New Hampshire Statutory Changes to Banks, Credit Unions & Trust Companies

By Baker Newman Noyes December 8, 2015

In July of 2015, the Governor of New Hampshire signed into law a new set of banking laws helping to clarify existing regulations that have been around for many years. These new laws, most of which are effective beginning October 1, 2015, do not affect banking customers; but rather they are focused on management, organization and operation of banks, credit unions and trust companies across the state of New Hampshire. The following list represents the different chapters of new legislation and the associated entities being governed by each one:

• RSA Chapter 383-A – All banks and credit unions
• RSA Chapter 383-B – Depository banks both mutual and stock, and the holding companies that own them
• RSA Chapter 383-C – Trust companies which are classified as banks, but are not authorized to accept deposits
• RSA Chapter 383-D – Family trust companies
• RSA Chapter 383-E – Credit unions

Under the new laws, depository banks are distinguished from trust companies and all will still continue to be classified as “banks.” For new depository banks, the organization process has been streamlined to a 4-6 month process with plans and applications required. Existing depository banks will see more flexibility with board meetings since there is no longer a requirement for a minimum physical attendance. A depository bank will be required to maintain a reserve in an amount that is not less than the minimum established by the Federal Reserve System. This requirement eliminates the 5% guaranty fund for mutual banks. Remaining articles simplify topics such as interstate banking, combinations, branch offices and deposit accounts. In addition, the Commissioner has recently announced that the per diem rate for state examinations will increase over a 3-year period to bring it closer in line with the banking department’s costs.

There is no longer a separate designation for “non-depository” trust companies. As listed above, trust companies are classified as banks that are not authorized to accept deposits. The new laws have created a requirement for trust companies to maintain a cash pledge (highly liquid or approved cash equivalents) between $250,000 and $1 million. There is no longer a surety bond requirement. Special assessments would be collected only from trust companies which are not authorized to accept deposits and if liquidation was imminent. The limit is up to $3 million, payable within 30 days and could be paid out of its own pledge account. Similar to depository banks, trust companies have also received a more streamlined organization process and board meeting flexibility.

Family trust companies and credit unions are also affected by the general improvements in the organization process. The majority of changes with these entities serve to help clarify and streamline the regulations. You may visit the New Hampshire Bankers Association or New Hampshire Banking Department for more information. For more information on this topic contact your BNN advisor at 1.800.244.7444.