N.J.S.A. 17:9A-423 — "Act" defined, commissioner's findings relative to application

17:9A-423. "Act" defined, commissioner's findings relative to application 42. a. In this section, "act" includes, without limitation, omission. b. For purposes of making findings on an application by a foreign bank or commercial lending company for approval to establish an office: (1) The commissioner may, in the absence of credible evidence to the contrary, find that the directors, executive officers, and any controlling person of the bank and the directors and executive officers of any controlling person of the bank are each of good character and sound financial standing. (2) The commissioner may find that the bank, a director, executive officer, or a controlling person of the bank, or director or executive officer of a controlling person of the bank is not of good character if that person: (a) Has been convicted of, or has pleaded nolo contendere to, any crime involving an act of fraud or dishonesty; (b) Has consented to or suffered a judgment in any civil action based upon conduct involving an act of fraud or dishonesty; (c) Has consented to or suffered the suspension or revocation of any professional, occupational, or vocational license based upon conduct involving an act of fraud or dishonesty; (d) Has willfully made or caused to be made in any application or report filed with the commissioner or in any proceeding before the commissioner, any statement which was at the time and in the light of the circumstances under which it was made false or misleading with respect to any material fact, or has willfully omitted to state in any such application or report any material fact which was required to be stated therein; or (e) Has willfully committed any violation of, or has willfully aided, abetted, counseled, commanded, induced, or procured the violation by any other person of, any provision of this section or of any regulation or order issued under this section. c. Paragraph (2) of subsection b. of this section shall not be deemed to be an exclusive list of the grounds upon which the commissioner may find, for purposes of making findings on an application by a foreign bank or commercial lending company for approval to establish an office, that such bank or company, a director, executive officer, or controlling person of the bank, or a director or executive officer of a controlling person of the bank or company, is not of good character. L.1996,c.17,s.42. 17:9A-424. Reports filed by foreign bank, commercial lending company 43. a. Each foreign bank and commercial lending company which is licensed to establish an office shall file with the commissioner reports as and when the commissioner may by regulation or order require. b. Each report filed with the commissioner under sections 37 through 86 of P.L.1996, c.17 (C.17:9A-418 through C.17:9A-467) or under any regulation or order issued thereunder shall be in the form, contain the information, be signed in the manner, and, if the commissioner so requires, be verified in the manner the commissioner may by regulation or order require. L.1996,c.17,s.43. 17:9A-425. Books, accounts, records of foreign bank, commercial lending company 44. Each foreign bank and commercial lending company which is licensed to establish an office shall make, keep, and preserve at an office or at any other place as the commissioner may by regulation or order approve, the books, accounts, and other records relating to the business of the office, in the form, manner, and for the time the commissioner may by regulation or order provide. L.1996,c.17,s.44. 17:9A-426. Prohibition on concurrent establishment of federal and State branch office 45. a. No foreign bank which is licensed to establish an agency or branch office shall concurrently establish a federal agency or federal branch in this State. b. No foreign bank which establishes a federal agency or federal branch in this State shall concurrently be licensed to establish an agency or branch office in this State. L.1996,c.17,s.45. 17:9A-427. Opening, maintenance of offices 46. A foreign bank or commercial lending company may open one or more offices in this State. Each office shall be separately licensed and each office of a separate class shall be separately maintained. L.1996,c.17,s.46. 17:9A-428. Requirement that commissioner be appointed as attorney to receive service of process; service 47. a. (1) No foreign bank, other than a foreign bank which is licensed to establish an agency or branch office, shall be issued a license to establish a representative office or commercial lending company unless it shall have first filed with the commissioner, in the form as the commissioner may by regulation or order require, an appointment irrevocably appointing the commissioner to be the bank's or commercial lending company's attorney to receive service of any lawful process in any noncriminal judicial or administrative proceeding against the bank or any of its successors which arises out of the activities in this State of the representative office or commercial lending company after the appointment has been filed, with the same force and validity as if served personally on the bank or its successor, as the case may be. (2) Any foreign bank, other than a foreign bank which is licensed to establish an agency or branch office or which establishes a federal agency or federal branch in this State, which establishes a representative office or commercial lending company and which has not filed with the commissioner an appointment pursuant to paragraph (1) of this subsection a., shall be deemed by the establishment of that office to have appointed the commissioner as its attorney to receive service of any lawful process in any noncriminal judicial or administrative proceeding against the bank or any of its successors which arises out of the activities in this State of the representative office or commercial lending company with the same force and validity as if served personally on the bank or its successor, as the case may be. b. (1) No foreign bank shall be issued a license to establish an agency or branch office unless it shall have first filed with the commissioner, in a form as the commissioner may by regulation or order require, an appointment irrevocably appointing the commissioner to be the bank's attorney to receive service of any lawful process in any noncriminal judicial or administrative proceeding against the bank or any of its successors which arises after the appointment has been filed, with the same force and validity as if served personally on the bank or its successor, as the case may be. (2) Any foreign bank which establishes an agency or branch office, other than a federal agency or federal branch, and which has not filed with the commissioner an appointment pursuant to paragraph (1) of this subsection b. shall be deemed by the establishment of that office to have appointed the commissioner as its attorney to receive service of any lawful process in any noncriminal judicial or administrative proceeding against the bank or any of its successors with the same force and validity as if served personally on the bank or its successor, as the case may be. c. Service may be made on a foreign bank which has appointed or is deemed to have appointed the commissioner as its attorney for service of process by leaving a copy of the process at any office of the commissioner. However, this service is not effective unless (1) the party making the service, who may be the commissioner, forthwith sends notice of the service and a copy of the process by registered or certified mail to the foreign bank at its last address on file with the commissioner at any of its offices in this State or at its primary office wherever located, and (2) an affidavit of compliance with this subsection c. by the party making service is filed in the case on or before the return date, if any, or within such further time as the court, in the case of a judicial proceeding, or the administrative agency, in the case of an administrative proceeding, allow. L.1996,c.17,s.47. 17:9A-429. License not transferable, assignable 48. No license shall be transferable or assignable. L.1996,c.17,s.48. 17:9A-430. Posting of license 49. Each foreign bank and commercial lending company which is licensed to establish an office shall post its license in a conspicuous place at that office. L.1996,c.17,s.49. 17:9A-431. Popular name assigned to foreign bank, commercial lending company 50. a. Each foreign bank and commercial lending company which is licensed to establish an office shall assign to that office a popular name which consists of a specific designation by name, number or both, and shall post the popular name and the name of the bank in a conspicuous place at the office. b. The popular name that a foreign bank assigns to a representative office which it is licensed to establish shall include the term "representative office." c. The popular name that a foreign bank assigns to an agency which it is licensed to establish shall not include the term "branch" unless that term is modified by the word "foreign" or "overseas" or by a similar word. d. Each foreign bank which is licensed to establish a commercial lending company shall select a popular name that includes the term "commercial lending company" and shall post with that popular name a clear expression of whether the foreign bank is liable for the debts and obligations of the commercial lending company. L.1996,c.17,s.50. 17:9A-432. Designation of primary office 51. Whenever a foreign bank is licensed to establish two or more offices it shall designate one of those offices as its primary office. L.1996,c.17,s.51. 17:9A-433. Conduct of business in single building, adjoining buildings; exceptions 52. Each foreign bank and commercial lending company which is licensed to establish an office shall conduct all of the business of that office in a single building or in a single building and adjoining buildings. However, for good cause and with the approval of the commissioner, the bank may conduct part of the business of the office elsewhere in the same vicinity. L.1996,c.17,s.52. 17:9A-434 Examination of licensed office. 53. a. The department shall have the right to examine each office which the commissioner licenses under sections 37 through 86 of P.L.1996, c.17 (C.17:9A-418 through C.17:9A-467). The department shall insure that each office which is licensed hereunder is examined by either the Federal Reserve or the department as often as the commissioner deems it advisable. The costs of any examination by the department shall be assessed to the bank or commercial lending company which is the holder of the license. The examination fees shall be assessed in the same manner and on the same basis as examination fees are assessed for banks or trust companies organized under the Banking Act. b. The commissioner may contract with the Federal Reserve or the bank examination officials in any other state of the United States or in any other foreign country to conduct cooperative examinations. Every report and copy of a report of examination of a foreign bank or office of a foreign bank made by or under the supervision of the commissioner, and every report and copy thereof made by a bank pursuant to the requirement of the commissioner, shall be confidential, and shall not be made public by any officer, director or employee of a foreign bank, and shall not be subject to subpoena or to admission into evidence in any action or proceeding in any court, except pursuant to an order of the court made upon notice to the commissioner and after affording the commissioner an opportunity to advise the court of reasons for excluding from evidence that report or any portion thereof. The court shall order the issuance of a subpoena for the production or admission into evidence of any report or portion thereof, only if it is satisfied that (1) it is material and relevant to the issues in the proceedings, and (2) the ends of justice and public advantage will be subserved thereby. This section shall not prohibit the commissioner from sharing a report of examination with another state or federal regulator or a bank regulator from a foreign country, or other person, so long as provision is made for retaining the confidentiality of the report. This section shall not apply to any action or proceeding instituted by the commissioner or Attorney General pursuant to any law of this State. L.1996,c.17,s.53. 17:9A-435. Compliance with applicable interest rate limitations 54. A foreign bank or commercial lending company which makes a loan or extends credit from an office in this State, or books a loan or extension of credit in this State, shall comply with any applicable interest rate limitations imposed by the laws of this State or the United States which would be applicable to that loan if made by a commercial bank organized under the Banking Act. When transacting business in this State, an office of a foreign bank shall comply with all other laws and regulations of the State governing the business in which the office is engaged, unless the commissioner, for good cause shown, exempts the office by regulation or order from compliance. L.1996,c.17,s.54. 17:9A-436. License required for establishment of representative office 55. a. No foreign bank shall establish a representative office in this State unless it is licensed to establish a representative office at that place. b. (1) No person shall establish a representative office in this State as representative of a foreign bank unless that bank is licensed to establish the office as a representative office. (2) For purposes of sections 37 through 86 of P.L.1996, c.17 (C.17:9A-418 through C.17:9A-467), if any person establishes an office in this State as representative of a foreign bank, that foreign bank shall be deemed to establish the office as a representative office. c. Neither subsection a. nor subsection b. of this section shall prohibit a foreign bank which establishes a federal agency or federal branch in this State from establishing one or more representative offices in this State. L.1996,c.17,s.55. 17:9A-437. Approval for foreign bank to establish representative office 56. a. (1) No foreign bank shall establish a representative office unless the commissioner shall have first approved the establishment of that office and issued a license authorizing the foreign bank to establish the office. (2) Paragraph (1) of this subsection a. shall not prohibit a foreign bank which establishes a federal agency or federal branch in this State from establishing one or more representative offices in this State. b. If the commissioner finds the following with respect to an application by a foreign bank to establish a representative office, the commissioner shall approve the application: (1) That the bank, any controlling person of the bank, the directors and executive officers of the bank or of any controlling person of the bank, and the proposed management of the office are each of good character and sound financial standing; (2) That the financial history and condition of the bank are satisfactory; (3) That the management of the bank and the proposed management of the office are adequate; (4) That it is reasonable to believe that, if licensed to establish the office, the bank will operate the office in compliance with all applicable laws, regulations, and orders; (5) That the bank's establishment of the office will promote the public convenience and advantage; and (6) Such other standards as the commissioner may by regulation require. If the commissioner finds otherwise, the commissioner shall deny the application. c. Whenever an application by a foreign bank to establish a representative office has been approved and all conditions precedent to the issuance of a license authorizing the foreign bank to establish the representative office have been fulfilled, the commissioner shall issue the license. L.1996,c.17,s.56. 17:9A-438. Approval for relocation of representative office of foreign bank 57. a. No foreign bank which is licensed to establish a representative office shall relocate its office unless the commissioner shall have first approved the relocation and issued a license authorizing the foreign bank to establish the office at the new site. b. If the commissioner finds the following with respect to an application by a foreign bank to relocate a representative office, the commissioner shall approve the application: (1) If the new site of the office is in the same vicinity as the old site, that the relocation of the office will not be substantially detrimental to the public convenience and advantage; or (2) If the new site of the office is not in the same vicinity as the old site: (a) that the relocation of the office from the old site will not be substantially detrimental to the public convenience and advantage in the area which is primarily served by the office at the old site; and (b) that the relocation of the office to the new site will promote the public convenience and advantage. If the commissioner finds otherwise, the commissioner shall deny the application. c. Whenever an application by a foreign bank to relocate a representative office has been approved and all conditions precedent to the issuance of a license authorizing such bank to establish the office at the new site have been fulfilled, the commissioner shall issue the license. d. Promptly after a foreign bank which is licensed to establish a representative office relocates its office, the bank shall surrender to the commissioner the license which authorized it to establish the office at the old site. L.1996,c.17,s.57. 17:9A-439. Restrictions upon representative office 58. A foreign bank which is licensed to establish a representative office may, subject to regulations the commissioner may prescribe, engage in representational functions at that office but shall not solicit or accept deposits or credit balances or otherwise transact business at the office. L.1996,c.17,s.58. 17:9A-440. Approval for closing representative office of foreign bank 59. a. (1) No foreign bank which is licensed to establish a representative office shall close its office unless the commissioner shall have first approved the closing. (2) Paragraph (1) of this subsection a. shall not prohibit a foreign bank which is licensed to establish a representative office from closing the office in accordance with sections 79 through 85 of P.L.1996, c.17 (C.17:9A-460 through C.17:9A-466). b. If the commissioner finds, with respect to an application by a foreign bank to close a representative office, that the closing of that office will not be substantially detrimental to the public convenience and advantage, the commissioner shall approve the application. If the commissioner finds otherwise, the commissioner shall deny the application. c. Whenever an application by a foreign bank to close a representative office has been approved and all conditions precedent to the closing have been fulfilled, that bank may close the office and shall promptly thereafter surrender to the commissioner the license which authorized it to establish the office. L.1996,c.17,s.59. 17:9A-441. Existing office granted license 60. Any office of a foreign bank existing in this State on the effective date of sections 37 through 86 of P.L.1996, c.17 (C.17:9A-418 through C.17:9A-467) which had been previously approved by the commissioner shall be granted a license by the commissioner as a representative office for purposes of that act. L.1996,c.17,s.60. 17:9A-442. Transaction of business limited to licensed agency, branch office 61. a. No foreign bank shall transact business in this State except at an agency or branch office which it is licensed to establish and at which it is permitted by sections 37 through 86 of P.L.1996, c.17 (C.17:9A-418 through C.17:9A-467) to transact that business. b. Subsection a. of this section shall not be deemed to prohibit: (1) Any foreign bank which establishes a federal agency or federal branch in this State from transacting at that federal agency or federal branch such business as it may be authorized to transact under applicable federal laws and regulations; (2) Any foreign bank from carrying on the activities described in paragraph (2) of N.J.S. 14A:13-3; (3) Any foreign bank which does not establish an agency or branch office from making, in this State, loans secured by liens on real or personal property located in this State or enforcing those loans in this State; or (4) Any foreign bank which does not establish an agency or branch office from transacting trust business in this State if the trust business is not conducted from an office or location in this State and that trust business is limited to trust business permitted by, and conducted pursuant to a certificate of authority issued by the commissioner in accordance with subsection B. of section 316 of P.L.1948, c.67 (C.17:9A-316). L.1996,c.17,s.61. 17:9A-443. Approval, license required for establishment of agency, branch office of foreign bank 62. a. (1) No foreign bank shall establish an agency or branch office unless the commissioner shall have first approved the establishment of that office and issued a license authorizing the bank to establish the office. (2) Paragraph (1) of this subsection a. shall not prohibit a foreign bank from establishing a federal agency or federal branch in this State. b. If the commissioner finds the following with respect to an application by a foreign bank to establish an agency or branch office, the commissioner shall approve that application: (1) That the bank, any controlling person of the bank, the directors and executive officers of the bank or of any controlling person of the bank, and the proposed management of the office are each of good character and sound financial standing; (2) That the financial history and condition of the bank are satisfactory; (3) That the management of the bank and the proposed management of the office are adequate; (4) That it is reasonable to believe that, if licensed to establish the office, the bank will operate the office in a safe and sound manner and in compliance with all applicable laws, regulations, and orders; (5) That the bank's plan to establish and to operate the office affords reasonable promise of successful operation; and (6) That the bank's establishment of the office will promote the public convenience and advantage. If the commissioner finds otherwise, the commissioner shall deny the application. c. Whenever an application by a foreign bank to establish an agency or branch office has been approved and all conditions precedent to the issuance of a license authorizing the bank to establish the office have been fulfilled, the commissioner shall issue the license. L.1996,c.17,s.62. 17:9A-444. Approval for relocation of agency, branch office of foreign bank 63. a. No foreign bank which is licensed to establish an agency or branch office shall relocate that office unless the commissioner shall have first approved the relocation and issued a license authorizing the bank to establish the office at the new site. b. If the commissioner finds the following with respect to an application by a foreign bank to relocate any agency or branch office, the commissioner shall approve the application: (1) If the new site of the office is in the same vicinity as the old site: (a) That it will not be unsafe or unsound for the bank to relocate the office; and (b) That the relocation of the office will not be substantially detrimental to the public convenience and advantage, or that the relocation is necessary in the interests of the safety and soundness of the bank; or (2) If the new site of the office is not in the same vicinity as the old site: (a) That the bank's plan to relocate the office and to establish the office at the new site affords reasonable promise of successful operation; (b) That the relocation of the office from the old site will not be substantially detrimental to the public convenience and advantage in the area which is primarily served by the office at the old site, or that the relocation is necessary in the interests of the safety and soundness of the bank; and (c) That the relocation of the office to the new site will promote the public convenience and advantage. If the commissioner finds otherwise, the commissioner shall deny the application. c. Whenever an application by a foreign bank to relocate an agency or branch office has been approved and all conditions precedent to the issuance of a license authorizing the bank to establish the office at the new site have been fulfilled, the commissioner shall issue the license. d. Promptly after a foreign bank which is licensed to establish an agency or branch office relocates the office, the bank shall surrender to the commissioner the license which authorized it to establish the office at the old site. L.1996,c.17,s.63. 17:9A-445. Transaction of business by foreign bank at agency or branch office 64. a. A foreign bank which is licensed to establish an agency or branch office may transact banking business at that office, subject to the following: (1) If the office is an agency, the bank shall not transact the business of accepting deposits, other than deposits of: (a) a foreign nation; (b) an agency or instrumentality of a foreign nation; or (c) a person which resides, is domiciled, and maintains its principal place of business in a foreign nation. For purposes of this paragraph "person" means any individual, proprietorship, joint venture, partnership, trust, business trust, syndicate, association, joint stock company, corporation, or any other organization or any branch or division thereof. (2) If the office is a branch office, the bank shall not transact the business of accepting any deposits other than: (a) deposits of the kind described in paragraph (1) of this subsection a.; (b) deposits of $100,000 or more; (c) deposits of less then $100,000 which the branch is permitted to accept under applicable federal law; or (d) deposits the acceptance of which the commissioner determines by regulation or order does not constitute engaging in domestic retail deposit activities requiring deposit insurance protection. (3) If the office is an agency or branch office or commercial lending company, the bank or lending company may maintain credit balances as those obligations are defined under the term "agency" in section 38 of P.L.1996, c.17 (C.17:9A-419). (4) In any case, the bank or commercial lending company shall not transact any business which it is not authorized to transact or is prohibited from transacting under the laws of its domicile or which banks organized under the laws of this State are not authorized to transact or are prohibited from transacting. b. No foreign bank which is licensed to establish an agency or branch office shall transact any trust business at that office unless the commissioner expressly authorizes the trust business by order upon a finding by the commissioner that the agency or branch is qualified to transact such business under standards similar to those required to obtain a charter for a trust company under the Banking Act. c. All provisions of the Banking Act shall apply to any foreign bank or commercial lending company licensed to transact business in this State, unless the commissioner by regulation or order otherwise specifies. d. (1) Any provisions of the Banking Act which are applicable to or with respect to foreign banks licensed to transact business in this State, whether by law, regulation or order, shall be applied with any changes in interpretation or application as may be necessary or appropriate. (2) Without limiting the provisions of paragraph (1) of this subsection d., for purposes of any provision of the Banking Act, which are applicable to or with respect to a foreign bank or commercial lending company licensed to transact business in this State: (a) "Approved by, or approval of, the board" means approved or ratified by the board of the bank, by a committee of the board authorized to exercise the powers of the board with respect to the particular matter, or by an officer of the bank who is assigned to the head office of the bank and who has authority over the bank's business in this State, including authority to approve or ratify the particular matter. (b) "Principal office" means the primary office of the bank. (c) "Shareholders' equity" means the shareholders' equity of the bank or, if the bank has no shareholders' equity, the closest equivalent account or accounts. e. Whenever any provision of the Banking Act, which is applicable to or with respect to a foreign bank or commercial lending company licensed to transact business in this State limits the amount of any assets or liabilities of the bank, including, by way of example, the amount of borrowings of, obligations to, or investment of the bank or commercial lending company, for purposes of calculating the amount of such assets or liabilities, only assets or liabilities of the agencies or branch offices of the bank or commercial lending company shall be included, and the assets and liabilities of offices of the bank or commercial lending company outside this State shall be excluded. L.1996,c.17,s.64. 17:9A-446. Report of condition, income 65. a. Whenever the commissioner calls for a report of condition or income from commercial banks organized under the laws of this State, the commissioner shall call for a like report from each foreign bank which is licensed to transact business in this State. b. Whenever a foreign bank which is licensed to transact business in this State files with the commissioner a report called for under subsection a. of this section, that report shall be readily available to the customers of the office of the bank. c. The statement of condition shall be in the form, contain the information, and be signed in the manner, and, if the commissioner so requires by regulation or order, be verified in the manner the commissioner may by regulation or order require. L.1996,c.17,s.65. 17:9A-447. Notice of noninsurance of deposits 66. Each foreign bank which is licensed to establish an agency or branch office shall, in accordance with the regulations the commissioner may prescribe, give notice that deposits in that office are not insured by the Federal Deposit Insurance Corporation. L.1996,c.17,s.66. 17:9A-448. Compliance with regulations by foreign bank 67. a. If a foreign bank is licensed to establish a depository agency or branch office and such office is not subject to the regulations of the Depository Institutions Deregulation Committee established pursuant to the "Depository Institutions Deregulation Act of 1980," 12 U.S.C. 3501 et seq., Regulation Q of the Federal Reserve, 12 CFR 217 et seq., or Part 329 of the regulations of the Federal Deposit Insurance Corporation, 12 CFR 329 et seq., the bank shall, with respect to deposits accepted at the office, comply with the regulations regarding maximum interest rates on deposits, prepayment of time deposits, and related matters the commissioner may prescribe as being necessary and appropriate to establish competitive equality between foreign banks and banks organized under the laws of this State which are subject to the regulations of the Depository Institutions Deregulation Committee, Regulation Q of the Federal Reserve, or Part 329 of the regulations of the Federal Deposit Insurance Corporation. b. Whenever the commissioner adopts a regulation or order of repeal of a regulation under subsection a. of this section, the commissioner may, without describing specific facts showing the need for immediate action, make the regulation or order of repeal effective immediately. L.1996,c.17,s.67. 17:9A-449. Assets kept separate, apart; priority of creditors 68. a. Each foreign bank which is licensed to transact business in this State shall keep the assets of that business separate and apart from the assets of its business outside this State. b. The creditors of the business in this State of a foreign bank which is licensed to transact business in this State shall be entitled to priority over other creditors with respect to the assets of the foreign banks's business in this State. L.1996,c.17,s.68. 17:9A-450. Definitions of adjusted liabilities and eligible assets relative to foreign banks 69. a. In this section: (1) "Adjusted liabilities," when used with respect to a foreign bank, means the liabilities of the bank's business in this State, excluding: (a) accrued expenses; (b) any liability to an office, whether in or outside of this State, or subsidiary of the bank; and (c) such other liabilities as the commissioner may by regulation or order exclude. (2) "Applicable minimum," when used with respect to eligible assets deposited or to be deposited with an approved depository by a foreign bank, means the amount as the commissioner may from time to time by regulation or order determine to be necessary for the establishment of sound financial condition, for the protection of the interests of creditors of the bank's business in this State, or for the protection of the public interest. However, in the case of a foreign bank which is licensed to establish an agency or a branch office, the applicable minimum shall in no event be less than the greater of (a) 5 percent of the adjusted liabilities of the bank or (b) $1,000,000. (3) "Approved depository," when used with respect to a foreign bank, means a bank organized under the laws of this State or a national bank headquartered in this State which has been selected by such foreign bank and approved by the commissioner for the purpose of acting as the approved depository of the foreign bank and which has filed with the commissioner, in the form as the commissioner may by regulation or order prescribe, an agreement to comply with all applicable provisions of this section and of any regulation or order issued under this section. (4) "Eligible assets" when used with respect to a foreign bank, means any of the following: (a) Cash. (b) Any investment security which by regulation is eligible for investment by a commercial bank organized under the Banking Act. (c) Any negotiable certificate of deposit which: (i) has a maturity of not more than one year, (ii) is payable in the United States, and (iii) is issued by a bank organized under the laws of a state of the United States, by a national bank, or by a branch office of a foreign bank which is located in the United States. (d) Any commercial paper which is payable in the United States and which is rated P-1 or its equivalent by a nationally recognized rating service; provided, however, that any conflict in rating shall be resolved in favor of the lower rating. (e) Any banker's acceptance which is payable in the United States and which is eligible for discount with a Federal Reserve bank. (f) Any other asset which the commissioner by regulation or order determines to be eligible. Notwithstanding the foregoing provisions of this paragraph, "eligible asset," when used with respect to a foreign bank, does not include any instrument the issuer of which: (i) is, or is affiliated with, the foreign bank; (ii) is domiciled in, or controlled by a bank or other person domiciled in, the same foreign nation as the foreign bank; or (iii) is, or is controlled by, the foreign nation. For purposes of the foregoing provision, to be "affiliated" means to control, to be controlled by, or to be under common control with. b. For purposes of this section: (1) The amount of adjusted liabilities of a foreign bank's business in this State shall be computed for the period, in the manner, and on the basis as the commissioner may by regulation or order prescribe. (2) Any eligible asset shall be valued at the lesser of market or par. c. (1) Before any foreign bank is licensed to transact business in this State, the bank shall deposit, and each foreign bank which is licensed to transact business in this State shall maintain on deposit, with an approved depository, eligible assets having a value in an amount not less than the applicable minimum. (2) Whenever a foreign bank which is licensed to transact business in this State ceases to be so licensed, the bank shall thereafter establish on deposit, with an approved depository, eligible assets having a value in an amount not less than the applicable minimum for the period of time the commissioner may determine to be necessary for the protection of creditors of the bank's business in this State or for the protection of the public interest. d. (1) No foreign bank which establishes eligible assets on deposit with an approved depository pursuant to this section shall withdraw any of those eligible assets except with the prior approval of the commissioner. (2) No approved depository which holds eligible assets on deposit from a foreign bank pursuant to this section shall release any of those eligible assets except with the prior approval of the commissioner or as otherwise provided in subsection h. of this section. e. Any foreign bank which establishes eligible assets on deposit with an approved depository pursuant to this section shall be entitled to receive any income paid on such eligible assets, unless the commissioner shall have suspended or revoked its license to transact business in this State or taken possession of its property and business in this State. f. (1) Whenever a foreign bank deposits eligible assets with, or withdraws eligible assets from, an approved depository pursuant to this section, the bank shall do so in accordance with the procedures and requirements the commissioner may by regulation or order prescribe. (2) Whenever an approved depository receives, holds, or releases eligible assets pursuant to this section, the approved depository shall do so in accordance with the procedures and requirements the commissioner may by regulation or order prescribe and shall file with the commissioner reports as and when the commissioner may by regulation or order require. g. Whenever a foreign bank establishes eligible assets on deposit with an approved depository pursuant to this section: (1) The eligible assets shall be deemed to be pledged to the commissioner for the benefit of the creditors of the bank's business in this State; and, notwithstanding any provision of the Uniform Commercial Code, N.J.S.12A:1-101 et seq., to the contrary, the commissioner, for the benefit of the creditors, shall be deemed to have a security interest in those eligible assets. (2) The eligible assets shall be free from any lien, charge, right of setoff, credit, or preference in connection with any claim of the approved depository against the bank. h. (1) If the commissioner takes possession of the property and business of a foreign bank which establishes eligible assets on deposit with an approved depository pursuant to this section, the approved depository shall, upon order of the commissioner, release those eligible assets to the commissioner, as liquidator of the property and business of the bank. (2) If a foreign bank which establishes eligible assets on deposit with an approved depository pursuant to this section fails to pay any judgment creditor of its business in this State and the commissioner has not taken possession of the property and business of the bank, the approved depository shall release the eligible assets to the commissioner, and the commissioner shall make the disposition of the eligible assets, as a court of competent jurisdiction of this State or of the United States may order for the benefit of that judgment creditor. For purposes of this paragraph, "judgment creditor of its business in this State" means a person to whom the bank is required to pay money under a judgment which: (a) arose out of the bank's business in this State; (b) has been entered by a court of competent jurisdiction of this State or of the United States; (c) has become final, in that all possibility of direct attack on that judgment by way of appeal, motion for new trial, motion to vacate, or petition for extraordinary writ has been exhausted; and (d) has remained unpaid for a period of not less than 60 days after becoming final. L.1996,c.17,s.69. 17:9A-451. Definitions of adjusted liabilities, eligible assets relative to agency or branch offices 70. a. In this section: (1) "Adjusted liabilities," when used with respect to a foreign bank which is licensed to establish an agency or a branch office this State, means the liabilities of that bank's business in this State, excluding: (a) accrued expenses; (b) any liability to an office, whether in or outside of this State, or majority-owned subsidiary of the bank; and (c) such other liabilities as the commissioner may by regulation or order exclude. (2) "Eligible assets" means any asset which the commissioner by regulation or order determines to be eligible for purposes of this section. However, "eligible asset," when used with respect to a foreign bank which is licensed to establish an agency or a branch office, includes: (a) any asset which the bank establishes on deposit pursuant to section 69 of P.L.1996, c.17 (C.17:9A-450); and (b) any reserves which the bank establishes with respect to its business in this State in accordance with requirements prescribed by the Federal Reserve. b. For purposes of this section, the amount of eligible assets and the amount of adjusted liabilities of a foreign bank which is licensed to establish an agency or a branch office in this State shall each be computed for the period, in the manner, and on the basis as the commissioner may by regulation or order prescribe. c. A foreign bank licensed to establish an agency or a branch office in this State shall hold at its agency or branch offices in this State or at such other places as the commissioner may approve, eligible assets in the amount, if any, as the commissioner may from time to time by regulation or order determine to be necessary for the interests of creditors of the bank's business in this State, or for the protection of the public interest. However, in no event shall the amount exceed 108 percent of the adjusted liabilities of the bank's business in this State. d. If the commissioner finds, with respect to a foreign bank licensed to establish an agency or a branch office in this State, that such action is necessary for the establishment of sound financial condition, for the protection of the public interest, the commissioner may order the bank to place all or part of the eligible assets which the bank is required to hold under subsection c. of this section in the custody of a bank organized under the laws of this State or a national bank headquartered in this State that the commissioner may designate. L.1996,c.17,s.70.

This is the verbatim text of N.J.S.A. 17:9A-423, retrieved from the New Jersey Legislature's public statute corpus. Statutes are amended periodically — for the most current version, check the external source link above. Kyzer is not a law firm and this page is not legal advice.