TITLE 7 BANKING AND FINANCE

Section 1. Financial Institutions, 7-1-1 through 7-1-1021.

ARTICLE 2 BANKS AND TRUST COMPANIES

7-1-602. Applications for branch offices.

Application to establish a branch office shall be made to the department in such form as it may prescribe from time to time. The department shall exercise its discretion in its consideration of the application; but the department shall not approve the application until it has ascertained to its satisfaction that the public need and advantage will be promoted by the establishment of the proposed branch office, based upon the following factors:
1. Reasonable opportunity for the proposed branch office to generate a sufficient profit;
2. The character and fitness of the board of directors and management of the bank to command the confidence of the community and to warrant the belief that the business of the bank or trust company at the branch office will be honestly and efficiently conducted;
3. The adequacy of the capital structure of the bank or trust company, particularly in view of the anticipated business to be generated by the proposed branch office; and
4. The overall financial condition and safety and soundness of the applicant bank or trust company.
  Where the department by rule, regulation, or written policy has provided for expedited processing of applications or for notice procedures, it may abbreviate its review of these criteria.
After receipt of a complete application, the department shall have 90 days within which to approve or disapprove such application.
The department may approve an application contingent upon the satisfaction of additional conditions including the submission of information such as the date of opening and the capital outlay for the branch office. If the approval of a federal regulatory agency is required with respect to the branch office, the department may at its option withhold its written approval or disapproval until such federal approval is granted or denied or may withdraw its approval if the federal agency fails to act or refuses to grant approval. If the department disapproves the branch office, it shall notify the applicant of its disapproval and state generally in writing the unfavorable factors influencing its decision. The decision of the department is final, except that it may be subject to judicial review as provided in Code Section 7-1-90.
The department may provide by regulation that a bank which meets certain financial and managerial criteria may, in lieu of application, file a written notification with the department at a time to be specified in such regulation. The department may waive publication requirements for such a procedure.
All lawfully established banking locations existing on July 1, 1999, other than a bank's main office, shall be known and shall qualify as branch offices.
In the event of merger or consolidation of two or more banks, pursuant to Parts 14 and 15 of this article, the surviving or resulting bank shall designate a main office and may retain and continue to operate any or all banking locations of each constituent bank as branch offices so long as they are consistent with and authorized by this part. In the event of the purchase of substantially all of the assets of a bank, subject to the review and approval by the commissioner of such transaction, the purchasing bank may retain and continue to operate any or all banking locations of the selling bank as branch offices so long as they are consistent with and authorized by this part.
The department's approval may be revoked if conditions in the approval have not been satisfied or if other violations of law occur as a result of the branch office's opening or operation.

(Code 1933, § 13-203.1, enacted by Ga. L. 1960, p. 67, § 5; Ga. L. 1963, p. 602, § 2; Ga. L. 1970, p. 954, § 4; Ga. L. 1973, p. 127, § 1; Ga. L. 1975, p. 473, § 1; Ga. L. 1978, p. 1710, § 3; Ga. L. 1978, p. 2068, § 1; Ga. L. 1980, p. 1082, § 1; Ga. L. 1983, p. 602, § 14; Ga. L. 1999, p. 674, § 17; Ga. L. 2000, p. 174, § 13; Ga. L. 2016, p. 390, § 2-13/HB 811.)

The 2016 amendment, effective July 1, 2016, deleted the former last sentence of subsection (b), which read: "Under normal circumstances and workload, the department will issue an approval or disapproval of a branch office within 21 days or after the end of the public comment period, whichever is later."

Law reviews.

- For article discussing compliance with Federal Securities Act of 1933 in bank acquisitions and the issuance of securities of bank holding companies, see 14 Ga. St. B.J. 114 (1978). For annual survey of law of business associations, see 43 Mercer L. Rev. 85 (1991). For comment on United States v. Citizens & S. Nat'l Bank, 422 U.S. 86, 95 S. Ct. 2099, 45 L. Ed. 2d 41 (1975), see 10 Ga. L. Rev. 641 (1976).

JUDICIAL DECISIONS

"Branch bank" not necessarily interchangeable with "bank".

- Term "branch bank", as used in O.C.G.A. § 7-1-602(e), is not necessarily interchangeable with "bank." Community Bankers Ass'n v. First Nat'l Bank of Commerce, 193 Ga. App. 569, 388 S.E.2d 387 (1989), aff'd, 260 Ga. 371, 394 S.E.2d 95 (1990).

Pertinent criteria in determining whether bank facility is a branch office.

- To determine whether a bank facility is a branch office, the court should look to four pertinent factual criteria; i.e., distance separating main banking house and the facility, number of intervening structures, lack of physical connection between main banking house and the facility, and the economic effect of the facility on the balance of competition between area banks. Dunn v. First Nat'l Bank, 345 F. Supp. 853 (N.D. Ga. 1972).

Acquisition and operation of branch banks by holding company's subsidiary.

- Although a bank holding company may change the corporate structure of the company's banking subsidiaries through merger, consolidation, or purchase, and may continue all of the banking activities of the component banks, a bank holding company may not, through the company's banking subsidiary, acquire "branch banks" and continue to operate those branches as such. First Nat'l Bank of Commerce v. Community Bankers Ass'n, 260 Ga. 371, 394 S.E.2d 95 (1990).

Merger with branch not approved without merging entire bank.

- Nothing in the Code expresses or implies any intent to permit approval of a bank holding company's merging or consolidating with, or acquiring control of, a branch bank by itself without merging or consolidating with, or acquiring control of, the entire bank. Community Bankers Ass'n v. First Nat'l Bank of Commerce, 193 Ga. App. 569, 388 S.E.2d 387 (1989), aff'd, 260 Ga. 371, 394 S.E.2d 95 (1990).

Cited in Jackson v. First Nat'l Bank, 246 F. Supp. 134 (M.D. Ga. 1965); Jackson v. First Nat'l Bank, 292 F. Supp. 156 (N.D. Ga. 1968); United States v. Citizens & S. Nat'l Bank, 422 U.S. 86, 95 S. Ct. 2099, 45 L. Ed. 2d 41 (1975).

OPINIONS OF THE ATTORNEY GENERAL

Legislative intent behind former Code 1933, § 13-203.1 was to provide for establishment and operation of new and additional bank offices and bank facilities. 1971 Op. Att'y Gen. No. 71-102.

Section empowers commissioner to regulate establishment of bank offices and facilities.

- Former Code 1933, § 13-203.1 empowered the superintendent of banks, (now commissioner of banking and finance) to regulate the establishment of bank offices and bank facilities and to provide for criteria of examination and determination of public need and advantage in establishment of bank offices and bank facilities. 1971 Op. Att'y Gen. No. 71-102.

Establishment of multiple bank offices through use of mobile bank unit.

- Georgia law does not prohibit a bank from establishing multiple bank offices or bank facilities, using a single mobile bank unit on a regular part-time basis. 1976 Op. Att'y Gen. No. 76-106.

In applying section, controlling geographical entity is the county.

- For purpose of applying state law to parent office of national bank established on military reservation, the controlling geographical entity is the county, not the military reservation. 1975 Op. Att'y Gen. No. 75-141.

Parent office located on military reservation may operate office off reservation.

- When two national banks whose parent banks are located in one county each have a branch bank in another county, even though it is on a military reservation, those banks may establish and operate additional offices in that first county off the military reservation. 1975 Op. Att'y Gen. No. 75-141.

Classification of formerly established branch bank.

- Place of banking business which is located within the county in which is located the principal office of the bank, and which was formerly a lawfully established branch bank within the meaning of former Code 1933, § 13-201.1 (see now O.C.G.A. § 7-1-600(5) is for purposes of former Code 1933, §§ 13-203 and 13-203.1 (see now O.C.G.A. §§ 7-1-601 and7-1-602) to be treated as a bank office as defined by former Code 1933, § 13-201.1 (see now O.C.G.A. § 7-1-600(4)). 1974 Op. Att'y Gen. No. 74-35.

Brokerage firm, in jointly operating an investment program, is not a branch.

- When a brokerage firm, in operating an investment program in conjunction with a bank, is performing the firm's functions primarily for the firm's own benefit, it is in no sense a mere adjunct of the participating bank, and the program does not result in the operation of branches, offices, or facilities by the participating bank in violation of O.C.G.A. §§ 7-1-601 and7-1-602. 1981 Op. Att'y Gen. No. 81-59.

RESEARCH REFERENCES

ALR.

- Power of banking corporation to loan money for others, 33 A.L.R. 597.

Branch banks, 50 A.L.R. 1340; 136 A.L.R. 471.

What is a "branch bank" within statutes regulating the establishment of branch banks, 23 A.L.R.3d 683.

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