Financial Institutions Act

The act governs the powers and operations of banks and trust companies, enumerating the corporate authority such institutions may exercise — taking deposits, offering safe deposit and escrow services, joining federal banking and deposit insurance systems, borrowing from and holding stock in a federal home loan bank, acting as fiscal or transfer agent, and selling certain insurance and annuity products — along with a mechanism for seeking parity with rights granted to national banks. A large portion is devoted to fiduciary business: the circumstances under which an institution may be appointed trustee, guardian, executor, administrator, or successor fiduciary, whether security or bond is required, how fiduciary assets must be segregated and recorded, and the accounting, reporting, and judicial supervision that follow. The act also constrains permissible investments, lending, and real estate holdings by reference to defined measures of capital, surplus, and extensions of credit, restricts self-dealing and conflict-of-interest transactions absent disclosure and consent, and addresses liquidation preferences and the consequences of violations.

Editorial summary generated from the text of this act. It is not part of the statute — read the sections below for the operative language.