Effective August 1, 2019, under Louisiana Banking Law, a state bank “may, through a wholly-owned operating subsidiary, conduct any activity or make any investment that the state bank is authorized to conduct or make under state or federal law. A state bank that establishes a subsidiary in accordance with this Subsection shall provide the commissioner written notice within thirty days after establishing the subsidiary or commencing the new activity in the subsidiary.”
If circumstances meet the written notice requirement, the bank should provide the following information:
– What activities the subsidiary has or will engage in or investments it has made or will make
– Confirmation that the subsidiary is wholly-owned by the depository institution
– The physical location(s) where the subsidiary will operate
– The date the subsidiary commenced operations as a subsidiary of your institution
If the establishment or acquisition of a subsidiary does not meet this criteria, a state bank “shall obtain written approval from the commissioner in order to conduct any activity through a subsidiary,” which requires the filing of an application with OFI. Linked to this location is a copy of the application, as well as instructions for filing the application. The current application fee for the establishment or acquisition of a subsidiary is $500.
Please comply with the following instructions to ensure a timely response from this Office:
- This Office will require the original and one copy of the completed application, and one copy should be retained in the Institution’s files.
- That the applicant will submit with the application a copy of the proposed Articles of Incorporation/Association and Bylaws. If the proposed subsidiary is already in existence, a copy of the executed Articles of Incorporation/Association and Bylaws should be submitted.
- The application, when filed, must be accompanied by an official check in the amount of $500 (non-refundable), which is to cover the cost of the application fee. Please make check payable to the “Louisiana Office of Financial Institutions.” There is no application fee for the establishment of an additional office of a subsidiary.
- If the Institution is to lease any or all of the proposed premises, submit a copy of the proposed lease, together with a statement from a Certified Public Accountant stating whether the lease is to be considered an operating lease or a capitalized lease according to the provisions of the Statement of Financial Accounting Standards #13 – Accounting For Leases. The provision to include the “Standard Bankruptcy Clause” in the lease is no longer required.
- The Institution should ensure that any purchase of real estate for future expansion is in compliance with this Office’s Investment in Real Estate for Business Purposes Policy, revised March 15, 2005.
- The Institution should disclose any involvement in this application by a Director, Officer, or Shareholder who directly or indirectly controls five percent or more of any class of voting stock. Involvement includes, but is not limited to, the sale or lease of property or equipment, legal fees, accounting fees, construction contracts, or consulting contracts.
Any questions you may have concerning the application should be directed to Deputy Chief Examiner Tim Robichaux at (225) 922-0878.