HRS § 412-3-612 - Acquisition of control of financial institution or financial institution holding company

(a) Unless the commissioner shall have given prior approval or shall have waived the requirement for approval pursuant to subsection (g): (1) A person who is not already in control of a Hawaii financial institution or financial institution holding company shall not acquire control of that financial institution or that financial institution holding company, directly or indirectly, individually or in concert with another; and (2) A person who is not already in control of a Hawaii financial institution or financial institution holding company shall not, directly or indirectly, make a tender offer for, request or invite a tender offer for, or offer to exchange securities for, any voting security or any security convertible into a voting security of that financial institution or that financial institution holding company if the transaction would result in the person acquiring control of that Hawaii financial institution or that financial institution holding company; provided that nothing in this section shall prohibit a person from negotiating or entering into agreements subject to the condition that the acquisition of control will not be effective until approval is obtained. (b) Notwithstanding subsection (a), this section shall not apply to any acquisition of control of a Hawaii financial institution or financial institution holding company: (1) That has been placed into receivership or conservatorship, or whose acquisition has been wholly or partially initiated or approved for purposes of supervisory assistance from the commissioner or any other state or federal agency; (2) By a donee or distributee of a gift or devise, if the gift or devise is not intended to avoid this section and provided that the donee or distributee within thirty days after the acquisition gives the commissioner written notice of the gift or devise and any other information that the commissioner may require; (3) If the acquisition of control is the subject of an application for approval by the commissioner pursuant to section 412:3-609, 412:3-611, or 412:3-613; (4) The acquisition of additional shares by a person who either on July 1, 1993, or the date of compliance with the procedures of this section, and continuously after that date held, directly or indirectly, solely or through another person or transaction, or in concert with another, power to vote twenty-five per cent or more of the voting shares of the Hawaii financial institution or financial institution holding company; or (5) The acquisition of additional shares by a person who on July 1, 1993, and continuously thereafter held, directly or indirectly, solely or through another person or transaction, or in concert with another, power to vote ten per cent or more of the voting shares of the Hawaii financial institution or financial institution holding company, if the transaction will not result in the person's direct or indirect ownership or power to vote twenty-five per cent or more of any class of voting securities of the Hawaii financial institution or financial institution holding company or if the commissioner determines that such person has controlled the Hawaii financial institution or financial institution holding company since July 1, 1993. (c) Unless the requirement for an application is waived by the commissioner, the proposed acquirer shall file an application with the commissioner pursuant to section 412:3-603 for approval to acquire control of the Hawaii financial institution or financial institution holding company. The application shall contain: (1) Information regarding the proposed acquirer; (2) Details concerning the acquisition; and (3) Any other information that the commissioner may require. (d) After receiving the proposed acquirer's application for approval and any amendments or supplements thereto, the commissioner shall promptly forward a copy of the same to the affected financial institution. The affected institution shall have ten days after receipt of the application and any amendments or supplements thereto within which to submit any relevant information to the commissioner regarding the proposed acquisition, and shall be entitled to appear and be heard at any informational and comment proceeding on the application. (e) Approval may be denied by the commissioner for the proposed acquisition of control if it appears that: (1) The overall experience, moral character, or integrity of any person who would acquire control of a Hawaii financial institution or financial institution holding company or become a financial institution holding company indicates that it would not be in the interest of the depositors, beneficiaries, creditors, or shareholders of the Hawaii financial institution or the financial institution holding company, or in the public interest, to permit the person to control the Hawaii financial institution or the financial institution holding company or to become a financial institution holding company; (2) The acquisition will not promote the convenience, needs, and advantage of the general public, particularly in the community in which the affected institution conducts its business; (3) The effect of the proposed acquisition may be substantially to lessen competition or tend to create a monopoly or restraint of trade in any section of the country that includes this State or a part thereof, and that these anti-competitive effects are not clearly outweighed in the public interest by the probable effect of the acquisition in meeting the convenience and needs of the community to be served; (4) The financial condition of any person who would acquire control of a Hawaii financial institution or a financial institution holding company or become a financial institution holding company may jeopardize the safety and soundness of the Hawaii financial institution or the financial institution holding company or prejudice the interests of the depositors, beneficiaries, creditors, or shareholders of the Hawaii financial institution or the financial institution holding company; (5) Any plan or proposal to liquidate, merge, or consolidate, or make any other major change in the business, corporate structure, or management of the Hawaii financial institution or the financial institution holding company or any of its significant subsidiaries is not fair and reasonable to the depositors, beneficiaries, creditors, or shareholders of the Hawaii financial institution or the financial institution holding company or any of its significant subsidiaries; or (6) The acquiring person has failed or refused to furnish information requested by the commissioner. (f) As a condition for approving the proposed acquisition of control, the commissioner shall impose a reasonable time period, not to exceed one year, within which the acquisition of control must occur. (g) The commissioner may waive the requirement for approval of an acquisition of control of a financial institution holding company which indirectly controls a nondepository financial services loan company, provided that publication in a form approved by the commissioner is made. The publication shall state the fact that a change of control will take place and shall describe the effect, if any, on the operations and employees of the nondepository financial services loan company. Publication shall be made once in a newspaper of general circulation. [L 1993, c 350, pt of §1; am L 2006, c 228, §30] Revision Note "July 1, 1993," substituted for "the effective date of this chapter".