399-407

FINANCIAL CODE
SECTION 399-407




399.  In this article:
   (a) "Preopening expenditure" means any obligation incurred, or sum
disbursed, by a bank prior to the time when it commences to transact
banking business, for the purpose of organizing such bank.
   (b) "Preopening noncapital expenditure" means any preopening
expenditure other than such preopening expenditures as may be
capitalized.



400.  The articles of incorporation of the proposed bank or trust
company shall be submitted to the commissioner for his or her
approval before they are filed with the Secretary of State pursuant
to the Corporations Code. After the articles have been filed with the
Secretary of State the proposed bank or trust company shall:
   (a) File with the commissioner a copy of its articles of
incorporation, certified by the Secretary of State.
   (b) File with the commissioner a statement in the form and with
any supporting data as the commissioner may require showing that the
entire contributed capital has been fully paid in lawful money,
unconditionally, and that the funds representing the contributed
capital, less sums spent as authorized by this article for preopening
expenditures are on deposit in a state or national bank in this
state, subject to withdrawal on demand.
   (c) Pay to the commissioner a fee of two thousand five hundred
dollars ($2,500).



401.  If the commissioner finds that the proposed bank or trust
company has in good faith complied with all the requirements of law
and fulfilled all the conditions precedent to commencing business
imposed by this code or by regulation, the commissioner shall, within
30 days after the statement and supporting data specified in Section
400 have been filed with him or her, issue in duplicate a
certificate of authorization to transact business as a bank or trust
company, as the case may be, and shall transmit one copy to the bank
or trust company and place one copy on file in the department. The
certificate of authorization shall state that the corporation named
therein has complied with all the provisions of this code governing
organization of banks or trust companies and that it is authorized to
transact the business specified therein.



402.  It shall be unlawful to accept payment of subscriptions for
shares of any corporation proposing to engage in the banking or trust
business unless authority to organize such corporation has been
granted by the commissioner.


403.  No corporation organized to transact a commercial banking or
trust business shall transact any business until the commissioner has
issued his or her certificate authorizing it to transact such
business. No bank or trust company shall incur any indebtedness
except that which is incidental to its organization until the amount
of its contributed capital has been fully paid in lawful money to the
cashier or chief financial officer thereof.



404.  If the proposed bank or trust company fails to file evidence
of incorporation and organization with the commissioner pursuant to
Section 400 within one year after the approval of the application for
authority to organize the bank or trust company, the right to
organize the bank or trust company automatically terminates. The
commissioner, however, for good cause on written application filed
before the expiration of the original period or any additional
period, as the case may be, and payment of a fee of one hundred
dollars ($100), may extend for additional periods not in excess of
six months each the time within which the bank or trust company may
be organized.



405.  If the proposed bank or trust company fails to open for
business within 90 days after the issuance of the certificate of
authorization, the right to transact business automatically
terminates. The commissioner, however, for good cause on written
application filed before the end of said 90-day period, may extend
for one additional period of not to exceed 90 days the time within
which the bank or trust company may open for business.



406.  It is unlawful to apply any part of the funds collected from
subscribers or shareholders to the payment of commissions or fees for
obtaining subscriptions or selling shares or, except with the prior
approval of the commissioner, to the payment of preopening noncapital
expenditures.


407.  Every bank and trust company shall keep posted in a
conspicuous place in its banking room at its head office the
certificate of authority to transact a banking or trust business
issued by the commissioner.