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Can you summarize NJST Chapter 17:16E?
CORPORATIONS AND INSTITUTIONS FOR FINANCE AND INSURANCE >
Short Summary
The provided legal document content pertains to the regulation of interlocking relationships among financial institutions in New Jersey. It states that a person who is a director or officer of a bank holding company can also be a director or officer of any one or more banks that are subsidiaries of the holding company. Similarly, a person who is a director or officer of a bank that is a subsidiary of a bank holding company can also be a director or officer of any one or more other banks that are subsidiaries of the holding company. Additionally, if more than 50% of the stock of two or more financial institutions is owned directly by the same persons, a person who is a director or officer of any one of those financial institutions may also be a director or officer of any one or more of the other institutions. However, a person who is a director, officer, or manager of a financial institution with a principal or branch office in a particular municipality cannot serve as a director, officer, or manager of another financial institution with a principal or branch office in the same municipality or in a contiguous or adjacent municipality. The Commissioner of Banking is responsible for enforcing the provisions of this act and may issue rules and regulations to that effect. The Commissioner may also waive the prohibition on interlocking relationships for a period of 2 years under certain circumstances. The document provides definitions for key terms such as ‘financial institution’, ‘municipality’, ‘contiguous’, ‘adjacent’, and ‘manager’. It also states that compliance with the federal ‘Depository Institution Management Interlocks Act’ and its regulations deems compliance with the provisions of the New Jersey act. Overall, these documents aim to promote fair competition among financial institutions by regulating interlocking relationships in specific geographical areas.
Whom does it apply to?
Directors, officers, and managers of financial institutions, including State or National banks, trust companies, savings banks, State or Federal savings and loan associations, State or Federal credit unions, and bank holding companies
What does it govern?
Interlocking relationships among financial institutions located in the same municipality, or in contiguous or adjacent municipalities
What are exemptions?
Interlocking relationships that existed prior to the effective date of this act may continue for a reasonable period of time necessary for termination in an orderly manner, but all such relationships must be terminated within 1 year after the effective date of this act. The Commissioner of Banking may waive the application of the prohibition for a period of 2 years upon formal application and for good cause shown, if special circumstances warrant such action and when such waiver is in the public interest.
What are the Penalties?
No specific penalties are mentioned in these documents.
Jurisdiction
New Jersey