Chapter 1: General
Provisions
§ 101. Short title.
§ 102. Definitions.
§ 103. Application of title.
§ 104. Requirements for banking business.
§ 105. Application to existing charters, articles of incorporation, or bylaws.
This title shall be known as the “Federated States of Micronesia Bank Act of 1980.”
Source: PL 1-94 § 101.
Case annotations: A municipal license fee ordinance which separately defines banking and insurance businesses and specifically imposes a different rate upon those businesses than would be imposed upon other kinds of businesses on its face appears to be an effort to regulate banking and insurance and is unconstitutional and void. Actouka v. Kolonia Town, 5 FSM Intrm. 121, 122 (Pon. 1991).
As used in this title, unless it is otherwise provided or the context requires a different construction, application, or meaning:
(1) “Bank” means a stock or mutual corporation or unincorporated association with sufficient capital, authorized by law to receive deposits of money or securities, to open credits, checking accounts, and savings accounts, to make loans, and in general to engage in all kinds of banking transactions, but does not mean a National banking association established by the Federated States of Micronesia. “Bank” includes a savings and loan association but does not include a credit union.
(2) “Banking Board” means the Board established pursuant to section 201 of this title.
(3) “Banking Commissioner” means the Banking Commissioner appointed pursuant to section 206 of this title.
(4) “Branch” means an office of a bank at which deposits are received or checks paid or money is lent.
(5) “Demand deposit” means any deposit which is repayable by its terms not more than three days after the time it is made.
(6) “Deposits” means money or other property transferred or assigned to any person pursuant to an agreement, expressed or implied, that the person shall repay such moneys upon demand (whether in person or by written order) or after a fixed or determinable period of time. Money loaned to a bank which is to be repaid not sooner than five years from the date of loan, and pursuant to a loan agreement under which the obligation to repay is subordinate to the rights of depositors, shall not be deemed to be a deposit. Money transferred to a credit union as a purchase of its shares shall not be deemed to be a deposit.
(7) “Domestic bank” means a bank organized under the provisions of chapter 3 of this title.
(8) “Foreign bank” means a corporation or other financial institution organized for the purpose of engaging in the banking business under the laws of the United States or of a territory or State of the United States, or of a foreign country, operating a bank in its home territory, State, or country.
(9) “Legal reserve” means the sum which every domestic bank and foreign bank shall at all times have available for the payment of their deposit liabilities pursuant to the provisions of this title.
(10) “Paid-in capital, surplus, and undistributed profits” means, in the case of a foreign bank, the aggregate paid-in capital, surplus, and undistributed profits of such bank and not merely that allocated to, located in, or arising out of its operations in the Federated States of Micronesia.
(11) “Person” includes individuals, corporations, partnerships, and any other business entity.
(12) “Public Auditor” means the Public Auditor appointed by the President of the Federated States of Micronesia with the advice and consent of the Congress pursuant to the Constitution.
(13) “Registrar of Corporations” means the Registrar of Corporations of the National Government of the Federated States of Micronesia.
(14) “Related person” with respect to any person means his spouse, child, parents, brothers, or sisters, or any partnership, corporation, or firm in which he owns more than a ten percent interest.
Source: PL 1-94 § 102; PL 1-154 § 1; PL 2-20 § 1; PL 9-130 § 1.
Editor’s note: Minor changes were made in the phraseology of this section in the 1982 edition of this code.
This title shall apply to and govern all banks operating a branch or office in the Federated States of Micronesia; and any bank now existing and operating a branch or office in the Federated States of Micronesia shall hereafter be operated in accordance with the provisions of this title, and shall be required to obtain a license pursuant to chapter 5 of this title on or before the 31st day of December following the effective date of this title.
Source: PL 1-94 § 103.
(1) No person shall engage in the business of accepting deposits in the Federated States of Micronesia or shall use the term “bank” or “savings and loan association” or any form thereof in the conduct of its business unless it has been granted a license pursuant to the provision of this title and such license has not expired and has not been canceled.
(2) Any person holding such a license shall engage in no business in the Federated States of Micronesia other than the banking business and shall engage in such business only at the locations authorized by the Banking Board.
Source: PL 1-94 § 104.
(1) Domestic and foreign banks shall be subject to the applicable provisions of their existing charters, articles of incorporation, or bylaws only to the extent that such are compatible and do not conflict with the provisions of this title.
(2) In the event of any conflict or incompatibility between this title and provisions of said charter, articles of incorporation, or bylaws with respect to any domestic or foreign bank, the provisions of this title shall prevail.
Source: PL 1-94 § 105.
Editor’s note: Minor changes were made in the phraseology of this section in the 1982 edition of this code.