| (a) In order to obtain approval for a subsidiary, the
savings bank must file with the Commissioner an application accompanied
by the following information:
(1) an audited financial statement in the event of
acquisition of an existing company;
(2) a certified board resolution of the board of the
applying savings bank approving the investment in the proposed subsidiary;
(3) a certified copy of the certificate of formation
and bylaws of the proposed subsidiary;
(4) the acquisition terms, cost, or investment requirements
of the savings bank;
(5) projected operating statements of the proposed
subsidiary for the first 3 years of operation;
(6) an attorney's opinion letter as to direct, indirect,
and/or contingent liability of the savings bank and the proposed subsidiary;
(7) an outline of plans for operation of the proposed
subsidiary;
(8) evidence that the proposed subsidiary will have
adequate management and operating personnel with proper supervision
by savings bank management;
(9) plans for the safeguarding of assets of the proposed
subsidiary;
(10) affidavits from all directors of a savings bank
and the proposed subsidiary fully disclosing any interest they may
directly or indirectly have in the proposed subsidiary; and
(11) such other information or data as the Commissioner
may require.
(b) The Commissioner may approve an investment in a
subsidiary if the Commissioner finds that:
(1) the operation and condition of the savings bank
affords no basis for supervisory objection;
(2) there are adequate income and reserves to support
the proposed investment;
(3) the operations of the subsidiary will be clearly
distinguishable from those of the parent savings bank; and
(4) the subsidiary is or will be profitably operating
within a reasonable period of time or the investment is reasonably
projected to result in economic benefit to the savings bank.
(c) If the Commissioner finds that a savings bank has
abused or is abusing the authority to invest in a subsidiary, the
Commissioner may exercise discretion in denying such savings bank
the right to future exercise thereof until such abuse or abuses have
been corrected.
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