will not prevent the rendering of proper and reasonable banking service to the community and trade area in which the bank is located. The commissioner shall not authorize any bank to close for more than one whole day during any week, state and federal legal holidays and Sundays excepted; provided, however, that in the event any state or federal legal holiday shall fall on a Saturday, then the commissioner may permit banks to observe the preceding Friday as a legal holiday, or if such holiday shall fall on Sunday, then the commissioner may permit banks to observe the next following Monday as a legal holiday.

HISTORY: Codes, 1942, § 5223; Laws, 1934, ch. 146; Laws, 1954, ch. 165; Laws, 1962, ch. 176; Laws, 1976, ch. 369; Laws, 1982, ch. 314, eff from and after July 1, 1982.

Cross References —

Time of receipt of items under the Uniform Commercial Code regulation of bank deposits and collections, see §75-4-107.

State-chartered banks having and possessing the rights, powers, privileges, immunities, duties and obligations of a national bank having its principal place of business in this state, irrespective of any conflict with the provisions of this section, see §81-5-1(9).

Establishment of electronic terminals by banks, see §81-5-100.

§ 81-5-98. Drive-in teller windows and branch offices considered to be branch banks.

Drive-in teller windows and branch offices in operation on July 1, 1986, shall on such date, and thereafter, be considered branch banks for the purpose of applying the branching provisions of this chapter and are authorized to continue operating as branch banks.

HISTORY: Laws, 1986, ch. 469, § 7, eff from and after July 1, 1986.

Cross References —

State-chartered banks having and possessing the rights, powers, privileges, immunities, duties and obligations of a national bank having its principal place of business in this state, irrespective of any conflict with the provisions of this section, see §81-5-1(9).

§ 81-5-99. Repealed.

Repealed by Laws, 1986, ch. 469, § 14, eff from and after July 1, 1986.

[Codes, 1942, § 5224.3; Laws, 1964, ch. 224, § 1; 1972, ch. 318, § 1]

Editor’s Notes —

Provisions concerning drive-in teller’s windows now appear in §81-5-98.

§ 81-5-100. Establishment of electronic banking terminals.

  1. For the purposes of this section, the following words shall have the meaning herein described unless the context shall otherwise require:
    1. “Electronic terminal” means an unmanned electronic device owned or operated by a federally insured bank or thrift through which a consumer may initiate an electronic fund transfer.
    2. “Electronic fund transfer” means any of the following:
      1. The withdrawal of cash from or the deposit of cash or checks into an unmanned electronic device, such as an automatic teller machine, but not including night depositories;
      2. An application for or acceptance of a loan through use of an unmanned electronic device;
      3. The transfer of funds between accounts through use of an unmanned electronic device; or
      4. The issuance of a check by an unmanned electronic device.
    3. “Electronic fund transfer” does not mean access to accounts, the application for or acceptance of a loan, the transfer of funds between accounts or other banking services accomplished through the use of a personal computer or telephone.
  2. A state bank or thrift, with the approval of the Commissioner of Banking and Consumer Finance, may establish electronic terminals.
  3. A bank desiring to establish such an electronic terminal shall file with the commissioner a written application requesting authority to establish such a terminal. Upon receipt of such application, the commissioner shall make inquiry into the facts sufficient to enable him to determine whether or not the proposed electronic terminal will provide bank customers with convenient access to the electronic transfer of funds. If the commissioner’s finding is favorable to the application, he shall grant the applicant a written permit to establish the terminal. These rights are extended to national banks upon the approval of the Comptroller of the Currency of the United States of America.
  4. For the use of its electronic terminals connected to sharing networks or systems, a bank may impose a fee if imposition of the fee is disclosed at a time and in a manner that allows a user to terminate or cancel the transaction without incurring the transaction fee. Such fee shall not exceed Two Dollars ($2.00) or four percent (4%) of the gross amount of the transaction, whichever is greater. An agreement to share electronic terminals shall not prohibit, limit or restrict the right of a bank to charge such fees for the use of its electronic terminals as allowed by state or federal law, or require a bank to limit or waive its rights or obligations under this section.

HISTORY: Laws, 1981, ch. 338, § 1; Laws, 1994, ch. 438, § 1; Laws, 1996, ch. 400, § 45, eff from and after passage (approved March 19, 1996).

Cross References —

Bank deposits and collections, generally, see §§75-4-101 et seq.

State-chartered banks having and possessing the rights, powers, privileges, immunities, duties and obligations of a national bank having its principal place of business in this state, irrespective of any conflict with the provisions of this section, see §81-5-1(9).

Banking hours, generally, see §81-5-97.

Drive-in teller’s windows, see §81-5-98.

Branch banks, generally, see §§81-7-1 et seq.

RESEARCH REFERENCES

ALR.

Maintenance of computer terminal in retail store for purpose of effecting transfer of funds between financial institution and its depositors as conduct of banking business by store. 73 A.L.R.3d 1282.

Am. Jur.

10 Am. Jur. 2d, Banks and Financial Institutions §§ 623-626.

Am. Jur. 2d New Topic Service, Consumer Credit Protection §§ 156 et seq.

3A Am. Jur. Legal Forms 2d, Banks §§ 38:155 (electronic fund transfer agreement), 38:172 (electronic fund transfer disclosure).

§ 81-5-101. Dissolution of solvent banks.

When the owners of two-thirds of the capital stock of any solvent corporation engaged in a banking business shall have determined and voted to dissolve the corporation, they shall proceed in the following manner, to-wit:

The corporation shall advise the department of bank supervision by registered mail, over the signature of the board of directors of said corporation, of their intention to liquidate, accompanied by a certified copy of the minutes of the stockholders meeting authorizing the liquidation, and shall cause notice to be published once each week for three consecutive weeks in some newspaper published within the county in which the corporation is domiciled, giving the date of the proposed liquidation, and calling on all creditors and depositors to present for payment their claims against such corporation not later than sixty days after said date of liquidation. With said notice to the department of bank supervision the corporation shall file a detailed statement of its assets and liabilities.

The stockholders of the corporation shall, by and with the approval of the state comptroller appoint a special agent who shall have charge of said liquidation and shall be responsible to the creditors and stockholders of such corporation and to the department of bank supervision for the proper liquidation of the affairs of the corporation. The special agent shall furnish bond to be approved by the state comptroller for the faithful performance of his duties as special agent and shall receive as salary not more than $200.00 per month out of the assets of the liquidating bank while actively engaged in the liquidation of the affairs of the bank and shall be at all times under the supervision of the department of bank supervision. The certificate of appointment of the special agent shall be filed in the office of the department of bank supervision, and a certified copy filed in the office of the chancery clerk of the county in which the bank is domiciled.

Upon the date set for the liquidation of the bank as per published notice the special agent shall take charge and file with the department of bank supervision a sworn detailed statement of the assets and liabilities of the bank as shown by the books of the same, a certified copy to be filed in the office of the chancery clerk of said county. He shall proceed to pay in full as presented all claims of creditors and depositors and shown by the books of the bank and all claims which may be proven against the bank.

A sufficient bond to be approved by the state comptroller in such amount as he may require shall be furnished by the stockholders of the bank made and conditioned to insure the payment of all liabilities as shown by the books of the bank and all proven claims against the bank. The said bond shall be filed in the office of the department of bank supervision. Suit may be brought upon this bond by any creditor claimant, and such suit shall be filed in the chancery court of the county in which the corporation is domiciled. No suit may be brought upon such bond except within four months after date of liquidation as provided in paragraph (a) of this section. When any such suit shall be brought on said bond, notice shall be given by publication in a newspaper published in the county of the domicile of the bank, requiring all creditors and claimants to intervene in order to determine in one proceeding all claims of creditors.

At the expiration of sixty days from the date of the liquidation as provided in paragraph (a) of this section, the special agent shall file with the department of bank supervision a detailed report of all his proceedings, collections and disbursements and list of all assets remaining and of all liabilities still unpaid or unclaimed, a certified copy of which shall be filed in the office of the chancery clerk of the county. A list of all unclaimed deposits or creditors as shown by the books together with the amounts due them, shall be delivered in cash, to the department of bank supervision to be deposited by the state comptroller in some bank subject to their order for payment upon presentation of claims by said depositors or creditors. The remaining assets of the bank may be distributed among the stockholders, provided the stockholders shall make sufficient bond approved by the state comptroller in amounts of the capital, surplus and undivided profits of the banks, payable to the State of Mississippi, said bond to expire four months from the date of liquidation as provided in paragraph (a) of this section, if no claim or suit has been filed against such bond. At the expiration of this bond the state comptroller shall give notice by publication for three consecutive weeks in some local or county newspaper of the expiration of said bond, and the said bond shall be relieved from further liability, and the stockholders of the corporation shall be relieved from further liability as stockholders of such corporation.

HISTORY: Codes, 1942, § 5225; Laws, 1934, ch. 146.

Editor’s Notes —

Section 81-1-57 provides that wherever the words “department of bank supervision” or “department” when referring to the department of bank supervision, shall be construed to mean the department of banking and consumer finance. Section 81-1-117 abolished the department of bank supervision, and transferred its functions, duties and responsibilities to the department of banking and consumer finance.

Section 81-1-57 provides that wherever the words “state comptroller” or “comptroller,”when referring to the office of state comptroller of banks, shall be construed to mean the commissioner of banking and consumer finance. Section 81-1-117 abolished the office of state comptroller, and provided that the functions, duties and responsibilities would be assumed by the commissioner of banking and consumer finance.

Cross References —

State-chartered banks having and possessing the rights, powers, privileges, immunities, duties and obligations of a national bank having its principal place of business in this state, irrespective of any conflict with the provisions of this section, see §81-5-1(9).

Liquidation of solvent bank, see §81-9-41.

Depositors’ liquidation, see §§81-9-43 et seq.

Liquidation of savings associations, see §81-12-69.

Voluntary dissolution of credit union, see §81-13-59.

RESEARCH REFERENCES

Am. Jur.

10 Am. Jur. 2d, Banks and Financial Institutions §§ 207-215, 1020, 1182-1184, 1197.

CJS.

9 C.J.S., Banks and Banking §§ 596-599.

§ 81-5-103. General penalty.

Any banker, officer, employee, director or agent of any state bank who shall knowingly or wilfully neglect to perform any duty required by law, where no other penalty is provided or who shall fail to conform to any lawful requirement made by the department of bank supervision shall be guilty of a misdemeanor and upon conviction thereof shall be punished by a fine not to exceed $500.00 or by imprisonment in the county jail not to exceed six months, or by both such fine and imprisonment. And each officer or employee of the department of bank supervision who shall wilfully fail to perform any duty required by law, where no other penalty is prescribed, shall be guilty of a misdemeanor and on conviction thereof shall be punished by a fine not to exceed $500.00 or by imprisonment in the county jail not to exceed six months, or by both such fine and imprisonment.

HISTORY: Codes, 1942, § 5282; Laws, 1934, ch. 146.

Editor’s Notes —

Section 81-1-57 provides that wherever the words “department of bank supervision” or “department” when referring to the department of bank supervision, shall be construed to mean the department of banking and consumer finance.

Section 81-1-117 abolished the department of bank supervision, and transferred its functions, duties and responsibilities to the department of banking and consumer finance.

Cross References —

State-chartered banks having and possessing the rights, powers, privileges, immunities, duties and obligations of a national bank having its principal place of business in this state, irrespective of any conflict with the provisions of this section, see §81-5-1(9).

Imposition of standard state assessment in addition to all court imposed fines or other penalties for any misdemeanor violation, see §99-19-73.

RESEARCH REFERENCES

ALR.

What constitutes willful misapplication of bank funds by bank officer or employee in violation of 18 USCS § 656. 51 A.L.R. Fed. 420.

§ 81-5-105. Standard of care for bank directors established.

  1. Bank and bank holding company officers and directors shall be deemed to stand in a fiduciary relationship to their bank or bank holding company and its stockholders and shall discharge the duties of their respective positions in good faith and with that diligence, care, judgment and skill as provided in subsection (2) of this section. Nothing contained in this section shall derogate from any indemnification authorized by either state or federal law.
  2. A director or officer of a bank or bank holding company shall not be held personally liable to the corporation or its successor, or the shareholders thereof, for monetary damages unless the director or officer acted in a grossly negligent manner as defined in subsection (5) of this section or engaged in conduct which demonstrates a greater disregard of the duty of care than gross negligence, such as intentional tortious conduct or intentional breach of his duty of loyalty or intentional commission of corporate waste.
  3. A director of a bank or bank holding company shall, in the performance of his duties, be fully protected in relying in good faith on the records of the bank or bank holding company and in relying in good faith upon information, opinions, reports or statements presented to him, to the bank or bank holding company, to the board of directors or to any committee thereof by any of the bank’s or bank holding company’s officers or employees or by any committee of the board of directors, or by any counsel, appraiser, engineer or independent or certified public accountant selected with reasonable care by the board of directors or any committee thereof or by any officer having the authority to make such selection or by any other person as to matters the director in good faith believes are within such selected person’s professional or expert competence, such person having been selected in good faith by the board of directors or any committee thereof or any officer having the authority to make such selection.
  4. Notwithstanding any other law to the contrary, the provisions of this section are the sole and exclusive law governing the relation and liability of directors and officers to their bank or bank holding company, or their successor, or to the shareholders thereof, or to any other person or entity. The provisions of this section shall be retroactive.
  5. As used in this section, the term “gross negligence” means a reckless disregard of, or a carelessness amounting to gross indifference to, the best interests of the bank or bank holding company or the shareholders thereof, and involves a substantial deviation below the standard of care expected to be maintained by a reasonably careful person under like circumstances.
  6. The provisions of this section shall not affect the application of common law or any other statute relating to the duties of officers and directors of other corporate entities.

HISTORY: Laws, 1994, ch. 645, § 1, eff from and after passage (approved April 8, 1994).

Cross References —

Qualifications of directors, see §81-5-105.

RESEARCH REFERENCES

Am. Jur.

10 Am. Jur. 2d, Banks and Financial Institutions §§ 350 et seq.

Law Reviews.

Robertson, The Law of Corporate Governance: Coming of Age in Mississippi? 65 Miss. L. J. 477.

Depository Financial Institutions Self-evaluation Reports

§ 81-5-151. Definitions.

For purposes of Sections 81-5-151 and 81-5-153, the following words and phrases shall have the meanings ascribed herein, unless the context requires otherwise:

“Bank” shall have the same definition as set forth in Section 81-3-1 and shall include the bank holding company, affiliates, and subsidiaries of a bank.

“Self-assessment” means a voluntary, self-initiated internal assessment, audit or review of a bank, its practices, policies and procedures or the bank’s review of a facility or activity at a facility acting under contract as the bank’s service provider, including, but not limited to, mortgage servicers and sub-servicers, credit and debit card processors, and providers of loan document systems.

“Self-assessment report” means any document, including any audit, report, finding, communication or opinion or any draft of an audit, report, finding, communication or opinion, prepared by internal personnel or by outside attorneys, accountants or consultants as a part of or in connection with a self-assessment that is made in good faith, and which report is not published outside the bank unless publication is made to bank regulators or to third parties acting pursuant to an agreement to preserve its confidentiality. Such agreement to preserve confidentiality need not be in writing and may be evidenced by an indication of confidentiality on the face of any such self-assessment report, or by a verbal agreement regarding its confidentiality.

“Bank regulators” means any state, federal or municipal governmental agency, bureau, commission, office or other governmental entity charged with the regulation and/or supervision of a bank or regulation or supervision of any activity in which a bank may be engaged. The term shall include, but is not limited to, the Office of the Comptroller of the Currency, the Federal Reserve Board, the Federal Deposit Insurance Corporation, the Consumer Financial Protection Bureau, the Fair Trade Commission, and the Mississippi Department of Consumer Finance and Banking.

“Banking law” means any federal, state or local statute, rule or regulation affecting or governing a bank or any activity in which a bank is or may be engaged, or any order, award, agreement, release, permit, license, standard or notice or issued by a federal, state or local court, agency, or governmental authority in pursuance thereof.

HISTORY: Laws, 2012, ch. 444, § 1, eff from and after July 1, 2012.

§ 81-5-153. Discovery and admissibility in evidence of self-evaluation reports of depository financial institutions; divulgence or dissemination of information in reports; exemption from Public Records Act.

  1. A self-assessment report is privileged and is not admissible in any legal or investigative action in any civil or administrative proceeding andis not subject to any discovery under the rules of civil procedure or administrative procedure, unless:
    1. The bank, irrespective of whether the self-assessment was conducted and/or prepared by a private contractor hired by the bank, expressly waives the protections of this section; or
    2. The court of record or hearing officer, who shall be neutral and independent, after an in camera review, determines that:
      1. The self-assessment report shows that the bank is not or was not in substantial compliance with a material provision of banking law, and
      2. The bank did not initiate good-faith efforts to achieve substantial compliance with a material provision of banking law within a reasonable time after the noncompliance was discovered, and
      3. The bank’s failure to comply caused material harm to a bank customer or consumer.
      4. For purposes of subparagraphs (i) and (ii) of this paragraph (b) only, if the evidence shows noncompliance by the bank, the bank may demonstrate that appropriate efforts to achieve compliance were or are being taken by establishing a phased schedule of actions to be taken to bring the bank into compliance, and those efforts shall protect the bank’s self-assessment report(s) from disclosure.
    3. The court of record or a hearing officer, who shall be neutral and independent, after an in camera review, determines that the privilege is being asserted for a fraudulent purpose or that the self-assessment report was prepared to avoid disclosure of information in an investigative, administrative or judicial proceeding that was underway at the time of its preparation, or for which the bank had been provided written notification that an investigation into a specific violation had been initiated, or it is found that a condition exists that demonstrates imminent and substantial harm to bank customers or consumers.
  2. The self-evaluation privilege does not apply to:
    1. Information in the possession of a regulatory agency obtained through observation, sampling, examination or otherwise and which is subject to public disclosure under the Mississippi Public Records Act of 1983; or
    2. Information obtained through any source independent of the self-assessment report and which was not protected by a confidentiality agreement; or
    3. Evidence existing before the commencement of and independent of the voluntary self-assessment, which is not protected by a confidentiality agreement and is not related to a request for compliance assistance from bank regulators.
    1. Upon a showing by any party, based upon independent knowledge, that probable cause exists to believe that an exception to the self-assessment privilege under subsection (1) of this section is applicable to a self-assessment report or that privilege does not apply to a self-assessment report under the provisions of subsection (2) of this section, then a court record or hearing officer, who shall be neutral and independent, may allow that party limited access to the self-assessment report for the purposes of an in-camera review only. The court of record or the hearing officer may grant limited access to all or part of the self-assessment under the provisions of this subsection (3) upon such conditions as may be necessary to protect the confidentiality of the self-assessment report. A moving party who obtains access to a self-assessment report under the provisions of this subsection (3) may not divulge any information from the report except as specifically allowed by the court or hearing officer.
    2. If any party divulges all or any part of the information contained in a self-assessment report in violation of the provisions of paragraph (a) of this subsection (3) or if any other person knowingly divulges or disseminates all or any part of the information contained in a self-assessment report that was provided to the person in violation of the provisions of paragraph (a) of this subsection (3), the party or other person is liable for any damages caused by the divulgence or dissemination of the information that are incurred by the bank. The court or hearing officer may issue such contempt orders and sanctions against the offending party or such party’s legal counsel as may be necessary to ensure compliance.
  3. Nothing in this section limits, waives or abrogates the scope or nature of any statutory or common law privilege.
  4. A bank asserting a self-assessment privilege has the burden of proving a prima facie case as to the privilege. A party seeking disclosure of a self-assessment report has the burden of proving that such a privilege does not exist under this section.
  5. All self-assessment reports that are protected by the self-assessment privilege created by this section shall be privileged and exempt from the provisions of the Mississippi Public Records Act in accordance with Section 25-61-11.

HISTORY: Laws, 2012, ch. 444, § 2, eff from and after July 1, 2012.

Cross References —

Mississippi Public Records Act of 1983, see §25-61-1 et seq.

Chapter 7. Branch Banks

§ 81-7-1. Application and procedure for establishment of branch banks; appeal; judicial review.

  1. Banks may establish branch banks under the restrictions prescribed in this chapter, but no branch bank may be established unless the parent bank shall have first obtained from the commissioner a certificate that the public convenience and necessity will be promoted by the establishment of such branch bank. Applications seeking permission for the establishment of branch banks shall be filed with the commissioner and shall be in such form and contain such information as the commissioner by regulation may require. A separate application shall be filed for each branch bank proposed to be established, and each application shall be accompanied by the fee required by statute, which shall be transferred by the commissioner into the maintenance fund of the Department of Banking and Consumer Finance.
  2. Upon receipt of such application, the commissioner shall immediately give written notice of the filing of said application to all banks having their domicile or a branch bank or branch office in the county in which the applicant bank maintains its principal office, together with all banks, branch banks or branch offices located in the county in which the proposed branch bank is to be located, and to such other banks and interested parties that, in the opinion of the commissioner, may have an interest in the application; and the commissioner shall also at the same time publish such notice once in a newspaper having a general circulation in the county in which the proposed branch bank is to be located. Any interested party may file a written protest to said application with the commissioner within thirty (30) days from the date of the mailing and publishing of said notice. Any protest shall specify the interest of the protestant in the application and state the grounds for the protest.
  3. If no protest is filed within the time prescribed, the commissioner shall investigate the facts and render a final decision within sixty (60) days after receipt of the application as to whether the public convenience and necessity requires the establishment of the proposed branch bank, said decision to be based upon the results of the commissioner’s investigation, the contents of the application and any additional evidence which the commissioner may request the applicant to furnish. If his decision is favorable to the applicant, he shall immediately grant the applicant a certificate to establish and operate the branch bank. If the commissioner’s decision shall be unfavorable to the applicant, he shall immediately furnish the applicant bank a copy of his final decision.

    Appeals from an unfavorable final decision may be taken by the applicant bank to the State Board of Banking Review by filing a notice of appeal with the commissioner within ten (10) days after the commissioner has rendered his final decision. The commissioner shall inform the board of such appeal, and the board shall hold a hearing on the matter within sixty (60) days after such notice is filed. At the hearing the board shall consider the findings and decision of the commissioner, shall hear such oral testimony as the commissioner may wish to give and shall also receive information and testimony from the applicant bank. The board may also consider such other information and evidence as it deems necessary to dispose of the application. The board shall render a decision within sixty (60) days after the conclusion of the final hearing on the matter. If the board’s decision is favorable to the applicant, the commissioner shall immediately grant to the applicant a certificate to establish and operate the branch bank. If the board’s decision is unfavorable to the applicant, the commissioner shall immediately furnish the applicant a copy of the board’s final decision.

    Appeals from an unfavorable board decision may be taken by the applicant bank within ten (10) days from the date of the board’s order to the chancery court of the county in which the proposed branch bank is to be located. Except as otherwise provided herein, appeals by an applicant bank from the State Board of Banking Review to a chancery court shall be taken in the manner set forth in Section 81-3-13(2), which governs appeals from the State Board of Banking Review in regard to the incorporation of a new bank.

  4. If a protest to an application to establish a branch bank is received by the commissioner within the prescribed time, he shall investigate the facts and submit said application, the results of his investigation, and his recommendations as to the disposition of said application to the State Board of Banking Review within sixty (60) days after receipt of the application. The board shall hold a hearing on the matter within one hundred twenty (120) days after the application is received and render a final decision thereon within sixty (60) days after the conclusion of the final board hearing. Except as otherwise provided herein, the board shall conduct its proceedings in accordance with Section 81-3-13(1), which prescribes the procedures for actions by the board on applications to establish new banks.

    Appeals from any final decision of the State Board of Banking Review acting upon a contested application may be taken by the applicant or any interested organization, person or persons who have participated in the proceeding and feel aggrieved by such decision. Such appeals shall be taken within ten (10) days from the date of the board’s order to the chancery court of the county in which the proposed branch bank is to be located. Except as otherwise provided herein, appeals from the State Board of Banking Review to a chancery court shall be taken in the manner set forth in Section 81-3-13(2), which governs appeals from the State Board of Banking Review in regard to the incorporation of a new bank.

  5. Notwithstanding the foregoing and any other provision of law to the contrary, if a branch bank has not been established and is not in operation within two (2) years from the date of the certificate approving such branch bank or within two (2) years from the date upon which any appellate litigation with respect to such certificate has been concluded, the certificate shall expire. Provided, however, the State Board of Banking Review may extend for good cause shown said two-year period a maximum number of two (2) times for periods not exceeding six (6) months each. This provision shall in no way affect certificates issued prior to March 21, 1980.
  6. Notwithstanding the foregoing and any other provision of law to the contrary, the commissioner may grant by regulation eligible banks, as defined in Section 81-3-1, certain preferences with respect to new branch activity which may include but are not limited to an expedited approval process.

HISTORY: Codes, 1942, § 5226; Laws, 1934, ch. 146; Laws, 1978, ch. 310, § 2, 1980, ch. 312, § 34; Laws, 1986, ch. 469, § 3; Laws, 1997, ch. 542, § 6, eff from and after passage (approved April 10, 1997).

Cross References —

Tax assessment of branch banks, see §27-35-37.

Branch banks under the Uniform Commercial Code, see §75-4-106.

Branch offices of savings associations, see §§81-12-175,81-12-176.

Department of Banking and Consumer Finance, see §§81-1-59 et seq.

Fee for filing application for branch bank, see §81-1-115.

State-chartered banks having and possessing the rights, powers, privileges, immunities, duties and obligations of a national bank having its principal place of business in this state, irrespective of any conflict with the provisions of this section, see §81-5-1(9).

Consolidation or merger of banks generally, see §81-5-85.

Establishment of electronic terminals by banks, see §81-5-100.

Provisions which conditions de novo establishment of branch banks upon compliance with the requirements of this section, see §81-7-7.

Applicability of provisions of this chapter to the establishment of branch banks by Mississippi banks which are under the control of non-Mississippi bank holding companies, see §81-8-7.

JUDICIAL DECISIONS

1. In general.

2. Permission to open branch bank.

3.-10. [Reserved for future use.]

11. Under former §81-7-5.

1. In general.

It is not the purpose of the Mississippi statute to deter competition or foster monopoly, but to guard the public and public interests against imprudent banking, and if the public need will be served by the establishment of a branch bank, commendable activities in community development by other bankers will not act to defeat its establishment. Grenada Bank v. Watson, 361 F. Supp. 728, 1973 U.S. Dist. LEXIS 12915 (N.D. Miss. 1973), aff'd, 488 F.2d 1056 (5th Cir. Miss. 1974).

2. Permission to open branch bank.

The decision of the comptroller of banks of Mississippi under Code 1942, § 5226 to permit the establishment of a branch bank in an unincorporated community within 100 miles of the parent bank is amply substantiated by the facts and circumstances. First Nat'l Bank v. Camp, 471 F.2d 1322, 1973 U.S. App. LEXIS 12125 (5th Cir. Miss. 1973).

The granting of permission to open a branch bank does not depend upon a showing that the existing banks are not rendering adequate service to their customers, or that a branch bank will be in a position to render better service to the public than the banks already in existence, but the finding must be that there is a public need for the establishment of the branch bank, or that the public convenience and necessity will be promoted by its establishment. Grenada Bank v. Watson, 361 F. Supp. 728, 1973 U.S. Dist. LEXIS 12915 (N.D. Miss. 1973), aff'd, 488 F.2d 1056 (5th Cir. Miss. 1974).

3.-10. [Reserved for future use.]

11. Under former § 81-7-5.

In considering a national bank’s simultaneous applications to relocate its main office and create a branch at its present main office the comptroller of currency could consider branching statutes to test the bank’s good faith, but he was neither bound by state laws nor required to ignore them; His decision denying the applications was not capricious, arbitrary, or an abuse of discretion in the light of the facts of the case. First Nat'l Bank v. Camp, 333 F. Supp. 682, 1971 U.S. Dist. LEXIS 11039 (N.D. Miss. 1971), aff'd, 467 F.2d 944 (5th Cir. Miss. 1972).

A bank which, after consolidation with two smaller banks each serving communities of less than 3,500 population, maintained branch offices in the towns which the consolidated banks had previously served, could not maintain a bill for an injunction to restrain a second bank located in another city from opening branch offices in the towns. Coahoma Bank & Trust Co. v. Bowen, 218 So. 2d 868, 1969 Miss. LEXIS 1627 (Miss. 1969).

When a state bank acquired all of the assets and liabilities of two smaller banks and consolidated them with it, the effect was that the charters of the smaller banks were extinguished, and thereafter the surviving bank had no right to carry on a general banking business in the communities of less than 3,500 population where the smaller banks had previously existed. Coahoma Bank & Trust Co. v. Bowen, 218 So. 2d 868, 1969 Miss. LEXIS 1627 (Miss. 1969).

Where the action of the comptroller of the currency approving the establishment of a branch of a national bank complied with the federal statutory requirement that its establishment must be one which is expressly authorized to state banks by the law of the state, it will not be declared void. Citizens Bank of Hattiesburg v. Camp, 279 F. Supp. 824, 1967 U.S. Dist. LEXIS 11607 (S.D. Miss. 1967).

The power to permit a bank to establish branch offices in the county in which it is domiciled is not limited to establishment within the corporate boundaries of municipalities. First Nat'l Bank v. Canton Exchange Bank, 247 Miss. 757, 156 So. 2d 580, 1963 Miss. LEXIS 353 (Miss. 1963).

RESEARCH REFERENCES

ALR.

What is “branch bank” within statutes regulating establishment of branch banks. 23 A.L.R.3d 683.

Maintenance of computer terminal in retail store for purpose of effecting transfer of funds between financial institution and its depositors as conduct of banking business by store. 73 A.L.R.3d 1282.

Application of requirement that newspaper be locally published for official notice publication. 85 A.L.R.4th 581.

What is a “branch” under 12 USCS § 36(f) which a national banking association may retain, establish, or operate. 52 A.L.R. Fed. 649.

Am. Jur.

10 Am. Jur. 2d, Banks and Financial Institutions §§ 623 et seq., 523.

CJS.

9 C.J.S., Banks and Banking §§ 46, 47.

§ 81-7-3. How branch banks to be named.

The name of all branch banks in this state shall include the name of the parent bank, followed by the name of the municipality in which the branch is domiciled, followed in turn by the word “branch”, and such name shall be prominently displayed upon the branch bank premises. Where an established bank is annexed or merged as a branch bank, then the name of the bank so annexed or merged may be retained if followed by appropriate words indicating it as a branch of the parent bank.

HISTORY: Codes, 1942, § 5227; Laws, 1934, ch. 146; Laws, 1954, ch. 166.

Cross References —

State-chartered banks having and possessing the rights, powers, privileges, immunities, duties and obligations of a national bank having its principal place of business in this state, irrespective of any conflict with the provisions of this section, see §81-5-1(9).

Applicability of provisions of this chapter to the establishment of branch banks by Mississippi banks which are under the control of non-Mississippi bank holding companies, see §81-8-7.

§ 81-7-5. Repealed.

Repealed by Laws, 1986, ch. 469, § 14, eff from and after July 1, 1986.

[Codes, 1942, § 5228; Laws, 1934, ch. 146; 1936, ch. 165; 1942, ch. 261; 1966, ch. 253, § 1; 1980, ch. 312, § 35]

Editor’s Notes —

Former §81-7-5 related to the establishment of branch banks in certain cities.

§ 81-7-7. Establishment of branch banks de novo or by merger or consolidation.

  1. For purposes of this section and Section 81-7-8, “branch bank de novo” or “branching de novo” refers to a branch established by the opening of a new branch bank and includes a branch bank or branch office acquired from another bank without acquiring substantially all of the assets of the other bank.
  2. Subject to the restrictions contained in Section 81-7-8, a bank may establish:
    1. Branch banks de novo within the applicable radius from the parent bank, as specified in subsection (5) of this section, subject to compliance with the procedures set forth in Section 81-7-1;
    2. Branch banks by the merger or consolidation with, or the purchase of all or substantially all of the assets of, any other bank located in Mississippi; and
    3. Branch banks de novo in accordance with subsection (3) of this section, subject to compliance with the procedures set forth in Section 81-7-1.

      Compliance with the procedures set forth in Section 81-7-1 is not required to establish branch banks under paragraph (b) of this subsection.

  3. Subject to the restrictions contained in Section 81-7-8, after the establishment of a branch bank or branch banks outside of the applicable radius from the parent bank (of the surviving bank for branching purposes), as specified in subsection (5) of this section, as a result of a transaction pursuant to subsection (2)(b) of this section, a bank may establish branch banks de novo:
    1. In any county where any such branch bank established under subsection (2)(b) is located; and
    2. If any such branch bank established under subsection (2)(b) is located in a town or city situated in two (2) or more counties, in any of such counties; and
    3. If any such branch bank established under subsection (2)(b) is located in an area designated as a Metropolitan Statistical Area by the United States Office of Management and Budget or any successor designation based upon substantially the same criteria, throughout such area so designated, or if such area is not entirely located in Mississippi then throughout the portion of such area located in Mississippi.
  4. The bank resulting from a merger, consolidation or purchase may retain and operate as branch banks any of the parent offices, branch banks or branch offices of the banks participating in the transaction.
  5. For the purposes of this section, the applicable radius from the parent bank shall be:
    1. One hundred (100) miles, from July 1, 1986, through June 30, 1987;
    2. One hundred fifty (150) miles, from July 1, 1987, through June 30, 1988;
    3. Two hundred (200) miles, from July 1, 1988, through June 30, 1989;
    4. The geographical boundaries of the State of Mississippi, from and after July 1, 1989.

HISTORY: Codes, 1942, § 5229; Laws, 1934, ch. 146; Laws, 1936, ch. 167; Laws, 1985, ch. 324; Laws, 1986, ch. 469, § 1, eff from and after July 1, 1986.

Cross References —

State-chartered banks having and possessing the rights, powers, privileges, immunities, duties and obligations of a national bank having its principal place of business in this state, irrespective of any conflict with the provisions of this section, see §81-5-1(9).

Prohibitions against chain banking systems, see §81-7-19.

Provision that, prior to approving acquisition of a Mississippi bank or bank holding company by a regional bank holding company, the Commissioner must determine that the acquisition will not result in a violation of this section, see §81-8-3.

Applicability of provisions of this chapter to the establishment of branch banks by Mississippi banks which are under the control of non-Mississippi bank holding companies, see §81-8-7.

JUDICIAL DECISIONS

1. In general.

2. Grant or denial of application.

1. In general.

The only territorial limitation on the establishment of a branch bank under Mississippi Code 1942, § 5229 is that it be within a radius of 100 miles from the parent bank. First Nat'l Bank v. Camp, 471 F.2d 1322, 1973 U.S. App. LEXIS 12125 (5th Cir. Miss. 1973).

2. Grant or denial of application.

In considering a national bank’s simultaneous applications to relocate its main office and create a branch at its present main office the comptroller of currency could consider branching statutes to test the bank’s good faith, but he was neither bound by state laws nor required to ignore them; His decision denying the applications was not capricious, arbitrary, or an abuse of discretion in the light of the facts of the case. First Nat'l Bank v. Camp, 333 F. Supp. 682, 1971 U.S. Dist. LEXIS 11039 (N.D. Miss. 1971), aff'd, 467 F.2d 944 (5th Cir. Miss. 1972).

Where the action of the comptroller of the currency approving the establishment of a branch of a national bank complied with the federal statutory requirement that its establishment must be one which is expressly authorized to state banks by the law of the state, it will not be declared void. Citizens Bank of Hattiesburg v. Camp, 279 F. Supp. 824, 1967 U.S. Dist. LEXIS 11607 (S.D. Miss. 1967).

RESEARCH REFERENCES

Am. Jur.

10 Am. Jur. 2d, Banks and Financial Institutions §§ 191, 192 et seq., 234, 238.

3B Am. Jur. Legal Forms 2d, Banks § 163.

CJS.

9 C.J.S., Banks and Banking § 164.

§ 81-7-8. Restrictions upon establishment of branch banks.

  1. A bank chartered after October 16, 1985, may neither establish a branch by merger, consolidation or purchase as provided in Section 81-7-7(2)(b) nor become a branch as the result of such a transaction, unless such bank has been in continuous operation as a state or federally chartered bank, savings association or savings bank for at least its previous five (5) years of existence. For purposes of the five-year requirement, a bank which has been involved in an interim bank merger shall be deemed to have been in operation from the date it began operation under the original charter. “Interim bank merger” means the technique by which a bank holding company obtains a new bank charter solely for the purpose of merging an existing bank into the bank for which the charter is sought or solely for the purpose of merging the bank for which the charter is sought into an existing bank.
  2. A bank is prohibited from establishing a branch by merger, consolidation or purchase, as provided for in Section 81-7-7(2)(b), if upon such merger, consolidation or purchase the surviving bank and all of its branch banks and branch offices located in Mississippi would have combined deposits which exceed twenty-five percent (25%) of the total deposits of all offices located in Mississippi of commercial banks, savings banks, savings and loan associations and credit unions. Determination of the percentage of total deposit concentration limited by this subsection shall be made based on data contained in the most recent call reports or reports of condition furnished immediately prior to the merger, consolidation or purchase to the appropriate regulatory officials by the banks involved in the merger, consolidation or purchase. “Appropriate regulatory officials” means, for any national bank in Mississippi, the Comptroller of the Currency of the United States or the Board of Governors of the Federal Reserve System of the United States; “appropriate regulatory officials” means, for any state-chartered bank in Mississippi, the Commissioner of Banking and Consumer Finance. In determining total deposits of all offices located in Mississippi of commercial banks, savings banks, savings and loan associations and credit unions, data shall be used as furnished by the Department of Banking and Consumer Finance as of the most recent calendar quarter for which complete data are available. For the purpose of furnishing such data, the department shall obtain from appropriate federal regulatory agencies the most recent data available regarding the deposits of federally chartered institutions. For purposes of this subsection and subsection (4) of this section, “deposits” mean all individual, partnership, corporate and government deposits (including, without limitation, all demand, savings, time, certificates of deposit and other similar depository accounts of individuals, partnerships, corporations and governmental bodies).
  3. In the sale of any insolvent bank made pursuant to the provisions of Chapter 9, Title 81, Mississippi Code of 1972, or pursuant to federal banking laws, the restrictions contained in subsections (1) and (2) of this section shall not apply to prevent the acquisition of such insolvent bank by another bank; and, additionally, neither restriction shall apply to prohibit any purchasing bank from retaining any established branches of the insolvent bank which the purchasing bank would otherwise be prohibited from establishing.
  4. For branching purposes, a parent bank is considered to be located where it was domiciled on June 30, 1986. For any bank opening for business after that date, a parent bank shall be considered for branching purposes to be located where it is first domiciled. Upon a merger, consolidation or purchase as provided for in Section 81-7-7(2)(b), the parent bank for branching purposes of the surviving bank shall be considered to be at the location of the parent bank for branching purposes of the bank involved in such transaction which had the greater amount of deposits based on data contained in the most recent call reports or reports of condition furnished immediately prior to the merger, consolidation or purchase to the appropriate regulatory officials referred to in subsection (2) of this section.
  5. In order for a parent bank to establish a branch bank through de novo branching, merger, consolidation or purchase after June 30, 1986, the parent bank shall have prior to the approval of any such branch application, and shall be expected to maintain, primary capital and total capital ratios equal to or above the minimum acceptable ratios established by the federal bank regulatory agency which primarily regulates and examines such bank. The components of capital and the method of computing the capital ratios shall be those defined by the applicable federal bank regulatory agency.

HISTORY: Laws, 1986, ch. 469, § 2; Laws, 1994, ch. 622, § 158; Laws, 1995, ch. 308, § 7; Laws, 1995, ch. 304, § 1; Laws, 1997, ch. 542, § 7, eff from and after passage (approved April 10, 1997).

Cross References —

Commissioner of Banking and Consumer Finance, see §81-1-61.

State-chartered banks having and possessing the rights, powers, privileges, immunities, duties and obligations of a national bank having its principal place of business in this state, irrespective of any conflict with the provisions of this section, see §81-5-1(9).

Provision that, subject to subsections (2), (3), and (4) of this section, a bank may annex branch banks by exchanging its shares for shares or assets of banks to be annexed, see §81-7-11.

Provision that, prior to approving acquisition of a Mississippi bank or bank holding company by a regional bank holding company, the Commissioner must determine that the acquisition will not result in a violation of this section, see §81-8-3.

Applicability of provisions of this chapter to the establishment of branch banks by Mississippi banks which are under the control of non-Mississippi bank holding companies, see §81-8-7.

Federal Aspects—

Comptroller of the Currency of the United States, see 12 USCS §§ 1 et seq.

Board of Governors of the Federal Reserve System, see 12 USCS §§ 241 et seq.

§ 81-7-9. Capital requirements for branch banking system.

All parent banks permitted to establish branch banks shall have capital sufficient to meet the requirements of the commissioner and/or other supervising federal regulatory agencies.

HISTORY: Codes, 1942, § 5230; Laws, 1934, ch. 146; Laws, 1994, ch. 320, § 9, eff from and after July 1, 1994.

Cross References —

State-chartered banks having and possessing the rights, powers, privileges, immunities, duties and obligations of a national bank having its principal place of business in this state, irrespective of any conflict with the provisions of this section, see §81-5-1(9).

Applicability of provisions of this chapter to the establishment of branch banks by Mississippi banks which are under the control of non-Mississippi bank holding companies, see §81-8-7.

§ 81-7-11. Issues of stock for annexation of branches.

Subject to the provisions of subsections (2), (3) and (4) of Section 81-7-8, a bank may annex actively operating unit banks as branch banks by exchanging its own increase of common or preferred capital shares, issued for such annexation purpose, for the capital shares of the bank proposed to be annexed as a branch. Also a bank may annex branch banks by issuing additional common or preferred shares to be exchanged for the assets of closed banks, including assets other than cash. All transactions authorized by this section shall first be submitted in writing in full detail to the commissioner, and shall not be effective until he shall have made a careful analysis and investigation of the soundness of the proposed transaction, and shall have approved the same in writing. In no instance, however, shall the bank building and fixtures of the operating or closed bank, proposed to be annexed as a branch bank, represent in value more than one-third (1/3) of the amount of stock issued by the parent bank for the purpose of such annexation. For purposes of applying the restrictions of subsections (2) and (3) of Section 81-7-8, the annexation of an actively operating unit bank described herein shall be considered the establishment of a branch by merger.

HISTORY: Codes, 1942, § 5231; Laws, 1934, ch. 146; Laws, 1986, ch. 469, § 4, eff from and after July 1, 1986.

Cross References —

State-chartered banks having and possessing the rights, powers, privileges, immunities, duties and obligations of a national bank having its principal place of business in this state, irrespective of any conflict with the provisions of this section, see §81-5-1(9).

Applicability of provisions of this chapter to the establishment of branch banks by Mississippi banks which are under the control of non-Mississippi bank holding companies, see §81-8-7.

§ 81-7-13. Discontinuance and removal of branch banks.

No branch bank in this state may be discontinued or abandoned without the consent in writing of the commissioner first obtained. By and with such consent first obtained, branch banks may be moved from one municipality to another within the restrictions provided in this chapter as to branching de novo. Any established unit bank (branch banks not included) may move from one municipality to a larger municipality, according to the latest federal census, within the county of its domicile, with the written consent and approval of the commissioner. However, any proposed movement of an established unit bank shall be subject to each and every restriction applicable to the location of branch banks as provided in this chapter, and, before giving any such consent and approval, the commissioner shall give to each bank in the county ten (10) days’ notice in writing of the application of any bank to move its domicile.

HISTORY: Codes, 1942, § 5232; Laws, 1934, ch. 146; Laws, 1936, ch. 165; Laws, 1986, ch. 469, § 5, eff from and after July 1, 1986.

Cross References —

State-chartered banks having and possessing the rights, powers, privileges, immunities, duties and obligations of a national bank having its principal place of business in this state, irrespective of any conflict with the provisions of this section, see §81-5-1(9).

Applicability of provisions of this chapter to the establishment of branch banks by Mississippi banks which are under the control of non-Mississippi bank holding companies, see §81-8-7.

§ 81-7-15. Examination of branch banks.

The state comptroller shall formulate rules and regulations for the examination of branch bank systems, including provisions for the simultaneous examination of a parent bank and all of its branches, and such rules and regulations when reduced to writing shall be enforced by him as other provisions of the Mississippi Banking Law.

HISTORY: Codes, 1942, § 5233; Laws, 1934, ch. 146.

Editor’s Notes —

Section 81-1-57 provides that wherever the words “state comptroller” or “comptroller”, when referring to the office of state comptroller of banks, shall be construed to mean the commissioner of banking and consumer finance.

Section 81-1-117 abolished the office of state comptroller, and provided that the functions, duties and responsibilities would be assumed by the commissioner of banking and consumer finance.

Cross References —

State-chartered banks having and possessing the rights, powers, privileges, immunities, duties and obligations of a national bank having its principal place of business in this state, irrespective of any conflict with the provisions of this section, see §81-5-1(9).

Applicability of provisions of this chapter to the establishment of branch banks by Mississippi banks which are under the control of non-Mississippi bank holding companies, see §81-8-7.

§ 81-7-17. National banks may establish branches.

National banks are hereby granted the right and authority to establish branches in this state, with the same rights and under the same restrictions as state banks establishing branches. But where federal statutes and regulations impose different restrictions, including minimum capital stock requirements, from those imposed by this state, then such federal restrictions may apply to such national banks instead of those of this state.

HISTORY: Codes, 1942, § 5234; Laws, 1934, ch. 146.

Cross References —

State-chartered banks having and possessing the rights, powers, privileges, immunities, duties and obligations of a national bank having its principal place of business in this state, irrespective of any conflict with the provisions of this section, see §81-5-1(9).

Applicability of provisions of this chapter to the establishment of branch banks by Mississippi banks which are under the control of non-Mississippi bank holding companies, see §81-8-7.

RESEARCH REFERENCES

Am. Jur.

10 Am. Jur. 2d, Banks and Financial Institutions § 523.

§ 81-7-19. Operation of multibank holding companies permitted; definitions; restrictions; divestment; enforcement.

  1. As used in this section, unless the context otherwise requires:
    1. “Appropriate regulatory officials” means, for any national bank in Mississippi, the Comptroller of the Currency of the United States; “appropriate regulatory officials” means, for any state bank in Mississippi, the Commissioner of Banking and Consumer Finance or the Federal Deposit Insurance Corporation or the Board of Governors of the Federal Reserve System of the United States.
    2. “Bank” means any person chartered to do a banking business subject to the laws of this or any other jurisdiction.
    3. “Bank holding company” means any person which is required to register as a bank holding company with the Board of Governors of the Federal Reserve System under the federal Bank Holding Company Act of 1956, as amended.
    4. “Person” means an individual, corporation, firm, trust, estate, partnership, joint venture or association.
    5. “Interim bank merger” means the technique by which a bank holding company obtains a new bank charter solely for the purpose of merging an existing bank into the bank for which the charter is sought or solely for the purpose of merging the bank for which the charter is sought into an existing bank.
    6. “Control” means the direct or indirect ownership of five percent (5%) or more of any class of voting securities of a bank.
  2. A bank holding company acting directly or indirectly may not acquire any of the shares of any bank in Mississippi unless such bank has been in operation for at least five (5) years, except in the following instances:
    1. The acquisition of shares of a bank by a bank holding company which before the acquisition owned more than fifty percent (50%) of the shares of the bank;
    2. An interim bank merger for the purpose of acquiring a bank which has been in operation for at least five (5) years;
    3. The acquisition by a bank affiliated with a bank holding company of stock which has been given as collateral security to the bank upon a loan contracted in good faith where the acquisition is necessary to prevent loss upon such loan and the making of the loan and the acquisition of such stock are in the ordinary course of business and not as a means of circumventing this section; however, the stock so purchased or acquired shall be sold or disposed of by the bank at public or private sale within a period of one (1) year from the acquisition thereof, unless the Commissioner of Banking and Consumer Finance extends such period because he deems that an additional period or periods are required to permit the disposition of such stock without undue risk or loss;
    4. The acquisition of an insolvent bank where the sale is made pursuant to the provisions of Chapter 9, Title 81, Mississippi Code of 1972, or pursuant to federal banking laws, or the acquisition of a bridge bank pursuant to federal banking laws;
    5. The acquisition of shares in any bank by another bank acting solely in a fiduciary capacity in the ordinary course of its trust business and not for the purpose of circumventing this section; and
    6. The acquisition of shares of a bank by a person which will become a bank holding company solely by reason of such acquisition.
  3. A bank holding company must divest itself of stock in a bank in Mississippi if, upon acquiring directly or indirectly twenty-five percent (25%) or more of any class of voting securities of such bank, the bank holding company fails within six (6) months after such acquisition to acquire stock sufficient to lawfully vote a merger of the banks or bank holding companies involved in the transaction, even though such merger is not required; however, such acquiring bank holding company may retain ownership of less than twenty-five percent (25%) of any class of voting securities of such bank. The six-month time period provided herein may be extended, upon a showing of reasonable cause therefor, by the Commissioner of Banking and Consumer Finance. This subsection (3) shall not apply to a bank holding company which has lawfully acquired, or has an application pending to acquire, five percent (5%) or more of any class of voting securities of a bank prior to October 1, 1989, with respect to the stock of that particular bank.
  4. A bank holding company is prohibited from acquiring, directly or indirectly, ownership of stock of a bank in Mississippi if the effect of such acquisition of stock is that the acquiring bank holding company would control, directly or indirectly, banks in Mississippi having in the aggregate more than twenty-five percent (25%) of the total deposits of all offices located in Mississippi of commercial banks, savings banks, savings and loan associations, and credit unions. Determination of the percentage of total deposit concentration limited by this subsection shall be made based on data contained in the most recent call reports furnished immediately before the acquisition of stock of such bank to the appropriate regulatory officials by the banks involved in the transaction. In determining total deposits of all offices located in Mississippi of commercial banks, savings banks, savings and loan associations and credit unions, data shall be used as furnished by the Department o f Banking and Consumer Finance as of the most recent calendar quarter for which complete data are available. For the purpose of furnishing such data, the department shall obtain from appropriate federal regulatory agencies the most recent data available regarding the deposits of federally chartered institutions. For purposes of this subsection, “deposits” means all individual, partnership, corporate and government deposits (including, without limitation, all demand, savings, time, certificates of deposit and other similar depository accounts of individuals, partnerships, corporations and governmental bodies). The restriction contained in this subsection shall not apply to prohibit transactions described in subsection (2)(c), (d), (e) and (f).
  5. The Commissioner of Banking and Consumer Finance shall have the power to enforce the prohibitions of this section by seeking to enjoin any violation, by issuing cease and desist orders, by imposing administrative fines or penalties, and by any other remedies that are provided by law.
  6. An out-of-state bank holding company, as defined in Section 81-8-1, shall comply with Chapter 8, Title 81, Mississippi Code of 1972, and this section.
  7. For purposes of this section, the acquisition of shares of a bank holding company shall be considered the indirect acquisition of shares of the bank or banks controlled by such bank holding company.

HISTORY: Codes, 1942, § 5235; Laws, 1934, ch. 146; Laws, 1986, ch. 469, § 6; Laws, 1987, ch. 416; Laws, 1990, ch. 302, § 1; Laws, 1994, ch. 622, § 159; Laws, 1995, ch. 304, § 2; Laws, 2001, ch. 401, § 1, eff from and after July 1, 2001.

Amendment Notes —

The 2001 amendment substituted “twenty-five percent (25%)” for “five percent (5%)” twice in the first sentence of (3).

Cross References —

Commissioner of Banking and Consumer Finance, see §81-1-61.

State-chartered banks having and possessing the rights, powers, privileges, immunities, duties and obligations of a national bank having its principal place of business in this state, irrespective of any conflict with the provisions of this section, see §81-5-1(9).

Provision that, prior to approving acquisition of a Mississippi bank or bank holding company by a regional bank holding company, the Commissioner must determine that the acquisition will not result in a violation of this section, see §81-8-3.

Applicability of provisions of this chapter to the establishment of branch banks by Mississippi banks which are under the control of non-Mississippi bank holding companies, see §81-8-7.

Federal Aspects—

Federal Bank Holding Act of 1956 is codified as 12 USCS § 1841 et seq.

JUDICIAL DECISIONS

1. In general.

Bankholding company’s application to acquire shares and debentures of bank did not violate statute prohibiting group banking since terms of agreement which gave applicant right to name two directors to board of bank power to provide bank with policy and operations advice, did not give applicant type of control over bank that would make applicant prohibited group banking system under statute. Bancorp of Mississippi, Inc., 72 F.R.D. 257 (1986).

§ 81-7-21. Certain branches not affected.

None of the provisions of Sections 81-7-1, 81-7-3, 81-7-7 and 81-7-9 of this chapter shall be mandatory on branch banks heretofore established and in operation on April 2, 1934, nor on the parent bank of such branch banks so far as such branch banks are concerned, but such parent and branch banks shall continue to operate under the laws in effect immediately preceding the enactment of this chapter, so far as such branch banks already established are concerned. However, when any parent bank now in existence shall hereafter establish a branch bank, it shall so far as such branch banks hereafter established are concerned, comply with this chapter in all respects.

HISTORY: Codes, 1942, § 5236; Laws, 1934, ch. 146.

Cross References —

State-chartered banks having and possessing the rights, powers, privileges, immunities, duties and obligations of a national bank having its principal place of business in this state, irrespective of any conflict with the provisions of this section, see §81-5-1(9).

Applicability of provisions of this chapter to the establishment of branch banks by Mississippi banks which are under the control of non-Mississippi bank holding companies, see §81-8-7.

§ 81-7-23. Application of chapter.

The provisions of this chapter apply to branching within the State of Mississippi by:

Banks chartered by the State of Mississippi or national banks having their headquarters in the State of Mississippi, and

Out-of-state banks which maintain a branch in the State of Mississippi subsequent to an interstate branching transaction pursuant to Chapter 23, Title 81, Mississippi Code of 1972, known as the “Interstate Bank Branching Act.”

HISTORY: Laws, 1996, ch. 441, § 15, eff from and after May 1, 1997.

Chapter 8. Regional Banking Institutions

§ 81-8-1. Definitions.

For the purposes of this chapter, the following words shall have the following meanings:

The term “acquire” means:

The merger or consolidation of one bank holding company with another;

The acquisition by a bank holding company of the direct or indirect ownership or control of voting shares of a bank or of another bank holding company if, after such acquisition, such bank holding company will directly or indirectly own or control more than five percent (5%) of any class of voting shares of such bank holding company or bank;

The direct or indirect acquisition by a bank holding company of all or substantially all of the assets of a bank or of another bank holding company; or

Any other action that would result in the direct or indirect control by a bank holding company of a bank or of another bank holding company.

“Bank” means any “insured bank” as such term is defined in Section 3(h) of the Federal Deposit Insurance Act, 12 USCS Section 1813(h), or any institution eligible to become an insured bank as such term is defined therein, which, in either event:

Accepts deposits that the depositor has a legal right to withdraw on demand; and

Engages in the business of making commercial loans.

“Banker’s bank” has the same meaning as the term is defined in 12 USCS Section 24.

“Banking office” means any bank, branch of a bank, or any other office at which a bank accepts deposits; however, the term “banking office” shall not include:

Unmanned automatic teller machines, point of sale terminals, or other similar unmanned electronic banking facilities at which deposits may be accepted;

Offices located outside the United States; or

Loan production offices, representative offices or other offices at which deposits are not accepted.

“Bank holding company” means any company which is a bank holding company under the federal Bank Holding Company Act of 1956, as amended, 12 USCS Section 1841(a)(1).

“Commissioner” means the Commissioner of Banking and Consumer Finance as provided for in Section 81-1-61.

“Control” has the meaning set forth in Section 2(a)(2) of the federal Bank Holding Company Act of 1956, as amended, 12 USCS Section 1841(a)(2).

“Department” means the Mississippi Department of Banking and Consumer Finance established in Section 81-1-59.

“Deposits” means all demand, time and savings deposits, without regard to the location of the depositor; provided, however, that “deposits” shall not include any deposits by banks. For purposes of this chapter, determinations of deposits shall be made by reference to regulatory reports of condition or similar reports made by or to state and federal regulatory agencies.

“Mississippi bank” means a bank organized under the laws of this state, or a bank organized under the laws of the United States which has its main office in Mississippi.

“Mississippi bank holding company” means a bank holding company in which the total Mississippi deposits of all bank subsidiaries of such company exceed the total deposits of such bank subsidiaries in any other state.

The “principal place of business” of a bank holding company is the state in which the total deposits of the bank subsidiaries of the bank holding company are the largest, or the state designated by the bank holding company.

“Out-of-state bank holding company” means a bank holding company other than a Mississippi bank holding company.

“Subsidiary” means that which is set forth in Section 2(d) of the federal Bank Holding Company Act of 1956, as amended, 12 USCS Section 1841(d).

HISTORY: Laws, 1986, ch. 469, § 8; Laws, 1995, ch. 304, § 3; Laws, 2000, ch. 325, § 1, eff from and after July 1, 2000.

Amendment Notes —

The 2000 amendment inserted present (c); redesignated the remaining subsections accordingly; and added “or the state designated by the bank holding company” in ( l

Cross References —

Authorization for multibank holding company to operate in state, see §81-7-19.

Federal Aspects—

Provisions of Section 3(h) of the Federal Deposit Insurance Act, see 12 USCS § 1813(h).

Sections 2(a)(1), 2(a)(2), and 2(d) of the federal Bank Holding Company Act of 1956, see 12 USCS §§ 1841(a)(1), (2), (d), respectively.

Provision of International Banking Act defining “foreign bank,” see 12 USCS § 3101(7).

§ 81-8-3. Acquisition of Mississippi bank or bank holding company by out-of-state bank holding company; approval by commissioner.

  1. An out-of-state bank holding company may establish a bank in Mississippi only by acquiring a Mississippi bank or Mississippi bank holding company upon approval by the commissioner, which approval:
    1. Determines that the Mississippi bank sought to be acquired has been in existence and continuously operating for more than five (5) years or that the Mississippi bank subsidiary of the Mississippi bank holding company sought to be acquired has been in existence and continuously operating for more than five (5) years;
    2. Determines that the acquisition will not result in a violation of Sections 81-5-28, 81-7-7, 81-7-8 and 81-7-19.
    3. Determines that a copy of the completed application or applications which are filed with the appropriate federal bank regulatory authority seeking approval of the acquisition, and a consent to service of process (all on such form or forms as the commissioner by regulation may require) shall have been filed with the commissioner for at least sixty (60) days, and notice of such acquisition, specifying the name of the out-of-state bank holding company, the name of the Mississippi bank or Mississippi bank holding company sought to be acquired and a brief description of the transaction shall have been published once in a newspaper of general circulation in each county in which the Mississippi bank or the subsidiary of the Mississippi bank holding company has banking offices.
  2. Nothing in this section shall prohibit the acquisition by an out-of-state bank holding company of all or substantially all of the shares of (a) a bank organized solely for the purpose of facilitating the acquisition of a bank which has been in existence and continuously operated as a bank for more than five (5) years, or (b) a banker’s bank that has been in existence less than five (5) years, if the acquisition has otherwise been approved pursuant to this section. However, any state or federally chartered banker’s bank that is acquired by an out-of-state bank holding company as provided in this subsection shall remain a banker’s bank for a period of not less than five (5) years after the date of acquisition.
  3. Notwithstanding the foregoing or any other provision of this chapter to the contrary, a Mississippi bank may enter into an interstate branching transaction as defined by and pursuant to Chapter 23, Title 81, Mississippi Code of 1972, known as the Interstate Bank Branching Act.

HISTORY: Laws, 1986, ch. 469, § 9; Laws, 1995, ch. 304, § 4; Laws, 1996, ch. 441, § 16; Laws, 2000, ch. 325, § 2, eff from and after July 1, 2000.

Amendment Notes —

The 2000 amendment, in (2), inserted the (a) designation, inserted “or (b) a banker’s bank that has been in existence less than five (5) years,” and added the last sentence.

Cross References —

State-chartered banks having and possessing the rights, powers, privileges, immunities, duties and obligations of a national bank having its principal place of business in this state, irrespective of any conflict with the provisions of this section, see §81-5-1(9).

Authorization for multibank holding company to operate in state, see §81-7-19.

RESEARCH REFERENCES

ALR.

Construction and application of “grandfather proviso” of § 4(a)(2) of Bank Holding Company Act (12 USCS § 1843(a)(2)). 35 A.L.R. Fed. 942.

Who is “party aggrieved” under § 9 of Bank Holding Company Act (12 USCS § 1848), which allows any party aggrieved by Federal Reserve Board order under Act to obtain judicial review. 36 A.L.R. Fed. 349.

Construction and application of Bank Holding Company Act provision that application for approval to acquire control of bank shall be deemed granted if Federal Reserve Board does not act on application within 91 days (12 USCS § 1842(b)). 38 A.L.R. Fed. 919.

Jurisdiction of United States Courts of Appeals to review agency action under § 9 of Bank Holding Company Act (12 USCS § 1848). 40 A.L.R. Fed. 593.

Denial by Board of Governors of Federal Reserve System of application for bank merger, consolidation, or acquisition on anticompetitive grounds under § 3(c) of Bank Holding Company Act of 1956 (12 USCS § 1842(c)). 71 A.L.R. Fed. 438.

What constitutes violation of provisions of Bank Holding Company Act prohibiting tying arrangements (12 USCS § 1972(1)). 74 A.L.R. Fed. 578.

Am. Jur.

10 Am. Jur. 2d, Banks and Financial Institutions §§ 19 et seq., 85 et seq., 176 et seq., 1192, 1194.

3B Am. Jur. Legal Forms 2d, Banks §§ 38:86 et seq.

CJS.

9 C.J.S., Banks and Banking §§ 5-47.

§ 81-8-5. Repealed.

Repealed by Laws, 1995, ch. 304, § 8, eff from and after the effective date of Section 101 of the Riegle-Neal Interstate Banking and Branching Efficiency Act of 1994, Public Law 103-328 (effective at the end of the 1 year period beginning on the date of enactment, September 29, 1994).

[Laws, 1986, ch. 469, § 10]

Editor’s Notes —

Former §81-8-5 was entitled: Prohibition against acquisition or ownership of Mississippi bank or bank holding company by nonqualifying entities; enforcement.

§ 81-8-7. Applicability of state laws and rules and regulations of state agencies.

Any bank holding company which controls a Mississippi bank or a Mississippi bank holding company shall be subject to such laws of this state and such rules of its agencies relating to the acquisition, ownership and operation of banks and bank holding companies as are applicable to Mississippi bank holding companies. Any Mississippi bank which is controlled by a bank holding company that is not a Mississippi bank holding company shall be subject to all laws of this state and rules and regulations of its agencies relating to the acquisition, ownership, operation and regulation of banks and their branches as are applicable to Mississippi banks which are not controlled by such non-Mississippi bank holding companies and may establish branches pursuant to Chapter 7 of this title.

HISTORY: Laws, 1986, ch. 469, § 11; brought forward, Laws, 1995, ch. 304, § 5, eff from and after the effective date of Section 101 of the Riegle-Neal Interstate Banking and Branching Efficiency Act of 1994, Public Law 103-328 (effective at the end of the 1 year period beginning on the date of enactment, September 29, 1994).

Cross References —

State-chartered banks having and possessing the rights, powers, privileges, immunities, duties and obligations of a national bank having its principal place of business in this state, irrespective of any conflict with the provisions of this section, see §81-5-1(9).

RESEARCH REFERENCES

ALR.

Construction and application of “grandfather proviso” of § 4(a)(2) of Bank Holding Company Act (12 USCS § 1843(a)(2)). 35 A.L.R. Fed. 942.

Who is “party aggrieved” under § 9 of Bank Holding Company Act (12 USCS § 1848), which allows any party aggrieved by Federal Reserve Board order under Act to obtain judicial review. 36 A.L.R. Fed. 349.

Construction and application of Bank Holding Company Act provision that application for approval to acquire control of bank shall be deemed granted if Federal Reserve Board does not act on application within 91 days (12 USCS § 1842(b)). 38 A.L.R. Fed. 919.

Jurisdiction of United States Courts of Appeals to review agency action under § 9 of Bank Holding Company Act (12 USCS § 1848). 40 A.L.R. Fed. 593.

Denial by Board of Governors of Federal Reserve System of application for bank merger, consolidation, or acquisition on anticompetitive grounds under § 3(c) of Bank Holding Company Act of 1956 (12 USCS § 1842(c)). 71 A.L.R. Fed. 438.

What constitutes violation of provisions of Bank Holding Company Act prohibiting tying arrangements (12 USCS § 1972(1)). 74 A.L.R. Fed. 578.

Am. Jur.

10 Am. Jur. 2d, Banks and Financial Institutions §§ 19 et seq., 85 et seq., 176 et seq., 1192, 1194.

3B Am. Jur. Legal Forms 2d, Banks §§ 38:86 et seq.

CJS.

9 C.J.S., Banks and Banking §§ 5-47.

§ 81-8-9. Cooperative agreements between department and other bank regulatory agencies.

The department is authorized to enter into cooperative agreements with other bank regulatory agencies to facilitate the regulation of banks and bank holding companies doing business in this state. The department may accept reports of examinations and other records from such other agencies in lieu of conducting its own examinations of banks controlled by bank holding companies with their principal places of business in other states. The department may take any action jointly with other regulatory agencies having concurrent jurisdiction over banks and bank holding companies doing business in this state or may take such actions independently in order to carry out its responsibilities.

HISTORY: Laws, 1986, ch. 469, § 12; brought forward, Laws, 1995, ch. 304, § 6, eff from and after the effective date of Section 101 of the Riegle-Neal Interstate Banking and Branching Efficiency Act of 1994, Public Law 103-328 (effective at the end of the 1 year period beginning on the date of enactment, September 29, 1994).

Cross References —

State-chartered banks having and possessing the rights, powers, privileges, immunities, duties and obligations of a national bank having its principal place of business in this state, irrespective of any conflict with the provisions of this section, see §81-5-1(9).

RESEARCH REFERENCES

Am. Jur.

10 Am. Jur. 2d, Banks and Financial Institutions §§ 19 et seq., 85 et seq., 176 et seq., 1192, 1194.

3B Am. Jur. Legal Forms 2d, Banks §§ 38:86 et seq.

CJS.

9 C.J.S., Banks and Banking §§ 5-47 et seq.

§ 81-8-11. Construction of chapter.

It is the purpose of this chapter to permit orderly development of banking institutions on a national basis in accordance with the Riegle-Neal Interstate Banking and Branching Efficiency Act of 1994, Public Law 103-328. It is not the purpose of this chapter to authorize interstate banking on any basis other than as expressly provided in this chapter and by federal law. To that end, if any provision of this chapter pertaining to the terms, conditions and limitations of interstate acquisitions of Mississippi banks and bank holding companies is determined to be inconsistent with or contrary to any provision of federal law, such provision of this chapter shall be null and void with respect to such federal law; however, any transaction which has been lawfully consummated pursuant to this chapter prior to a determination of invalidity shall be unaffected by such determination.

HISTORY: Laws, 1986, ch. 469, § 13; Laws, 1995, ch. 304, § 7, eff from and after the effective date of Section 101 of the Riegle-Neal Interstate Banking and Branching Efficiency Act of 1994, Public Law 103-328 (effective at the end of the 1 year period beginning on the date of enactment, September 29, 1994).

Cross References —

State-chartered banks having and possessing the rights, powers, privileges, immunities, duties and obligations of a national bank having its principal place of business in this state, irrespective of any conflict with the provisions of this section, see §81-5-1(9).

RESEARCH REFERENCES

Am. Jur.

10 Am. Jur. 2d, Banks and Financial Institutions §§ 19 et seq., 85 et seq., 176 et seq., 1192, 1194.

3B Am. Jur. Legal Forms 2d, Banks §§ 38:86 et seq.

CJS.

9 C.J.S., Banks and Banking §§ 5-47 et seq.

Chapter 9. Insolvent Banks

§ 81-9-1. Capital stock impaired; how restored.

When it shall be brought to the attention of the state comptroller that the capital stock of any bank is impaired to such an extent as to render a further continuance of its business hazardous to its creditors, depositors, or the public, he shall immediately request the stockholders to pay into the bank a sufficient sum to restore the capital or to execute to him, for the use and benefit of all creditors whether then existing or thereafter created, a bond for such sum as may be required to fully restore the capital stock with good and sufficient sureties to be approved by him, conditioned that all just debts and liabilities, whensoever created, shall be paid in full. Such requests on the part of the state comptroller shall not be compulsory, and any stockholder may refuse to accede to such request. If the stockholders shall fail, within a time to be fixed by the state comptroller, to restore the capital stock or to give such bond, the state comptroller shall close such bank and submit the same to the proper chancery court for liquidation as provided in this chapter. However, when the state comptroller finds the capital stock of any bank to some extent impaired, but considers that a further continuance of its business will not be hazardous to its creditors, depositors, or the public, he may grant any such bank a reasonable time, to be determined by the state comptroller, to overcome or restore such impairment. If the impairment is not overcome or restored within the time allowed for this purpose, the state comptroller shall then proceed to deal with any such bank as provided for above.

If stockholders owning one-third (1/3) or more of the total outstanding capital stock of said bank shall refuse to accede to the comptroller’s request, as above provided, for additional capital and if the cause of the comptroller’s request shall have been in part the result of bad management as evidenced by unsatisfactory loans or investments, then any three (3) or more minority stockholders, representing one-third (1/3) or more of the total outstanding capital and surplus, if any, may petition the state comptroller for liquidation of the bank and, if satisfactory action be not taken by the state comptroller within ten days, as set out in said petition of the minority stockholders, then the said minority stockholders, representing one-third or more of the outstanding capital stock, shall have the right to petition the appropriate chancery court for liquidation of the bank and such other relief as the court may render. In such cases, the examination reports of the department of bank supervision and proper federal supervisory agencies shall be prima facie evidence of the cause to be heard.

HISTORY: Codes, 1942, § 5237; Laws, 1934, ch. 146; Laws, 1936, ch. 165; Laws, 1966, ch. 254, § 1, eff from and after passage (approved May 11, 1966).

Editor’s Notes —

Section 81-1-57 provides that wherever the words “state comptroller” or “comptroller”, when referring to the office of state comptroller of banks, shall be construed to mean the commissioner of banking and consumer finance.

Section 81-1-117 abolished the office of state comptroller, and provided that the functions, duties and responsibilities would be assumed by the commissioner of banking and consumer finance.

Cross References —

Insolvency and preference under the Uniform Commercial Code, see §75-4-214.

Annual examination of banks and powers and duties of officer making such examination, see §§81-1-81,81-1-83.

State-chartered banks having and possessing the rights, powers, privileges, immunities, duties and obligations of a national bank having its principal place of business in this state, irrespective of any conflict with the provisions of this section, see §81-5-1(9).

Depositors’ liquidation, see §§81-9-43 et seq.

JUDICIAL DECISIONS

1. In general.

Transaction whereby bank superintendent allowed bank to remain open upon deposit of directors’ notes to cover loss exceeding capital and surplus on loan held contract between bank and directors and not invalid. Love v. Wilson, 172 Miss. 546, 159 So. 97, 160 So. 565, 1936 Miss. LEXIS 229 (Miss. 1936).

Officers’ and directors’ contract to pay all bank’s losses, to prevent assessment against stockholders, held not contrary to public policy nor statute; nor did such contract prevent banking department from exercising statutory powers. Love v. Dampeer, 159 Miss. 430, 132 So. 439, 1931 Miss. LEXIS 62 (Miss. 1931).

RESEARCH REFERENCES

Am. Jur.

10 Am. Jur. 2d, Banks and Financial Institutions §§/ 207-213, 1017-1184.

CJS.

9 C.J.S., Banks and Banking §§ 128-204.

§ 81-9-3. Transfers by banks and other acts in contemplation of insolvency.

All transfers of the notes, bonds, bills of exchange, or other evidences of debt owing to any bank, or of deposits to its credit; all assignments of mortgage, securities on real estate, or of judgments or decrees in its favor; all deposits of money, bullion, or other valuable thing for its use, or for the use of any of its shareholders or creditors; and all payments of money to either, made after the commission of an act of insolvency, or in contemplation thereof, with a view to prevent the application of a bank’s assets in the manner prescribed by this chapter, or with a view to the preference of one creditor to another, except state deposits, shall be utterly null and void.

HISTORY: Codes, 1942, § 5238; Laws, 1934, ch. 146; Laws, 1969, Ex Sess, ch. 53, § 9, eff from and after December 31, 1969.

Cross References —

State-chartered banks having and possessing the rights, powers, privileges, immunities, duties and obligations of a national bank having its principal place of business in this state, irrespective of any conflict with the provisions of this section, see §81-5-1(9).

Penalty for receiving deposits when bank is insolvent, see §97-19-47.

RESEARCH REFERENCES

Am. Jur.

10 Am. Jur. 2d, Banks and Financial Institutions §§ 1023, 1024.

§ 81-9-5. Closing insolvent banks.

If at any time the state comptroller shall be of the opinion that a bank is insolvent, or that its condition is such that a further continuance of its business is hazardous to its creditors, depositors, or the public, or is unable to meet its obligations in the ordinary course of business, he shall close said bank and proceed as provided in this chapter.

HISTORY: Codes, 1942, § 5240; Laws, 1934, ch. 146.

Editor’s Notes —

Section 81-1-57 provides that wherever the words “state comptroller” or “comptroller”, when referring to the office of state comptroller of banks, shall be construed to mean the commissioner of banking and consumer finance.

Section 81-1-117 abolished the office of state comptroller, and provided that the functions, duties and responsibilities would be assumed by the commissioner of banking and consumer finance.

Cross References —

State-chartered banks having and possessing the rights, powers, privileges, immunities, duties and obligations of a national bank having its principal place of business in this state, irrespective of any conflict with the provisions of this section, see §81-5-1(9).

JUDICIAL DECISIONS

1.-10. [Reserved for future use.]

11. Under former law.

1.-10. [Reserved for future use.]

11. Under former law.

Fees of auditors and a special master, in a bank liquidation proceedings, were properly a part of the taxable costs involving the liquidation, and were entitled to preference upon distribution of the assets. Taylor, Powell & Wilson v. Parker, 193 Miss. 514, 10 So. 2d 192, 1942 Miss. LEXIS 132 (Miss. 1942).

Depositors of insolvent state bank are not entitled to payment of claims as preferred claims, unless claims were preferred before liquidation. Christensen v. Merchants' & Marine Bank, 168 Miss. 43, 150 So. 375, 1933 Miss. LEXIS 172 (Miss. 1933).

Depositors in insolvent state bank, who did not consent to sale of assets to reorganized bank, held not entitled to payment of claims in full, giving them preference over other creditors. Christensen v. Merchants' & Marine Bank, 168 Miss. 43, 150 So. 375, 1933 Miss. LEXIS 172 (Miss. 1933).

State superintendent of banks may sell assets of insolvent bank in bulk at any stage in liquidation. Christensen v. Merchants' & Marine Bank, 168 Miss. 43, 150 So. 375, 1933 Miss. LEXIS 172 (Miss. 1933).

State superintendent of banks need not sell assets of insolvent bank all at one time or at any particular time, but should make such sale as will better promote interests of creditors. Christensen v. Merchants' & Marine Bank, 168 Miss. 43, 150 So. 375, 1933 Miss. LEXIS 172 (Miss. 1933).

Sale of assets of insolvent state bank to reorganized bank need not necessarily be for cash, but may be made partially on credit, or on terms. Christensen v. Merchants' & Marine Bank, 168 Miss. 43, 150 So. 375, 1933 Miss. LEXIS 172 (Miss. 1933).

Liquidation of insolvent state bank should proceed speedily, and assets should be sold for fair and reasonable value. Christensen v. Merchants' & Marine Bank, 168 Miss. 43, 150 So. 375, 1933 Miss. LEXIS 172 (Miss. 1933).

State superintendent of banks must secure approval of chancery court in liquidation proceedings before he can sell assets of insolvent bank. Christensen v. Merchants' & Marine Bank, 168 Miss. 43, 150 So. 375, 1933 Miss. LEXIS 172 (Miss. 1933).

Petitions or other proceedings by depositors or other creditors affecting liquidation of insolvent state bank should be asserted in liquidation proceedings and not in collateral suits. Christensen v. Merchants' & Marine Bank, 168 Miss. 43, 150 So. 375, 1933 Miss. LEXIS 172 (Miss. 1933).

Statutes providing for liquidation of insolvent state bank are remedial, and should receive liberal construction. Christensen v. Merchants' & Marine Bank, 168 Miss. 43, 150 So. 375, 1933 Miss. LEXIS 172 (Miss. 1933).

In absence of special permission from court having jurisdiction of bank liquidation proceeding, creditors cannot, until after completion of such proceeding, maintain separate suits for purpose of securing individual claims or establishing liability of bank directors or superintendent of banks for negligence occurring before closing of bank. Love v. State, 166 Miss. 776, 145 So. 619, 1933 Miss. LEXIS 325 (Miss. 1933).

In bank liquidation proceeding, all equities, liens, and priorities are to be settled by decree of chancery court. Love v. Sunflower County, 165 Miss. 507, 144 So. 856, 1932 Miss. LEXIS 296 (Miss. 1932).

Statute (§ 3817, Code 1930) respecting bank liquidation proceedings vests full jurisdiction of subject-matter in chancery court. Love v. Sunflower County, 165 Miss. 507, 144 So. 856, 1932 Miss. LEXIS 296 (Miss. 1932).

Where insolvent bank was being liquidated, county and city could not maintain separate bill in equity and have subjected specific property of bank to their demand. Love v. Sunflower County, 165 Miss. 507, 144 So. 856, 1932 Miss. LEXIS 296 (Miss. 1932).

General creditors held entitled to participate in distribution of assets of insolvent bank along with depositors. Anderson v. Baskin & Wilbourn, 114 Miss. 81, 74 So. 682, 1917 Miss. LEXIS 2 (Miss. 1917).

Where cashier was in full charge of bank in process of liquidation, his knowledge of transaction with debtor resulting in compromise of bank’s claim renders his action binding on bank. Metzger v. Southern Bank, 98 Miss. 108, 54 So. 241, 1910 Miss. LEXIS 115 (Miss. 1910).

§ 81-9-7. Examiner to be placed in charge.

If the Commissioner of Banking and Consumer Finance shall close a bank as provided in this chapter and the assets thereof shall not be promptly sold as provided in Section 81-9-11, he shall immediately place in charge an examiner, whose salary and expenses, including auditing and clerical help, shall be paid out of the assets of the bank and not out of the Department of Banking and Consumer Finance Maintenance Fund.

HISTORY: Codes, 1942, § 5241; Laws, 1934, ch. 146; Laws, 1994, ch. 622, § 160, eff from and after July 1, 1994.

Cross References —

State-chartered banks having and possessing the rights, powers, privileges, immunities, duties and obligations of a national bank having its principal place of business in this state, irrespective of any conflict with the provisions of this section, see §81-5-1(9).

Appointment of Federal Deposit Insurance Corporation as receiver, see §81-9-73.

Appointment of conservator of credit union, see §81-13-21.

§ 81-9-9. Conservation of assets; title.

During the period in which such examiner shall be in charge he shall prepare and make a transcript of the books and affairs of the bank, and shall generally conserve the assets of the bank. During such period the legal title to the assets of the bank shall be in the state comptroller, which title shall be generally that of a temporary receiver. The examiner in charge shall be the custodian of the affairs and assets of the bank, for and in behalf of the state comptroller, and shall work under the direction of the state comptroller. The state comptroller shall forthwith file a petition in the chancery court of the county in which the bank is situated, in a cause to be entitled, “In the matter of the custody of (naming bank) by (name of state comptroller), state comptroller.” The bank shall be a party respondent to the petition, unless the board of directors, by resolution voted for by a majority thereof, shall have submitted the bank and its affairs to the custody of the state comptroller, and waived service of process on the petition, in which event the hearing on such petition may be ex parte. If no such resolution is passed the chancellor shall order a hearing on such petition at such time to be fixed by him, and shall order issuance of a summons for the bank, returnable at the time so fixed. At the hearing on the petition the chancellor shall confirm the acts of the state comptroller in taking charge of the bank unless good cause be shown for returning the bank to the management of the directors.

HISTORY: Codes, 1942, § 5242; Laws, 1934, ch. 146.

Editor’s Notes —

Section 81-1-57 provides that wherever the words “state comptroller” or “comptroller”, when referring to the office of state comptroller of banks, shall be construed to mean the commissioner of banking and consumer finance.

Section 81-1-117 abolished the office of state comptroller, and provided that the functions, duties and responsibilities would be assumed by the commissioner of banking and consumer finance.

Cross References —

State-chartered banks having and possessing the rights, powers, privileges, immunities, duties and obligations of a national bank having its principal place of business in this state, irrespective of any conflict with the provisions of this section, see §81-5-1(9).

Appointment of receiver after ninety days, see §81-9-17.

§ 81-9-11. Sale of assets of insolvent bank.

After the state comptroller has taken charge of an insolvent bank as herein provided, he shall have power and authority, by and with the consent of the chancery court, or of the chancellor in vacation, to whose jurisdiction the affairs of the insolvent bank have been submitted, (and also of the Federal Deposit Insurance Corporation if the deposits of such bank be to any extent insured by said corporation) to sell the assets of such insolvent bank to any going bank at such price as may be deemed fair and reasonable value for such assets, allowing the purchasing bank to assume all or a certain percentage of the liabilities of the insolvent bank in payment for the assets so sold or taken over by the purchasing bank. Such sale when approved by the chancery court or chancellor shall have the effect of a quit claim of all the right, title and interest of the comptroller and of the insolvent bank in and to the property and assets so sold and transferred. In such cases the title to all assets other than real estate shall pass to the purchasing bank by delivery, and a conveyance of the real estate of the insolvent bank may be made by the comptroller in the form of a deed of conveyance which shall operate as a special warranty deed against the comptroller and the insolvent bank.

HISTORY: Codes, 1942, § 5243; Laws, 1934, ch. 146.

Editor’s Notes —

Section 81-1-57 provides that wherever the words “state comptroller” or “comptroller”, when referring to the office of state comptroller of banks, shall be construed to mean the commissioner of banking and consumer finance.

Section 81-1-117 abolished the office of state comptroller, and provided that the functions, duties and responsibilities would be assumed by the commissioner of banking and consumer finance.

Cross References —

Application of territorial and numerical restrictions on establishment of branch banks to purchaser of insolvent bank, see §§81-7-7,81-7-8.

Applicability of time constraints for approval of certificate of incorporation to purchasers of insolvent institutions, see §81-3-13.

State-chartered banks having and possessing the rights, powers, privileges, immunities, duties and obligations of a national bank having its principal place of business in this state, irrespective of any conflict with the provisions of this section, see §81-5-1(9).

Authorization for multibank holding company to operate in state, see §81-7-19.

Sale of assets by receiver, see §81-9-27.

§ 81-9-13. Reopening banks under “freezing of deposits” agreements.

The comptroller of banks of the State of Mississippi is authorized to reopen any closed bank, with the approval of the chancery court of the county in which the bank is situated, or of the chancellor thereof in vacation, when at least three-fourths of the general depositors and creditors therein holding unsecured deposits, or any number of the general depositors and creditors therein, provided they own at least three-fourths of the unsecured deposits in or claims against such bank, agree to the reopening thereof and sign what is commonly termed a “freezing-of-deposits” agreement, under which they agree to accept repayment of their deposits and claims in deferred installments, for the full amount thereof or in reduced amounts, with or without interest, the period over which the deposits and claims are to be repaid and the rate of payment, together with the interest rate, if any, to be determined by the comptroller of banks, if the comptroller is convinced that such bank as reopened will be in a solvent condition and can repay the depositors and creditors the amounts of their deposits and claims in accordance with the terms of the agreement for the repayment of same.

Before any such bank shall be reopened, the entire plan for the reopening of the same, and all material facts in connection there with, shall be submitted by the comptroller to the chancery court of the county in which the bank is situated, or the chancellor in vacation, by proper petition, duly verified, such petition to contain a statement of the assets and liabilities of the bank and such other information as may be necessary to convey to the court or chancellor the true facts with reference to the condition of such bank, and a decree of the court or chancellor in vacation obtained approving the plan agreed upon and submitted by the comptroller for the reopening of such bank and authorizing the same to be reopened. The hearing of such petition shall be had at such time and place as shall be fixed by the court or chancellor, after ten days’ notice is given of such hearing by publication in some newspaper having a general circulation in the county in which the closed bank is located. The filing of a petition by any closed bank submitted to the jurisdiction of the chancery court of the county of its domicile and publishing of notice to creditors as otherwise provided by law shall vest in said court jurisdiction over all of the assets of said bank and of its creditors and empower it to so act hereunder.

When any closed bank has been reopened as herein provided, the general depositors and creditors thereof who have not expressly agreed to accept repayment of their deposits and claims in accordance with the freezing-of-deposits plan shall be bound to accept repayment of their deposits and claims according to the terms of the decree of the court or chancellor in vacation and on the same basis and at the same rate as those general depositors and creditors who have signed the freezing-of-deposits agreement, except that this paragraph shall not apply to deposits of public moneys or to depositors and creditors holding preferred claims, or secured claims, nor to correspondent banks holding bills payable of the closed bank to the extent that same are adequately secured by the collateral held therefor.

Proper provision shall be made in the plan for the reopening of such bank to pay public depositors, depositors, and creditors holding preferred and secured claims and correspondent banks holding bills payable to the extent which they are adequately secured by collateral held, on terms acceptable to them, but any arrangement so made shall not operate prejudicially to the rights of the general depositors and creditors of the bank.

This section shall not be construed to give the comptroller the right to diminish the assets of a closed bank to the prejudice of the depositors and creditors thereof, and any assets that may be charged out as doubtful or as losses and not carried into the reopened bank as an asset, shall be held by the reopened bank in trust for payment pro rata of such parts of the claims of the depositors and creditors as under the decree authorizing the reopening of the bank are provided shall not be a charge against the assets of the reopened bank. The reopened bank shall be accountable to the said chancery court for the proper handling of such assets not taken into the reopened bank and the payment of the proceeds thereof to the creditors entitled thereto; but without restriction upon the public in dealing with the reopened bank relative thereto nor obligation upon the public so dealing to see that such bank properly accounts therefor.

This section is to be liberally construed as an exercise of the police power of the state as a sovereign to legislate with reference to banks as public utilities to promote the public welfare, and shall apply to all closed banks whether heretofore, now or hereafter closed.

HISTORY: Codes, 1942, § 5245; Laws, 1934, ch. 146.

Editor’s Notes —

Section 81-1-57 provides that wherever the words “state comptroller” or “comptroller”, when referring to the office of state comptroller of banks, shall be construed to mean the commissioner of banking and consumer finance.

Section 81-1-117 abolished the office of state comptroller, and provided that the functions, duties and responsibilities would be assumed by the commissioner of banking and consumer finance.

Cross References —

State-chartered banks having and possessing the rights, powers, privileges, immunities, duties and obligations of a national bank having its principal place of business in this state, irrespective of any conflict with the provisions of this section, see §81-5-1(9).

JUDICIAL DECISIONS

1. In general.

2. Disposition of assets and deposits.

3. Process.

4. —Notice by citation.

1. In general.

Previous similar provision (Laws 1932, ch. 251) was held merely to change the method of liquidation, making the resumption of business a means of payment of creditors, and therefore not to impair contractual rights or to annul rights of property in violation of Art. I § 10, or of the Fourteenth Amendment of the Federal Constitution.Doty v. Love, 295 U.S. 64, 55 S. Ct. 558, 79 L. Ed. 1303, 1935 U.S. LEXIS 305 (U.S. 1935).

Provision of plan for reorganization of closed state bank, pursuant to previous similar statute (Laws 1932, ch. 251), in effect releasing old stockholders who participate in reorganization and advance new capital from part of stockholders’ liability, held not invalid as impairing obligation of contract arising with stockholders who took stock in bank, where plan was substantially more beneficial to depositors than continuance of ordinary liquidation, and depositors could not show substantial prejudice. Dunn v. Love, 172 Miss. 342, 155 So. 331, 1934 Miss. LEXIS 382 (Miss. 1934), aff'd, 295 U.S. 64, 55 S. Ct. 558, 79 L. Ed. 1303, 1935 U.S. LEXIS 305 (U.S. 1935).

2. Disposition of assets and deposits.

When money of a ward is deposited in a bank under the authorization and direction of the chancery court, pursuant to previous similar provision (Laws 1932, ch. 251, § 2), the minor is bound by the provisions of this section [Code 1942, § 5245] as to funds on deposit; and such funds would be subject to the business risks taken by others in the prudent handling of the bank’s business. Dorsey v. Murphy, 188 Miss. 291, 194 So. 603, 1940 Miss. LEXIS 29 (Miss. 1940).

Where under a freezing agreement the bank established a pool of notes for collection to apply on certain frozen deposits, the bank could not collect on such notes and apply the receipt therefrom to its own purposes, since under the agreement collections should be applied to the account of either the frozen deposit or the funds placed in the pool for the depositors whose claims were pooled. Dorsey v. Murphy, 188 Miss. 291, 194 So. 603, 1940 Miss. LEXIS 29 (Miss. 1940).

3. Process.

Petition for reorganization of closed state bank is part of liquidation proceedings, and no original process by way of summons to depositors is necessary, since liquidation proceeding is quasi receivership. Dunn v. Love, 172 Miss. 342, 155 So. 331, 1934 Miss. LEXIS 382 (Miss. 1934), aff'd, 295 U.S. 64, 55 S. Ct. 558, 79 L. Ed. 1303, 1935 U.S. LEXIS 305 (U.S. 1935).

4. —Notice by citation.

In proceedings for liquidation of state bank wherein petition was filed for reorganization of bank, citation directed to parties in interest should be served in reasonable manner and for reasonable length of time, all circumstances considered. American Nat'l Bank & Trust Co. v. National Cash Register Co., 1970 OK 147, 473 P.2d 234, 1970 Okla. LEXIS 428 (Okla. 1970).

In proceeding for liquidation of state bank, wherein petition was filed for reorganization of bank, personal service of citation on selected fifteen out of five thousand depositors, and publication of citation in newspaper published in county wherein bank was located, held sufficient compliance with requirement that notice by citation should be given. Dunn v. Love, 172 Miss. 342, 155 So. 331, 1934 Miss. LEXIS 382 (Miss. 1934), aff'd, 295 U.S. 64, 55 S. Ct. 558, 79 L. Ed. 1303, 1935 U.S. LEXIS 305 (U.S. 1935).

Where petition for reorganization of closed state bank is filed in proceedings for liquidation of bank, citation to parties in interest need not be served either with same formality or for same length of time as original process by way of summons. Dunn v. Love, 172 Miss. 342, 155 So. 331, 1934 Miss. LEXIS 382 (Miss. 1934), aff'd, 295 U.S. 64, 55 S. Ct. 558, 79 L. Ed. 1303, 1935 U.S. LEXIS 305 (U.S. 1935).

RESEARCH REFERENCES

Am. Jur.

10 Am. Jur. 2d, Banks and Financial Institutions §§ 1035, 1048, 1053, 1109-1114.

CJS.

9 C.J.S., Banks and Banking §§ 156-158.

§ 81-9-15. Limitation on custodial period; approval of acts involving discretion or judgment.

The period in which the state comptroller shall remain the custodian of banks closed as provided in Section 81-9-5 shall not exceed ninety days, and during such period all acts of the state comptroller involving discretion or judgment shall be approved by order of the chancellor, entered in the cause provided for in Section 81-9-9 in the same manner and to the same extent as if the state comptroller were a receiver.

HISTORY: Codes, 1942, § 5247; Laws, 1934, ch. 146.

Editor’s Notes —

Section 81-1-57 provides that wherever the words “state comptroller” or “comptroller”, when referring to the office of state comptroller of banks, shall be construed to mean the commissioner of banking and consumer finance.

Section 81-1-117 abolished the office of state comptroller, and provided that the functions, duties and responsibilities would be assumed by the commissioner of banking and consumer finance.

Cross References —

State-chartered banks having and possessing the rights, powers, privileges, immunities, duties and obligations of a national bank having its principal place of business in this state, irrespective of any conflict with the provisions of this section, see §81-5-1(9).

Appointment of receiver at end of ninety day period, see §81-9-17.

§ 81-9-17. Receiver to be appointed.

At the end of ninety days, if the state comptroller has not sold the assets of the bank as provided in Section 81-9-11 above, the state comptroller shall file a petition in the proper chancery court in a cause to be entitled “In the matter of the receivership of (name of bank).” Such petition shall recite the taking of the bank into custody under the provisions of this chapter, the failure to sell the assets as provided in Section 81-9-11 above, and shall pray for the appointment of a receiver. The chancellor shall enter an order upon such petition, appointing a receiver of his own selection who shall not have been an officer, director or employee of the bank for a period of five years prior to the closing thereof. However, upon petition signed by the owners and holders of a majority in amount of the deposit liability of the bank, the chancellor may appoint such an officer, director or employee as receiver.

HISTORY: Codes, 1942, § 5248; Laws, 1934, ch. 146.

Editor’s Notes —

Section 81-1-57 provides that wherever the words “state comptroller” or “comptroller”, when referring to the office of state comptroller of banks, shall be construed to mean the commissioner of banking and consumer finance.

Section 81-1-117 abolished the office of state comptroller, and provided that the functions, duties and responsibilities would be assumed by the commissioner of banking and consumer finance.

Cross References —

Appointment or removal of receivers by chancery court, see §§11-5-151 et seq.

State-chartered banks having and possessing the rights, powers, privileges, immunities, duties and obligations of a national bank having its principal place of business in this state, irrespective of any conflict with the provisions of this section, see §81-5-1(9).

Bond of receiver, see §81-9-21.

Duties of receiver, see §81-9-23.

Powers of receivers, see §§81-9-25 et seq.

Depositors’ liquidation, see §§81-9-43 et seq.

Appointment of a receiver for an insolvent savings association, see §81-12-183.

JUDICIAL DECISIONS

1. In general.

A decree discharging a receiver did not prevent institution of another receivership. Franks v. Receiver of Booneville Banking Co., 202 Miss. 858, 32 So. 2d 859, 1947 Miss. LEXIS 349 (Miss. 1947).

RESEARCH REFERENCES

Am. Jur.

10 Am. Jur. 2d, Banks and Financial Institutions §§ 1032-1037, 1081-1083.

CJS.

9 C.J.S., Banks and Banking §§ 176 et seq.

§ 81-9-19. Surrender of assets to receiver; reports.

The state comptroller shall forthwith surrender to the receiver possession of all the assets of the bank, including the books and records thereof, and shall render to the receiver a true accounting and report of all transactions concerning assets and liabilities of the bank during the period of the state comptroller’s custody thereof. Whereupon, future liability of the state comptroller with reference to said bank shall cease.

HISTORY: Codes, 1942, § 5249; Laws, 1934, ch. 146.

Editor’s Notes —

Section 81-1-57 provides that wherever the words “state comptroller” or “comptroller”, when referring to the office of state comptroller of banks, shall be construed to mean the commissioner of banking and consumer finance.

Section 81-1-117 abolished the office of state comptroller, and provided that the functions, duties and responsibilities would be assumed by the commissioner of banking and consumer finance.

Cross References —

State-chartered banks having and possessing the rights, powers, privileges, immunities, duties and obligations of a national bank having its principal place of business in this state, irrespective of any conflict with the provisions of this section, see §81-5-1(9).

§ 81-9-21. Bond of receiver.

The receiver shall furnish bond in such amount and with such sureties as may be fixed by the chancellor, payable to the State of Mississippi, and conditioned for the faithful performance of his duties as receiver of such bank. Such bond may, with consent of the chancellor, be put in action by anyone aggrieved by the receiver’s conduct of the affairs of the insolvent bank, and premiums on the bond shall be an expense of the liquidation.

HISTORY: Codes, 1942, § 5250; Laws, 1934, ch. 146.

Cross References —

State-chartered banks having and possessing the rights, powers, privileges, immunities, duties and obligations of a national bank having its principal place of business in this state, irrespective of any conflict with the provisions of this section, see §81-5-1(9).

§ 81-9-23. Duties of receiver.

The receiver shall proceed promptly to wind up the affairs of the bank, and in all matters involving discretion or judgment shall obtain the approval of the chancellor in an order entered in the receivership cause which was opened by the state comptroller by the filing of the petition asking for the appointment of a receiver. By and with the consent of the chancellor the receiver may be made a party respondent to petitions filed in the receivership caused by persons seeking to have adjudicated rights in the assets and affairs of the bank, and which the receiver has refused to recognize. The receiver may sell all or any portion of the assets of the bank, real, personal, or mixed, for cash or upon other terms; may effect compromises, and bring about exchanges of property; all under the approval of the chancellor with a view to equity and approximate justice to all parties, and a prompt and efficient liquidation.

HISTORY: Codes, 1942, § 5251; Laws, 1934, ch. 146.

Editor’s Notes —

Section 81-1-117 abolished the office of state comptroller, and provided that the functions, duties and responsibilities would be assumed by the commissioner of banking and consumer finance.

Cross References —

State-chartered banks having and possessing the rights, powers, privileges, immunities, duties and obligations of a national bank having its principal place of business in this state, irrespective of any conflict with the provisions of this section, see §81-5-1(9).

Receiver’s duty in regard to proof of claims, see §81-9-31.

Receiver’s inventory and bookkeeping, see §81-9-33.

Payment of dividends by receiver, see §81-9-35.

Reports by receiver, see §81-9-37.

JUDICIAL DECISIONS

1. In general.

Receiver of insolvent bank may bring suit, either in courts of law or in equity, when authorized to do so by appointing court. Kretschmar v. Stone, 90 Miss. 375, 43 So. 177, 1907 Miss. LEXIS 45 (Miss. 1907).

Receiver of insolvent bank, when authorized by appointing court, may sue at law to recover from stockholders dividends paid by corporation when insolvent. Kretschmar v. Stone, 90 Miss. 375, 43 So. 177, 1907 Miss. LEXIS 45 (Miss. 1907).

RESEARCH REFERENCES

Am. Jur.

10 Am. Jur. 2d, Banks and Financial Institutions § 1083.

CJS.

9 C.J.S., Banks and Banking §§ 176, 182 et seq.

§ 81-9-25. Receivers empowered to borrow money.

By and with the approval of the chancellor all receivers of insolvent banks in this state shall have power to borrow money, in the capacity of receivers, from any individual or corporation, including corporations or other agencies organized under the laws of the United States. For the security of such loans the receiver may pledge, mortgage and hypothecate any portion of or all of the assets, real, personal, or mixed, of such insolvent bank. Such loan may be extended, renewed, and rearranged from time to time, and shall be the direct obligation of the receivership, but the receiver shall not be personally liable for payment thereof. The lender shall not be charged with any duty or responsibility in regard to the application by the receiver of the proceeds of any such loan.

HISTORY: Codes, 1942, § 5252; Laws, 1934, ch. 146.

Cross References —

State-chartered banks having and possessing the rights, powers, privileges, immunities, duties and obligations of a national bank having its principal place of business in this state, irrespective of any conflict with the provisions of this section, see §81-5-1(9).

RESEARCH REFERENCES

Am. Jur.

10 Am. Jur. 2d, Banks and Financial Institutions § 1083.

§ 81-9-27. Receivers may sell assets of insolvent banks.

By and with the approval of the chancellor all receivers of insolvent banks in this state shall have power to sell, for cash or on terms, to any individual or corporation, including corporations or other agencies organized under the laws of the United States, any portion or all of the assets of such insolvent bank. Such conveyances shall have the effect of a quit claim of all the right, title and interest of the receiver, and the purchaser shall not be charged with any duty or responsibility in regard to the application by the receiver of the purchase money. By and with the approval of the chancellor and of the state comptroller, receivers of insolvent banks may sell any portion or all of the assets of such receivership to an active and operating bank the purchase price to be in cash or on terms, or otherwise; or, the purchasing bank may be allowed to assume a percentage of the liabilities of the insolvent bank, with optional privilege to the creditors to receive cash or other property in settlement of their claims. Under this section chancellors shall have broad powers and discretion to approve plans which are for the best interests of creditors of closed banks, taken as a whole.

HISTORY: Codes, 1942, § 5253; Laws, 1934, ch. 146.

Editor’s Notes —

Section 81-1-57 provides that wherever the words “state comptroller” or “comptroller”, when referring to the office of state comptroller of banks, shall be construed to mean the commissioner of banking and consumer finance.

Section 81-1-117 abolished the office of state comptroller, and provided that the functions, duties and responsibilities would be assumed by the commissioner of banking and consumer finance.

Cross References —

Application of territorial and numerical restrictions on establishment of branch banks to bank purchaser of insolvent bank, see §§81-7-7,81-7-8.

Applicability of time constraints for approval of certificate of incorporation to purchasers of insolvent institutions, see §81-3-13.

State-chartered banks having and possessing the rights, powers, privileges, immunities, duties and obligations of a national bank having its principal place of business in this state, irrespective of any conflict with the provisions of this section, see §81-5-1(9).

Sale of assets of insolvent banks by state comptroller, see §81-9-11.

RESEARCH REFERENCES

CJS.

9 C.J.S., Banks and Banking § 185.

§ 81-9-29. Liquidation; separate assets for creditors; corporate stock.

Where a bank chartered under the laws of the State of Mississippi has failed, or may hereafter fail, and in the process of liquidation or after reorganization or reopening of such failed bank certain assets are placed in a separate fund for the benefit of creditors of such bank, it is found that said bank, or the owner of such trust assets, owns stock in, has a lien on, or is in any way interested in the stock of a corporation, organized and doing business under the laws of the State of Mississippi, and such bank, or owners of such trust assets, is unable to sell such stock at its reasonable fair value, and such stock is less than ten percent of the outstanding stock of said corporation, and the remainder of the stock of such corporation is owned by a small number of persons, then the chancery court of the county in which said bank is located is authorized and empowered in a suit brought for that purpose, to fix the value of said stock. In the event the holders of the majority of the stock will not pay the value as fixed by the court then the court shall order the assets of said corporation, or a sufficient amount thereof, to be sold to pay the value of said stock as fixed by the court, if the surplus undivided profits and other accumulations of said corporation are sufficient to take care of the value of said stock as fixed by the court without seriously interfering with the continued operation of said corporation.

HISTORY: Codes, 1942, § 5287; Laws, 1938, ch. 247.

Cross References —

State-chartered banks having and possessing the rights, powers, privileges, immunities, duties and obligations of a national bank having its principal place of business in this state, irrespective of any conflict with the provisions of this section, see §81-5-1(9).

Priority of claims for payment against certain insolvent banks upon liquidation or upon execution of purchase of assets and assumption of liabilities, see §81-9-75.

JUDICIAL DECISIONS

1. In general.

Purchaser of failed bank’s assets gains only such title as is held by receiver. Federal Deposit Ins. Corp. v. O'Hara's, Inc., 713 F. Supp. 966, 1989 U.S. Dist. LEXIS 6074 (N.D. Miss. 1989).

RESEARCH REFERENCES

ALR.

Meaning of “book value” of corporate stock. 51 A.L.R.2d 606.

§ 81-9-31. Proof of claims.

The receiver appointed under Section 81-9-17 shall cause notice to be given in such newspaper as the court may direct, once a week for four consecutive weeks, calling on all persons who may have claims against the bank to present the same and make proof thereof upon forms to be furnished by the receiver, at a place and within a time specified in the notice, which shall be approximately ninety days from the date of the first publication. A copy of the notice shall be mailed to all depositors and creditors as shown by the books of the bank, at their last known post-office address. If the receiver doubts the justice or validity of any claim he shall reject the same by serving notice upon the claimant in writing, and such rejection shall be final unless the claimant shall, within ninety days from the date of such rejection, petition the chancellor in the receivership cause for a review of the action of the receiver. Claims presented more than ninety days after the first publication of the above recited notice shall be entitled to share only in dividends thereafter paid.

HISTORY: Codes, 1942, § 5254; Laws, 1934, ch. 146.

Cross References —

Insolvency and preference under the Uniform Commercial Code, see §75-4-214.

State-chartered banks having and possessing the rights, powers, privileges, immunities, duties and obligations of a national bank having its principal place of business in this state, irrespective of any conflict with the provisions of this section, see §81-5-1(9).

Priority of claims for payment against certain insolvent banks upon liquidation or upon execution of purchase of assets and assumption of liabilities, see §81-9-75.

JUDICIAL DECISIONS

1. In general.

Where receiver is merely custodian of fund for distribution to beneficiaries of proceeds of law suit which has been compromised and settled, it is within discretion of trial court to permit a beneficiary to intervene and file claim to portion of the fund after the expiration of the time allowed by order of the court for that purpose. Edwards v. Williams, 196 Miss. 618, 18 So. 2d 128, 1944 Miss. LEXIS 242 (Miss. 1944).

A claim should be admitted at any time before actual distribution, or even after partial distribution if there is surplus in hands of receiver so as not to interfere with payments already made, even though not filed within the time specified in an order given for the publication of notice, where reasonable excuse for such delay is shown. Edwards v. Williams, 196 Miss. 618, 18 So. 2d 128, 1944 Miss. LEXIS 242 (Miss. 1944).

Although claimant failed to prove her claim to participate with other certificate holders in proceeds of suit which had been compromised and settled until after expiration of time allowed therefor in court order, directing receiver to publish notice requiring certificate holders to prove their claims within a certain time, and to give further notice thereof by mail, she was entitled to participate in first dividend declared payable to those who had complied with the terms of such notice, where no notice had been mailed to the claimant who neither knew of the appointment of the receiver nor of the fact that a fund was to be distributed until after the time limitation had expired, and where the receiver had on hand undistributed funds sufficient to pay the declared dividend to all certificate holders. Edwards v. Williams, 196 Miss. 618, 18 So. 2d 128, 1944 Miss. LEXIS 242 (Miss. 1944).

RESEARCH REFERENCES

Am. Jur.

10 Am. Jur. 2d, Banks and Financial Institutions §§ 1098, 1115, 1116.

4 Am. Jur. Pl & Pr Forms (Rev), Banks, Form 142.

CJS.

9 C.J.S., Banks and Banking §§ 190 et seq.

§ 81-9-33. Inventory and books by the receiver.

The receiver shall make an inventory of all assets and liabilities of the bank which may have been turned over to him by the state comptroller, or of which he may otherwise come into possession, and shall file a transcript of such inventories, certified by him as correct, in the court file of the receivership cause. He shall cause to be kept complete books of account of all transactions involving the assets and liabilities of the bank.

HISTORY: Codes, 1942, § 5255; Laws, 1934, ch. 146.

Editor’s Notes —

Section 81-1-57 provides that wherever the words “state comptroller” or “comptroller”, when referring to the office of state comptroller of banks, shall be construed to mean the commissioner of banking and consumer finance.

Section 81-1-117 abolished the office of state comptroller, and provided that the functions, duties and responsibilities would be assumed by the commissioner of banking and consumer finance.

Cross References —

State-chartered banks having and possessing the rights, powers, privileges, immunities, duties and obligations of a national bank having its principal place of business in this state, irrespective of any conflict with the provisions of this section, see §81-5-1(9).

RESEARCH REFERENCES

CJS.

9 C.J.S., Banks and Banking § 176.

§ 81-9-35. Dividends by receiver.

From time to time, upon order of the chancellor, the receiver shall pay dividends to such persons as may by right be thereunto entitled, and it shall be the duty of the receiver paying dividends to make every reasonable effort to locate the party or parties entitled thereto.

HISTORY: Codes, 1942, § 5256; Laws, 1934, ch. 146; Laws, 1936, ch. 165; Laws, 1938, ch. 246.

Cross References —

State-chartered banks having and possessing the rights, powers, privileges, immunities, duties and obligations of a national bank having its principal place of business in this state, irrespective of any conflict with the provisions of this section, see §81-5-1(9).

RESEARCH REFERENCES

Am. Jur.

10 Am. Jur. 2d, Banks and Financial Institutions § 1117.

§ 81-9-37. Reports by receiver; petition for discharge.

  1. The receiver shall make such reports of his administration to the chancellor as the chancellor may require, which reports shall be filed in the court file of the receivership cause. Before the receivership cause shall be closed, a final report shall be made of such matters as may be required by the chancellor, and which shall include classified lists and totals of expenses; the gross amount of collections; classified lists and totals of disbursements to common creditors and other claimants; and all dividends on hand belonging to depositors, creditors, stockholders or others which for any reason have not been distributed; also the names of such depositors, creditors and stockholders, together with the amount of dividends belonging to each.
  2. The receiver shall file a petition for discharge with his final report, and the final report, together with said petition, shall remain on file subject to the inspection of any person interested. If the chancellor is satisfied with the final report of the receiver, he shall, by order entered on the minutes of the court, direct that the clerk of the court cause a notice to be run in a newspaper published in the county wherein the receivership is pending, or if none is so published, in some newspaper having a general circulation therein, which notice shall state that the liquidation of the bank has been completed and that the final report of the receiver and petition for his discharge are on file; that unless written objection is filed with the clerk of the court within thirty days from the date of the first publication of the notice, all persons shall be forever precluded from filing any claim against the bank or the receiver, and from questioning any of the acts of the receiver, except for fraud. Said notice shall be published once a week until the expiration of said thirty day period.
  3. Should the receiver have dividends on hand belonging to depositors, creditors, stockholders or others which have not been distributed the notice hereinabove referred to shall specify this fact, and shall give the name of each party who is entitled to such dividend, but it shall not be necessary to give the amount thereof. The notice shall direct that said parties call for said dividends prior to the day set for the filing of written objections, otherwise, their claim thereto shall be forfeited. On the day of the final hearing if there are dividends on hand which have not been called for, the receiver shall not be discharged, but the chancellor, by order entered on the minutes of the court, shall direct the receiver to make distribution of such unclaimed dividends to the known depositors and creditors pro rata. In the event the known depositors and creditors have already been paid in full, or if any are unpaid an amount in cash equal to that requisite to pay every such person, as shown to be due to them by the books of the bank is set apart and paid over in accordance herewith to the state comptroller as herein provided, the amount, if any, remaining shall be distributed to the stockholders pro rata.
  4. If on the day of the final hearing there are no dividends on hand for distribution and there have been no objections filed to the discharge of the receiver, the chancellor shall enter an order granting his discharge. If there are dividends on hand, the chancellor shall direct their distribution as above provided. Should written objections be filed to the discharge of the receiver within the time above provided, the chancellor shall set the matter for hearing in vacation or in term time as he may deem proper, and the same shall be proceeded with as any other action in chancery. In no event shall anyone be permitted to file an objection after the time specified in the notice above provided for.
  5. Should there be any dividends to stockholders not called for at the expiration of thirty days from the date the chancellor orders the distribution as above provided in subsection 3 of this section, the receiver shall pay the same and all amounts due to depositors and creditors who have not called for payment, to the state comptroller, who shall hold the same for the parties entitled thereto hereunder for a period of at least one year from the date of its receipt by him, and notice shall be given as hereinafter provided.
  6. Where any depositors’ liquidating corporation has not paid its depositors in full, and has realized everything possible from its assets, but still has on hand insufficient money to make a distribution to its creditors, the chancery court creating such corporation may, upon finding such facts, dissolve such liquidating corporation and discharge its directors and their sureties, and make such orders with respect to the cash on hand as may appear equitable and proper, after an application for a dissolution of said corporation, accompanied by a final report of the administration thereof from the date of the creation of said corporation, has been on file with the clerk of said court not less than thirty days, and notice of the filing thereof has been given by inserting one notice in a newspaper published in the county wherein the receivership is pending not less than ten days before the date set for the hearing thereof.
  7. Nothing contained in this section shall apply to any bank heretofore or hereafter liquidated by the Federal Deposit Insurance Corporation.

HISTORY: Codes, 1942, § 5257; Laws, 1934, ch. 146; Laws, 1938, Ex. ch. 52.

Editor’s Notes —

Section 81-1-57 provides that wherever the words “state comptroller” or “comptroller”, when referring to the office of state comptroller of banks, shall be construed to mean the commissioner of banking and consumer finance.

Section 81-1-117 abolished the office of state comptroller, and provided that the functions, duties and responsibilities would be assumed by the commissioner of banking and consumer finance.

Cross References —

State-chartered banks having and possessing the rights, powers, privileges, immunities, duties and obligations of a national bank having its principal place of business in this state, irrespective of any conflict with the provisions of this section, see §81-5-1(9).

Depositors’ liquidations, see §§81-9-43 et seq.

Appointment of Federal Deposit Insurance Corporation as receiver, see §81-9-73.

JUDICIAL DECISIONS

1. In general.

A final decree discharging a receiver does not in itself effect dissolution of the banking corporation. Franks v. Receiver of Booneville Banking Co., 202 Miss. 858, 32 So. 2d 859, 1947 Miss. LEXIS 349 (Miss. 1947).

§ 81-9-39. Compensation and expenses of receiver and attorney.

Compensation of the receiver and attorney shall be fixed by the court from time to time, upon a salary basis. In banks with total assets of one million dollars ($1,000,000.00) or more the salary of the receiver shall not exceed three hundred dollars ($300.00) per month and the salary of the attorney shall not exceed two hundred fifty dollars ($250.00) per month. In banks with total assets of less than one million dollars ($1,000,000.00) the salary of the receiver shall not exceed two hundred dollars ($200.00) per month and the salary of the attorney shall not exceed one hundred fifty dollars ($150.000) per month. The receiver and attorney shall also be allowed reasonable amounts for necessary expenses, all of which shall be a charge upon the assets of the bank. Any receiver, attorney, or employee may be removed for cause by the chancellor at any time.

In the event a bank receivership shall be closed and the receiver and attorney finally discharged and it should appear after a lapse of ten (10) years from the date of the closing of said receivership that certain probable assets might be recovered for the benefit of depositors and creditors of said bank and the court shall reopen said receivership for the purpose of recovering said assets, the receiver or attorney, or both, so appointed by the court to recover said assets may be allowed for his services in lieu of the salaries above stated, a fee to be fixed by the court, and said fee may be either a cash fee or an interest in the property or thing recovered in the sole discretion of the court, and the court may allow such fee for services heretofore rendered for a period of not more than six (6) years prior to March 6, 1958.

HISTORY: Codes, 1942, § 5261; Laws, 1934, ch. 146; Laws, 1958, ch. 165.

Cross References —

State-chartered banks having and possessing the rights, powers, privileges, immunities, duties and obligations of a national bank having its principal place of business in this state, irrespective of any conflict with the provisions of this section, see §81-5-1(9).

RESEARCH REFERENCES

ALR.

Attorneys’ fees: cost of services provided by paralegals or the like as compensable element of award in state court. 73 A.L.R.4th 938.

CJS.

9 C.J.S., Banks and Banking § 184.

§ 81-9-41. Liquidation of solvent bank.

Any bank found to be solvent may be liquidated, if desired by the bank, in accordance with this section.

It is the purpose of this section to require that the claims of all depositors and creditors as reflected by the books of the bank, be paid, whether proven or not, provided they are called for within the period stipulated in this section. The bank shall continue as a corporation until that authorized hereunder to be done has been accomplished whereafter its charter shall be surrendered as provided by law.

If the receiver shall have heretofore paid, or shall hereafter pay, or have assets readily convertible for payment to each and every depositor, creditor and claimant of such bank whose claim or claims shall have been filed, whether duly proven and allowed or undisposed of, the principal amount, with additions, if any, shown by the books of the bank to be due by the bank, or if every such unpaid depositor, creditor or claimant for whom no such provision has been made as above, if any there be, consents thereto in writing, and the receiver shall have paid all expenses of the liquidation, all out of the assets of the failed bank, upon petition of a board of directors to be selected by the stockholders of the bank at a special meeting to be held therefor on call of any of the former officers of the bank, and with the consent of all claimants or creditors who have filed claims which have not been finally disposed of or which are disputed, and with the consent of every person, firm or corporation having a lien on the assets of the bank, if any there be, the receiver shall deliver to any such agent or agents of said bank, selected by the board of directors as hereinabove provided, upon a decree therefor made by the chancery court or the chancellor in vacation, all undivided and uncollected or other assets of said bank then remaining in his hands or under his control subject to any liens thereupon. On such delivery, the receiver and the surety on his bond shall be discharged from any and all liability to the bank, its creditors and all other persons, provided that (1) before making such delivery, the receiver shall have turned over to the state comptroller for depositors the principal amount, with additions, if any, shown by the books of the bank to be due by the bank to such depositors, and provided, (2) that the receiver shall file a final report showing all such matters and things as should be embraced in the final report hereinabove required for complete liquidation. Thereupon the chancellor shall by order entered direct that the clerk of the court cause a notice to be run in a newspaper published in the county where the receivership is pending, or if none is so published, in some newspaper having a general circulation therein, which notice shall state that the liquidation of the bank by the receiver is to be terminated and the assets remaining delivered to the bank as herein provided, and that the final report of the receiver has been filed and an application made to transfer the remaining assets in accordance herewith to an agent of the bank, and unless written objection is filed with the clerk within thirty days from the first publication of the notice, all persons shall be forever precluded from filing any claim against the receiver or from questioning any of the acts of the receiver except for fraud, or claims, demands and rights which are to be assumed by the bank and subject to which the transfer is to be made. Said notice shall be published once a week until the expiration of said thirty day period.

All unpaid deposits, debts and dividends hereunder paid over to the state comptroller of banks shall be held in trust for the parties rightfully entitled thereto, to whom payment thereof shall be made, less any costs lawfully deductible therefrom. In case the state comptroller shall be in doubt as to the person or amount, he may file in regard thereto a bill of interpleader and thereupon be finally discharged, paying from such amount so deposited in court, the requisite costs for filing such bill.

Within one year after receipt of any amount from a receiver, the state comptroller shall give notice of unclaimed amounts by publication in some newspaper having a general circulation in the county where such banking corporation was domiciled, once a week for three consecutive weeks, notifying such unpaid persons to come forward and claim the amounts due, and in said notice stating the amount of money received, the name of the party who is entitled to any portion thereof according to the books of the bank, but without specifying the amount, and shall command said parties to call for such amounts prior to the date fixed for payment to the state treasurer, and stating that unless they shall do so, the amounts will be paid over to the state treasurer in trust on or after a day therein to be named. After the expiration of said time, the state comptroller shall pay over such amounts held by him to the state treasurer, less any publication or other costs incurred in connection therewith and give to the state treasurer a list of all persons entitled to any amount together, if possible, with the amount thereof and the residence, if possible, of such person. Thereupon the state treasurer shall be required to place the amount so paid over to him in a special trust fund in the state treasury for the benefit of any and all persons rightfully entitled thereto, and thereafter when said funds are so paid over, there shall be no further liability on the bank, its receiver, the state comptroller, his bond or any other agent or employee, for any amount so thus paid over to the state treasurer under this section. Persons rightfully entitled to any such amounts so paid over into this trust fund shall be paid the amount thereof direct from such trust fund by the state treasurer without specific appropriation therefor, such payment to be made by the state treasurer upon requisition drawn by the state comptroller on the written approval of the attorney general. The state comptroller and the state treasurer shall have power to pay from such amount on hand the cost of any publication and other expense items properly incurred chargeable thereto, which amounts shall be deducted from the amount to be paid over. The state comptroller or the state treasurer may apply the interest earned by the money so held by either of them, if any, towards defraying the expenses of the payment and the distribution to the persons entitled.

After the expiration of fifteen (15) years from the date of the receipt of such amount by the state treasurer, the deposits and amounts then unclaimed shall be placed by the state treasurer in the general fund of the State of Mississippi, and such fund shall belong to the State of Mississippi, free from the claims of all persons whatsoever.

The delivery of such assets to such agent of said bank, selected as aforesaid, and the discharge of such receiver shall not release, discharge or affect any right, claim or action which any creditor or claimant consenting to such transfer and discharge might then or thereafter have against said bank, or the stockholders of the bank on account of their double liability, if any, if the assets of the bank are insufficient to pay said creditors’ or claimants’ claims in full, with interest, if any is due; it being the intention hereof that the liability of the bank and its stockholders, if any, shall not be affected or released by the discharge of the receiver. The court having jurisdiction of the receivership shall retain jurisdiction over any suit, petition or proceeding brought pursuant hereto, and especially involving a contested claim for depositor or creditor, and such suit, or suits, may be as fully and completely determined and adjudicated by said court as if had under the receivership.

Such agent or agents under the direction of the board of directors of said bank shall convert the assets coming into his or their possession into cash, if so directed, and after paying all taxes and any and all unpaid claims, lawfully established, and the expenses of said liquidation, shall distribute the assets in cash or kind pro rata among the stockholders of the bank in proportion to the stock held by each and every stockholder. Such bank may from time to time hold meetings of its stockholders in accordance with its by-laws for the election of boards of directors and such other corporate business as may properly come before the meeting looking towards its liquidation, and such directors may, from time to time, replace such agent or agents in charge of such liquidation, paying such agent or agents such compensation as they may determine. All expenses of such liquidation by such agent or agents shall be subject to approval by the board of directors of the bank.

Prior to or contemporaneously with the delivery of said assets to the agent or agents of said bank, it shall be a condition thereto that all persons having a direct lien on the assets of the trust and also all persons having an undisposed of disputed claim, if any there be, pending in the receivership, be required to give their consent in writing to the release of the assets in the hands of the receiver to the bank. When the court is satisfied of compliance with all requirements hereinbefore contained, a decree shall be entered which shall have the effect (1) to discharge the receiver and his surety from all liability to all persons; (2) to revest title to all assets withheld by the receiver in the old banking corporation and to vest such corporation with full authority to receive and deal with such property for purposes only of effective liquidation.

HISTORY: Codes, 1942, §§ 5258, 5259; Laws, 1938, Ex. ch. 52.

Editor’s Notes —

Section 81-1-57 provides that wherever the words “state comptroller” or “comptroller”, when referring to the office of state comptroller of banks, shall be construed to mean the commissioner of banking and consumer finance.

Section 81-1-117 abolished the office of state comptroller, and provided that the functions, duties and responsibilities would be assumed by the commissioner of banking and consumer finance.

Cross References —

Insolvency and preference under the Uniform Commercial Code, see §75-4-214.

State-chartered banks having and possessing the rights, powers, privileges, immunities, duties and obligations of a national bank having its principal place of business in this state, irrespective of any conflict with the provisions of this section, see §81-5-1(9).

Depositors’ liquidation, see §§81-9-43 et seq.

Priority of claims for payment against certain insolvent banks upon liquidation or upon execution of purchase of assets and assumption of liabilities, see §81-9-75.

Voluntary dissolution of credit unions, see §81-13-59.

Dissolution of solvent banks, see also §81-5-101.

RESEARCH REFERENCES

Am. Jur.

10 Am. Jur. 2d, Banks and Financial Institutions §§ 1117 et seq., 207-213.

§ 81-9-43. Procedure to obtain depositors’ liquidation.

Proceedings to accomplish depositor liquidation of banks shall be begun by the filing of a petition in the chancery court of the county in which such bank shall be domiciled within the ninety day period in which the state comptroller remains in charge of the closed bank. Each petition shall be signed by depositors owning sixty percent in amount of deposits not preferred and totally unsecured, and the allegations thereof shall be sworn to by at least one of the signers of the petition, either as true and correct upon personal knowledge, or upon information and belief. If any signer be a corporation the signature thereof by the president or vice-president shall be sufficient, and the signature of any partnership or similar firm by any member thereof shall be sufficient. The state comptroller shall be the only necessary party respondent to such petition. The petition may be heard by the chancellor in vacation or in term time, at such place in his district as he may direct, upon certificate of the chancery clerk that he has sent, at least five days before such hearing, by registered mail, to the respondent at the city of Jackson, Mississippi, a true copy of the petition, with time and place of hearing designated thereon. The cause in which such petition shall be filed shall be entitled “In the matter of the depositor liquidation of (name of bank proposed to be liquidated) by (naming here the liquidating corporation proposed to be formed).”

HISTORY: Codes, 1942, § 5262; Laws, 1934, ch. 146.

Editor’s Notes —

Section 81-1-117 abolished the office of state comptroller, and provided that the functions, duties and responsibilities would be assumed by the commissioner of banking and consumer finance.

Cross References —

Dissolution of solvent banks, see §§81-5-101,81-9-41.

State-chartered banks having and possessing the rights, powers, privileges, immunities, duties and obligations of a national bank having its principal place of business in this state, irrespective of any conflict with the provisions of this section, see §81-5-1(9).

Appointment of receiver, see §81-9-17.

Release of stockholders’ double liability, see §81-9-51.

RESEARCH REFERENCES

Am. Jur.

10 Am. Jur. 2d, Banks and Financial Institutions §§ 207-213, 1020, 1182-1184, 1197.

CJS.

9 C.J.S., Banks and Banking §§ 164 et seq.

§ 81-9-45. Petition and decree thereon.

If the petition shall be signed and sworn to as aforesaid, and shall pray that the liquidation of the bank shall be conducted by the depositors and that a liquidating corporation be formed for such purpose, the chancellor shall, by decree on such petition, create a liquidating corporation, not for pecuniary gain, and without capital or capital stock. The decree shall name five directors for the corporation who shall be natural persons chosen by the chancellor from among the signers of the petition, but such signers as may be named as directors in the petition shall be so named in the decree. The decree shall give the corporation a name, which shall include the words, “liquidating corporation,” preceded by the name of the bank to be liquidated. The municipality in which the bank to be liquidated is domiciled shall be the domicile of the corporation. The decree shall be recorded on the book of corporation charters in the office of the chancery clerk of the proper county, and need not be published.

HISTORY: Codes, 1942, § 5263; Laws, 1934, ch. 146.

Cross References —

State-chartered banks having and possessing the rights, powers, privileges, immunities, duties and obligations of a national bank having its principal place of business in this state, irrespective of any conflict with the provisions of this section, see §81-5-1(9).

General powers of liquidating corporation, see §81-9-49.

§ 81-9-47. Effect of decree.

The signing of the decree shall divest the state comptroller and the department of bank supervision of all title to the assets of the bank and of all control of the liquidation thereof, and the state comptroller and the department shall be relieved of future liability thereto, except for proper delivery of the assets of the corporation. The recording of a certified copy of the decree in the deed records of any county shall have the same effect as the recording of a deed to the assets.

HISTORY: Codes, 1942, § 5264; Laws, 1934, ch. 146.

Editor’s Notes —

Section 81-1-57 provides that wherever the words “state comptroller” or “comptroller”, when referring to the office of state comptroller of banks, shall be construed to mean the commissioner of banking and consumer finance.

Section 81-1-117 abolished the office of state comptroller, and provided that the functions, duties and responsibilities would be assumed by the commissioner of banking and consumer finance.

Cross References —

State-chartered banks having and possessing the rights, powers, privileges, immunities, duties and obligations of a national bank having its principal place of business in this state, irrespective of any conflict with the provisions of this section, see §81-5-1(9).

§ 81-9-49. General powers of liquidating corporation.

Liquidating corporations created under the authority of this chapter shall be bodies corporate and politic, with power to sue and be sued by their respective corporate names. No action shall be begun against any such corporation except in the county in which it is domiciled. The corporation shall have as its seal the seal of the bank which it is liquidating. Such corporation shall have generally the powers and responsibilities of receivers with respect to the assets and liabilities of all banks which they shall liquidate. Acts involving discretion shall be subject to approval of the chancery court, except as herein specifically provided.

HISTORY: Codes, 1942, § 5265; Laws, 1934, ch. 146.

Cross References —

State-chartered banks having and possessing the rights, powers, privileges, immunities, duties and obligations of a national bank having its principal place of business in this state, irrespective of any conflict with the provisions of this section, see §81-5-1(9).

§ 81-9-51. Double liability of certain stockholders released.

Such corporation shall have power to bring suits to enforce any liability of directors or officers of the bank, but the double liability of stockholders, as provided in Section 81-5-27, by the turning over of the liquidation by the depositors as herein provided, shall be released as to all stockholders of any such bank. However, no stockholder shall be refunded any sum of money which he may have actually paid in discharge of his double liability, nor shall the release of double liability provided by this section be construed to extend to any instance where a stockholder shall have executed a promissory note or other instrument of writing in settlement of such double liability. All double liabilities of stockholders, as referred to in this section, are canceled and released with respect to future liquidations.

HISTORY: Codes, 1942, § 5266; Laws, 1934, ch. 146.

Cross References —

State-chartered banks having and possessing the rights, powers, privileges, immunities, duties and obligations of a national bank having its principal place of business in this state, irrespective of any conflict with the provisions of this section, see §81-5-1(9).

Liability of stockholders generally, see §81-5-27.

RESEARCH REFERENCES

CJS.

9 C.J.S., Banks and Banking §§ 5-47 et seq.

§ 81-9-53. Bond of directors; compensation.

Each director shall make bond, conditioned to perform faithfully his duties as director, payable to the corporation, with such surety or sureties as the chancellor may approve, and in such sum as the chancellor may, from time to time, direct, but in no case less than $2,000.00 for any one director. Such bonds shall serve generally the same purposes and be of the same general effect as a receiver’s bond, and action upon such bonds may be brought by any party aggrieved. No action shall lie, however, against any director or upon any director’s bond because of the exercise of any power recited in Section 81-9-61, excepting only instances of actual abuse of discretion.

No director shall be entitled to compensation as such, but the chancellor, may, in his discretion, allow conservative compensation on a salary basis for designated period of time, in instances where an unreasonable amount of any director’s time shall be required for the faithful performance of his duties.

HISTORY: Codes, 1942, § 5267; Laws, 1934, ch. 146.

Cross References —

State-chartered banks having and possessing the rights, powers, privileges, immunities, duties and obligations of a national bank having its principal place of business in this state, irrespective of any conflict with the provisions of this section, see §81-5-1(9).

Receiver’s bond, see §81-9-21.

Prohibition against compensation for directors of credit unions, see §81-13-29.

RESEARCH REFERENCES

Am. Jur.

10 Am. Jur. 2d, Banks and Financial Institutions §§ 330 et seq.

CJS.

9 C.J.S., Banks and Banking § 119.

§ 81-9-55. Vacancies and removal of directors.

Vacancies among directors shall be filled by the chancellor on ex parte hearing in term time, or in vacation, but the choice of any four remaining directors shall be the choice of the chancellor, except for good cause shown. Removal of directors shall be in the discretion of the chancellor, in term time or in vacation, on petition of any party aggrieved, and upon such notice not less than five days as the chancellor may direct.

HISTORY: Codes, 1942, § 5268; Laws, 1934, ch. 146.

Cross References —

State-chartered banks having and possessing the rights, powers, privileges, immunities, duties and obligations of a national bank having its principal place of business in this state, irrespective of any conflict with the provisions of this section, see §81-5-1(9).

§ 81-9-57. Officers of the corporation.

The directors shall choose from among themselves a president and a vice-president of the corporation. They shall also employ a liquidator who shall be ex officio secretary-treasurer of the corporation, and who need not be a depositor in the bank being liquidated by the corporation. No officer, except the liquidator, shall be entitled to compensation as such. The liquidator shall furnish bond, payable to the corporation, in such amount and with such surety or sureties as may be approved by the directors, conditioned to perform his duties faithfully as liquidator, and action upon such bond may be brought by any party aggrieved.

HISTORY: Codes, 1942, § 5269; Laws, 1934, ch. 146.

Cross References —

State-chartered banks having and possessing the rights, powers, privileges, immunities, duties and obligations of a national bank having its principal place of business in this state, irrespective of any conflict with the provisions of this section, see §81-5-1(9).

§ 81-9-59. Compensation of liquidator and other employees.

The directors shall fix the compensation of the liquidator, may employ and fix the compensation of counsel for the corporation; and may employ and fix the compensation of such clerical and other employees as they may deem necessary or advisable to carry on the business of the corporation.

HISTORY: Codes, 1942, § 5270; Laws, 1934, ch. 146.

Cross References —

State-chartered banks having and possessing the rights, powers, privileges, immunities, duties and obligations of a national bank having its principal place of business in this state, irrespective of any conflict with the provisions of this section, see §81-5-1(9).

RESEARCH REFERENCES

CJS.

9 C.J.S., Banks and Banking §§ 144, 145.

§ 81-9-61. Exercise of discretion without approval of court.

By authority of order on the minutes signed by all five directors, the corporation may do and perform, without approval of court, the following, to-wit:

Employ and fix the compensations of the liquidator, counsel and other employees;

Lease premises to be occupied by the corporation as business quarters;

Borrow money, execute promissory notes, and pledge or mortgage the assets of the corporation;

Compromise or extend indebtedness due the bank being liquidated, and release and surrender securities and collaterals;

Compromise claims against the bank;

Sell any or all assets of the bank for cash or on other terms;

Barter or exchange any assets of the bank for other property;

Lease any property belonging to the bank;

Pay dividends to creditors or stockholders of the bank.

HISTORY: Codes, 1942, § 5271; Laws, 1934, ch. 146.

Cross References —

State-chartered banks having and possessing the rights, powers, privileges, immunities, duties and obligations of a national bank having its principal place of business in this state, irrespective of any conflict with the provisions of this section, see §81-5-1(9).

General powers of liquidating corporation, see §81-9-49.

JUDICIAL DECISIONS

1. In general.

All persons are charged with notice of the conditions under which settlements may be made under this statute, and in cases not involving the approval of the chancery court as to settlements of indebtedness due a bank being liquidated, this section must be complied with. Under this section [Code 1942, § 5271] the power of the liquidating agent to make a settlement is dependent upon the order of the directors spread on the minutes and, in the absence of such authority so entered on the minutes, signed by all five of the directors, a settlement could not be bindingly made without presenting the matter to the chancery court which created the liquidating corporation, and securing its approval of the settlement. Williams v. Peoples Bank Liquidating Corp., 184 Miss. 167, 185 So. 579, 1939 Miss. LEXIS 32 (Miss. 1939).

§ 81-9-63. Sale of assets to going bank.

By and with the approval of the chancellor and of the state comptroller any liquidating corporation may sell any portion or all of the assets of the bank being liquidated by such corporation to an active and operating bank, the purchase price to be in cash or on terms, or otherwise; or, the purchasing bank may be allowed to assume a percentage of the liabilities of the insolvent bank, with optional privilege to the creditors to receive cash or other property in settlement of their claims. Under this section chancellors shall have broad powers and discretion to approve plans which are for the best interests of creditors of closed banks taken as a whole.

HISTORY: Codes, 1942, § 5272; Laws, 1934, ch. 146.

Editor’s Notes —

Section 81-1-117 abolished the office of state comptroller, and provided that the functions, duties and responsibilities would be assumed by the commissioner of banking and consumer finance.

Cross References —

Application of territorial and numerical restrictions on establishment of branch banks to bank purchaser of insolvent bank, see §§81-7-7,81-7-8.

Applicability of time constraints for approval of certificate of incorporation to purchasers of insolvent institutions, see §81-3-13.

State-chartered banks having and possessing the rights, powers, privileges, immunities, duties and obligations of a national bank having its principal place of business in this state, irrespective of any conflict with the provisions of this section, see §81-5-1(9).

Authorization for multibank holding company to acquire assets of insolvent bank, see §81-7-19.

Sale of assets of insolvent bank by state comptroller, see §81-9-11.

Sale of assets of insolvent bank by receiver, see §81-9-27.

Priority of claims for payment against certain insolvent banks upon liquidation or upon execution of purchase of assets and assumption of liabilities, see §81-9-75.

§ 81-9-65. Corporation and directors may be restrained.

On petition of any party aggrieved, filed in the depositor liquidation cause, the liquidating corporation and its directors and officers may, as in other cases, be enjoined by the chancellor from actual abuse of discretion.

HISTORY: Codes, 1942, § 5273; Laws, 1934, ch. 146.

Cross References —

State-chartered banks having and possessing the rights, powers, privileges, immunities, duties and obligations of a national bank having its principal place of business in this state, irrespective of any conflict with the provisions of this section, see §81-5-1(9).

§ 81-9-67. Liquidating corporations may apply to court for directions.

Liquidating corporations shall have the power to apply in vacation to the chancellor for orders and directions concerning the liquidation, and this section shall be liberally construed in favor of speedy and economical liquidations.

HISTORY: Codes, 1942, § 5274; Laws, 1934, ch. 146.

Cross References —

State-chartered banks having and possessing the rights, powers, privileges, immunities, duties and obligations of a national bank having its principal place of business in this state, irrespective of any conflict with the provisions of this section, see §81-5-1(9).

§ 81-9-69. Records and inspection thereof.

Full and complete minutes shall be kept of all proceedings of the directors, and full and complete records and books of account shall be kept by the corporation. The directors shall have discretion to grant to parties of interest reasonable inspection and permission to take copies of all such minutes, records and books, and such reasonable inspection and right to take copies may be ordered by the chancellor in term time or vacation, upon reasonable notice to the corporation of time and place of a hearing on any petition seeking such inspection and right to take copies.

HISTORY: Codes, 1942, § 5275; Laws, 1934, ch. 146.

Cross References —

State-chartered banks having and possessing the rights, powers, privileges, immunities, duties and obligations of a national bank having its principal place of business in this state, irrespective of any conflict with the provisions of this section, see §81-5-1(9).

§ 81-9-71. Final report and dissolution of the corporation.

  1. When the affairs of the bank shall be completely liquidated, or liquidated in so far as it is practical for the directors so to do, they shall make, or cause to be made, to the chancery court of the county in which the corporation is domiciled a final report, the correctness of which shall be sworn to by at least one director of the corporation, either upon personal knowledge or upon information and belief, after a careful examination of the report. Such report shall include the gross amount of collections and the total amount of all disbursements to common creditors, depositors, or other claimants, and the amount of all dividends on hand belonging to common creditors, stockholders, or others, which for any reason have not been distributed and they shall also file as part of such report the following books and records of said corporation, to wit: The journal and the general ledger kept by the corporation and the minute book of the corporation and also the ledger showing the amount due each depositor and other creditors at the time the corporation was created and upon which dividends were paid, or such other books, set of books, or records used by or that were set up by said corporation which reveal the above enumerated facts, and if available the audit of the department of bank supervision showing all assets and liabilities of the bank in liquidation.
  2. The directors shall file a petition for their discharge and a dissolution of the corporation with their report, and the final report together with said petition shall remain on file subject to the inspection of any person interested for the time and in the manner hereinafter provided. Upon the filing of said petition and report in the chancery clerk’s office in the county in which the corporation is domiciled, the clerk shall immediately notify the chancellor by registered mail of the filing of said petition and report whereupon the chancellor by order entered upon the minutes of the court shall direct the clerk of the court to have a notice published in some newspaper in the county wherein the corporation is domiciled, or if none is so published, then in some newspaper having a general circulation therein, which notice shall state that the liquidation of the bank has been completed and that the final report of the directors and petition for their discharge and dissolution of the corporation are on file; that unless written objection is filed with the clerk of the court within forty-five (45) days from the date of the first publication of the notice, all persons shall be forever precluded from filing any claim against the bank, corporation, or the directors and officers, and from questioning any of the acts of the directors or officers except for fraud. Said notice shall be published once a week for four successive weeks.
  3. Should the directors have dividends on hand belonging to the depositors, creditors, stockholders or others which have not been distributed, the notice hereinabove referred to shall specify this fact, and shall give the name of each party who is entitled to such dividend, but it shall not be necessary to give the amount thereof. The notice shall direct that said parties call for said dividends prior to the day set for the filing of written objections, otherwise their claim thereto shall be forfeited. On the day of the final hearing if there are dividends on hand which have not been called for, the directors shall not be discharged, or the corporation dissolved, but the chancellor by order entered on the minutes of the court shall direct the directors to make distribution of such unclaimed dividends to the known depositors and creditors pro rata; provided, that in the event the known depositors and creditors have already been paid in full, such unclaimed dividends shall be distributed to the stockholders pro rata.
  4. If on the day of the final hearing there are no dividends on hand for distribution and there have been no objections filed to the discharge of the directors and the dissolution of the corporation, the chancellor shall enter an order granting the discharge of the directors and a dissolution of the corporation. If there are dividends on hand, the chancellor shall direct their distribution as above provided. Should written objections be filed to the discharge of the directors and the dissolution of the corporation within the time above provided, the chancellor shall set the matter for hearing in vacation or term time as he may deem proper, and the same shall be proceeded with as any other action in chancery. In no event shall anyone be permitted to file objections after the time specified in the notice above provided for.
  5. Should there be any dividends not called for at the expiration of forty-five (45) days from the date the chancellor orders the distribution as provided in subsection (3) hereof, the directors shall pay the same to the state comptroller who shall hold the same for parties entitled thereto for a period of one year from the date of the order of the chancellor directing the distribution. If said funds are not called for before the expiration of said period, the owners shall lose all right thereto, and the state comptroller shall pay the same, or so much thereof as remains in his hands, into the state treasury. Upon the directors making the distribution provided for in subsection (3) hereof, either by paying said funds to the parties entitled thereto, or by paying the same or a part thereof to the state comptroller, they shall report such fact to the chancellor, who shall enter his decree granting the discharge of the directors and the dissolution of the corporation, and the court or chancellor in vacation, shall have the power and authority during the course of proceedings under this section to make all such orders as he may deem right and proper to fully carry out the purposes of this section.
  6. When the final decree of the discharge and dissolution is entered by the court or chancellor in vacation, it shall be the duty of the clerk to immediately turn over to the state comptroller all the books of the corporation which have been filed with said cause and take a receipt from said comptroller therefor and file said receipt with the papers in said cause. It shall be the duty of the state comptroller to receive said books, and receipt therefor and to file and preserve the same in his office as other bank records.

HISTORY: Codes, 1942, § 5276; Laws, 1934, ch. 146; Laws, 1942, ch. 264.

Editor’s Notes —

Section 81-1-57 provides that wherever the words “state comptroller” or “comptroller”, when referring to the office of state comptroller of banks, shall be construed to mean the commissioner of banking and consumer finance.

Section 81-1-117 abolished the office of state comptroller, and provided that the functions, duties and responsibilities would be assumed by the commissioner of banking and consumer finance.

Cross References —

Application of territorial and numerical restrictions on establishment of branch banks to bank purchaser of insolvent bank, see §§81-7-7 and81-7-8.

State-chartered banks having and possessing the rights, powers, privileges, immunities, duties and obligations of a national bank having its principal place of business in this state, irrespective of any conflict with the provisions of this section, see §81-5-1(9).

Reports by receiver, see §81-9-37.

§ 81-9-73. When Federal Deposit Insurance Corporation or any similar corporation to be appointed receiver.

Whenever the state comptroller shall apply for appointment of a receiver under the provisions of this chapter, and the deposits of such bank shall be to any extent insured by the Federal Deposit Insurance Corporation, or any similar corporation organized under the laws of the United States, and it shall appear that said corporation will accept the receivership of said bank, then it shall be mandatory upon the chancellor to appoint said Federal Deposit Insurance Corporation, or any similar corporation organized under the laws of the United States, receiver of such bank. In such event, the receivership may be conducted by the Federal Deposit Insurance Corporation or any similar corporation organized under the laws of the United States, at its option, in the proper chancery court of this state and under the provisions of this chapter applicable to other bank receivers. In all instances in which the Federal Deposit Insurance Corporation, or any similar corporation organized under the laws of the United States, shall pay any portion of the deposits of a bank in this state, it shall be fully subrogated to the position of depositors in so far as such payments are made and as equity and justice may appear.

HISTORY: Codes, 1942, § 5277; Laws, 1934, ch. 146.

Editor’s Notes —

Section 81-1-57 provides that wherever the words “state comptroller” or “comptroller”, when referring to the office of state comptroller of banks, shall be construed to mean the commissioner of banking and consumer finance.

Section 81-1-117 abolished the office of state comptroller, and provided that the functions, duties and responsibilities would be assumed by the commissioner of banking and consumer finance.

Cross References —

Application of territorial and numerical restrictions on establishment of branch banks to bank purchaser of insolvent bank, see §§81-7-7 and81-7-8.

State-chartered banks having and possessing the rights, powers, privileges, immunities, duties and obligations of a national bank having its principal place of business in this state, irrespective of any conflict with the provisions of this section, see §81-5-1(9).

§ 81-9-75. Priority of claims for payment against certain insolvent banks upon liquidation or upon execution of purchase of assets and assumption of liabilities.

On liquidation of a state or private bank or on execution of a purchase of certain assets and assumption of certain liabilities of a state bank under this chapter, claims for payment against that state bank have the following priority:

Obligations incurred by the Banking Commissioner, fees and assessments due to the Department of Banking and Consumer Finance, and expenses of liquidation, including any taxes due, all of which may be covered by a proper reserve of funds;

Claims of depositors having an approved claim against the general liquidating account of the bank;

Claims of salaried employees of the bank for salaries that are earned but unpaid at the time the bank is closed or purchased under this chapter;

Claims of general creditors having an approved claim against the general liquidating account of the bank;

Claims otherwise proper that were not filed within the time prescribed by this code;

Approved claims of subordinated creditors; and

Claims of stockholders of the bank.

HISTORY: Laws, 1994, ch. 305, § 1, eff from and after July 1, 1994.

Cross References —

Liquidation of insolvent banks, see §81-9-29.

Proof of claims, see §81-9-31.

Liquidation of solvent banks, see §81-9-41.

Sale of assets to going bank, see §81-9-63.

RESEARCH REFERENCES

Am. Jur.

10 Am. Jur. 2d, Banks and Financial Institutions §§ 1117 et seq.

CJS.

9 C.J.S., Banks and Banking §§ 188, 197-203, 416.

Chapter 11. Savings and Loan Associations [Repealed]

Editor’s Notes —

Special Note to Chapter

Chapter 445, Laws of 1977, repealed sections 81-11-1 through 81-11-89 of Chapter 11 of Title 81, and created new provisions governing savings associations. By the terms of section 67 of Chapter 445, Laws of 1977, that chapter became effective and was in force from and after July 1, 1977. The new provisions created by Chapter 445, Laws of 1977, governing savings associations, have been codified as new Chapter 12 of Title 81. See infra. The following table shows where matter similar to that appearing in the repealed sections of Chapter 11 may be found in new Chapter 12. Repealed New 81-11-3 81-12-3 81-11-5 81-12-77 81-11-7 81-12-25 81-11-9 81-12-25, 81-12-29 81-11-11 81-12-27 81-11-13 81-12-33 81-11-15 81-12-93 81-11-17 81-12-41 81-11-19 81-12-5 81-11-21 81-12-7, 81-12-9 81-11-29 81-12-79, 81-12-177 81-11-31 81-12-155 thru 81-12-165 81-11-35 81-12-113 81-11-37 81-12-127 81-11-39 81-12-151, 81-12-153 81-11-41 81-12-181, 81-12-183, 81-12-185 81-11-43 81-12-53 thru 81-12-63 81-11-45 81-12-69 81-11-47 81-12-49 81-11-49 81-12-187, 81-12-189 81-11-51 81-12-193 81-11-57 81-12-195 81-11-59 81-12-135 81-11-61 81-12-137 81-11-63 81-12-141 81-11-65 81-12-139 81-11-67 81-12-133 81-11-69 81-12-147 81-11-71 81-12-143 81-11-73 81-12-173 81-11-75 81-12-169 81-11-79 81-12-191 81-11-81 81-12-85

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§§ 81-11-1 through 81-11-89. Repealed.

Repealed by Laws, 1977, ch. 445, § 66, eff from and after July 1, 1977.

§81-11-1. [Codes, 1942, § 5288-01; Laws, 1962, ch. 228, § 1]

§81-11-3. [Codes, 1942, § 5288-02; Laws, 1962, ch. 228, § 2; 1968, ch. 272, § 1]

§81-11-5. [Codes, 1942, § 5288-03; Laws, 1962, ch. 228, § 3; 1968, ch. 272, § 2; 1976, 1st Ex Sess, ch. 4, § 3]

§81-11-7. [Codes, 1942, § 5288-04; Laws, 1962, ch. 228, § 4(a)]

§81-11-9. [Codes, 1942, § 5288-05; Laws, 1962, ch. 228, § 4(b)]

§81-11-11. [Codes, 1942, § 5288-06; Laws, 1962, ch. 228, § 5]

§81-11-13. [Codes, 1942, § 5288-07; Laws, 1962, ch. 228, § 6(a)]

§81-11-15. [Codes, 1942, § 5288-08; Laws, 1962, ch. 228, § 6(b)]

§81-11-17. [Codes, 1942, § 5288-09; Laws, 1962, ch. 228, § 6(c)]

§81-11-19. [Codes, 1942, § 5288-10; Laws, 1962, ch. 228, § 6(d)]

§81-11-21. [Codes, 1942, § 5288-11; Laws, 1962, ch. 228, § 6(e); 1971, ch. 405, § 1]

§81-11-23. [Codes, 1942, § 5288-12; Laws, 1962, ch. 228, § 6(f-k)]

§81-11-25. [Codes, 1942, § 5288-13; Laws, 1962, ch. 228, § 7]

§81-11-27. [Codes, 1942, § 5288-13.5; Laws, 1964, ch. 490]

§81-11-29. [Codes, 1942, § 5288-14; Laws, 1962, ch. 228, § 8]

§81-11-31. [Codes, 1942, § 5288-15; Laws, 1962, ch. 228, § 9; 1968, ch. 272, § 3; 1974, ch. 416]

§81-11-33. [Codes, 1942, § 5288-16; Laws, 1962, ch. 228, § 10; 1971, ch. 337, § 1]

§81-11-35. [Codes, 1942, § 5288-17; Laws, 1962, ch. 228, § 11; 1971, ch. 404, § 1]

§81-11-37. [Codes, 1942, § 5288-18; Laws, 1962, ch. 228, § 12]

§81-11-39. [Codes, 1942, § 5288-19; Laws, 1962, ch. 228, § 13]

§81-11-41. [Codes, 1942, § 5288-20; Laws, 1962, ch. 228, § 14]

§81-11-43. [Codes, 1942, § 5288-21; Laws, 1962, ch. 228, § 15]

§81-11-45. [Codes, 1942, § 5288-22; Laws, 1962, ch. 228, § 16]

§81-11-47. [Codes, 1942, § 5288-23; Laws, 1962, ch. 228, § 17; 1973, ch. 363, § 1]

§81-11-49. [Codes, 1942, § 5288-24; Laws, 1962, ch. 228, § 18]

§81-11-51. [Codes, 1942, § 5288-25; Laws, 1962, ch. 228, § 19; 1968, ch. 272, § 4; 1972, ch. 404, § 1]

§81-11-53. [Codes, 1942, § 5288-26; Laws, 1962, ch. 228, § 20; 1972, ch. 404, § 2]

§81-11-55. [Codes, 1942, § 5288-27; Laws, 1962, ch. 228, § 21]

§81-11-57. [Codes, 1942, § 5288-28; Laws, 1962, ch. 228, § 22(a)]

§81-11-59. [Codes, 1942, § 5288-29; Laws, 1962, ch. 228, § 22(b)]

§81-11-61. [Codes, 1942, § 5288-30; Laws, 1962, ch. 228, § 22(c)]

§81-11-63. [Codes, 1942, § 5288-31; Laws, 1962, ch. 228, § 22(d)]

§81-11-65. [Codes, 1942, § 5288-32; Laws, 1962, ch. 228, § 22(e)]

§81-11-67. [Codes, 1942, § 5288-33; Laws, 1962, ch. 228, § 22(f)]

§81-11-69. [Codes, 1942, § 5288-34; Laws, 1962, ch. 228, § 22(g)]

§81-11-71. [Codes, 1942, § 5288-35; Laws, 1962, ch. 228, § 22(h); Laws, 1971, ch. 415, § 1]

§81-11-73. [Codes, 1942, § 5288-36; Laws, 1962, ch. 228, § 22(i)]

§81-11-75. [Codes, 1942, § 5288-37; Laws, 1962, ch. 228, § 22(j)]

§81-11-77. [Codes, 1942, § 5288-38; Laws, 1962, ch. 228, § 23]

§81-11-79. [Codes, 1942, § 5288-39; Laws, 1962, ch. 228, § 24]

§81-11-81. [Codes, 1942, § 5288-40; Laws, 1962, ch. 228, § 25; Laws, 1976, 1st Ex. Sess., ch. 4, § 1]

§81-11-83. [Codes, 1942, § 5288-41; Laws, 1962, ch. 228, § 26]

§81-11-85. [Codes, 1942, § 5288-12; Laws, 1962, ch. 228, § 27]

§81-11-87. [Codes, 1942, § 5288-13; Laws, 1962, ch. 228, § 28]

§81-11-89. [Codes, 1942, § 5288-14; Laws, 1962, ch. 228, § 29]

§§ 81-11-91 through 81-11-95. Repealed.

Repealed by Laws, 1997, ch. 542, § 12-14, eff from and after passage (approved April 10, 1997).

§81-11-91. [Laws, 1976, 1st Ex Sess, ch. 4, § 2; Laws 1977, ch. 301]

§81-11-93. [Laws, 1976, 1st Ex Sess, ch. 4, § 5]

§81-11-95. [Laws, 1976, 1st Ex Sess, ch. 4, § 4]

Editor’s Notes —

Former §81-11-91 provided for the appointment, powers and duties of a conservator for savings associations not having deposits insured by a federal or state agency.

Former §81-11-93 provided restrictions on transactions in shares and deposits of savings associations under the jurisdiction of a conservator.

Former §81-11-95 defined terms utilized in the provisions of law governing the appointment of a conservator for savings associations not having deposits insured by a federal or state agency.

Chapter 12. Savings Associations Law

§ 81-12-1. Citation of chapter.

This chapter shall be cited as the “Savings Association Law.”

HISTORY: Laws, 1977, ch. 445, § 1; reenacted, Laws, 1982, ch. 301, § 1; Laws, 1990 Ex Sess, ch. 52, § 1; Laws, 1993, ch. 441, § 1; Laws, 1994, ch. 622, § 37; reenacted without change, Laws, 1997, ch. 496, § 1; reenacted without change, Laws, 2001, ch. 488, § 1, eff from and after July 1, 2001.

Amendment Notes —

The 2001 amendment reenacted the section without change.

Cross References —

State privilege tax on savings associations, see §27-17-9.

Savings Bank Law, see §§81-14-1 et seq.

Companies authorized to act as fiduciaries, see §81-27-1.101.

RESEARCH REFERENCES

ALR.

Bank’s liability for breach of implied contract of good faith and fair dealing. 55 A.L.R.4th 1026.

Am. Jur.

13 Am. Jur. 2d, Building and Loan Associations §§ 4-7, 18.

CJS.

12 C.J.S., Building and Loan Associations, Savings and Loan Associations, and Credit Unions §§ 1 et seq.

§ 81-12-3. Definitions.

When used in this chapter, the following words and phrases shall have the following meanings, except to the extent that any such word or phrase specifically is qualified by its context:

“Association” means a savings association or savings and loan association subject to provisions of this chapter.

“Board” means the State Board of Banking Review.

“Capital stock association” means an association organized pursuant to Sections 81-12-37 and 81-12-39.

“Commissioner” means the Commissioner of Banking and Consumer Finance.

“Community” means a centralized area or locality in which the inhabitants have common residential, social or business interests. The term is not restricted to a municipal corporation or other political subdivision; a community need not be limited by lines and boundaries. A city, town or other governmental unit, either incorporated or unincorporated, may constitute one (1) community; a large, populous area under one or more forms of government may comprise one (1) or several communities.

“Department” means the Department of Banking and Consumer Finance.

“Earnings” means that part of the “sources available for payment of earnings” as defined herein which is declared payable on savings accounts from time to time by the board of directors. Earnings also may be referred to as “interest.”

“Financial institution” means a thrift institution, commercial bank or trust company.

“Impaired condition” means a condition in which the assets of an association in the aggregate do not have a fair value equal to the aggregate amount of liabilities of the association to its creditors, including its members and all other persons, or a condition in which the association shall be unable to pay when due current withdrawal requests by its members or depositors.

“Insured association” means an association, the savings accounts of which are insured wholly or in part in accordance with the provisions of this chapter.

“Liquid assets” means cash on hand, cash on deposit in federal home loan banks, in state banks performing similar reserve functions, or in commercial banks insured by the Federal Deposit Insurance Corporation, which is not pledged as security for indebtedness; except that any deposits in a bank under the control or in the possession of any supervisory authority shall not be considered as liquid assets; loans immediately available or federal funds on a day-to-day basis to a bank insured by the Federal Deposit Insurance Corporation; and direct obligations of, or obligations which are fully guaranteed as to principal and interest by, the United States or agencies or instrumentalities thereof or this state.

“Member” means a person holding a savings account of a mutual association, and a person borrowing from or assuming or obligated upon a loan or interest therein held by an association, or purchasing property securing a loan or interest therein held by an association, and any other person obligated to an association. A joint and survivorship relationship, whether of savers or borrowers, constitutes a single membership. This definition shall not apply to associations organized under Sections 81-12-37 and 81-12-39 as a capital stock association.

“Mutual association” means an association composed of members which is not a capital stock association as authorized by this chapter.

“Net income” means gross revenues for an accounting period less all expenses paid or incurred, taxes and losses sustained as shall not have been charged to reserves pursuant to the provisions of this chapter.

“Net worth” means the sum of all reserve accounts (except specific or valuation reserves), retained earnings, capital stock, any other nonwithdrawable accounts of an association, and the principal amount of any subordinated debt securities to the extent authorized by the commissioner.

“One borrower” means: (i) any person or entity which is or which, upon the making of a loan, will become obligor on a real estate loan; (ii) nominees of such obligor; (iii) all persons, trusts, partnerships, syndicates and corporations of which such obligor is a nominee or a beneficiary, partner, member or record or beneficial stockholder owning ten percent (10%) or more of the capital stock; and (iv) if such obligor is a trust, partnership, syndicate or corporation, all trusts, partnerships, syndicates and corporations of which any beneficiary, partner, member or record or beneficial stockholder owning ten percent (10%) or more of the capital stock, is also a beneficiary, partner, member or record or beneficial stockholder owning ten percent (10%) or more of the capital stock of such obligor. A guarantor or endorser shall be considered an obligor.

“Person” means any natural or artificial being, including any legal entity.

“Primary lending area” means this state and any county (or parish) of another state of which the county seat is located not more than seventy-five (75) air miles from the home or a branch office of an association.

“Real estate loan” means any loan or other obligation secured by a first lien on real estate in any state held in fee or in a leasehold or subleasehold extending or renewable automatically or at the option of the holder (or at the option of the association) for a period of at least ten (10) years beyond the maturity or date scheduled for a final principal payment of such loan or obligation, or any transaction out of which a first lien or claim is created against such real estate, including, inter alia, the purchase of such real estate in fee by an association and the concurrent or immediate sale thereof on installment contract.

“Savings account” means that part of the savings liability of the association which is credited to the account of the holder thereof. A savings account also may be referred to as a deposit.

“Savings institution” means either an association or a savings bank.

“Savings liability” means the aggregate amount of savings accounts of members and depositors, including earnings credited to such accounts, less redemptions and withdrawals.

“Service organization” means an organization, substantially all the activities of which consist of originating, purchasing, selling and servicing loans upon real estate and participating interests therein, or clerical, bookkeeping, accounting, statistical or similar functions performed primarily for associations, and such other activities as the commissioner, by regulation, may approve, which are directly related to real estate development and the servicing of real estate loans.

“Sources available for payment of earnings” means net income for an accounting period less amounts transferred to reserves as provided in or permitted by this chapter, plus any balance of undivided profits from preceding accounting periods, or from surplus.

“Thrift institution” means a savings bank, bank for savings, a homestead association, a savings and loan association, a building and loan association, a federal savings association, a federal savings and loan association, and a supervised thrift and residential financing institution of a substantially similar nature, but shall not include a banking association organized under the laws of the United States or a bank organized under the laws of this state or any other state.

“Withdrawal value” means the amount credited to a savings account of a member, less lawful deductions therefrom, as contained in the records of the association.

HISTORY: Laws, 1977, ch. 445, § 2; reenacted, Laws, 1982, ch. 301, § 2; Laws, 1990 Ex Sess, ch. 52, § 2; Laws, 1992, ch. 489, § 106; Laws, 1993, ch. 441, § 2; reenacted and amended, Laws, 1994, ch. 622, § 38; reenacted without change, Laws, 1997, ch. 496, § 2; reenacted without change, Laws, 2001, ch. 488, § 2, eff from and after July 1, 2001.

Amendment Notes —

The 2001 amendment reenacted the section without change.

Cross References —

Multistate, state and limited liability trust institutions, see §81-27-1.001 et seq.

JUDICIAL DECISIONS

1.-10. [Reserved for future use.]

11. Under former §81-11-3.

1.-10. [Reserved for future use.]

11. Under former § 81-11-3.

The placing of a savings and loan association under the savings and loan law did not in any way change or impair its corporate powers or alter its characteristics as a stock company. Hamblett v. Board of Sav. & Loan Assos., 472 F. Supp. 158, 1979 U.S. Dist. LEXIS 14100 (N.D. Miss. 1979).

RESEARCH REFERENCES

Am. Jur.

13 Am. Jur. 2d, Building and Loan Associations § 4.

CJS.

12 C.J.S., Building and Loan Associations, Savings and Loan Associations, and Credit Unions § 2.

§ 81-12-4. Private corporation laws; application to savings and loan associations.

All the provisions of law relating to private corporations operating in this state which are not inconsistent with this chapter, or with the proper business of depository institutions, shall be applicable to all savings and loan associations.

HISTORY: Laws, 1998, ch. 392, § 2; reenacted without change, Laws, 2001, ch. 488, § 3, eff from and after July 1, 2001.

Amendment Notes —

The 2001 amendment reenacted the section without change.

§ 81-12-5. Repealed.

Repealed by Laws of 1994, ch. 622, § 162, eff from and after July 1, 1994.

[Laws, 1977, ch. 445; Laws, 1980, ch. 560, § 29; reenacted, Laws, 1982, ch. 301, § 3; 1990 Ex Sess, ch. 52, § 3; Laws, 1992, ch. 489, § 107; Laws, 1993, ch. 441, § 3]

Editor’s Notes —

Former §81-12-5 was entitled: Savings Institution Board; composition, qualification and term of members; compensation.

§ 81-12-6. Department of Savings Institutions and Savings Institution Board abolished; transfer of powers, duties, etc. to other agencies.

The Department of Savings Institutions and the Savings Institution Board are abolished, and all of the powers, duties, property, contractual rights and obligations and unexpended funds of that department and board shall be transferred to the Department of Banking and Consumer Finance, Commissioner of Banking and Consumer Finance and State Board of Banking Review as provided in this chapter.

HISTORY: Laws, 1994, ch. 622, § 1; reenacted without change, Laws, 1997, ch. 496, § 3; reenacted without change, Laws, 2001, ch. 488, § 4, eff from and after July 1, 2001.

Amendment Notes —

The 2001 amendment reenacted the section without change.

§ 81-12-7. Rights, powers, privileges and duties of board.

The commissioner shall have such rights, powers and privileges and shall be subject to such duties as are provided by this chapter, and shall make such other provisions for the orderly conduct of the business of the department under this chapter as he deems necessary. The commissioner shall have the authority and duty to make, after notice and hearing, such reasonable rules, regulations and orders as required by this chapter and as may be necessary from time to time to administer and enforce this chapter. The commissioner shall give at least thirty (30) days’ notice of any proposed rule or regulation by publication not less than one (1) time in a newspaper having statewide circulation and, in addition, shall give such notice of the proposed rule or regulation by United States mail, postage prepaid, to each thrift institution in this state and to such others as he deems necessary or advisable and shall file such notice in his office. Any savings institution may propose rules or regulations for consideration by the commissioner. The commissioner shall maintain in his office permanent records of his hearings and decisions. Notice of the adoption of any rule or regulation shall be sent by United States mail, postage prepaid, to each thrift institution within ten (10) days of its adoption.

HISTORY: Laws, 1977, ch. 445, § 3 (4); reenacted, Laws, 1982, ch. 301, § 4; Laws, 1990 Ex Sess, ch. 52, § 4; Laws, 1992, ch. 489, § 108; Laws, 1993, ch. 441, § 4; reenacted and amended, Laws, 1994, ch. 622, § 39; reenacted without change, Laws, 1997, ch. 496, § 4; reenacted without change, Laws, 2001, ch. 488, § 5, eff from and after July 1, 2001.

Amendment Notes —

The 2001 amendment reenacted the section without change.

Cross References —

Regulation of advertising, see §81-12-201.

JUDICIAL DECISIONS

1.-10. [Reserved for future use.]

11. Under former §81-11-23.

1.-10. [Reserved for future use.]

11. Under former § 81-11-23.

In granting or denying the right to establish a savings and loan association or a branch office, the board exercises a licensing power which is essentially a legislative function, so that the scope of judicial review in such cases is to determine whether the order granting or denying the license is supported by substantial evidence, is arbitrary or capricious, is beyond the board’s power, or violates some constitutional or statutory right of an interested party. Bankers Trust Sav. & Loan Asso. v. Bank of Winona, 243 So. 2d 415, 1971 Miss. LEXIS 1513 (Miss. 1971).

A state chartered savings and loan association, by substantial compliance with the provisions of the former Code 1942, § 5310, obtained a charter amendment, which became effective prior to the effective date of Code 1942, §§ 5288-01 et seq., authorizing it to move its principal office or place of business from North Mississippi Sav. & Loan Asso. v. Confederate States Sav. & Loan Asso., 250 Miss. 463, 166 So. 2d 119, 1964 Miss. LEXIS 475 (Miss. 1964).

The right given to a state chartered savings and loan association by Code 1942, § 5319, prior to the 1962 amendment, to choose or elect to maintain an office in the county of its domicil was one which the Board of Savings and Loan Associations could not impair or modify in a proceeding to prevent the savings and loan association from changing the location of its home office from one city to another within the state. North Mississippi Sav. & Loan Asso. v. Confederate States Sav. & Loan Asso., 250 Miss. 463, 166 So. 2d 119, 1964 Miss. LEXIS 475 (Miss. 1964).

Since the rights vested in a state chartered savings and loan association by virtue of its charter amendment, changing its domicil from Columbus to Oxford, including the right to establish and maintain an office in Oxford, were rights created prior to the effective date of Code 1942, §§ 5288-01 et seq., the Board of Savings and Loan Associations could not precipitately annul or modify such rights in view of Code 1942, § North Mississippi Sav. & Loan Asso. v. Confederate States Sav. & Loan Asso., 250 Miss. 463, 166 So. 2d 119, 1964 Miss. LEXIS 475 (Miss. 1964).

A savings and loan association seeking to prevent another savings and loan association from changing its home office from one city to another within the state could not, in that proceeding, attack the validity or legality of the stockholders’ meeting at which the charter amendment, authorizing the other savings and loan association to make the change of location, was approved by its stockholders. North Mississippi Sav. & Loan Asso. v. Confederate States Sav. & Loan Asso., 250 Miss. 463, 166 So. 2d 119, 1964 Miss. LEXIS 475 (Miss. 1964).

§ 81-12-9. Determinations of commissioner final; judicial review.

The determination by the commissioner upon any matter decided by him shall be final, subject to review by the courts as provided herein.

HISTORY: Laws, 1977, ch. 445, § 3 (5); reenacted, Laws, 1982, ch. 301, § 5; Laws, 1990 Ex Sess, ch. 52, § 5; Laws, 1993, ch. 441, § 5; reenacted and amended, Laws, 1994, ch. 622, § 40; reenacted without change, Laws, 1997, ch. 496, § 5; reenacted without change, Laws, 2001, ch. 488, § 6, eff from and after July 1, 2001.

Amendment Notes —

The 2001 amendment reenacted the section without change.

Cross References —

Appeal of order temporarily removing officer or director, see §81-12-24.

§ 81-12-11. Duties of department.

The department is charged with the execution of all laws relating to institutions carrying on a savings and loan business in this state.

HISTORY: Laws, 1977, ch. 445, § 4 (1, 2); reenacted, 1982, ch. 301, § 6; Laws, 1983, ch. 536, § 7; Laws, 1990 Ex Sess, ch. 52, § 6; Laws, 1992, ch. 489, § 109; Laws, 1993, ch. 441, § 6; reenacted and amended, Laws, 1994, ch. 622, § 41; reenacted without change, Laws, 1997, ch. 496, § 6; reenacted without change, Laws, 2001, ch. 488, § 7, eff from and after July 1, 2001.

Amendment Notes —

The 2001 amendment reenacted the section without change.

§§ 81-12-13 and 81-12-15. Repealed.

Repealed by Laws, 1994, ch. 622, § 162, eff from and after July 1, 1994.

§81-12-13. [Laws, 1977, ch. 445, § 4 (3, 4); 1982, chs. 301, § 7, 331, § 1; 1990 Ex Sess, ch. 52, § 7; 1992, ch. 489, § 110; 1993, ch. 441, § 7]

§81-12-15. [Laws, 1977, ch. 445, § 4 (5); reenacted, 1982, ch. 301, § 8; 1990 Ex Sess, ch. 52, § 8; 1992, ch. 489, § 111; 1993, ch. 441, § 8]

Editor’s Notes —

Former §81-12-13 was entitled: Examiners; bonding requirements of commissioner, assistant commissioner and examiners.

Former §81-12-15 was entitled: Appointment of secretary, other employees and assistant commissioner.

§ 81-12-17. Interests in savings institutions prohibited; confidentiality of information.

  1. The commissioner, deputy commissioner and examiners shall not be interested in a savings institution, directly or indirectly, either as creditor (except that each may be a savings account holder and receive earnings thereon), director, officer, employee, borrower (except that each may be a borrower as to a single home in which he actually resides or has resided), trustee or attorney, nor shall any one (1) of them receive, directly or indirectly, any payment, compensation or gratuity from any savings institution.
  2. The commissioner, examiners, all employees of the department and members of the board shall not divulge any information acquired by them in the discharge of their duties as prescribed by this chapter, except insofar as the same may be rendered necessary by law or under order of court; however, the commissioner may furnish information as to the condition of any savings institution to the appropriate federal regulatory authority, any federal home loan bank, the board, or the board of directors of the affected savings institution, and the commissioner may provide to members of the public the information authorized under Section 81-12-178 without being in violation of this subsection.

HISTORY: Laws, 1977, ch. 445, § 4 (6-8); reenacted, 1982, ch. 301, § 9; Laws, 1990 Ex Sess, ch. 52, § 9; Laws, 1992, ch. 489, § 112; reenacted and amended, 1993, ch. 441, § 9; Laws, 1994, ch. 622, § 42; reenacted without change, Laws, 1997, ch. 496, § 7; reenacted without change, Laws, 2001, ch. 488, § 8, eff from and after July 1, 2001.

Amendment Notes —

The 2001 amendment reenacted the section without change.

§ 81-12-19. Repealed.

Repealed by Laws, 1994, ch. 622, § 162, eff from and after July 1, 1994.

[Laws, 1977, ch. 445, § 4 (9); reenacted, 1982, ch. 301, § 10; 1990 Ex Sess, ch. 52, § 10; 1992, ch. 489, § 113; 1993, ch. 441, § 10]

Editor’s Notes —

Former §81-12-19 was entitled: Seal of commissioner.

§ 81-12-21. Transfer of books and records; continuation of actions.

  1. Within sixty (60) days after July 1, 1977, the funds, books, records, documents, equipment, and supplies of every such office and officer created or appointed by Chapter 11, Title 81, Mississippi Code of 1972, shall be transferred, pursuant to orders of the Governor, to the office of the commissioner.
  2. All actions or proceedings heretofore instituted by any officer or officers charged with the supervision of such associations other than actions or proceedings by the conservator appointed pursuant to Section 81-11-91, shall be continued in the name of the commissioner in such manner as he may direct.

HISTORY: Laws, 1977, ch. 445, § 4 (10,11); reenacted, 1982, ch. 301, § 11; Laws, 1990 Ex Sess, ch. 52, § 11; Laws, 1993, ch. 441, § 11; Laws, 1994, ch. 622, § 43; reenacted without change, Laws, 1997, ch. 496, § 8; reenacted without change, Laws, 2001, ch. 488, § 9, eff from and after July 1, 2001.

Editor’s Notes —

Section 81-11-91 referred to in (2) was repealed by Laws, 1997, ch. 542, § 12, eff from and after passage (approved April 10, 1997).

Amendment Notes —

The 2001 amendment reenacted the section without change.

§ 81-12-23. Commissioner; supervisory and enforcement powers; approvals, orders and instructions.

  1. The commissioner shall have general supervision over all associations and corporations which are subject to the provisions of this chapter. He shall enforce the provisions of this chapter by use of the powers herein conferred; and he is hereby vested with the authority to require such associations and corporations to correct violations of this chapter. Upon a finding that it is necessary and appropriate to further the objective of this chapter, the commissioner may order that improper entries found on the books and records of an association be corrected.
  2. Every approval by the commissioner or the board given pursuant to the provisions of this chapter and every communication having the effect of an order or instruction to any association shall be in writing signed by the commissioner under seal and shall be sent by United States mail, postage prepaid, to the association affected thereby, addressed to the president thereof at the home office of the association.

HISTORY: Laws, 1977, ch. 455, § 5; Laws, 1982, chs. 301, § 12; 331, § 2; reenacted, 1990 Ex Sess, ch. 52, § 12; Laws, 1993, ch. 441, § 12; Laws, 1994, ch. 622, § 44; reenacted without change, Laws, 1997, ch. 496, § 9; reenacted without change, Laws, 2001, ch. 488, § 10, eff from and after July 1, 2001.

Amendment Notes —

The 2001 amendment reenacted the section without change.

§ 81-12-24. Removal of officers and directors.

  1. If, in the commissioner’s opinion, after an examination, audit, or investigation, it is determined that any director or officer or any employee or controlling stockholder of any association has knowingly participated in or consented to any violation of this chapter, or any other law, rule, regulation or order, or any repeated violation of or failure to comply with any association’s bylaws, and that as a result, a situation exists requiring immediate corrective action, the commissioner shall give notice to the board of directors of the association setting forth the violations and the remedies for same. Failure of the board of directors to comply with the requirements of the commissioner within ten (10) days from the date of the notice shall render the board of directors in default thereupon. Upon the expiration of such ten (10) days and upon continuation of such noncompliance and default, the commissioner may issue an order temporarily removing such person or persons cited for improper conduct as above described pending a hearing before the commissioner. In regard to a controlling stockholder, the commissioner may order the stockholder to place all his voting stock in a voting trust, the trustee of the voting trust to be designated by the commissioner. Any temporary order of removal shall state its duration on its face and the words “Temporary Order of Removal” and shall be effective upon issuance for a period of thirty (30) days and may be extended once upon written notice by the commissioner for an additional period of fifteen (15) days. A hearing upon such “Temporary Order of Removal” shall be held by the commissioner within the thirty-day period, or any extension thereof, upon not less than fifteen (15) days’ notice to the removed person or persons by certified United States mail, restricted delivery, at which hearing the commissioner may dissolve the temporary order or make the same permanent. No removed person or persons shall receive any salary, compensation or remuneration from the association as an officer or director after the order is made permanent. Any temporary order of removal by the commissioner shall not be subject to judicial review in any form. Any final order of the commissioner may be appealed as provided in Section 81-12-205.
  2. Any removal pursuant to subsection (1) of this section shall be effective in all respects as if such removal had been made by the board of directors or the shareholders of the association in question.
  3. Without the prior written approval of the commissioner, no director or officer removed pursuant to this section shall be eligible to be elected or reelected to any position as an officer or director of that association nor shall such an officer or director be eligible to be elected to or retain a position as an officer or director of any other association or financial institution.
  4. The commissioner may appoint a director or officer to fill any vacancy caused by a removal pursuant to this section, but such appointed director or officer, should such removal be permanent, shall be appointed only to serve the balance of the term of the vacant position. The commissioner may waive the requirements of Section 81-12-83(3) of a director appointed under the provisions of this section. Such director shall be eligible to be elected by the shareholders thereafter. Such officer shall be eligible to be elected by the board of directors of an association.

HISTORY: Laws, 1983, ch. 455; reenacted, Laws, 1990 Ex Sess, ch. 52, § 13; Laws, 1993, ch. 441, § 13; reenacted and amended, 1994, ch. 622, § 45; reenacted without change, Laws, 1997, ch. 496, § 10; reenacted without change, Laws, 2001, ch. 488, § 11, eff from and after July 1, 2001.

Amendment Notes —

The 2001 amendment reenacted the section without change.

RESEARCH REFERENCES

ALR.

Bank officer’s or employee’s misapplication of funds as state criminal offense. 34 A.L.R.4th 547.

§ 81-12-25. Incorporation; petition; fee; articles; bylaws; exhibits.

Any five (5) or more individuals (hereinafter referred to as the “incorporators”), citizens of this state, may form a mutual association or capital stock association to promote thrift and home financing, subject to approval as hereinafter provided in this chapter, by filing with the commissioner, two (2) sworn duplicate originals of a petition for a certificate of incorporation in the form to be prescribed by the commissioner, accompanied by the proposed articles of incorporation and proposed bylaws, each in a form approved by the commissioner and accompanied by the incorporation fee. The proposed bylaws shall make provisions for (a) annual meeting of members or stockholders, (b) special meeting of members or stockholders, (c) notice of meeting of members or stockholders, (d) procedure for nomination of directors, (e) meetings of board of directors, (f) resignation and removal of directors, (g) officers, (h) execution of instruments, (i) evidence of savings accounts, (j) corporate seal, (k) fiscal year, (l) amendments and (m) such other matters as may be prescribed by the commissioner by rule or regulation. The petitioners shall submit with their petition statements, exhibits, maps and other data which the commissioner may require, which data shall be sufficiently detailed and comprehensive to enable the commissioner to pass upon the petition as to the criteria set out in Section 81-12-27.

HISTORY: Laws, 1977, ch. 445, § 6 (1); reenacted, 1982, ch. 301, § 13; Laws, 1990 Ex Sess, ch. 52, § 14; Laws, 1993, ch. 441, § 14; reenacted and amended, 1994, ch. 622, § 46; reenacted without change, Laws, 1997, ch. 496, § 11; reenacted without change, Laws, 2001, ch. 488, § 12, eff from and after July 1, 2001.

Joint Legislative Committee Note —

Pursuant to Section 1-1-109, the Joint Legislative Committee on Compilation, Revision, and Publication corrected a typographical error in Section 11 of ch. 496, Laws, 1997. In item (b) of this section, the words “or members” were deleted. The Joint Committee ratified the correction at the May 8, 1997 meeting of the Committee, and the section has been reprinted in the supplement to reflect the corrected language.

Amendment Notes —

The 2001 amendment reenacted the section without change.

Cross References —

Articles of incorporation of banking corporations, see §81-3-7.

Filing of articles of incorporation of an association converting into a capital stock association, see §81-12-57.

RESEARCH REFERENCES

Am. Jur.

13 Am. Jur. 2d, Building and Loan Associations §§ 186-191.

5 Am. Jur. Pl & Pr Forms (Rev), Building and Loan Associations, Forms 1 et seq. (formation and organization).

4 Am. Jur. Legal Forms 2d, Building and Savings and Loan Associations §§ 48:21-48:24, 48:31-48:34.

CJS.

12 C.J.S., Building and Loan Associations, Savings and Loan Associations, and Credit Unions §§ 9 et seq.

§ 81-12-27. Incorporation; examination and investigation of petition.

Upon receipt of a petition for a certificate of incorporation, including supporting data, the commissioner shall promptly give consideration to the petition and make an examination of the proposed articles of incorporation to determine if they meet all requirements of law. The commissioner shall then make an investigation to determine that the prerequisites of this chapter have been complied with and that:

The character, responsibility and general fitness of the persons named in the petition are such as to command confidence and warrant belief that the business of the proposed association will be honestly and efficiently conducted in accordance with the intent and purpose of this chapter, and that the proposed association will have qualified full-time management;

There is public need for the proposed association and the interest of the public will be best served by granting the petition;

The anticipated volume and type of business of the proposed association is such as to indicate profitable operation within a reasonable time; and

The operation of the proposed association will not unduly harm any properly conducted financial institution serving the needs and existing in the community in which the principal office or any branch of the proposed association is to be located.

HISTORY: Laws, 1977, ch. 445, § 6(2); reenacted, 1982, ch. 301, § 14; Laws, 1990 Ex Sess, ch. 52, § 15; Laws, 1993, ch. 441, § 15; Laws, 1994, ch. 622, § 47; reenacted without change, Laws, 1997, ch. 496, § 12; reenacted without change, Laws, 2001, ch. 488, § 13, eff from and after July 1, 2001.

Amendment Notes —

The 2001 amendment reenacted the section without change.

Cross References —

Certificate to incorporate and organize bank, see §81-3-13.

Data required to be submitted with petition for incorporation, see §81-12-25.

Hearing on petition for certificate of incorporation, see §81-12-29.

Application of criteria of this section to change of location of home office, see §81-12-43.

Examination and investigation of a petition to establish a branch office, see §81-12-175.

JUDICIAL DECISIONS

1.-10. [Reserved for future use.]

11. Under former §81-11-11.

1.-10. [Reserved for future use.]

11. Under former § 81-11-11.

Where substantial evidence supported the findings of board of savings and loan associations granting an association authority to open a branch office in another city, the court will uphold the findings of the board. Colonial Sav. & Loan v. Security Sav. & Loan Asso., 288 So. 2d 857, 1974 Miss. LEXIS 1876 (Miss. 1974).

A savings and loan association which seeks to establish a branch office must show a substantial or obvious need justifying the location of a branch savings and loan association; mere convenience is not sufficient to satisfy the statutory requirement. Bankers Trust Sav. & Loan Asso. v. Bank of Winona, 243 So. 2d 415, 1971 Miss. LEXIS 1513 (Miss. 1971).

§ 81-12-29. Incorporation; notice of petition; filing notice of opposition; hearing.

  1. Upon receipt of a petition for a certificate of incorporation to form an association, the complete filing and filing date to be determined by the commissioner, the commissioner shall, within fifteen (15) days of the determined filing date, give written notice to all financial institutions in the county in which the proposed association is to be located and to all financial institutions in the counties bordering the county in which the proposed association is to be located. Notice shall also be sent to all interested persons and shall be published one (1) time in a newspaper of general circulation in the county in which the proposed association is to be located. Such notice shall include the subject matter of the petition and shall invite persons to be heard by the board by sworn written statement or in person. Any financial institution opposing approval of the petition of incorporation shall file a sworn written statement of such opposition with the commission er not later than the date fixed therefor by the commissioner in his notice. The statement of opposition shall set forth in summary form specific objections to the incorporation of the proposed association. The protestant shall, at the same time its statement of opposition is filed with the commissioner, furnish the petitioner a copy of such statement by first class United States mail. The protestant shall certify to the commissioner that he has furnished such statement to the petitioner.
  2. Within forty-five (45) days of the determined filing date of a petition for a certificate of incorporation to form an association, the commissioner, in writing, shall set a date for the hearing of such petition by the board to consider the petition and his findings, such date to be not earlier than sixty (60) days and not more than ninety (90) days from the determined filing date of the petition. Written notice of such hearing date shall be furnished by first class United States mail to the board members, the petitioner, the petitioner’s attorney, and any protestants of record and their attorneys.
  3. When the commissioner has completed the examination and made his investigation, he shall record his findings and recommendations in writing and present them to the board at least fifteen (15) days prior to the hearing date set pursuant to subsection (2) of this section.
  4. Times established pursuant to this section may be extended by the commissioner upon good cause shown.

HISTORY: Laws, 1977, ch. 445, § 6(3); Laws, 1982, chs. 301, § 15; 331, § 3; reenacted, 1990 Ex Sess, ch. 52, § 16; Laws, 1993, ch. 441, § 16; reenacted and amended, 1994, ch. 622, § 48; reenacted without change, Laws, 1997, ch. 496, § 13; reenacted without change, Laws, 2001, ch. 488, § 14, eff from and after July 1, 2001.

Amendment Notes —

The 2001 amendment reenacted the section without change.

Cross References —

Requirement of a hearing for change of name or location of home office, see §81-12-43.

Application and notice of hearing to change name or location of branch bank, see §81-12-175.

Establishment of a savings branch office, loan branch office or a loan processing office by an association, see §81-12-176.

JUDICIAL DECISIONS

1.-10. [Reserved for future use.]

11. Under former §81-11-9.

1.-10. [Reserved for future use.]

11. Under former § 81-11-9.

A state-chartered savings and loan association, by substantial compliance with the provisions of former Code 1942, § 5310, obtained a charter amendment, which became effective prior to the effective date of Code 1942, §§ 5288-01 et seq., authorizing it to move its principal office or place of business from North Mississippi Sav. & Loan Asso. v. Confederate States Sav. & Loan Asso., 250 Miss. 463, 166 So. 2d 119, 1964 Miss. LEXIS 475 (Miss. 1964).

§ 81-12-31. Incorporation; meeting of board to consider petition; cross-examination of and compelling attendance of witnesses; disposition of petition.

The board, at its meeting, shall consider the findings and recommendation of the commissioner and shall hear such oral testimony as he may wish to give or be called upon to give, and shall also receive information and hear testimony from the prospective incorporators of the proposed association and from any and all other interested persons bearing upon the approval of the petition and the operation of the new association. All witnesses shall be subject to cross-examination by any of the parties who are incorporators or objectors or by the board. After considering the findings, and recommendation submitted to it by the commissioner and his oral testimony, if any, and considering such other information and evidence, either written or oral, which has come before it, the board shall decide if it has before it sufficient information and evidence upon which it can dispose of the petition for a certificate of incorporation to form an association. If it is determined that evidence and information is not sufficient, then the board shall order the commissioner to secure such additional information and evidence as it may prescribe or shall request such from the prospective incorporators and from other interested persons. The board shall thereupon set a date for a future meeting to be held in not less than forty-five (45) nor more than sixty (60) days and shall give to the prospective incorporators, financial institutions and other interested persons the same notice of such meeting prescribed above and shall recess the meeting then being held until such future date. The board shall have and is hereby vested with the power to compel attendance of witnesses, just as is the commissioner, and all testimony given before said board shall be taken down and may be transcribed by a reporter at the request of any interested party. If the board, or a majority thereof, shall determine that it has before it sufficient evidence and information upon which to base a decision, then it shall render a written opinion and decision in the matter within sixty (60) days of the last meeting. If its decision is favorable, then the board shall issue a certificate of approval of incorporation of the association.

HISTORY: Laws, 1977, ch. 445, § 6(4); reenacted, 1982, ch. 301, § 16; Laws, 1990 Ex Sess, ch. 52, § 17; Laws, 1993, ch. 441, § 17; Laws, 1994, ch. 622, § 49; reenacted without change, Laws, 1997, ch. 496, § 14; reenacted without change, Laws, 2001, ch. 488, § 15, eff from and after July 1, 2001.

Amendment Notes —

The 2001 amendment reenacted the section without change.

Cross References —

Hearing on petition for certificate of incorporation, see §81-12-29.

§ 81-12-33. Incorporation; proceedings upon approval of incorporation; commencement of corporate existence.

  1. The commissioner shall file one (1) signed copy of such certificate of approval and of the certificate of incorporation with the Secretary of State. The commissioner shall endorse upon the two (2) copies of the petition for certificate of incorporation filed with him such certificate of approval and return the duplicate original and a copy of the certificate of incorporation to the association, addressed to the chairman of the incorporators, and shall retain the original petition for certificate of incorporation and a copy of the certificate of incorporation in the permanent files of his office. He shall return one (1) copy of the approved bylaws to the association, addressed to the chairman of the incorporators, and retain in the permanent files of his office the original signed copy of the approved bylaws. The petition for certificate of incorporation, the certificate of approval of incorporation, the certificate of incorporation, and the bylaws shall not be filed or recorded in any other state or county office. The failure of the commissioner to file, return or retain any such document as above provided shall not affect the validity of the incorporation of any association.
  2. The corporate existence of an association shall begin on the date the commissioner issues the certificate of incorporation of the association.

HISTORY: Laws, 1977, ch. 445, § 6(5, 6); reenacted, 1982, ch. 301, § 17; Laws, 1990 Ex Sess, ch. 52, § 18; Laws, 1993, ch. 441, § 18; Laws, 1994, ch. 622, § 50; reenacted without change, Laws, 1997, ch. 496, § 15; reenacted without change, Laws, 2001, ch. 488, § 16, eff from and after July 1, 2001.

Amendment Notes —

The 2001 amendment reenacted the section without change.

JUDICIAL DECISIONS

1.-10. [Reserved for future use.]

11. Under former §81-11-13.

1.-10. [Reserved for future use.]

11. Under former § 81-11-13.

Where two petitioners have applied for authority to locate or establish a savings and loan business in a particular area, the two applications may be simultaneously considered by the board, but the first application must be either granted or dismissed before the board can finally adjudicate or act upon the subsequent application. However, consideration should be given by the board to the merits of each application before making a decision on the first application so as to insure that the public will be protected. North Mississippi Sav. & Loan Asso. v. Collins, 317 So. 2d 913, 1975 Miss. LEXIS 1788 (Miss. 1975).

RESEARCH REFERENCES

Am. Jur.

13 Am. Jur. 2d, Building and Loan Associations § 102.

5 Am. Jur. Pl & Pr Forms (Rev), Building and Loan Associations, Forms 1, 3, 4.

CJS.

12 C.J.S., Building and Loan Associations, Savings and Loan Associations, and Credit Unions § 20.

§ 81-12-35. Organization of mutual association; subscription by incorporators; bond; expense fund; organization meeting.

  1. A mutual association shall be organized in accordance with this section. The incorporators shall appoint one (1) of their number as chairman of the incorporators. The incorporators, before a certificate of incorporation is issued, shall pay in cash to such chairman, as subscription to the savings accounts of any proposed association, including that part of the original subscription paid by such chairman, an aggregate amount, fixed as follows in relation to the population of the municipality in which the home office of the association is to be located: (a) in municipalities having not more than twenty-five thousand (25,000) inhabitants, the minimum sum of Five Hundred Thousand Dollars ($500,000.00); (b) in municipalities having more than twenty-five thousand (25,000), but not more than one hundred thousand (100,000) inhabitants, the minimum sum of One Million Dollars ($1,000,000.00); (c) in municipalities having one hundred thousand (100,000) or more inhabitant s, the minimum sum of One Million Five Hundred Thousand Dollars ($1,500,000.00). The population of the municipality shall be determined by the commissioner based upon the latest federal decennial census.
  2. The incorporators shall procure from a surety company or other surety acceptable to the commissioner, a surety bond in form approved by the commissioner in an amount equal to seventy-five percent (75%) of the minimum original subscription required by paragraph (1). Such bond shall name the commissioner as obligee and shall be delivered to him. It shall assure the safekeeping of the funds subscribed and their delivery to the association after the issuance of the certificate of incorporation and after the bonding of the officers. In the event of the failure to complete organization, such bond shall assure the return of the amounts collected to the respective subscribers or their assigns, less reasonable expense which shall be deducted from the expense fund.
  3. The incorporators, in addition to their subscriptions to savings accounts, shall create an expense fund in an amount not less than twenty-five percent (25%) of the minimum amount of savings account subscriptions required to be paid in under this chapter, from which expense fund the expense of organizing the association and its operating expenses may be paid until such time as its net income is sufficient to pay such earnings as may be declared and paid or credited to its savings account holders from sources available for payment of earnings. The incorporators and others, before a certificate of incorporation is issued, shall deposit to the credit of the chairman of the incorporators in cash the amount of the expense fund. The amounts contributed to the expense fund by the incorporators and others shall not constitute a liability of the association except as hereinafter provided.
  4. Contributions made by the incorporators and others to the expense fund may be repaid pro rata to the contributors from the net income of the association after provision for statutory reserves and declaration of earnings of not less than the contract or prevailing rate whichever may be applicable. In case of the liquidation of an association before contributions to the expense fund have been repaid, any contributions to the expense fund remaining unexpended, after the payment of expenses of liquidation, all creditors, and the withdrawal value of all savings accounts, shall be repaid to the contributors pro rata. The books of the association shall reflect the expense fund. Contributors to the expense fund shall, at the times earnings regularly are distributed to savings account holders, be paid earnings on the amounts paid in by them and remaining unreimbursed, and for such purpose such contributions shall be considered as savings accounts of the association.
  5. Within thirty (30) days after the corporate existence of an association begins, the directors of the association shall hold an organization meeting and shall elect officers pursuant to the provisions of this chapter and the bylaws. At the organization meeting the directors shall take such other action as is appropriate in connection with beginning the transaction of business by the association. The commissioner may extend by order the time within which the organization meeting shall be held for a period not to exceed thirty (30) days.

HISTORY: Laws, 1977, ch. 445, § 7; reenacted, 1982, ch. 301, § 18; Laws, 1990 Ex Sess, ch. 52, § 19; Laws, 1993, ch. 441, § 19; Laws, 1994, ch. 622, § 51; reenacted without change, Laws, 1997, ch. 496, § 16; reenacted without change, Laws, 2001, ch. 488, § 17, eff from and after July 1, 2001.

Amendment Notes —

The 2001 amendment reenacted the section without change.

Cross References —

Requirement of an organizational meeting for formation of a capital stock association, see §81-12-39.

§ 81-12-37. Capital stock association; minimum required capital; paid-in surplus; determining and maintaining adequate net worth.

A capital stock association shall be organized in accordance with this section. The incorporators shall appoint one (1) of their number as chairman of the incorporators. The capital of a capital stock association shall be the sum of the par value of all shares of voting capital stock. The minimum required capital shall be: (a) in municipalities having not more than twenty-five thousand (25,000) inhabitants, the minimum sum of Five Hundred Thousand Dollars ($500,000.00); (b) in municipalities having more than twenty-five thousand (25,000), but not more than one hundred thousand (100,000) inhabitants, the minimum sum of One Million Dollars ($1,000,000.00); (c) in municipalities having more than one hundred thousand (100,000) inhabitants, the minimum sum of One Million Five Hundred Thousand Dollars ($1,500,000.00). The population of the municipality shall be determined by the commissioner based upon the latest federal census. No commissions, fees or other remuneration shall be paid for the sale of shares of capital stock necessary to meet the minimum capital and paid-in surplus requirements of this section. No incentive stock shall be issued. All stock shall be sold at not less than par value.

In addition to the minimum capital required above, the subscribers shall pay an additional amount equal to not less than twenty-five percent (25%) of the par value of the stock subscribed, which shall be credited to paid-in surplus and may be used to offset losses from operations. Such minimum capital and surplus may be used for the reserves required by law as may be permitted by the board.

After organization or conversion, each capital stock association shall maintain an adequate net worth appropriate for the conduct of its business and the protection of its savings account holders. The net worth adequacy of a capital stock association shall be determined by the commissioner on a regular basis but not less than one (1) time per year after evaluating the character of management, the liquidity or quality of assets, history of earnings and the retention thereof, the potential volatility of the deposit structure, and the association’s capacity to furnish the broadest service to the public. A written report of such finding and determination shall be made and filed. Such report shall include actions recommended to be taken. A copy of such report shall be sent to each member of the board and considered by the board at its next meeting.

HISTORY: Laws, 1977, ch. 45, § 8(1); Laws, 1982, chs. 301, § 19; 426, § 1; reenacted, 1990 Ex Sess, ch. 52, § 20; Laws, 1993, ch. 441, § 20; Laws, 1994, ch. 622, § 52; reenacted without change, Laws, 1997, ch. 496, § 17; reenacted without change, Laws, 2001, ch. 488, § 18, eff from and after July 1, 2001.

Amendment Notes —

The 2001 amendment reenacted the section without change.

Cross References —

Exclusion of capital stock associations organized under this section from definition of “member,” see §81-12-3.

Reduction of permanent capital through reduction of outstanding voting capital stock, see §81-12-51.

§ 81-12-39. Capital stock association; statement of compliance; issuance of certificate of authorization; organization meeting.

  1. After approval by the board of the petition for a certificate of incorporation, the proposed capital stock association shall file with the commissioner a statement in such form and with such supporting data and proof as it may require, showing that the entire capital including paid-in surplus has been fully and unconditionally paid in lawful cash money and that the funds representing such capital and paid-in surplus, less sums of the paid-in surplus spent with the approval of the commissioner for land, building, supplies, fixtures, equipment and organization, are on hand and that it has acquired insurance of accounts as provided in this chapter. If the board finds that the capital stock association has in good faith complied with all the requirements of law, it shall, within thirty (30) days after the filing of the said statement issue, in duplicate, under its official seal, a certificate of authorization to transact a general savings and loan business, transmitting one (1) copy to the association and placing one (1) copy in the department file. Said certificate shall state that the association named therein is authorized to transact a general savings and loan business. Should the board find that said statement does not comply with the law, it shall so notify the association and require such compliance as it finds necessary.
  2. Within forty-five (45) days after the corporate existence of an association begins, the directors of the association shall hold an organization meeting for the purpose set forth in Section 81-12-35(5) above, provided the time of such meeting may be similarly extended.

HISTORY: Laws, 1977, ch. 445, § 8(2, 3); reenacted, 1982, ch. 301, § 20; Laws, 1990 Ex Sess, ch. 52, § 21; Laws, 1993, ch. 441, § 21; Laws, 1994, ch. 622, § 53; reenacted without change, Laws, 1997, ch. 496, § 18; reenacted without change, Laws, 2001, ch. 488, § 19, eff from and after July 1, 2001.

Amendment Notes —

The 2001 amendment reenacted the section without change.

Cross References —

Exclusion of capital stock associations organized under this section from definition of “member,” see §81-12-3.

§ 81-12-41. Name of association; enjoining violations; penalty.

  1. The name of every association may include either the words “savings association,” or “savings and loan association.” If used, these words shall be preceded by an appropriate descriptive word or words approved by the commissioner. An ordinal number may not be used as a single descriptive word preceding the words “savings association,” or “savings and loan association,” unless such words are followed by the words “of_______________ ,” the blank being filled by the name of the community, town, city or county in which the association has its home office. An ordinal number may be used, together with another descriptive word, preceding the words “savings association” or “savings and loan association,” provided the other descriptive word has not been used in the corporate name of any other association in the state, in which case the suffix mentioned above is not required to be used. An ordinal number may be used, together with another descriptive word, preceding the words “savings association” or “savings and loan association,” even when such other descriptive word has been used in the corporate name of an association in the state, provided the suffix “of_______________ ,” as provided above, is also used. The suffix provided above may be used in any corporate name. The use of the words, “National,” “Federal,” “United States,” “Insured,” “Guaranteed,” or any form thereof, separately or in any combination thereof with other words or syllables, is prohibited as part of the corporate name of an association organized under this chapter. No certificate of incorporation of a proposed association having the same name as a corporation authorized to do business under the laws of this state or a name so nearly resembling it as to be likely to deceive shall be issued by the commissioner, except to an association formed by the reincorporation, reorganization, or consolidation of the association with other associations, or upon the sale of the property or franchise of an association.
  2. No person, firm, company, association, fiduciary, partnership or corporation, either domestic or foreign, unless he or it is lawfully authorized to do business in this state under the provisions of this chapter and actually is engaged in carrying on an association business shall do business under any name or title which contains the terms “savings association,” “savings and loan association,” “building and loan association,” “building association,” or any combination employing either or both of the words “building” or “loan” with one or more of the words “saving,” “savings,” “thrift,” or words of similar import, or any combination employing one or more of the words “saving,” “savings,” “thrift,” or words of similar import with one or more of the words “association,” “institution,” “society,” “company,” “fund,” “corporation,” or words of similar import, or use any name or sign or circulate or use any letterhead, billhead, circular or paper whatever, or advertise or represent in any manner which indicates or reasonably implies that his or its business is the character or kind of business carried on or transacted by an association or which is likely to lead any person to believe that his or its business is that of an association. Upon application by the commissioner or any association, an injunction may issue to restrain any such entity from violating or continuing to violate any of the foregoing provisions of this subsection. Any person who violates any provision of this subsection shall be punished by a fine of not more than Five Thousand Dollars ($5,000.00), and each day of violation shall constitute a separate offense. The prohibitions of this subsection shall not apply to any corporation or association formed solely for the purpose of promoting the interests of thrift institutions, the membership of which is comprised of thrift institutions, their officers or other representatives.

HISTORY: Laws, 1977, ch. 445, § 9(1, 2); reenacted, 1982, ch. 301, § 21; Laws, 1990 Ex Sess, ch. 52, § 22; Laws, 1993, ch. 441, § 22; Laws, 1994, ch. 622, § 54; Laws, 1996, ch. 400, § 17; reenacted without change, Laws, 1997, ch. 496, § 19; reenacted without change, Laws, 2001, ch. 488, § 20, eff from and after July 1, 2001.

Amendment Notes —

The 2001 amendment reenacted the section without change.

Cross References —

Inclusion of words “bank” or “banking,” in name of bank, see §81-3-3.

Power of the commissioner to require associations and corporations to correct violations, see §81-12-23.

JUDICIAL DECISIONS

1. In general.

Statute prohibiting state incorporation of a savings association under a name deceitfully similar to an existing association doing business within the state does not appear to provide a right of action and sanctions against a savings association once it has been incorporated under such a name. First Southern Federal Sav. & Loan Asso. v. First Southern Sav. & Loan Asso., 614 F.2d 71, 1980 U.S. App. LEXIS 19424 (5th Cir. Miss. 1980).

RESEARCH REFERENCES

Am. Jur.

13 Am. Jur. 2d, Building and Loan Associations § 188.

§ 81-12-43. Change of name or location of home office; hearing.

  1. Without the prior approval of the commissioner or the board, as provided in this chapter, no association shall change its name or establish any office other than its home office, which shall be in the location named in the certificate of incorporation. No office of an association shall be moved unless approved as provided in this chapter.
  2. The name or the location of the home office of any association fixed in the certificate of incorporation may be changed in the following manner:
    1. The proposed new name of the association shall be approved by a resolution adopted by the board of directors. Immediately preceding application to the commissioner for approval, notice of intention to change the name, signed by two (2) officers, shall be published once a week for two (2) successive weeks in a newspaper of general circulation in the county in which the home office is located, and a copy of such notice shall be displayed during such consecutive period of two (2) weeks in a conspicuous public place in the home office of the association. Five (5) copies of an application to the commissioner for approval shall be signed by two (2) officers of the association, acknowledged before an officer competent to take acknowledgments of deeds, and filed with the commissioner. If the application for change of name is approved, the commissioner shall endorse on each copy of the application therefor a certificate of approval thereof, and the change of name of such association shall be effective immediately.
      1. The proposed new location of the association shall be approved by a resolution adopted by the board of directors. Immediately preceding application to the commissioner for approval, notice of intention to change the location of the home office, signed by two (2) officers, shall be published once a week for two (2) successive weeks in a newspaper of general circulation in the county in which the home office is located, and a copy of such notice shall be displayed during such consecutive period of two (2) weeks in a conspicuous public place in the home office of the association. Five (5) copies of an application to the commissioner for approval shall be signed by two (2) officers of the association and acknowledged before an officer competent to take acknowledgments of deeds, and filed with the commissioner.
      2. Whenever the commissioner shall receive from any association pursuant to item (i) of this paragraph (b) an application for change of location of its home office to a municipality other than that in which it is located, he shall make a determination based upon the criteria set out in Section 81-12-27 in the case of establishment of a newly chartered association, and thereafter a hearing shall be held in the manner, within the time and on the notice provided for in Section 81-12-29 and no change of location shall be made without approval of the board.
      3. Whenever the commissioner shall receive from any association pursuant to item (i) of this paragraph (b) an application for change of location of its home office to another location within the same municipality, the commissioner shall prescribe the form of the petition, prerequisites and requirements. If no protests are filed after notice is given as provided in Section 81-12-29(1), the commissioner may approve such application if it meets the established prerequisites and requirements. If protests are filed, the commissioner, upon reasonable notice to the applying association and its attorney and to the protestants and their attorneys, shall hold a hearing and, based upon his written findings at such hearing, issue a certificate of approval or disapproval.
  3. Upon approval of an application for a change of name or home office location, the commissioner shall endorse on each copy of such application a certificate of approval, as provided in this chapter. When the commissioner shall have endorsed such approval upon the copies of an application for approval of change of name or change of location of home office, he shall file one (1) copy thereof with the Secretary of State, two (2) copies with the federal home loan bank of which the association is a member, return one (1) copy to the applicant association and retain the original copy in the permanent files of his office.

HISTORY: Laws, 1977, ch. 445, § 9(3, 4); Laws, 1982, chs. 301, § 22; 331, § 4; reenacted, 1990 Ex Sess, ch. 52, § 23; Laws, 1993, ch. 441, § 23; Laws, 1994, ch. 622, § 55; reenacted without change, Laws, 1997, ch. 496, § 20; reenacted without change, Laws, 2001, ch. 488, § 21, eff from and after July 1, 2001.

Amendment Notes —

The 2001 amendment reenacted the section without change.

Cross References —

Change of name or location of a branch office, see §81-12-175.

§ 81-12-45. Forfeiture of corporate existence; new corporations; extension of time within which to commence business.

Any association which obtains its charter of incorporation subsequent to July 1, 1977, and which shall not commence business within six (6) months after the date upon which its corporate existence shall have begun, shall forfeit its corporate existence, unless the commissioner, before the expiration of such period of six (6) months shall have approved the extension of time within which it may commence business not to exceed ninety (90) days, upon a written application stating the reasons for such delay. Upon such forfeiture the certificate of incorporation shall expire, and all action taken in connection with the incorporation thereof, except the payment of the incorporation fee, shall become void. Amounts credited on savings accounts, less expenditures authorized by law, shall be returned pro rata to the respective holders thereof.

HISTORY: Laws, 1977, ch. 445, § 9(5); reenacted, 1982, ch. 301, § 23; Laws, 1990 Ex Sess, ch. 52, § 24; Laws, 1993, ch. 441, § 24; Laws, 1994, ch. 622, § 56; reenacted without change, Laws, 1997, ch. 496, § 21; reenacted without change, Laws, 2001, ch. 488, § 22, eff from and after July 1, 2001.

Amendment Notes —

The 2001 amendment reenacted the section without change.

§ 81-12-47. Insurance accounts; liquidation of noncomplying existing associations; false representation as to insurance; penalty; injunction.

  1. Each association which obtained its charter of incorporation prior to July 1, 1977, and was organized and engaged in business on July 1, 1977, must submit evidence satisfactory to the commissioner that it has:
    1. Obtained insurance of its savings accounts and share accounts by the Federal Deposit Insurance Corporation or an agency of this state established for the purpose of insuring savings accounts of associations organized under this chapter; or
    2. Become a federal savings and loan association and a member of the federal home loan bank system; or
    3. Merged into, been acquired by, or otherwise consolidated with an existing association whose savings accounts and share accounts are insured by the Federal Savings and Loan Insurance Corporation or by some other federal agency or an agency of this state established for the purpose of insuring savings accounts of associations organized under this chapter; provided any merger into, acquisition by or consolidation with an insured association must have prior approval of the board; or
    4. Entered into voluntary or involuntary liquidation.
  2. No charter of incorporation shall be granted or approved by the board after July 1, 1977, unless the applicant for such charter submits sufficient evidence satisfactory to the board that its savings accounts and share accounts are insured by the Federal Deposit Insurance Corporation or an agency of this state established for the purpose of insuring savings accounts of associations organized under this chapter, or will be so insured immediately subsequent to the approval of the charter of incorporation by the board.
  3. No association that obtained its charter prior to July 1, 1977, but which was not organized and engaged in business on July 1, 1977, shall accept deposits unless and until it first complies with subsection (2) of this section, and any additional requirements imposed as to charters granted after July 1, 1977.
  4. Notwithstanding any other provision of state law to the contrary, if any association which obtained its charter of incorporation prior to July 1, 1977, and was organized and engaged in business on July 1, 1977, has not accomplished one (1) of the four (4) conditions prescribed in subparagraphs (a), (b), (c) and (d) of subsection (1) on July 1, 1977, the conservator appointed pursuant to Section 81-11-91 shall apply to the chancery court judge designated by the Supreme Court as hereinafter provided for appointment of a liquidating receiver for purposes of liquidating the assets of the association; however, if any such association shall furnish sufficient evidence satisfactory to the conservator appointed pursuant to Section 81-11-91 that a definite plan of accomplishment of one (1) of the four (4) conditions prescribed in subsection (1) has been substantially completed, the conservator appointed pursuant to Section 81-11-91 may extend the time for taking action for the appointment of such receiver, but not beyond March 31, 1978, upon such terms and conditions as the conservator may prescribe. In the absence of a compelling reason to do otherwise, the chancery court judge shall appoint the conservator appointed pursuant to Section 81-11-91 as the liquidating receiver. For the purposes of this subsection, the Supreme Court, upon application of the conservator appointed pursuant to Section 81-11-91, shall designate a chancery court judge who shall, after such designation, have exclusive jurisdiction of all proceedings initiated under this subsection.
  5. No association or officer or employee thereof shall represent in any way that its accounts are insured, unless such accounts are in fact insured by the Federal Deposit Insurance Corporation or an agency of this state established for the purpose of insuring savings accounts in associations. Any person who shall violate this provision shall be guilty of a misdemeanor and, upon conviction, shall be punished as such. Upon application of the Attorney General to the chancery court of the county in which the association is domiciled, violations of this provision shall be enjoined.

HISTORY: Laws, 1977, ch. 445, § 10; reenacted, 1982, ch. 301, § 24; Laws, 1990 Ex Sess, ch. 52, § 25; Laws, 1993, ch. 441, § 25; reenacted and amended, 1994, ch. 622, § 57; reenacted without change, Laws, 1997, ch. 496, § 22; reenacted without change, Laws, 2001, ch. 488, § 23, eff from and after July 1, 2001.

Editor’s Notes —

Section 81-11-91 referred to in (4) was repealed by Laws, 1997, ch. 542, § 12, eff from and after passage (approved April 10, 1997).

Amendment Notes —

The 2001 amendment reenacted the section without change.

RESEARCH REFERENCES

Am. Jur.

13 Am. Jur. 2d, Building and Loan Associations § 11.

§ 81-12-49. Powers of associations.

Every association incorporated pursuant to or operating under the provisions of this chapter shall have all the powers enumerated, authorized and permitted by this chapter and such other rights, privileges and powers as may be incidental to or reasonably necessary for the accomplishment of the objects and purposes of this chapter. Every association shall have the following powers:

To be organized for a period not to exceed ninety-nine (99) years, but renewable for additional periods of ninety-nine (99) years in the same manner as the original charter was secured; to adopt and use a corporate seal, which may be affixed by imprint, facsimile or otherwise; and to adopt and amend bylaws as provided in this chapter;

To sue and be sued, complain and defend in any court of law or equity;

To acquire, hold, sell, dispose of and convey real and personal estate incidental to its business as a thrift institution, to mortgage, pledge or lease real or personal estate, and to take property by gifts, devise or bequest, provided that such powers are consistent with the objects and powers granted by this chapter;

An association may accept such savings accounts or other accounts as are authorized by its board of directors and approved by the general regulation of the commissioner not inconsistent with this chapter. The savings deposits may be evidenced by certificates of deposit, passbooks or such other evidence of deposit or account as the board of directors may prescribe. An association may pay interest on its deposits or other accounts from any sources available for such payment at such rate and at such times and for such time or notice periods as are determined by resolution of its board of directors within the limitation set by the commissioner. The board of directors shall determine by resolution the method of calculating the interest on deposits or other accounts and the time when and manner in which interest is to be paid or credited. Such methods shall comply with the regulations issued by the commissioner as to calculation and payment of interest;

An association may borrow up to twenty-five percent (25%) of its savings liability and net worth for lending purposes; an association may borrow an additional twenty-five percent (25%) of its savings liability and net worth for the purpose of making loans guaranteed by the Federal Housing Administration, a private mortgage guaranty insurance company licensed to do business in this state, or by the Veterans Administration; an association may borrow up to fifty percent (50%) of its savings liability and net worth to pay withdrawals. Borrowing of additional amounts for purchase or construction of a home office or branch office is authorized, but only with approval of the commissioner. Subsequent reduction of savings liability and net worth shall not in any way affect outstanding obligations, but shall be reported to the commissioner and steps taken to comply within a reasonable time. The directors may pledge or authorize the officers to pledge any assets of the association to secure any loans herein permitted. For the purpose of this paragraph, use of savings accounts in the association shall not be considered borrowing;

To sell without recourse any loan, including any participating interests therein, at any time; notwithstanding the limitations of this subsection, loans may be assigned for collateral purposes with recourse to any federal home loan bank of which the association is a member;

To obtain and maintain insurance of its savings accounts with the Federal Deposit Insurance Corporation or an agency of this state established for the purpose of insuring savings accounts of associations organized under this chapter;

To qualify as and become a member of a federal home loan bank;

To appoint officers, agents and employees as its business shall require and to provide them suitable compensation; to provide for life, health and casualty insurance for officers and employees, and to adopt and operate reasonable bonus plans and retirement benefits for such officers and employees; and to provide for reimbursement and indemnification of its officers, employees and directors as prescribed or permitted in this chapter, whether by insurance or otherwise;

To become a member of, deal with or make reasonable payments or contributions to any organization to the extent that such organization assists in furthering or facilitating the association’s purposes, powers or community responsibilities, and to comply with any reasonable conditions of eligibility;

To maintain and let safes, boxes or other receptacles for the safekeeping of personal property upon such terms and conditions as may be agreed upon;

To sell money orders, travel checks and similar instruments drawn by it on its bank accounts or as agent for any organization empowered to sell such instruments through agents within this state;

If and when an association is a member of a federal home loan bank, to act as fiscal agent of the United States, and, when so designated by the Secretary of the Treasury, to perform, under such regulations as he may prescribe, all such reasonable duties as fiscal agent of the United States as he may require;

To service loans and investments for others;

Upon application to and approval by the commissioner, to act as trustee, and to receive reasonable compensation for so acting, of any trust created or organized in the United States and forming part of a plan which qualifies for specific tax treatment under Section 401(d) of the Internal Revenue Code of 1954, including any Keogh or IRA plan, or any trust created or organized in the United States for the purpose of paying burial or cemetery expenses, if the funds of such trust are invested only in savings accounts or deposits in such association or in obligations or securities issued by such association. All funds held in such fiduciary capacity by any such association may be commingled for appropriate purposes of investment, but individual records shall be kept by the fiduciary for each participant and shall show in proper detail all transactions engaged in under the authority of this subsection;

To acquire savings and pay earnings thereon, and to lend and invest its funds as provided in this chapter;

To appoint a registered agent of the association upon whom any process, notice or demand required or permitted by law to be served on the association shall, if such agent is appointed, be served;

To have and possess such of the rights, powers, privileges, immunities, duties and obligations of a federal savings and loan association located in this state as may be prescribed by the board by general regulation under the circumstances and conditions set out therein. In the event of a conflict between the provisions of this paragraph (r) and any other provision of this chapter, the provisions of this paragraph shall control;

To act as agent for others in any transaction incidental to the operation of the association’s business;

To issue, sell or negotiate or advertise for the issuance and sale of debt securities to the extent authorized by the commissioner.

HISTORY: Laws, 1977, ch. 445, § 11; Laws, 1980, ch. 449, § 2; Laws, 1982, chs. 301, § 25; 467, § 1; reenacted, Laws, 1990 Ex Sess, ch. 52, § 26; Laws, 1993, ch. 441, § 26; reenacted and amended, Laws, 1994, ch. 622, § 58; reenacted without change, Laws, 1997, ch. 496, § 23; reenacted without change, Laws, 2001, ch. 488, § 24, eff from and after July 1, 2001.

Amendment Notes —

The 2001 amendment reenacted the section without change.

Cross References —

Additional powers of capital stock associations, see §81-12-51.

Power to pay withdrawals to parties other than account holders if federal associations in state acquire such power, see §81-12-151.

JUDICIAL DECISIONS

1.-10. [Reserved for future use.]

11. Under former §81-11-77.

1.-10. [Reserved for future use.]

11. Under former § 81-11-77.

Since the rights vested in a state chartered savings and loan association by virtue of its charter amendment, changing its domicil from Columbus to Oxford, including the right to establish and maintain an office in Oxford, were rights created prior to the effective date of Code 1942, §§ 5288-01 et seq., the board of savings and loan associations could not precipitately annul or modify such rights in view of this section. North Mississippi Sav. & Loan Asso. v. Confederate States Sav. & Loan Asso., 250 Miss. 463, 166 So. 2d 119, 1964 Miss. LEXIS 475 (Miss. 1964).

RESEARCH REFERENCES

CJS.

12 C.J.S., Building and Loan Associations, Savings and Loan Associations, and Credit Unions §§ 71 et seq.

§ 81-12-51. Additional powers of capital stock associations.

A capital stock savings and loan association (hereinafter referred to as a “capital stock association”) shall have the powers enumerated in the preceding section, and shall have the following additional powers:

Capital stock may be issued as follows:

A capital stock association may issue the shares of stock authorized by its articles of incorporation and none other. Capital stock shall have the par value as stated in the articles of incorporation and, with the prior approval of the commissioner, may consist of common stock and preferred stock, which may be divided into classes and classes into series. Each kind, class and series may have such distinguishing characteristics, including designations, preferences, or restrictions as regards dividends, redemption, voting powers or restrictions or qualifications of voting powers as are imposed in the articles of incorporation. Restrictions and qualifications of voting powers so imposed shall control in any case in which any vote or consent of stockholders is now or hereafter required by statute unless such statute shall expressly provide a voting procedure to the contrary.

With the prior approval of the commissioner, shares of preferred or special stock of any class may be divided by number from time to time into, and issued in, designated series. Such shares of preferred or special stock of any class or series thereof shall have such relative rights and preferences with regard to dividend rates, redemption rights, conversion privileges, voting powers and other distinguishing characteristics, as shall be stated and expressed with respect to such class or series, either in the articles of incorporation or in the resolution or resolutions providing for the issue of such stock adopted by the board of directors of the corporation.

Except for stock issued pursuant to a plan of merger, consolidation or conversion from a mutual to a stock association or other type of reorganization which has been approved as provided herein, the consideration for the issuance of voting capital stock, the par value of which shall be maintained as the permanent capital of the association, except as otherwise provided in subparagraph (a)(iv) of this section, shall be paid in cash, and any excess shall be credited to paid-in surplus which shall not be available for dividends or other distribution to stockholders, except upon liquidation.

Except as provided herein, the total of the par values of all outstanding shares of voting capital stock shall be the permanent capital of the association and shall not be retired until final liquidation of the association. Notwithstanding the foregoing limitation, a capital stock association may reduce its permanent capital through a reduction of its outstanding voting capital stock pursuant to a plan adopted by its board of directors, and approved by an affirmative vote of a majority of the shares eligible to vote, and by an affirmative vote of two-thirds (2/3) of those shares present and voting, in person or by proxy, at an annual or special meeting of the stockholders of the association. In the event approval of any such plan for the reduction of stock as herein provided shall result in fractional shares, the association may acquire such fractional shares of its own stock by tender of payment of the price per share prior to such reduction as stipulated in the plan. Such tender may be made by bank check drawn upon association funds payable to the record holders of such fractional shares and mailed United States postage prepaid to such holders at the last address of record with the association. Pursuant to such plan, a capital stock association may purchase or redeem whole shares of its own stock at the price per share stipulated in the plan upon written assent of the holders thereof prior to such reduction. No plan for the reduction of the permanent capital or outstanding voting capital stock of an association shall be effective without first obtaining the written consent of the commissioner.

Unless otherwise provided by the articles of incorporation, every stockholder, upon the sale for cash of any new stock of the same kind, class or series as that which he already holds, shall have the right to purchase his pro rata share thereof, as nearly as may be done without issuance of fractional shares, at the price at which it is offered to others, which price must be in excess of par.

An association shall not make a loan secured by the pledge of its capital stock.

A capital stock association may sell any authorized but unissued shares of capital stock for cash at a price which must be in excess of par. No incentive stock shall be issued. Subject to the requirements of Section 81-12-51(a)(v), an association may employ an agent to sell those shares of authorized capital stock not necessary to meet the minimum capital and paid-in surplus requirements of Section 81-12-37, provided that the proposed agreement with the agent for the sale of such stock is approved by the commissioner before the association enters into such agreement.

No capital stock savings and loan association shall declare or pay any dividend upon its common stock unless such association has received written approval by the Commissioner of Banking and Consumer Finance. Directors declaring a dividend in violation of the provisions of this section shall be personally liable to the full amount of the dividend so declared and it shall be the duty of the commissioner, upon discovering the payment of any such dividend, to forthwith make demand upon the directors that the same be restored to the association, and upon their failure so to do he shall cause suit to be brought against them in the chancery court of the county in which the association is located, either in his name or in the name of the association, to recover the same for the benefit of the association.

HISTORY: Laws, 1977, ch. 445, § 12; Laws, 1980, ch. 311, § 1; Laws, 1982, chs. 301, § 26; 426, § 2; reenacted, 1990 Ex Sess, ch. 52, § 27; Laws, 1993, ch. 441, § 27; Laws, 1994, ch. 622, § 59; Laws, 1996, ch. 400; reenacted without change, Laws, 1997, ch. 496, § 24; reenacted without change, Laws, 2001, ch. 488, § 25, eff from and after July 1, 2001.

Amendment Notes —

The 2001 amendment reenacted the section without change.

Cross References —

Minimum required capital, see §81-12-37.

Stock ownership requirements for directors of certain reorganized associations, see §81-12-83.

Reserve requirements, see §81-12-113.

§ 81-12-53. Conversion of association organized under state law into federal association.

At an annual meeting or at any special meeting of the members called to consider such action, any mutual association as defined in this chapter may convert itself into a federal mutual savings association or federal mutual savings and loan association, hereinafter in this subsection called “federal association,” in accordance with the provisions of the laws of the United States, as now or hereafter amended, upon an affirmative vote of fifty-one percent (51%) or more of the total number of votes of the members eligible to be cast. A copy of the minutes of the proceedings of such meeting of the members, verified by the affidavit of the secretary or an assistant secretary, shall be filed in the office of the commissioner within ten (10) days after the date of such meeting. A sworn copy of the proceedings of such meeting, when so filed, shall be presumptive evidence of the holding and action of such meeting. Any member challenging the accuracy of such minutes by sworn objection may appeal to the commissioner. Within three (3) months after the date of such meeting, the association shall take such action in the manner prescribed and authorized by the laws of the United States as shall make it a federal association. There shall be filed with the commissioner a copy of the charter issued to such federal association by the appropriate federal regulatory authority or a certificate showing the organization of such association as a federal association, certified by the secretary or assistant secretary of the appropriate federal regulatory authority. A similar copy of the charter, or of such certificate, shall be filed by the association with the Secretary of State. No failure to file any such instruments with either the commissioner or the Secretary of State shall affect the validity of such conversion. Upon the grant to any association of a charter by the appropriate federal regulatory authority, the association receiving such charter shall cease to b e an association incorporated under this chapter and shall no longer be subject to the supervision and control of the commissioner. Upon the conversion of any association into a federal association, the corporate existence of such association shall not terminate, but such federal association shall be deemed to be a continuation of the entity of the association so converted and all property of the converted association, including its rights, titles and interests in and to all property of whatever kind, whether real, personal or mixed, and things in action, and every right, privilege, interest and asset then existing, or pertaining to it, or which may inure to it, shall immediately by operation of law and without any conveyance or transfer and without any further act or deed remain and be vested in and continue and be the property of such federal association into which the association has converted itself, and such federal association shall have, hold and enjoy the same in its own right as fully and to the same extent as the same was possessed, held and enjoyed by the converting association, and such federal association, as of the time of the taking effect of such conversion, shall continue to have and succeed to all the rights, obligations and relations of the converting association. All pending actions and other judicial proceedings to which the converting association is a party shall not be deemed to have abated or to have discontinued by reason of such conversion, but may be prosecuted to final judgment, order or decree in the same manner as if such conversion into such federal association had not been made and such federal association resulting from such conversion may continue such action in its corporate name as a federal association, and any judgment, order or decree may be rendered for or against it which might have been rendered for or against the converting association theretofore involved in such judicial proceedings. Any association or corporation which has heretofore converted itself into a federal association under the provisions of the laws of the United States and has received a charter from the appropriate federal regulatory authority shall hereafter be recognized as a federal association, and its federal charter shall be given full recognition by the courts of this state to the same extent as if such conversion had taken place under the provisions of this section; however, there shall have been compliance with the foregoing requirements with respect to the filing with the commissioner of a copy of the federal charter or a certificate showing the organization of such association as a federal association.

HISTORY: Laws, 1977, ch. 445, § 13(1); reenacted, 1982, ch. 301 § 27; Laws, 1990 Ex Sess, ch. 52, § 28; Laws, 1993, ch. 441, § 28; reenacted and amended, 1994, ch. 622, § 60; reenacted without change, Laws, 1997, ch. 496, § 25; reenacted without change, Laws, 2001, ch. 488, § 26, eff from and after July 1, 2001.

Amendment Notes —

The 2001 amendment reenacted the section without change.

Cross References —

Applicability of provisions regarding property and other rights to federal association converting to association organized under state law, see §81-12-55.

Applicability of provisions regarding property to associations converting to capital stock association, see §81-12-57.

Applicability of provisions regarding property to capital stock association organized under state law being converted into federal association, see §81-12-61.

RESEARCH REFERENCES

Am. Jur.

13 Am. Jur. 2d, Building and Loan Associations § 236.

§ 81-12-55. Conversion of federal association into association organized under state law.

At an annual meeting or at any special meeting of the members or stockholders called to consider such action, any federal mutual or capital stock savings association or federal mutual or capital stock savings and loan association, hereinafter in this subsection called “federal association,” may apply for conversion into a state-chartered association under this chapter upon an affirmative vote of fifty-one percent (51%) or more of the total number of votes of the members eligible to be cast or an affirmative vote of sixty-six and two-thirds percent (66-2/3%) or more of all the issued and outstanding stock of such federal association. Upon such affirmative vote, the federal association may apply for a certificate of authority by filing with the commissioner a certificate signed by its president or secretary which sets forth the corporate action herein prescribed and asserts that the institution has complied with the provisions of the laws of the United States. The federal association shall also file with the commissioner the plan of conversion and the proposed amendments to its articles of association as approved by the members or stockholders for the operation of the association as a state-chartered association. Upon receipt of such application, the commissioner shall examine all facts associated with the conversion. The expenses and costs incurred for such special examination shall be paid by the institution applying for permission to convert. The commissioner shall present his findings and recommendations to the State Board of Banking Review for consideration. Upon approval by the State Board of Banking Review, the commissioner shall issue a certificate of authority to the applicant allowing the conversion to proceed.

HISTORY: Laws, 1977, ch. 445, § 13(2); reenacted, 1982, ch. 301, § 28; Laws, 1990 Ex Sess, ch. 52, § 29; Laws, 1993, ch. 441, § 29; reenacted and amended, 1994, ch. 622, § 61; Laws, 1995, ch. 308, § 8; reenacted without change, Laws, 1997, ch. 496, § 26; reenacted without change, Laws, 2001, ch. 488, § 27, eff from and after July 1, 2001.

Amendment Notes —

The 2001 amendment reenacted the section without change.

RESEARCH REFERENCES

Am. Jur.

13 Am. Jur. 2d, Building and Loan Associations § 237.

§ 81-12-57. Conversion of association organized under state law or of federal association into capital stock association.

If the board of directors determines, and the commissioner concurs, that substantial business benefit to the association will or may result, and if federal law, regulations or administrative rulings authorize federal associations to convert to capital stock associations, the voting members of a mutual association organized pursuant to this chapter, or otherwise subject to the provisions of this chapter or a federal mutual savings or savings and loan association (hereinafter in this subsection referred to as a “federal association”) located in this state may vote to convert the association into a total or partial capital stock association by adopting a plan of conversion which is approved by the commissioner.

The plan of conversion must be approved at a meeting of voting members called to consider such action by an affirmative vote of fifty-one percent (51%) or more of the total number of votes eligible to be cast. The commissioner may approve or disapprove the plan of conversion in his discretion, but he shall not approve the plan unless he finds that the plan is fair and equitable to members of the association and that the interests of the savings account holders and the public are adequately protected. Notice of the meeting, giving the time, place and purpose thereof, together with a proxy statement and proxy form approved by the commissioner, covering all matters to be brought before the meeting, shall be mailed at least thirty (30) days prior thereto to the commissioner and to each voting member at his last address as shown on the books of the association. The notice shall advise the savings account holders of their right to the public hearing provided in Section 81- 12-59.

Copies of the minutes of the meeting of members, verified by the affidavit of the secretary or assistant secretary of the association, shall be filed in the office of the department and with the appropriate federal regulatory authority within a reasonable time after the meeting. When so filed, the verified copies of the minutes are presumptive evidence of the holding of the meeting and of the action taken. Any member or stockholder challenging the accuracy of such minutes by sworn objection may appeal to the commissioner.

The directors of the association shall execute and file with the supervisory authority proposed articles of incorporation as provided for in Section 81-12-25, together with an application for conversion and a firm commitment for, or evidence of, insurance of deposits and other accounts of a withdrawable type. The articles shall contain a statement that the corporation resulted from the conversion of a mutual or federal association to a capital stock association. If approved by the commissioner, he shall affix the same to the articles of incorporation. An authenticated copy of the articles of incorporation shall be filed with the Secretary of State and one (1) copy of the articles of incorporation and the certificate of incorporation shall be returned to the association. The association shall cease to be a mutual association at the time and on the date specified in the approved articles of incorporation.

All the provisions regarding property and other rights contained in Section 81-12-53 shall apply to the conversion of a mutual or federal association to a capital stock association, so that the capital stock association shall be a continuation of the corporate entity of the mutual or federal association and continue to have all of its property and rights.

HISTORY: Laws, 1977, ch. 445, § 13(3); reenacted, 1982, ch. 301, § 29; Laws, 1990 Ex Sess, ch. 52, § 30; Laws, 1993, ch. 441, § 30; reenacted and amended, 1994, ch. 622, § 62; reenacted without change, Laws, 1997, ch. 496, § 27; reenacted without change, Laws, 2001, ch. 488, § 28, eff from and after July 1, 2001.

Amendment Notes —

The 2001 amendment reenacted the section without change.

Cross References —

Restriction on declaring dividends following conversion, see §81-12-51.

§ 81-12-59. Conversion of association organized under state law or of federal association into capital stock association; hearing on plan of conversion; notice; costs.

With respect to a conversion arising under Section 81-12-57 above, the commissioner may hold a hearing upon the plan of conversion. A hearing may be held by the commissioner on his own motion or upon application of the converting association or any member thereof and shall be held upon application by the holders of five percent (5%) or more in amount of the association’s savings accounts. All persons to whom it is proposed to issue capital stock in connection with the conversion may appear at any hearing, and notice of the time and place of the hearing shall be given to all such persons in person or by mail at least thirty (30) days before the hearing by the association. Evidence satisfactory to the commissioner that the notice has been given shall be submitted to the commissioner at least ten (10) days prior to the hearing. Following the hearing, the commissioner may approve the terms of the plan of conversion, may reject the same or approve the same upon condition that portions thereof may be modified. All costs to the state resulting from conversions under this section shall be paid by the association making application for conversion.

HISTORY: Laws, 1977, ch. 445, § 13(6); reenacted, Laws, 1982, ch. 301, § 30; Laws, 1990 Ex Sess, ch. 52, § 31; Laws, 1993, ch. 441, § 31; reenacted and amended, Laws, 1994, ch. 622, § 63; reenacted without change, Laws, 1997, ch. 496, § 28; reenacted without change, Laws, 2001, ch. 488, § 29, eff from and after July 1, 2001.

Amendment Notes —

The 2001 amendment reenacted the section without change.

§ 81-12-61. Conversion of capital stock association organized under state law into federal association.

  1. A capital stock association organized under this chapter may vote to convert itself into a federal mutual or capital stock savings or savings and loan association, hereinafter in this subsection referred to as a “federal association,” at any legal meeting called to consider the action. The required affirmative vote to effect the conversion shall be not less than sixty-six and two-thirds percent (66-2/3%) of the issued and outstanding stock of such association. Notice of the meeting giving the time, place and purpose thereof, together with a proxy statement and proxy form covering all matters properly brought before the meeting shall be mailed at least thirty (30) days prior thereto to the commissioner and the appropriate federal regulatory authority and to each stockholder at his last address as shown on the books of the association. A copy of the minutes of the proceedings of the meeting, verified by the affidavit of the secretary or an assistant secretary of the association, shall be filed in the office of the commissioner within ten (10) days after the date of the meeting. When filed, a verified copy of the proceedings of the meeting is presumptive evidence of the holding of the meeting and of the action taken. Any stockholder challenging the accuracy of such minutes by sworn objection may appeal to the commissioner. Within three (3) months after the date of the meeting, the association shall take such further action, in the manner prescribed and authorized by the laws of the United States, as shall make it a federal association. Three (3) copies of the charter issued by the appropriate federal regulatory authority, or three (3) copies of a certificate showing the organization of the association as a federal association, certified by the secretary or an assistant secretary of the appropriate federal regulatory authority shall be filed with the commissioner. Upon the payment of the fees prescribed by law, the commissioner shall note the filing upon each of the copies and shall retain one (1) copy in his office, file one (1) copy with the Secretary of State, and return one (1) copy to the association. The failure to file the instruments with the commissioner shall not affect the validity of the conversion. Upon the grant to any association of a charter by the appropriate federal regulatory authority, the association shall cease to be an association incorporated under this chapter and shall no longer be subject to the supervision and control of the department. All provisions regarding property and other rights contained in Section 81-12-53 above apply to the conversion of a capital stock association into a federal association.
    1. The plan of conversion must provide:
      1. That each savings account holder of the mutual association will receive a withdrawable account in the capital stock association equal in amount to his withdrawable account in the mutual association;
      2. That each savings account holder of record as provided in paragraph (iii) will be entitled to receive voting stock or rights to purchase voting stock in equal proportion to the amount his account bears to all savings accounts;
      3. That the record date fixed by the commissioner for determining savings account holders is to be used. During the month of January each year the commissioner shall publish a record date which shall be used in determining the respective interests of account holders. The date shall be not more than eighteen (18) months prior to its publication;
      4. That the business purpose to be accomplished by the conversion is set forth with particularity;
      5. Such other information in such form as required by the commissioner to enable him to determine whether the plan is fair and equitable to members of the association and that the interest of the savings account holders and the public is adequately protected.
    2. A plan of conversion will not be considered unfair or inequitable merely because it contains provisions which provide:
      1. That shares of stock will be issued to savings account holders with or without cost;
      2. That shares of stock will be issued with cost to all savings account holders and that no stock will be issued without cost;
      3. That savings account holders will or will not have preemptive rights to all stock proposed to be issued;
      4. That those persons who were savings account holders during a particular number of years have preemptive rights to purchase voting stock at the fair market value thereof;
      5. That employment contracts are provided for officers and employees of the association;
      6. That no more than ten percent (10%) of the voting stock proposed to be issued pursuant to the plan of conversion is reserved by the association for stock options for officers and employees.

HISTORY: Laws, 1977, ch. 445, § 13 (4, 5); reenacted, Laws, 1982, ch. 301, § 31; Laws, 1990 Ex Sess, ch. 52, § 32; Laws, 1993, ch. 441, § 32; reenacted and amended, Laws, 1994, ch. 622, § 64; reenacted without change, Laws, 1997, ch. 496, § 29; reenacted without change, Laws, 2001, ch. 488, § 30, eff from and after July 1, 2001.

Amendment Notes —

The 2001 amendment reenacted the section without change.

§ 81-12-63. Conversion prohibited; exceptions.

No conversion of an association or a federal association, direct or indirect, shall be permitted, except as specifically authorized by this chapter, Section 81-14-101 or Section 81-5-85.

HISTORY: Laws, 1977, ch. 445, § 13 (7); reenacted, Laws, 1982, ch. 301, § 32; Laws, 1990 Ex Sess, ch. 52, § 33; Laws, 1992, ch. 489, § 114; Laws, 1993, ch. 441, § 33; Laws, 1994, ch. 622, § 65; Laws, 1997, ch. 542, § 8; reenacted and amended, Laws, 1997, ch. 496, § 30; reenacted without change, Laws, 2001, ch. 488, § 31, eff from and after July 1, 2001.

Joint Legislative Committee Note —

Section 8 of ch. 542, Laws of 1997, effective from and after passage (approved April 10, 1997) amended this section. Section 30 of ch. 496, Laws of 1997, effective July 1, 1997, also amended this section. As set out above, this section reflects the language of Section 30 of ch. 496, Laws of 1997, pursuant to Section 1-3-79 which provides that whenever the same section of law is amended by different bills during the same legislative session, the amendment with the latest effective date shall supersede all other amendments to the same section taking effect earlier.

Amendment Notes —

The 2001 amendment reenacted the section without change.

RESEARCH REFERENCES

Am. Jur.

13 Am. Jur. 2d, Building and Loan Associations §§ 236, 237.

§ 81-12-65. Reorganization, merger and consolidation of associations.

Pursuant to a plan adopted by the board of directors and approved by the commissioner as equitable to the members of the association and as not impairing the usefulness and success of other properly conducted associations in the community and serving the needs of the community, an association shall have power to reorganize or to merge or consolidate with another association or federal association within its primary lending area, provided that the plan of such reorganization, merger or consolidation shall be approved at an annual meeting or at any special meeting of the members or stockholders called to consider such action by an affirmative vote of fifty-one percent (51%) or more of the total number of votes of the members or an affirmative vote of sixty-six and two-thirds percent (66-2/3%) of those shares of stock of such association voted, in person or by proxy. Any such plan must set forth (a) the names of the associations proposing to merge or consolidate and the name of the association into which they propose to merge or consolidate, which is herein designated as “the surviving association”; (b) the terms and conditions of the proposed merger or consolidation and the mode of carrying it into effect; (c) the manner and basis of converting the savings accounts of each merging or consolidating association into savings accounts of the surviving association; (d) the manner and basis of the cancellation and issuance of the capital stock of the merging and surviving associations; (e) a statement of any changes in the articles of incorporation of the surviving association to be effected by the merger or consolidation; (f) a statement of the contracts pertaining to the employment, or the retention as consultant, of officers and directors of the merged or consolidated association; and (g) such other provisions with respect to the proposed merger or consolidation as are deemed necessary or desirable by the boards of directors or the commissioner. In al l cases the corporate continuity of the resulting corporation shall possess the same incidents as that of an association which has converted in accordance with this chapter. No association, directly or indirectly, shall reorganize, merge, consolidate, or acquire substantially all of the assets of or assume substantially all of the liabilities of any financial institution or any other organization, person or entity, except as specifically authorized by this chapter. The charter of any association which does not survive a reorganization, merger or consolidation shall be surrendered to the commissioner and the Secretary of State on the effective date of such reorganization, merger, or consolidation and promptly cancelled by him.

HISTORY: Laws, 1977, ch. 445, § 14; Laws, 1982, chs. 301, § 33; 426, § 3; reenacted, Laws, 1990 Ex Sess, ch. 52, § 34; Laws, 1993, ch. 441, § 34; reenacted and amended, Laws, 1994, ch. 622, § 66; reenacted without change, Laws, 1997, ch. 496, § 31; reenacted without change, Laws, 2001, ch. 488, § 32, eff from and after July 1, 2001.

Amendment Notes —

The 2001 amendment reenacted the section without change.

Cross References —

Applicability of the limitations contained in this section to termination of associations, see §81-12-69.

RESEARCH REFERENCES

Am. Jur.

13 Am. Jur. 2d, Building and Loan Associations § 235.

4 Am. Jur. Legal Forms 2d, Building and Savings and Loan Associations §§ 48:41 et seq. (merger of building and savings and loan associations).

CJS.

12A C.J.S., Building and Loan Associations, Savings and Loan Associations, and Credit Unions §§ 137, 138.

§ 81-12-66. Ownership by holding company.

  1. Notwithstanding any other provision of law, any stock savings association may simultaneously with its incorporation or conversion to a stock savings association provide for its ownership by a holding company. In the case of a conversion, members of the converting savings association shall have the right to purchase capital stock of the holding company in lieu of capital stock of the converted savings association in accordance with Section 81-12-61, Mississippi Code of 1972.
  2. Notwithstanding any other provision of law, any stock savings association may reorganize its ownership to provide for ownership by a holding company, upon adoption of a plan of reorganization by a favorable vote of not less than two-thirds (2/3) of the members of the board of directors of the savings association and approval of such plan of reorganization by the holders of not less than a majority of the issued and outstanding shares of stock of the savings association. The plan of reorganization shall provide that (a) the resulting ownership shall be vested in a Mississippi corporation; (b) all stockholders of the stock savings association shall have the right to exchange shares; (c) the exchange of stock shall not be subject to state or federal income taxation; (d) stockholders not wishing to exchange shares shall be entitled to dissenters’ rights as provided under Section 79-4-13.01 et seq., Mississippi Code of 1972; and (e) the plan of reorganization is fair and equitable to all stockholders.

HISTORY: Laws, 1997, ch. 542, § 9; reenacted without change, Laws, 2001, ch. 488, § 33, eff from and after July 1, 2001.

Amendment Notes —

The 2001 amendment reenacted the section without change.

§ 81-12-67. Acquisition of controlling interest in capital stock association; certificate of approval; definitions; restrictions on ownership or control; reports; examinations.

  1. In any case in which a person or group of persons propose to purchase or acquire voting stock of any capital stock association, which purchase or acquisition would cause such person or group of persons to have control, as defined in subsection (3) of this section, of the association, such person or group of persons shall first make application to the commissioner for a certificate of approval of such purchase or acquisition. The application shall contain the name and address of the proposed new owner or owners of voting stock, and the commissioner shall issue the certificate of approval only after he has become satisfied, by a hearing or otherwise, that the proposed new owner or owners of voting stock are qualified by character, experience and financial responsibility to control the association in a legal and proper manner and that the interest of the stockholders, depositors and creditors of the association and the interest of the public generally will not be jeopardized by the proposed purchase or acquisition of voting stock.
  2. As used in this section, unless the context otherwise requires:
    1. “Business organization” or “company” means any corporation, partnership, trust, joint stock company or similar organization, but does not include any company the majority of the stock of which is owned by the United States or this state, by an officer of the United States or this state in his official capacity, or by an instrumentality of the United States or this state.
    2. “Savings and loan holding company” means any company which directly or indirectly controls an association or controls any other company which is a savings and loan holding company by virtue of this section.
    3. “Person” means an individual or company.
    4. “Subsidiary” of a person means any company which is controlled by such person or by a company which is a subsidiary of such person by virtue of this section.
  3. For purposes of this section, a business organization shall be deemed to have control of an association or any other business organization if the business organization:
    1. Directly or indirectly, or acting in concert with one or more persons or through one or more subsidiaries, owns, controls, holds with powers to vote, or holds proxies representing, more than twenty-five percent (25%) of the voting stock of such association or other business organization;
    2. Controls in any manner the election of a majority of the directors of such association or other business organization;
    3. Exercises a controlling influence over the management or policies of such association or other business organization.
  4. The following restrictions shall apply to ownership or control of associations in this state:
    1. Unless organized pursuant to the laws of this state, and not controlled by a business organization organized under the laws of another jurisdiction, no business organization shall either directly or indirectly control any association located in this state.
    2. No business organization shall acquire control of a capital stock association located in this state without first obtaining the prior written approval of the commissioner. Prior to such acquisition, such business organization shall file an application with the commissioner containing such information as the commissioner may require and as will aid in determining that the acquisition will not be detrimental to the public interest.
  5. Each savings and loan holding company and each subsidiary thereof shall file such reports as the commissioner may require from time to time or as required by this chapter. Each savings and loan holding company and each subsidiary thereof shall be subject to such examination as the commissioner shall prescribe or as required by this chapter. The cost of such examinations shall be assessed against such holding company and paid to the State Treasurer to the credit of the department.

HISTORY: Laws, 1977, ch. 445, § 15; reenacted, Laws, 1982, ch. 301, § 34; Laws, 1990 Ex Sess, ch. 52, § 35; Laws, 1993, ch. 441, § 35; reenacted and amended, Laws, 1994, ch. 622, § 67; reenacted without change, Laws, 1997, ch. 496, § 32; reenacted without change, Laws, 2001, ch. 488, § 34, eff from and after July 1, 2001.

Amendment Notes —

The 2001 amendment reenacted the section without change.

§ 81-12-69. Termination of association; liquidation of assets; surrender of charter.

  1. Subject to the limitations of Section 81-12-65 of this chapter, any association may, at any special meeting of the members or stockholders called to consider such action, terminate its existence in accordance with the provisions of this section upon an affirmative vote of fifty-one percent (51%) or more of the total number of votes of members, in the case of a mutual association, or an affirmative vote of sixty-six and two-thirds percent (66-2/3%) of all the issued and outstanding stock, in the case of a capital stock association.
  2. Upon such vote, five (5) copies of a certificate of dissolution, which shall state the vote cast in favor of dissolution, shall be signed by two (2) officers and acknowledged before an officer competent to take acknowledgments of deeds. Five (5) copies of such certificate shall be filed with the commissioner, who shall examine such association, and, if he finds that it is not in an impaired condition, shall so note, together with his approval of such dissolution, upon all the copies of the certificate of dissolution. The commissioner shall place a copy in the permanent files in his office, file a copy with the Secretary of State, and return the remaining copies to the parties filing the same.
  3. Upon such approval, the association shall be dissolved and shall cease to carry on business but nevertheless shall continue as a corporate entity for the sole purpose of paying, satisfying and discharging existing liabilities and obligations, collecting and distributing assets, and doing all acts required to adjust, wind up and dissolve its business and affairs.
  4. The board of directors shall act as trustees for liquidation as provided in this section. They shall proceed as quickly as may be practicable to wind up the affairs of the association and, to the extent necessary or expedient to that end, shall exercise all the powers of such dissolved association and, without prejudice to the generality of such authority, may fill vacancies, elect officers, carry out the contracts, make new contracts, borrow money, mortgage or pledge the property, sell its assets at public or private sale, or compromise claims in favor of or against the association, apply assets to the discharge of liabilities, distribute assets either in cash or in kind among savings account members or savings account holders according to their respective pro rata interests after paying or adequately providing for the payment of other liabilities, distribute assets either in cash or in kind among stockholders, and perform all acts necessary or expedient to the winding up of the association. Provided, however, that upon liquidation, savings account holders shall be first paid the value of their accounts, if such funds are available, before any sums are paid to the stockholders. All deeds or other instruments shall be in the name of the association and executed by the president or a vice president and the secretary or an assistant secretary. The board of directors shall also have power to exchange or otherwise dispose of or to put in trust all or substantially all or any part of the assets, upon such terms and conditions and for such considerations, which may be money, stock, bonds, shares or accounts of any insured association, or of any federal association, or other instruments for the payment of money, or other property, or other considerations, as the board of directors may deem reasonable or expedient, and may distribute such considerations or the proceeds thereof, or trust receipts, or certificates of beneficial interest among the savings account members or savings account holders in proportion to their pro rata interests therein.
  5. The association, during the liquidation of the assets of the association by the board of directors, shall continue to be subject to the supervision of the commissioner, and the board of directors shall report the progress of such liquidation to the commissioner from time to time as he may require. Upon completion of liquidation, the board of directors shall file with the commissioner a final report and accounting of such liquidation and shall surrender the charter of the association. If such report is approved, the commissioner shall promptly cancel said charter. The approval of such report by the commissioner shall operate as a discharge of the board of directors and each member thereof in connection with the liquidation of such association. No such dissolution or any action of the board of directors in connection therewith shall impair any contract right between such association and any borrower or other person or persons or the vested rights of any member or savings account holder of such association.

HISTORY: Laws, 1977, ch. 445, § 16; reenacted, 1982, ch. 301, § 35; Laws, 1990 Ex Sess, ch. 52, § 36; Laws, 1993, ch. 441, § 36; Laws, 1994, ch. 622, § 68; reenacted without change, Laws, 1997, ch. 496, § 33; reenacted without change, Laws, 2001, ch. 488, § 35, eff from and after July 1, 2001.

Amendment Notes —

The 2001 amendment reenacted the section without change.

RESEARCH REFERENCES

CJS.

12A C.J.S., Building and Loan Associations, Savings and Loan Associations, and Credit Unions § 122.

§ 81-12-71. Annual meeting of members of association; voting; quorum.

  1. An annual meeting of the members of each mutual association shall be held as fixed in the bylaws of such association. Special meetings may be called as provided in the bylaws.
  2. The members who shall be entitled to vote at any meeting of the members shall be those who are members of record at the end of the calendar month next preceding the date of the meeting of members, except those who have ceased to be members. The number of votes which members shall be entitled to cast shall be in accordance with the books on the said date determinative of entitlement to vote.
  3. In the determination of all questions requiring action by the members, each member shall be entitled to cast one (1) vote, plus an additional vote for each One Hundred Dollars ($100.00) or fraction thereof of the withdrawal value of savings accounts, if any, held by such member. No member, however, shall cast more than four hundred (400) votes.
  4. Voting by proxy at a meeting shall be permitted as set forth in the bylaws of the association. Constitution of a quorum shall be set forth in the bylaws of the association.

HISTORY: Laws, 1977, ch. 445, § 17; reenacted, Laws, 1982, ch. 301, § 36; Laws, 1990 Ex Sess, ch. 52, § 37; Laws, 1993, ch. 441, § 37; Laws, 1994, ch. 622, § 69; reenacted without change, Laws, 1997, ch. 496, § 34; reenacted without change, Laws, 2001, ch. 488, § 36, eff from and after July 1, 2001.

Amendment Notes —

The 2001 amendment reenacted the section without change.

§ 81-12-73. Annual meeting of stockholders of capital stock associations; notice; voting; quorum.

  1. An annual meeting of stockholders of capital stock associations shall be held as fixed in the bylaws of the association. Whenever the provisions of this chapter, the articles of incorporation, or the bylaws require or authorize the stockholders to take any action at an annual or special meeting, a notice of such meeting, signed by the secretary or other officer permitted by the bylaws, shall be mailed to each stockholder entitled to vote at such meeting, at his address as it appears on the records of the corporation, not less than ten (10) nor more than sixty (60) days before the date set for such meeting. The articles of incorporation or bylaws may require that such notice also be published in one or more newspapers. The notice shall state the purpose of the meeting, a general statement of the business to be transacted, and the time and place it is to be held. Such notice shall be sufficient for said meeting and any adjournment thereof unless otherwise provided in the articles of incorporation or bylaws. If any stockholder shall transfer any of his stock after notice, it shall not be necessary to notify the transferee. Such meetings shall be held within the state and within the county in which the home office of the association is located. Any stockholder may waive notice of any meeting either before, at or after the meeting.
  2. Unless otherwise provided in the articles of incorporation, every such stockholder shall be entitled at such meeting, and upon each proposal presented at such meeting, to one (1) vote for each share of voting stock recorded in his name on the books of the corporation on the record date fixed as above provided or, if no such record date was fixed, on the day of meeting. The books of record of stockholders shall be produced at any stockholders’ meeting upon the request of any stockholder.
  3. The stockholders record date and voting by proxy at any meeting shall be established and permitted, respectively, as set forth in the bylaws of the association. Constitution of a quorum shall be set forth in the bylaws of the association.

HISTORY: Laws, 1977, ch. 445, § 18; reenacted, Laws, 1982, ch. 301, § 37; Laws, 1990 Ex Sess, ch. 52, § 38; Laws, 1993, ch. 441, § 38; Laws, 1994, ch. 622, § 70; reenacted without change, Laws, 1997, ch. 496, § 35; reenacted without change, Laws, 2001, ch. 488, § 37, eff from and after July 1, 2001.

Amendment Notes —

The 2001 amendment reenacted the section without change.

§ 81-12-75. Membership fees prohibited.

An association shall not directly or indirectly charge any membership, admission, withdrawal or any other fee or sum of money for the privilege of becoming, remaining or ceasing to be a member or savings account holder of the association.

HISTORY: Laws, 1977, ch. 445, § 19; reenacted, Laws, 1982, ch. 301, § 38; Laws, 1990 Ex Sess, ch. 52, § 39; Laws, 1993, ch. 441, § 39; Laws, 1994, ch. 622, § 71; reenacted without change, Laws, 1997, ch. 496, § 36; reenacted without change, Laws, 2001, ch. 488, § 38, eff from and after July 1, 2001.

Amendment Notes —

The 2001 amendment reenacted the section without change.

§ 81-12-77. Inspection of books and records of association; confidential nature of certain books and records; access by members; procedure for members to communicate with other members with reference to questions to be presented at annual meeting.

  1. Every member, savings account holder or borrower shall have the right to inspect the books and records of an association as pertain to his loan or savings account. Otherwise, the right of inspection and examination of the books and records shall be limited (a) to the commissioner or his duly authorized representatives as provided in this chapter, (b) to persons duly authorized to act for the association, (c) officers and directors of the association, and (d) to any federal or state instrumentality or agency authorized to inspect or examine the books and records of an insured association. The books and records pertaining to the accounts and loans of members, savings account holders, and borrowers shall be kept confidential by the association, its directors, officers and employees, and by the commissioner, his examiners and representatives, except where the disclosure thereof shall be compelled by a court of competent jurisdiction, and no member or any other person shall have access to the books and records or shall be furnished or shall possess a partial or complete list of the members, savings account holders, or borrowers except upon express action and authority of the board of directors. This shall in no way be construed to prevent the commissioner from performing his duties under this chapter in any form permitted by law.
  2. In the event, however, that any member or members desire to communicate with the other members of the association with reference to any question pending or to be presented for consideration at a meeting of the members, the association shall furnish upon request a statement of the approximate number of members of the association at the time of such request, and an estimate of the cost of forwarding such communication. The requesting member or members shall then submit the communication, together with a sworn statement that the proposed communication is not for any reason other than the business welfare of the association, to the commissioner who, if he finds it to be appropriate, truthful and in the best interests of the association and its members, shall execute a certificate setting out such findings, forward the certificate together with the communication, which may be sealed and its contents protected, to the association, and direct that the communication be prepared an d mailed by the association to the members upon the requesting member’s or members’ payment to it of the expense of such preparation and mailing. If the commissioner finds such proposed communication to be inappropriate, untruthful or contrary to the best interests of the association and its members, he shall have the discretion to make any disposition of the request to communicate which he deems proper and he shall execute a certificate setting out such findings and deliver it to the requesting member together with his order making disposition of the request.

HISTORY: Laws, 1977, ch. 445, § 20; reenacted, Laws, 1982, ch. 301, § 39; Laws, 1990 Ex Sess, ch. 52, § 40; Laws, 1993, ch. 441, § 40; Laws, 1994, ch. 622, § 72; reenacted without change, Laws, 1997, ch. 496, § 37; reenacted without change, Laws, 2001, ch. 488, § 39, eff from and after July 1, 2001.

Amendment Notes —

The 2001 amendment reenacted the section without change.

RESEARCH REFERENCES

Am. Jur.

13 Am. Jur. 2d, Building and Loan Associations § 311.

CJS.

12 C.J.S., Building and Loan Associations, Savings and Loan Associations, and Credit Unions §§ 40, 41.

§ 81-12-79. Call reports.

The commissioner shall call upon each association for the reports required in this section. Such calls shall be made by the commissioner in writing by letter or other similar means of written communications for the same dates and as often as calls are issued by the appropriate federal regulating authority for reports from federal associations. The commissioner shall prescribe the forms for such reports. The reports shall be sworn to by either the president, vice president or cashier of the association making them, attested by not less than two (2) of the board of directors, and shall exhibit in detail, under appropriate heads, the total resources and total liabilities of the association on the day specified by the commissioner. Associations shall transmit to the department such call reports within a time limitation established by regulation by the commissioner; however, such time limitation cannot exceed that set by the Federal Deposit Insurance Corporation for state insured associations. For any failure or delay in furnishing this report, the president, vice president or cashier of any such association, so in default, and the members of the board of directors of the association refusing to attest the report, shall be subject to an administrative fine, which may be imposed by the commissioner, of Fifty Dollars ($50.00) a day for each day while in such default.

HISTORY: Laws, 1977, ch. 445, § 21; reenacted, Laws, 1982, ch. 301, § 40; Laws, 1990 Ex Sess, ch. 52, § 41; Laws, 1993, ch. 441, § 41; reenacted and amended, Laws, 1994, ch. 622, § 73; Laws, 1996, ch. 400, § 19; reenacted without change, Laws, 1997, ch. 496, § 38; reenacted without change, Laws, 2001, ch. 488, § 40, eff from and after July 1, 2001.

Amendment Notes —

The 2001 amendment reenacted the section without change.

§ 81-12-81. Board of directors to direct business of association; number and qualifications of members; oath; procedure for filling vacancies.

  1. The business of the mutual association shall be directed by a board of directors of not less than five (5) nor more than fifteen (15) as determined by, and elected by, ballot from among the members by a plurality of the votes of the members present or voting by proxy. At all times at least two-thirds (2/3) of the directors shall be bona fide residents of this state.
  2. In order to qualify as a director, a member of an association must hold individually, or jointly with his spouse, a savings account, the withdrawal value of which is at least Five Hundred Dollars ($500.00); provided that if the assets of the association exceed Five Million Dollars ($5,000,000.00), the withdrawal value of such account must be at least One Thousand Dollars ($1,000.00). No member shall be eligible for election or shall serve as a director or officer of an association who has been convicted of a criminal offense involving dishonesty or a breach of trust. A director shall cease to be a director when he ceases to be a member, or when he is adjudicated a bankrupt or is convicted of a criminal offense as herein provided, or when the net equity above loans of all savings accounts in the association held by him aggregates for a period of thirty (30) consecutive days less than the minimum required to be eligible for election as a director, but no action of the board of directors shall be invalidated through the participation of such director in such action unless the vote of such director be challenged prior to such action; provided that if a director becomes ineligible under the terms of this subsection by reason of the exercise by the association of the right of redemption of savings accounts provided for in Section 81-12-153 he shall remain validly in office until the expiration of his term or until he otherwise becomes ineligible, resigns or is removed, whichever may occur first.
  3. Directors shall be classified as set forth in the bylaws of the association.
  4. The authorized number of directors determined by the members within the limits hereinabove specified may subsequently be increased or decreased only by vote of the members.
  5. Each director, upon assuming office, shall take an oath that he will, so far as the duty devolves on him, diligently and honestly administer the affairs of the association and will not knowingly violate or permit to be violated, any of the provisions of this chapter, and a written copy of such oath shall be filed with the commissioner.
  6. If the members fail to elect a director to fill each vacancy created by any such increase, the directors may fill such vacancy by electing a director to serve until the next annual meeting of the members, at which time a director shall be elected to fill the vacancy for the unexpired term of the class of director in which such vacancy exists.
  7. Whenever under the provisions hereof the number of directors is changed and vacancies caused by such change are filled, the directors so elected shall be classified in accordance with the provisions of the bylaws of the association.
  8. Any vacancy among directors, not so filled by the members, may be filled by a majority vote of the remaining directors, though less than a quorum, by electing a director to serve until the next annual meeting of the members, at which time a director shall be elected to fill the vacancy for the unexpired term for the class of director in which such vacancy exists. In event of a vacancy on the board of directors from any cause, the remaining directors shall have full power and authority to continue direction of the association until such vacancy is filled.

HISTORY: Laws, 1977, ch. 445, § 22; reenacted, Laws, 1982, ch. 301, § 41; Laws, 1990 Ex Sess, ch. 52, § 42; Laws, 1993, ch. 441, § 42; Laws, 1994, ch. 622, § 74; reenacted without change, Laws, 1997, ch. 496, § 39; reenacted without change, Laws, 2001, ch. 488, § 41, eff from and after July 1, 2001.

Amendment Notes —

The 2001 amendment reenacted the section without change.

RESEARCH REFERENCES

CJS.

12 C.J.S., Building and Loan Associations, Savings and Loan Associations, and Credit Unions §§ 22, 23.

§ 81-12-83. Board of directors to manage business and exercise powers of capital stock association; election of members; term of office; qualifications; oath; vacancies.

  1. The business of a capital stock association shall be managed and its powers exercised by a board of directors. The board shall consist of not less than five (5) adult natural persons who shall be elected at the annual meeting of stockholders in the following manner:

    At each election for directors every shareholder entitled to vote at such election shall have the right to vote, in person or by proxy, the number of shares owned by him for as many persons as there are directors to be elected and for whose election he has a right to vote.

  2. The term of office of the directors shall be for one (1) year; provided that when the board of directors shall consist of nine (9) or more members, in lieu of electing the whole number of directors annually, the articles of incorporation may provide that the directors be divided into either two (2) or three (3) classes, each class to be as nearly equal in number as possible, the term of office of directors of the first class to expire at the first annual meeting of the shareholders after their election; that of the second class to expire at the second annual meeting after their election; and that of the third class, if any, to expire at the third annual meeting after their election. At each annual meeting after such classification, the number of directors equal to the number of the class whose term expires at the time of such meeting shall be elected to hold office until the second succeeding annual meeting, if there be two (2) classes, or until the third succeeding annual meeting, if there be three (3) classes. No classification of directors shall be effective prior to the first annual meeting of shareholders.
  3. Every director must, during his whole term of service, be a citizen of the United States, and at least three-fifths (3/5) of the directors must have resided in this state for at least one (1) year preceding their election and must be residents therein during their continuance in office. No person shall be eligible for election or shall serve as a director or officer of a capital stock association who has been convicted of a criminal offense. A director or officer shall automatically cease to be a director when he is adjudicated a bankrupt or convicted of a criminal offense. However, no action of the board of directors shall be invalidated through the participation of such director in such action unless challenge is made to such director’s vote prior to such action. Each director shall, in his own name, own capital stock in, or have a deposit relationship with, the association on an unencumbered basis as follows:
    1. For stock associations under Fifty Million Dollars ($50,000,000.00) in assets, stock ownership in the institution or its holding company of Two Thousand Five Hundred Dollars ($2,500.00) in market value at time of purchase; or
    2. For mutual associations under Fifty Million Dollars ($50,000,000.00) in assets, a Two Thousand Five Hundred Dollar ($2,500.00) deposit relationship; or
    3. For stock associations over Fifty Million Dollars ($50,000,000.00) in assets, stock ownership in the institution or its holding company of Five Thousand Dollars ($5,000.00) in market value at the time of purchase; or
    4. For mutual associations over Fifty Million Dollars ($50,000,000.00) in assets a Five Thousand Dollar ($5,000.00) deposit relationship.

      For associations that cross the Fifty Million Dollar ($50,000,000.00) threshold, the commissioner shall allow a reasonable period for the directors to comply with the ownership interest requirement.

  4. Each director, upon assuming office, shall take an oath that he will, so far as the duty devolves on him, diligently and honestly administer the affairs of such capital stock association and will not knowingly violate or permit to be violated, any of the provisions of this chapter, and a written copy of such oath shall be filed with the commissioner.
  5. The board of directors of each capital stock association shall hold meetings as set forth in the bylaws of the association.
  6. Vacancies on the board of directors may be filled at a meeting by the stockholders called for that purpose.

HISTORY: Laws, 1977, ch. 445, § 24; reenacted, Laws, 1982, ch. 301, § 43; Laws, 1990 Ex Sess, ch. 52, § 43; Laws, 1993, ch. 441, § 43; Laws, 1994, ch. 622, § 75; Laws, 1996, ch. 400, § 20; reenacted without change, Laws, 1997, ch. 496, § 40; reenacted without change, Laws, 2001, ch. 488, § 42, eff from and after July 1, 2001.

Amendment Notes —

The 2001 amendment reenacted the section without change.

Cross References —

Waiver of requirements of this section for director appointed to replace temporarily removed director, see §81-12-24.

RESEARCH REFERENCES

Am. Jur.

13 Am. Jur. 2d, Building and Loan Associations § 38.

5 Am. Jur. Pl & Pr Forms (Rev), Building and Loan Associations, Forms 11 et seq. (directors and officers).

CJS.

12 C.J.S., Building and Loan Associations, Savings and Loan Associations, and Credit Unions §§ 22, 23.

§ 81-12-85. Bonding of association’s officers, attorneys, employees, agents and directors.

Each association shall provide and maintain a fidelity bond covering its officers, attorneys, employees, agents and directors when performing the duties of officers or employees, in the form and amount required by the commissioner, but in no event less than One Hundred Thousand Dollars ($100,000.00). No bond coverage will be required of any agent which is a financial institution insured by the Federal Deposit Insurance Corporation. Such bonds shall provide that a cancellation thereof either by the surety or by the insured shall not become effective unless and until thirty (30) days’ notice in writing first shall have been given to the commissioner, unless he shall have approved such cancellation earlier.

HISTORY: Laws, 1977, ch. 445, § 24; reenacted, Laws, 1982, ch. 301, § 43; Laws, 1990 Ex Sess, ch. 52, § 44; Laws, 1993, ch. 441, § 44; reenacted and amended, Laws, 1994, ch. 622, § 76; Laws, 1996, ch. 400, § 21; reenacted without change, Laws, 1997, ch. 496, § 41; reenacted without change, Laws, 2001, ch. 488, § 43, eff from and after July 1, 2001.

Amendment Notes —

The 2001 amendment reenacted the section without change.

RESEARCH REFERENCES

CJS.

12 C.J.S., Building and Loan Associations, Savings and Loan Associations, and Credit Unions §§ 22, 23, 32.

§ 81-12-87. Fiduciary relationship of directors and officers; disclosure of personal interests; restrictions governing conduct; penalty.

Directors and officers occupy a fiduciary relationship to the association of which they are directors or officers, and no director or officer shall engage or participate, directly or indirectly, in any business or transaction conducted on behalf of or involving the association, which would result in a conflict of his own personal interests with those of the association which he serves. Without limitation by any of the specific provisions of any of the subsections hereof, the commissioner may require the disclosure by directors, officers and employees of any personal interest, directly or indirectly, in any business or transactions on behalf of or involving the association and of their control of or active participation in enterprises having activities related to the business of the association. The following restrictions governing the conduct of directors and officers expressly are specified, but such specification is not to be construed in any manner as excusing such persons from the observance of any other aspect of the general fiduciary duty owed by them to the association which they serve:

From and after January 1, 1979, no officer or director of an association shall hold office as a director or officer of another thrift institution the principal office of which is located in the association’s primary lending area.

No director of an association shall receive remuneration as director except reasonable fees for service as a director or for service as a member of a committee of directors, except that nothing herein contained shall be deemed to prohibit or in any way to limit any right of a director who is also an officer or employee of or attorney for the association to receive compensation for service as an officer, employee or attorney.

Loans aggregating fifteen percent (15%) of the unimpaired capital and unimpaired surplus may be made by any association to any director or executive officer thereof, as defined in Regulation O promulgated by the Board of Governors of the Federal Reserve System, less existing direct and indirect liabilities thereto, upon affirmative approval of a majority of all directors spread on the minutes of a directors’ meeting held before such loan is made, provided, such loan is made on substantially the same terms and conditions extended to other borrowers for comparable transactions. Any association may lend to any such director or executive officer thereof, upon affirmative approval of a majority of all directors spread on the minutes of a directors’ meeting held before such loan is made, not more than twenty percent (20%) of the unimpaired capital and unimpaired surplus of the association, less the amount of existing direct and indirect liabilities, when secured; or when the portion thereof in excess of any amount loaned under the first provision hereof is secured by obligations of the United States government, the State of Mississippi, and the levee districts, counties, road districts, school districts, and municipalities of the State of Mississippi, obligations of any other state of the United States and other bonds of recognized character and standing, which are the subject of daily newspaper market quotations, provided such loan shall not exceed eighty percent (80%) of the market or par value (whichever is less) of the bonds or obligations offered as security. Any association may lend to any executive officer or director thereof upon affirmative approval of a majority of all directors spread on the minutes of a directors’ meeting held before such loan is made, such amount as is safe and proper, when secured by warehouse receipts or shippers’ order bills of lading representing actual existing values, provided the amount loaned shall not exceed eighty percent (80%) of the market value of the commodities representing the actual existing values, and loans of this nature shall be made payable on demand so that the security held therefor may be sold on any date and the proceeds thereof applied to the payment of the loan. However, an association’s board of directors may, as shown in its minutes, give to an association officer the authority to make secured or unsecured loans to an executive officer or director of such association, without receiving the board’s prior approval, in an amount that, when aggregated with the amount of all other extensions of credit to that person and to all related interests of that person, does not exceed the greater of Twenty-five Thousand Dollars ($25,000.00) or five percent (5%) of the association’s unimpaired capital and unimpaired surplus.

Loans and discounts by an association to a director or executive officer thereof secured in full by funds on deposit in time or savings accounts with the lending association to the credit of the borrower shall not be restricted to the fifteen percent (15%) or twenty percent (20%) limitations herein prescribed.

The limitations of this section shall not apply where an executive officer or director shall bona fide purchase from the association at a reasonable price real or personal property acquired by the association in payment of debts due the association, provided such transactions are approved by a majority of the board of directors, such approval to be shown in their minutes; and, in cases where loans are made by branch offices, the sum total of loans made by any branch or branches and its parent association to such executive officer or director shall be computed as against the total capital stock and surplus of the parent association and its branch or branches. Loans heretofore made to executive officers or directors may be renewed or extended if in accord with sound banking practice.

However, no association shall extend credit to any director or executive officer thereof, in an amount that, when aggregated with all other extensions of credit to that person and to all related interests of that person, exceeds Five Hundred Thousand Dollars ($500,000.00) without documented prior affirmative approval of a majority of its directors.

No director or officer shall have any interest, directly or indirectly, in the proceeds of a loan or investment or of a purchase or sale made by the association, unless such loan, investment, purchase or sale is authorized expressly by resolution of the board of directors, and unless such resolution is approved by vote of at least two-thirds (2/3) of the directors authorized by the association, any interested director taking no part in such vote.

No director or officer shall have any interest, directly or indirectly, in the purchase at less than its face value of any evidence of a savings account, deposit or other indebtedness issued by the association.

No director, association or officer thereof shall require, as a condition to the granting of any loan or the extension of any other service by the association, that the borrower or any other person undertake a contract of insurance or any other agreement, or understanding with respect to the furnishing of any other goods or services, with any specific company, agency or individual.

No officer or director acting as proxy for a member or stockholder of record of an association shall exercise, transfer or delegate such vote or votes in any consideration of a private benefit or advantage, direct or indirect, accruing to himself, nor shall he surrender control or pass his office to any other for any consideration of a private benefit or advantage, direct or indirect. The voting rights of members, stockholders and directors shall not be subject to sale, barter, exchange or similar transaction, either directly or indirectly. Any officer or director who violates the provisions of this section shall be held accountable to the association for any increment and subject to the criminal penalty below.

No director or officer shall solicit, accept or agree to accept, directly or indirectly, from any person other than the association any gratuity, compensation or other personal benefit for any action taken by the association or for endeavoring to procure any such action.

Any violation of the provisions of this section shall be punishable by not more than five (5) years’ imprisonment or a fine of not more than Five Thousand Dollars ($5,000.00).

HISTORY: Laws, 1977, ch. 445, § 25; reenacted, Laws, 1982, ch. 301, § 44; Laws, 1990 Ex Sess, Ch. 52, § 45; Laws, 1993, ch. 441, § 45; reenacted and amended, Laws, 1994, ch. 622, § 77; Laws, 1996, ch. 400, § 22; reenacted without change, Laws, 1997, ch. 496, § 42; reenacted without change, Laws, 2001, ch. 488, § 44, eff from and after July 1, 2001.

Amendment Notes —

The 2001 amendment reenacted the section without change.

§ 81-12-89. Deposit of association funds; approval by directors.

No association shall deposit any of its funds, except with a depository approved by a vote of a majority of the directors authorized by the association, any director who is an officer, partner, director, or trustee of the depository so designated taking no part in such vote.

HISTORY: Laws, 1977, ch. 445, § 26; reenacted, Laws, 1982, ch. 301, § 45; Laws, 1990 Ex Sess, ch. 52, § 46; Laws, 1993, ch. 441, § 46; Laws, 1994, ch. 622, § 78; reenacted without change, Laws, 1997, ch. 496, § 43; reenacted without change, Laws, 2001, ch. 488, § 45, eff from and after July 1, 2001.

Amendment Notes —

The 2001 amendment reenacted the section without change.

§ 81-12-91. Indemnification of director, officer or employee for expenses of action to which he is made a party by reason of his position.

Any person may be indemnified or reimbursed by the association for reasonable expenses, including, but not limited to, attorney’s fees actually incurred by him in connection with any action, suit or proceeding, instituted or threatened, judicial or administrative, civil or criminal, to which he is made a party by reason of his being or having been a director, officer or employee of an association; however, no person shall be so indemnified or reimbursed, nor shall he retain any advancement or allowance for indemnification which may have been made by the association in advance of final disposition, in relation to such action, suit or proceeding in which and to the extent that he finally shall be adjudicated to have been guilty of a breach of good faith, to have been negligent in the performance of his duties or to have committed an action or failed to perform a duty for which there is a common law or a statutory liability. In addition, a person may, with the approval of the commissioner, be so indemnified or reimbursed for:

Amounts paid in compromise or settlement of any action, suit or proceeding, including reasonable expenses incurred in connection therewith; or

Reasonable expenses, including fines and penalties, incurred in connection with a criminal or civil action, suit or proceeding in which such person has been adjudicated guilty, negligent or liable, if it shall be determined by the board of directors and the commissioner that such person was acting in good faith and in what he believed to be the best interests of the association and without knowledge that the action was illegal and if such indemnification or reimbursement is approved at an annual or special meeting of the members or stockholders by a majority of the votes eligible to be cast. Amounts paid to the association, whether pursuant to judgment or settlement by any person within the meaning of this section, shall not be indemnified or reimbursed in any case.

HISTORY: Laws, 1977, ch. 445, § 27; reenacted, Laws, 1982, ch. 301, § 46; Laws, 1990 Ex Sess, ch. 52, § 47; Laws, 1993, ch. 441, § 47; reenacted and amended, Laws, 1994, ch. 622, § 79; reenacted without change, Laws, 1997, ch. 496, § 44; reenacted without change, Laws, 2001, ch. 488, § 46, eff from and after July 1, 2001.

Amendment Notes —

The 2001 amendment reenacted the section without change.

§ 81-12-93. Management contracts.

No association shall make any management contract with any person or persons extending for more than three (3) years. Contracts in excess of one (1) year shall first be approved by the commissioner. No such contract shall permit an association to be managed on a commission basis.

HISTORY: Laws, 1977, ch. 445, § 28; reenacted, Laws, 1982, ch. 301, § 47; Laws, 1990 Ex Sess, ch. 52, § 48; Laws, 1993, ch. 441, § 48; Laws, 1994, ch. 622, § 80; reenacted without change, Laws, 1997, ch. 496, § 45; reenacted without change, Laws, 2001, ch. 488, § 47, eff from and after July 1, 2001.

Amendment Notes —

The 2001 amendment reenacted the section without change.

§ 81-12-95. Records; minutes of meetings; business transactions.

Every association shall keep at the home office correct and complete minutes of the proceedings and meetings of members, stockholders, directors and the executive committee. Complete records of all business transacted at the home office shall be maintained at the home office, and control records of all business transacted at each branch office or agency shall be maintained at the home office, except as permitted below. However, any state savings association may cause any or all records at any time in its custody to be reproduced in a format of storage commonly used, whether electronic, imaged, magnetic, microphotographic, or otherwise, and any reproduction so made shall have the same force and effect as the original thereof and be admitted in evidence equally with the original.

HISTORY: Laws, 1977, ch. 445, § 29(1); reenacted, Laws, 1982, ch. 301, § 48; Laws, 1990 Ex Sess, ch. 52, § 49; Laws, 1993, ch. 441, § 49; Laws, 1994, ch. 622, § 81; reenacted without change, Laws, 1997, ch. 496, § 46; Laws, 2000, ch. 335, § 2; reenacted without change, Laws, 2001, ch. 488, § 48, eff from and after July 1, 2001.

Amendment Notes —

The 2000 amendment added the third sentence.

The 2001 amendment reenacted the section without change.

Cross References —

Record keeping – banks, see §81-5-7.

Record keeping – credit unions, see §81-13-73.

Record keeping – savings banks, see §81-14-153.

§ 81-12-97. Records; branch offices; agents.

  1. Each branch office shall keep detailed records of all transactions at such branch office and shall furnish full control records to the home office, except as permitted below.
  2. Each agent of an association shall keep an original record of each transaction of business of the association and shall report promptly to the home office. Complete detailed permanent records of such transactions are not required to be maintained at such agency.

HISTORY: Laws, 1977, ch. 445, § 29(2, 3); reenacted, Laws, 1982, ch. 301, § 49; Laws, 1990 Ex Sess, ch. 52, § 50; Laws, 1993, ch. 441, § 50; Laws, 1994, ch. 622, § 82; reenacted without change, Laws, 1997, ch. 496, § 47; reenacted without change, Laws, 2001, ch. 488, § 49, eff from and after July 1, 2001.

Amendment Notes —

The 2001 amendment reenacted the section without change.

§ 81-12-99. Records; maintenance by means of data processing services.

An association which determines to maintain any of its records by means of data processing services shall so notify the commissioner, in writing, at least ninety (90) days prior to the date on which such maintenance of records will begin. Such notification shall include identification of the records to be maintained by data processing services and a statement as to the location at which such records will be maintained. Any contract, agreement or arrangement made by an association pursuant to which data processing services are to be performed for such association shall be in writing and shall expressly provide that the records to be maintained by such services shall at all times be available for examination and audit.

HISTORY: Laws, 1977, ch. 445, § 29(4); reenacted, Laws, 1982, ch. 301, § 50; Laws, 1990 Ex Sess, ch. 52, § 51; Laws, 1993, ch. 441, § 51; Laws, 1994, ch. 622, § 83; reenacted without change, Laws, 1997, ch. 496, § 48; reenacted without change, Laws, 2001, ch. 488, § 50, eff from and after July 1, 2001.

Amendment Notes —

The 2001 amendment reenacted the section without change.

§ 81-12-101. Records; forms and accounting principles; closing of books; description of assets.

  1. Every association shall use such forms and observe such accounting principles and practices as the commissioner may require from time to time.
  2. Every association shall close its books annually.
  3. No association by any system of accounting or any device of bookkeeping shall, either directly or indirectly, enter any of its assets upon its books in the name of any other person, partnership, association or corporation or under any title or designation that is not truly descriptive of such assets.

HISTORY: Laws, 1977, ch. 445, § 29(5-7); reenacted, Laws, 1982, ch. 301, § 51; Laws, 1990 Ex Sess, ch. 52, § 52; Laws, 1993, ch. 441, § 52; Laws, 1994, ch. 622, § 84; reenacted without change, Laws, 1997, ch. 496, § 49; reenacted without change, Laws, 2001, ch. 488, § 51, eff from and after July 1, 2001.

Amendment Notes —

The 2001 amendment reenacted the section without change.

§ 81-12-103. Records; overvaluation of assets.

The commissioner, after a determination of value made in accordance with Section 81-12-177(8), may order that assets, individually or in the aggregate, to the extent that such assets are overvalued on an association’s books, be charged off, or that a special reserve or reserves equal to such overvaluation be set up by transfers from undivided profits or reserves.

HISTORY: Laws, 1977, ch. 445, § 29(8, 9); reenacted, Laws, 1982, ch. 301, § 52; Laws, 1990 Ex Sess, ch. 52, § 53; Laws, 1993, ch. 441, § 53; reenacted and amended, Laws, 1994, ch. 622, § 85; Laws, 1996, ch. 400, § 23; reenacted without change, Laws, 1997, ch. 496, § 50; reenacted without change, Laws, 2001, ch. 488, § 52, eff from and after July 1, 2001.

Amendment Notes —

The 2001 amendment reenacted the section without change.

§ 81-12-105. Records; real estate investments; appraisal.

  1. An association shall not carry any real estate on its books at a sum in excess of the total amount invested by such association on account of such real estate, including advances, costs, and improvements but excluding accrued but uncollected interest.
  2. Every association shall have appraised each parcel of real estate immediately following acquisition thereof. The report of each such appraisal shall be submitted in writing to the board of directors and shall be kept in the records of the association. In addition to his powers under Section 81-12-177(8) of this chapter, the commissioner may require the appraisal of real estate securing loans which are delinquent more than four (4) months.

HISTORY: Laws, 1977, ch. 445, § 29(10, 11); reenacted, Laws, 1982, ch. 301, § 53; Laws, 1990 Ex Sess, ch. 52, § 54; Laws, 1993, ch. 441, § 54; Laws, 1994, ch. 622, § 86; reenacted without change, Laws, 1997, ch. 496, § 51; reenacted without change, Laws, 2001, ch. 488, § 53, eff from and after July 1, 2001.

Amendment Notes —

The 2001 amendment reenacted the section without change.

§ 81-12-107. Records; loan and investment.

Every association shall maintain complete loan and investment records in a manner prescribed by the commissioner. Detailed records necessary to make determinations of compliance by an association with the investment, liquidity, loan and other provisions of this chapter shall be maintained consistently and at all times, the record of each real estate loan or other secured loan or investment containing documentation to the satisfaction of the commissioner of the type, adequacy and completion of the security.

HISTORY: Laws, 1977, ch. 445, § 29(12); reenacted, Laws, 1982, ch. 301, § 54; Laws, 1990 Ex Sess, ch. 52, § 55; Laws, 1993, ch. 441, § 55; Laws, 1994, ch. 622, § 87; reenacted without change, Laws, 1997, ch. 496, § 52; reenacted without change, Laws, 2001, ch. 488, § 54, eff from and after July 1, 2001.

Amendment Notes —

The 2001 amendment reenacted the section without change.

§ 81-12-109. Records; membership and stockholder.

Every association shall maintain membership and stockholder records, which shall show the name and address of the member or stockholder, the status of the member as a savings account holder, or an obligor, or a savings account holder and obligor, and the date of membership or ownership of stock. In the case of members holding a savings account the association shall obtain a savings account contract containing the signature of each holder of such account or his duly authorized representative, and shall preserve such contract in the records of the association.

HISTORY: Laws, 1977, ch. 445, § 29(13); reenacted, Laws, 1982, ch. 301, § 55; Laws, 1990 Ex Sess, ch. 52, § 56; Laws, 1993, ch. 441, § 56; Laws, 1994, ch. 622, § 88; reenacted without change, Laws, 1997, ch. 496, § 53; reenacted without change, Laws, 2001, ch. 488, § 55, eff from and after July 1, 2001.

Amendment Notes —

The 2001 amendment reenacted the section without change.

§ 81-12-111. Records; reproduction by photostatic, photographic or microfilming process.

Any association may cause any or all records kept by such association to be copied or reproduced by any photostatic, photographic or microfilming process which correctly and permanently copies, reproduces or forms a medium for copying or reproducing the original record on a film or other durable material, and such association may thereafter dispose of the original record. Any such copy or reproduction shall be deemed to be an original record for all purposes and shall be treated as an original record in all courts or administrative agencies for the purpose of its admissibility in evidence. A facsimile, exemplification or certified copy of any such copy or reproduction reproduced from a film record shall, for all purposes, be deemed a facsimile, exemplification or certified copy of the original record.

HISTORY: Laws, 1977, ch. 445, § 29(14); reenacted, Laws, 1982, ch. 301, § 56; Laws, 1990 Ex Sess, ch. 52, § 57; Laws, 1993, ch. 441, § 57; Laws, 1994, ch. 622, § 89; reenacted without change, Laws, 1997, ch. 496, § 54; reenacted without change, Laws, 2001, ch. 488, § 56, eff from and after July 1, 2001.

Amendment Notes —

The 2001 amendment reenacted the section without change.

§ 81-12-113. Reserves.

Every association shall set up and maintain the reserves required by the board and may set up and maintain such additional reserves as are permitted by this chapter. The commissioner shall fix the amount of each association’s separate reserve account to be set up and maintained for the sole purpose of absorbing losses (termed in this chapter “general reserve”), but in no event shall such amount of such general reserve be less than the amount required by the Federal Deposit Insurance Corporation. Transfers to general reserve shall be made at such time or times as set by the commissioner.

HISTORY: Laws, 1977, ch. 445, § 30; reenacted, Laws, 1982, ch. 301, § 57; Laws, 1990 Ex Sess, ch. 52, § 58; Laws, 1993, ch. 441, § 58; reenacted and amended, Laws, 1994, ch. 622, § 90; reenacted without change, Laws, 1997, ch. 496, § 55; reenacted without change, Laws, 2001, ch. 488, § 57, eff from and after July 1, 2001.

Amendment Notes —

The 2001 amendment reenacted the section without change.

§ 81-12-115. Savings liability of association to equal aggregate amount of savings accounts plus earnings; additions to accounts; responsibility of members for losses; assessment of accounts; declaration of earnings; preferences.

The savings liability of an association is not limited, but shall consist only of the aggregate amount of savings accounts of its members or savings account holders, plus earnings credited to such accounts, less redemption and withdrawal payments. Except as limited by the board of directors from time to time, a member or savings account holder may make additions to his savings accounts in such amounts and at such times as he may elect. The members or savings account holders of an association shall not be responsible for any losses which its savings liability shall not be sufficient to satisfy, and savings accounts shall not be subject to assessment. Earnings shall be declared in accordance with the provisions of this chapter. Except as provided in Section 81-12-153, no association shall prefer one (1) of its savings accounts over any other savings account as to the right to participate in earnings. No preference between savings account members or savings account holders shall be created with respect to the distribution of assets upon voluntary or involuntary liquidation, dissolution or winding up of an association. No association shall issue, sell, negotiate or advertise any type of savings account or debt security, except as authorized by this chapter, nor shall it contract with respect to any savings account or other account in a manner inconsistent with the provisions of this chapter.

HISTORY: Laws, 1977, ch. 445, § 31; reenacted, Laws, 1982, ch. 301, § 58; Laws, 1990 Ex Sess, ch. 52, § 59; Laws, 1993, ch. 441, § 59; Laws, 1994, ch. 622, § 91; reenacted without change, Laws, 1997, ch. 496, § 56; reenacted without change, Laws, 2001, ch. 488, § 58, eff from and after July 1, 2001.

Amendment Notes —

The 2001 amendment reenacted the section without change.

§ 81-12-117. Savings accounts.

Savings accounts may be opened and held solely and absolutely in his own right by, or in trust or other fiduciary capacity for, any person, including an adult or minor individual, male or female, single or married, partnership, association, fiduciary, corporation or by a political subdivision or public or governmental unit, but only to the extent expressly authorized by the statutes of this state. Savings accounts shall be represented only by the account of each savings account holder on the books of the association, and such accounts or any interest therein shall be transferable only on the books of the association and upon proper written application by the transferee and upon acceptance by the association of the transferee as a savings account holder upon terms approved by the board of directors. The association may treat the holder of record of a savings account as the owner thereof for all purposes.

HISTORY: Laws, 1977, ch. 445, § 32(1); reenacted, Laws, 1982, ch. 301, § 59; Laws, 1990 Ex Sess, ch. 52, § 60; Laws, 1993, ch. 441, § 60; Laws, 1994, ch. 622, § 92; reenacted without change, Laws, 1997, ch. 496, § 57; reenacted without change, Laws, 2001, ch. 488, § 59, eff from and after July 1, 2001.

Amendment Notes —

The 2001 amendment reenacted the section without change.

§ 81-12-119. Savings accounts; execution of contract by holder.

Each holder of a savings account shall execute a savings account contract setting forth any special terms and provisions applicable to such savings account and the ownership thereof and the conditions upon which withdrawals may be made, not inconsistent with the provisions of this chapter.

HISTORY: Laws, 1977, ch. 445, § 32(2); reenacted, Laws, 1982, ch. 301, § 60; Laws, 1990 Ex Sess, ch. 52, § 61; Laws, 1993, ch. 441, § 61; Laws, 1994, ch. 622, § 93; reenacted without change, Laws, 1997, ch. 496, § 58; reenacted without change, Laws, 2001, ch. 488, § 60, eff from and after July 1, 2001.

Amendment Notes —

The 2001 amendment reenacted the section without change.

§ 81-12-121. Savings accounts; evidence of ownership.

Evidence of ownership of a savings account shall be issued in such form as approved by the commissioner by regulation.

HISTORY: Laws, 1977, ch. 445, § 32(3); reenacted, Laws, 1982, ch. 301, § 61; Laws, 1990 Ex Sess, ch. 52, § 62; Laws, 1993, ch. 441, § 62; Laws, 1994, ch. 622, § 94; reenacted without change, Laws, 1997, ch. 496, § 59; reenacted without change, Laws, 2001, ch. 488, § 61, eff from and after July 1, 2001.

Amendment Notes —

The 2001 amendment reenacted the section without change.

§ 81-12-123. Savings accounts; lost or destroyed account books or certificates.

Upon the filing with an association by the holder of record as shown by the books of the association, or by his legal representative, of an affidavit to the effect that the account book or certificate evidencing his savings account with the association has been lost or destroyed, and that such account book or certificate has not been pledged or assigned in whole or in part, such association shall issue a new account book or certificate in the name of the holder of record, such evidence stating that it is issued in lieu of the one lost or destroyed, and the association shall in no way be liable thereafter on account of the original account book or certificate, provided that the board of directors shall, if in its judgment it is necessary, require a bond in an amount it deems sufficient to indemnify the association against any loss which might result from the issuance of such new account book or certificate.

HISTORY: Laws, 1977, ch. 445, § 32(4); reenacted, Laws, 1982, ch. 301, § 62; Laws, 1990 Ex Sess, ch. 52, § 63; Laws, 1993, ch. 441, § 63; Laws, 1994, ch. 622, § 95; reenacted without change, Laws, 1997, ch. 496, § 60; reenacted without change, Laws, 2001, ch. 488, § 62, eff from and after July 1, 2001.

Amendment Notes —

The 2001 amendment reenacted the section without change.

§ 81-12-125. Savings accounts; inducements to open.

The commissioner shall by regulation determine the conditions under which merchandise, things of value or services performed outside the premises of an association may be furnished as an inducement for the opening or increase of any savings account.

HISTORY: Laws, 1977, ch. 445, § 32(5); reenacted, Laws, 1982, ch. 301, § 63; Laws, 1990 Ex Sess, ch. 52, § 64; Laws, 1993, ch. 441, § 64; reenacted and amended, Laws, 1994, ch. 622, § 96; reenacted without change, Laws, 1997, ch. 496, § 61; reenacted without change, Laws, 2001, ch. 488, § 63, eff from and after July 1, 2001.

Amendment Notes —

The 2001 amendment reenacted the section without change.

§ 81-12-127. Savings accounts; adverse claims to accounts.

Notice to any association doing business in this state of an adverse claim to an account on its books in the name of any savings account holder shall not be effectual to cause the association to recognize such adverse claimant unless such adverse claimant either procures a restraining order, injunction or other appropriate process against the association from a court of competent jurisdiction in a cause therein instituted by him wherein the savings account holder in whose name the account appears is made a party and served with summons, or shall execute to the association, in form and with sureties acceptable to it, a bond indemnifying it from any and all liability, loss, damage, costs and expenses for and on the account of the payment of such adverse claim.

HISTORY: Laws, 1977, ch. 445, § 32(6); reenacted, Laws, 1982, ch. 301, § 64; Laws, 1990 Ex Sess, ch. 52, § 65; Laws, 1993, ch. 441, § 65; Laws, 1994, ch. 622, § 97; reenacted without change, Laws, 1997, ch. 496, § 62; reenacted without change, Laws, 2001, ch. 488, § 64, eff from and after July 1, 2001.

Amendment Notes —

The 2001 amendment reenacted the section without change.

Cross References —

Withdrawals from accounts, see §81-12-151.

JUDICIAL DECISIONS

1. In general.

Since §81-12-127 concerns the regulation of the savings association itself, and not the ownership of funds it holds, the statute could not be used as a lever to overturn the finding of the circuit court that the depositor owned the accounts which she had opened in names of various relatives. Carter v. State Mut. Federal Sav. & Loan Asso., 498 So. 2d 324, 1986 Miss. LEXIS 2750 (Miss. 1986).

RESEARCH REFERENCES

Am. Jur.

13 Am. Jur. 2d, Building and Loan Associations §§ 5-7.

CJS.

12 C.J.S., Building and Loan Associations, Savings and Loan Associations, and Credit Unions §§ 35-46.

§ 81-12-129. Savings plans at educational institutions.

An association may contract with the proper authorities of any public or nonpublic elementary or secondary school or institution of higher learning, or any public or charitable institution caring for minors, for the participation and implementation by the association in any school or institutional thrift or savings plan, and it may accept savings accounts at such a school or institution, either by its own collector or by any representative of the school or institution which becomes the agent of the association for such purpose.

HISTORY: Laws, 1977, ch. 445, § 33(1); reenacted, Laws, 1982, ch. 301, § 65; Laws, 1990 Ex Sess, ch. 52, § 66; Laws, 1993, ch. 441, § 66; Laws, 1994, ch. 622, § 98; reenacted without change, Laws, 1997, ch. 496, § 63; reenacted without change, Laws, 2001, ch. 488, § 65, eff from and after July 1, 2001.

Amendment Notes —

The 2001 amendment reenacted the section without change.

Cross References —

Payment of earnings on savings accounts opened pursuant to this section, see §81-12-149.

§ 81-12-131. Payroll savings plans.

An association may contract with any employer with respect to the solicitation, collection and receipt of savings by payroll deduction to be credited to a designated account or accounts of his or its employee or employees who voluntarily may participate.

HISTORY: Laws, 1977, ch. 445, § 33(2); reenacted, Laws, 1982, ch. 301, § 66; Laws, 1990 Ex Sess, ch. 52, § 67; Laws, 1993, ch. 441, § 67; Laws, 1994, ch. 622, § 99; reenacted without change, Laws, 1997, ch. 496, § 64; reenacted without change, Laws, 2001, ch. 488, § 66, eff from and after July 1, 2001.

Amendment Notes —

The 2001 amendment reenacted the section without change.

Cross References —

Payment of earnings on savings accounts opened pursuant to this section, see §81-12-149.

§ 81-12-133. Attorneys authorized to make withdrawals; revocation of authority.

Any association may continue to recognize the authority of an attorney in fact authorized in writing to manage or to make withdrawals either in whole or in part from the savings account of a member or savings account holder until it receives written notice or is on actual notice of the revocation of his authority. For the purposes of this section, written notice of the death or adjudication of incompetency of such savings account holder shall constitute written notice of revocation of the authority of his attorney. No such institution shall be liable for damages, penalty or tax by reason of any payment made in accord with this section.

HISTORY: Laws, 1977, ch. 445, § 34; reenacted, Laws, 1982, ch. 301, § 67; Laws, 1990 Ex Sess, ch. 52, § 68; Laws, 1993, ch. 441, § 68; Laws, 1994, ch. 622, § 100; reenacted without change, Laws, 1997, ch. 496, § 65; reenacted without change, Laws, 2001, ch. 488, § 67, eff from and after July 1, 2001.

Amendment Notes —

The 2001 amendment reenacted the section without change.

§ 81-12-135. Savings accounts issued to minors or persons under disability; payment of withdrawals; powers of parent or guardian; withdrawals on death of holder.

An association and any federal association may issue savings accounts to any minor or other person under disability as the sole and absolute owner of such savings account, and receive payments thereon by or for such owner, and pay withdrawals, accept pledges to the association, and act in any other manner with respect to such accounts on the written instruction of such savings account holder in accord with this chapter. Any payment or delivery of rights to any minor or other person under a disability, or a receipt or acquittance signed by a minor or other person under a disability, who holds a savings account, shall be a valid and sufficient release of such association for any payment so made or delivery of rights to such minor or person. The receipt, acquittance, pledge or other action required by the association to be taken by such minor or person shall be binding upon such minor or person with like effect as if he were of full age and legal capacity. The parent or guardian of such minor or person shall not in his capacity as parent or guardian have the power to attach or in any manner to transfer any savings account issued to or in the name of such minor or person; provided, however, that in the event of the death of such minor or person the receipt or acquittance of either parent, a person standing in loco parentis, guardian or conservator of such minor or person shall be a valid and sufficient discharge of such association for any sum or sums not exceeding in the aggregate One Thousand Dollars ($1,000.00) unless the minor or person shall have given written notice to the association not to accept the signature of such person.

HISTORY: Laws, 1977, ch. 445, § 35; Laws, 1982, chs. 301, § 68; 467, § 2; reenacted, Laws, 1990 Ex Sess, ch. 52, § 69; Laws, 1993, ch. 441, § 69; Laws, 1994, ch. 622, § 101; reenacted without change, Laws, 1997, ch. 496, § 66; reenacted without change, Laws, 2001, ch. 488, § 68, eff from and after July 1, 2001.

Amendment Notes —

The 2001 amendment reenacted the section without change.

Cross References —

Bank deposits by minors, see §81-5-59.

Payment of indebtedness or delivery of personal property of decedent to decedent’s successor, see §91-7-322.

§ 81-12-137. Accounts in the name of two (2) or more persons.

  1. Accounts may be in the name of two (2) or more persons, whether minor or adult, in such form that the monies in the accounts are payable to either, or the survivor or survivors, and such money due under such accounts and all additions thereto shall be the property of such persons as joint tenants with the right of survivorship. The monies due under such accounts may be paid to or on the order of any one (1) of such persons during his lifetime or to or on the order of any one (1) of the survivors of them after the death of any one or more of them. The opening of the account in such form shall be conclusive evidence as to the liability of the association only in any action or proceeding to which the association is a party, of the intention of all of the parties to the account to vest title to money due under the account and the additions thereto in such survivor or survivors. By written instructions given to the association by all the parties to the account, the signatures of more than one (1) of such persons during their lifetime or of more than one (1) of the survivors after the death of any one (1) of them may be required for withdrawal, in which case the association shall pay the monies in the account only in accordance with such instructions, but no such instructions shall limit the right of the survivor or survivors to receive the money in the account. By written agreement with the association, any person may create a joint account with other persons as joint tenants with the right of survivorship and said agreement may be signed only by the persons creating said account.
  2. The association, unless instructed in writing to the contrary, may loan money to any one or more persons constituting a single membership or account as joint tenants with the right of survivorship, and any person authorized to make withdrawals as provided in this section may pledge, hypothecate or assign all or any part of the money due or to become due under such account. Any such pledge, hypothecation or assignment or any increase to or withdrawal from the account shall not destroy the joint tenancy with right of survivorship.
  3. Payment of all or any of the monies in such account, as provided in this section, shall discharge the association from liability with respect to the monies so paid, prior to receipt by the association of a court order. After receipt of such court order, an association may refuse, without liability, to honor any withdrawal on the account pending determination of the rights of the parties. No association paying any survivor in accordance with the provisions of this section shall thereby be liable for any estate, inheritance or succession taxes which may be due this state.

HISTORY: Laws, 1977, ch. 445, § 36; reenacted, Laws, 1982, ch. 301, § 69; Laws, 1990 Ex Sess, ch. 52, § 70; Laws, 1993, ch. 441, § 70; Laws, 1994, ch. 622, § 102; reenacted without change, Laws, 1997, ch. 496, § 67; reenacted without change, Laws, 2001, ch. 488, § 69, eff from and after July 1, 2001.

Amendment Notes —

The 2001 amendment reenacted the section without change.

Cross References —

Bank deposits in the name of two or more persons, see §81-5-63.

Payment of indebtedness or delivery of personal property of decedent to decedent’s successor, see §91-7-322.

JUDICIAL DECISIONS

1. In general.

2. Garnishment of joint account.

1. In general.

Section81-5-63 and §81-12-137, which deal, respectively, with joint deposits in a bank checking account and in a savings account in a savings association, create a presumption of joint tenancy ownership with the right of survivorship. On the other hand, such presumption does not apply to bank issued certificates of deposit held in the names of 2 or more persons, in the absence of express intent on the certificate to create such joint tenancy. Delta Fertilizer, Inc. v. Weaver, 547 So. 2d 800, 1989 Miss. LEXIS 366 (Miss. 1989).

2. Garnishment of joint account.

A joint account should be garnishable only in proportion to the debtor’s ownership of the funds, as to which evidence is admissible to show what portion of the funds is actually owned by each depositor. Delta Fertilizer, Inc. v. Weaver, 547 So. 2d 800, 1989 Miss. LEXIS 366 (Miss. 1989).

RESEARCH REFERENCES

ALR.

Liability of bank to joint depositor of savings account for amounts withdrawn by other joint depositor without presentation of passbook. 35 A.L.R.4th 1094.

Nondrawing cosignor’s liability for joint checking account overdraft. 48 A.L.R.4th 1136.

§ 81-12-139. Accounts of administrators, executors, guardians, trustees, and other fiduciaries.

Any association may accept accounts in the name of any administrator, executor, guardian, trustee or other fiduciary in trust for a named beneficiary or beneficiaries. Any such fiduciary shall have power to vote as a member as if any membership account were held absolutely, to make payments upon, and to withdraw any such account, in whole or in part. The withdrawal value of any such account, or other rights relating thereto may be paid or delivered, in whole or in part, to such fiduciary, without regard to any notice to the contrary, as long as such fiduciary is living. The payment or delivery to any such fiduciary or a receipt of acquittance signed by any such fiduciary to whom any such payment or any such delivery of rights is made shall be valid and sufficient release and discharge of any association for the payment or delivery so made. Whenever a person holding an account in a fiduciary capacity dies and no written notice of the revocation or termination of t he trust relationship shall have been given to an association and the association has no notice of any other disposition of the trust estate, the withdrawal value of such account, or other rights relating thereto may, at the option of an association, be paid or delivered, in whole or in part, to the beneficiary or beneficiaries of such trust. Whenever an account shall be opened by any person describing himself in opening such account as trustee for another and there is no other or further notice of the existence and terms of a legal and valid trust, then such description shall be given in writing to such association. In the event of the death of the person so described as trustee, the withdrawal value of such account or any part thereof may be paid to the person for whom the account was thus stated to have been opened, and such account and all additions thereto shall be the property of such person, unless prior to payment the trust agreement is presented to the association showing a contrary interest. When made in accord with this section, the payment or delivery to any such beneficiary, beneficiaries or designated person, or a receipt or acquittance signed by any such beneficiary, beneficiaries or designated person for any such payment or delivery shall be valid and sufficient release and discharge of an association for the payment or delivery so made. Trust accounts permitted by this chapter shall not be required to be acknowledged and recorded. When an account is opened in a form described in this section, the right set forth in Section 81-12-145 shall apply. No association paying any beneficiary in accordance with the provisions of this section shall thereby be liable for any estate, inheritance or succession taxes which may be due this state.

HISTORY: Laws, 1977, ch. 445, § 37; reenacted, Laws, 1982, ch. 301, § 70; Laws, 1990 Ex Sess, ch. 52, § 71; Laws, 1993, ch. 441, § 71; Laws, 1994, ch. 622, § 103; reenacted without change, Laws, 1997, ch. 496, § 68; reenacted without change, Laws, 2001, ch. 488, § 70, eff from and after July 1, 2001.

Amendment Notes —

The 2001 amendment reenacted the section without change.

Cross References —

Powers of administrators generally, see §91-7-47.

Investment by trustees, guardians, and other fiduciaries of funds held in trust, see §§91-13-1 et seq.

§ 81-12-141. Accounts of deceased nonresidents.

When an account is held in any association by a person residing in another state or country, the account, or any part thereof not in excess of Two Thousand Five Hundred Dollars ($2,500.00), may be paid to the administrator or executor appointed in the state or country where the account holder resides at the time of death, provided such administrator or executor has furnished the association with (a) authenticated copies of his letters and of the order of the court which issued the letters to him authorizing him to collect, receive and remove the personal estate, and (b) an affidavit by the administrator or executor that to his knowledge no letters are then outstanding in this state and no petition for letters by an heir, legatee, devisee or creditor of the decedent is pending on the estate in this state, and that there are no creditors of the estate in this state. Upon payment or delivery to such representative after receipt of the affidavit and authenticated copies, the association is released and discharged to the same extent as if the payment or delivery had been made to a legally qualified resident executor or administrator, and is not required to see to the application or disposition of the property. No action at law or in equity shall be maintained against the association for payment made in accordance with the above provisions.

HISTORY: Laws, 1977, ch. 445, § 38; Laws, 1980, ch. 426, § 2; reenacted, Laws, 1982, ch. 301, § 71; Laws, 1990 Ex Sess, ch. 52, § 72; Laws, 1993, ch. 441, § 72; Laws, 1994, ch. 622, § 104; enacted without change, Laws, 1997, ch. 496, § 69; reenacted without change, Laws, 2001, ch. 488, § 71, eff from and after July 1, 2001.

Amendment Notes —

The 2001 amendment reenacted the section without change.

§ 81-12-143. Payments to successors without administration.

Any association may pay to the successor of a deceased depositor, as defined in Section 91-7-322(2), without necessity of administration, any sum to the credit of the deceased not exceeding Twelve Thousand Five Hundred Dollars ($12,500.00), upon affidavit that the deceased died leaving no last will and testament and bond signed by each of the successors guaranteeing payment of any lawful debts of the deceased to the extent of that withdrawal. The receipt of acquittance of the person or persons so paid shall be valid and sufficient release and discharge to the association as against all other persons and claimants for any payment so made; however, the bond shall be made available to any creditor for suit against the makers of the bond.

HISTORY: Laws, 1977, ch. 445, § 39; Laws, 1980, ch. 426, § 2; reenacted, 1982, ch. 301, § 72; Laws, 1990 Ex Sess, ch. 52, § 73; Laws, 1993, ch. 441, § 73; Laws, 1994, ch. 622, § 105; Laws, 1995, ch. 380, § 2; reenacted without change, Laws, 1997, ch. 496, § 70; reenacted without change, Laws, 2001, ch. 458, § 2; Laws, 2003, ch. 394, § 1, eff from and after July 1, 2003.

Joint Legislative Committee Note —

Section 2 of ch. 458, Laws, 2001, effective from and after July 1, 2001 (approved March 23, 2001), amended this section. Section 72 of ch. 488, Laws, 2001, effective from and after July 1, 2001 (approved March 24, 2001), also amended this section. As set out above, this section reflects the language of Section 72 of ch. 488, Laws, 2001, pursuant to Section 1-3-79 which provides that whenever the same section of law is amended by different bills during the legislative session, and the effective dates of the sections are the same, the amendment with the latest approval date shall supersede all other amendments to the same section approved on an earlier date.

Amendment Notes —

The first 2001 amendment (ch. 458) rewrote the section.

The second 2001 amendment (ch. 488) made identical changes as the first 2001 amendment.

The 2003 amendment rewrote the first sentence of the section to provide that the funds that savings and loan associations and savings banks may pay to the successors of deceased depositors without necessity of administration are any funds to the credit of the deceased, not just those funds in savings accounts.

§ 81-12-145. Accounts payable at death.

[Effective until January 1, 2020, this section will read as follows:]

Accounts payable at death may be established under the following conditions:

An account in an association may be opened by any person or persons with directions to make such an account payable on the death of the person or persons opening such an account to the named beneficiary or beneficiaries. When an account is so opened, the association shall pay any monies to the credit of the account from time to time to, or pursuant to the order of the person or persons opening such an account during his or their lifetime in the same manner as if the account were in the sole name or names of such person or persons.

If the named beneficiary or one (1) of the beneficiaries so named survive the death of the person opening such an account and the beneficiary or all of the beneficiaries so named are sixteen (16) years of age or over at the death of the person opening such an account, the association shall pay the monies to the credit of the account, less all proper setoffs and charges, to the named beneficiary or beneficiaries or upon his or their order, as hereinafter provided, and such payment by the association shall be valid, notwithstanding any lack of legal age of the named beneficiary or beneficiaries; provided, however, where such an account is opened or subsequently held by more than one (1) person, the death of one (1) of such persons shall not terminate the account and the account shall continue as to the surviving person or persons and the named beneficiary or beneficiaries subject to the provisions of subsections (c) through (i) of this section.

If the named beneficiary or all of the beneficiaries so named survive the death of the person or persons opening such an account and are under sixteen (16) years of age at such time, the association shall pay the monies to the credit of the account, less all proper setoffs and charges:

When or after the named beneficiary becomes sixteen (16) years of age, to the named beneficiary or upon his order; or

When more than one (1) beneficiary is named, the association shall pay to each beneficiary so named his proportionate interest in such account as each severally becomes sixteen (16) years of age; or

To the legal guardian of the named beneficiary, wherever appointed and qualified, or where more than one (1) beneficiary is named, the association shall pay such beneficiary’s proportionate interest in such account to his legal guardian wherever and whenever appointed and qualified; or

In the event no guardian is appointed and qualified, payment may be made in accordance with the provisions of Section 93-13-211 et seq., in situations to which such section or sections are applicable.

Where the death of the person or persons opening such an account terminates the account under the provisions of subsections (b) and (c) of this section and where one or more of the named beneficiaries are under sixteen (16) years of age and the remainder of the named beneficiaries are sixteen (16) years of age or over, the association shall pay the monies to the credit of the trust, less all proper setoffs and charges, to:

The named beneficiaries sixteen (16) years of age or over at the time of termination of said account pursuant to subsection (b) of this section, and

The named beneficiaries under sixteen (16) years of age at the time of termination of said account pursuant to subsection (c) of this section.

Where such account is opened or subsequently held by more than one (1) person, the association, in the absence of any written instructions to the contrary, consented to by the association, shall accept payments made to such account and may pay any monies to the credit of such account from time to time to, or pursuant to the order of, either or any of said persons during their life or lives in the same manner as if the account were in the sole name of either or any of such persons.

When a person or persons opens an account in an association, in the form set forth in subsection (a) of this section, and makes a payment or payments to such account, or causes a payment or payments to be made to such account, such person or persons shall be conclusively presumed to intend to vest in the named beneficiary or beneficiaries a present beneficial interest in such payment so made, and in the monies to the credit of the account from time to time, to the end that, if the named beneficiary or beneficiaries survive the person or persons opening such an account, all the right and title of the person or persons opening such an account in and to the monies to the credit of the account at the death of such person or persons, less all proper setoffs and charges, shall, at such death, vest solely and indefeasibly in the named beneficiary or beneficiaries subject to the conditions and limitations of subsections (c) through (i) of this section.

If the named beneficiary predeceases the person opening such an account, the present beneficial interest presumed to be vested in the named beneficiary pursuant to subsection (f) of this section shall terminate at the death of the named beneficiary. In such case, the personal representatives of the named beneficiary, and all others claiming through or under the named beneficiary, shall have no right in or title to the monies to the credit of the account, and the association shall pay such monies, less all proper setoffs and charges, to the person opening such an account, or pursuant to his order, in the same manner as if the account were in the sole name of the person opening such an account; provided, however, where such an account names more than one (1) beneficiary, the death of one (1) of the beneficiaries so named shall not terminate the account and the account shall continue as to the surviving beneficiary or beneficiaries subject to the provisions of subsections (c) through (i) of this section.

An association which makes any payment pursuant to subsections (c) through (g) of this section, prior to service upon the association or an order of court restraining such payment, shall, to the extent of each payment so made, be released from all claims of the person or persons opening such an account, the named beneficiary or beneficiaries, their legal representatives, and all others claiming through or under them.

When an account is opened in a form described in subsection (a) of this section, the right of the named beneficiary or beneficiaries to be vested with sole and indefeasible title to the monies to the credit of the account on the death of the person or persons opening such an account shall not be denied, abridged or in anywise affected because such right has not been created by a writing executed in accordance with the law of this state prescribing the requirements to effect a valid testamentary disposition of property.

HISTORY: Laws, 1977, ch. 445, § 40; reenacted, Laws, 1982, ch. 301, § 73; Laws, 1990 Ex Sess, ch. 52, § 74; Laws, 1993, ch. 441, § 74; Laws, 1994, ch. 622, § 106; reenacted without change, Laws, 1997, ch. 496, § 71; reenacted without change, Laws, 2001, ch. 488, § 73, eff from and after July 1, 2001.

Amendment Notes —

The 2001 amendment reenacted the section without change.

The 2019 amendment, effective January 1, 2020, in (c)(iv), substituted “If no guardian” for “In the event no guardian” and “Section 93-20-209 or 93-20-431” for “Section 93-13-211 et seq.”; and substituted “paragraph” and “paragraphs” for “subsection” and “subsections” in (d) and (f) through (i).

Cross References —

Application of this section to fiduciary accounts, see §81-12-139.

§ 81-12-145. Accounts payable at death.

[Effective from and after January 1, 2020, this section will read as follows:]

Accounts payable at death may be established under the following conditions:

An account in an association may be opened by any person or persons with directions to make such an account payable on the death of the person or persons opening such an account to the named beneficiary or beneficiaries. When an account is so opened, the association shall pay any monies to the credit of the account from time to time to, or pursuant to the order of the person or persons opening such an account during his or their lifetime in the same manner as if the account were in the sole name or names of such person or persons.

If the named beneficiary or one (1) of the beneficiaries so named survive the death of the person opening such an account and the beneficiary or all of the beneficiaries so named are sixteen (16) years of age or over at the death of the person opening such an account, the association shall pay the monies to the credit of the account, less all proper setoffs and charges, to the named beneficiary or beneficiaries or upon his or their order, as hereinafter provided, and such payment by the association shall be valid, notwithstanding any lack of legal age of the named beneficiary or beneficiaries; provided, however, where such an account is opened or subsequently held by more than one (1) person, the death of one (1) of such persons shall not terminate the account and the account shall continue as to the surviving person or persons and the named beneficiary or beneficiaries subject to the provisions of subsections (c) through (i) of this section.

If the named beneficiary or all of the beneficiaries so named survive the death of the person or persons opening such an account and are under sixteen (16) years of age at such time, the association shall pay the monies to the credit of the account, less all proper setoffs and charges:

When or after the named beneficiary becomes sixteen (16) years of age, to the named beneficiary or upon his order; or

When more than one (1) beneficiary is named, the association shall pay to each beneficiary so named his proportionate interest in such account as each severally becomes sixteen (16) years of age; or

To the legal guardian of the named beneficiary, wherever appointed and qualified, or where more than one (1) beneficiary is named, the association shall pay such beneficiary’s proportionate interest in such account to his legal guardian wherever and whenever appointed and qualified; or

If no guardian is appointed and qualified, payment may be made in accordance with the provisions of Section 93-20-209 or 93-20-431 in situations to which such section or sections are applicable.

Where the death of the person or persons opening such an account terminates the account under the provisions of paragraphs (b) and (c) of this section and where one or more of the named beneficiaries are under sixteen (16) years of age and the remainder of the named beneficiaries are sixteen (16) years of age or over, the association shall pay the monies to the credit of the trust, less all proper setoffs and charges, to:

The named beneficiaries sixteen (16) years of age or over at the time of termination of said account pursuant to paragraph (b) of this section, and

The named beneficiaries under sixteen (16) years of age at the time of termination of said account pursuant to paragraph (c) of this section.

Where such account is opened or subsequently held by more than one (1) person, the association, in the absence of any written instructions to the contrary, consented to by the association, shall accept payments made to such account and may pay any monies to the credit of such account from time to time to, or pursuant to the order of, either or any of said persons during their life or lives in the same manner as if the account were in the sole name of either or any of such persons.

When a person or persons opens an account in an association, in the form set forth in paragraph (a) of this section, and makes a payment or payments to such account, or causes a payment or payments to be made to such account, such person or persons shall be conclusively presumed to intend to vest in the named beneficiary or beneficiaries a present beneficial interest in such payment so made, and in the monies to the credit of the account from time to time, to the end that, if the named beneficiary or beneficiaries survive the person or persons opening such an account, all the right and title of the person or persons opening such an account in and to the monies to the credit of the account at the death of such person or persons, less all proper setoffs and charges, shall, at such death, vest solely and indefeasibly in the named beneficiary or beneficiaries subject to the conditions and limitations of paragraphs (c) through (i) of this section.

If the named beneficiary predeceases the person opening such an account, the present beneficial interest presumed to be vested in the named beneficiary pursuant to paragraph (f) of this section shall terminate at the death of the named beneficiary. In such case, the personal representatives of the named beneficiary, and all others claiming through or under the named beneficiary, shall have no right in or title to the monies to the credit of the account, and the association shall pay such m