Division of Financial Institutions may authorize restriction of withdrawals; procedure; segregation of new deposits.
1. The Division of Financial Institutions may, upon a proper application in writing showing good cause therefor, authorize any bank in this state or organized under this title to restrict, for a limited period, the percentage of withdrawals from all of the accounts of such bank.
2. Whenever, in the interest of public business, any bank doing business in this state deems it necessary to curtail or restrict the withdrawals of its patrons for a limited period, such bank, through its proper officers, may make application in writing, setting forth the reasons therefor, to the Division of Financial Institutions requesting an order or authorization from the Division to restrict, for a limited period, withdrawals by the depositors of the bank to a specific percentage of their respective deposits.
3. Upon receipt of such application by the Division of Financial Institutions, and good cause appearing therefor, the Division may issue to the applicant an authorization specifying therein the percentage of all deposits which the bank may pay to its depositors, and the period to which such restriction or limitation may extend. For good cause shown, the Division of Financial Institutions may shorten, cancel, extend or renew such authorization whenever the Division deems such action proper in the interest of public business.
4. Any bank obtaining any order or authorization authorized by this section shall post and maintain, during the period of restriction, in a conspicuous place in or upon its banking premises, a certified copy of each order or authorization.
5. The Division of Financial Institutions may authorize all such banks thereafter to receive new deposits, which must be segregated from the old deposits, and the new deposits are not subject to any restriction as to the withdrawal thereof, except as provided in the terms of any time certificate of deposit or savings passbook; and the new deposits must be invested in such liquid assets as may be approved by the Division in order that such banks may at all times have sufficient funds available to meet the demands on such new deposits in accordance herewith.
Last modified: February 26, 2006