§ 11101. Definitions
Except as otherwise specifically provided elsewhere in this title, and subject to
such definitions as the Commissioner adopts by rule, the following terms have the
following meanings for purposes of Parts 1, 2, and 5 of this title, unless the context
clearly indicates otherwise:
(1) “Affiliate” means any company or person that, directly or indirectly, controls, is
controlled by, or is under common control with another company.
(2) “Automated teller machine” or “ATM” means an electronic device at which a natural
person may make deposits to an account by cash or check and perform other account
transactions. Point-of-sale terminals, machines that only dispense cash, night depositories,
and lobby deposit boxes are not automated teller machines.
(3) “Bank” or “bank and trust company” means any financial institution organized under
the prior laws of this State that is authorized to exercise the powers and subject
to the conditions and limitations on the exercise of those powers as set forth in
chapter 204 of this title.
(4) “Bank credit card” means a card, plate, or other credit device issued by a bank or
financial institution to a cardholder for the purpose of obtaining money, property,
labor, or services on credit. The term “bank credit card” shall not be deemed to include
a debit card; provided, however, that a credit card may include features of a debit
card.
(5) “Bank holding company” shall have the same meaning as in 12 U.S.C. § 1841(a) and shall include a financial holding company as defined in 12 U.S.C. § 1841(p).
(6) “Banking day” shall mean each day that a financial institution is open to the public
for the transaction of substantially all of its banking functions and shall be deemed
a banking day for the purposes of all transactions with the financial institution
under this title, Title 9A as it applies to financial institutions, and all other
provisions of law applicable to financial institutions and the business of banking
in this State.
(7) “Billing date” means the cycle date on the financial institution books and statements,
which statements shall be mailed four days after the closing of the cycle.
(8) “Billing period” means the time interval between periodic statement dates. A billing
period shall be considered a month or monthly if the last day of each billing period
is on the same day of each month or does not vary by more than four days each month.
(9) “Borrower” means any person who is named as a borrower or debtor in a loan or extension
of credit, including a drawer, endorser, or guarantor who is deemed a borrower under
subsection 14301(d) of this title.
(10) “Branch” means any office of a financial institution at which deposits are received,
checks paid, or money lent. A branch may include a messenger service, mobile branch,
temporary facility, night depository (drop box), drive-in facility, or a seasonal
agency. A branch does not include:
(A) a remote service unit;
(B) an office that does not permit members of the public to have physical access for purposes
of making deposits, paying checks, or borrowing money;
(C) an office that is located at the site of, or is an extension of, an approved main
or branch office;
(D) a loan production office; or
(E) deposit production office.
(11) “Business of banking,” “business of financial institutions,” or “banking business”
means soliciting, receiving, or accepting money or its equivalent on deposit and the
loaning of money as a regular business by any person.
(12)(A) “Capital,” for purposes of determining statutory limits that are based on the amount
of a bank’s or financial institution’s capital or surplus:
(i) means the sum of the amount of common stock outstanding and unimpaired, the amount
of perpetual preferred stock outstanding and unimpaired, and the amount of capital
surplus, and undivided profits, for financial institutions organized as corporations;
(ii) means the sum of members’ or partners’ contributions and undistributed earnings of
the company or partnership, for financial institutions organized as limited liability
companies, limited partnerships, or limited liability partnerships; or
(iii) means the sum of capital deposits, surplus, and undivided earnings for all other financial
institutions.
(B) For purposes of evaluating a Vermont depository institution’s financial condition
and safety and soundness, “capital” shall be determined in accordance with applicable
federal regulations and interagency guidelines issued jointly by the Federal Deposit
Insurance Corporation, the Office of the Comptroller of the Currency, the Board of
Governors of the Federal Reserve System, and the Office of Thrift Supervision.
(13) “Charter” means the grant of authority to a financial institution under state or federal
law to operate as a financial institution.
(14) “Closely related activities” mean those activities that are part of the business of
banking, are closely related to the business of banking, are convenient and useful
to the business of banking, are reasonably related to the operation of a financial
institution, or are financial in nature or incidental to such financial activity.
“Closely related activities” include business and professional services, data processing,
courier and messenger services, credit-related activities, consumer services, real
estate-related services, insurance and related services, securities brokerage, investment
advice, securities underwriting, mutual fund activities, financial consulting, tax
planning and preparation, community development and charitable activities, and any
activities reasonably related or incidental to these activities. A “closely related
activity” shall include:
(A) any activity that may be authorized from time to time for financial institutions or
their service corporations or subsidiaries, including financial subsidiaries as defined
in Subdivision 5136A(g)(3) of Chapter One of Title XLII of the Revised Statutes of
the United States, to engage in pursuant to statutes administered by the Board of
Governors of the Federal Reserve System, the Office of the Comptroller of the Currency,
or the Office of Thrift Supervision; and
(B) any additional activities that the Commissioner by rule or order determines to be
a “closely related activity.”
(15) “Commercial bank” means a bank or bank and trust company organized under prior law
of this State or the laws of the United States, another country, or state, but does
not include a special purpose financial institution or similar entity.
(16) “Commissioner” means the Commissioner of Financial Regulation.
(17) “Control” means that a person, directly or indirectly or acting through one or more
other persons or through one or more subsidiaries, owns, controls, or has power to
vote 25 percent or more of any class of equity interest of a financial institution;
the person controls in any manner the election of a majority of the directors of the
financial institution; or that the person directly or indirectly exercises a controlling
influence over the management or policies of the financial institution. For depository
institutions, control determinations may be made under the federal Bank Holding Company
Act of 1956, 12 U.S.C. § 1841 et seq., or the federal Change in Bank Control Act, 12 U.S.C. 1817(j), or the Home Owners Loan Act, 12 U.S.C. § 1467a, as applicable in the circumstances. For institutions that are not depository institutions,
control may be determined by the Commissioner.
(18) “Cooperative financial institution” means any financial institution organized pursuant
to chapter 203 in which the earnings and net worth of the institution inure to the
ultimate benefit of the members.
(19) “Day” means a calendar day unless otherwise expressly provided.
(20) “Debit card” means a card, plate, or other device issued by a bank or financial institution
to a depositor for the purpose of drawing funds from a deposit account and that does
not include any credit features other than (i) provisions to maintain a minimum deposit
account balance, or (ii) protection against deposit account overdrafts.
(21) “Department” means the Vermont Department of Financial Regulation.
(22) “Deposit production office” means any place of business of a financial institution
at which information is distributed or assistance provided in connection with the
opening of new deposit accounts, provided that any initial deposit of funds is made
at the main office or an authorized branch of the financial institution and not at
such office.
(23) “Depositors” of a financial institution, solely for the purposes of chapter 210 of
this title, include the holders of its regular savings accounts, other savings accounts,
NOW accounts, certificates of deposit and other deposits having a fixed maturity,
and all other accounts except noninterest bearing demand deposits.
(24) “Depository institution” shall mean an insured depository institution within the meaning
of 12 U.S.C. § 1813(c)(2).
(25) “Director” means a member of the governing body of a financial institution.
(26) “Electronic banking” means conducting the business of banking and any closely related
activity electronically.
(27) “Equity interest” means common stock, preferred stock, members’ or partners’ interests,
or any other type of capital instrument that entitles the holder to vote pursuant
to the financial institution’s organizational documents; provided, however, that this
definition shall not be deemed to prohibit or impair the creation of nonvoting classes
of stock or other ownership interests in a financial institution.
(28) “Executive officer” shall have the same meaning as in Regulation O of the Federal
Reserve Board, 12 C.F.R. Part 215.
(29) “Federal association” means a savings and loan association, savings bank, or other
financial institution organized pursuant to the Act of Congress entitled “Home Owners’
Loan Act of 1933”, as amended.
(30) “Federal Deposit Insurance Corporation” or “FDIC” shall have the same meaning as in
12 U.S.C. § 1811.
(31) “Fiduciary capacity” means every capacity specified in section 14401 of this title and every other capacity in which a financial institution acts or may act through
its trust department pursuant to chapter 204, subchapter 4 of this title, including
trusteeship with respect to collective investment funds.
(32) “Financial institution” means any Vermont financial institution, state financial institution,
and national financial institution.
(33) “Financial institution holding company” means any company that has control over any
financial institution or has control over any company that controls any financial
institution and shall include bank holding companies as defined in subdivision (5)
of this section and savings and loan holding companies as defined in 12 U.S.C. § 1467a.
(34) “Foreign bank” means any company organized under the laws of a foreign country, a
territory of the United States, Puerto Rico, Guam, American Samoa, or the Virgin Islands
that engages directly in the banking business. “Foreign bank” includes foreign commercial
banks, foreign merchant banks, and other foreign institutions that engage in usual
banking activities in connection with the banking business in the countries where
the foreign institutions are organized or operating.
(35) “Governing body” means the body that oversees the affairs of a financial institution.
The governing body may also be referred to as the “board of directors,” “board of
trustees,” “board of managers,” “partners’ committee,” or “managing partners’ committee,”
depending upon the ownership structure of the financial institution.
(36) “Home state” means, for a national financial institution, the state in which the main
office of the national financial institution is deemed to be located; for a state
financial institution, the state by which the financial institution is chartered;
and for a foreign bank, the state of the United States that the foreign bank has designated
as its home state as determined in accordance with 12 U.S.C. § 3103(c).
(37) “Host state” means a state, other than the home state of a bank or financial institution,
in which the bank or financial institution maintains or seeks to establish and maintain
a branch.
(38) “Investor” means any person who has an equity interest in a financial institution
and is entitled to vote under the institution’s organizational documents; provided,
however, that this definition shall not be deemed to prohibit or impair the ownership
rights of the holders of nonvoting classes of stock or other ownership interests in
a financial institution.
(39) “Investor-owned institution” means a financial institution organized under chapter
202 of this title.
(40) “Loan production” means the business of a financial institution in which loans or
loan contracts are originated, but not approved, in this State.
(41) “Mutual financial institution” or “mutual institution” means any financial institution
organized pursuant to chapter 203 of this title, in which the earnings and net worth
of the institution inure to the ultimate benefit of the depositors.
(42) “Mutual holding company” means, solely for the purposes of chapter 210 of this title,
the corporation that continues in the mutual form as the corporate parent of a stock
financial institution resulting from the reorganization of a mutual financial institution
pursuant to chapter 210 of this title.
(43) “Mutual holding company subsidiary financial institution” means, for purposes of chapter
210 of this title, an investor-owned financial institution organized under chapter
202 of this title to receive the assets and liabilities of a reorganizing mutual financial
institution in accordance with the provisions of chapter 210 of this title and that
will be a subsidiary of the mutual holding company upon consummation of a reorganization
under chapter 210 of this title.
(44) “Mutual voter” means a corporator of a mutual financial institution or member of a
cooperative financial institution.
(45) “National bank” means a commercial banking association or limited purpose banking
association organized pursuant to the Act of Congress entitled “The National Bank
Act,” as amended, or any subsequent Act of Congress relating to the same subject.
(46) “National financial institution” means a national bank as defined in subdivision (45)
of this section or a federal association as defined in subdivision (29).
(47) “National trust company” means a national bank with powers generally limited to trust
or fiduciary matters.
(48) “Nondepository trust company” means any Vermont financial institution with powers
generally limited to trust or fiduciary matters or any national trust company, organized
for the purpose of consolidation or reorganization of trust operations pursuant to
section 12602 of this title or organized as a trust company under prior law.
(49) “Officer” means a person who has been given managerial or other high-level duties
by the governing body or organizational documents of the financial institution. Depending
upon the ownership structure of the institution, an officer may include a person with
the title of chair, president, secretary, vice president, treasurer, manager, managing
partner, or partner. For organizations that are not corporate in nature, the term
“secretary” shall refer to the person to whom the governing body has delegated responsibility
for the custody of the minutes of the meetings of the governing body and the equity
interest holders, and for authenticating records of the organization.
(50) “Operating subsidiary” means an entity that is owned in whole or in part by a Vermont
financial institution and whose activities are limited to the business of banking
and closely related activities and in which a financial institution or financial institution
holding company directly or indirectly holds more than 50 percent of the equity interests,
but not including any equity interest:
(A) taken in satisfaction of a debt previously contracted; or
(B) held in a fiduciary capacity.
(51) “Organizational document” means the charter, certificate of organization, articles
of incorporation, articles of association, articles of organization, certificate of
limited liability partnership, bylaws, or other internal governance documents, operating
agreement, partnership agreement, or any other similar document required to be filed
with and approved by the Commissioner pursuant to section 12101 or 13101 of this title.
(52) “Principal” means, with respect to a trust account, the individual or entity to whom
the financial institution ordinarily furnishes statements of account and other customer
communications regarding such trust account.
(53) “Proprietary interests” of the depositors of a mutual or cooperative financial institution
refer to the proportionate inchoate interests that such depositors have in the net
worth of such financial institution, such interests maturing and being realized upon
the financial institution’s liquidation and after the claims of all creditors, including
those of depositors as creditors, have been satisfied. “Proprietary interests” of
the depositors of a subsidiary financial institution refer to the proportionate inchoate
interests that such depositors have in the net worth of the mutual holding company
of which such financial institution is a subsidiary, such interests maturing and being
realized upon the mutual holding company’s liquidation and after the claims of all
creditors have been satisfied.
(54) “Real estate-related services” means real estate investment and development, including
maintenance and management of improved real estate; real estate appraising; real estate
settlement services; real estate brokerage activities with respect to properties owned
by a financial institution authorized to do business in this State, a bank holding
company, or subsidiaries thereof, regardless of how the property is acquired or for
what purpose; or any real estate-related service authorized by this title or by rule
or order of the Commissioner or any real estate-related service authorized for any
financial institution chartered by or otherwise subject to the jurisdiction of the
federal government.
(55) “Remote Service Unit” or “RSU” means an automated, unstaffed banking facility, such
as an automated teller machine, cash dispensing machine, point-of-sale terminal, or
other remote electronic facility, at which deposits are received, cash disbursed,
or money lent.
(56) “Savings and loan association,” “association,” “cooperative savings and loan association,”
or “foreign building and loan association” means a financial institution organized
under the prior laws of this State that is authorized to exercise the powers and subject
to the conditions and limitations on those powers set forth in chapter 204 of this
title.
(57) “Savings bank” means a financial institution organized under the prior laws of this
State that is authorized to exercise the powers and subject to the conditions and
limitations on those powers set forth in chapter 204 of this title.
(58) “Service corporation” means a corporation substantially all the activities of which
consist of originating, purchasing, selling, and servicing loans and participation
interests in loan activities; or clerical, bookkeeping, accounting, and statistical
or similar functions related to a financial institution or real estate activities;
or management, personnel, marketing, or investment counseling related to a financial
institution or real estate activities; or any activity authorized by the Commissioner
by rule or order that has not been prohibited by federal law for service corporations.
(59) “Special purpose financial institution” means an institution authorized and operating
pursuant to chapter 202, subchapter 6 of this title or other entity with the same
or similar functions by whatever name that was established prior to January 1, 2001.
(60) “State financial institution” means a bank, bank and trust company, commercial bank,
industrial loan corporation that is a depository institution with insurance by the
Federal Deposit Insurance Corporation, limited or special purpose bank, special purpose
financial institution, savings and loan association, savings bank, trust company,
nondepository trust company, and universal financial institution, or other entity
with the same or similar functions by whatever name that is organized under the laws
of a state other than Vermont or by special act of the legislature of a state other
than Vermont and is regulated by its home state in an equivalent manner to a Vermont
financial institution; however, trust company as used in this subdivision shall not
include an entity that is regulated by its home state in an equivalent manner to an
independent trust company as defined in chapter 77 of this title. Nothing in this
definition shall be deemed to be a grant of authority to any person to operate as
a financial institution unless otherwise authorized under law.
(61) “State trust company” means a special purpose financial institution that is organized
under the laws of a state other than Vermont and whose business is limited to trust
or fiduciary powers as those powers are set forth in chapter 204, subchapter 4 of
this title.
(62) “Subsidiary” means an organization owned or controlled by a financial institution
or financial institution holding company.
(63) “Supervisory agency” means:
(A) the banking department or equivalent agency of a state;
(B) the Federal Deposit Insurance Corporation;
(C) the National Credit Union Administration;
(D) the Federal Reserve Board;
(E) the Office of Thrift Supervision;
(F) the Office of the Comptroller of the Currency;
(G) any successor agency to any of the agencies enumerated in this section.
(64) “Universal financial institution” means an investor-owned institution or a mutual
or cooperative financial institution authorized by its organizational documents to
exercise all the powers granted in chapter 204 of this title and includes any bank,
bank and trust company, commercial bank, savings bank, and savings and loan association
established prior to January 1, 2001, pursuant to this title, or by special act of
the General Assembly.
(65) “Vermont financial institution” means a special purpose institution or universal financial
institution organized under the laws of the State of Vermont.
(66) “Derivative transaction” means any transaction that is a contract, agreement, swap,
warrant, note, or option that is based, in whole or in part, on the value of any interest
in or any quantitative measure or the occurrence of any event relating to one or more
commodities, securities, currencies, interest, or other rates, indices, or other assets. (Added 1999, No. 153 (Adj. Sess.), § 2, eff. Jan. 1, 2001; amended 2001, No. 73 (Adj. Sess.), § 2, eff. Feb. 2, 2002; 2011, No. 78 (Adj. Sess.), §§ 2, 25, eff. April 2, 2012; 2021, No. 105 (Adj. Sess.), § 285, eff. July 1, 2022.)