Section 5-3A-1

Required times; items to be examined; "affiliate" defined.

(a) Every bank other than national banks shall be subject to the supervision and inspection of the superintendent and the regulations and supervision thereof. The superintendent shall, by competent examiner appointed by him or her, visit and examine every bank organized under the laws of Alabama at least once in each eighteen-month period. The examination of banks shall be at irregular intervals. On every examination, inquiry shall be made as to the conditions and resources of the bank, the mode of conducting and managing the affairs of the bank, the action of its directors, the investment of the funds of the bank, the safety and prudence of the management of the bank, whether the requirements of its charter and of law have been complied with in the administration of the affairs of the bank, and such other matters as the superintendent may prescribe. In addition, the superintendent may in like manner examine or cause to be examined the affairs of every bank and every affiliate of the bank except a national bank, a subsidiary of a national bank or a bank holding company, or a subsidiary of a bank holding company other than a bank organized under the laws of Alabama, whenever, in the judgment of the superintendent, the management and condition of the bank or affiliate renders an examination of its affairs necessary or expedient, or whenever, in the opinion of the superintendent, the interest of the public demands an examination.

(b) The term "affiliate" shall include any corporation, business trust, association, or other similar organization under any of the following conditions:

(1) When a bank, directly or indirectly, owns or controls either a majority of the voting shares or more than 50 percent of the number of shares voted for the election of its directors, trustees, or other persons exercising similar functions at the preceding election, or controls in any manner the election of a majority of its directors, trustees, or other persons exercising similar functions.

(2) When control of a bank is held, directly or indirectly, through stock ownership or in any other manner, by the shareholders of a bank who own or control either a majority of the shares of the bank or more than 50 percent of the number of shares voted for the election of directors of the bank at the preceding election, or by trustees for the benefit of the shareholders of the bank.

(3) When a majority of the directors of the bank comprise a majority of the directors, trustees, or other persons exercising similar functions of the organization.

(4) When the organization owns or controls, directly or indirectly, either a majority of the shares of capital stock of a bank or more than 50 percent of the number of shares voted for the election of directors of a bank at the preceding election, or controls in any manner the election of a majority of the directors of a bank at the preceding election, or controls in any manner the election of a majority of the directors of a bank, or for the benefit of whose shareholders or members all or substantially all the capital stock of a bank is held by trustees.

(Acts 1980, No. 80-658, §5-3-1; Acts 1997, No. 97-495, §1.)