The Vermont Statutes Online

Title 8: Banking and Insurance

Chapter 205: Branches

• Subchapter 001: Intrastate Branching

• § 15101. Establishment of Vermont branches

  A Vermont financial institution shall not establish or maintain any branch in this State for the general transaction of its business without the approval of the Commissioner. The Commissioner shall approve the application for a branch under this section if the Commissioner finds that, based on an application filed under subsection 11701(b) of this title, the application meets the general good of the State as determined under section 11703 of this title. A Vermont financial institution may establish and maintain offices or facilities that do not constitute a branch, without the approval of the Commissioner; provided, however, that establishment of a remote service unit by a Vermont financial institution shall be subject to payment of the fee provided in subdivision 19(a)(6) of this title. (Added 1999, No. 153 (Adj. Sess.), § 2, eff. Jan. 1, 2001.)

• Subchapter 002: Interstate Branching and Activities

• § 15201. Establishment of branches outside Vermont

  (a) A Vermont financial institution may establish a branch in any state other than this State by merger, consolidation, acquisition, or as otherwise permitted by and in accordance with the laws of such host state and applicable federal financial institution laws.

  (b) A merger or consolidation pursuant to this section shall be in accordance with and subject to the provisions of chapter 207 of this title.

  (c) Not later than the date on which the required application is filed with the responsible federal supervisory agency, the applicant in the establishment of a branch under this section shall file an application on a form prescribed by the Commissioner. If the Commissioner finds that the proposed transaction will not be detrimental to the safety or soundness of the applicant and the applicant has obtained and provided the Commissioner with copies of all other required approvals, the Commissioner shall approve the application and the operation of the branch outside this State.

  (d) A branch of a Vermont financial institution that is located in another state may conduct any activity that is permissible for a branch in that state of a financial institution incorporated under the laws of such state. In order to engage in trust activities in an out-of-state branch, a Vermont financial institution shall have previously obtained the Commissioner’s approval to engage in trust activities under section 14403 of this title. (Added 1999, No. 153 (Adj. Sess.), § 2, eff. Jan. 1, 2001.)

• § 15202. Establishment of branches in Vermont by financial institutions

  (a) A state financial institution, foreign bank, or national bank may establish a branch in this State pursuant to this section and in accordance with applicable state and federal financial institution laws.

  (b) The establishment of a branch in this State under this section shall be accomplished by:

  (1) a merger, or consolidation with, or the purchase of all or substantially all of the assets of, a financial institution or acquisition of a branch located in this State; or

  (2) establishment of a branch; provided, however, that the law of the home state of any state financial institution or national financial institution proposing to establish one or more de novo branches in this State must expressly authorize, under conditions no more restrictive than those imposed by the laws of this State as determined by the Commissioner, the financial institution whose home state is this State to engage in interstate branch establishment of de novo branches in that state. A financial institution that is not a Vermont financial institution and is establishing a branch in this State shall file a copy of the branch application, with any amendments to the application, with the Commissioner at the time the application is filed with any supervisory agency.

  (c) A merger or consolidation pursuant to this section involving a Vermont financial institution shall be in accordance with and subject to the provisions of chapter 207 of this title, except that the application requirement shall be treated as a notice requirement and the Commissioner may file an objection with the applicable supervisory agency with jurisdiction over the transaction if the transaction fails to comply with law. Approval of the Commissioner under chapter 207 of this title shall not be required.

  (d) Any merger, consolidation, or acquisition pursuant to this section shall be subject to the provisions of section 14108 of this title.

  (e) A state financial institution that establishes a branch in this State shall comply with the provisions of 11A V.S.A. chapter 15, 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. Notwithstanding section 14103 of this title, a branch in this State of a state financial institution may engage in the activities permitted of a financial institution organized under the laws of this State, and may use the words “bank,” “banking association,” or “trust company” when engaged in such activities. The organizational name of such financial institution shall not be deceptively similar to any name in use by a person authorized to do business in this State.

  (f) A branch of a state financial institution located in this State shall comply with the laws of this State, including laws regarding community reinvestment, consumer protection, fair lending, and the establishment of intrastate branches, to the same extent as such laws apply to a branch in this State of a Vermont financial institution. A branch in this State of a state financial institution may conduct any activity that is permissible for a branch in this State of a Vermont financial institution, but may not conduct any activity that is not permissible for a branch in this State of a Vermont financial institution. If Vermont law requires a Vermont financial institution or any branch of such financial institution to obtain the Commissioner’s approval to engage in an activity, then a branch of a state financial institution shall obtain the Commissioner’s approval in the same manner as a Vermont financial institution.

  (g) A branch of a national financial institution located in this State shall comply with the laws of this State, including laws regarding community reinvestment, consumer protection, fair lending, and establishment of intrastate branches, to the same extent as such laws apply to a national financial institution whose principal place of business is in this State.

  (h) A national or state financial institution that maintains a branch in this State pursuant to this section may establish and operate one or more remote service units in this State, without the approval of the Commissioner. Any remote service unit established pursuant to this subsection shall be subject to the provisions of section 10302 of this title. Nothing in this section shall be deemed to authorize any other person or entity to establish or operate any remote service unit in this State that accepts deposits or that transfers funds between accounts. (Added 1999, No. 153 (Adj. Sess.), § 2, eff. Jan. 1, 2001; amended 2021, No. 105 (Adj. Sess.), § 300, eff. July 1, 2022.)

• § 15203. Foreign branches

  (a) A foreign bank not licensed by federal authorities to establish a federal branch in this State may transact business in this State only at a branch that is licensed by the Commissioner. The Commissioner may, upon receipt of an application of the foreign bank to establish a branch, issue a license to a foreign bank to conduct such business in compliance with the laws of this State if the Commissioner finds that:

  (1) the foreign bank and its management are of good character and sound financial standing;

  (2) the management of the foreign bank and proposed management of the branch are adequate;

  (3) the convenience and needs of the persons to be served by the proposed branch will be promoted; and

  (4) the foreign bank satisfies such other standards as the Commissioner may establish.

  (b) The application required under this section shall be on a form approved by the Commissioner and shall contain a copy of all applicable federal approvals. Except as otherwise provided in this section, subsections 15202(b) and (d) of this title, the license, application, and operations of a branch licensed under this section shall be subject to the requirements imposed on the establishment and operation of branches of financial institutions organized under the laws of this State. Except as otherwise provided in federal law, this title or by rule or order of the Commissioner, the operations of a foreign bank at a branch in this State shall be conducted with the same rights, privileges, and powers as a financial institution incorporated under the laws of this State at the same location and shall be subject to all the same duties, restrictions, penalties, liabilities, conditions, and limitations that would apply under the laws of the state to a financial institution incorporated under the laws of this State. The Commissioner may impose conditions or restrictions on the operations of a branch of a foreign bank in this State. (Added 1999, No. 153 (Adj. Sess.), § 2, eff. Jan. 1, 2001.)

• § 15204. Other activities

  (a) Subject to subsection (b) of this section, a financial institution having its principal office in a jurisdiction other than Vermont may maintain or conduct the following offices or activities in this State:

  (1) a temporary agency;

  (2) an office used solely for internal operations of the institution to which the public is not admitted for the conduct of financial institution business;

  (3) an automated teller machine owned by other than a Vermont financial institution; provided, however, that it does not accept deposits or transfer funds between accounts;

  (4) loan production;

  (5) foreign exchange services; or

  (6) any other financial institution related office or activity that the Commissioner determines may be maintained or conducted in this State.

  (b) A financial institution shall obtain the Commissioner’s written approval prior to maintaining any office or conducting any activity described in subsection (a) of this section. The Commissioner may condition approval on the existing availability of the activity in the State.

  (c) Nothing in this section shall be deemed to permit a financial institution to solicit or accept deposits, pay checks, or loan money within this State, unless it is otherwise authorized to engage in such activity in this State.

  (d) Notwithstanding section 14103 of this title, a financial institution authorized to engage in the activities permitted under this section may use the words “bank,” “banking association,” “national association,” “financial institution,” or “trust company” when engaged in the activities permitted under this section. A financial institution that is authorized to engage in loan production in this State, but not authorized to approve loans in this State, shall disclose in any printed material and advertising that it is engaged in loan production. The organizational name of such financial institution shall not be deceptively similar to any name in use by an authorized financial institution doing business in this State. (Added 1999, No. 153 (Adj. Sess.), § 2, eff. Jan. 1, 2001; amended 2001, No. 73 (Adj. Sess.), § 5, eff. Feb. 2, 2002.)

• § 15205. Out-of-state activities by Vermont financial institutions

  (a) Subject to subsection (b) of this section, a Vermont financial institution may maintain or conduct the following offices or activities in another state:

  (1) a temporary agency;

  (2) an office used solely for internal operations of the institution to which the public is not admitted for the conduct of financial institution business;

  (3) an automated teller machine owned by a Vermont financial institution; provided, however, that it does not accept deposits or transfer funds between accounts;

  (4) loan production;

  (5) foreign exchange services;

  (6) trust activities; or

  (7) any other financial institution-related activity that the host state determines may be maintained or conducted in such state.

  (b) The Vermont financial institution shall provide the Commissioner with written evidence that the host state approved, did not object to, or otherwise allows the Vermont financial institution to maintain the office or conduct in the host state the activity described in subsection (a) of this section. In order to engage in trust activities in the host state, a Vermont financial institution shall have previously obtained the Commissioner’s approval to engage in trust activities under section 14403 of this title.

  (c) Nothing in this section shall be deemed to permit a Vermont financial institution to solicit or accept deposits, pay checks, or lend money within the host state, unless it is otherwise authorized to engage in such activity in the host state. (Added 2005, No. 36, § 6, eff. June 1, 2005.)

• Subchapter 003: Branch Sales, Closings, and Change of Control

• § 15301. Branch sales, closings, and change of control

  (a) Sales. A Vermont financial institution that proposes to sell one or more of its branches shall file an application for a certificate of approval on a form prescribed by the Commissioner. Notwithstanding subsection 11701(b) and section 11703 of this title, the Commissioner shall approve the application upon finding that the proposed sale will not be detrimental to the safety and soundness of the applicant.

  (b) Closings. Any state financial institution that intends to close a branch located in this State shall provide the Commissioner with the same notice required to be provided to the appropriate federal financial institution supervisory agency pursuant to 12 U.S.C. § 1831r-1.

  (c) Notice of subsequent change of control. Each state financial institution that has established and maintains a branch in this State pursuant to this chapter shall give at least 30 days’ prior written notice or, in the case of an emergency transaction, such shorter notice as is consistent with applicable state or federal law, to the Commissioner of any merger, consolidation or other transaction that would cause a change of control with respect to such state financial institution or any bank holding company that controls such financial institution, with the result that an application would be required to be filed pursuant to the federal Change in Financial Institution Control Act of 1978, as amended, 12 U.S.C. § 1817(j), or the federal Bank Holding Company Act of 1956, as amended, 12 U.S.C. § 1841 et seq., or the Home Owners Loan Act, 12 U.S.C. § 1467a, or any successor statutes. (Added 1999, No. 153 (Adj. Sess.), § 2, eff. Jan. 1, 2001; amended 2021, No. 105 (Adj. Sess.), § 301, eff. July 1, 2022.)