SB495 Alabama 2010 Session

Summary

Primary Sponsor

Bobby Denton

Democrat

Session

Regular Session 2010

Title

Banking Department, regulation of banks, removal of officers, prohibition of certain persons participating in affairs of a bank, review of applications for change of control, quorum of Banking Board, acquisition of out-of-state banks, Secs. 5-2A-12, 5-3A-6, 5-5A-44, 5-8A-20, 5-8A-24, 5-13B-3, 5-13B-4, 5-13B-5, 5-13B-6 am'd.

Summary

SB495 expands Alabama banking oversight by empowering penalties and removal for bank harm, tightening control of changes in bank ownership (including out-of-state), updating review and notice processes, and strengthening receivership and confidentiality rules.

What This Bill Does

It lets the Banking Board order civil penalties and remove individuals who cause a bank substantial financial loss, and allows the Banking Department to bar those people from participating in Alabama banks or their holding companies even after they leave. It removes a prior exemption that let certain transactions skip Federal Reserve Board approval, instead requiring state-level review of change of control applications with detailed information, notice, and appeal rights. It changes quorum rules to require a majority of those present and entitled to vote, tightens oversight of bank acquisitions (including out-of-state), and updates receivership procedures, including confidentiality protections and public notice requirements.

Who It Affects

• Officers, directors, and other employees of Alabama state banks who could be subject to civil penalties, removal, and prohibition from participating in bank affairs.
• Alabama state banks and their holding companies, which would face new penalties, removal authorities, and stricter control-over-change-of-control processes.
• Bank holding companies and banks seeking to acquire Alabama banks or out-of-state banks, who must file detailed applications, meet ownership and concentration limits, and obtain prior superintendent approval.
• The general public and depositors in Alabama, who will have public notice and comment opportunities on proposed acquisitions and heightened safeguards through confidentiality and enforcement actions.

Key Provisions

• Civil penalties up to $1,000 per day (max $100,000 aggregate) for unsafe and unsound bank practices, with removal of the affected person from participating in Alabama banks or holding companies.
• Removal and prohibition from participation may apply even after the person is no longer employed by a state-chartered bank.
• Elimination of FDIC prior-approval exemption for certain transactions; the Superintendent will review and approve changes of control under new procedures.
• Quorum for Banking Board decisions on certain matters is the majority of those present and entitled to vote.
• FDIC/receivership procedures modified: the FDIC may no longer be required to obtain an order confirming appointment in some cases; receivership and liquidation processes revised.
• New framework for acquiring Alabama banks or Alabama bank holding companies by a state or out-of-state entity, including: prior superintendent approval, public notice, and a detailed information filing.
• Limits on control: acquiring party may not obtain control if, after acquisition, it would hold 30% or more of deposits in Alabama banks; five-year existence requirement for the target bank or its holding company, with specific exceptions.
• Public notice and opportunity for comment on applications; required disclosures if the applicant is out-of-state or not incorporated in Alabama.
• Confidentiality of proceedings; penalties for improper disclosure of nonpublic information; appeal rights to Circuit Court on final denials (de novo review).

AI-generated summary using openai/gpt-5-nano on Feb 25, 2026. May contain errors — refer to the official bill text for accuracy.

Subjects

Banks and Banking