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(a) A wholly-owned bank subsidiary may engage in business activity that is authorized for the parent bank, including conducting a safe deposit business, engaging in an activity authorized in 3 AAC 02.185, and operating a trust company formed under AS 06.25, except that a bank subsidiary may not take deposits. An activity authorized by this subsection must be solely for the benefit of the parent bank and may be performed by the subsidiary on the bank's premises by bank personnel.
(b) In addition to those activities authorized under (a) of this section and subject to the prior approval of the department and compliance with any conditions placed on the bank or its subsidiary by the department, a bank may invest in bank subsidiaries engaged in the following:
(1) activities expressly authorized by AS 06.05.272 ;
(2) activities authorized under (a) of this section, when the subsidiary is not wholly-owned by the bank; and
(3) any other activity approved in advance by the department.
(c) Each bank subsidiary shall conduct business and operations in a safe and sound manner, observe separate corporate formalities, and maintain separate accounting procedures and corporate records.
(d) A bank may not require a customer to use the services of the bank's subsidiary as a condition of engaging in a service of the bank.
(e) The department will, in its discretion, revoke or restrict the authority of a bank to hold stock in a subsidiary, if the department determines that the holding of the subsidiary stock is contributing to, or is likely to contribute to, the deterioration of the condition of the bank.
History: Eff. 1/10/94, Register 129
Authority: AS 06.05.005 (a)
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Last modified 7/05/2006