SECTIONS 350-357 - California Statutes

FINANCIAL CODE

SECTION 350-357

350. When authorized by the commissioner as provided in this
chapter a corporation may be formed by one or more persons in
accordance with the laws of this state for the purpose of conducting
a commercial banking business or a trust business, or both of them.
The qualification requirements of the Corporate Securities Law of
1968 shall not apply to the offer and sale of securities issued by
and representing an interest in or a direct obligation of a bank or
trust company incorporated under the laws of this state if the
securities are offered and sold pursuant to the commissioner's
authorization described in Section 691 or the securities are exempt
from authorization pursuant to Section 691.1, or by a regulation or
order of the commissioner.

351. No bank shall be a close corporation (as defined in Section
158 of the Corporations Code).

352. Except where explicitly stated or the context provides
otherwise, this division is applicable to the following:
(a) All corporations engaging in commercial banking, industrial
banking, or the trust business.
(b) All national banking associations authorized to transact
business in this state to the extent that the provisions of this
division are not inconsistent with and do not infringe paramount
federal laws governing national banking associations.
(c) All other corporations that subject themselves to the special
provisions and sections of this division.
(d) All other persons, associations, copartnerships, or
corporations who, by violating any of its provisions, become subject
to the penalties provided for in this division.

353. (a) A California state bank is a corporation incorporated
under Division 1 (commencing with Section 100) of Title 1 of the
Corporations Code that is, with the approval of the commissioner,
incorporated for the purpose of engaging in, or that is authorized by
the commissioner to engage in, the commercial or industrial banking
business.
(b) All provisions of law applicable to corporations generally,
including, but not limited to, the General Corporation Law (Division
1 (commencing with Section 100), Title 1 of the Corporations Code)
shall apply to banks. However, whenever any provision of this
division or any regulation or order issued under any provision (other
than this section) of this division applicable to banks is
inconsistent with any provision of law applicable to corporations
generally, that provision of this division or that regulation or
order shall apply and the provision of law applicable to corporations
generally shall not apply.

354. It shall be unlawful for any person, corporation, limited
liability company, partnership, firm, or any other form of business
entity allowed by law, to engage in or transact commercial banking
business, industrial banking business, or trust business within this
state except by means of a corporation duly organized for that
purpose.

355. No corporation shall hereafter be organized under the laws of
this state to transact the business of a commercial bank, industrial
bank, or trust company, except as provided in this chapter.

356. Neither the enactment of this code nor the amendment or repeal
thereof, nor the repeal of any statute affected thereby, shall take
away or impair any liability or cause of action existing or incurred
against any bank or trust company, or the shareholders, directors, or
officers thereof.

357. The amount of funds of a bank or trust company that are
deposited in any other financial institution (other than a Federal
Reserve Bank) shall not at any time exceed 10 percent of the sum of
shareholders' equity, allowance for loan and lease losses, capital
notes, and debentures of the depositing bank or trust company unless
the financial institution has been designated as a depositary for the
funds of the depositing bank or trust company by a vote of the
majority of the directors of the depositing bank or trust company,
and unless the financial institution has been approved by the
commissioner as a depositary for the purposes of this section. The
commissioner may, in his or her discretion, revoke his or her
approval of any such depositary and may, in his or her discretion,
limit the amount of funds that may be deposited by any bank or trust
company with any other financial institution. A deposit by one bank
or trust company with another financial institution shall not be
regarded as a loan.