Banking Code of 1965 - 7 P.S. § 101 et seq.

Chapter 1
Section 102 - Definitions

05/13/05
Gift Cards
Letter states that retailer offering gift cards in a “closed system” is not required to be licensed under the Check Casher Licensing Act or Money Transmitter Act, and is not engaging in the business of accepting money for deposit or transmission within the meaning of Section 105 of the Banking Code.

07/16/03
Credit to Bank Subsidiary
Letter states that lending limit in Section 306(a), and limits on interaffiliate transactions in Section 311(e.1), do not apply to loans made by bank to its subsidiary.  Letter also addresses conflicting definitions of "subsidiary" in Section 102.


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Section 103 - Declaration of Purposes: Standards for Exercise of Power and Discretion by Department

03/28/00
Establish & Operate Messenger Service Branches
This letter addresses the ability of a Pennsylvania state-chartered bank to engage in messenger service branch activity as a matter of legal theory. Since a messenger service branch would be a branch of a Pennsylvania state chartered bank, Bank must file a branch application with, and receive the approval of, the Department, prior to establishing and operating a messenger service branch.

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Section 105 - Persons Authorized to Engage in Business of Receiving Deposits and Money for Transmission

05/13/05
Gift Cards
Letter states that retailer offering gift cards in a “closed system” is not required to be licensed under the Check Casher Licensing Act or Money Transmitter Act, and is not engaging in the business of accepting money for deposit or transmission within the meaning of Section 105 of the Banking Code.

11/22/02
Money Transmission

Brand Company and Distributor of prepaid debit card program are subject to Section 105 of the Banking Code of 1965, and the Money Transmitter Act ("MTA") unless formal agency relationship established between Bank, Company, and Distributor, or Company and Distributor if Company becomes licensed under MTA.

08/12/02
Money Transmission Activity
Letter discusses the Department's position regarding whether the activities of a company or any affiliated third-party promotional partners in regard to a prepaid debit card program are subject to Section 105 of the Banking Code of 1965, or the Money Transmitter Act.

03/24/98
Ownership of Automated Teller Machines
Automated Teller Machines, which solely dispense cash, may be owned by a non-banking entity.

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Section 106 - Corporations Authorized to Act as Fiduciary

05/12/05
Reciprocity Determination -- Section 106(b) of the Banking Code of 1965

Letter addresses reciprocity determination between Pennsylvania and Virginia regarding foreign fiduciaries.

02/02/04
Nonprofit Corporation Acting as Fiduciary for Service Population
Letter addresses nonprofit corporation acting as fiduciary under Section 106 of the Banking Code.

07/25/05
Confirmation of an Interpretation Under Section 106 of 1965
Letter states that the Pennsylvania General Assembly intends to allow a national bank located in a state other than Pennsylvania, which has been granted fiduciary authority pursuant to 12 U.S.C. § 92a and which does not have a physical presence in Pennsylvania, to act as a fiduciary in Pennsylvania under 7 P.S. § 106(b) without having to meet the requirements set forth at 7 P.S. § 106(b)(i)-(iii).

12/28/00
Section 106(b) of the Banking Code, as Amended by Act 89 of 2000
The Department's position that section 106(b) of the Banking Code, as amended by Act 89 of 2000, permits a national bank, regardless of the state in which the national bank is headquartered, to engage in activity in Pennsylvania, either with or without a physical presence in Pennsylvania, provided the national bank is authorized to conduct fiduciary activity under section 92a of the National Bank Act.

11/17/98
Foreign Fiduciary in Pennsylvania-Massachusetts
Letter addresses ability of a Massachusetts state-chartered bank, to act as a fiduciary (specifically, a substituted corporate co-trustee) in Pennsylvania.

04/22/98
Foreign Fiduciary in Pennsylvania- Rhode Island
Letter addresses ability of a Rhode Island state-chartered trust company to act as a foreign fiduciary in Pennsylvania under the terms of the Indenture of Trust.

04/29/98
Trust Services to Act as a Fiduciary in Pennsylvania-Indiana
Letter addresses ability of an Indiana state-chartered bank with powers limited to trust services to act as a fiduciary in Pennsylvania.

04/06/98
Trust Services to Act as a Fiduciary in Pennsylvania-Ohio
Letter addresses ability of an Ohio state-chartered bank with powers limited to trust services to act as a fiduciary in Pennsylvania.

02/26/98
Fiduciary Capacity in Pennsylvania-Michigan and Ohio
Letter addresses ability of a Michigan-chartered national bank and an Ohio-chartered national bank to act in a fiduciary capacity in Pennsylvania.

01/29/98
Fiduciary in Pennsylvania-Ohio
Letter addresses ability of a Ohio state-chartered bank with trust powers, which qualifies as an interstate bank, may act as a fiduciary in Pennsylvania to the extent permitted by its chartering state law.

05/31/94
Corporations Authorized to Act as Fiduciary
Letter states Department position that acting as custodian for customer funds is fiduciary activity under Section 106 of the Banking Code of 1965.

12/28/00
Section 106(b) of Pennsylvania’s Banking Code of 1965, as amended
Letter addresses the Department of Banking’s interpretation of "acting as a fiduciary" for purposes of section 106.

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Section 112 - Acquisitions, and Offers to Acquire, Shares of Banks, Bank and Trust Companies, Trust Companies and National Banks

03/02/07
Section 112 of the Banking Code
Letter states Department position that prior written approval of the Department is required in order to solicit proxies from shareholders of a corporation that controls an institution subject to the Banking Code where the plain language of the revocable proxy form solicits voting rights of shareholders.

10/12/05
Section 112 of the Banking Code

Letter approves Section 112 application for proxy solicitation.

3/21/97
Section 112 of the Banking Code
Letter approves Section 112 application to solicit proxies and addresses Section 112(g) prohibition regarding misleading statements in proxy solicitations.

3/24/95
Section 112 of the Banking Code
Letter notifies solicitor of proxies of Section 112 requirement and addresses penalties for soliciting proxies without prior Department approval.

2/15/94
Section 112 of the Banking Code
Letter notifies proposed acquiror of shares of steps to remedy proxy solicitation in violation of Section 112. 

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Section 115 - Mutual Holding Companies

03/23/98
Stock-for-Stock Acquisitions
Letter addresses stock-for-stock acquisitions by mid-tier stock holding company subsidiary of Pennsylvania mutual holding company.

02/04/98
Authority to Merge or Consolidate
Pennsylvania state-chartered stock savings bank to acquire/merge with a Pennsylvania state-chartered mutual savings bank.

02/02/98
Reorganization of Mutual Holding Company
Letter addresses reorganization of mutual holding company from mutual to stock form with the result that Bank will be wholly-owned by a stock holding company.

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Chapter 2
Section 201 - General Corporate Powers of Incorporated Institutions

02/1/2013
Credit Exposures to Derivatives and Securities Financing Activities 
Deputy Secretary’s letter addresses Department’s position regarding calculation of credit exposures to derivatives and securities financing activities for purposes of determining an institution’s lending limit.
NOTE: The April 1, 2013 date for compliance with 12 CFR 32.9 has been extended to July 1, 2013.
   

03/19/08
Nonobjection to Charge Prepayment Penalties in Parity
Letter provides nonobjection to request from bank to charge prepayment penalties in parity with ability of federal savings associations. 

09/30/04
Actions Required, Permitted or Prohibited in Fiduciary Capacity
Pennsylvania state-chartered trust companies, bank and trust companies, and savings banks and savings associations with trust powers may engage in fiduciary activities to the same extent as national banks without notice to the Department. 

06/07/04
General Third-party Real Estate Brokerage Activities
Letter states that wholly-owned service corporation subsidiary of a bank may engage in general third-party real estate brokerage activities in parity with service corporations of Federal savings associations.

05/13/04
Bank Premises-State Charter
State-chartered bank may invest in bank premises in parity with national banks.

05/13/04
Calculating Lending Limits
State-chartered bank may calculate the legal lending limit on a quarterly basis in parity with national banks.

06/27/02
Savings Bank May Acquire Wholly-Owned Subsidiary
Savings Bank may acquire wholly-owned subsidiary that engages in employee benefits consulting, pursuant to authority granted by section 201(c) of the Banking Code of 1965.

06/26/02
Restructure to Limited Liability Company
Bank permitted to restructure its capitol by making special distribution from its capitol to limited liability company subsidiaries, pursuant to section 315(i) of the Banking Code of 1965.

06/26/02
Agreements to Repurchase Securities
Bank to engage in borrowing money through the use of agreements to repurchase securities with securities dealers and others under applicable sections of the National Bank Act pursuant to the authority granted by section 201(c) of the Banking Code of 1965. 

03/27/02
Capital Securities
Bank issuing capital securities in the form of a $2 million unsecured, 15-year note, pursuant to the authority granted by section 201(c) of the Banking Code of 1965.

03/12/02
Pilot Program for Residential Real Estate and Small Business Loans
Bank conducting its lending activity under the Pilot Program for Residential Real Estate and Small Business Loans as authorized under the applicable regulations of the National Bank Act pursuant to the authority granted by section 201(c) of the Banking Code of 1965.

02/25/02
Small Business Investment Companies as a Limited Partner
Bank investing in small business investment companies as a limited partner under the National Bank Act pursuant to the authority granted by section 201(c) of the Banking Code of 1965.

01/29/02
Title Insurance Activities
A Pennsylvania state-chartered bank, bank and trust company, or savings bank may acquire and hold the stock of a subsidiary corporation which is engaged in title insurance activities permissible for such institution, pursuant to section 203(d) of the Banking Code of 1965.

01/19/01
Activities That Do Not Constitute Providing Investment Advice for a Fee
It is the position of the Department that Bank may engage in activities that do not constitute providing investment advice for a fee, including assisting Bank customers in selecting and working with investment advisers and other securities professionals, as an incidental power pursuant to section 315(i) and as a parity power under section 202 of the Pennsylvania Banking Code, 7 P.S. § 315(i).

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Section 203 - Additional Powers Related to Conduct of Business of Incorporated Institutions Other Than Trust Companies

03/29/00
Real Estate and Title Agent Services
A Pennsylvania state-chartered bank may form and become sole shareholder of a subsidiary that holds a 75% non-controlling interest in a limited partnership which provides real estate and title agent services.

02/11/99
Banks to Make Minority Investment
Pennsylvania state-chartered bank may make a minority investment as a limited partner in a title insurance agency in a limited partnership form, subject to conditions set forth in the letter.

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Chapter 3
Section 306 - Limits on Indebtedness of One Customer (Including Purchase Paper)

02/1/2013
Credit Exposures to Derivatives and Securities Financing Activities
Deputy Secretary’s letter addresses Department’s position regarding calculation of credit exposures to derivatives and securities financing activities for purposes of determining an institution’s lending limit.
NOTE: The April 1, 2013 date for compliance with 12 CFR 32.9 has been extended to July 1, 2013.


07/16/03
Credit to Bank Subsidiary

Letter states that lending limit in Section 306(a), and limits on interaffiliate transactions in Section 311(e.1), do not apply to loans made by bank to its subsidiary.  Letter also addresses conflicting definitions of "subsidiary" in Section 102.

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Section 310 - Real Estate Loans

03/29/00
Real Estate and Title Agent Services

A Pennsylvania state-chartered bank may form and become sole shareholder of a subsidiary that holds a 75% non-controlling interest in a limited partnership which provides real estate and title agent services.
Section 311 - Transactions with respect to shares of corporate stock and capital securities

07/16/03
Extensions of Credit to Bank
Subsidiary
Letter states that lending limit in Section 306(a), and limits on interaffiliate transactions in Section 311(e.1), do not apply to loans made by bank to its subsidiary.  Letter also addresses conflicting definitions of "subsidiary" in Section 102.

04/28/98
Minority Interest in an Entity Which Owns 100% of a Mortgage Bank
It is the conclusion of the Department that a Pennsylvania state-chartered commercial bank may own a minority interest in an entity which owns 100% of a mortgage banking company as an incidental power, subject, at least, to the same terms and conditions imposed upon national banks by the OCC.

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Section 315 - Miscellaneous and Incidental Banking Powers

01/26/05
Bank-owned Life Insurance--BOLI

Letter addresses conditions for Pennsylvania state-chartered banking institutions to purchase and hold bank-owned life insurance ("BOLI").

05/16/01
Escrow Agent for New Bank Chartering Groups
It is the position of the Department that the Bank is and has been authorized to serve as a non-discretionary escrow agent for new bank chartering groups as an incidental power of the Bank under section 315 of Pennsylvania's Banking Code of 1965, 7 P.S. § 315(i), without obtaining trust powers.

01/19/01
Activities that do not Constitute Providing Investment Advice for a Fee
It is the position of the Department that Bank may engage in activities that do not constitute providing investment advice for a fee, including assisting Bank customers in selecting and working with investment advisers and other securities professionals, as an incidental power pursuant to section 315(i) and as a parity power under section 202 of the Pennsylvania Banking Code, 7 P.S. § 315(i).

03/29/00
Real Estate and Title Agent Services
A Pennsylvania state-chartered bank may form and become sole shareholder of a subsidiary that holds a 75% non-controlling interest in a limited partnership which provides real estate and title agent services.

03/28/00
Establish and Operate Messenger Service Branches

This letter addresses Pennsylvania state-chartered banks may establish and operate messenger service branches.

06/30/99
Human Resource Consulting Services
A Pennsylvania state-chartered bank or service corporation could hire a qualified person to perform human resource consulting services initially for internal bank purposes exclusively and the person could use their excess time capacity to provide those services to small business customers of the bank.

05/25/99
Human Resource Services
This letter addresses the offering of human resource services by a Pennsylvania state-chartered bank is permitted as an activity incidental to banking business.

02/11/99
Pennsylvania State-Chartered Bank to Make Minority Investment
This letter addresses Pennsylvania state-chartered bank may make a minority investment as a limited partner in a title insurance agency in a limited partnership form, subject to conditions set forth in the letter.

04/28/98
Minority Interest in an Entity Which Owns 100% of a Mortgage Bank

It is the conclusion of the Department that a Pennsylvania state-chartered commercial bank may own a minority interest in an entity which owns 100% of a mortgage banking company as an incidental power, subject, at least, to the same terms and conditions imposed upon national banks by the OCC.

02/12/98
Licenses to Financial Institutions to Directly Sell Insurance

Under the provisions of Act 40 of 1997, the Pennsylvania Insurance Department is authorized to issue licenses to financial institutions to directly sell insurance and annuities in Pennsylvania.

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Section 322 - Extensions of Credit to Individuals, Partnerships and Unincorporated Association

10/16/98
Extensions of Credit to Individuals, Partnerships and Unincorporated Association

The Department’s position is that if a national bank chooses to use the provisions of the Simplification Act to make loans in Pennsylvania, the national bank is required to comply with all of the terms and conditions of that statute. If a national bank lends funds out-of-state at the interest rate permitted by the borrower’s state, then the bank becomes subject to those provisions of the usury laws of the borrower’s state that are "material to the determination of the interest rate."

08/09/95
Financing Motor Vehicle Purchases with a Credit Card Pursuant to Bank Simplification Act
Letter addresses financing motor vehicle purchases with a credit card pursuant to bank simplification act

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Chapter 4
Section 402 - Powers to Act as Fiduciary and in Other Representative Capacities

09/30/04
Fiduciary Activities
This letter addresses Pennsylvania state-chartered trust companies, bank and trust companies, and savings banks and savings associations with trust powers may engage in fiduciary activities to the same extent as national banks without notice to the Department.

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Section 403 - Actions Required, Permitted or Prohibited in Fiduciary Capacity

09/30/04
Fiduciary Activities
This letter addresses Pennsylvania state-chartered trust companies, bank and trust companies, and savings banks and savings associations with trust powers may engage in fiduciary activities to the same extent as national banks without notice to the Department.

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Section 404 - Collective Investment Funds

09/30/04
Collective Investment Funds
This letter addresses Pennsylvania state-chartered trust companies, bank and trust companies, and savings banks and savings associations with trust powers may engage in fiduciary activities to the same extent as national banks without notice to the Department.

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Section 406 - Title Insurance

03/29/00
Real Estate and Title Agent Services
A Pennsylvania state-chartered bank may form and become sole shareholder of a subsidiary that holds a 75% non-controlling interest in a limited partnership which provides real estate and title agent services.

02/11/99
Pennsylvania State-Chartered Bank to Make Minority Investment
This letter addresses Pennsylvania state-chartered bank may make a minority investment as a limited partner in a title insurance agency in a limited partnership form, subject to conditions set forth in the letter

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Chapter 5
Section 502 - Additional Powers Related to Conduct of Business of Savings Bank

01/26/05
Bank-owned Life Insurance-BOLI

Letter addresses conditions for Pennsylvania state-chartered banking institutions to purchase and hold bank-owned life insurance ("BOLI").

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Section 516 - Limits on Indebtedness of One Customer (Including Purchase Paper)

02/1/2013
Credit Exposures to Derivatives and Securities Financing Activities
Deputy Secretary’s letter addresses Department’s position regarding calculation of credit exposures to derivatives and securities financing activities for purposes of determining an institution’s lending limit.
NOTE: The April 1, 2013 date for compliance with 12 CFR 32.9 has been extended to July 1, 2013.

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Chapter 9
Section 904 - Authorization of New Branches

12/30/03
Reciprocity Between Pennsylvania and Virginia

This letter addresses reciprocity exists between Pennsylvania and Virginia regarding de novo branching.

04/01/03
Reciprocity Between Pennsylvania and Connecticut

This letter addresses reciprocity exists between Pennsylvania and Connecticut regarding de novo branching.

12/12/01
Reciprocity Between Pennsylvania and Ohio

This letter addresses reciprocity exists between Pennsylvania and Ohio regarding de novo branching.

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Chapter 11
Section 1102 - Minimum Capital

02/02/98
Reorganization of Mutual Holding Company
This letter addresses reorganization of mutual holding company from mutual to stock form with the result that Bank will be wholly-owned by a stock holding company.

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Chapter 16
Section 1602 - Authority to Merge or Consolidate

02/04/98
Authority to Merge or Consolidate
This letter addresses Pennsylvania state-chartered stock savings bank to acquire/merge with a Pennsylvania state-chartered mutual savings bank.


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Section 1609 - Mergers, Consolidations and Conversions of Savings Banks

02/04/98
Authority to Merge or Consolidate

This letter addresses Pennsylvania state-chartered stock savings bank to acquire/merge with a Pennsylvania state-chartered mutual savings bank.

02/02/98
Reorganization of Mutual Holding Company
This letter addresses reorganization of mutual holding company from mutual to stock form with the result that Bank will be wholly-owned by a stock holding company.