Banking Law Blog

HB 35 - Ohio's New Banking Act

Jun 08, 2017 by Steven D. Shandor

OHIO’S NEW BANKING ACT

The Ohio House of Representatives is currently considering H.B.35 which would enact a new Banking Law governing banks, savings and loan associations, and savings banks, under one statute.  The law, if passed, would provide for a single bank charter under which all three types of financial institutions would operate.  It would, therefore, eliminate the separate laws currently regulating savings and loan associations and savings banks. 

Unlike banks, the ownership structure of savings and loan associations or savings banks must not be represented by shares of stock, and the bill enacts new provisions in the Banking Law that specifically address these institutions.  The bill also modifies a number of provisions of existing law to make them expressly applicable only to state banks. 

Among the changes to Ohio’s Banking Law, the bill would also:

1.               Acknowledge electronic banking;

2.               Reference provisions of the general corporation law applicable to the operation of banks;

3.               Require the Superintendent of Financial Institutions’ pre-approval of amendments to a bank’s Articles of Incorporation or Amended Articles of Incorporation;

4.               Expand what is deemed privileged and confidential to include information obtained as a result of the supervision of a bank;

5.               Provide for a capital restoration plan in the event a bank is undercapitalized; and

6.               Eliminate the law governing societies for savings.

The bill would also make changes to the current state of law regarding director, officer, employee, or other institution affiliated party, personal liability for violations of the Banking Law.

The new Banking Act, introduced on February 7, 2017, was reported on by the Committee for Financial Institutions, Housing, and Urban Development on March 8, 2017, and remains pending. For information on how these potential changes may impact your business, contact Steven D. Shandor at 330.774.4508 or sdshandor@dayketterer.com.