17:9A-20. Application for establishment of full branch office, minibranch office, communication terminal facility

20. A. (1) Before any full branch office shall be established, the bank or savings bank shall file written application in the department for the commissioner's approval thereof. If, after such investigation or hearings, or both, as the commissioner may determine to be advisable, the commissioner shall find:

(a) That the bank or savings bank has complied with the requirements of section 19 of P.L.1948, c.67 (C.17:9A-19);

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

(c) That conditions in the locality in which the proposed full branch office is to be established afford reasonable promise of successful operation; and

(d) That the applicant has achieved sufficient compliance, as defined by the commissioner by regulation, with the "Community Reinvestment Act of 1977," 12 U.S.C. s.2901 et seq.; the commissioner shall, within 90 days after the filing of the application, approve such application.

(2) To determine if an applicant meets the requirements of subparagraph (c) of paragraph (1) of this subsection A., 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 applicant as a whole.

(3) 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.

B. Before any minibranch office shall be established, the bank or savings bank shall file a written application on forms supplied by the commissioner. A duly adopted resolution of the board of directors or managers authorizing such application shall accompany the application. Notice of such application shall be published in accordance with procedural rules and regulations of the department. Within 20 days after said notice is published, any person or banking institution having objections to the application shall submit detailed written factual and legal grounds for the objection to the commissioner. There shall be no hearing required to be held by the commissioner in connection with such application. The commissioner, after considering the application and written objections and such investigation as the commissioner deems advisable, shall approve the application, if the commissioner shall find

(1) That the convenience and needs of the public will be served to advantage by the establishment of such minibranch office; and

(2) That the costs of establishing such minibranch office, including (a) construction and alteration costs; (b) the cost of real property to be acquired in connection therewith or rental to be paid for space to be occupied by such office; (c) the cost of purchasing or renting and installing the equipment to be used in the operation of such office; and (d) the cost of manning such office, shall not in the aggregate exceed such sum as the commissioner shall deem reasonable, taking into consideration the capital and surplus of the bank, or the surplus of the savings bank.

C. (Deleted by amendment, P.L.1999, c.252.)

D. (Deleted by amendment, P.L.1999, c.252.)

E. A bank or savings bank shall provide insurance protection under its bonding program for transactions involving a communication terminal facility.

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

G. The commissioner shall have the power to make, amend and repeal rules and regulations concerning the establishment, maintenance and operation of full branch offices, minibranch offices and communication terminal facilities not inconsistent with the provisions of this act. The regulations so made shall also be directed toward the creation, operation and maintenance of a substantial competitive parity between banking institutions and other financial institutions in all matters relating to the establishment, operation, and maintenance of branch offices and communication terminal facilities.

H. (1) In lieu of the procedures set forth in subsection A or B of this section, or in section 22 or 23 of P.L.1948, c.67 (C.17:9A-22 or C.17:9A-23), a bank or savings bank which directly or through a predecessor bank or savings bank 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 bank or savings bank 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 bank or savings bank 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, "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 bank or savings bank, and (b) at least a rating of 2 for management, if such a rating is given. Nothing in this subsection shall be construed to affect the confidentiality of any rating under applicable law or regulation.

L.1948,c.67,s.20, amended 1975, c.148, s.3; 1996, c.17, s.5; 1999, c.252, s.3; 2000, c.69 s.2.