Purpose And Scope

(1) In enacting Public Chapter 768, “Acts of 1996” (The Bank Reform Act), the General Assembly expressed its intent to broaden the permissible activities available to state-chartered banks and to insure that Tennessee chartered financial institutions can compete on an equal footing with other entities who offer financial products or services. The purpose of this chapter is to establish the limits within which state-chartered banks may make certain investments and engage in certain activities with particular emphasis on the guidelines which must be followed in the interest of safety and soundness. In addition, to adequately monitor the safety and soundness of state-chartered banks, the Department must be notified any time a state-chartered bank forms a subsidiary or begins engaging in a new activity through an existing subsidiary. (2) The existence of any subsidiary formed prior to the effective date of this Chapter shall not be subject to the application and/or notice requirements of this Chapter. However, if a subsidiary formed prior to the effective date of this Chapter seeks to engage directly or indirectly in a new activity after the effective date of this Chapter, it must file an application and get the Commissioner’s approval for the new activity or give notice if the activity is listed in Rule 0180-19-.03(1). (3) The limitations on certain investments found in Rules 0180-19-.08, .09 and .11 shall apply to all investments upon the effective date of this rule. However, should any bank’s investment exceed these limitations upon these rules becoming effective the bank may maintain the investment for a period of time not to exceed three (3) years so long as the bank submits a plan of divestiture to the Commissioner within ninety (90) days of the effective date of this rule. (4) In enacting T.C.A. §§45-2-1801 - 1809 the General Assembly expressed its intent to broaden the permissible activities available to state-chartered banks and to insure the soundness of the state’s banking system by protecting depositors. The purpose of this chapter is to establish the limits within which state-chartered banks may offer securities services to their customers with particular emphasis on the guidelines which must be followed in the interest of safety and soundness. While this chapter greatly expands the permissible securities activities of state-chartered banks, it does not empower the Commissioner to authorize state-chartered banks to directly or indirectly through a subsidiary, engage in any activity which federal law would otherwise prohibit. (5) The Commissioner, however, may vary or may waive a requirement where permitted by statute.