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The Vermont Statutes Online

 

Title 8: Banking and Insurance

Chapter 204: POWERS OF FINANCIAL INSTITUTIONS

  • Subchapter 001: General Powers
  • § 14101. Applicability of chapter

    The provisions of this chapter set forth the powers granted to all financial institutions organized pursuant to chapters 202 and 203 of this title and branches of any state or foreign financial institution authorized under section 15202 or 15203 of this title. The powers, privileges, duties, and restrictions conferred and imposed in the organizational documents or act of incorporation of any commercial bank, savings bank, savings and loan association, bank and trust company, or trust subsidiaries, organized under the prior laws of this State are abridged, enlarged, or modified so that each such charter or act of incorporation conforms to this title. Notwithstanding anything in a charter or act of incorporation of such an institution, every such institution possesses the powers, rights, and privileges and is subject to the duties, restrictions, and liabilities conferred and imposed by this title. (Added 1999, No. 153 (Adj. Sess.), § 2, eff. Jan. 1, 2001.)

  • § 14102. General organizational powers

    (a) A Vermont financial institution shall have all of the powers enumerated in Title 11 or 11A, depending on the organizational form of the institution.

    (b) Unless otherwise prohibited or limited by part 1, 2, or 5 of this title, a Vermont financial institution has and may exercise all powers necessary or convenient to effect the purposes for which the financial institution is organized or to further the businesses in which the financial institution is or may be lawfully engaged. Such powers shall include:

    (1) establishing, acquiring, investing, or participating in or utilizing a service corporation;

    (2) engaging, directly or indirectly through an operating subsidiary, in closely related activities as defined in subdivision 11101(14) of this title; and

    (3) investing or participating in an entity that engages in closely related activities but is not an operating subsidiary, with the Commissioner's approval; provided, however, the Commissioner may require that closely related activities be conducted through a subsidiary whenever the Commissioner determines that a limitation on the Vermont financial institution's direct financial risk is prudent. A Vermont financial institution shall keep such records as may be required by the Commissioner relative to the activities permitted by this subsection. Service corporations and operating subsidiaries shall be subject to regulation and supervision under this title.

    (c) A Vermont financial institution may engage in electronic banking.

    (d) Any Vermont financial institution may amend its organizational documents to provide for the separation of its corporate franchises into separate departments according to the nature of its business. In that event, it shall equitably apportion its assets between those departments in such manner as the Commissioner shall approve and thereafter shall maintain a segregation of the assets and obligations of those departments. Depositors shall be notified of the segregation and of the department to which their deposits are assigned. In case of liquidation or the imposition of restrictions upon the payment of deposits, at any time more than six months after such notice, the depositors of each of the departments shall be entitled to receive payment of deposits out of the assets of the department to which their deposits have been assigned in priority to all depositors in the other department, and to creditors who become such after the segregation, except as those obligations to creditors are properly allocated to a department at the time the obligations are created. The assets of the trust department shall be devoted first to meeting the obligations of the financial institution to the beneficiaries of its trusts according to their respective rights.

    (e) A Vermont financial institution shall have the power to join the Federal Reserve System or any cooperative league or other entity organized for the purpose of protecting and promoting the welfare of financial institutions and their depositors; and to comply with all conditions of membership therein. A Vermont financial institution which is a member of the Federal Reserve Bank is by this subsection vested with all powers conferred upon member banks of the federal reserve system by the terms of the Federal Reserve Act as fully and completely as if those powers were specifically enumerated and described in this subsection, and all those powers shall be exercised subject to all restrictions and limitations imposed by the Federal Reserve Act or by regulations of the Federal Reserve Board made pursuant thereto. A member financial institution under this subsection shall continue to be subject to the supervision and examinations required by the laws of this State, except that the Federal Reserve Board and the Federal Deposit Insurance Corporation shall have the right, if deemed necessary, to make examinations. The authorities of this State having supervision over the financial institution may disclose to the Federal Reserve Board or to the Federal Deposit Insurance Corporation or to their duly appointed examiners, all information in reference to the affairs of any financial institution which has become or desires to become a member.

    (f) Subject to the approval of the Commissioner, a Vermont financial institution may contract with another financial institution or financial institutions for branch or agency services or to provide those services to the customers of that financial institution or financial institutions.

    Notwithstanding the foregoing sentence, any Vermont financial institution subsidiary of a bank holding company may receive deposits, renew time deposits, close loans, service loans, and receive payments on loans and other obligations as an agent for an affiliate depository institution or contract to receive such services without such approval. (Added 1999, No. 153 (Adj. Sess.), § 2, eff. Jan. 1, 2001.)

  • § 14103. Advertising; doing business or using name unlawfully

    No person shall advertise or put forth any sign as a bank, banking association, or trust company, or in any way solicit or receive deposits or transact business as a bank, banking association, financial institution or trust company, or use the words "bank," "banking association," or "trust company" or other similar sounding word or name unless it is a financial institution reporting to and under the supervision of the Commissioner or is authorized to conduct such business in this state under federal law, or unless the Commissioner approves the activity or word or name used in writing after giving due consideration for whether the activity, word, or name will confuse or mislead the public as to the nature of the business of the entity. However, this section shall not prevent an individual, as such, from acting in a trust capacity. (Added 1999, No. 153 (Adj. Sess.), § 2, eff. Jan. 1, 2001.)

  • § 14104. Capital or surplus requirements

    (a) Every Vermont financial institution shall establish and maintain adequate levels of capital or surplus pursuant to standards established by the Commissioner.

    (b) Any issuance considered as capital under subsection (a) of this section shall be submitted to the Commissioner for review and approval at least 10 days prior to issuance and include such documentation as the Commissioner deems necessary.

    (c) Notwithstanding the provisions of subsections (a) and (b) of this section, the Commissioner may permit the formation of a Vermont financial institution without capital or surplus to be merged with or into or consolidated with an existing financial institution for the purpose of facilitating a reorganization or acquisition transaction, including a triangular merger transaction, involving such existing financial institution. (Added 1999, No. 153 (Adj. Sess.), § 2, eff. Jan. 1, 2001.)

  • § 14105. Participation in public agencies

    A financial institution has the power to participate in a public agency created under the laws of this State or of the United States, the purpose of which is to afford advantages or safeguards to financial institutions, depositors, or investors and to comply with all requirements and conditions imposed upon such participants except to the extent limited by rule or order of the Commissioner. (Added 1999, No. 153 (Adj. Sess.), § 2, eff. Jan. 1, 2001.)

  • § 14106. Expanded powers of Vermont financial institutions

    In addition to all other powers permitted under these statutes, any Vermont financial institution shall have the powers conferred under federal law administered by the Federal Reserve Board, the Office of the Comptroller of the Currency, or the Office of Thrift Supervision upon national financial institutions or their subsidiaries. (Added 1999, No. 153 (Adj. Sess.), § 2, eff. Jan. 1, 2001.)

  • § 14107. Investments

    (a) A Vermont financial institution may invest its assets prudently in accordance with the best judgment of its governing body in a manner consistent with this section.

    (b) A Vermont financial institution may not acquire more than five percent of the equity interest of any Vermont financial institution or of a Vermont bank holding company without the prior approval of the Commissioner.

    (c) Notwithstanding any other provision of law to the contrary, a financial institution may invest its funds, operate a business, manage or deal in property, or take any other action over whatever period of time may reasonably be necessary to avoid loss on an investment or loan previously made or an obligation created in good faith.

    (d) A Vermont financial institution's governing body shall establish a written investment policy, which it shall review and ratify at least annually, that addresses, at a minimum, the following:

    (1) investment quality parameters;

    (2) investment mix and diversification;

    (3) investment maturities; and

    (4) delegation of authority to officers and committees responsible for administering the portfolio.

    (e) A Vermont financial institution shall not acquire a lien on its equity interests as collateral for any extension of credit or other obligation nor acquire title to such collateral except to prevent loss upon a loan or investment previously made or an obligation created in good faith. If a Vermont financial institution acquires such a lien upon its equity interest or acquires title to such equity interest under the exception in this subsection, it shall not permit the lien to continue for more than two years, nor shall it hold title to the equity interest for more than one year, without the consent of the Commissioner.

    (f) Except as otherwise provided in subsection (e) of this section, and subject to subchapter 4 of chapter 202 and subchapter 2 of chapter 203 of this title, a Vermont financial institution may repurchase or redeem its own equity interests. (Added 1999, No. 153 (Adj. Sess.), § 2, eff. Jan. 1, 2001.)

  • § 14108. Prohibited mergers and acquisitions

    (a) No depository institution may by merger, consolidation, or other form of acquisition come to hold in excess of 30 percent of the total time and demand deposits held in Vermont by depository institutions. For the purposes of this section, the total deposits of a depository institution shall consist of all time and demand deposits held in Vermont by such depository institution and all of its affiliates.

    (b) Notwithstanding subsection (a) of this section, the commissioner may waive the deposit concentration limit set forth in subsection (a) of this section if the commissioner determines that any financial institution to be merged, consolidated, or acquired is not adequately capitalized, or is subject to a conservation, receivership, or dissolution order under this title or applicable federal law, and the waiver is otherwise in the best interest of depositors. (Added 1999, No. 153 (Adj. Sess.), § 2, eff. Jan. 1, 2001.)

  • § 14109. Prohibited management interlocks

    A director or officer of a Vermont financial institution shall not at the same time be a director or officer of another financial institution engaged in the business of banking in the State of Vermont or a state contiguous to Vermont. The terms of this section shall not apply to:

    (1) a financial institution which is in liquidation, receivership, conservatorship or similar proceedings;

    (2) the Federal Reserve Bank of Boston;

    (3) a financial institution affiliated by reason of common ownership or control of at least 25 percent of the voting interests of such affiliated financial institutions; or

    (4) any other relationship otherwise permitted under interagency guidelines or regulations of federal supervisory authorities adopted from time to time, relating to management interlocks. (Added 1999, No. 153 (Adj. Sess.), § 2, eff. Jan. 1, 2001.)

  • § 14110. Duties of executive officers, directors, and persons who control principal equity interests in financial institutions; officers may not receive fees

    (a) All executive officers, directors, and holders of principal equity interest of a Vermont or state financial institution subject to the laws of this State under this title, shall comply with the standards for member banks established by Regulation O of the Federal Reserve Board, 12 C.F.R., Part 215, as amended.

    (b) An officer, director, or employee of a Vermont or state financial institution shall not corruptly solicit or demand for the benefit of any person, or corruptly accept or agree to accept (i) any fee, present, benefit, or commission, directly or indirectly, from a borrower or applicant for a loan or from anyone negotiating securities at the financial institution of which he or she is an officer, director, or employee; (ii) any fee, present, benefit, or commission, directly or indirectly, for signing with another as accommodation maker, surety or endorser, or for a loan made or securities bought or sold by the financial institution, except for the benefit or profit he or she may derive in common with other depositors or stockbrokers, and the compensation allowed by the financial institution, for services and expenses. (Added 1999, No. 153 (Adj. Sess.), § 2, eff. Jan. 1, 2001.)


  • Subchapter 002: Deposits in General
  • § 14201. Deposit powers

    (a) Applicability. This subchapter governs deposits or accounts in financial institutions.

    (b) General deposit powers.

    (1) A financial institution may receive money on deposit and may establish the terms and conditions of each deposit contract. A financial institution may receive demand deposits subject to withdrawal or to payment upon the depositor's check, order, or other authorization.

    (2) At the time of opening a deposit account, a financial institution shall provide the depositor a statement containing the existing terms and conditions of the deposit contract. The statement may be set forth on the depositor's signature card. Depositors and any other owners of interests in a deposit account shall be bound by changes made by the financial institution in their deposit contracts. Financial institutions shall provide advance notice of changes in accordance with 12 U.S.C. § 4301 et seq.

    (3) A financial institution, in its sole discretion, may refuse deposits and at any time may return all or part of a deposit.

    (4) For any period during which funds are on deposit, a financial institution may pay interest.

    (c) Insurance of deposits or accounts. Except as permitted by subchapter 6 of chapter 202 of this title, a Vermont financial institution that accepts deposits or a branch of a state financial institution authorized to do business in this State shall not accept deposits in this State unless the financial institution is insured by the Federal Deposit Insurance Corporation.

    (d) Cash reserve on deposits and accounts. A financial institution shall maintain reserves on deposits or accounts as required from time to time by the Federal Reserve Act, as amended, and any regulations promulgated under it. (Added 1999, No. 153 (Adj. Sess.), § 2, eff. Jan. 1, 2001.)

  • § 14202. Payment of deposits to administrators from another state or country

    (a) When a deposit is made in a financial institution by a person residing in another state or country, the deposit, or any part thereof, with the interest thereon, may be paid to the administrator or executor appointed in the state or country where the depositor resided at the time of death, provided an administrator or executor has not been appointed in this State at the time of such payment.

    (b) An action shall not be maintained against a financial institution for the recovery of a deposit or any part thereof, with the dividend or interest thereon, made by a person residing in another state or country who has died, payment of which has been made to the executor or administrator appointed in the state or country where the depositor resided at the time of death, before the appointment of an executor or administrator in this State. (Added 1999, No. 153 (Adj. Sess.), § 2, eff. Jan. 1, 2001.)

  • § 14203. Trust deposits; payment on death of trustee

    When a deposit is made in a financial institution by one or more persons in trust for another, the name and residence of the person for whom the deposit is made shall be disclosed, and the deposit shall be credited to the depositor or depositors as trustee for such person. When other notice of the existence and terms of a legal trust is not given in writing to the financial institution, at the death of the trustee, or if there is more than one trustee, at the death of the surviving trustee, the deposit or any part thereof, with the interest thereon, may be paid to the person for whom the deposit was made or to his or her estate. (Added 1999, No. 153 (Adj. Sess.), § 2, eff. Jan. 1, 2001.)

  • § 14204. Joint deposits

    (a) Payment. When a deposit has been made in a financial institution in the names of two or more persons, payable to any one of them, or payable to the survivors or any one of the survivors, such deposit or any part thereof, or any interest or dividend thereon may be paid to any one of such persons, whether the others are living or not, and the receipt or acquittance of the person so paid shall be a valid and sufficient release and discharge of the financial institution for any payment so made.

    (b) Evidence of joint deposit. The recital of the words "payable to either or to the survivor" or words of like effect in the order creating such account and signed by the person or persons who furnish the funds for such deposit shall be conclusive evidence, as between the payees and their legal representatives, of the creation of an absolute joint account. However, nothing herein shall prevent the proof of fraud, undue influence, or incapacity, to defeat such joint interests. (Added 1999, No. 153 (Adj. Sess.), § 2, eff. Jan. 1, 2001.)

  • § 14205. Payable on death accounts

    (a) A "payable-on-death account" is created by a deposit in a financial institution in the name of an account holder or several joint account holders with a designation that the account is payable on death to one or more payees, known as "P.O.D. payees". On the death of the sole account holder or the last surviving joint account holder, any remaining balance in a payable-on-death account, including interests or dividends, shall vest solely in the surviving P.O.D. payee or equally and severally in the then surviving P.O.D. payees. Ninety days later, unless prevented as provided in subsection (c) of this section, the financial institution may pay the remaining balance to the new owner or owners or their legal representatives without further liability for the amount or amounts paid. If no P.O.D. payee is surviving 90 days after the last surviving account holder dies, the balance of the account shall be payable to the personal representative of that account holder.

    (b) Recital of the words "payable-on-death," the abbreviation "P.O.D.," or words of like effect in the order creating the account, signed by the person or persons furnishing the funds for the deposit, shall be conclusive evidence, as between the legal representatives of account holders and the payable-on-death payees or their legal representatives, of the creation of an absolute payable-on-death account, except as provided in subsection (c) of this section. However, nothing in this section shall prevent proof of fraud, undue influence, or incapacity to defeat a payable-on-death interest.

    (c) If other assets of the probate estate of the last surviving account holder are insufficient to pay debts and expenses, including statutory allowances and assignments to the surviving spouse, a payable-on-death account shall not transfer to P.O.D. payees sums needed for that purpose. A P.O.D. payee who receives payment from a payable-on-death account after the death of the last surviving account holder shall be liable to the account holder's personal representative for the amount of payment to the extent necessary to discharge debts and expenses remaining unpaid after application of the decedent's estate. No proceeding shall be commenced later than two years after the death of the decedent. Sums recovered by the personal representative shall be administered as part of the decedent's estate. This section shall not affect the right of a financial institution to make payment from a payable-on-death account to a P.O.D. payee 90 days after the death of the last surviving account holder or make a financial institution liable to the personal representative of the estate of a deceased account holder unless before making payment the financial institution is served with process in a proceeding brought by the personal representative or with an order from the Probate Division of the Superior Court prohibiting payment. (Added 1999, No. 153 (Adj. Sess.), § 2, eff. Jan. 1, 2001; amended 2009, No. 154 (Adj. Sess.), § 238a, eff. Feb. 1, 2011.)

  • § 14206. Deposits of minors; exemption from trustee process

    (a) Payment. The governing body of a financial institution, in its discretion, may accept deposits from a minor and may pay to a minor such sum as is deposited to the credit of such person, and is due, as if such minor were of age. The check and receipt or acquittance of such minor shall be a full discharge for the amount for which it is given.

    (b) Minor's deposits exempt from trustee process. A financial institution shall not be chargeable as trustee on account of funds deposited to the credit of a minor, provided such funds are earned by or belong to such minor. (Added 1999, No. 153 (Adj. Sess.), § 2, eff. Jan. 1, 2001.)

  • § 14207. Provisions when title to deposit is litigated

    (a) Multiple claims. In actions against a financial institution by one spouse to recover for moneys deposited by the other spouse in the latter's own name, the depositing spouse may be a witness. In actions against such financial institution to recover for money on deposit, if there is a person, whether married or not, claiming the same fund, who is not a party to the action, the Court, on the petition of such financial institution and on such notice as it considers proper to the plaintiff and such claimant, may order the proceedings to be amended by making such claimant a party defendant. The Court shall thereupon hear and determine the rights and interests of the parties to such action in and to such fund.

    (b) Litigated deposits; payment into Court; costs. The deposits which are the subject of such action may remain with such financial institution upon the same interest as other deposits of like amount, until final judgment therein, and the same shall be paid by such financial institution in accordance with the order of the Court; or the deposits may be paid into Court to await the final determination of the action. When so paid into Court, the financial institution shall no longer be a party to such action, and its liability for such deposit shall cease. The costs in such action shall be in the discretion of the Court and may be charged upon the fund affected thereby. (Added 1999, No. 153 (Adj. Sess.), § 2, eff. Jan. 1, 2001.)

  • § 14208. Security for deposits

    No Vermont or state financial institution may pledge, hypothecate, or deliver any of its assets of any description whatsoever as security for a deposit of private funds, or for the purpose of indemnifying any person, as surety for the financial institution, or as surety for any other person. However, a Vermont financial institution or state financial institution may so secure a deposit to the credit of the United States, of the State of Vermont, or of any political subdivisions of the State, either directly or indirectly. (Added 1999, No. 153 (Adj. Sess.), § 2, eff. Jan. 1, 2001.)

  • § 14209. Examination of accounts

    Each Vermont financial institution shall annually cause a sampling of its loans and deposit accounts to be verified by the account holder. The verification shall be under the direction of an outside auditor or the internal auditor of the Vermont financial institution. The auditor shall report the results directly to the governing body. The verification methodology and results shall be available to the commissioner upon request. (Added 1999, No. 153 (Adj. Sess.), § 2, eff. Jan. 1, 2001.)

  • § 14210. Real estate trust and escrow

    (a) In accordance with its schedule for similar remittances, any financial institution in which a pooled real estate trust or escrow account has been established under 26 V.S.A. § 2214(c) shall remit the interest accumulated on the account to the Vermont Housing Finance Agency established under 10 V.S.A. chapter 25 to be used in the agency's single family home mortgage programs.

    (b) A financial institution may deduct a reasonable remittance fee for transferring funds to the Housing Finance Agency under this section. (Added 1999, No. 153 (Adj. Sess.), § 2, eff. Jan. 1, 2001.)

  • § 14211. Claims not clearly consistent

    If any claim not clearly consistent with the terms of any applicable authority on file with a financial institution is made to any deposit, safe deposit box, property held in safekeeping, security, obligation, or other property in the financial institution's possession or control, in whole or in part, by any person, including any depositor, individual, or group of individuals, whether or not authorized to draw on or exercise any right or control with respect to the property, the financial institution is not required to recognize the claim without one of the following:

    (1) a court order, issued by a court of competent jurisdiction and served on the financial institution, enjoining or restraining the financial institution from taking any action with respect to the property or instructing the financial institution to pay the balance of the account, provide access to the safe deposit box, or deliver the property as provided in the order; or

    (2) a bond in the form and amount and with sureties satisfactory to the financial institution, indemnifying the financial institution against any liabilities, loss, and expenses it might incur because of its recognition of the claim or because of its refusal, due to the claim, to honor or recognize any right with respect to the property. (Added 1999, No. 153 (Adj. Sess.), § 2, eff. Jan. 1, 2001.)

  • § 14212. Joint fiduciary accounts

    (a) Statement of purpose. The purpose of this section is to create a new form of joint financial account whereby the account owner designates a fiduciary with authority to use monies in the account for the benefit and under the direction of the account owner, and to enable the account owner as well as law enforcement to enforce the terms of the declaration of intent.

    (b) A "joint fiduciary account" is created by a deposit in a financial institution in the name of an owner naming a fiduciary or several fiduciaries when the owner has received a disclosure statement and executed a declaration of intent as provided in this section. An "owner" may be one or more joint owners of the account. Only the owner may designate a fiduciary at the time an account is opened, or may substitute or remove a fiduciary. A fiduciary shall act only in accordance with the declaration of intent and shall have authority to take all actions permitted by the terms and conditions of the account that are consistent with the declaration of intent.

    (c) The declaration of intent shall include: date of execution; name and signature of owner; name and signature of fiduciary; any limitations on the power of the fiduciary to distribute or expend the funds; whether the fiduciary is to be paid and, if so, how much and on what basis; name and signature of two or more witnesses, neither of whom shall, at the time of execution, be the fiduciary and who attest to the sound mind and lack of duress on the owner; acknowledgment of receipt by the fiduciary of a copy of the declaration; and notice to the fiduciary that a withdrawal or expenditure of the funds in the joint fiduciary account which is not in accordance with the declaration of intent may result in criminal or civil liability. The financial institution that is to hold the joint fiduciary account shall provide its name and address and the number of the account.

    (d) A disclosure statement must accompany a declaration of intent. The disclosure statement and declaration of intent shall be in no less than 10-point type and in substantially the following form:

    (1)  Disclosure Statement: 

    INFORMATION CONCERNING JOINT FIDUCIARY ACCOUNTS

         A joint fiduciary account allows you to give direction on how you would like your money to be spent, at the same time as it allows you to give another person (or persons) authority to withdraw money or write checks on your account. If you open a joint fiduciary account, you are considered the "owner"  of the account. The person or persons you authorize to access the account are  called a "fiduciary." The fiduciary shall handle your money in a way that is beneficial to you and to act according to your instructions. You, as the owner, always have the right to withdraw money from or to write checks on the account.

         One way to understand the advantages of a joint fiduciary account is to compare it to alternative forms of accounts. A regular joint account is an account in two or more names. Both people have the same authority to take and use the money. Thus, even if the money really belongs to one of the account holders, and the intent was that it would be used for that person, nothing can  be done to stop the other account holder from taking and using all the money for other purposes.

         A sole account with multiple authorized signatures provides a little more protection than a regular joint account. At least it is clear with this account that the money really belongs to the person whose name is on the account, and does not belong to those who are only authorized to sign. (There are often tax reasons for a person to have a sole account with multiple authorized signatures rather than a joint account.) Nevertheless, nothing can be done to stop a person who is authorized to sign on the account from taking and using all the money for some purpose other than for the person whose money  it is.

         A joint fiduciary account provides more protection for the owner than either of the other accounts because the owner makes a clear statement about how the money can be used, and the fiduciary has to follow those instructions or be subject to civil or criminal liability, or both. The fiduciary is also legally  required to keep track of how the money is spent so the owner or another authorized person can verify that the money was used according to the instructions.

    How do you want your money to be spent?

         If you open a joint fiduciary account, you decide how you want your money to be spent. This statement should be broad enough to include everything you need  and want, but not so broad as to go too far beyond that. Thus, you might want  to instruct the fiduciary to spend your money on "all my basic living expenses and, if any money is left over, on gifts to my children and grandchildren, but not to exceed five percent of deposits per year." What is included in the instructions to the fiduciary is completely up to you. If you want to pay your fiduciary for the services provided, or if you want your fiduciary to be able to make gifts to himself or herself or others, you must explicitly indicate that in your declaration of intent.

    Do you want special instructions on accountings?

         If you give no special instructions on accountings, the fiduciary must just keep track of how the money is spent and provide that information to you, your  legal representative, a state agency or a court, but only if asked to do so. You might want to instruct your fiduciary to give a periodic accounting to you  or to someone else. Thus, your instructions could include: "Give a copy of an  accounting of your use of this account to me and to my attorney [or my daughter] every January."

    If you want more than one fiduciary, what do you want their relationship to be?    

         For some account owners, it is useful to name more than one fiduciary. For example, you might want your daughter to be the primary fiduciary, but your nephew to be the fiduciary when she goes to Florida every winter. You can name  more than one fiduciary, but it is useful for you to give them instructions on when you want each to act. Those instructions dictate how they should act. However, the financial institution holding the account is under no obligation to make sure the fiduciaries act in accordance with your instructions; it will  still accept either signature as valid for taking money out of the account.

    Are you trying to make sure your fiduciary takes certain actions, or just trying to give your fiduciary authority to act?

         Sometimes an account owner wants to use the account to make sure the fiduciary  takes certain actions, such as paying the utility bills or paying the mortgage. The joint fiduciary account cannot guarantee for you that the fiduciary will act as you hope. The account simply authorizes the fiduciary to  act, but does not oblige the fiduciary to act. The same is true for a regular  joint account, as well as a sole account with multiple authorized signatures. For any of these accounts, if you want to make sure certain bills are paid, you and your creditor may agree to have the creditor automatically debit your account on a specific day of the month for the amount of your bill.

    Have you already given or do you want to give someone authority to make decisions for you beyond using the money in an account?

         Creating a joint fiduciary account will only give the fiduciary authority to act on your behalf with regard to the monies held in the account. It can be combined with a power of attorney or a durable power of attorney (one that lasts even if you are no longer able to make decisions for yourself). You can name the same person to be your fiduciary on a joint fiduciary account and your agent under a power of attorney, or you can name different people for each. In either event, it is useful to think through who should be named in each document and the relationship between them if you are going to name different people. If you have an attorney preparing a power of attorney, consider consulting with the attorney when opening a joint fiduciary account.

    THE JOINT FIDUCIARY ACCOUNT WILL NOT BE VALID UNLESS A DECLARATION OF INTENT IS SIGNED BY YOU IN THE PRESENCE OF TWO OR MORE WITNESSES WHO ARE NOT A NAMED FIDUCIARY, AND IS ALSO SIGNED BY THE FIDUCIARY.

            (2) Declaration of Intent:

    DECLARATION OF INTENT FOR JOINT FIDUCIARY ACCOUNT OWNER OF ACCOUNT

    I/We ________________________, hereby open a Joint Fiduciary Account. Following are my instructions to the fiduciary for how monies which are deposited into this joint fiduciary account shall be used:

    _____________________________________________________________

    _____________________________________________________________

    (Attach additional pages as necessary)

    I/We hereby appoint ______________________ of ____________________

    (town of residence) and ____________ of ____________ (town of residence) to be the fiduciary(ies) on the

    account, and acknowledge that I/we have received a copy of "Information Concerning Joint Fiduciary Accounts".

          Dated at _____________ , this ______ day of ________, 20____ . ____________________                           Signature of Owner of Account

          Dated at _____________ , this ______ day of ________, 20____ . ____________________                           Signature of Owner of Account

    WITNESSES

         I declare that the owner(s) appear(s) to be of sound mind and free from duress  at the time of signing this Declaration of Intent for a joint fiduciary account, and that the owner(s) affirmed that he and/or she is (are) aware of the nature of the document and is (are) signing it freely and voluntarily. I further declare that I am not a person named as a fiduciary. ____________________________________

    Witness Signature _________________________ Dated: ____________

    Witness Address __________________

    Witness (Print Name) _________________ ____________________________________

    Witness Signature _________________________ Dated: ____________

    Witness Address __________________

    Witness (Print Name) _________________

    FIDUCIARIES (Only one is required.)

         I declare that I am willing to act as the fiduciary on the Joint Fiduciary Account of __________________ (owner(s)). I have read the Declaration of Intent and agree to use the money in the account only for the purposes stated therein. I further agree to maintain accurate records of my use of any monies in the account and to produce them upon request by the owner, by a legal representative of the owner, by a state agency, or by a court. I understand that my authority to act ceases when an owner changes the fiduciary, closes the account, or the last owner has died. I further acknowledge that I may be sued civilly if I intentionally or negligently fail to abide by the terms of the Declaration of Intent, or may be charged criminally if I intentionally fail to abide by its terms, or both. I acknowledge that I have received a copy  of the Declaration of Intent.

    ________________________

    Fiduciary (Print Name)

    ______________________________________________________________

    Fiduciary Address

    ____________________________________            Date ________________ Fiduciary Signature

    If more than one:

    ________________________

    Fiduciary (Print Name)

    ______________________________________________________________

    Fiduciary Address

    ____________________________________            Date ________________ Fiduciary Signature

    For Financial Institution Use Only:

    Financial Institution Name: ________           Account Number: ____________ Address: ___________________

     (3) The Commissioner shall have the authority to adopt rules amending the disclosure statement and declaration of intent to reflect changes necessitated by a change in law or to make minor changes to the forms in this subsection.

     

    (e) The fiduciary shall maintain accurate records to permit an accounting of the acts of the fiduciary, and shall provide such records and accounting if requested to do so by the owner, by a legal representative of the owner, by the Attorney General, a State's Attorney, or the Department of Disabilities, Aging, and Independent Living if any has reason to believe the fiduciary is in violation of this section, or by a court of competent jurisdiction.

    (f) All rights, title, interest, and claim to a joint fiduciary account, and any additions or accumulations thereto, shall be the property of the owner of the account. An owner shall have authority to take all actions permitted by the terms and conditions of the account. The designation of a fiduciary shall not affect the title to funds in the account, and the owner shall not be considered to have made a gift to the fiduciary of all or any portion of the funds in the joint fiduciary account, or to any additions or accumulations thereto. The fiduciary shall have no right of survivorship in the account unless such right is specifically provided for in the account title.

    (g) The financial institution holding a joint fiduciary account shall retain a signed copy of the declaration of intent according to the financial institution's records retention policy. Notwithstanding any provision of law to the contrary, no financial institution shall be responsible for monitoring transactions to or from any joint fiduciary account. A financial institution shall not be liable for withdrawals and payments made by the fiduciary unless an owner has notified the financial institution, in accordance with the terms and conditions of the account, to change the fiduciary, or has closed the account, or the financial institution has been notified that the last owner is deceased.

    (h) Any owner who sustains damages or injury as a result of a fiduciary's action or inaction in violation of this section or the declaration of intent may sue the fiduciary for appropriate equitable relief, and may sue and recover from the fiduciary the amount of his or her damages, reasonable attorney's fees, and exemplary damages not exceeding three times the owner's damages. Nothing in this section shall be construed to abrogate any other causes of action or relief at law or equity to which the owner is entitled under other laws or at common law.

    (i) Whenever the Attorney General or a State's Attorney has reason to believe that a fiduciary has used or is about to use the proceeds in a joint fiduciary account in violation of the declaration of intent, the Attorney General or a State's Attorney may bring an action in the name of the State against such person to restrain by temporary or permanent injunction the use of funds from the account. The action may be brought in the Superior Court of the county in which the joint fiduciary account is located, where the owner resides, or where the fiduciary resides, has a place of business, or is doing business. In addition to the foregoing, the Attorney General or a State's Attorney may request, and the Court is authorized to render, any other temporary or permanent relief, or both, as may be in the public interest, including, closing the account, replacing the fiduciary, ordering restitution of cash to the account, imposing of a civil penalty of not more than $10,000.00 for each violation, and ordering reimbursement to the State of Vermont for the reasonable value of its services and expenses in investigating and prosecuting the action. In addition to the foregoing, the Attorney General or a State's Attorney may seek relief under 33 V.S.A. chapter 69, subchapter 2 or may charge the fiduciary pursuant to 13 V.SA. § 2028. (Added 2001, No. 115 (Adj. Sess.), § 1; amended 2005, No. 174 (Adj. Sess.), § 13.)


  • Subchapter 003: Loans
  • § 14301. Loan authority

    (a) General loan authority. Unless otherwise prohibited by State law, a Vermont financial institution may make, sell, purchase, arrange, participate in, invest in, or otherwise deal in loans, derivative transactions, or extensions of credit for any lawful purpose.

    (b) Written loan policy.

    (1) A financial institution's governing body shall establish a written loan, credit, and derivative transaction policy, as applicable to the activities of the financial institution, which shall be reviewed and ratified at least annually, that addresses at a minimum, the following:

    (A) Loan portfolio mix and diversification standards, and, if applicable, derivative transaction portfolio mix and diversification standards;

    (B) Prudent underwriting standards, including loan-to-value limits that are clear and measurable;

    (C) Loan administration procedures, including delegation and individual lending officer authority; and

    (D) Documentation and approval requirements to monitor compliance with lending policies.

    (2) The policies adopted pursuant to this section shall be consistent with safe and sound banking practices and appropriate to the size of the institution and nature and scope of its operations.

    (c) Interest on loans. Financial institutions may demand and receive interest and charges on their loans in accordance with 9 V.S.A. chapter 4 or as otherwise provided by law.

    (d) Limitations. A Vermont financial institution may not make loans, derivative transactions, or extensions of credit outstanding at one time to a borrower in excess of 20 percent of its capital. Total loans, derivative transactions, or other extensions of credit in excess of 10 percent of capital shall be approved by a majority of the governing body or the executive committee of that institution or organization.

    (1) Loans, derivative transactions, or extensions of credit to one person will be attributed to another person and each person shall be deemed a borrower as follows:

    (A) In the case of obligations of one person, the proceeds will be deemed to be used for the direct benefit of another person and will be attributed to the other person when the proceeds, or assets purchased with the proceeds, are transferred to another person, other than a bona fide arm's length transaction where the proceeds are used to acquire property, goods, or services.

    (B) In the case of obligations of a partnership or association, the obligations of each general partner and of each member of the association.

    (C) In the case of obligations of a general partner or a member of an association, the obligations of the partnership or association.

    (D) In the case of obligations of a corporation, the obligations of any subsidiaries in which it holds, directly or indirectly, a controlling equity interest.

    (E) In the case of obligations of a limited liability company, the obligations of any subsidiaries in which it holds, directly or indirectly, a controlling equity interest.

    (F) In the case of obligations of a corporation or limited liability company, the amount of a loan made to any other person to the extent that the proceeds of the loan directly or indirectly are to be:

    (i) loaned to the corporation or limited liability company;

    (ii) used for the acquisition from the corporation or limited liability company of any equity interest therein; and

    (iii) transferred to the corporation or limited liability company without fair and adequate consideration; provided, however, that the discharge of an equivalent amount of debt previously incurred in good faith for value shall be deemed fair and adequate consideration.

    (2) The following shall not be counted as indebtedness subject to the limitation of this subsection:

    (A) Indebtedness evidenced by bills of exchange or drafts drawn against existing values and secured by a lien upon goods in transit with shipper's order, bills of lading, or comparable instruments attached.

    (B) Indebtedness evidenced by notes or other paper secured by readily marketable corporate stock having a fair market value of not less than 125 percent of the indebtedness.

    (C) Indebtedness evidenced by notes or other paper secured by an assignment of accounts receivable or of amounts due to become due on open account or on a contract to the extent of not less than 125 percent of the indebtedness.

    (D) Indebtedness evidenced by notes or other paper secured by liens upon agricultural products, manufactured goods, or other chattels in storage in warehouses or elevators with warehouse or elevator receipts attached, or goods released on trust receipts, when the value of the security is not less than 125 percent of the indebtedness and the financial institution's interest therein is insured against loss by insurance policies or certificates of insurance attached.

    (E) Indebtedness arising out of the daily transaction of the business of any clearing house association.

    (F) Indebtedness secured to the extent thereof by the cash surrender value of life insurance evidenced by policies of insurance validity issued and assigned.

    (G) Indebtedness secured to the extent thereof by savings deposits or certificates of deposit of solvent financial institutions up to the amount insured by the Federal Deposit Insurance Corporation, and duly assigned.

    (H) Any portion of any indebtedness which the United States government, or an agency or instrumentality of the United States unconditionally agreed to purchase or has unconditionally guaranteed as to payment of both principal and interest, including loans insured or guaranteed under the National Housing Act or the Servicemen's Readjustment Act of 1944, as amended.

    (I) Additional funds advanced for the benefit of a borrower by a financial institution for payment of taxes, insurance, utilities, security, and maintenance and operating expenses necessary to preserve the value of real property securing the loan.

    (J) Amounts paid against uncollected funds in the normal process of collection.

    (K) That portion of a loan or extension of credit sold as a participation by a financial institution on a nonrecourse basis, provided that the participation results in a pro rata sharing of credit risk proportionate to the respective interests of the originating and participating lenders. (Added 1999, No. 153 (Adj. Sess.), § 2, eff. Jan. 1, 2001; amended 2011, No. 78 (Adj. Sess.), § 26, eff. April 2, 2012.)

  • § 14302. Real estate loans

    (a) Clear title. All loans secured by mortgages on real estate shall be supported by written evidence satisfactory to the financial institution that title to the security is marketable and the lien is valid and enforceable. A mortgage on lands subject to lease under which rents are reserved to the owner, with all of the owner's rights and options under the lease collaterally assigned to the financial institution as security or a mortgage upon lands impressed with a public use, sometimes known as lease, society, or glebe lands, but held under a durable lease, shall not be deemed to be subordinate to such lease or public use.

    (b) Appraised value. The appraisal of real estate securing a federally related transaction entered into by a financial institution shall comply with the regulations of the Federal Deposit Insurance Corporation, as amended and codified at 12 C.F.R. Part 323. The appraisal of real estate securing a nonfederally related transaction entered into by a financial institution shall comply with the federal supervisory agencies' interagency guidelines, as amended.

    (c) Servicing of loans. A financial institution may contract with another financial institution, corporation, or association whose transactions are in whole or in part the handling and servicing of mortgage loans, to handle and service loans in its behalf. Whenever such a contract is made, the financial institution shall not lose or suffer any impairment of any right of deduction or offset it might have against any one liable for the mortgage debt.

    (d) Home loan escrow accounts. Any financial institution which requires a home loan escrow account to be established and maintained by a borrower shall follow the provisions of section 10404 of this title.

    (e) Loans insured or guaranteed by federal law. Any mortgage on real estate given to secure a loan insured or guaranteed by the federal housing commissioner, the administrator of Veterans Affair's or the administrator of the Small Business Administration, under the National Housing Act, the Servicemen's Readjustment Act of 1944 or the Small Business Act, respectively, as amended, shall not be subject to the provisions of any law of this State prescribing the nature, amount, or form of security, or manner of repayment, or requiring security upon which loans or advances of credit may be made, or prescribing or limiting the period or principal amount of which loans may be made, or prescribing or limiting the interest which may be charged or other charges which may be made or taken upon any loan or advance of credit. (Added 1999, No. 153 (Adj. Sess.), § 2, eff. Jan. 1, 2001.)

  • § 14303. Bank credit cards

    (a) General authority. Any financial institution which is authorized to do a lending business in this State may issue bank credit cards.

    (b) No discrimination. No financial institution shall discriminate against any applicant for a bank credit card on the bases set forth in section 10403 of this title. Nothing in this section shall be taken to prohibit the establishment of separate credit card accounts for persons who are married.

    (c) Statements of account. Issuers of bank credit cards shall promptly furnish a statement of each cardholder's account as of the end of each monthly period (which need not be a calendar month) in which there is any unpaid balance thereunder, which statement shall include the following information, not necessarily in the order stated:

    (1) the unpaid balance of the account at the beginning of the period;

    (2) the amount of cash advances, if any, during the period;

    (3) unless furnished by the seller or tax department to the cardholder by sales slip, memorandum, or otherwise, information in the statement of account sufficient to allow the cardholder reasonably to identify the transaction or delinquent taxes paid as permitted by 32 V.S.A. § 3109(c) during the period, the cash price and the date of each purchase or tax payment;

    (4) the payments and other credits applied to the cardholder's account during the period;

    (5) the balance at the billing date for cash advances, property, and services subject to finance charge;

    (6) the amount and rate of the finance charge imposed;

    (7) the balance at the billing date for property, labor, or services purchased or delinquent taxes paid during the billing period, if any, and the date by which it may be paid to avoid any finance charge.

    (d) Finance charges; annual fees; ATM fee.

    (1) As to that part of an account balance which shall result from cash advances, if any, the finance charge shall be applied to the average daily balance of the cash advances in the account for the billing period. An issuer of a bank credit card account may provide for an annual fee. Except for cash advances, no finance charge shall be imposed on items in the account for property, labor, and services purchased during the billing period to the extent that they are paid for not later than 25 days from the financial institution's billing date therefor. No change in the terms of a bank credit card agreement which might require such credit cardholder to pay an annual fee shall take effect unless:

    (A) at least 60 days prior to the effective date of the change, a written notice has been mailed or delivered to the cardholder that clearly and conspicuously describes the annual fee, and contains a return stamped response addressed to the issuer with instructions to the cardholder to return the response to the issuer within 30 days, signed by the cardholder and indicating a preference, expressed in the response, for either of the following options:

    I accept the change as notified.

    I do not accept, and hereby cancel my card.

    The notice shall further state that the incurrence by the cardholder or another authorized person of any further indebtedness under the plan to which the agreement relates on or after the effective date of such change specified in the notice shall constitute acceptance of such annual fee; and

    (B) either the credit cardholder agrees in writing to such annual fee or the credit cardholder or another authorized person incurs such further indebtedness on or after the effective date of the change stated in such notice.

    (2) A credit transaction effected by the use of an automated teller machine (ATM) may be subject to a transaction fee in addition to any finance charges permitted by this section.

    (e) Payments.

    (1) 9 V.S.A. §§ 45 and 47 shall apply with respect to prepayment and application of payments to cardholder accounts. With respect to transactions in Vermont charged to a bank credit card account established by a Vermont financial institution, the defenses preserved by 9 V.S.A. § 2455, shall be available to the cardholder as against the financial institution in any action or proceeding to enforce collection of said account by a financial institution.

    (2) In the case of a bank credit card account, except for a loan or extension of credit secured by a lien against real estate, the periodic billing shall be no less than 1/48th of the balance as of the last advance.

    (f) Quarterly Reports. Any financial institution which is authorized to do business in this State, may issue bank credit cards only if it reports quarterly to the Commissioner pursuant to subsection 10401(b) of this title on its rates and charges on its bank credit card products. (Added 1999, No. 153 (Adj. Sess.), § 2, eff. Jan. 1, 2001.)

  • § 14304. Card holder represented by legal counsel

    (a) A credit card company or its creditor or collection agency shall not contact a card holder regarding a debt, late fee, or other charge once informed that the card holder is disputing the debt, late fee, or other charge; is represented by legal counsel in the dispute; and the card holder has provided the credit card company or its creditor or collection agency with the name, address, and telephone number of the legal counsel.

    (b) A credit card company or its creditor or collection agency that violates subsection (a) of this section shall be fined not more than $10,000.00.

    (c) Each violation of subsection (a) of this section shall be considered a separate offense. (Added 2009, No. 55, § 11.)


  • Subchapter 004: Trust Powers
  • § 14401. Types of trust functions

    (a) With the prior approval of its governing board, a financial institution may act alone or with others as:

    (1) fiduciary;

    (2)  custodian of property;

    (3) agent or attorney in fact;

    (4) registrar or transfer agent of securities;

    (5) trustees under corporate mortgages, trust deeds or similar indentures; or

    (6) fiscal agent of the United States, a political subdivision thereof, a body politic, a corporation, or an individual.

    (b) With that approval, a financial institution may also be appointed and act as executor or coexecutor of a will, codicil, or writing testamentary, as administrator or co-administrator with the will annexed, as administrator or co-administrator of a person deceased, as receiver, assignee, trustee, alone or with others, or as guardian or co-guardian of a person subject to guardianship, and with that approval may relinquish the fiduciary office, under the same circumstances, in the same manner and subject to the same control by a court having jurisdiction, as a natural person legally qualified. (Added 1999, No. 153 (Adj. Sess.), § 2, eff. Jan. 1, 2001.)

  • § 14402. National financial institutions; state financial institutions

    (a) To the same extent that the laws of the United States permit, a national financial institution located and doing business in this State may act, alone or with others, as specified in section 14401 this title.

    (b) Subject to the provisions of 11A V.S.A. chapter 15 and 11 V.S.A. chapter 21, subchapter 10, except that 11A V.S.A. § 15.06 and 11 V.S.A. § 3136 shall not apply to any financial institution, including a state trust company, a financial institution with trust powers with its principal place of business not in Vermont may act, alone or with others, as specified in section 14401 of this title, and may establish one or more places of business in this State for the conduct of such trust business, provided that:

    (1) it is a direct or indirect subsidiary of a bank holding company that has a direct or indirect financial institution subsidiary that has an office in this State at which deposits are accepted; or

    (2) the law of the state in which it is located or domiciled would allow either a Vermont financial institution or a national financial institution, with its principal place of business located in Vermont to establish one or more places of business in such state for the conduct of trust activities if authorized by its supervisory agency to exercise trust powers.

    (c) As a condition precedent to its right to act in the capacities specified in this section, it shall file a stipulation with the Commissioner of Taxes, in which it shall agree that any funds, securities, or property held by it under any appointment under this subchapter, shall be taxed in the same manner and to the same extent as funds of the same character held by a Vermont financial institution.

    (d) A state financial institution with trust powers, including a state trust company, shall obtain the Commissioner's written approval before establishing a place of business in this State pursuant to subsection 11701(b) of this title. Before issuing such approval, the Commissioner must find that it is adequately staffed, equipped, and able to furnish trust services in this State. The Commissioner may examine its activities in this State at any time deemed necessary to ensure its continued safety and soundness, ability to furnish trust services, and compliance with the laws of this State. It shall make its books and records pertaining to its business in this State available to the Commissioner for such examination. Each state financial institution shall pay fees and assessments as prescribed by sections 18, 19, and 11501 of this title. (Added 1999, No. 153 (Adj. Sess.), § 2, eff. Jan. 1, 2001.)

  • § 14403. Approval of Commissioner

    No financial institution not otherwise expressly authorized by its respective supervisory agency under state or federal law may exercise the powers provided in this subchapter until it has applied for and obtained approval of the Commissioner to do so under subsection 11701(b) of this title. The Commissioner shall conduct inquiry into the affairs of the financial institution applying for those powers to determine if the financial institution is staffed, equipped, and able to furnish those services. (Added 1999, No. 153 (Adj. Sess.), § 2, eff. Jan. 1, 2001; amended 2005, No. 36, § 5, eff. June 1, 2005.)

  • § 14404. Security

    The capital of a financial institution exercising trust powers shall be held as security for the faithful discharge of the duties undertaken thereby as well as for the claims of other creditors. The financial institution shall furnish to the authority making the appointment a good and sufficient bond for a sum not less than 25 percent of the amount of the trust fund, conditioned for the faithful discharge of the duties undertaken by virtue of section 14401 of this title. However, when the bond would not exceed $2,000.00, a financial institution shall be relieved of furnishing it. (Added 1999, No. 153 (Adj. Sess.), § 2, eff. Jan. 1, 2001.)

  • § 14405. Powers and duties of officers

    In proceedings in the Probate Division of the Superior Court or elsewhere, connected with authority exercised as executor, administrator, receiver, assignee, trustee, or guardian, all accounts, returns, and other papers may be signed and sworn to in behalf of such a financial institution exercising trust powers by any officer thereof duly authorized by it. The answers and examinations of that officer, under oath, shall be received as the answers and examinations of the financial institution. The Court may order and compel any and all officers of the financial institution to answer and attend the examinations, in the same manner as if they, personally, were parties to the proceeding or inquiry. Such a financial institution shall not be required to receive or hold any property or money or to execute any trust contrary to its own desire. (Added 1999, No. 153 (Adj. Sess.), § 2, eff. Jan. 1, 2001; amended 2009, No. 154 (Adj. Sess.), § 238a, eff. Feb. 1, 2011.)

  • § 14406. Segregation of trust funds; exception

    All monies, property, or securities received or held by a financial institution in the capacity of executor, administrator, receiver, assignee, trustee, or guardian shall be kept separate and distinct from its general business and shall not be mingled with the investments of its assets or be liable for its debts or obligations. However, a financial institution exercising trust powers, in good faith, may deposit temporarily in its commercial or savings departments any money so held in trust awaiting distribution or investment and may also deposit in its savings department as an investment for any one trust an amount insurable and insured by the Federal Deposit Insurance Corporation. All such deposits in either department shall be in the name of the trust or in the name of the financial institution as trustee of the trust. If the security afforded by virtue of this section and section 14404 of this title is insufficient to satisfy in full any claim growing out of the holding or management of monies, property, and securities so received and held, the unsatisfied balance shall then be satisfied as are demands of the general creditors of the financial institution. (Added 1999, No. 153 (Adj. Sess.), § 2, eff. Jan. 1, 2001.)

  • § 14407. Collective investment funds

    (a) A Vermont financial institution may invest assets that it holds as a fiduciary in the following collective investment funds:

    (1) a fund maintained by the financial institution, or by one or more affiliated financial institutions, exclusively for the collective investment and reinvestment of money contributed to the fund by the financial institution, or by one or more affiliated financial institutions, in its capacity as trustee, executor, administrator, guardian, or custodian under the Uniform Gift to Minors Act;

    (2) a fund consisting solely of assets of retirement, pension, profit sharing, stock bonus, or other trusts that are exempt from federal income taxation under the Internal Revenue Code; and

    (3) a fund consisting of any other assets held as a fiduciary, to the extent not prohibited by applicable law.

    (b) In addition to any other rules that the Commissioner finds necessary or desirable for the administration of this section, the Commissioner may adopt rules on the following:

    (1) the requirements for a written plan for the establishment, maintenance, and operation of collective investment funds;

    (2) the method and frequency of valuation of such fund's assets;

    (3) the admission and withdrawal of accounts;

    (4) standards on self-dealing and conflicts of interest;

    (5) permissible management fees;

    (6) the requirements for audits and financial reports of collective investment funds; and

    (7) the requirements for the establishment, maintenance, and operation of other investments permitted by subdivision (a)(3) of this section, including the treatment of exemptions from the provisions of this section.

    (c) A Vermont financial institution administering a collective investment fund shall have exclusive management thereof, except as a prudent person might delegate responsibilities to others.

    (d) Each participating account in a collective investment fund shall have a proportionate interest in all the fund's assets.

    (e) A Vermont financial institution administering a collective investment fund may charge reasonable expenses incurred in operating the fund, but not expenses associated with establishing or reorganizing a collective investment fund.

    (f) A Vermont financial institution may not advertise any collective investment fund except in connection with the advertisement of the general fiduciary services of the institution.

    (g) A Vermont financial institution shall not issue any certificate representing an interest in a collective investment fund, except to provide a withdrawing account with an interest in a segregated investment. (Added 1999, No. 153 (Adj. Sess.), § 2, eff. Jan. 1, 2001; amended 2015, No. 23, § 87.)

  • § 14408. Registration and sale of securities

    A Vermont or state financial institution owning or holding stocks or other securities in any fiduciary capacity may cause the same to be registered in the name of a nominee. The word "nominee" shall be construed to include one or more natural persons, a partnership, a corporation, or similar entity. Any such securities jointly held in a fiduciary capacity by a financial institution and another, individual or corporate, may be registered in the name of a nominee mutually satisfactory to the co-fiduciaries. Any fiduciary acting jointly with a financial institution may authorize and direct the financial institution in writing to register securities provided herein. An individual or corporate fiduciary may deliver any such securities to a financial institution as custodian and may authorize and direct the financial institution in writing to register such securities in the name of a nominee. A financial institution having caused securities to be registered in the name of a nominee as provided herein and wishing or being required by the terms of its fiduciary agreement to deliver them to one legally entitled thereto shall first cause them to be transferred into the name of the one to receive delivery. Sales of any such securities made by a financial institution under its fiduciary authority may be completed by delivery of the security, endorsed by the nominee without the necessity of transfer through a joint fiduciary, the trust-creator, or the beneficiary. (Added 1999, No. 153 (Adj. Sess.), § 2, eff. Jan. 1, 2001.)

  • § 14409. Disposition of securities upon court order; liability for acts of nominee

    Any fiduciary financial institution may dispose of any security under an order or decree of any court of competent jurisdiction by delivery of the security endorsed by the nominee as provided in section 14408 of this title in the case of sales. Any fiduciary financial institution shall be absolutely liable for any loss occasioned by the acts of the nominee or the financial institution with respect to any securities registered in the nominee's name. Both legal and equitable ownership of all securities in the financial nominee's possession or subject to the financial nominee's control shall be fully revealed by the financial institution's records. (Added 1999, No. 153 (Adj. Sess.), § 2, eff. Jan. 1, 2001.)

  • § 14410. Fiduciary investments

    (a) In the absence of an express prohibition in the instrument, judgment, decree, power, order, or other writing creating a trust or other fiduciary relationship, a financial institution acting as fiduciary may invest and reinvest funds held by it in a fiduciary capacity in the securities of an open-end or closed-end investment company or investment trust registered under 15 U.S.C. § 80a-1 to 80a-64 (Investment Company Act of 1940), as that act exists now or as amended in the future.

    (b) The investments authorized in subsection (a) of this section may be made even if the financial institution, or an affiliate thereof, is providing services to the investment company and is receiving reasonable compensation for such services as an advisor, manager, sponsor, administrator, broker, distributor, custodian, shareholder servicing agent, transfer agent, registrar, or any related services. At least annually, the financial institution shall disclose in a clear and conspicuous manner to the principal of each fiduciary account the fees it has charged or received from the investment company, or an affiliate thereof, for such services and the basis upon which compensation is calculated, expressed either in a specific amount or as a percentage of asset value. (Added 1999, No. 153 (Adj. Sess.), § 2, eff. Jan. 1, 2001.)


  • Subchapter 005: Safe Deposit Boxes
  • § 14501. Failure to pay rent; removal of contents

    (a) If the amount due for the use of any safe or box in the vaults of a financial institution is not paid for one year, or such other period as may be fixed in the contract of renting of such safe or box, the financial institution, at the expiration thereof, may cause to be sent to the person in whose name the safe or box stands on its books, a notice in writing that if the amount then due for the use of the safe or box is not paid within 60 days from the date of the notice, the financial institution will then cause the safe or box to be opened in the presence of an officer duly authorized by the governing body and of a notary public not an officer or in the employ of the financial institution, and the contents thereof, if any, will be sealed up by the notary in a package upon which the notary will distinctly mark the name and address of the person in whose name such safe or box stands upon the books of the financial institution and the estimated value thereof. The package so sealed and addressed, when marked for identification by the notary, will be placed by the notary in one of the general safes or boxes of such financial institution. The notice shall be sent in a postage prepaid registered letter directed to that person at his or her post office address as recorded upon the books of the financial institution, and at his or her last known address.

    (b) The proceedings of the notary shall be fully set forth in the notary's own handwriting and official seal in a book to be kept by the financial institution for that purpose. After such contents have been so placed in general safes or boxes, the financial institution shall be required to use only the degree of care required of a bailee for the sole benefit of the bailor notwithstanding the contract of renting requires a higher degree of care during the period of renting. (Added 1999, No. 153 (Adj. Sess.), § 2, eff. Jan. 1, 2001.)