DEPARTMENT OF BANKING AND INSURANCE
DIVISION OF BANKING
Proposed Readoption with Amendments: N.J.A.C 3:1
Proposed Repeals: N.J.A.C. 3:1-2.15, 8, 9.3, 9.4, 9.5 9.6 and 15.2 through 15.7
Authorized By: Karen L. Suter, Commissioner, Department of Banking and Insurance
Authority: N.J.S.A. 17:1-8, 17:8.1, 17:2A-1 et seq., 17:9-41, 17:9A-1 et seq., 17:9A-9, 17:9A-24a, 17:9A-25.2, 17:9A-316, 17:11C-49, 17:12B-1 et seq., 17:16F-11, 17:16I-1 et seq., 17:16L-1 et seq. and 17:16N-1 et seq.
Proposal Number: PRN 2001-28
Submit comments by February 15, 2001 to:
Fax: (609) 292-0896
The agency proposal follows:
The Department of Banking and Insurance ("Department") proposes to readopt N.J.A.C. 3:1, which is scheduled to expire on March 6, 2001 pursuant to Executive Order No. 66 (1978).
Subchapter 1, Interest and Usury, establishes maximum interest rates on certain types of loans and is promulgated pursuant to N.J.S.A. 31:1-1. Several changes are proposed. Effective dates of changes to the interest rates set forth at N.J.A.C. 3:1-1.1(a), (b) and (e) and 1.2(c) have been deleted because the changes were effective over eighteen years ago and the operative dates are needed in the rule at the current time. N.J.A.C. 3:1-1.1(d) and 1.2(b) have been deleted because they are redundant.
Subchapter 2 specifies procedures for applying to the Department for bank, savings bank or savings and loan charters, branches, and other types of facilities. It also specifies procedures for publishing notice of applications as well as procedures for hearings. The proposal clarifies that an oral presentation is not a contested case. New rules on expedited branching, based on recently enacted legislation, are proposed at N.J.A.C. 3:1-2.3(g) and the fee for such an expedited branch application is established at N.J.A.C. 3:1-2.23(a)2ii and 2.24(a)6ii. Several new definitions are proposed at N.J.A.C. 3:1-2.1 to help clarify the rules. A change to N.J.A.C. 3:1-2.2(a)6 is proposed so that an applicant for a charter would submit a copy of the Federal Deposit Insurance Corporation (FDIC) application it plans to submit to the FDIC, with the actual submission to follow later. Previously, the rule required the actual application submitted to the FDIC, in which case an applicant could not file its state charter application until its FDIC application was completed. With the change, an applicant could pursue both governmental approvals at once. A change is proposed at N.J.A.C. 3:1-2.2(a)10 to add the requirement that the Department be notified if any changes occur in the information submitted as part of a charter application. N.J.A.C. 3:1-2.3(b)5, 2.3(c)5 and 2.6(c), requiring newspaper publication for a savings and loan branch or branch relocation, are deleted because the requirement has been deleted from the statute. Changes have been proposed to N.J.A.C. 3:1-2.4(b), 2.5(a), 2.6(a), 2.6(b) and 2.22(b) to recognize the merger of the two groups representing the interests of savings banks and savings and loans into one entity. Changes have been proposed to N.J.A.C. 3:1-2.18 regarding conditions of approval for charters. Previously, there was a restriction of the amount of interest on deposits that new depositories could offer. This has been proposed for deletion because of the difficulty in determining the trade area of the new depository with the advent of interest banking. A new condition is proposed, requiring a certain level of capital to assets ratio for five years for new depositories. A change to N.J.A.C. 3:1-2.19(c) regarding stock of new depositories has been proposed. Previously, the stock could be sold until the charter was granted. Now, it is proposed that the stock will be able to be sold after the application for the charter has been filed but the proceeds of the stock will be required to be held in escrow and not released until the charter was granted. The Department will also review the form of the escrow agreement. A change regarding the relaxation of procedural requirements is also proposed. N.J.A.C. 3:1-2.22(e) is deleted, reworded and inserted as the last section of the subchapter at N.J.A.C. 3:1-2.25. A fee for the verification of a State-chartered bank, savings bank or savings and loan’s authority to conduct business is proposed at N.J.A.C. 3:1-2.23(d). In addition, technical and language changes are proposed.
Subchapter 3 regulates the making of mortgage loans in disaster areas. The term "building and loan" has been deleted from the definition of financial institution in N.J.A.C. 3:1-3.1 because no entity by that name is in existence in New Jersey any longer. In addition, several technical changes are proposed.
Subchapter 4 implements the Governmental Unit Deposit Protection Act, N.J.S.A. 17:9-41 et seq., and regulates the securing of governmental deposits. These rules specify the collateral that is required by a depository to secure a deposit of public funds. N.J.A.C. 3:1-4.7(a)3 has been proposed to be reworded to eliminate the reference to capital funds in N.J.S.A. 17:9-4.1 because it was determined to be confusing. The proposed new language would refer to the broader concept of "any law or regulation" rather than to a specific statute. A new provision proposed at N.J.A.C. 3:1-4.9(a) would permit collateral to be deposited in the Federal Reserve Bank of the district where the public depository’s principal office is located in addition to the institutions specified in the statute, pursuant to rulemaking authority established in N.J.S.A. 17: 9-44(c).
Subchapter 5 is reserved.
Subchapters 6 and 7 set the fees the Department charges for specified services. A new subsection, N.J.A.C. 3:1-6.7(c), is being proposed to make it clear that a licensee subject to suspension for failure to pay a charge has the right to an administrative hearing and to require the disputed charge to be posted in escrow pending the hearing. Minor procedural changes are proposed for name and address changes. Changes are proposed for N.J.A.C. 3:1-7.1(a)1 regarding names of licensees to reflect statutory changes regarding licensed lenders and money transmitters. Further, a fee for the name change of a debt adjuster has been added here and the fee for the name change of a licensed casher of checks has been deleted because the activity is no longer licensed because of a change in the statute. The fee for a name change of a foreign bank has been deleted in this section of the rules as it already exists at N.J.A.C. 3:1-2.23(b)3. In addition, in N.J.A.C. 3:1-7.3 a change in the fee for a license standing certificate and in the rate for licensee listings has been proposed. Further, a procedure for a licensee verification with a fee and a rate schedule for copies of licensing statutes has been proposed. The penalty for filing license renewals late, set forth at N.J.A.C. 3:1-7.6, has been changed.
Subchapter 8 governed when and how appraisals were required on loan applications. It is being repealed because of a statutory change.
Subchapter 9 implements the Home Mortgage Disclosure Act, N.J.S.A. 17:16F-1 et seq. Several technical changes are proposed.
Subchapter 10 requires a bank, savings bank, or savings and loan association that applies to the Department for a charter, branch or other facility, and that intends to purchase or lease the real estate for the facility from an affiliated person, to file with its application a detailed real estate application for the purpose of demonstrating to the Commissioner that the transaction is in the best interest of the institution and that the terms of the transaction are equal to or better than the institution could have received in an arm’s length transaction. N.J.A.C. 3:1-10.3(a)2 is amended to require that the independent appraiser attest that the terms and conditions are equal to or better than in an arm’s length transaction.
Subchapter 11 prohibits banks, savings banks and savings and loan associations, and their affiliates from purchasing or making a loan involving a director, executive officer, or affiliated person unless the terms of the loan are comparable to those prevailing for non-affiliated persons or other employees. The definition of "affiliated person" is amended, and N.J.A.C. 3:1-11.2(b) added, to permit a director or executive officer to participate in institution-wide employee loan discount programs while remaining subject to the other limitations on borrowing for directors and executive officers.
Subchapter 12 regulates multiple party deposit accounts. Minor language changes are proposed.
Subchapter 13 prohibits a banking institution, holding company or other lender from requiring a borrower to obtain insurance from an agent controlled by the lender. Minor language and codification changes are proposed.
Subchapter 14 regulates revolving credit equity loans, including the terms of the agreement, the notification of changes and the methods of computing interest.
Subchapter 15 requires that banking institutions provide notification to their customers concerning availability of funds or comply with Federal Regulation CC, implementing the Expedited Funds Availability Act, 12 U.S.C. §§ 229 et seq. The Department proposes that the separate state notice requirement be eliminated and that all banking institutions comply with the Federal regulation.
Subchapter 16 regulates the fees, charges, and obligations connected with applications for closed-end residential mortgage loans secured by first liens. In particular, the rules set the requirements for loan applications, lock-in agreements, and commitments, and define the permissible fees. Changes are proposed in N.J.A.C. 3:1-16.1 and 16.3 to reflect the repeal of the Mortgage Bankers and Brokers Act, N.J.S.A. 17:11B-1 et seq. and its replacement by the Licensed Lenders Act, N.J.S.A. 17:11C-1 et seq. and the changed terms from that statutory substitution. In addition, language changes to clarify the rule are proposed at N.J.A.C. 3:1-16.2.
Subchapter 17 sets forth the rules for a banking institution to establish an automated teller machine (ATM). N.J.A.C. 3:1-17.4(a) and (b) are proposed to be repealed. These sections previously attempted to restrict foreign financial institutions from operating ATM’s in New Jersey. The rule was based on New Jersey statutes that considered ATM’s to be branches of banks. The statute has been changed and ATM’s are no longer considered branches; therefore, it was appropriate to propose changing the rule to reflect the change in the statute. N.J.A.C. 3:1-17.4 is amended to provide that foreign banks or associations may not accept applications for loans through these machines in accordance with the statutes cited.
Subchapter 18 sets the registration requirements for foreign banks to establish service facilities in this State. In addition, the rule defines the permissible activities that foreign banks may conduct at these locations. It is proposed that the function of maintaining credit balances be added to the list of permissible activities, under the definition of "bank office operations."
Subchapter 19 regulates Consumer Checking Accounts that must be established by depositories in this State. In addition, an application procedure is established for institutions desiring to establish alternative accounts.
Appendix A contains sample forms for joint accounts, P.O.D. accounts and trust accounts.
The Department also is proposing several technical amendments to the rules to recognize the merger of the Department of Banking and the Department of Insurance into the Department of Banking and Insurance, to make certain grammatical changes as a matter of form, and to replace references to public laws with the current statutory citations.
The Department has reviewed the remaining rules and determined them to be necessary, reasonable and proper for the purpose for which they were originally promulgated.
The rules proposed for readoption with amendments apply to all financial institutions subject to supervision, regulation or licensing by the Department. They will continue to implement the policies of the Department on a wide variety of subjects as outlined in the Summary above. Moreover, the rules proposed for readoption with amendments will continue to enable the Department to carry out its mission of requiring financial institutions to engage in their business in a manner that respects and protects consumers and yet frees financial institutions from unnecessary regulation. Thus, the rules proposed for readoption with amendments will continue to have a beneficial social impact on consumers and financial institutions.
The Department does not expect that the rules proposed for readoption with amendments will have a significant negative economic impact on New Jersey financial institutions. The requirement that financial institutions charge legal interest rates for loans, that chartering and branching by depositories be conducted in an orderly fashion, that mortgage loans be made available in disaster areas, that depositories pay the appropriate fees for examinations and annual assessment, that licensees pay appropriate annual fees and fees for changes in the status of their licenses, that depositories report to the Department when they enter into a real estate transaction with an officer or director, that loans by depositories to officers and directors be no more favorable than those to other employees, that the holders of multiple party deposit accounts at depositories be advised of their rights, that insurance tie- ins are not required by lenders, that customers know the timeframe for when funds deposited will be available, that mortgage applicants and borrowers are treated properly by brokers and proposed lenders, that automated teller machines are appropriately located, that foreign banks register with the Commissioner, and that New Jersey Consumer Checking Accounts are offered to New Jersey consumers, are reasonable and necessary for the proper regulation of financial institutions operating in New Jersey. The rules proposed for readoption with amendments will continue to provide a substantial measure of protection to the consumer, thereby averting potential negative economic consequences to a consumer. The fees charged by the Department for chartering, licensing, examinations, administration and inquiries are not unreasonable or overly burdensome. The fee charged for use of the newly created expedited application for depositories to branch has been established at $1,000, which is $500.00 less than that for the standard application to branch.
Federal Standards Statement
The rules proposed for readoption with amendments do not contain any standards or requirements which exceed the standards or requirements imposed by Federal law. The rules proposed for readoption with amendments continue to apply certain Federal statutes and regulations to New Jersey financial institutions. The Federal statutes and regulations involved are 12 U.S.C. § 2901, 12 U.S.C. § 1831o, 12 C.F.R. 325.2(k) and 12 C.F.R. 229.
The Department does not anticipate that any jobs will be generated or lost as a result of the rules proposed for readoption with amendments. Financial institutions will use existing staff for continued compliance with the existing rules. The amendments similarly will not require additional staff because they are technical in nature and will impose no new substantial requirements.
The Department invites commenters to submit any data or studies concerning the jobs impact of the proposed readoption with amendments together with their written comments on other aspects of this proposal.
Agriculture Industry Impact
The Department does not expect any agriculture industry impact from the rules proposed for readoption with amendments.
Regulatory Flexibility Analysis
Due to the nature of the financial services industry, a large percentage of the businesses covered by the rules proposed for readoption fall into the category of small business, as defined by the Regulatory Flexibility Act, N.J.S.A. 52:14B-16 et seq. The rules proposed for readoption do impose recordkeeping, reporting and compliance requirements on these regulated institutions. The Department is concerned with the impact these rules will have on institutions. However, it has been concluded that separate or differing standards for small businesses would not effectively safeguard the soundness of the institution and the security of the banking public. For the above stated reasons and the instances explained below, no differentiation in compliance or application of these rules is proposed.
Subchapter 2 requires that applications submitted to the Department for expansions of banking facilities include certain information. Since all of the information requested is needed to provide the Department with an adequate basis for reaching a decision on the application, the Department favors retaining the current requirements for all applicants and establishes no differing standards.
Subchapter 4 requires public depositories to file a report with the Commissioner twice a year giving the balance of public funds on deposit in the institution. The submission of this information is necessary in order for the Department to monitor deposits of public funds in depository institutions. Therefore, the Department favors retaining this requirement for all public depositories. Subchapter 4 also requires public depositories to file a certified statement if they have on deposit public deposits exceeding 75 percent of the capital funds of the depository. The Department thinks that this requirement should be retained for all public depositories so that it can be notified of high level of public deposits.
Subchapter 9, pursuant to the mandate of the Home Mortgage Disclosure Act, N.J.S.A. 17:16F-1 et seq., requires certain depository institutions (that is, those having assets of $10,000,000 or more) to file quarterly reports with the Department. Consistent with this provision, this subchapter differentiates the compliance requirements for small businesses.
Subchapter 10 requires institutions which file applications for additional facilities, and which wish to purchase or lease the real estate for the facility from an affiliated person, to file with its application a detained real estate application for the purpose of proving to the Department that the transaction is in the best interests of the institution and that the terms of the transaction are equal to, or better than, the institution could have gotten in an arm’s length transaction with a non-affiliated party. The Department favors retaining the current requirement that a detailed real estate application be submitted with all applications because of the importance of monitoring real estate transactions between institutions and affiliated persons
Subchapter 16 requires that certain lenders of first lien residential mortgage loans make disclosures to borrowers, limit their fees to those designated, and collect those fees only at permissible points in the application process. The basic purpose of this subchapter is to establish a comprehensive system of regulation for first lien residential mortgage transactions. To exempt lenders which are small businesses would frustrate the purpose of the rules.
Subchapter 17 sets the filing requirements for institutions desiring to establish off-site Automated Teller Machines. The Department is concerned regarding these compliance requirements, especially when added to the compliance requirements recently added by N.J.S.A. 17:16K-7 to 15, which concerns the security measurers necessary at these automated branches. Accordingly, the Department will consider in the future whether the requirements imposed by this subchapter may be lessened.
Subchapter 18 requires foreign banks which establish back offices to file with the Department and pay a $500.00 fee. The Department is of the view that these minimal compliance requirements are necessary for all institutions to ensure compliance with the Act, and therefore has made no differentiation for small businesses.
Subchapter 19, consistent with N.J.S.A. 17:16N-1 et seq., requires depositories to offer consumer checking accounts to consumers, defines the terms of such an account and set forth a procedure for institutions to obtain approval for accounts which are not conforming. The Department views these rules, and the compliance requirements, as necessary to ensure that institutions comply with the Act and that they have the necessary flexibility to offer accounts which are consistent with its purposes.
The fees, charges and assessments as set forth in the Economic Impact Statement, are imposed on small businesses. The assessment is based on the assets of the bank, and therefore is based on the business size of the institution. No differentiation in the other fees has been made based on business size because these fees typically reimburse the Department for its administrative expenses, and this cost is not necessarily contingent on the size of the institution making the application or obtaining the license.
These rules may require professional services in the form of attorney representation. In particular, subchaopter 16 which requires disclosures on mortgage loans and limits the fees which may be charged often requires interpretation by counsel.
Full text of the rules proposed for readoption may be found in the New Jersey Administrative Code at N.J.A.C. 3:1.
Full text of the proposed repeals may be found in the New Jersey Administrative Code at N.J.A.C. 3:1-2.15, 8, 9.3, 9.4, 9.5, 9.6 and 15.2 through 15.7.
Full text of the proposed amendments follows (additions indicated in boldface thus; deletions indicated in brackets [thus]):
SUBCHAPTER 1. INTEREST AND USURY
3:1-1 Interest rates
(e) The rates established herein shall be effective at 12:01 A.M., October 20, 1981, and shall remain in force until such time as this regulation is rescinded or until said rate or rates are revised by a subsequent regulation.]
3:1-1.2 Interest rates; other loans
[(a)] Notwithstanding any provisions of N.J.S.A. 31:1-1 or N.J.A.C. 3:1-1.1 and except as otherwise provided by law, any person may charge a rate of interest on any loan which rate does not exceed one percent in excess of the discount rate on 90-day commercial paper in effect at the Federal Reserve Bank of New York on the date of the loan, at any time when that discount rate exceeds seven percent. Nothing in this subsection shall authorize any person to make any loan which is not authorized by law, nor shall anything in this subsection apply to loans secured by a first lien on real estate on which there is erected or to be erected a structure containing one, two, three, four, five or six dwelling units, a portion of which structure may also be used for non-residential purposes. Additionally, nothing in this subsection (a) shall be applicable to the exceptions contained in N.J.S.A. 31:1.1(e) and N.J.A.C. 3:1-1.1(c).
[(b) Where in any law a rate of interest applicable to loans regulated by this section is referred to as that established by N.J.S.A. 31:1-1, the rate allowable shall be as established herein.
(c) The rate established herein shall be effective for loans made on or after 12:01 A.M., July 27, 1979.]
SUBCHAPTER 2. PROCEDURAL RULES
The following words and terms, when used in this subchapter, shall have the following meanings unless the context clearly indicates otherwise.
"Accepted" means that an application has been received by the Department and it contains all necessary information required or needed by the Department for its review and the Department has acknowledged in writing that the application is ready for review.
"Adequately managed" means, unless otherwise determined in writing by the Commissioner:
2. At least a rating of 2 for management, if such a rating is given.
"Bank" [shall] means a New Jersey chartered bank as defined in [section 1 of P.L. 1948, c.67 )] N.J.S.A. 17:9A-1[,] and shall include a limited purpose trust company.
"Banking institution" [shall] means a depository , or a similar institution chartered by the Federal government or another state.
"Branch application" [shall] means an application by a banking institution to establish a full branch or a minibranch office, or to relocate a principal office, full branch office or mini-branch office, or to interchange a principal office and full branch office.
"Commissioner" [shall] means the Commissioner of the New Jersey Department of Banking and Insurance.
. . .
"Department" [shall] means the New Jersey Department of Banking and Insurance.
"Depository" [shall] means bank, savings bank or savings and loan association.
"Foreign bank" [shall] means a banking institution which has no branch offices in this State.
"Individual" [shall] means a natural person.
"Newly-chartered institution" means an institution which has been open to the public for business fewer than three years.
. . .
"Out-of-State association" [shall] means a savings and loan association or building and loan association insured by the Federal Deposit Insurance Corporation and chartered under the laws of a state other than New Jersey, but not as a bank as defined in 12 U.S.C. § 1813(a)(2).
. . .
"Savings and loan association" [shall] means a New Jersey chartered savings and loan association, and shall include a capital stock association, and a mutual association.
"Savings bank" [shall] means a New Jersey chartered savings bank, and shall include a capital stock savings bank and a mutual savings bank.
"Sufficient compliance" means that the depository has received a currently applicable Community Reinvestment Act, 12 U.S.C. §§2901 et seq., (CRA) rating of "satisfactory or better" by the applicable federal regulatory agency. A depository which has a currently applicable CRA rating by the applicable federal regulatory agency of "needs to improve" shall be considered to be in sufficient compliance if it has entered into an agreement with the Federal agency which is intended to improve its CRA rating, and the Department has verified that the institution has taken reasonable steps to comply with the agreement.
"Well capitalized" means a depository that exceeds the required minimum level for each relevant capital measure, as that term is defined in 12 U.S.C. §1831 or its successor section.
3:1-2.2 Charter applications
1. – 5. (No change.)
10. Any changes in (a)1 through 9 above.
3:1-2.3 Branch applications of depositories
1. – 6. (No change.)
(b) An application by a depository to relocate a principal office, full branch office or minibranch office from a location in this State to another location in this State, shall contain the following items before it will be accepted by the Department:
3:1-2.4 Branch application of out-of-State banks and out-of-State associations
1. – 3. (No change.)
3:1-2.5 Charter applications; notice and publication
(b) – (d) (No change.)
3:1-2.6 Branch applications; notice and publication
[(c) Within 15 days after receiving notification from the Department that the application was accepted, an applying savings and loan association shall publish notice of the application in a newspaper published within the municipality in which it proposes to locate the branch office if there is one, and if there is no such newspaper, in a newspaper published in the county and having a substantial circulation in the municipality. The notice shall contain the name and address of applying depository, the proposed location and the statement contained in (b) above. The savings and loan association shall provide the Commissioner with proof of publication within 10 days after this publication. A savings and loan association which notifies its customers of its proposed activity in accordance with Federal law is exempt from this publication requirement.]
3:1-2.7 Charter applications; objections and [oral presentations] hearings
3:1-2.9 Insufficiency of data in support of application; hearing
3:1-2.10 Oral presentations
(b) Any oral presentation pursuant to the subchapter may be held before the Commissioner, or [before any deputy commissioner, regulatory officer or any employee of the Department authorized by the Commissioner] his or her designee, as presiding officer.
3:1-2.13 Prehearing conference
officer may, in [his/her] his or her discretion, direct all parties and counsel to appear before [him/her] him or her for a prehearing conference for any or all of the following purposes:
1. –3. (No change.)
(b) Such conference, in the discretion of the [regulatory] presiding officer, need not be recorded, but the [regulatory] presiding officer shall enter in the record an order signed by the parties which recites the results of the conference. Such order, a copy of which shall be furnished to each party, shall include the [regulatory] presiding officer’s rulings upon matters considered at the conference, together with appropriate directions, if any, to the parties; and such order shall control the subsequent course of the proceedings unless notified at the oral presentation for good cause shown by appropriate order of the [regulatory] presiding officer.
3:1-2.14 Procedure for oral presentation
(a)- (b) (No change.)
(c) The applicant and the objector shall each be permitted to make an opening statement, stating precisely what information they will present. The applicant and participants may then present witnesses, materials and data. Questions may be addressed to the applicants, objectors and witnesses after each of their presentations by the [regulatory] presiding officer, applicant or objector. The applicant and objector shall then concisely summarize their positions. Witnesses shall not be sworn.
(d) (No change.)
3:1-[2.16] 2.15 Closing of branch offices
(a) (No change.)
(c) (No change.)
(d) Notice requirements for closing of branch offices are as follows:
1. – 2. (No change.)
(e) – (g) (No change.)
3:1-[2.17] 2.16 Officially recognized data sources
1. United States Department of Commerce, Bureau of the Census, 4700 Silver Hill Road, Suitland, MD 20746 , www.census.gov, Census of Housing (published decennially);
2. United States Department of Commerce, Bureau of the Census, 4700 Silver Hill Road, Suitland, MD 20746 , www.census.gov, Census of Population (published decennially)
3. United States Department of Commerce, Bureau of the Census, 4700 Silver Hill Road, Suitland, MD 20746, www.census.gov, Census of Business (published every five years);
4. United States Department of Commerce, Bureau of the Census, 4700 Silver Hill Road, Suitland, MD 20746, www.census.gov, Census of Manufacturers (published every five years);
5. Population Estimates for New Jersey – Official State Estimates, New Jersey Department of Labor [and Industry] P.O. Box 056, Trenton, NJ 08625, www.state.nj.us/labor/lra (published annually);
6. United States Department of Commerce, Bureau of the Census, 4700 Silver Hill Road, Suitland, MD 20746, www.census.gov, Construction Review (published monthly);
7. New Jersey Department of Community Affairs, Division of Local Government Services, P.O. Box 800, Trenton, NJ, www.state.nj.us/dca/lgs, Annual Report (published annually);
8. New Jersey Department of Labor [and Industry], Division of [Planning and Research] Labor Planning and Analysis, P.O. Box 056, Trenton, NJ 08625, www.state.nj.us/labor/lra, State of New Jersey-Residential Construction Authorized by Building Permits (published annually and available also on a monthly basis);
9. United States Department of Commerce, Bureau of the Census, 4700 Silver Hill Road, Suitland, MD 20746, www.census.gov, Current Population Reports (published monthly);
10. United States Internal Revenue Service, 31 Hopkins Plaza, Baltimore, MD 21203, www.irs.ustreas.gov, Statistics of Income (published annually);
11. New Jersey Department of Community Affairs, Division of Local Government Services, P.O. Box 800, Trenton, NJ, www.nj.us/dca/dcahome.htm, United States Census Data for New Jersey Townships (provides tables of statistical information from the  most recent United States Census paralleling those available for non-townships in printed census reports);
12. –13. (No change.)
14. Federal Deposit Insurance Corporation, 20 Exchange Place, New York, NY 10005, www.fdic.gov, Operating Banking Offices (published annually);
15. Federal Deposit Insurance Corporation, 20 Exchange Place, New York, NY 10005, www.fdic.gov, Bank Operating Statistics (Published annually)
16. Federal Deposit Insurance Corporation, 20 Exchange Place, New York, NY 10005, www.fdic.gov, Changes Among Operating Banks and Branches (published annually);
17. Federal Deposit Insurance Corporation, 20 Exchange Place, New York, NY 10005, www.fdic.gov, Summary of Deposits in All Commercial and Mutual Savings Banks (published annually);
18. Federal Home Loan Bank Board, 7 World Trade Center, 22nd Flr, New York, NY 10048-1185, www.fhlbny.com, Summary Savings Accounts by Geographic Area (published annually);
19. [R.L. Polk & Co.], Thomson Financial Publishing, 4709 W. Gulf Road, Skokie, IL 60076, www.tpf.com, Polk’s World Bank Directory (published semiannually);
20. Department of Agriculture, P.O. Box 330, Trenton, NJ 08625, www.state.nj.us/agriculture, Soil Conservation Services Studies and Reports;
21. New Jersey Department of Labor [and Industry], Division of Employment Security ,P.O. Box 056, Trenton, NJ 08625, www.state.nj.us/labor/lra, Covered Employment Trends (published annually and available on a monthly basis);
22. (No change.)
23. New Jersey Department of Banking and Insurance, P.O. Box 325, Trenton, NJ 08625, www.njdobi.org, Annual Report;
(b) – (c) (No change.)
3:1-[2.18] 2.17 (No change in text.)
3:1-[2.19] 2.18 Charter applications; conditions for approval
(a) The Commissioner shall condition approval of a charter application by a depository on the following factors:
1. (No change.)
3. The depository shall comply with all requirements with respect to loans and transactions involving the depository and its directors, offices and other persons set forth in subtitles 1 and 2 of Title 17 of the [Revised Statutes] New Jersey Statutes Annotated and Title 3 of the New Jersey Administrative Code, including but not limited to, N.J.S.A. 17:9A-71, 17:9A-72, and 17:9A-195, and N.J.A.C. 3:1-11, 3:6-3, 3:6-15, and 3:7-5;
[4. The depository for the first three years after issuance of the certificate of authority shall not offer deposits which yield more than 50 basis points above the highest rate offered by a depository in its trade area;]
 4. For the first three years after issuance of the certificate of authority, the depository shall obtain prior approval from the Commissioner before installing any person on the board of directors or employing any person with the depository in an executive officer position as defined in N.J.A.C. 3:6-3.1; [and]
5. For the first five years after issuance of the certificate of authority, the depository shall maintain a tier 1 capital-to-assets ratio, as that ratio is defined in 12 C.F.R. § 325.2(k), that is at least 10 percent of the bank’s total assets unless prior written consent has been received from the Commissioner permitting a lower ratio; and
6. Such other conditions for a specific applicant as the Commissioner [deems] identifies as appropriate.
3:1-[2.20] 2.19 Minimum and maximum stock subscriptions
(a) – (b) (No change.)
(c) [The] After a charter application is accepted, the balance of the capital stock, if any, shall be offered to the general public in the area to be served by the depository [if and when the application is approved and under such terms and conditions as set forth in the Commissioner’s Decision and Order]. The proceeds of such sale shall be placed in escrow and remain in escrow and not released until the bank obtains a Certificate of Authority. The form of the escrow agreement shall be approved by the Department.
(d)-(e) (No change.)
3:1-[2.21] 2.20 Criteria for branch approval: Public interest
(a) In reaching a determination as to whether an applicant meets the requirement that
"the interests of the public will be served to advantage by the establishment of such full branch" as required by [(]N.J.S.A. 17:9A-[20A(2)] 20(A)(1)(b), [)] the Commissioner shall consider only the following factors:
3. The conditions set forth in Departmental regulations regarding insider real estate transactions[;], if any; and
4. The current financial condition of the applicant, including, but not limited to, capital, asset quality, management, earnings and liquidity. [The] Department files, with respect to the factors contained in this subsection, shall be confidential [(] as required by N.J.S.A. 17:9A-264[)] and shall not be open or available for review by either the applicant or objectors.
5. The Commissioner’s determination with respect to these factors shall be a final agency decision.
3:1-[2.22] 2.21 (No change in text.)
3:1-[2.23] 2.22 Modification of [Order] order and/or rehearing
(a) (No change.)
(b) The Department shall notify the applicant of receipt of a complete application within 10 days, and shall publish notice of the proposed modification in the weekly associations’ bulletins of the New Jersey Bankers Association, [the New Jersey Council of Savings Institutions,] the New Jersey[‘s] League Community and Savings Bankers [and the New Jersey Savings League], and/or their successor organizations, if any. [In its notification to the applicant, the Department will advise whether the application on its face appears to require a hearing.] If a hearing is deemed necessary, the notice will also indicate the hearing date, location, time, and the procedures to be followed. Upon receipt of such notice from the Department, the applicant shall then mail notice to all shareholders of the affected institution and provide proof of mailing. Said notice shall include: the applicant’s name; a brief statement of the nature of the application; [if a hearing has been set, its] the date, time, and location of the hearing; and the procedure for shareholders to file objections.
(c)-(d) (No change.)
[(e) In any instance where the Commissioner or his or her designee shall determine that the foregoing requirements or procedures of this subchapter shall be unwarranted, inapplicable, unreasonable, unnecessary or not required, the he or she may relax or dispense with any or all of the requirements or procedures established herein.]
3:1-[2.24] 2.23 Fees; banks and savings banks
(a) A bank or savings bank shall pay to the Commissioner for use of the State the following fees:
1. (No change.)
2. For filing an application for approval of the establishment of a full branch
i. (No change.)
ii. For an expedited branch approval….$1,000
3. – 22. (No change.)
(b)-(c) (No change.)
(d) The Department shall, upon written request, furnish verification of a state-chartered bank, savings bank or savings and loan’s authority to conduct business in New Jersey. The fee shall be $25.00 per verification.
3:1-[2.25] 2.24 Fees; State associations
a merger or bulk purchase…………………………$1,500
7.-21. (No change.)
(b-c) (No change.)
3:1-2.25 Relaxation or dispensation of requirements of subchapter
Any procedural requirements of this subchapter may be relaxed or dispensed with by the Commissioner, in his or her discretion, in any case where strict adherence thereto may be deemed inappropriate or unnecessary or may result in injustice.
SUBCHAPTER 3. MORTGAGE LOANS IN DISASTER AREAS
The following words and terms, when used in this subchapter, shall have the following meanings, unless the context clearly indicates otherwise.
"Commissioner" means the Commissioner of the Department of Banking and Insurance of the State of New Jersey or his or her duly authorized deputy or representative.
"Department" means the New Jersey Department of Banking and Insurance.
. . .
"Financial institution" means any bank, savings bank, savings and loan association, [building and loan association] or insurance company [which] that is organized under the laws of this State or is authorized to do business and is doing business under the laws of this State and [which] that is subject to the supervision of the Department of Banking and Insurance of the State of New Jersey.
. . .
3:1-3.2 Duties of Commissioner
(a) - (c) (No change.)
(d) When any financial institution shall exercise or use any emergency mortgage powers, as enumerated in this subchapter, the Commissioner shall ascertain and determine in connection with and as part of the usual examinations and audits conducted by the Department [of Banking] concerning the affairs, conditions and status of such financial institutions, whether such financial institution has complied with the requirements enumerated in N.J.A.C. 3:1-3.3.
(a) Notwithstanding any other provision of this [Subchapter] subchapter, no financial institution shall exercise or use any emergency mortgage powers as enumerated herein unless it complies with the following limitations:
1. The amount of funds which a bank may invest or advance in any mortgage loan made pursuant to this [Subchapter] subchapter shall not exceed [ten] 10 percent of its aggregate capital stock, surplus and undivided profits accounts.
2. The amount of funds which a savings bank may invest or advance in any mortgage loan made pursuant to this [Subchapter] subchapter shall not exceed [ten] 10 percent of its surplus account.
3. The amount of funds, which a savings and loan [or building and loan association] may invest or advance in any mortgage loan made pursuant to this [Subchapter] subchapter shall not exceed one percent of capital.
4. The amount of funds, which an insurance company may invest or advance in any mortgage loan made pursuant to this [Subchapter] subchapter shall not exceed that permitted under the insurance laws of this State.
(b) No financial institution investing or advancing any funds in connection with mortgage loans made pursuant to this [Subchapter] subchapter may exclude the principal balances owing thereon in determining the aggregate amount of its assets that it may invest in all mortgage loans as prescribed by applicable statutes.
(c) (No change.)
SUBCHAPTER 4. GOVERNMENTAL UNIT DEPOSIT PROTECTION
3:1-4.1 Public depository; acceptance of deposits
No deposit may be accepted from a governmental unit by any public depository unless the public depository secures such deposit in accordance with the Governmental Unit Deposit Protection Act, N.J.S.A. 17:9-41 et seq., (hereinafter called the Act).
3:1-4.2 Filing of certified statement by public depository
Every public depository shall file with the Commissioner [of Banking], on forms furnished by the [Commissioner] Department, a certified statement signed by its president or vice president and one other officer indicating the average daily balance or the alternate average balance as provided in the Act of either collected or uncollected public funds on deposit during the six month period ending on the next preceding valuation date (June 30 or December 31 of each year). The statement shall include information as to the capital funds of the depository and detailed information, including location pertaining to the eligible collateral pledged to secure public funds. The statement shall be filed as of June 30 and December 31 of each year and at such other times as the Commissioner may require. The public depository shall remit to the Department with each such statement a filing fee of $25.00.
3:1-4.7 Scope of terms surplus and undivided profits
(a) As included within the definition of capital funds in N.J.S.A. 17:9-41:
1. - 2. (No change.)
3. The term "undivided profits" shall, in the case of an association, include any reserve for contingency required by any law or regulation and [included within the definition of capital funds in N.J.S.A. 17:9-4.1,] any reserve for bad debts as computed for Federal income tax purposes, but shall:
i.-ii. (No change.)
3:1-4.8 Substitution of collateral
Public depositories shall have the right to make substitutions of eligible collateral between valuation dates without notification to and approval by the Commissioner; provided, that any substituted collateral have a market value as of the date of substitution which is at least equal to the market value of the collateral so replaced as reported on the last valuation date. Any withdrawal of pledged collateral without replacement as mentioned aforesaid requires the prior approval of the Commissioner. A letter to the Commissioner requesting such withdrawal of collateral shall indicate the collateral to be withdrawn and the reason or reasons for such withdrawal. The Commissioner shall transmit to the public depository in writing his or her approval or disapproval of such withdrawal [to the public depository].
3:1-4.9 Agreement or resolution; custodial depository and Commissioner
(a) The depositories specified in N.J.S.A. 17:9-44(c) and the Federal Reserve Bank of the Federal Reserve district where the depository institution’s principal office is located shall be known as custodial depositories. A public depository shall not deposit collateral in a custodial depository which is a parent or subsidiary of the public depository, or is otherwise related to the public depository.
3:1-4.12 Records maintained by Commissioner; eligibility
The Commissioner [of Banking] shall maintain such records as he or she shall deem necessary in order to determine which public depositories have complied with the provision of the Act. After receipt of the periodic certified statement, the Commissioner shall give written notification to each reporting public depository of its eligibility to act as a depository for public funds.
SUBCHAPTER 6. FEES
The following words and terms, when used in this subchapter, shall have the following meanings unless the context clearly indicates otherwise.
. . .
"Licensee" means a person other than a bank, savings bank, savings and loan association or credit union [which] that is regulated or supervised by the [Department] Division of Banking.
3:1-6.5 Annual review
The fees assessed by this [regulation] subchapter shall be reviewed at least annually and if necessary shall be increased or decreased in accordance with the services performed by the Department [of Banking].
3:1-6.7 Failure to pay license and examination charges
(a) If a licensee pays an examination charge, application fee, license fee or any other fee or charge with a check which is returned for insufficient funds or is not paid for any other reason, the Department shall advise the licensee by letter. The licensee shall have 20 days from the date of such letter to provide the Department with a certified or cashier’s check payable to the Treasurer, State of New Jersey for the amount of the dishonored check plus $10.00. If the Department does not receive a certified or cashier’s check within 20 days of the date of this letter, the Department shall suspend the license of the licensee until payment by certified or cashier’s check is received.
(c) Prior to a license suspension set forth in (a) or (b) above, a licensee may request a
hearing pursuant to the Administrative Procedure Act, N.J.S.A. 52:14B-1 et seq., and the Uniform Administrative Procedure Rules, N.J.A.C. 1:1. The licensee shall place the disputed amount in escrow pending disposition of the hearing and shall provide proof of same to the Department.
SUBCHAPTER 7. MISCELLANEOUS FEES
3:1-7.1 Name change
(a) [Every] A licensee who [shall] makes any change [its] in name [at any time] shall, within 10 days of such change, submit written proof of the name change to the Commissioner, and shall surrender its license or licenses for [endorsement of such change, or] issuance of a new license or licenses reflecting the change. The licensee shall submit evidence of the name change in the form of a copy of the amended certificate of incorporation, [fictitious corporate] alternate name registration, or amended certificate of authority bearing the [New Jersey Secretary of State’s] dated filing stamp of the Department of Treasury, Division of Revenue or a copy of the trade name certificate filed with the office of the county clerk of the county in which the business is located. The licensee shall also [pay] submit to the Department [of Banking and Insurance] the fee or fees, made payable to the Treasurer, State of New Jersey provided in [schedule] Schedule A below. Within 30 days of receipt of the notice of [change of] name change, and all documentation and fees necessary to effectuate the change, the Commissioner shall [either return the license with the correct endorsement or shall] issue a new license that reflects the change. While the licensee is awaiting the issuance of the [endorsed or new] license, the licensee may continue in business, provided that all documents and fees are supplied, unless the licensee receives a notice of suspension or revocation, or unless the biennial licensing period expires.
i. Motor vehicle installment seller-$75.00;
iii. Home repair contractor-$75.00;
v. [Consumer loan licensee] Money transmitter or foreign money transmitter-$75.00;
[vii. Foreign money remitter-$75.00;]
[viii.] vii. [Licensed] Check casher [of checks]-$75.00;
[ix. Foreign banks-$75.00;
x. Secondary mortgage loan license-$75.00;]
[xi.] viii. Insurance premium finance company -$75.00;
[xii. Licensed seller of checks-$75.00;]
xiii. Mortgage banker or broker-$75.00;
ix. Debt Adjusters - $75.00.
(b) (No change.)
3:1-7.2 Duplicate licenses and certificates
(a) (No change.)
(b) The request for the issuance of such duplicate license or certificate [will] shall be made
on forms [supplied by] available from the Department [of Banking].
(c) The licensee shall pay to the Department [of Banking] the fee[,] or fees provided in
[schedule] Schedule B of this subchapter for such licenses or certificates.
1. Schedule B
iii. Home repair contractor - $25.00;
iv. Home financing agency - $25.00;
v. [Consumer loan licensee] Money transmitter or foreign money transmitter - $25.00;
vi. Pawnbroker - $25.00;
[vii. Foreign money remitter - $25.00;]
[viii.] vii. [Licensed] Check casher[ of checks]-$25.00;
[ix. Foreign banks-$25.00;
x. Secondary mortgage loan license-$25.00;]
[xi.] viii. Home repair [salesmen] salesperson - $25.00;
[xii.] ix. Insurance premium finance company-$25.00;
x. Debt Adjusters - $35.00;
[xiii. Licensed seller of checks - $25.00;]
[xiv.] xi. Mortgage [banker or broker] solicitor -$[25.00] 15.00.
3:1-7.3 Requests for certificate of standing, licensee [standing and locations] verification, licensing statutes and licensee listings
(a) The Department shall furnish, upon written request, a certificate of standing with seal for a licensee. The fee shall be $30.00 per certificate.
[(a)] (b) The Department [of Banking may] shall furnish, upon written request, [information concerning a licensee’s standing and location. The information provided shall be in a form prescribed by the Department of Banking.] a licensee verification, indicating if a person or entity is licensed and its main office. The fee shall be $10.00 per verification.
[(b) A requester shall pay to the Department of Banking the fee or fees provided in
1. Schedule C:
i. Motor vehicle installment seller-$15.00;
ii. Sales finance company-$15.
iii. Home repair contractor-$15.00;
iv. Home financing agency-$15.00;
v. Consumer loan licensee-$15.00
vii. Foreign money remitter-$15.00;
viii. Licensed cashier of checks-$15.00;
ix. Foreign banks-$15.00;
x. Secondary mortgage loan license-$15.00;
xi. Home repair salemen-$15.00;
xii. Insurance premium finance company-$15.00;
xiii. Licensed seller of checks-$15.00;
xiv. Individual group listings-.20 per item.]
(c) The Department shall furnish, upon written request, a copy of licensing statutes or licensee listings. The fee shall be $0.75 per page for the first 10 pages, $0.50 per page for the 11th to 20th pages and $0.25 per page for all pages over 20 or as otherwise established by N.J.S.A. 47: 1A-1 et seq.
3:1-7.4 Address change
Every licensee referenced in N.J.A.C. 3:1-7.1(a)1 in Schedule A or 3:1-7.2(c)1 in Schedule B [which] that changes a licensed business address at any time shall, within 10 days of the change, submit information relative to the address change to the Commissioner, surrender the affected license or licenses [for endorsement of the change;] and pay to the Department an address change fee of $75.00; except that pawnbrokers, check cashiers and insurance premium finance companies shall comply with the provisions of N.J.A.C. 3:16-1.6, N.J.A.C. [3:15A-41] 3:24-1.6(h), or N.J.S.A. 17:16D-4, respectively. [Motor vehicle installment sellers, home repair contractors, and home financing agencies are exempt from the $75.00 fee.] Licensees submitting a notice of change of address pursuant to this section shall submit their license or licenses [for endorsement of the change or] for the issuance of the new license reflecting the change. Within 30 days of receipt of the notice of change of address and all documentation and fees necessary to effectuate the change, the Commissioner shall [either return the license or licenses with the correct endorsement or shall] issue a new license or licenses that reflect the change. While the licensee is awaiting the issuance of the [endorsed or] new license or licenses, the licensee may continue in business, provided that all documentation and fees are supplied, unless the licensee receives notice of suspension or revocation, or unless the biennial licensing period expires.
3:1-7.5 Fees subject to review
The fees in the schedules of this subchapter shall be subject to periodic review and shall be increased or decreased in accordance with the cost of the services performed by the Department [of Banking].
3:1-7.6 Penalty for late filing
Motor vehicle installment sellers, home repair contractors, home repair [salesmen,] salespersons, home financing agencies, [licensed sellers of checks, licensed] check cashers, [of checks,] money transmitters, debt adjusters, foreign money [remitters,] transmitters, pawnbrokers, and insurance premium finance companies [which] that file renewal license applications after the expiration of their licenses shall be subject to a [$25.00] $50.00 penalty. [Mortgage bankers, correspondent, consumer lenders and sales finance companies] Licensed lenders [that]who file renewal license applications after the expiration of their licenses shall be subject to N.J.A.C. 3:15-2.6, including any penalties specified therein. The imposition of this penalty shall not prevent the Department from imposing further penalties on the licensee for transacting business without a license.
SUBCHAPTER 9. HOME MORTGAGE DISCLOSURE
3:1-9.1 Authority; scope; enforcement
(a) This [regulation] subchapter is promulgated pursuant to the provisions of [Chapter 1, Public Laws of 1977] N.J.S.A. 17:16F-11 and N.J.S.A. 17:1-8.1 et seq. This [regulation] subchapter applies to depository institutions [which] that make mortgage loans. Nothing in this [regulation] subchapter is intended to, nor shall it be construed to, encourage unsound lending practices or the allocation of credit.
(b) Compliance with this [regulation] subchapter and [Chapter 1, Public Laws of 1977] N.J.S.A. 17:16F-1 et seq. shall be enforced by the Commissioner of Banking and Insurance of the State of New Jersey.
The following words and terms, when used in this subchapter, shall have the following meanings unless the context clearly indicates otherwise.
"Depository institution" means any banking institution as defined in [section 1 of the Banking Act of 1948, P.L. 1948 c. 67(C.] N.J.S.A. 17:9A-1[)], any association as defined in [the Savings and Loan Act (1963) P.L. 1963, c. 144 (C.] N.J.S.A. 17:12B-5[1 et. seq.)], or any State or Federal credit union, which makes mortgage loans. Any non-depository, majority-owned subsidiary of a depository institution shall be deemed to be part of its parent depository institution for the purposes of this [regulation] subchapter. No depository institution may aggregate its reports with any other depository institution, subsidiary, affiliate, or otherwise.
. . .
3:1-9.8 Powers of the Commissioner; [Investigations] investigations and hearings
(a) In order to aid in determining whether the Act or N.J.A.C. 3:1-9.7 [hereof] has been violated by a depository institution other than a national bank, the Commissioner [of Banking] shall have the power to hold hearings, issue subpoenas to compel the attendance of witnesses and the production of documents, papers, books, records and other evidence before him or her.
(b) In the case of a failure of any person to comply with any subpoena issued by the Commissioner or to testify to any matter concerning which he or she may be lawfully interrogated, the Commissioner may apply to the Superior Court for an order requiring the attendance of such person and the giving of testimony or production of evidence.
(c) (No change.)
3:1-9.10 Investigatory hearings; presiding officer
Any hearing held pursuant to this subchapter may be conducted by the Commissioner or [Deputy Commissioner] his or her designee,
SUBCHAPTER 10. RESTRICTIONS ON REAL PROPERTY TRANSACTIONS
"Affiliated person" means the following:
1. – 3. (No change.)
4. Any corporation or organization of which a director, manager or executive officer of such institution is an officer or partner or is, directly or indirectly either alone or with his or her spouse, the owner of 10 percent or more of any class of equity securities or the owner with other directors, managers and executive officers of such institution and their spouses of 25 percent or more of any class of equity securities;
5. Any trust or other estate in which a director, manager or executive officer of such institution or the spouse of such person has a substantial beneficial interest or as to which such person or his or her spouse serves as trustee or in a similar fiduciary capacity.
. . .
3:1-10.2 Application required on real property transactions
When an institution files an application for a branch, minibranch, limited facility branch, branch relocation, auxiliary or new charter and intends to purchase or lease, directly or indirectly, the premises applied for from an affiliated person, it shall simultaneously file a detailed real estate application concerning the proposed transaction with the Commissioner for his or her approval. In the event an institution desires to enter into such a transaction on an existing office it must file a detailed real estate application concerning the proposed transaction with the Commissioner for his or her approval.
3:1-10.3 Approval of denial of real estate applications
1. (No change.)
2. The applicant provides a written attestation of an independent appraiser that the terms and conditions of the proposed transaction are equal to or better than those which the institution would have obtained had the premises been purchased or leased in an arm’s length transaction with a non-affiliated third party.
3:1-10.4 Objectors and hearings
The Commissioner’s deliberations on the acceptability of a real estate transaction shall be made pursuant to his or her examination powers and shall be confidential pursuant to N.J.S.A. 17:9A-264. However, this shall not preclude objectors from raising similar and/or parallel issues in written or oral objections which may relate to the applicable statutory criteria for the particular application involved.
SUBCHAPTER 11. RESTRICTIONS ON LOANS INVOLVING AFFILIATED PERSONS
The following words or terms, when used in this subchapter, shall have the following meanings unless the context clearly indicates otherwise.
. . .
"Affiliated person" means the following:
Recodify existing 1.-4. as 2.-5. (No change in text.)
. . .
(a) No institution or affiliate thereof may, either directly or indirectly, make a loan to any director or executive officer of an institution or to any affiliated person of such institution, or purchase any such loan, unless the terms and conditions of the loan (including but not limited to interest rate, maturity and collateral) are comparable to those terms and conditions then prevailing for a comparable loan to a nonaffiliated person.
(b) Any loans or extensions of credit made pursuant to a benefit or compensation program shall be permitted if the benefit or compensation program:
1. Is widely available to employees of an institution and, in the case of loans or extensions of credit to a director or executive officer of its affiliates, is widely available to employees of the affiliates at which that person is a director or executive officer; and
(c) Nothing in this section shall be construed to affect other existing limitations on amounts or kinds of loans or extensions of credit to directors or executive officers.
SUBCHAPTER 12. MULTIPLE PARTY DEPOSIT ACCOUNTS
The following words and terms, when used in this subchapter, shall have the following meanings unless the context clearly indicates otherwise. [ Reference is made to the Act for the definitions not set out below, which may be necessary to construe this subchapter.]
"Act" means [chapter 491. Public Laws of 1979,] N.J.S.A. 17:16I-1 et seq., which may also be cited as "Multiple[-party] Party Deposit Account Act."
. . .
3:1-12.3 Type of accounts
Nothing in the Act or in this subchapter is to be construed as requiring a financial institution to enter into any deposit account contract. Financial institutions are not required to open any multiple [-] party deposit account [which does not] that fails to provide for rights of survivorship as provided in[section 5 of the Act] N.J.S.A. 17:16I-5.
3:1-12.4 Specific content of deposit contract
(a) The following information must be included in all multiple[-]party account contracts:
1. A statement that the account is subject to the provisions of the Multiple Party Deposit Account Act, N.J.S.A. 17:16I-1 et seq. [(P.L. 1979, c. 491).]
2. – 5. (No change.)
(b) (No change.)
3:1-12.5 Additional provisions
A financial institution may include any additional provisions in its form of contract which are necessary to [fully] inform fully its depositors of the terms of multiple[-]party deposit accounts and applicable[ regulations] rules, provided that such provisions are not inconsistent with the provisions of the Act [of] or this subchapter.
SUBCHAPTER 13. INSURANCE ACTIVITIES
3:1-13.1 Insurance tie-in prohibition
(a) No [banking institution, bank holding company, savings and loan association, savings and loan association service corporation, credit union or any other type of] lender shall require any borrower to obtain insurance from a licensed insurance agent or broker, owned by or controlled directly or indirectly by that lender, as a precondition for obtaining financing.
(b) In the event a loan or other financing is granted for personal, family or household purposes, and if insurance is required and is available through the [lending institution] lender, the terms of the loan agreement or a separate written notice to the borrower shall state that the borrower has the option of securing such insurance from a source of the borrower's own choosing. Nothing herein shall prevent the lender from reserving the right to refuse to accept, for reasonable cause, an insurer or insurance offered by the consumer; provided however, the lender must give written notice to the consumer stating specific reasons why insurance coverage provided by the consumer is unacceptable to the lender.
[3:1-13.2 Amount of fire insurance required]
[(a)] (c) No [mortgage] lender shall, in connection with any application for a loan secured by a mortgage on real property located in New Jersey, require any mortgagor to obtain by purchase or otherwise a fire insurance policy in excess of the replacement value of the covered premises as permitted under N.J.S.A. 17:36-5.19 as a condition for granting such mortgage loan.
[(b)] (d) For purposes of this section, the term [mortgage] "lender" means any bank, savings bank, savings and loan association, credit union, [mortgage banker or broker, secondary mortgage loan licenses] licensed lender, banking institution, bank holding company, savings and loan service corporation or any other person, or any subsidiary or affiliate thereof, who makes a loan secured by a first, second or subsequent mortgage on real property located in New Jersey.
SUBCHAPTER 14. REVOLVING CREDIT EQUITY LOANS
A bank, savings bank or savings and loan association shall have authority to make loans secured by a lien on real estate [which] that shall be known as a "Revolving Credit Equity Loan" and may charge, contract for and receive thereon interest at a rate or rates agreed to by the bank, savings bank or savings and loan association and the borrower.
3:1-14.3 Terms of agreement
(a) If an agreement governing a revolving credit equity loan so provides:
1. The bank, savings bank or savings and loan association may at any time [or from time to time] change the terms of the agreement, including the terms governing the periodic interest rate, the calculation of interest, or the method of computing the required amount of periodic installment payments, provided however, that the period interest rate shall not be changed more than once in each billing cycle nor shall the minimum installment payment be less than 1/240 of the outstanding principal balance due plus interest accrued at the end of the billing cycle.
2. (No change.)
3:1-14.4 Notification of changes
(a) The bank, savings bank or savings and loan association shall notify each affected borrower of any change in terms in the manner set forth in the agreement governing the plan and in compliance with the Truth-in-Lending Act and regulations promulgated thereunder, as in effect from time to time, if applicable; provided however, that if such change has the effect of increasing the interest rate or other changes to be paid by the borrower, the bank, savings bank or savings and loan association shall mail or deliver to the borrower at least 15 days before the effective date of the change a clear and conspicuous written notice [which] that shall describe the change and the existing term or terms of the agreement affected by the change and shall also set forth the effective date and an explanation, if necessary, of the change.
(b) (No change.)
SUBCHAPTER 15. AVAILABILITY OF FUNDS
The following words and terms, when used in this subchapter shall have the following meanings, unless the context clearly indicates otherwise:
["After hours deposits" means a deposit received after the banking institution’s established close of banking hour for any business day. Such hours may vary at different offices of an institution. After hours deposits shall also include deposits received on a Saturday, Sunday or legal holiday. All after hours deposits shall be deemed to have been deposited on the next business day of the banking institution.]
. . .
["Business day" means any day other than a Saturday, Sunday or legal holiday.
"Check" is deemed to include a negotiable order of withdrawal, share draft, traveler’s check, money order or other negotiable instrument used for the purpose of making payments or transfers to third parties.
"Deposit account" means an account at a banking institution established by a natural person for personal or family purposes. A deposit account includes but is not necessarily limited to a demand deposit, negotiable order of withdrawal account, money market account, a transaction account, a share draft account and any other personal or family savings account other than a time deposit.
"Personal or family purposes" means purposes other than primarily for business or investment purposes. Any account opened by a corporation, a partnership, a limited partnership or joint venture shall not be for personal or family purposes. A banking institution may rely on the written representation of the deposit account holder as to the purpose of the account.
"Time deposit" means a deposit that the depositor does not have the right to withdraw for a period of seven days or more after the date of deposit.]
3:1-[15.8] 15.2 Compliance with Federal law
[Compliance] Each banking institution shall comply with [federal Regulation CC,] 12 C.F.R. 229 (Regulation CC) or with [a] its successor[ to that] regulation[, shall be deemed to be compliance, with this subchapter].
SUBCHAPTER 16. MORTGAGE LOANS, FEES, OBLIGATIONS
. . .
"Broker" means any mortgage broker as that term is defined in N.J.S.A. [17:11B-1d] 17:11C-2, or any lender when accepting and processing a mortgage loan application on behalf of a lender which will issue the commitment or loan denial.
. . .
"Lender" means a State or Federally-chartered bank, savings bank, savings and loan association, credit union, or a mortgage banker or correspondent mortgage banker as defined in N.J.S.A. [17:11B-1c] 17:11C-2.
. . .
(a) No lender shall charge a borrower any fees incident to the origination, processing or closing of a mortgage loan other than the following, except as otherwise authorized by State or Federal law, either explicitly or as interpreted by the appropriate regulator in official staff commentary, regulatory bulletins, or memoranda.
1. (No change.)
2. Credit report fee, which [may] shall not exceed the amount paid, or to be paid to the credit reporting agency by the party [providing] who receives the credit report directly from the credit reporting agency. [, except that that] The initial charge to the borrower may be based on a reasonable estimate provided that any amount in excess of the amount paid to the party providing the credit report is refunded to the borrower at or prior to closing;
3. Appraisal fee, which [may] shall not exceed the amount paid, or to be paid, directly to the party [providing] performing the appraisal. [, provided that if] If the appraisal is done in-house, the fee shall not exceed the going charge for such appraisals by third parties. [ and, except that the] The initial charge to the borrower may be based on a reasonable estimate provided that any amount in excess of the amount [paid to the party providing the appraisal] authorized above in this paragraph is refunded to the borrower at or prior to closing;
4. – 9. (No change.)
(b) - (d) (No change.)
3:1-16.3 Application process
(a) Before a lender or broker accepts any application fee in whole or in part, any credit report fee, appraisal fee or any fee charges as reimbursement for third party fees, the lender or broker shall make written disclosure to the borrower (which disclosure may be contained in the application) as required by this section or N.J.A.C. 3:1-16.10, respectively, setting forth:
1. – 5. (No change.)
6. For correspondent mortgage bankers [non-servicing], a statement indicating that the licensee is a correspondent mortgage banker [non-servicing] and as such does not hold mortgage loans or service mortgage loans for more than 90 days in the regular course of business.
(b) - (e) (No change.)
SUBCHAPTER 17. AUTOMATED TELLER MACHINES (ATM)
The following words and terms, when used in this subchapter, shall have the following meanings, unless the context clearly indicates otherwise:
"Automated teller machine" means an automated facility or terminal owned or rented by a bank, savings bank or savings and loan association at which a customer may do one or more of the following:
1.-3. (No change.)
Included within this definition is a communication terminal [branch office] facility as defined in N.J.S.A. 17:9A-1(17), and a remote service unit as defined in N.J.S.A. 17:12B-8(e).
3:1-17.4 Interstate [access] transactions
[(a) No foreign financial institution shall establish, operate, maintain or share ownership of an automated teller machine anywhere within the State of New Jersey, except that a foreign financial institution may share access to such a machine.
(b) No automated teller machine in this State shall bear any identification of a foreign financial institution, except that a generic name or display identifying or associated with a regional or national network of automated teller machines is not prohibited.]
[(c)](a) A customer having an account in a foreign financial institution may make deposits to that account from an automated teller machine located in New Jersey.
(b) A foreign bank or foreign association that accepts applications for loans through an automated teller machine, automated loan machine, computer terminal or any other electronic device located in this State shall be deemed to be transacting business as that term is used in N.J.S.A. 17:9A-316 and 17:12B-214, in violation of those statutes, except that this section shall not apply to in-person contact over a telephone, nor to drawing on a pre-existing line of credit.
SUBCHAPTER 18. FOREIGN BANKS AND ASSOCIATIONS; REGISTRATION OF SERVICE FACILITIES
The following words and terms shall have the following meanings when used in this subchapter, unless the context clearly indicates otherwise:
"Back office operation" shall mean the following activities:
1. – 6. (No change.)
7. Producing and mailing correspondence and other documents; [and]
8. Maintaining credit balances; and
[8.] 9. Such other similar activities [which] that the Commissioner approves.
"Back office operation" shall not mean:
3. Accepting deposits[; and].
[4. Maintaining credit balances.]
"Department" shall mean the New Jersey Department of Banking and Insurance.
. . .
3:1-18.3 Registration process
(a) A foreign financial institution may request to register a service facility by [mailing] submitting to the Department the following items:
1. – 2. (No change.)
SUBCHAPTER 19. NEW JERSEY CONSUMER CHECKING ACCOUNTS
3:1-19.3 [Non-conforming] Alternative accounts
(a) A depository institution may apply to the Commissioner for approval of any account[, which] that does not conform to the criteria set forth in N.J.A.C. 3:1-19.2[,] as a New Jersey Consumer Checking Account.
(b) Each application for approval of [a non-conforming] an alternative form of account shall provide:
1.-9. (No change.)
(c) (No change.)
(d) The Commissioner shall issue a decision on an application for approval of [non-conforming] alternative forms of accounts within 30 days of receipt of the application, although the Commissioner may extend the time for issuing such decision by notifying the depository institution of such extension within the 30-day period. If neither a decision [or] nor a notice of extension has been issued within that time, the application shall be deemed approved.
3:1-19.4 Closing New Jersey Consumer Checking Accounts
(a) – (b) (No change.)
(c) A depository institution [which] that determines that the revenue [which] it obtains through fees [which] that it charges to the account holder is less than its cost of offering a New Jersey Consumer Checking Account, and which intends to discontinue offering the account on that basis, shall notify the Department 30 days prior to such discontinuance, and shall submit with such notice the data supporting its determination regarding cost .
(d) A depository institution which discontinues an account pursuant to (c) above shall not thereby be relieved from its statutory obligation to provide a New Jersey Consumer Checking Account to consumers unless it provides data supporting a conclusion by the Commissioner that the depository institution would lose money on any account [which] that would satisfy the requirements of [P.L. 1991, c.210] N.J.S.A. 17:16N-3.
3:1-19.5 Consumer information requirements
(a) A depository institution [which] that is required by [P.L. 1991, c.210] N.J.S.A. 17:16N-3 to offer a New Jersey Consumer Checking Account shall provide reasonable in-person information and assistance to customers regarding New Jersey Consumer Checking Accounts generally, and related financial services.
(b) A depository institution [which] that is required by [P.L. 1991, c.210] N.J.S.A. 17:16N-3 to offer a New Jersey Consumer Checking Account shall post in a conspicuous place in the lobby of each office of the depository institution a sign and make printed material available in the public area which indicates that the office offers New Jersey Consumer Checking Accounts. The notice and printed material shall explain the [material] significant features and limitations of such an account. A depository institution may identify its New Jersey Consumer Checking account by any name, provided that it also indicates conspicuously that the account is a "New Jersey Consumer Checking Account."