(1) Each office must be operated from the home or corporate office. All branch offices are subject to direction from the home or corporate office. The home office of an association must be the principal office specified in the Articles of Incorporation. Nothing in this chapter may be construed to prohibit any association from establishing a corporate office or offices upon prior written notification to the Board. A corporate office must be primarily established for the purpose of managing the administrative functions of the association and any service corporations and shall not accept deposits or issue payment for withdrawals of certificates or accounts. A corporate office may be established in connection with a branch office in which case an application pursuant to subsection (2) must be submitted.

(2)(a) A "branch office" is a legally established place of business of an association, other than the home or a corporate office or a remote service unit (Section 34-28-30), where deposits may be accepted.

(b) No association shall establish or maintain a branch office without the prior written approval of the Board. Each application for approval of the establishment and maintenance of a branch office must be in that form as the Board may prescribe and shall state:

1. The proposed location;

2. The functions to be performed;

3. The estimated volume of business;

4. The estimated annual expense;

5. The mode of payment; and

6. Other information as the Board may require.

(c) Upon receipt by the Board of an application, it shall consider the following criteria:

1. The sufficiency of the association's capital to support the association's deposit base and the additional fixed assets proposed for the branch and its operations, without undue exposure to its depositors, members, or stockholders;

2. The sufficiency of revenue prospects to support the anticipated expenses of the branch without jeopardizing the financial position of the association;

3. The sufficiency and quality of management of the association;

4. Whether the name of the proposed branch reasonably identifies the branch and is not likely to unduly confuse the public;

5. The substantial compliance by the association with all state law and federal law affecting its operations.

(d) The Board shall approve the application unless it finds that one or more of the conditions specified in 1 through 5 exist:

1. Public convenience and advantage will not be promoted by the establishment of the proposed branch. In determining whether an applicant meets the requirements of this paragraph, the Board shall consider all materially relevant factors, including:

a. 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;

b. The primary service area's general economic and demographic characteristics.

2. Local conditions do not indicate reasonable promise of the successful operation of the proposed branch and of those associations already established in the primary service area in determining whether an applicant meets the requirements of this paragraph, the Board shall consider all materially relevant factors, including:

a. Current economic conditions and the growth potential of the community in which the proposed applicant intends to locate the proposed branch;

b. The growth rate, size, financial strength, and operating characteristics of associations in the primary service area of the proposed branch.

3. The officers and directors of the applicant do not have sufficient experience, ability, standing, and responsibility to indicate reasonable promise of the successful operation of the branch;

4. The name of the proposed branch does not comply with Section 34-28-110.

5. Provision has not been made for suitable quarters at the location specified in the application.

(e) When the Board has approved a branch application, it shall promptly issue a certificate authorizing the operation of the branch and specifying the date on which it may be opened and the place where it will be located.

(f) A nonrefundable filing fee established by the Board shall accompany each application for a branch.

(3) With prior written notification to the Board, and in order to relieve some of the burdens on the public caused by congestion of public streets, roadways, and parking facilities, promote safety of pedestrians on public ways, or otherwise serve the needs or convenience of the public, an association may operate facilities providing services to customers. It is not necessary that any facility be a part of, or physically connected to, the main structure of the home office or branch if the facility is located on the property on which the main structure of the home office or branch is situated or on property contiguous thereto. Property which is separated from the property on which the main structure of the home office or branch is situated only by a street and one or more walkways and alleyways is, for the purpose of this subsection, considered contiguous. The operation of any facility which is not located on the property on which the main structure of the home office or branch is situated or on property contiguous thereto shall not constitute a facility within the meaning of this subsection.

(4) A home office or branch office may be relocated with the prior written approval of the Board. The Board shall consider the criteria set forth in this section for the establishment of a branch office in the determination of approval for the relocation. A nonrefundable filing fee in the amount specified by the Board shall accompany the application to relocate a home office or branch office.

HISTORY: 1985 Act No. 124, Section 1.