| Notice Filed with SOS |
08/30/2024 |
| Rule |
ProposedRuleAttach2024-00416.docx
|
| Additional Information |
AddInfoAttach2024-00416.pdf
|
| Statutory Authority |
11-101-102. Declaration of policy.
11-102-104. Powers and duties of the banking board.
11-109-103. Applicability of powers of banking board and bank commissioner to trust companies.
11-109-501. Directors’ meetings - duties |
| Description of Subjects/Issues |
The purpose of this rule is to apply restrictions to the declaration and payment of dividends by a
State-Chartered Trust Company.
The purpose of this rulemaking is to amend Rule 3 CCR 701-6 TC8.
The Colorado Division of Banking (Division) finds that the proposed amendments this rule are necessary as follows:
● The current Rule TC8 is silent on capital limitations on the payment of dividends. Including such capital limitations is necessary to help ensure State-Chartered Trust Companies maintain sufficient capital.
● Under Rule TC8(C), Earnings Limitation on Payment of Dividends, the current Rule does not provide clarification regarding the source of dividend payments, nor is there a definition of undivided profits in the Rule. These additions are necessary to provide clarity regarding the source of dividend payments.
● Include the Prompt Corrective Action “undercapitalized” definition through the incorporation by reference the following applicable code of federal regulation:
o Code of Federal Regulations Title 12 - Banks and Banking Chapter III - Federal Deposit Insurance Corporation Subchapter B - Regulations and Statements of General Policy Part 324 Capital Adequacy of FDIC-Supervised Institutions, which includes Subpart H Prompt Corrective Action. The incorporated material is available at
https://banking.colorado.gov/banking-home/rules-statutes. |
| Purpose/Objective of Rule |
The purpose of this rule is to apply restrictions to the declaration and payment of dividends by a State-Chartered Trust Company. |
| Basis And Purpose |
BasisAndPurposeAttachment2024-00416.pdf
|
| Comments |
The Colorado Division of Banking finds that the proposed amendments this rule are necessary as follows:
The current Rule TC8 is silent on capital limitations on the payment of dividends. Including such capital limitations is necessary to help ensure State-Chartered Trust Companies maintain sufficient capital.
Under Rule TC8(C), Earnings Limitation on Payment of Dividends, the current Rule does not provide clarification regarding the source of dividend payments, nor is there a definition of undivided profits in the Rule. These additions are necessary to provide clarity regarding the source of dividend payments.
Include the Prompt Corrective Action “undercapitalized” definition through the incorporation by reference the following applicable code of federal regulation:
o Code of Federal Regulations Title 12 - Banks and Banking Chapter III - Federal Deposit Insurance Corporation Subchapter B - Regulations and Statements of General Policy. |
| Submitted in response to issues raised by COLS/OLLS? |
No
|
| Is this rule adopted in response to recent legislation? |
No
|
| Hearing Date |
10/17/2024 |
| Hearing Time |
10:00 AM |
| Hearing Location |
1560 Broadway, Suite 100D, Denver, Colorado |
| Contact Name |
Charles Siler |
| Contact Title |
Banking Board Administrator |
| Contact Telephone |
3038947584 |
| Contact email |
charles.siler@state.co.us |