(1) When authorized by the Board as provided in this article, an association may be formed under the laws of this State for the purpose of conducting a general savings and loan business and having all the powers and purposes authorized by this chapter and otherwise by Title 34.

(2) A written application for authority to organize an association as provided in subsection (1) must be filed with the Board and include:

(a) the proposed corporate name and evidence that the proposed name has been reserved with the Secretary of State; however, evidence that an association has reserved a corporate name with the Secretary of State does not preclude the Board from disapproving the name on the grounds of potential confusion with the name of an existing financial institution;

(b) detailed financial and biographical information as the Board may require for each proposed director, chief executive officer, and managing officer;

(c) the total amount of the savings account capital or capital stock proposed to be issued, the amount subscribed by each incorporator, and the method to be used to raise any remaining capital required before the proposed association will be authorized to begin business;

(d) the name and address of the proposed managing officer and chief executive officer, if known;

(e) the community and the street and number, if available, where the proposed association is to be located; and

(f) additional information as the Board may reasonably require. The application for authority to organize must be filed with the Board in triplicate and must be accompanied by a nonrefundable filing fee established by the Board.

(3)(a) Upon the filing of an application, the Board shall make an investigation of:

1. the character, reputation, financial standing, experience, and business qualifications of the proposed officers and directors;

2. the character, reputation, financial standing, and motives of the incorporator or incorporators in organizing the proposed association;

3. the public need for an association or additional association, as the case may be, in the primary service area where the proposed association is to be located, giving particular consideration to the ability of the primary service area to support both the proposed and all other existing associations in the community in the conduct of profitable operations and to the benefits of competition to the public.

(b) Any applicant who files an application which requires an investigation to be conducted outside the State shall reimburse the Board for all costs incurred in the normal course of investigation, which reimbursement must be in addition to the filing fee authorized in this section.

(4) The Board shall approve the application unless it finds that one or more of the conditions in (a) through (f) exist:

(a) Public convenience and advantage will not be promoted by the establishment of the proposed association. In determining whether an applicant meets this requirement, the Board shall consider all materially relevant factors, including:

1. the location and services proposed to be offered by the applicant and currently offered by existing associations in the primary service area to be served by the applicant; and

2. the primary service area's general economic and demographic characteristics.

(b) Local conditions do not indicate reasonable promise of the successful operation of the proposed association and of those associations already established in the primary service area community. In determining whether an applicant meets this requirement, the Board shall consider all materially relevant factors, including:

1. Current economic conditions and the growth potential of the primary service area in which the proposed association intends to locate; and

2. The growth rate, size, financial strength, and operating characteristics of other associations in the primary service area of the proposed association.

(c) The proposed officers and directors do not have sufficient experience, ability, standing, and responsibility to indicate reasonable promise of the successful operation of the association.

(d) The applicant's proposed capital structure is inadequate. In no event may the minimum capital required be less than three million dollars or that larger amount as may be specified in a regulation issued by the Board.

(e) The name of the proposed association does not comply with Section 34-28-110.

(f) No provision has been made for suitable quarters at the location specified in the application.

(5) The order approving an application may impose reasonable conditions which must be met before a certificate of authorization to transact business will be issued, which conditions may include employment of suitable personnel, alterations to the proposed capital structure, the obtaining of suitable quarters at the location proposed, or those other matters as the Board may deem necessary. If the Board approves the application for authority to organize, the applicant shall file its articles of incorporation with the Secretary of State and apply for a commitment for appropriate insurance of accounts. Upon approval by the Board of the application for authority to organize, the Board shall forward a copy of its final order to the Federal Savings and Loan Insurance Corporation. The corporate existence of an association begins on the date that the approved articles of incorporation are filed with the Secretary of State, unless otherwise provided in the articles of incorporation, but the association shall not commence business before it is in possession of a certificate of authorization to transact business as provided in Section 34-28-150. Prior to that time, an association may perform only those acts as are necessary to perfect its organization, raise capital, obtain and equip a place of business, and otherwise prepare for a general savings association business.

HISTORY: 1985 Act No. 124, Section 1.