A.R.S. tit. 6 ch. 11 — Arizona Revised Statutes Title 6 Chapter 11 — Financial Institution Holding Companies

6-1101. Definitions In this chapter, unless the context otherwise requires: 1. "Acquisition of control" means a transaction by which a person obtains, directly or indirectly, control of a financial institution. 2. "Application" means an application which is made pursuant to this article for approval of the deputy director to become a financial institution holding company. 3. "Control" means direct or indirect ownership or power to vote twenty-five percent or more of the outstanding voting securities of a financial institution or controlling person or to control in any manner the election of a majority of the directors of a financial institution or controlling person. For the purposes of determining the percentage of voting securities owned, controlled or held by a person, there shall be aggregated with the voting securities attributed to the person the voting securities of any other person directly or indirectly controlling, controlled by or under common control with the other person, by any officer, partner, employee or agent of the person or by any spouse, parent or child of the person. 4. "Controlling person" means a person who is directly or indirectly in control of a financial institution. 5. "Financial institution" means a bank, trust company, savings and loan association, international banking facility and holding company of a bank, trust company, savings and loan association and international banking facility under the jurisdiction of the department. 6. "Financial institution holding company" means a corporation, trust, association, partnership or similar organization that directly or indirectly, acting through one or more persons, controls a financial institution or a controlling person. 7. "Voting security" means any security presently entitling the owner or holder of the security to vote for the election of directors of a financial institution or controlling person, excluding, in the case of a savings and loan association, votes attributable to savings accounts. A specified percentage of outstanding voting securities is the amount of the outstanding voting securities that entitles the holder or holders of the securities to cast that specified percentage of the aggregate votes that the holders of all outstanding voting securities are entitled to cast. 6-1102. Prohibitions A person shall not directly or indirectly take any action that causes or results in a company becoming a financial institution holding company, except with the approval of the deputy director pursuant to this article or as otherwise allowed by this article. 6-1103. Exempt persons and transactions A. This article does not apply to the following persons or transactions of the type specified: 1. A registered dealer who acts as an underwriter or member of a selling group in a public offering of the voting securities of a financial institution or controlling person. 2. A person who acts as proxy for the sole purpose of voting at a designated meeting of the security holders of a financial institution or controlling person. 3. A person who acquires control of a financial institution or controlling person by devise or descent, except that the person shall divest himself of such control not more than two years after the date of the acquisition unless the acquisition of control is approved by the deputy director pursuant to this article. 4. A person who acquires control of a financial institution or controlling person as a personal representative, custodian, guardian or conservator appointed by a court or as a trustee, a receiver or other officer appointed by a court. 5. A pledgee of a voting security of a financial institution or controlling person who does not have the right, as pledgee, to vote the voting security. 6. A person who acquires control of a financial institution or controlling person through the collection of a debt previously contracted in good faith, except that the person shall divest himself of such control not more than two years after the date of the acquisition unless the acquisition of control is approved by the deputy director pursuant to this article. B. A person or transaction that the deputy director by rule or order exempts as not being necessary or appropriate in the public interest or for the protection of a financial institution or the depositors, beneficiaries, creditors or shareholders of the financial institution is exempt from this article. C. A person, before filing an application for approval pursuant to this article, may request in writing a determination from the deputy director as to whether the person, on consummation of a proposed transaction, will be in control. On such a request, the deputy director may enter an order that the person will not be in control, in which event the proposed transaction is an exempt transaction under this article. D. This article does not supersede, rescind or modify any provision, requirement or condition of this title that would otherwise be applicable to any acquisition of a financial institution by a financial institution holding company. This article does not supersede, rescind or modify any provision, requirement or condition that would otherwise be applicable to any merger of financial institutions or the acquisition or sale of all or substantially all of the assets of the financial institution, except that an approval obtained pursuant to this article satisfies the requirements of chapter 1, article 4 of this title. 6-1104. Acquisition of control; approval by deputy director A. A person shall not, directly or indirectly, make a tender offer for, request or invite a tender offer for, offer to exchange securities for or acquire in the open market or otherwise any voting security or any security convertible into a voting security of a financial institution or controlling person if the transaction would result in the person becoming a financial institution holding company unless the deputy director has approved the acquisition of control pursuant to this article. This section does not prohibit a person from negotiating or entering into agreements subject to the condition that the acquisition of control is not effective until approval of the deputy director pursuant to this article is obtained. B. A person who has been approved pursuant to this article is not required to make a subsequent application pursuant to this article to acquire additional control or fractions of control of the financial institution or controlling person for which it was approved if the person has remained in continuous control of the financial institution or controlling person. 6-1105. Application for approval A. An application shall be in writing, in such form as the deputy director may prescribe and accompanied by the information, data and records the deputy director requires. The deputy director shall prescribe by rule or order the form of the application and the information, data or records that may be required. B. The deputy director shall cause copies of an initial application and any amendment or supplement to the application to be given to the financial institution concerned and the controlling person, if any, within three business days. 6-1106. Material change of fact; filing amended statements If any material change occurs in the facts set forth in the application, or if for any other reason the acquiring party desires to amend the application, the person shall file with the deputy director an amendment setting forth the change, together with copies of all documents and other material relevant to the change. 6-1107. Denial of application; grounds A. The deputy director may deny an application if the deputy director finds any of the following: 1. The financial condition of the financial institution holding company that would acquire control will jeopardize the financial stability of the financial institution or controlling person or prejudice the interests of the depositors, beneficiaries, creditors and shareholders of the financial institution or controlling person. 2. A plan or proposal to liquidate or consolidate the financial institution or controlling person or to make any other major change in the business, corporate structure or management of the financial institution or controlling person is not fair and reasonable to the depositors, beneficiaries, creditors and shareholders of the financial institution or controlling person. 3. The applicant has neglected, failed or refused to furnish to the deputy director any required information. 4. The proposed acquisition is contrary to law. 5. The acquisition would result in a monopoly or would be in furtherance of any combination or any conspiracy to monopolize or to attempt to monopolize the business of financial institutions and financial institution holding companies. 6. The effect of the proposed acquisition will be to substantially lessen competition, tend to create a monopoly or in any other manner be a restraint of trade, unless the deputy director finds that the effects of the proposed acquisition are clearly outweighed by its probable effect in meeting the convenience and needs of the community to be served and by the public interest. 7. The applicant has made a material false statement on the application. B. The deputy director shall give the applicant written notification of the granting or denial of an application together with a statement in support of the decision. If the deputy director, based on the information available at the time, plans to deny the application and no hearing has been held in accordance with title 41, chapter 6, article 10, the deputy director shall send the applicant a written statement that specifies the reasons for the tentative denial. The applicant shall have fifteen days following the date of this statement within which to file a written request to amend its application. On the filing of the request, the applicant shall be given thirty days in which to amend its application. C. The deputy director may approve an application subject to conditions the deputy director considers necessary and appropriate to protect the public interest and carry out the purposes of this title. The deputy director shall give the applicant written notification of the approval of an application that is subject to conditions together with a statement in support of the decision. 6-1108. Failure to act on application as approval An application that is not denied or approved by the deputy director within sixty days after the application is filed with the deputy director is deemed to be approved by the deputy director as of the first day after the period. The deputy director and the applicant may extend the sixty-day period by agreement. If the deputy director gives notice of a hearing, the sixty-day period is extended to the date fixed by order of the deputy director. For the purposes of this section, an application is not deemed filed until all amendments, supplements and additional information required by the deputy director have been received. 6-1109. Determination of control of one person by another; hearing; notice Before determining whether a person controls another person or before denying or approving an application for approval to become a financial institution holding company the deputy director may hold a hearing. The deputy director shall give notice of the hearing to the applicant, the financial institution or controlling person concerned and to such other persons as the deputy director determines appropriate. The date for commencement of the hearing shall be not later than thirty days after the date of the notice, unless the applicant consents to an extension of the period. 6-1110. Appointment of deputy director as agent for service of process; forwarding of process; consent to jurisdiction A person who is not a resident of this state, domiciled in this state or authorized to do business in this state and who files an application is deemed to have: 1. Consented to the jurisdiction of the courts of this state for all actions arising under this article. 2. Appointed the deputy director as the person's lawful agent for the purpose of accepting service of process in any action, suit or proceeding that may arise under this article. The deputy director shall transmit copies of all such lawful process accepted by the deputy director as an agent by certified mail to the person at the person's last known address. 6-1112. Acquisition of voting securities in violation of article; limitation on rights as shareholder; injunction A. With respect to any voting security acquired in violation of this article or any rule or order of the deputy director, a person is not entitled to vote or give a written proxy or consent for a period of five years after the acquisition except with the written consent of the deputy director. If a voting security of a financial institution or controlling person is acquired in violation of this article or any rule or order, any shareholder of the financial institution or controlling person or the deputy director may apply to the superior court for injunctive or other equitable relief, including costs and reasonable attorney fees, to enjoin prospectively any person from voting or giving any written proxy or consent with respect to the voting security for a period of five years after the acquisition except with the written consent of the deputy director. The deputy director may apply to the superior court for injunctive or other relief, including costs, to void any vote or any giving of a written proxy or consent with respect to the security that has occurred since the acquisition, except that the court may not void the vote if the court finds that to void the vote would not be in the interest of the depositors, beneficiaries, creditors or shareholders of the financial institution or controlling person or in the public interest. B. A person may file an application for consent of the deputy director with the deputy director and the deputy director shall grant or deny the application within thirty days. In giving consent, the deputy director may require those conditions that the deputy director deems reasonable, necessary or otherwise in the public interest. Except as provided in section 41-1092.08, subsection H, the final action of the deputy director is subject to judicial review pursuant to title 12, chapter 7, article 6 if the complaint seeking review is filed with the superior court in Maricopa county. C. No civil action may be brought to void any vote pursuant to subsection A of this section unless commenced within one year after the transaction that constituted a violation of this article or any rule or order of the deputy director. 6-1113. Reports; examination; costs A. The deputy director may require reports from and examine financial institution holding companies and each subsidiary of the holding companies. The deputy director shall accept the examination and financial reports of the appropriate federal or state holding company regulatory authority in lieu of any examination or financial report authorized or required by this chapter. The reports so accepted are considered for all purposes as official reports of the department. B. Notwithstanding subsection A of this section, the deputy director may require reports from and examine financial institution holding companies and their subsidiaries if it appears to the deputy director that any of these entities has engaged, is engaging or is about to engage in any act, practice or transaction that constitutes an unsafe or unsound practice or a violation of this title or any rule or order of the deputy director. This section does not prohibit the department from participating with federal regulators in the examinations to aid in enforcing this title. C. The cost of any examination shall be assessed against and paid by each financial institution holding company pursuant to section 6-125.