Hawaii Revised Statutes 412. Code of Financial Institutions

ARTICLE 1. GENERAL PROVISIONS

  • 412:1-100 Short Title.
    This chapter shall be known and may be cited as the Code of Financial Institutions. [L 1993, c 350, pt of §1]
  • 412:1-101 Purpose.
    This chapter shall be liberally construed and applied to promote its underlying purposes and policies, which are as follows: (1) To simplify, clarify, and modernize...
  • 412:1-102 Scope and Application of Chapter.
    (a) This chapter shall be applicable to the following: (1) All Hawaii financial institutions; (2) Other persons, including foreign financial institutions, who subject themselves...
  • 412:1-103 Application to Existing Financial Institutions.
    (a) The provisions of this chapter shall apply to all financial institutions existing on July 1, 1993, except as provided in this section. (b) The...
  • 412:1-104 Names.
    (a) Unless authorized to engage in business as a financial institution in this State of the type indicated by the name or as otherwise...
  • 412:1-105 Deposits.
    Except as expressly authorized by this chapter or by federal law, no person shall solicit, accept, or hold deposits in this State. [L 1993,...
  • 412:1-106 Headings; References.
    The meaning or scope of any provision of this chapter is not affected by any heading. Any references in this chapter to federal laws or...
  • 412:1-107 Particular Provisions Prevail.
    Provisions of this chapter relating to a particular class of financial institutions or a particular matter shall prevail over provisions relating to financial institutions in...
  • 412:1-108 Jurisdiction Conferred Upon Circuit Court.
    For all matters requiring or permitting judicial action or remedy in this chapter, jurisdiction is conferred upon the circuit court of the judicial circuit in...
  • 412:1-109 Definitions.
    As used in this chapter, except as otherwise specifically provided herein: "Affiliate" with respect to an existing or proposed financial institution or a financial institution...

ARTICLE 2. DIVISION OF FINANCIAL INSTITUTIONS
PART I. ADMINISTRATION

PART II. EXAMINATIONS

  • 412:2-200 Examinations.
    (a) The commissioner shall examine each Hawaii financial institution at least once every twenty-four months, or more frequently as the commissioner may determine. (b)...
  • 412:2-201 Use of Federal Examinations.
    §412:2-201 Use of federal examinations. The commissioner may accept, adopt, or use in lieu of an examination prescribed by section 412:2-200 all or any part...

PART III. ENFORCEMENT ACTIONS

PART IV. CONSERVATORS AND RECEIVERS

PART V. SUPERVISED ACQUISITION OF FINANCIAL INSTITUTIONS

PART VI. PENALTIES, ADMINISTRATIVE FINES AND PROHIBITED ACTS

ARTICLE 3. ORGANIZATION AND MANAGEMENT OF
FINANCIAL INSTITUTIONS
PART I. GENERAL PROVISIONS

PART II. ORGANIZATION OF BANKS, SAVINGS BANKS, SAVINGS AND
LOAN ASSOCIATIONS, TRUST COMPANIES AND DEPOSITORY
FINANCIAL SERVICES LOAN COMPANIES

PART III. ORGANIZATION OF NONDEPOSITORY FINANCIAL SERVICES
LOAN COMPANIES

  • 412:3-300 Applicability of Part.
    The provisions of this part shall govern the organization of nondepository financial services loan companies in this State. [L 1993, c 350, pt of
  • 412:3-301 Application for License.
    (a) Any corporation or any person intending to form a corporation incorporated in this State may file an application with the commissioner for a license...
  • 412:3-302 Publication of Notice.
    (a) Once the application for a license is complete and has been accepted by the commissioner, the applicant shall publish a notice at least once...
  • 412:3-303 Informational and Comment Proceeding.
    (a) An informational and comment proceeding on the application shall not be mandatory and whether an informational and comment proceeding is held shall be within...
  • 412:3-304 Grant of Approval.
    (a) An application for a license shall be approved only if the commissioner finds that: (1) The proposed nondepository financial services loan company and holding...
  • 412:3-305 Denial of License.
    If the commissioner is not satisfied that the applicant meets all the criteria set forth for approval, the commissioner shall issue a written decision denying...
  • 412:3-306 Paid-In Capital and Surplus.
    (a) Every nondepository financial services loan company conducting business under the laws of this State shall at all times have paid-in capital and surplus of...

PART IV. MANAGEMENT OF STOCK FINANCIAL INSTITUTIONS

PART V. PLACES OF BUSINESS

PART VI. CONVERSIONS, MERGERS, CONSOLIDATIONS, ACQUISITIONS,
ASSUMPTIONS, AND VOLUNTARY DISSOLUTIONS

ARTICLE 4. DEPOSITS IN FINANCIAL INSTITUTIONS
GENERALLY

ARTICLE 5. BANKS
PART I. GENERAL PROVISIONS

  • 412:5-100 Definition.
    In this article the term "bank" means a corporation which has authority to operate as a bank under this chapter. [L 1993, c 350,...
  • 412:5-101 Necessity for Bank Charter.
    Except as expressly permitted by federal law or this chapter, no person shall engage in any activity for which a charter to operate as...

PART II. POWERS OF BANKS

PART III. LOANS AND INVESTMENTS

PART IV. INTRA-PACIFIC BANKS

ARTICLE 5A. INTERNATIONAL BANKING CORPORATIONS

PART II. APPLICATION PROCEDURES AND POWERS

PART III. FOREIGN BANK OFFICES AND AGENCIES--REPEALED

ARTICLE 6. SAVINGS BANKS
PART I. GENERAL PROVISIONS

  • 412:6-100 Definition.
    In this article, "savings bank" means a corporation which has the authority to operate as a savings bank under this chapter. [L 1993, c...
  • 412:6-101 Necessity for Savings Bank Charter.
    Except as expressly permitted by federal law or this chapter, no person shall engage in any activity for which a charter to operate as...

PART II. POWERS OF SAVINGS BANKS

  • 412:6-200 General Powers.
    (a) Except as expressly prohibited or limited by this chapter, a savings bank shall have the power to solicit, accept and hold deposits, engage...
  • 412:6-201 Powers Granted Under Federal Law.
    (a) In this section "federal power" means any activity, right, privilege, or immunity granted to a federal savings bank under any federal statute, rule, regulation,...
  • 412:6-202 Membership in Federal Home Loan Bank.
    Any savings bank may become a member of a federal home loan bank organized under authority of the Federal Home Loan Bank Act, or any...
  • 412:6-203 Service Corporations.
    (a) "Service corporation" means a corporation whose stock is owned entirely by one or more state or federally chartered savings banks or savings and...
  • 412:6-204 Operating Subsidiaries.
    (a) "Operating subsidiary" means a corporation other than a corporation referred to in section 412:6-306(g)(2) to (7) of which more than fifty per cent...

PART III. LOANS AND INVESTMENTS

ARTICLE 7. SAVINGS AND LOAN ASSOCIATIONS
PART I. GENERAL PROVISIONS

PART II. POWERS OF SAVINGS AND LOAN ASSOCIATIONS

  • 412:7-200 General Powers.
    (a) Except as expressly prohibited or limited by this chapter, a savings and loan association shall have the power to solicit, accept and hold...
  • 412:7-201 Powers Granted Under Federal Law.
    (a) In this section "federal power" means any activity, right, privilege, or immunity granted to a federal savings and loan association under any federal statute,...
  • 412:7-202 Membership in Federal Home Loan Bank.
    Any savings and loan association may become a member of a federal home loan bank organized under authority of the Federal Home Loan Bank Act,...
  • 412:7-203 Service Corporations.
    (a) "Service corporation" means a corporation whose stock is owned entirely by one or more state or federally chartered savings and loan associations or...
  • 412:7-204 Operating Subsidiaries.
    (a) "Operating subsidiary" means a corporation other than a corporation referred to in section 412:7-306(g)(2) to (7) of which more than fifty per cent...

PART III. LOANS AND INVESTMENTS

PART IV. MANAGEMENT OF MUTUAL SAVINGS
AND LOAN ASSOCIATIONS--REPEALED

ARTICLE 8. TRUST COMPANIES
PART I. GENERAL PROVISIONS

  • 412:8-100 Applicability of Article.
    This article shall apply to all financial institutions chartered under this article as trust companies or otherwise authorized to engage in the trust business...
  • 412:8-101 Definitions.
    In this article: "Client" means a customer of a trust company, including without limitation a settlor or beneficiary with a vested interest, the grantor...
  • 412:8-102 Necessity for Trust Company Charter.
    No person shall engage in the business of a trust company in this State or control any other person engaging in the business of a...
  • 412:8-103 Authority to Serve As Trustee
    . Unless chartered as a trust company under this chapter or otherwise specifically authorized by the laws of this State, no person shall hold itself...

PART II. POWERS OF TRUST COMPANIES

  • 412:8-200 General Powers.
    (a) Except as expressly prohibited or limited by this chapter, a trust company shall have the fiduciary powers specified in section 412:8-201, such powers...
  • 412:8-201 Fiduciary Powers.
    Every trust company shall have the power and authority to serve as a trustee, personal representative, conservator, assignee for the benefit of others, or...
  • 412:8-202 Acting As Agent.
    (a) A trust company may act as an agent in behalf of a principal in the transaction of any business or in the management of...
  • 412:8-203 Use of Nominees.
    A trust company acting in a fiduciary or agency capacity, and any fiduciary acting as a co-fiduciary with a trust company, may cause any stock,...
  • 412:8-204 Agreement Between Trust Companies and Banks.
    A trust company granted full trust powers may contract by written agreement with any bank or national banking association to carry on trust services in...

PART III. INVESTMENT OF TRUST COMPANY ASSETS

PART IV. INVESTMENT OF FIDUCIARY ASSETS

  • 412:8-400 General Requirements.
    Uniform Fiduciaries Act, see chapter 556. §412:8-400 General requirements. Within the limits of the standard of a prudent investor, a trust company as fiduciary,...
  • 412:8-401 Trust Funds Awaiting Investment.
    Uniform Fiduciaries Act, see chapter 556. §412:8-401 Trust funds awaiting investment. (a) Except as may be otherwise provided by the terms of the trust,...
  • 412:8-402 Common Trust Fund Investments.
    Uniform Fiduciaries Act, see chapter 556. §412:8-402 Common trust fund investments. (a) As used in this chapter the term "common trust funds" shall have...
  • 412:8-403 Disclosure of Fees.
    Uniform Fiduciaries Act, see chapter 556. §412:8-403 Disclosure of fees. All fees and commissions charged by a trust company to its clients or the...

ARTICLE 9. FINANCIAL SERVICES LOAN COMPANIES
PART I. GENERAL PROVISIONS

PART II. POWERS OF FINANCIAL SERVICES LOAN COMPANIES

  • 412:9-200 General Powers.
    Except as expressly prohibited or limited by this chapter, a financial services loan company shall have the power to make loans where the interest...
  • 412:9-201 Powers that Require Regulatory Approval.
    (a) A financial services loan company may sell or refer the following products and services and collect premiums or fees for the sale or referral...
  • 412:9-202 Prohibitions.
    Except as otherwise expressly authorized by this chapter, a financial services loan company shall not: (1) Employ its funds, directly or indirectly, in trade or...

PART III. LOANS AND EXTENSIONS OF CREDIT

PART IV. DEPOSITORY FINANCIAL SERVICES LOAN COMPANIES

PART V. NONDEPOSITORY FINANCIAL SERVICES LOAN COMPANIES

ARTICLE 10. CREDIT UNIONS
PART I. GENERAL PROVISIONS

  • 412:10-100 Definitions.
    The following definitions shall apply in construing this article unless such application would produce a result clearly inconsistent with the context of the statutory...
  • 412:10-101 Necessity for Credit Union Charter.
    Except as expressly permitted by federal law or this chapter, no person shall engage in the business of a credit union, represent itself as...
  • 412:10-102 Capital Stock or Surplus.
    A credit union shall have no capital stock, and shall have no minimum paid-in capital or surplus requirement. [L 1993, c 350, pt of §1]
  • 412:10-103 Application for Charter.
    (a) Five or more residents of this State who share a common bond may file an application with the commissioner to engage in the business...
  • 412:10-104 Articles and Bylaws.
    (a) The applicants shall file with the commissioner proposed articles of association and bylaws as a part of the application for organization. (b) The articles...
  • 412:10-105 Disclosure of Information.
    The identity of each original chartering applicant, and any information which is not confidential shall be available to the public. The original [chartering] applicants may...
  • 412:10-106 Deposit and Share Insurance.
    (a) The organizers of the proposed credit union shall apply for insurance on share and deposit accounts from the National Credit Union Administration or any...
  • 412:10-107 Grant of Approval.
    (a) Approval of the application for charter shall be granted if the commissioner finds that: (1) The proposed credit union will be formed for legitimate...
  • 412:10-108 Denial of Charter.
    If the commissioner is not satisfied that the applicant meets all the criteria set forth for approval, the commissioner shall issue a written decision denying...
  • 412:10-109 Membership.
    (a) The membership of a credit union shall consist of those persons who share a common bond set forth in the articles of association,...
  • 412:10-110 Membership Meetings.
    (a) A credit union shall hold annual and special meetings of members when and as required by its bylaws. The bylaws shall provide that members...
  • 412:10-111 Voting.
    (a) Persons eligible to vote at a credit union meeting shall be: (1) A member for at least three months; provided, that during the first...
  • 412:10-112 Board of Directors.
    (a) The governing body of a credit union shall be its board of directors. The board shall consist of an odd number of directors, at...
  • 412:10-113 No Compensation of Directors or Committee Members.
    No member of the board, no officer of the board other than the treasurer, and no member of any committee, other than an employee, shall...
  • 412:10-114 Credit Committee.
    (a) If the bylaws provide for a credit committee, the board of directors may appoint or the members may elect a credit committee. The credit...
  • 412:10-115 Credit Manager.
    If the bylaws provide, the board of directors may appoint a credit manager in addition to or in lieu of a credit committee, subject to...
  • 412:10-116 Loan Officers.
    (a) The board of directors, and if given such power by the board, the credit committee or the credit manager, may appoint one or more...
  • 412:10-117 Supervisory Committee.
    (a) Within thirty days following each annual election, the board of directors shall appoint a supervisory committee consisting of no fewer than three and not...
  • 412:10-118 Record of Officials.
    Within thirty days after election or appointment, a record of the names and addresses of the members of the board and such other committees and...
  • 412:10-119 Conflicts of Interest.
    No director, committee member, officer, agent or employee of the credit union shall in any manner, directly or indirectly, participate in the deliberation upon or...
  • 412:10-120 Suspension or Removal of Officials.
    (a) The supervisory committee by a two-thirds vote of the entire committee may suspend any member of the credit committee or the credit manager and...
  • 412:10-121 Central Credit Unions.
    (a) Central credit unions may be chartered under this article and shall enjoy all powers of other credit unions chartered under this article and be...
  • 412:10-122 Taxation.
    (a) All credit unions, now or hereafter chartered under this chapter shall have the same immunity from state and local taxation that federally chartered credit...
  • 412:10-123 Fiscal Year.
    The fiscal year of every credit union organized under this article shall end at the close of business on December 31. [L 1993, c 350,...
  • 412:10-124 Conducting Business Outside This State.
    A credit union organized under this article may conduct business outside of this State in other states or territories where it is permitted to conduct...
  • 412:10-125 Credit Union Advisory Board.
    (a) There shall be a credit union advisory board consisting of five members appointed pursuant to section 26-34 by the governor who shall also designate...

PART II. POWERS OF CREDIT UNIONS

PART III. ACCOUNTS

  • 412:10-300 Applicability of Other Provisions of This Chapter.
    Except to the extent that the provisions of this part are inconsistent, all provisions of article 4 shall apply to the share accounts and...
  • 412:10-301 Share Accounts and Membership Shares.
    (a) Share accounts and membership shares (if any) shall be subscribed to and paid for in such manner as the bylaws prescribe. (b) A credit...
  • 412:10-302 Dividends.
    (a) At such intervals as the board of directors may authorize, and after provision for required reserves, the board of directors may declare dividends to...
  • 412:10-303 Deposit Accounts.
    (a) A credit union may accept deposit accounts from its members, other credit unions and governmental units subject to the terms, rates and conditions established...
  • 412:10-304 Withdrawals.
    (a) Funds in share and deposit accounts may be withdrawn for payment to the account holder or third parties in such manner and in accordance...
  • 412:10-305 Minor Accounts.
    Payments on share and deposit accounts may be received from a minor who may withdraw funds from such accounts including the dividends and interest thereon....
  • 412:10-306 Joint Accounts.
    A member may designate any person or persons to own a share or deposit account with the member in joint tenancy with the right of...
  • 412:10-307 Trust Accounts.
    (a) Share and deposit accounts may be owned by a member in trust for a beneficiary. (b) Beneficiaries may be minors, but no beneficiary unless...
  • 412:10-308 Payable-On-death Accounts.
    Notwithstanding any other provision of law, a credit union may establish share and deposit accounts payable to one or more persons during their lifetimes and...
  • 412:10-309 Liens.
    The credit union shall have a lien on the share accounts and accumulated dividends of a member for any sum owed the credit union by...
  • 412:10-310 Dormant Accounts.
    (a) If there has been no activity on a share or deposit account for one year, the credit union may impose a reasonable maintenance fee....

PART IV. LOANS

  • 412:10-400 Applicability of Part.
    This part sets forth the requirements and restrictions for lending by all credit unions. A credit union may make loans and extensions of credit...
  • 412:10-401 General Requirements for Loans.
    A credit union shall make loans and extensions of credit that are consistent with prudent lending practices and in compliance with all applicable federal and...
  • 412:10-402 Loans to Members.
    A credit union may make unsecured and secured loans to its members for such purposes and upon such conditions as the bylaws may provide. The...
  • 412:10-403 Interest Rates.
    (a) The interest rates on loans shall be determined by the board of directors, subject to the following: (1) The interest rate on any credit...
  • 412:10-404 Other Charges.
    (a) In addition to interest charged on loans, a credit union may charge members all reasonable expenses in connection with the making, closing, disbursing, extending,...
  • 412:10-405 Applications.
    Except as provided in section 412:10-410, every application for a loan shall be made in writing upon a form prescribed by the credit union. Each...
  • 412:10-406 Prepayment of Loan.
    A member may repay a loan, prior to maturity in whole or in part on any business day without penalty. [L 1993, c 350, pt...
  • 412:10-407 Limitations on Obligations of One Borrower.
    (a) No credit union shall permit a person to become indebted or liable to it, either directly or indirectly, on loans or extensions of credit...
  • 412:10-408 Loans to Officials.
    Loans may be made to officers, directors and members of the credit and supervisory committees of the credit union, provided that: (1) The loan complies...
  • 412:10-409 Real Estate Mortgage Loans.
    (a) The amount of any credit union loan secured by a mortgage on real property shall be limited to the following percentages of the appraised...
  • 412:10-410 Lines of Credit.
    A credit union may offer its members self-replenishing lines of credit. Loan advances within the limits of a line of credit may be made without...
  • 412:10-411 Loans to Other Credit Unions.
    A credit union may make loans to other credit unions, central credit unions, corporate credit unions or a central liquidity facility established under federal or...
  • 412:10-412 Participation Loans.
    Participation loans to credit union members jointly with other credit unions, credit union service organizations, or financial organizations shall be in accordance with written policies...
  • 412:10-413 Other Loan Programs.
    (a) A credit union may loan to members under any government guaranteed or insured loan program and such insurance on these loans shall be deemed...

PART V. INVESTMENTS

  • 412:10-500 Applicability of Part.
    This part sets forth the requirements and restrictions for investments made by all credit unions. A credit union may invest its assets as may...
  • 412:10-501 General Requirement for Investments.
    (a) A credit union shall make investments that are consistent with prudent investment practices and in compliance with all applicable federal and state law. (b)...
  • 412:10-502 Permitted Investments.
    (a) To the extent specified herein, a credit union may invest its own assets in: (1) Securities and obligations of the United States government and...
  • 412:10-503 Deposits Made by Credit Unions.
    A credit union may deposit any of its funds in a deposit or share account with another depository institution; provided that the other depository institution...

PART VI. RESERVE ALLOCATIONS

  • 412:10-600 Regular Reserve.
    (a) At the end of each accounting period and before the payment of any dividend, each credit union shall set aside from its gross...
  • 412:10-601 Special Reserves.
    The board of directors may establish, or [the] commissioner may require any credit union on an individual basis to establish, and transfer funds into one...
  • 412:10-602 Risk Assets.
    The commissioner shall define by rule what is deemed "risk assets" for the purpose of establishing the regular reserve. [L 1993, c 350, pt...

PART VII. OTHER MEMBER SERVICES

  • 412:10-700 Insurance for Members.
    A credit union may purchase or make available insurance for its members either on an individual or group basis. [L 1993, c 350, pt...
  • 412:10-701 Liability Insurance for Officers
    . A credit union may purchase and maintain insurance on behalf of any person who is or was a director, officer, employee, or agent of...
  • 412:10-702 Group Purchasing
    . A credit union may enter into marketing arrangements and joint ventures with other credit unions, or organizations or financial institutions to facilitate its members'...
  • 412:10-703 Money-Type Instruments
    . A credit union may collect, receive and disburse monies in connection with the providing of negotiable checks, money orders, travelers checks, and other money-type...
  • 412:10-704 Retirement Accounts
    . A credit union may act as trustee or custodian of any form of retirement, pension, profit-sharing, or deferred income accounts authorized under federal law...

PART VIII. CORPORATE CREDIT UNION

  • 412:10-800 Application of Part.
    Provisions of this part shall govern the formation and operations of a corporate credit union. Only one corporate credit union may be chartered under...
  • 412:10-801 Purposes.
    The purposes of the corporate credit union are to: (1) Accumulate and prudently manage the liquidity of its member credit unions through interlending and investment...
  • 412:10-802 Membership.
    Membership in the corporate credit union shall consist of and be limited to the credit union subscribers to the articles of association, credit unions chartered...
  • 412:10-803 Organization.
    The application, approval and formation process for the corporate credit union shall be the same as for any other credit union, except that ten or...
  • 412:10-804 Management and Operation of Corporate Credit Union.
    The corporate credit union shall be organized and operated like any other credit union, except that: (1) Persons eligible to hold office and vote shall...
  • 412:10-805 Powers.
    The corporate credit union shall have all the rights, powers and privileges of any other credit union chartered under this article, as well as the...
  • 412:10-806 Participation in Central System.
    The corporate credit union may enter into agreements and subscribe to any required shares for the purpose of participation in the National Credit Union Administration...
  • 412:10-807 Collection on Loans to Members.
    (a) For any amounts due from a member to the corporate credit union, the corporate credit union shall have: (1) A right of immediate setoff...
  • 412:10-808 Meetings.
    The board of directors of the corporate credit union shall meet at least every ninety days in person or by means of telephone as provided...

ARTICLE 11. FINANCIAL INSTITUTION HOLDING COMPANIES

ARTICLE 12. INTERSTATE BRANCHING AND BANK
MERGERS

ARTICLE 13. THE HAWAII INTERNATIONAL BANKING ACT
PART I. GENERAL

  • 412:13-100 Title and Purpose.
    (a) This article shall be known and may be cited as the Hawaii International Banking Act. (b) This article is intended generally to provide...
  • 412:13-101 Application to Existing Foreign Banks.
    (a) The licenses of foreign banks to open and maintain agency offices and representative offices in this State which were granted before and which...
  • 412:13-102 Definitions.
    As used in this article: "Affiliate" has the same meaning as set forth in section 2(k) of the Bank Holding Company Act (12 U.S.C....

PART II. DIRECT BRANCH, AGENCY, AND REPRESENTATIVE OFFICES OF
FOREIGN BANKS

PART III. HAWAII BRANCHES OF OUT-OF-STATE FOREIGN BANKS

ARTICLE 14. MISCELLANEOUS PROVISIONS

Revision Note

Chapter heading added by revisor.

Cross References

Money transmitters act, see chapter 489D.

Secure and fair enforcement for mortgage licensing act, see chapter 454F.

Rules of Court

Applicability of Hawaii Rules of Civil Procedure, see HRCP rule 81(b)(12).

Last modified: October 27, 2016