Chapter 1301:12-4 - Organization

1301:12-4-01 Incorporation.

(A) An application for the organization of a savings bank shall be filed with the division of financial institutions in accordance with this rule and sections 1161.02 , 1161.03 , 1161.04 , 1161.08 , 1161.09 , 1161.10 and 1161.12 of the Revised Code.

(B) The application shall contain:

(1) A comprehensive description of the necessity for the proposed savings bank in the community where it is to be located;

(2) A comprehensive description of the reasonable probability of usefulness and success of the savings bank's role of providing credit for the housing needs of its community;

(3) A copy of the proposed articles of incorporation;

(4) Copies of the proposed constitution and bylaws of the savings bank ;

(5) A comprehensive statement of the applicant's plan to help meet the credit needs of its entire community, including low- and moderate-income neighborhoods;

(6) A commitment by the applicant to obtain insurance of the savings bank's accounts from the federal deposit insurance corporation;

(7) An affidavit from the applicant that the cost of incorporation and all expenses incurred up to the time of commencing business will be borne by the incorporators, unless with prior approval of the superintendent, such cost may be included in the sale price of permanent stock up to a stated minimum amount;

(8) A commitment by the applicant to establish full-time operation of the savings bank in suitable, independent quarters;

(9) A comprehensive description of the acquisition or lease of the proposed office premise(s):

(10) The qualifications, experience and proposed compensation and benefits of proposed officers and directors;

(11) A business plan detailing the savings bank's intention with regard to operating practices, a projected budget, management policies and compensation, lending policies, the payment of dividends and interest, forms the savings bank will utilize, and any other information regarding the prudent operation of a savings bank;

(12) A legal opinion regarding the validity of the proposed incorporation and stock;

(13) The names and addresses of the proposed incorporators; and

(14) A comprehensive description of the source(s) of capitalization of the savings bank.

(C) The authorized capital of a savings bank shall be not less than ten million dollars or such other amount, as the superintendent may determine, that is adequate in relation to the amount and character of the anticipated business of the savings bank and the safety of prospective depositors. The superintendent shall also require the applicant to make a nonrefundable cash contribution for operating expenses in an amount to be determined by the superintendent.

(D) The application will be processed in accordance with the provisions of section 1161.03 of the Revised Code. Upon a determination that the application is in compliance with statutory and the division of financial institutions requirements, the superintendent will advise the applicant, in writing, to publish the notice within ten days from the date of such advice. The notice shall be published once a week for two weeks in a newspaper printed in the English language and having general circulation in the community to be served by the proposed savings bank, a notice of the filing of the application shall be in the form prescribed by the superintendent. Promptly after publication of the notice, the applicant shall transmit a copy of the notice to the division of financial institutions accompanied by certificate certifying that the notice has been published in accordance with the requirements of this rule. The notice shall be in substantially the following form:

Notice of filing of application for permission to organize a savings bank

Notice is hereby given that, pursuant to Chapter 1161. of the Revised Code, ________________ has filed an application with the division of financial institutions for permission to organize a savings bank to be located at, or in the immediate vicinity of _________________, ______________________, Ohio. Any person may file communications, including briefs, in favor or in protest of said application, at the division of financial institutions within twenty days after the date of this publication. If a protest is filed, a public hearing will be held on this application in accordance with the provisions of Chapter 119. of the Revised Code.

(1) Upon receipt of an application to establish a savings bank, the superintendent may also give notice to any other persons he believes might have an interest in the application, but failure to give notice to such persons having such an interest is not a basis for procedural objection.

(2) Any person may file communications, including briefs, in favor or in protest of the application, at the division of financial institutions within twenty days of publication of notice or within twenty days after the date of notification to competing institutions, whichever is later. Two copies of each communication shall be filed with the division.

(3) If a protest is filed, a public hearing will be held on the application in accordance with the provisions of Chapter 119. of the Revised Code.

Effective: 08/09/2010
R.C. 119.032 review dates: 04/14/2010 and 04/14/2015
Promulgated Under: 119.03
Statutory Authority: 1163.24
Rule Amplifies: 1161.02 , 1161.03 , 1161.04 , 1161.08 , 1161.09 , 1161.10 , 1161.12
Prior Effective Dates: 11-17-91, 6-3-04

1301:12-4-02 Change in control.

(A) As used in this rule:

(1) "Acquisition" means a purchase, assignment, transfer, exchange, pledge, or other disposition of voting shares, or an increase in percentage ownership of a state savings bank resulting from a redemption of voting shares, or a similar transaction.

(2) "Acting in concert" means knowing participation in a joint activity or parallel action towards a common goal of acquiring control of a state savings bank, whether or not pursuant to an express agreement.

(3) "Control" means:

(a) The power, directly or indirectly, to direct the management or policies of a state savings bank, or

(b) Ownership, control of, or the power to vote twenty-five per cent or more of any class of voting securities of a state savings bank.

(4) "Immediate family" means a person's father, mother, stepfather, stepmother, brother, sister, stepbrother, stepsister, son, daughter, stepson, stepdaughter, grandparent, grandson, granddaughter, father-in-law, mother-in-law, the spouse of any of the foregoing, and the person's spouse.

(5) "Person" means an individual, corporation, partnership, trust, association, joint venture, pool, syndicate, sole proprietorship, unincorporated organization, and any other form of entity; and a voting trust, voting agreement, and any group of persons acting in concert.

(6) "State savings bank" means a savings bank chartered under the laws of Ohio and includes any savings bank holding company that has control of any such state savings bank, and any other company that controls a state savings bank.

(7) "Securities" means all equity interests in a state savings bank and includes rights, interests, and powers with respect thereto.

(B) Any person, acting directly or indirectly or through or in concert with one or more persons, shall give the division of financial institutions sixty days prior written notice before acquiring control of any state savings bank through a purchase, assignment, transfer, exchange, succession, pledge, or other disposition of voting securities of such savings bank, or through any other transaction used in lieu of such a purchase, assignment, transfer, exchange, succession, pledge, or other disposition of voting securities of such savings bank.

(1) It is presumed, subject to rebuttal, that a person acquiring ownership, control of, or the power to vote ten per cent or more of any class of voting securities of a state savings bank constitutes the power to direct that state savings bank's management or policies requiring prior notice to the division of financial institutions if either of the following apply:

(a) The state savings bank has registered securities under section 12 of the Securities Exchange Act of 1934 ( 15 U.S.C. 78 ); or

(b) No other person will own, control, or hold the power to vote a greater percentage of that class of voting securities immediately after the transaction. If two or more persons, not acting in concert, each propose to acquire simultaneously equal percentages often per cent or more of a class of voting securities of a state savings bank, each such person shall file prior notice with the division of financial institutions.

(2) It is presumed, subject to rebuttal, that a person is acting in concert with members of the person's immediate family.

(3) Transactions other than those set forth in paragraph (B)(1) of this rule resulting in a person's control of less than twenty-five per cent of a class of voting securities of a state savings bank are deemed not to constitute control requiring prior notice.

(4) A person may request an opportunity to rebut any presumption established by paragraphs (B)(1) and (B)(2) of this rule with respect to a proposed transaction. The superintendent shall afford the person the opportunity to present views in writing or where appropriate, orally before the superintendent or the superintendent's designated representatives either at informal conference discussions or at informal presentations of evidence. A person rebutting concerted action with a federal regulator may file the information to rebut the presumption filed with the federal regulator with the division of financial institutions.

(C) To request the written consent of the superintendent to a proposed acquisition of control of a state savings bank:

(1) A person who is also required to file a notice or application with the federal deposit insurance corporation, federal reserve system or the office of thrift supervision in regard to the proposed transaction, pursuant to the Change of Bank Control Act ( 12 U.S.C. 1817(j) ), or the Savings and Loan Holding Company Act ( 12 U.S.C. 1467a ), shall file with the division of financial institutions an originally executed copy of the notice or application.

(2) A person who is not required to file a notice or application with the office of thrift supervision in regard to the proposed transaction shall notify the division of financial institutions by letter of the proposed transaction, which letter shall include a summary of the proposed transaction and the reason the person is not required to file a notice or application in regard to the proposed transaction with the federal deposit insurance corporation or the federal reserve system. A person filing notice under this paragraph shall submit the following information:

(a) The identity, personal history, and business background and experience of each person by whom or on whose behalf the acquisition is to be made, including each person's material business activities and affiliations during the past five years; a description of any material pending legal or administrative proceedings in which each person is a party; and any criminal indictment or conviction of each person by a state or federal court.

(b) A statement of the assets and liabilities of each person by whom or on whose behalf the acquisition is to be made, as of the end of the fiscal year for each of the five years immediately preceding the date of the notice, together with related statements of income and source and application of funds for each of the fiscal years then concluded, all prepared in accordance with generally accepted accounting principles consistently applied; an interim statement of the assets and liabilities for each person, together with related statements of income and source and application of funds, as of a date not more than ninety days prior to the date of the filing of the notice.

(c) The terms and conditions of the proposed acquisition and the manner in which the acquisition is to be made.

(d) The identity, source, and amount of the funds or other consideration used or to be used in making the acquisition and, if any part of these funds or other consideration has been or is to be borrowed or otherwise obtained for the purpose of making the acquisition, a description of the transaction, the names of the parties, and any arrangements, agreements, or understandings with the parties.

(e) Any plans or proposals any acquiring person may have to liquidate the state savings bank, to sell its assets or merge it with any company, or to make any other major change in its business or corporate structure or management.

(f) The identification of any person employed, retained, or to be compensated by an acquiring person, or by any person on an acquiring person's behalf, to make solicitations or recommendations to shareholders for the purpose of assisting in the acquisition, and a brief description of the terms of the employment, retainer, or arrangement for compensation.

(g) Copies of all invitations or tenders or advertisements making a tender offer to stockholders for purchase of their stock to be used in connection with the proposed acquisition.

(h) Any additional relevant information in the form the division of financial institutions may require by rule or by specific request in connection with any particular notice.

(i) Any other information the division of financial institutionsrequires.

(D) The sixty day notice period specified in paragraph (B) of this rule shall not commence until the superintendent has accepted the notice required in paragraph (C)(1) or (C)(2) for processing.

(E) The proposed acquisition of control may be made within sixty days of the superintendent's acceptance of the notice for processing unless the superintendent has done either of the following:

(1) Disapproved the proposed acquisition of control; or

(2) Extended the time during which the superintendent may disapprove a proposed acquisition of control as follows:

(a) For an additional thirty days in the discretion of the superintendent; or

(b) For two additional extensions of not more than forty-five days each if any of the following applies:

(i) The superintendent determines that any acquiring person has not furnished all of the information required under this rule;

(ii) In the superintendent's judgment, any material information filed is substantially inaccurate;

(iii) The superintendent has been unable to complete the investigation of an acquiring person because of any delay caused by, or the inadequate cooperation of, that acquiring person; or

(iv) The superintendent determines that additional time is needed to investigate and determine whether any acquiring person has a record of failing to comply with the requirements of subchapter II of chapter 53 of subtitle IV of Title 31 of the United States Code.

(F) Any person filing notice under this rule shall be required to publish, within ten days from receipt of the superintendent's acceptance for processing of information required to be filed under this rule, an announcement on the proposed acquisition in a newspaper of general circulation in the community in which the state savings bank has its principal place of business. In the case of information filed with the division of financial institutions in contemplation of a tender offer, publication of the announcement required by this paragraph may be delayed until thirty days after the superintendent's acceptance of the information for processing. Whenever a person required to publish an announcement pursuant to this paragraph is also required by federal law or regulation to publish an announcement regarding the same transaction, the announcement published pursuant to federal law or regulation shall satisfy the publication requirement of this paragraph if the announcement includes all of the information required by this paragraph. The newspaper announcement shall include:

(1) The name of the state savings bank and the name of each person identified in the information as a proposed acquirer and the proposed date of the acquisition of the securities;

(2) A statement that interested persons may submit comments on the proposed acquisition to the superintendent at the division of financial institutions for a period of twenty days from the date of publication of the announcement, along with the division of financial institutions address; and

(3) A statement that the superintendent will consider all public comments received in writing within the twenty days following the required publication.

(G) The superintendent may do either of the following with respect to the newspaper publication requirement:

(1) Permit delay of the publication if the superintendent determines, for good cause, that it is in the public interest to grant a delay; or

(2) Shorten the public comment period, waive the public comment, waive the newspaper publication, or act on a notice before the expiration of the a public comment period, if the superintendent determines that either an emergency exists or disclosure of a proposed acquisition, solicitation of the public comment, or delay of its action until expiration of the public comment period would seriously threaten the safety or soundness of a state savings bank.

(H) Any person who is required to file information with the division of financial institutions pursuant to paragraph (C)(1) of this rule shall also file with the division of financial institutions any additional information filed with the federal reserve system, federal deposit insurance corporation, or the office of thrift supervision in connection with a notice regarding the same proposed transaction together with a copy of any request from the federal reserve system,federal deposit insurance corporation or the office of thrift supervision in response to which such information was filed.

(I) An acquisition of control may be made prior to the expiration of the denial period, or any extension thereof, if the superintendent issues written consent to the acquisition.

(J) The superintendent may deny consent to a proposed acquisition of a controlling interest in a state savings bank if:

(1) The proposed acquisition of control would result in a monopoly or would be in furtherance of any combination or conspiracy to monopolize or to attempt to monopolize the business of savings bank in any part of this state or any markets served by the state savings and loan association;

(2) The effect of the proposed acquisition of control in any part of this state and any markets served by the state savings bank may be substantially to lessen competition, tend to create a monopoly, or in any other manner restrain trade, and the anticompetitive effects of the proposed acquisition of control are not clearly outweighed in the public interest by the probable effect of the acquisition in meeting the convenience and needs of the community to be served;

(3) The financial condition of any acquiring person might jeopardize the financial stability of the state savings bank or prejudice the interests of the depositors of the state savings bank;

(4) The competence, experience, and integrity of any acquiring person or of any of the proposed management personnel indicates that it would not be in the interest of the depositors of the state savings bank, or in the interest of the public to permit such person to control the state savings bank; or

(5) Any acquiring person neglects, fails, or refuses to furnish the superintendent all the information required by the superintendent; or

(6) The superintendent determines the proposed acquisition would have an adverse effect on the savings association insurance fund administered by the federal deposit insurance corporation.

(K) Within three days after deciding to disapprove any proposed acquisition of control of a state savings bank, the superintendent shall notify the acquiring person in writing of the disapproval. The notice of disapproval shall provide a statement of the basis for the disapproval.

(L) Whenever a change in control of a state savings bank occurs, the state savings bank shall promptly report to the division of financial institutions any changes or replacement of its chief executive officer or of any director occurring in the next twelve-month period, including in its report a statement of the past and current business and professional affiliations of the new chief executive officer or directors.

(M) A person acquiring control of a state savings bank is not required to provide prior notice to the division of financial institutions, but is required to notify the division of financial institutions within ninety days after control is acquired and to provide the superintendent with any information requested, if the person has acquired control by any of the following means:

(1) Through testate or intestate succession;

(2) Through a bona fide gift;

(3) In satisfaction of a debt previously contracted in good faith, except that the acquirer of a defaulted loan secured by a controlling amount of a state savings bank voting shares shall file a notice before the loan is acquired ;

(4) Redemption of voting shares by the issuing state savings bank; or

(5) Sale of shares by any shareholder that is not within the control of the person resulting in that person becoming the largest shareholder.

(N) The following transactions do not require a person proposing to acquire control in a state savings bank to obtain the prior written consent of the superintendent:

(1) A customary one-time proxy solicitation; and

(2) The receipt of voting securities through a pro rata stock dividend.

Effective: 08/09/2010
R.C. 119.032 review dates: 04/14/2010 and 04/14/2015
Promulgated Under: 119.03
Statutory Authority: 1163.24
Rule Amplifies: 1161.78
Prior Effective Dates: 11-17-91, 6-3-04

1301:12-4-03 Agency agreement between savings banks and affiliate and non-affiliate depository institutions.

(A) Subject to paragraphs (C), (D), (E) and (F) of this rule a savings bank may contract to receive deposits, renew time deposits, close loans, service loans, and receive payments on loans and other obligations for its customers through an affiliate depository institution, at any and all offices of the affiliate depository institution, without being required to obtain prior written approval of the superintendent of financial institutions.

(B) A savings bank that wants to contract to provide services other than those listed in paragraph (A) of this rule or to provide services to its customers through an unaffiliated depository institution must individually seek prior approval from the superintendent of financial institutions in accordance with section 1161.071 of the Revised Code.

(C) A savings bank may not contract to establish new deposit accounts, extend credit, or create new business relationships through offices of other depository institutions.

(D) A savings and bank may not, as agent or as principal through its agent, conduct any activity which the savings bank is prohibited from conducting under applicable federal or state law.

(E) All agreements to act as agent pursuant to this rule shall be in writing and address the nature of the services to be provided and the rights and responsibilities of each party.

(F) Any agency relationship shall be on terms that are consistent with safe and sound practices.

(G) The banking office of the depository institution acting as agent pursuant to this rule and section 1161.071 of the Revised Code is not considered to be a branch of the contracting savings bank.

R.C. 119.032 review dates: 04/14/2010 and 04/14/2015
Promulgated Under: 119.03
Statutory Authority: 1163.24
Rule Amplifies: 1161.071
Prior Effective Dates: 11-17-91, 6-3-04

1301:12-4-04 Conversion from mutual to stock.

(A) As used in this rule:

(1) "Account holders" mean depositors of the savings bank.

(2) "Acting in concert" means a combination or pooling of voting or other interests in the securities of an issuer for a common purpose pursuant to any contract, understanding, relationship, agreement or other arrangement, whether written or otherwise, except that any of the savings bank's benefit plans will not be deemed to be acting in concert with its trustee or a person who serves in a similar capacity solely for the purpose of determining whether stock held by the trustee and stock held by the plan will be aggregated.

(3) "All other account holders" mean any person, other than an eligible account holder, having a qualifying deposit on the record date established for purposes of determining persons eligible to vote at the meeting at which the plan of conversion will be submitted to the savings bank's members for approval.

(4) "Eligibility record date" means the record date established in accordance with paragraph (F)(1)(j) of this rule in the plan of conversion for determining eligible account holders of an savings bank.

(5) "Eligible account holder" means any person holding a deposit on the eligibility record date.

(6) "Offering" means the provision for purchase of shares of stock in accordance with the approved plan of conversion.

(7) "Officer" refers to a person who participates or has authority to participate, other than as a director, in major policymaking functions of the savings bank, whether or not the officer has an official title or is serving without salary or other compensation.

(8) "Plan of conversion" means a formal plan adopted by the board of directors outlining the steps to be taken to effect the conversion to a stock company.

(9) "Qualifying deposit" means the total deposit balances in an eligible account holder's savings accounts in the savings bank at the close of business on the eligibility record date.

(10) "Sale" or "sell" includes every contract to sell or otherwise dispose of a security or interest in a security for value.

(11) "Savings account" includes any withdrawable deposit account.

(12) "Subscription offering" refers to the offering of shares of capital stock through subscription rights issued pursuant to the plan of conversion.

(13) "Subscription rights" is the non-transferable right to purchase shares of stock under the terms of the plan of conversion in accordance with paragraph (F)(1)(a) of this rule.

(B) A mutual savings bank shall not convert to a stock savings bank unless the following conditions are satisfied:

(1) Two-thirds of the authorized members of the board of directors shall approve a plan of conversion.

(2) The board of directors shall notify its members of the adoption of the plan of conversion in accordance with paragraph (C) of this rule.

(3) An application containing the items specified in paragraph (D) of this rule shall be submitted to the superintendent.

(4) Public notice of the application shall be published upon acceptance of the application by the superintendent in accordance with paragraph (E)(2) of this rule.

(5) The application shall be approved in writing by the superintendent.

(6) Upon approval by the superintendent, the members shall be provided all information as hereafter specified in this rule to vote on the transaction.

(7) The members shall adopt the plan of conversion by the affirmative vote of three-fifths of the total outstanding votes eligible to be cast at the meeting at which the plan of conversion is presented to the members for adoption.

(8) All approvals, consents and authorizations required to be obtained from other regulatory or supervisory authorities shall be obtained.

(C) Promptly after the adoption of a plan of conversion by its board of directors, the savings bank shall notify its members of such action by publishing a statement in a newspaper printed in the English language and having general circulation in each community in which an office of the savings bank is located or by mailing a letter to each of its members. A savings bank may also issue a press release. The division of financial institutions may require broader publication, if necessary, to ensure adequate notice to all members.

(D) The application to be filed with the superintendent shall consist of the following:

(1) A certified board resolution approving the plan of conversion.

(2) The plan of conversion.

(3) The proposed amendments to the articles of incorporation, constitution and bylaws for the savings bank to be converted.

(4) A preliminary copy of the proxy statement, proxy form and offering materials to be used in connection with the conversion.

(5) An independent appraisal prepared in accordance with paragraph (F)(2) of this rule of the estimated pro forma market value of the savings bank to be converted.

(6) An opinion by either legal counsel or the savings bank's accountant as to the tax consequences of the conversion.

(7) A copy of the proposed notice of the meeting of members to consider the plan of conversion.

(8) A copy of the proposed business plan for the converted savings bank.

(E) Procedures for filing application.

(1) The savings bank shall file one copy of an application that is materially complete with the division of financial institutions and one copy with the appropriate federal supervisory agency(s). Any application that is materially incomplete may be returned to the savings bank by the division of financial institutions. Where any information filed pursuant to paragraph (D) of this rule is amended or revised in any material respect, amended documents shall be promptly filed with the division of financial institutions and any amendments or revisions shall be marked to clearly identify such changes made therein.

(2)

(a) Upon determination that the application is properly executed and contains all of the items specified in paragraph (D) of this rule, the division of financial institutions will advise the savings bank, in writing, to publish a notice of the filing of the application. Promptly after receipt of the advice, the savings bank shall prominently post the notice in each of its offices and publish a notice in a newspaper printed in the English language and having general circulation in each community in which an office of the savings bank is located, as follows:

"NOTICE OF FILING OF AN APPLICATION TO CONVERT TO A STOCK SAVINGS BANK

Notice is hereby given that, pursuant to section 1161.111 of the Revised Code, _________________________ (name of savings bank) has filed an application with the division of financial institutions requesting approval to convert to an Ohio-chartered permanent stock savings bank. The proposed plan of conversion will be available for inspection by any member of the _________________________ (name of savings bank) at each office of the _________________________ (name of savings bank). Comments or objections to the proposed conversion from any member of the _________________________ (name of savings bank) or interested party should be filed with the division of financial institutions at address 77 South High Street, 21st Floor, Columbus, Ohio, 43215-6120, within ten business days after the date of this notice."

(b) The notice required in paragraph (E) of this rule is to be substantially in the form set forth in paragraph (E)(2)(a) of this rule. However, the notice may be combined with any required federal notice(s).

(c) Promptly after publication of the notice or notices prescribed in paragraph (E)(2)(a) of this rule, the savings bank shall file a copy of each notice with the superintendent accompanied by a certificate certifying that the notice or notices have been published in accordance with the requirements of this rule.

(d) Anyone may file comments or objections in favor of or in protest of an application with the division of financial institutions within ten business days after the date of publication as required in paragraph (E)(2)(a) of this rule. A copy of all comments or objections filed with the division of financial institutions shall be furnished to the savings bank by the division of financial institutions.

(3) Subsequent to the approval of the application by the division of financial institutions, a final copy of all proxy materials shall be mailed to the division of financial institutions not later than the day after such material is first provided to the savings bank's members.

(4) The savings bank shall promptly file with the division of financial institutions after the meeting of the savings bank's members called to consider the plan of conversion the following documents:

(a) A certified copy of each resolution adopted at such meeting relating to the plan of conversion;

(b) A certificate certifying the total number of votes eligible to be cast at the meeting; the total number of votes represented in person or by proxy at the meeting; the total number of votes cast in favor of and against each resolution; and the number of votes necessary to approve each resolution.

(F) General principles for conversions.

(1) The plan of conversion. The board of directors shall adopt a plan for the conversion from a mutual form of ownership to a stock form of ownership.

(a) The plan of conversion shall establish nontransferable subscription rights, the classes for these rights, and the priority of each class. The savings bank must utilize the eligible account holder subscription classes as described in paragraphs (F)(1)(a)(i) and (F)(1)(a)(iv) of this rule but may elect not to utilize any or all of the remaining classes. The eligible account holder subscription class described in paragraph (F)(1)(a)(i) of this rule shall have priority over all other subscription classes. The eligible account holder subscription class described in paragraph (F)(1)(a)(iv) of this rule shall have priority over the subscription classes described in paragraphs (F)(1)(a)(v) and (F)(1)(a)(vi) of this rule and may have priority over the subscription classes described in paragraphs (F)(1)(a)(ii) and (F)(1)(a)(iii) of this rule. The subscription classes are as follows:

(i) Each eligible account holder shall receive, without payment, nontransferable subscription rights to purchase stock in an amount determined on a pro rata basis based upon total eligible deposits up to a maximum of five per cent of the total offering of shares.

(ii) Tax-qualified employee benefit plans of the savings bank may receive, without payment, nontransferable subscription rights to purchase stock in an amount not to exceed ten per cent of the total offering of shares.

(iii) Non-tax qualified stock benefit plans for the directors, officers and employees of the savings bank may receive, without payment, nontransferable subscription rights to purchase stock in an amount not to exceed six per cent of the total offering of shares. Stock purchased by such non-tax qualified stock benefit plans may be awarded at no cost to the directors, officers and employees of the savings bank in recognition of their service to the savings bank.

(iv) Each eligible account holder purchasing the full amount which such person is entitled to purchase as an eligible account holder may receive, without payment, nontransferable subscription rights to purchase any remaining stock, subject to the aggregate purchase limitation provided in paragraph (F)(1)(c) of this rule. In the event of an oversubscription to stock pursuant to this class, shares shall be allocated among the subscribing eligible account holders based on the proportion of each eligible account holder's qualifying deposit to the qualifying deposits of all eligible account holders who subscribe for shares.

(v) All other account holders may receive, without payment, nontransferable subscription rights to purchase stock. In the event of an oversubscription of stock pursuant to this class, shares shall be allocated among the subscribing other account holders based on the proportion of each other account holder's eligible deposit to the eligible deposits of all other account holders who subscribe for shares.

(vi) Any remaining shares of the savings bank may be sold either in a public offering through an underwriter or directly by the savings bank in a direct community offering, subject to such conditions as may be provided in the plan of conversion. The savings bank may commence the direct community offering or the public offering, or both, concurrently with or at any time during or after the subscription offering. However, should less than eighty-five per cent of the appraised value of the total offering of shares be sold to persons with subscription rights, either a public offering or a direct community offering must be conducted.

(a) The plan of conversion may limit purchases in either the public offering or the direct community offering by any person or any group of persons acting in concert to a specified amount, which amount shall not exceed five per cent of the total offering of shares.

(b) In the event of an oversubscription to shares in this class, orders in the public offering or the direct community offering shall be filled by allocating to each person a proportion of the available shares equal to the proportion of the shares ordered by such person to the shares ordered by all persons in the public offering or direct community offering.

(c) The savings bank may reject any order received in the public offering or direct community offering from any person other than natural persons residing in the counties in which the savings bank has an office.

(d) Any insignificant residue of shares of the savings bank not sold in the subscription offering or in a direct community offering or public offering may be sold in such other manner as the board of directors shall determine and as approved by the division of financial institutions.

(b) In connection with the conversion, the savings bank may establish one or more stock option plans for the benefit of the directors, officers and employees of the savings bank, subject to the following conditions:

(i) A number of shares not to exceed, in the aggregate, ten per cent of the total offering of shares, may be reserved for the issuance of options pursuant to such plans.

(ii) The exercise price for stock options granted on the effective date of the conversion will not be less than the price per share at which shares are sold to subscribing eligible account holders.

(iii) No additional cash compensation shall be provided as part of the stock option plan.

(iv) The stock option plan shall provide that any option granted under the plan must be exercised within ten years of the date of grant.

(c) The total number of shares which any person or any group of persons acting in concert may subscribe for or purchase in the conversion shall not exceed five per cent of the total offering of shares. Shares issued pursuant to benefit plans shall not be included for purposes of this limitation.

(d) Capital stock purchased by directors and officers of the savings bank in the conversion shall not be sold for a period of one year after the date of purchase except in the event of death of the director or officer. This restriction must be noted on the individual stock certificates.

(e) The sale price of the shares of stock to be sold in the conversion shall be a uniform price per share, except as provided in paragraph (H)(5) of this rule.

(f) The plan of conversion may provide that any savings accounts with total deposit balances of less than fifty dollars shall not constitute a qualifying deposit.

(g) Any person exercising subscription rights to purchase stock shall be required to purchase a specified minimum number of shares, which number shall not exceed twenty-five shares to the extent such shares are available, provided that the aggregate price for any minimum share purchase shall not exceed five hundred dollars.

(h) Each savings account holder shall receive, without payment, a withdrawable savings account or accounts in the converted savings bank equal in withdrawable amount to the withdrawal value of such account holder's savings account or accounts in the savings bank and under the same terms and conditions as their accounts before the conversion.

(i) The savings bank's plan of conversion shall be adopted by a two-thirds vote of the board of directors.

(j) An eligibility record date shall be established which is not less than ninety days and not more than one hundred eighty days prior to the date of adoption of the plan of conversion by the savings bank's board of directors.

(k) The plan of conversion may be amended by the board of directors at any time before it is approved by the superintendent and may be amended after receipt of the superintendent's approval but prior to the solicitation of proxies from members to vote on the plan with the prior approval of the superintendent. The conversion may be terminated by the board of directors at any time prior to the meeting of members called to consider the plan of conversion.

(l) The savings bank shall not lend funds collateralized by the stock of the converted savings bank to any person to purchase the stock of the converted savings bank.

(m) The conversion must be completed within twenty-four months of the date the superintendent approves the plan of conversion unless extended by the savings bank with the approval of the superintendent.

(2) Appraisal required.

(a) An estimated pro forma market value of the savings bank shall be established and set forth in a report by a person independent of the savings bank, experienced in the area of corporate appraisal and acceptable to the superintendent. The fee paid for the appraisal shall not be contingent upon completion of the conversion.

(b) The report of the appraiser shall contain data sufficient to support the conclusions reached therein.

(c) The estimated pro forma market value of the savings bank shall be established as of a date not more than thirty days before the application for conversion is filed with the superintendent.

(3) Within the first year after any conversion, the total cash compensation paid to any director or officer of the savings bank, not including any amounts received under stock benefit plans, may not be increased by more than fifteen per cent from such director's or officer's compensation immediately before the conversion without the prior written approval of the superintendent.

(4) Liquidation account.

(a) Each converted savings bank shall, at the time of conversion, establish a liquidation account in an amount equal to its net worth as of the latest practical date prior to conversion. For the purposes of this paragraph, the savings bank shall use the net worth figure no later than that set forth in its latest statement of financial condition contained in the offering circular. Except as provided in paragraph (F)(5) of this rule, the existence of the liquidation account shall not operate to restrict the use or application of any of the other net worth accounts of the converted savings bank.

(b) The liquidation account shall be maintained by the converted savings bank for the benefit of eligible account holders who maintain their savings accounts in such savings bank after the conversion. Each such eligible account holder shall, with respect to each savings account held, have a related inchoate interest in a portion of the liquidation account balance.

(c) In the event of a dissolution of the converted savings bank pursuant to section 1161.66 of the Revised Code and only in such event, each eligible account holder shall be entitled to receive a distribution from the liquidation account in the amount of the then current adjusted subaccount balances before any distribution may be made with respect to capital. A merger, consolidation, charter conversion, or similar combination or transaction with another institution is not considered a dissolution for these purposes, and in such a transaction the liquidation account shall be assumed and preserved by the surviving institution.

(d) The initial subaccount balance for a savings account held by an eligible account holder shall be determined by multiplying the opening balance in the liquidation account by a fraction of which the numerator is the amount of qualifying deposits in such savings account on the eligibility record date, and the denominator is the total amount of qualifying deposits of all eligible account holders in the applicant on such dates. Such initial subaccount balances shall not be increased, and they shall be subject to downward adjustment as provided in this paragraph.

(e) If the deposit balance in any savings account of an eligible account holder at the close of business on any fiscal year-end subsequent to the respective record dates is less than the lesser of:

(i) The deposit balance in such savings account at the close of business on any other fiscal year-end subsequent to the eligibility record date; or

(ii) The amount of the qualifying deposit as of the eligibility record date, the subaccount balance for such savings account shall be adjusted by reducing such subaccount balance in an amount proportionate to the reduction in such deposit balance. In the event of such downward adjustment, the subaccount balance shall not be subsequently increased, notwithstanding any increase in the deposit balance of the related savings account. The converted savings bank shall not be required to recompute the liquidation account and subaccount balances provided the converted savings bank maintains records sufficient to make necessary computations in the event of a complete liquidation or such other events as may require a computation of the balance of the liquidation account. The liquidation subaccount of an account holder shall be maintained for as long as the account holder maintains an account with the same social security number.

(5) No converted savings bank shall declare or pay a dividend on or repurchase any of its capital stock if such action would cause its regulatory capital to be reduced below the amount required for its liquidation account.

(6)

(a) Prior to the completion of a conversion, no person shall transfer, or enter into any agreement or understanding to transfer, the legal or beneficial ownership of conversion subscription rights, or the underlying securities, to the account of another person.

(b) Prior to the completion of a conversion, no person shall make any offer, or any announcement of an offer, for any security of the savings bank issued in connection with the conversion nor shall any person acquire securities of the converted savings bank issued in connection with the conversion in excess of the maximum purchase limitations established in the savings bank's approved plan or conversion pursuant to this rule.

(7) No proxy soliciting material required to be filed with the superintendent prior to use shall be furnished to the savings bank members or otherwise released for distribution until the use of such material has been authorized in writing by the superintendent. Proxy material authorized for use by the superintendent shall be mailed to the savings bank's members within ten days of such authorization unless extended by the superintendent in writing.

(8) No solicitation subject to this rule shall be made unless each person solicited is concurrently furnished or has previously been furnished a written proxy statement, the use of which has been authorized by the superintendent.

(9) Requirements for proxy.

(a) Proxies held with respect to voting rights in the savings bank may not be voted regarding the conversion. New proxies must be solicited for voting on the proposed plan of conversion.

(b) The form of proxy subject to this section shall be prepared in accordance with the requirements of the Securities Exchange Act of 1934 and the regulations adopted and orders issued by the securities and exchange commission pursuant to such act.

(c) The proxy statement or form of proxy shall provide that, where the person solicited specifies a choice with respect to any matter to be acted upon, the votes will be voted in accordance with the specification so made; and that if no choice is so specified, the votes will be cast as indicated in bold face type on the form of proxy.

(d) Proxies solicited for the purpose of voting for the plan of conversion shall be revocable in accordance with section 1701.48 of the Revised Code.

(e) The disclosure in the proxy statement should:

(i) Specify under what basis and why, in considering the proposed transaction, the board of directors determined to undertake the proposed transaction. This discussion should include a statement that management believes that the plan of conversion is equitable to the account holders and to the savings bank and the basis for that belief.

(ii) Discuss the compensation and other benefits that will be received by the directors and officers following the proposed transaction as compared with current compensation and benefits structure.

(10) The savings bank shall perform the following acts as may be duly requested in writing by a member of the savings bank with respect to a matter to be considered at the meeting to vote on the plan of conversion by any member of the savings bank who will defray in advance the reasonable expense to be incurred by the savings bank in the performance of the act or acts requested.

(a) The savings bank shall mail or otherwise furnish to a member upon request the following information as promptly as practicable after the receipt of a request:

(i) A statement of the approximate number of savings bank members who have been or are to be solicited on behalf of the management, or any group of savings bank members which a requesting savings bank member shall designate; and

(ii) An estimate of the cost of mailing a specified proxy statement, form of proxy or other communication to such savings bank members.

(b) Copies of any proxy statement, form of proxy or other communication furnished by the savings bank member and approved by the superintendent shall be mailed by the savings bank to such of the savings bank members as the savings bank member shall designate.

(c) Any such material which is furnished by the savings bank member shall be mailed with reasonable promptness by the savings bank after receipt of the material to be mailed, together with envelopes or other containers therefor and postage or payment for postage.

(d) Neither the management nor the savings bank shall be responsible for such proxy statement, form of proxy or other communication.

(11) No person soliciting a proxy from a savings bank member for the meeting to vote on the conversion shall solicit:

(a) Any undated or post-dated proxy;

(b) Any proxy which provides that it shall be deemed to be dated as of any date subsequent to the date on which it is signed by the savings bank member; and

(c) Any proxy which is not revocable in accordance with section 1701.48 of the Revised Code.

(12)

(a) Following approval by the superintendent of an application for conversion, the plan of conversion shall be submitted at a meeting of members.

(b) A notice of the meeting to consider a plan of conversion shall be given not more than sixty nor fewer than twenty days prior to the date of the meeting to each savings bank member entitled to receive notice of the meeting.

(13) The plan shall be approved by three-fifths vote of the total votes eligible to be cast at the meeting. A vote for the approval of the plan of conversion shall be deemed a vote for the approval of the amended articles of incorporation, constitution and bylaws, unless the articles of incorporation, constitution or bylaws of the converting savings bank require a greater proportion. Voting may be in person or by proxy.

(14)

(a)

(i) No offer to sell securities of a savings bank pursuant to a plan of conversion may be made prior to approval by the superintendent of the application for conversion, proxy statement and offering materials, and until the proxy statement has been authorized for use by the superintendent.

(ii) No sale of securities pursuant to this rule may be made except by means of offering materials which have been authorized for use by the superintendent. Such offering materials shall be prepared in accordance with the federal and state law.

(b) The proxy statement and offering materials authorized for use by the superintendent shall set forth the estimated pro forma market value of the savings bank and either:

(i) The price of each share, the minimum number of shares that must be sold in order to effect the conversion and the maximum number of shares that will be sold; or

(ii) The number of shares to be sold, the minimum aggregate subscription price which must be received in order to effect the conversion and the maximum aggregate subscription price which will be accepted. The minimum aggregate subscription price which must be received in order to effect the conversion must be not less than eighty-five per cent of the estimated pro forma market value of the savings bank, unless otherwise approved by the superintendent. The maximum aggregate subscription price which may be accepted shall be no more than one hundred fifteen per cent of the estimated pro forma market value of the converted savings bank. The price per share shall be no less than five dollars and no more than fifty dollars, unless otherwise approved by the superintendent.

(c) The division of financial institutions will review the price information required under this section in determining whether to give approval to an application for conversion. No representations may be made in any manner that such price information has been approved by the division of financial institutions or that the shares of stock sold pursuant to the plan of conversion have been approved or disapproved by the division of financial institutions or that the division of financial institutions has passed upon the accuracy or adequacy of any offering material covering such shares. A bold print legend stating same will be placed upon the front cover of the offering materials.

(d)

(i) Promptly after the superintendent has authorized the use of the offering materials, the savings bank shall make available order forms for the purchase of shares of capital stock in the offering to all persons who have subscription rights under the plan of conversion.

(ii) Each order form shall be accompanied or preceded by the offering materials for the subscription offering, direct community offering or public offering, as applicable, and a set of detailed instructions explaining how to properly complete such order forms.

(iii) The subscription price stated on each order form shall be the amount to be paid when the order form is returned.

(iv) Each order form shall be prepared so as to indicate to the person receiving it, in as simple, clear and intelligible a manner as possible, the actions which are required or available to him or her with respect to the form and the stock offered for purchase thereby.

(v) The order form may provide that it may not be modified without the savings bank's consent after its receipt as set forth in the order form.

(e) Notwithstanding any regulatory provision regarding penalties for early withdrawal from certificate accounts, the savings bank may allow payment for capital stock pursuant to the exercise of subscription rights by withdrawal from a certificate account without the assessment of such penalties. In the case of early withdrawal of only a portion of such account, the certificate evidencing such account shall be cancelled if the applicable minimum balance requirement ceases to be met, and the remaining balance will earn interest at the rate paid on regular savings accounts of such size.

(f) The sale of all shares of stock of the savings bank to be made under the plan of conversion, including any sale in a direct community or public offering, shall be completed as promptly as possible and within forty-five calendar days after the last day of the subscription offering period.

(i) The superintendent may grant one or more extensions of the time required to complete the sale of all shares of capital stock, provided that no single extension of time shall exceed ninety days.

(ii) Immediately upon the granting of an extension of time, the savings bank shall provide written notification of the extension to each subscriber in the subscription offering and, if applicable, each person who has ordered capital stock in the direct community offering or the public offering, which shall notify each subscriber and each ordering person of the right of each subscriber and each ordering person to increase, decrease, or rescind their subscription at any time prior to twenty days before the end of the extension period.

(iii) After the expiration of subscription rights and before consummation of the conversion, the savings bank shall file with and have declared effective by the superintendent a post-effective amendment to the offering materials delivered to subscribers upon the occurrence of any event, circumstance, or change of circumstance which would be material to the investment decision of a subscriber or, if applicable, a person who has ordered capital stock in the direct community offering or public offering. Each subscriber and each ordering person shall have at least twenty days from the date of the effective date of the post-effective amendment to increase, decrease, or rescind their subscriptions or orders.

(g) The savings bank shall pay interest at not less than the lowest passbook rate paid on its regular savings accounts on all amounts paid in cash or by check or money order to the savings bank to purchase shares of stock in the subscription offering or direct community offering or public offering from the date payment is received by the savings bank until the conversion is completed or terminated.

(G) Conversion in connection with the formation of a holding company. A savings bank may convert to a permanent stock form pursuant to this rule as part of a transaction in which a holding company is organized to acquire upon issuance all of the capital stock of the converted savings bank. In such a transaction, all persons with subscription rights as detailed in paragraph (F)(1)(a) of this rule shall receive, without payment, nontransferable rights to purchase capital stock of the holding company, rather than stock of the savings bank. Unless clearly inapplicable, all of the requirements of this rule shall apply to a conversion pursuant to this paragraph.

(H) Conversion in connection with an acquisition or merger.

(1) A savings bank may convert to a permanent stock form pursuant to this rule as part of a transaction in which an existing holding company acquires upon issuance all of the stock of the converted savings bank. In such a transaction, all persons having subscription rights pursuant to the plan of conversion of the savings bank shall receive, without payment, nontransferable subscription rights from the holding company to purchase its capital stock in lieu of capital stock of the converting association. Unless clearly inapplicable, all of the requirements of this rule shall apply to a conversion pursuant to this paragraph.

(2) A savings bank may convert to a permanent stock form pursuant to this rule as part of a transaction in which the converting savings bank merges into an existing stock savings bank, savings association or bank which is a wholly-owned subsidiary of a holding company. In such a transaction, the persons with rights pursuant to paragraph (F)(1)(a) of this rule shall receive, without payment, non-transferable rights from the holding company to purchase its capital stock in lieu of capital stock of the converting savings bank. Unless clearly inapplicable, all of the requirements of this rule shall apply to a conversion pursuant to this paragraph.

(3) A savings bank may convert to a permanent stock form pursuant to this rule as part of a transaction in which the savings bank is merged into an existing savings bank, savings association or bank which is not a wholly-owned subsidiary of a holding company. In such a transaction, persons with rights pursuant to paragraph (F)(1)(a) of this rule shall receive, without payment, non-transferable rights from the existing financial institution to purchase its stock in lieu of stock of the converting savings bank. Unless clearly inapplicable, all of the requirements of this rule shall apply to a conversion pursuant to this paragraph.

(4) In a conversion pursuant to paragraph (H)(1), (H)(2) or (H)(3) of this rule, the plan of conversion may provide that, to the extent the shares offered in the conversion are not purchased by the persons having subscription rights under the plan of conversion of the savings bank pursuant to paragraph (F)(1)(a) of this rule, the employee stock benefit plans and directors, officers and employees of the issuer may receive, without payment, non-transferable rights to purchase the stock being issued. In the event of an oversubscription pursuant to such provision, the shares shall be allocated on an equitable basis to be set forth in the plan of conversion or determined by the issuer's board of directors.

(5) The plan of conversion may provide for the sale of shares at purchase prices which are not uniform, subject to the approval of the superintendent.

(6) Except as the superintendent may otherwise authorize, the value of the total offering of shares sold pursuant to any conversion under paragraph (H)(1), (H)(2) or (H)(3) of this rule must be not less than one hundred per cent nor more than one hundred fifteen per cent of the estimated pro forma market value of the converted savings bank.

(7) Additional required disclosure.

(a) The savings bank must provide detailed reasons for the savings bank entering into the proposed transaction. The company must discuss the costs, benefits, drawbacks, and other alternatives to the proposed transaction in the context of explaining why the proposed transaction is preferable.

(b) The disclosure must discuss whether management believes the proposed transaction is in the best interests of account holders and the savings bank and, if so, detailed reasons why.

(c) The disclosure must:

(i) Include a discussion of the specific fiduciary duties owed to account holders by the directors and officers; and

(ii) Specify under what basis and why, in considering the proposed transaction and in the exercise of this fiduciary duties, the directors determined to undertake the proposed transaction. This discussion should include a statement that management believes that the plan of conversion is equitable to the account holders and to the institution and the basis for that belief.

(d) Discuss the compensation and other benefits that will be received by the directors and officers following the proposed transaction as compared with current compensation and benefits structure.

(I) This rule shall apply to any conversion for which the application filed pursuant to paragraph (D) of this rule is approved by the superintendent on or after the effective date of this rule. This rule shall not apply to any conversion with respect to which the application is approved in writing by the superintendent prior to the effective date of this rule, notwithstanding the fact that such conversion is completed after the effective date of this rule.

(J) Waiver.

(1) The provisions of this rule shall govern the conversion of mutual savings banks organized under Chapter 1151. of the Revised Code to stock savings banks organized under Chapter 1151. of the Revised Code. However, in the event of an emergency or in supervisory situations which do not rise to the level of an emergency, the superintendent may waive any or all requirements of this rule.

(2) The superintendent may a grant a waiver in accordance with paragraph (J)(1) of this rule, upon receipt of a written request from the savings bank. The written request must state:

(a) The specific requirements(s) or provision(s) the savings bank wants the superintendent to waive; and

(b) Demonstrate that the waiver is equitable and is not detrimental to the savings bank and the account holders, and is not contrary to the public interest.

Replaces: 1301:12-4-04

Effective: 08/09/2010
R.C. 119.032 review dates: 04/14/2015
Promulgated Under: 119.03
Statutory Authority: 1163.24
Rule Amplifies: 1161.111
Prior Effective Dates: 11-17-91, 6-3-04

1301:12-4-05 Conversion to savings bank charter.

(A) Applications for the conversion to a savings bank organized and chartered under the laws of this state shall be filed with the division of financial institutions in accordance with section 1161.63 or 1161.631 of the Revised Code, and this rule.

(B) In addition to the requirements of section 1161.63 or 1161.631 of the Revised Code, the application shall contain:

(1) A copy of the proposed amendments to the applicant's articles of incorporation;

(2) A copy of the constitution and bylaws proposed to be adopted or amended by the applicant;

(3) A plan of conversion including:

(a) An updated business plan detailing the applicant's intention with regard to operating practices, a projected budget, management policies and compensation, lending policies, the payment of dividends and interest, a list of the services currently offered by the applicant and any services to be added or deleted as a result of the charter conversion, and any other information regarding the prudent operation of a savings bank;

(b) Details as to how the applicant plans to comply with the laws pertaining to savings banks that differ from the laws formerly governing the applicant; and

(c) A description of the estimated expenses and financial impact of the conversion.

(4) Copies of the applicant's annual audit reports and report of income and condition for the last three calendar years;

(5) A comprehensive statement of the applicant's record of helping to meet the credit needs of its entire community, including low- and moderate-income neighborhoods for the last three calendar years;

(6) The names, addresses, experience, and general character of the applicant's officers, directors, and controlling persons;

(7) A comprehensive description of the applicant's corporate structure including authorized and outstanding capital, holding companies, subsidiaries, service corporations, and affiliates;

(8) A description of the services rendered by the applicant's holding companies, subsidiaries, service corporations, and affiliates;

(9) A balance sheet for each holding company, subsidiary, service corporation, and affiliate;

(10) The locations of the applicant's branches;

(11) Information regarding any supervisory or enforcement actions taken by regulators within the last three calendar years;

(12) A copy of the most recent regulatory report(s) of examination;

(13) Evidence of all applicable federal regulatory approvals; and

(14) Such other information as the superintendent, in his discretion, may request.

(C) Notwithstanding paragraph (B) of this rule, the applicant may request permission to file an abbreviated application to convert to a savings bank. The abbreviated application shall contain such information as the superintendent, in his discretion, may require. In order to make a determination as to whether an applicant shall be permitted to file an abbreviated application, the superintendent may consider, among other things, the availability from alternative sources of the information required in paragraph (B) of this rule.

(D) Prior to approving the application for charter conversion, the superintendent shall make such inquiry as is necessary to determine whether the applicant will be able to commence operations as a savings bank established and operated under the provisions of Chapters 1161. to 1165. of the Revised Code.

(1) In order to determine the applicant's overall condition with regard to safety and soundness, the superintendent may conduct an entrance examination of the affairs of an applicant prior to approving the application for charter conversion. To the extent that the superintendent conducts an entrance examination, he may charge the applicant nonrefundable examination expenses in an amount no greater than two thousand five hundred dollars.

(2) The superintendent, in his discretion, may waive any requirement of this rule.

(E) If the applicant for conversion to a savings bank is a state chartered bank regulated by the Ohio division of banks, the applicant shall file a notice with the division of banks of its intent to convert to a savings bank. Such notice shall be filed at the time the applicant files its application with the division of savings banks.

R.C. 119.032 review dates: 04/14/2010 and 04/14/2015
Promulgated Under: 119.03
Statutory Authority: 1163.24
Rule Amplifies: 1163.13 , 1161.63 , 1161.631
Prior Effective Dates: 11-17-91, 6-3-04

1301:12-4-06 Remote service units.

(A) Transactions made under this rule are subject to the Electronic Funds Transfer Act

( 15 U.S.C. section 1693 et seq.) and Regulation E of the Federal Reserve Board ( 12 C.F.R. section 205.2 ).

(B) As used in this rule:

(1) "Generic data" means statistical information which does not identify any individual accountholder.

(2) "Personal security identifier" means any word, number, or other security identifier essential for an accountholder to gain access to an account.

(3) "Remote service unit" means an information processing device, including associated equipment, structures and systems, by which information relating to financial services rendered to the public is stored and transmitted, instantaneously or otherwise, to a financial institution.

Any such device not on the premises of a savings bank that, for activation and account access, requires use of a machine-readable instrument and personal security identifier in the possession and control of an accountholder, is a remote service unit.

The term includes, without limitation, point-of-sale terminals, merchant-operated terminals, cash-dispensing machines, and automated teller machines. It excludes automated teller machines on the premises of a savings bank, unless shared with other financial institutions. A remote service unit is not a branch, or other type of facility or agency of a savings bank under Chapter 1161. of the Revised Code.

(4) "Remote service unit account" means a savings or loan account or demand account that may be accessed through use of a remote service unit.

(C) A savings bank may establish or use remote service units and participate with others in remote service unit operations; however, no remote service unit may be used to enable accountholders to open a savings account or demand account or to establish a loan account.

(D) A savings bank shall provide a personal security identifier to each accountholder and require its use to gain access to a remote service unit; it may not employ remote service unit-access techniques that require the accountholder to disclose a personal security identifier to another person. The savings bank must inform each accountholder that the personal security identifier is for security purposes and shall not be disclosed to third parties. Any device used to activate a remote service unit shall bear the words "not transferable" or the equivalent. A passbook may not be such a device.

(E) A savings bank shall allow accountholders to obtain any information concerning their remote service unit accounts. Except for generic data or data necessary to identify a transaction, no savings bank may disclose account data to third parties other than the superintendent or his representatives, unless written consent of the accountholder is given or applicable law requires. Information disclosed to the superintendent will be kept in a manner to ensure compliance with any applicable privacy law. A savings bank may operate a remote service unit according to an agreement with a third party or share computer systems, communications facilities, or services of another financial institution only if such third party or institution agrees to abide by this rule as to information concerning remote service unit accounts in the savings bank.

(F) A savings bank shall take all steps necessary to protect its interest in financial services processed at each remote service unit, including obtaining available fidelity, forgery, and other appropriate insurance.

(G) All savings banks shall comply with security requirements of their insuring agency or as may be required by their surety bond carrier, and shall protect electronic data against fraudulent alterations or disclosure.

(H) A savings bank may share a remote service unit controlled by an institution not subject to examination by a federal or state regulatory agency only if such institution has agreed in writing that the remote service unit is subject to such examination by the division of financial institutions.

R.C. 119.032 review dates: 04/14/2010 and 04/14/2015
Promulgated Under: 119.03
Statutory Authority: 1163.24
Rule Amplifies: 1163.24
Prior Effective Dates: 11-17-91, 6-3-04