17:12B-24. Establishment, operation of branch offices by State association

24. A. No State association shall hereafter establish or operate a branch office or offices, other than as provided by law without the prior written approval of the commissioner; provided, however, that any association operating an authorized branch office at the effective date of this act may continue to do so.

(1) An association operating a branch office approved prior to the effective date of this act with conditions or restrictions imposed on its operation may upgrade such office by notifying the commissioner at least 30 days before such upgrading. A branch office is considered upgraded if the association is relieved of any of the conditions or restrictions imposed on operation of the office when it opened. If within 30 days of receipt of the notice, the commissioner does not notify the association of his objection which would require the association to submit an application or additional information before upgrading, the association may upgrade the office.

(2) An approved, but unopened branch office as of the effective date of this amendatory act may open and operate in the same manner as a branch office approved subsequent to the effective date of this amendatory act.

(3) Any application which deals with offices of a State association filed with the commissioner prior to the effective date of this amendatory act shall continue to be processed as any application filed subsequent to the effective date of this amendatory act; however, the commissioner may request such additional information as may be necessary to comply with the requirements of this amendatory act.

B. An association may apply for a branch office regardless of the number of branch applications it has pending before the commissioner. Within 90 days after receipt of a branch application, the commissioner shall announce his decision upon such application.

C. The commissioner shall approve the application if the commissioner finds that:

(1) the State association's capital equals or exceeds the minimum capital established by the commissioner by regulation;

(2) the interests of the public will be served to advantage by the establishment of the full branch office;

(3) conditions in the locality in which the proposed full branch office is to be established afford reasonable promise of successful operation. To determine if an applicant meets this requirement, the commissioner shall consider only the costs of purchasing, constructing, leasing or otherwise establishing the proposed office, including the costs for staffing, furniture and equipment needed therefor and the effect of these costs on the operations of the applying institution as a whole. The applicant need not demonstrate an ability to operate the proposed office at a profit within a definable period of time based on the generation of new deposits from the market area to be entered except to the extent that losses suffered at the proposed office could affect the safety and soundness of the applicant's overall operations; and

(4) that the applicant has achieved sufficient compliance as defined by the commissioner by regulation with the provisions of the "Community Reinvestment Act of 1977," 12 U.S.C. s.2901 et seq.

D. (Deleted by amendment, P.L.1996, c.17.)

E. The commissioner shall conduct such investigation or hearing, or both, as the commissioner may deem advisable. The commissioner may adopt, amend, alter or rescind regulations prescribing the form of protest to applications and the procedures to be followed in the event that the commissioner elects to hold a hearing in connection with an application for a branch office, and such other regulations as the commissioner may deem necessary with respect to the provisions of this section.

F. (1) In lieu of the procedures set forth in subsections A through C and E of this section, section 89 of P.L.1996, c.17 (C.17:12B-24.1), paragraph (2) of section 28 of P.L.1963, c.144 (C.17:12B-28), or paragraph (2) of section 40 of P.L.1963, c.144 (C.17:12B-40), a State association which, directly or through a predecessor association by merger or other reorganization, has been in business for at least three years, and which is well capitalized, adequately managed, and, if applicable, has received in its most recent examination under the "Community Reinvestment Act of 1977," 12 U.S.C.s.2901 et seq., a rating of not less than "satisfactory record of meeting community credit needs," or its equivalent, may apply for expedited branch office approval pursuant to this subsection. The State association shall file written application of the proposed establishment with the commissioner and with those other persons designated by the commissioner by rule or regulation. The application shall be accompanied by or be in the form of a certification that (a) all applicable provisions of this subsection have been met, (b) the applicant requests expedited processing under this subsection, and (c) contains that other information, if any, as the commissioner may require by rule or regulation to confirm that an establishment of the branch will not adversely affect the safety and soundness of the State association or the public interest.

(2) An application shall be deemed approved on the 30th day after receipt by the commissioner, unless approved or denied earlier by the commissioner in writing.

(3) For purposes of this subsection, the term "well capitalized" has the meaning given the term in 12 U.S.C. s.1831o and "well managed" means, unless otherwise determined in writing by the commissioner, (a) the achievement of a composite rating of 1 or 2 under the Uniform Financial Institutions Rating System or an equivalent rating system in connection with the most recent examination or subsequent review of the State association, and (b) at least a rating of 2 for management, if such rating is given. Nothing in this subsection shall be construed to affect the confidentiality of any such rating under applicable law or regulation.

L.1963,c.144,s.24; amended 1975, c.159, s.3; 1977, c.413, s.1; 1981, c.376, s.3; 1996, c.17, s.88, 2000, c.69, s.9.