Trust Companies

C.R.S. tit. 11, art. 109

in effect

C.R.S. § 11-109-101 Definitions

11-109-101. Definitions. As used in this article, unless the context otherwise requires: (1) "Act as a fiduciary" or "acting as a fiduciary" means to: (a) Accept or execute trusts, including to: (I) Act as trustee under a written agreement; (II) Receive money or other property in the capacity as trustee for investment in real or personal property; (III) Act as trustee and perform the fiduciary duties committed or transferred to the trustee by order of a court of competent jurisdiction; (IV) Act as personal representative or trustee of the estate of a deceased person; or (V) Act as trustee for a minor or incapacitated person; (b) Administer real or tangible personal property in any other fiduciary capacity; or (c) Act pursuant to an order of a court of competent jurisdiction as personal representative, executor, or administrator of the estate of a deceased person or as a guardian or conservator for a minor or incapacitated person. (2) "Banking board" shall have the same meaning as defined in section 11-101-401 (7). (3) "Commissioner" means the state bank commissioner. (4) "Order" means all or any part of the final disposition, whether affirmative, negative, injunctive, or declaratory in form, by the banking board of any matter other than the making of rules of general application. (5) "Person" means an individual, corporation, partnership, joint venture, unincorporated association, or any other legal or commercial entity. (6) "Representative trust office" means an office at which a trust company has been authorized by the banking board to engage in a trust business other than acting as a fiduciary. (7) "Savings deposit" means a deposit or account with respect to which the depositor is not required by the deposit contract, but may at any time be required by the trust company, to give written notice of an intended withdrawal not less than seven days before withdrawal is made, and that is not payable on a specified date or at the expiration of a specified time after the date of deposit, and funds deposited to the credit of, or in which any beneficial interest is held by, a corporation, association, partnership, or other organization operated for profit do not exceed one hundred fifty thousand dollars per depositor at the trust company. (8) "Time deposit" means a deposit that the depositor does not have a right to withdraw for a period of seven days or more from the date of deposit. A "time deposit" may be represented by a transferable or nontransferable, or a negotiable or nonnegotiable, certificate, instrument, passbook, statement, or otherwise. (9) "Transaction account" means a deposit or account that the depositor or account holder may withdraw by check or by similar means for payment to third parties. (10) "Trust business" means the holding out by a person to the public by advertising, solicitation, or other means that the person is available to perform any service authorized pursuant to section 11-109-201, including acting as a fiduciary. (11) "Trust company" means a corporation organized pursuant to and subject to regulation by the provisions of this article. (12) "Trust institution" means a trust company, a federal or state chartered bank with trust powers, a state bank with trust powers chartered under the laws of another state, or a trust company chartered under the laws of another state. (13) "Trust office" means an office, other than the principal office, at which a trust company is authorized by the banking board to engage in the trust business and to act as a fiduciary.

C.R.S. § 11-109-102 Use of words "trust" or "trust company"

11-109-102. Use of words "trust" or "trust company". (1) It is unlawful for any person, firm, association, or corporation to use or advertise the words "trust" or "trust company" in the conduct of its business in such a manner as is likely to cause the public to be confused, deceived, or mistaken that the person, firm, association, or corporation has been authorized to transact business as a regulated financial institution unless the person, firm, association, or corporation is organized under the "Colorado Banking Code", articles 101 to 109 of this title, article 70 of this title, the banking laws of another state, or the national banking laws and is authorized to use the words "trust" or "trust company" as part of its name. (2) Subsection (1) of this section does not apply to trust institutions.

C.R.S. § 11-109-103 Applicability of powers of banking board and bank commissioner to trust companies

11-109-103. Applicability of powers of banking board and bank commissioner to trust companies. The powers, duties, and functions of the banking board and the commissioner contained in article 102 of this title and the declaration of policy contained in section 11-101-102 shall apply to the provisions of this article.

C.R.S. § 11-109-104 Powers - banking board - commissioner

11-109-104. Powers - banking board - commissioner. (1) In addition to the other powers conferred on the banking board by this article, the banking board shall have the power to: (a) Implement by order and rule any provision of this article and to obtain restraining orders and injunctions to prevent violation of and to enforce compliance with the provisions of this article and the orders and rules issued thereunder. In the exercise of the power to make orders and issue rules, the banking board shall act in the interests of maintaining sound trust companies and the security of fiduciary funds. (b) Regulate the procedure and the practice at hearings; (c) Order any person or a trust company to cease violating any provision of this article or any rule and to mail a copy of the order to the person or trust company and to each director of the trust company; (d) Suspend, after notice and hearing, any officer or director for fraud, theft, or failure to comply with the provisions of this article or with any valid order or rule; (e) Subpoena witnesses, require the production of evidence, administer oaths, and examine any person under oath in connection with any matter relating to the powers and duties of the banking board; (f) Require that each trust company maintain such insurance and bonds as necessary and appropriate; (g) Approve amendments to a trust company's articles of incorporation; (h) Approve or disapprove a change of location; (i) Approve or disapprove any merger or other corporate reorganization; (j) Require a trust company holding fiduciary funds pursuant to section 11-109-906 to collateralize such funds as are in excess of federally insured amounts in accordance with the rules adopted by the banking board; (k) Require that a trust company that is accepting deposits pursuant to section 11-109-201 (1)(d) limit the aggregate amount of such deposits. (2) If the banking board has reason to believe that the capital of any trust company is inadequate under the rules of the banking board, the banking board may ascertain the facts and furnish the trust company with a copy of its determination. If the banking board finds an inadequacy of capital based upon such determination, the commissioner, with the approval of the banking board, may direct the trust company to levy an assessment in a designated amount upon the holders of record of common stock to remedy the inadequacy of capital. Upon receipt of an order to levy an assessment, the directors shall cause to be sent to all holders of common stock, at their addresses, a copy of the order and a copy of this subsection (2). If an assessment is not paid within the time prescribed in the order or such shorter period as the directors decide, but not less than thirty days, the trust company may, within sixty days thereafter as the banking board may prescribe in its order, offer the shares of the defaulting stockholders for sale at public auction or private sale at a price that shall not be less than the amount of the assessment and the cost of the sale. Any excess shall be paid to the prior owners. The method of collection provided in this subsection (2) shall be the sole method of collecting assessments. If an assessment is not paid within ninety days after the date of the order to levy or at such other date as may be specified in the order, but in no event less than thirty days, the commissioner may, with the approval of the banking board, proceed pursuant to section 11-109-702. However, for good cause shown to the banking board by the affected trust company, the banking board may extend the ninety-day limit. (3) The term "shareholder" shall apply not only to such persons as appear on the books of the trust company as shareholders, but also to every owner of stock, legal or equitable, although the stock may stand on such books in the name of another person, but not to a person that holds the stock as collateral security for the payment of a debt. any, the banking board may extend the ninety-day limit. (3) The term "shareholder" shall apply not only to such persons as appear on the books of the trust company as shareholders, but also to every owner of stock, legal or equitable, although the stock may stand on such books in the name of another person, but not to a person that holds the stock as collateral security for the payment of a debt. (4) Any trust company shareholder that has transferred such shareholder's shares, caused such transfer to appear on the books of the trust company within sixty days before the capital inadequacy of such trust company, or that has made such transfer with knowledge of such impending capital inadequacy shall be liable to the same extent that the transferee or subsequent transferee fails to meet such liability. This section shall not be construed to affect in any way any recourse that such shareholder might otherwise have against those in whose names such shares appear upon the books of the trust company at the time of such capital inadequacy. (5) No stockholder of a trust company shall set off against the stockholder's liability any claim such stockholder may have as a depositor in or creditor of any insolvent trust company. (6) The commissioner shall examine the books and records of every trust company as often as deemed advisable and to the extent required by the banking board; shall make and file a correct report in detail disclosing the results of such examination; and shall mail a copy of such report to the trust company examined. (7) The commissioner shall examine, as often as deemed advisable and to the extent required by the banking board, any information technology function of a trust company or a third-party provider, as applicable, without regard to the location of the function or third-party provider, and shall make and file in the commissioner's office a correct report in detail disclosing the results of the examination. (8) (a) The commissioner, if the commissioner deems it necessary or if required by the banking board, may examine the books and records of the controlling shareholder of a trust company and any affiliated entities of the controlling shareholder for the purpose of determining the safety and soundness of the trust company. If the controlling shareholder or affiliate's records are located outside this state, the controlling shareholder or affiliate shall either make them available to the commissioner at a convenient location within this state or pay the reasonable and necessary expenses for the commissioner or the commissioner's representative to examine them at the place where they are located. The commissioner may designate representatives, including comparable officials of the state in which the records are located, to inspect them on the commissioner's behalf. If a controlling shareholder or affiliate refuses to permit the commissioner to make an examination, the banking board may fine such controlling shareholder or affiliate an amount not to exceed one thousand dollars for each day any such refusal continues. In lieu of any examination required by this subsection (8), the commissioner may accept an audit for the previous fiscal year prepared by an independent certified public accountant, independent registered accountant, or other independent qualified person. If the commissioner accepts an audit prepared by such independent person, the costs of the audit shall not be borne by the commissioner, and all costs of such audit remain the obligation of the controlling shareholder or affiliate. (b) For purposes of this subsection (8): (I) "Affiliated entity" or "affiliate" means an entity in control of a controlling shareholder. (II) "Controlling shareholder" means a shareholder in control of a trust company. (III) "In control of" means that an entity or shareholder meets the same criteria for acquiring control as is set forth in section 11-102-303 for acquiring control of a state bank.

C.R.S. § 11-109-105 No private right of action

11-109-105. No private right of action. Except as expressly provided in this article, no person, other than the banking board, shall have the right to bring or maintain any private action, at law or in equity, for a violation of or to enforce this article.

C.R.S. § 11-109-201 Powers of trust companies

11-109-201. Powers of trust companies. (1) A trust company shall be incorporated under and subject to the general corporation laws of this state not inconsistent with this article. The business activities of a trust company in this state shall be limited to the exercise of the power to: (a) Act or be appointed by a court to act in like manner as an individual, an executor, a personal representative, a trustee, an administrator, a guardian, a conservator, an assignee, a custodian, a receiver, or a depository or in any other fiduciary capacity for any purposes permitted by law; (b) Act as a transfer agent, a registrar, an escrow agent, or an attorney-in-fact and to receive, manage, and apply sinking funds; (c) Maintain and rent safe deposit and safekeeping facilities; (d) Receive and maintain savings deposits, time deposits, and certificates of deposit, and to pay interest thereon at the rates permitted state banks under section 11-105-102 (3), subject to the restrictions of section 11-109-204; (e) Exercise the same investment powers as an individual fiduciary under like circumstances; (f) Accept and execute any fiduciary business permitted by the laws of this state or any other state and the United States and to establish common trust funds as provided by article 24 of this title; (g) Take oaths and execute affidavits by the oath or affidavit of the president, vice-presidents, secretary, assistant secretary, manager, trust officer, or assistant trust officer; (h) Act as an investment adviser under any applicable law; (i) Do and perform any other acts necessary or proper to exercise the powers enumerated in this section. (2) Except for those powers specifically authorized in subsection (1) of this section and section 11-109-907, a trust company shall not have the power to conduct a banking business, receive and maintain transaction deposit accounts, nor use the word "bank" in its name. (3) As authorized pursuant to section 10-2-601 (2), C.R.S., a trust company may, pursuant to federal law or under such rules as may be adopted by the banking board or the commissioner of insurance pursuant to section 10-2-601, C.R.S., act as the agent for any insurance company authorized to do business in this state by soliciting and selling insurance and collecting premiums on policies issued by such company. For such services, a trust company may receive such fees or commissions as may be agreed between the trust company and the insurance company.

C.R.S. § 11-109-202 Offices of trust companies

11-109-202. Offices of trust companies. (1) (a) Each trust company shall have and continuously maintain a principal office in this state. (b) Each executive officer at the principal office is an agent of the trust company for service of process. (c) A trust company may change its principal office to any location within this state by filing a written notice with the banking board. The written notice shall contain: (I) The name of the trust company; (II) The street address of its principal office before the change; (III) The street address to which the principal office is to be changed; and (IV) A copy of the resolution authorizing the change adopted by the board of directors of the trust company. (d) The change of principal office shall take effect on the thirty-first day after the date the banking board receives the notice pursuant to paragraph (c) of this subsection (1), unless: (I) The banking board establishes an earlier or later date; or (II) Prior to such day the banking board notifies the trust company that the trust company shall establish, to the satisfaction of the banking board, that the relocation is consistent with the original determination made under section 11-109-306 for the establishment of a trust company at that location, in which event the change of principal office shall take effect when approved by the commissioner. (2) A trust company may act as a fiduciary and engage in a trust business at each trust office as permitted by this article. (3) A trust company may not act as a fiduciary but may otherwise engage in a trust business at a representative trust office as permitted by this article. (4) (a) A trust company may establish or acquire and maintain trust offices or representative trust offices anywhere in this state. (b) (I) A trust company desiring to establish or acquire and maintain an additional office shall file a written notice with the banking board. The written notice shall contain the following: (A) The name of the trust company; (B) The location of the proposed additional office; and (C) Information indicating whether the additional office will be a trust office or a representative trust office. (II) The trust company shall also furnish a copy of the resolution authorizing the additional office adopted by the board of directors of the trust company and shall pay the filing fee, if any, prescribed by the banking board. (c) The trust company may commence business at the additional office on the thirty-first day after the date the banking board receives the notice, unless the banking board specifies an earlier or later date. (d) The thirty-day period of review may be extended by the banking board on a determination that the written notice raises issues that require additional information or additional time for analysis. If the period of review is extended, the trust company may establish the additional office only on prior written approval by the banking board. (e) The banking board may deny approval of the additional office if the banking board finds that the trust company lacks sufficient financial resources to undertake the proposed expansion without adversely affecting its safety or soundness or that establishment of the proposed office would be contrary to the public interest. (5) A trust company chartered by a state other than Colorado may establish and maintain a trust office or representative trust office anywhere in this state if the establishment and operation of such office is authorized expressly by rules promulgated by the banking board for that purpose. The out-of-state trust company must provide to the banking board notice of its intent to open an office at least sixty days before opening such office for business.

C.R.S. § 11-109-203 Activities not requiring a charter

11-109-203. Activities not requiring a charter. (1) Notwithstanding any other provision of this article 109 to the contrary, a company does not engage in the trust business, or in any other business in a manner requiring a charter, under this article 109 or in an unauthorized trust activity by: (a) Acting in the scope of authority as an agent of a trust institution; (b) Rendering a service customarily performed by an attorney or law firm in a manner approved and authorized by the Colorado supreme court; (c) Acting as trustee under a deed of trust delivered only as security for the payment of money or for the performance of another act; (d) Receiving and distributing rents and proceeds of sale as a licensed real estate broker on behalf of a principal in a manner authorized by the real estate commission pursuant to article 10 of title 12; (e) Engaging in a securities transaction or providing an investment advisory service as a licensed and registered broker-dealer, investment advisor, or registered representative of an investment advisor, if the activity is regulated by the securities commissioner or the federal securities and exchange commission; (f) Engaging in the sale and administration of an insurance product as an insurance company or agent licensed by the division of insurance to the extent that the activity is regulated by the division of insurance; (g) Acting as trustee for a public, private, or independent institution of higher education or a university system, including an institution of higher education's or university system's affiliated foundations or corporations, with respect to endowment funds or other funds owned, controlled, provided to, or otherwise made available to such institution or system with respect to its educational or research purposes; (h) Rendering services customarily performed by a certified public accountant in a manner authorized by article 100 of title 12; (i) If the company is a trust institution and is not otherwise prohibited from engaging in a trust business in this state: (I) Marketing or soliciting in this state through the mails, telephone, any electronic means, or in person with respect to acting or proposing to act as a fiduciary outside of this state; (II) Delivering money or other intangible assets and receiving the money or other intangible assets from a client or other person in this state; or (III) Accepting or executing outside of this state a trust of any client or otherwise acting as a fiduciary outside of this state for any client.

C.R.S. § 11-109-204 Federal deposit insurance required

11-109-204. Federal deposit insurance required. (1) No trust company may accept or hold savings deposits, time deposits, or certificates of deposit pursuant to section 11-109-201 (1)(d) unless such deposits are insured by the federal deposit insurance corporation or its successor. (2) Each trust company shall immediately give notice to the banking board when it has applied to the federal deposit insurance corporation or its successor for deposit insurance and, thereafter, shall give bi-monthly reports on the status of its application for deposit insurance to the banking board until final disposition of the application is made.

C.R.S. § 11-109-205 Transactions with affiliates

11-109-205. Transactions with affiliates. (1) Unless otherwise prohibited by law, a trust company and its affiliates may engage in any of the transactions described in subsection (2) of this section if such transactions are either: (a) On terms and under circumstances, including credit standards, that are substantially the same, or at least as favorable to such trust company or its subsidiary, as those prevailing at the time for comparable transactions with or involving nonaffiliated companies; or (b) In the absence of comparable transactions, on terms and under circumstances, including credit standards, that in good faith would be offered to, or would apply to, nonaffiliated companies. (2) Transactions covered. Subsection (1) of this section shall apply to the following: (a) A purchase of, or an investment in, securities issued by the affiliate; (b) A purchase of assets, including assets subject to an agreement to repurchase, from the affiliate; (c) The acceptance of securities issued by the affiliate as collateral security for a loan or extension of credit to any person or company; (d) The sale of securities or other assets to an affiliate, including assets subject to an agreement to repurchase; (e) The payment of money or the furnishing of services to an affiliate under contract, lease, or otherwise; (f) Any transaction in which an affiliate acts as an agent or broker or receives a fee for its services for the trust company or for any other person; and (g) Any transaction or series of transactions with a third party including those in which an affiliate has a financial interest in the third party or is a participant in such transaction or series of transactions. (3) (a) A company or shareholder shall be deemed to have control over another company if such company or shareholder: (I) Directly or indirectly, or acting through one or more other persons, owns, controls, or has power to vote twenty-five percent or more of any class of voting securities of the other company; or (II) Controls in any manner the election of a majority of the directors or trustees of the other company. (b) Notwithstanding any other provision of this section, no company shall be deemed to own or control another company by virtue of its ownership or control of shares in a fiduciary capacity or if the company owning or controlling such shares is a business trust. (4) The banking board may promulgate rules to exempt transactions or relationships from the requirements of this section if the banking board finds such exemptions are in the public interest and consistent with the purposes of this section. (5) As used in this section, unless the context otherwise requires: (a) (I) "Affiliate" with respect to a trust company means: (A) Any company that controls the trust company and any other company that is controlled by the company that controls the trust company; (B) Any company that is controlled, directly or indirectly, by a trust or otherwise, by or for the benefit of shareholders who beneficially or otherwise control, directly or indirectly, by trust or otherwise, the trust company or any company that controls the trust company; (C) Any company in which a majority of its directors or trustees constitute a majority of the persons holding any such office with the trust company or any company that controls the trust company; (D) Any company, including a real estate investment trust, that is sponsored and advised on a contractual basis by the trust company or any subsidiary or affiliate of the trust company; and (E) Any investment company with respect to which a trust company or any affiliate thereof is an investment advisor as defined in 15 U.S.C. sec. 80a-2 (a)(20). (II) "Affiliate" with respect to a trust company does not include: (A) Any company that is a subsidiary of a trust company; and (B) Any company engaged solely in holding the premises of the trust company. iliate of the trust company; and (E) Any investment company with respect to which a trust company or any affiliate thereof is an investment advisor as defined in 15 U.S.C. sec. 80a-2 (a)(20). (II) "Affiliate" with respect to a trust company does not include: (A) Any company that is a subsidiary of a trust company; and (B) Any company engaged solely in holding the premises of the trust company. (b) "Company" means a corporation, partnership, business trust, association, or similar organization and, unless specifically excluded, the term "company" includes a "trust company" and a "bank". (c) "Securities" shall have the same meaning as set forth in section 11-51-201 (17).

C.R.S. § 11-109-206 Trust company organized as a limited liability company

11-109-206. Trust company organized as a limited liability company. (1) Pursuant to section 11-102-104 (5.5)(c), a trust company charter may be issued to a limited liability company that otherwise meets the requirements of this article. (2) A trust company organized as a limited liability company shall not be required to exist in perpetuity; except that the articles of organization of such a trust company shall provide for a method to extend the existence of the trust company in the event that termination occurs. In addition, the articles of organization of such a trust company shall require that liquidation of the limited liability company conform with the requirements of this code. (3) Upon approval of the banking board, a trust company organized as a limited liability company may be merged with or converted into another entity regardless of the form of the surviving entity, so long as the surviving entity satisfies the requirements of this code. (4) Upon approval of the banking board, a trust company organized as a corporation may be merged with or converted into a limited liability company, so long as it satisfies the requirements of this code. (5) (a) A trust company organized as a limited liability company shall have a written operating agreement containing any provisions for the affairs of the trust company and the conduct of its business as may be agreed upon by the members and which provisions are consistent with this code and the "Colorado Limited Liability Company Act", article 80 of title 7, C.R.S. (b) A copy of the written operating agreement shall be filed with the banking board prior to the granting of a charter to the trust company, and any amendments to the operating agreement shall be filed with and approved by the banking board prior to adoption. (c) The banking board may promulgate rules establishing additional requirements relating to operating agreements to implement the provisions of this section. (6) All distributions made by a trust company organized as a limited liability company to its members shall be subject to the requirements applicable to dividends issued by a trust company organized as a corporation under this code and the rules of the banking board. (7) For purposes of implementing this section, the following definition constructions shall apply: (a) Where this code refers to "articles of incorporation", that term shall be construed to apply to a limited liability company's articles of organization, as that term is defined in section 7-80-102 (1), C.R.S.; (b) Where this code refers to "bylaws", that term shall be construed to apply to a limited liability company's operating agreement, as that term is defined in section 7-80-102 (11), C.R.S.; (c) Where this code refers to "common stock" or "shares" of a trust company, such terms shall be construed to apply to a limited liability company's membership interests; (d) Where this code refers to a "corporation", such term shall be construed to include a limited liability company organized under the "Colorado Limited Liability Company Act", article 80 of title 7, C.R.S., which limited liability company conforms to this section and the requirements established by the banking board pursuant to section 11-102-104 (5.5); (e) Where this code refers to a "director" or a "board of directors" of a trust company, such terms shall be construed to apply to a manager or the managers of a limited liability company; (f) Where this code refers to an "incorporator", such term shall be construed to apply to the organizers of a limited liability company; (g) Where this code refers to a "shareholder" or a "stockholder" of a trust company, such terms shall be construed to apply to a member of a limited liability company.

C.R.S. § 11-109-301 Incorporators

11-109-301. Incorporators. Five or more individual incorporators desiring to organize a trust company shall file with the banking board an application for charter on the form prescribed by the banking board, together with all other documents required by section 11-109-305, all of which instruments shall be duly signed by each of the incorporators and sworn to before an officer authorized by the laws of this state to administer oaths.

C.R.S. § 11-109-302 Application fee

11-109-302. Application fee. Each application for charter shall be accompanied by an application fee established by the banking board pursuant to section 11-102-104 (11). The fee may be refunded to the incorporators if the application is withdrawn prior to the date set for public hearing.

C.R.S. § 11-109-303 Assessments

11-109-303. Assessments. (1) The banking board shall annually establish fees and assessments pursuant to section 11-102-104 (11). Assessments may be made more frequently than annually at the discretion of the banking board. (2) For the fiscal year beginning July 1, 1992, and for each fiscal year thereafter, the banking board shall establish its annual assessment to be collected at least semiannually in such amounts as are sufficient to generate the moneys appropriated by the general assembly to the division of banking for each such fiscal year.

C.R.S. § 11-109-304 Capital

11-109-304. Capital. (1) The banking board shall establish by rules the capital standards and guidelines, the methods for measuring capital, and the definitions of "capital", "capital adequacy", "capital inadequacy", and other related terms for trust companies subject to this article, which may differ for specific purposes. In promulgating such rules, the banking board shall consider all relevant factors, including without limitation the policies set forth in section 11-101-102 and relevant federal laws and regulations. (2) Each trust company subject to this article shall at all times comply with the capital rules promulgated by the banking board.

C.R.S. § 11-109-305 Application for charter

11-109-305. Application for charter. (1) After the capital stock has been fully subscribed, the incorporators shall make application to the banking board for a charter. The incorporators shall submit to the banking board the following: (a) The proposed articles of incorporation in such form as the banking board, pursuant to rules, shall prescribe and as shall be acceptable to the secretary of state for purposes of filing; (b) An application for a charter in such form and containing such information as the banking board may require. (2) If the proposed articles of incorporation or application do not comply with the requirements of this article, and with the requirements of the banking board issued pursuant thereto, the banking board shall, within thirty days after the receipt thereof, return both of the said documents to the incorporators, calling attention to the defects therein.

C.R.S. § 11-109-306 Procedure for granting or denying charter

11-109-306. Procedure for granting or denying charter. (1) Within sixty days following the filing of the completed application for charter, the commissioner shall make or cause to be made a careful investigation to determine that the following requirements have been met: (a) That the applicant has proceeded in a lawful manner; (b) That the name is not deceptively similar to that of another trust company or otherwise misleading; (c) That the persons who will serve as directors or officers, insofar as such persons are known, are qualified by character and experience and that the qualifications and financial status of the incorporators, directors, officers, and persons in control of the trust company, as defined in section 11-109-401, are consistent with their responsibilities and duties; (d) That the proposed capital satisfies the standards and guidelines in the rules promulgated by the banking board; (e) That the proposed or amended articles of incorporation and bylaws are appropriate or may be amended to be appropriate. (2) Within ninety days after the filing of the application, the banking board shall conduct a public hearing to consider the application. At least thirty days prior to such hearing, the banking board shall give written notice thereof to all persons doing a trust business in the community in which the proposed trust company is to be located and to such other persons as it may designate. At such hearing, the applicants shall have the burden of proving that: (a) The public convenience and advantage will be promoted by the establishment of the proposed trust company; (b) Conditions in the locality in which the proposed trust company will transact business afford reasonable promise of successful operation; (c) The trust company is being formed for no other purpose than the legitimate objects contemplated by this article; (d) The applicants have complied with all of the applicable provisions of this article; (e) The books and records of the proposed trust company will be maintained in Colorado and a substantial portion of the proposed trust company's operations will be conducted in Colorado. (3) Notwithstanding any other provision of this section, if the banking board has given notice pursuant to subsection (2) of this section of a hearing on any application for charter filed pursuant to this section and the banking board has received no written protests against such charter application within ten days before the hearing, the banking board may grant such charter without a hearing as otherwise required in this section if the applicants for such charter are known to the banking board. (4) Within thirty days after the date of the conclusion of the hearing, the banking board shall grant a charter to the applicants if the banking board determines that the requirements of subsections (1) and (2) of this section have been met. (5) If the proposed trust company fails to open for business within six months after the date of granting the charter, the privilege of transacting business shall terminate. The banking board, for good cause and upon written application filed prior to the expiration of such six-month period, may extend the time within which the trust company may open for business. (6) Unless otherwise provided by law to the contrary, articles of incorporation, amended articles of incorporation, or amendments to articles of incorporation shall be delivered to the secretary of state for filing in accordance with the general corporate laws of this state.

C.R.S. § 11-109-401 Acquisition of majority control over an existing trust company - definitions

11-109-401. Acquisition of majority control over an existing trust company - definitions. (1) As used in this section, unless the context other requires: (a) "Controlling person" means a person who is in control of a trust company or would be in control of a trust company after the proposed acquisition. (b) A person shall be deemed to have acquired control of a trust company if as a result of acquisition such person: (I) Directly or indirectly owns, controls, holds with the power to vote, or holds proxies representing twenty-five percent or more of the outstanding voting stock thereof; (II) Controls in any manner the election of a majority of the directors thereof; or (III) Exercises a controlling influence over the management or policies thereof. (2) (a) Whenever a person proposes to acquire control of any trust company, such person shall first make application to the banking board for approval. Without approval from the banking board pursuant to subsection (3) of this section, a person shall be prohibited from making such an acquisition. (b) An application required by paragraph (a) of this subsection (2) shall contain the following information to the extent that it is known by the person making the application: (I) The number of shares involved; (II) The name of each seller or transferor; (III) The name of each purchaser or transferee; (IV) The name of each beneficial owner if the share or shares are registered in another name; (V) The purchase price; (VI) Detailed information concerning any loans made in connection with the acquisition; (VII) Such other information concerning the transaction as may be required by the banking board regarding the effect of the transaction upon the control of the trust company involved; (VIII) Biographical and financial information concerning each purchaser, controlling person, or person in control of a controlling person participating in the proposed acquisition; and (IX) The name of each controlling person and each person in control of a controlling person participating in the proposed acquisition. (3) (a) After receipt of an application, the banking board shall make an investigation, and the banking board shall approve the change of control only after the banking board has determined: (I) That the person proposing to acquire control is qualified by character, experience, and financial responsibility to control the trust company in a legal and proper manner; (II) That the interests of the public generally will not be jeopardized by the proposed acquisition; and (III) That the person proposing to acquire control has satisfied the requirements of this section and the other provisions of this article. (b) The general assembly declares that the acquisition of control of or of any ownership interest in trust companies by persons owned or controlled by a country with which it has been determined to be against the national interest to trade without export controls for national security purposes by the president of the United States or another appropriate agency of the federal government as directed by the president pursuant to the "Export Administration Act of 1979", 50 U.S.C. Appendix sec. 2401 et seq., as amended, the "International Emergency Economic Powers Act", 50 U.S.C. sec. 1701 et seq., as amended, or any rule, order, or decision promulgated in connection therewith, is against the public interest. If the application or the banking board's investigation indicates that any person seeking to have control of or any ownership interest in a trust company is owned or controlled by such a country, the banking board may not approve any such change of control. (4) This section shall not apply to the acquisition of: (a) Voting proxies acquired in the normal course of business as a result of a proxy solicitation in conjunction with a stockholders' meeting; ndicates that any person seeking to have control of or any ownership interest in a trust company is owned or controlled by such a country, the banking board may not approve any such change of control. (4) This section shall not apply to the acquisition of: (a) Voting proxies acquired in the normal course of business as a result of a proxy solicitation in conjunction with a stockholders' meeting; (b) Stock held in a fiduciary capacity unless the acquiring person has sole discretionary authority to exercise voting rights with respect thereto; (c) Stock acquired in securing or collecting, in whole or in part, a debt contracted in good faith or stock acquired through testate or intestate succession or bona fide gift, if the acquirer advises the banking board of such acquisition within thirty days after the acquisition and provides any information required or requested by the banking board or commissioner; (d) Stock acquired by an underwriter in good faith and without any intent to evade the purpose of this section if the shares are held only for such reasonable period of time as will permit the sale thereof; or (e) Pro rata stock dividends. (5) If the banking board has not acted upon a completed application within sixty days after receipt thereof, the time may be extended for an additional thirty days by the banking board. (6) Whenever any person proposes to acquire control of any trust company and is required by the "Change in Bank Control Act of 1978" (section 7 (j) of the "Federal Deposit Insurance Act", 12 U.S.C. 1817 (j)), as amended, to give the appropriate federal banking agency prior written notice of such proposed acquisition, a copy of such notice with supporting information shall be given concurrently to the banking board for information. The banking board may use such information in evaluating applications submitted pursuant to this section and shall submit its recommendation and comments to the appropriate federal regulatory authority in a timely manner.

C.R.S. § 11-109-402 Reports to the banking board and to the commissioner - penalty - rules

11-109-402. Reports to the banking board and to the commissioner - penalty - rules. (1) The board of directors shall cause the financial statements of the trust company to be prepared in accordance with generally accepted accounting principles consistently applied, except as the banking board may otherwise provide in order to establish regulatory and competitive parity and pursuant to the policies expressed in section 11-101-102. (2) The board of directors shall cause an annual audit of the trust company to be completed by an accounting firm composed of certified public accountants or a directors' examination by a public accountant or any other independent person or persons as determined by the banking board at least annually but at intervals of not more than fifteen months as may be required by the banking board or its rules. The banking board shall adopt rules regarding the qualifications of such public accountant and other independent person or persons who shall assume the responsibility for due care in such directors' examinations. The banking board's rules shall also establish the scope of such directors' examinations, which shall include safeguards to insure that such examinations adequately describe the financial condition of the financial institution. The banking board may require an audit to be completed by an accounting firm composed of certified public accountants under certain circumstances. A report of the audit or directors' examination and any related management letters and documents shall be completed and submitted to the banking board within the time frames, in the form, and containing such information as the banking board may require in its rules. Such report of the audit or directors' examination and any related management letters and documents shall be reviewed by the directors at the next meeting of the board of directors. (3) If a trust company is owned or controlled by a bank holding company, the requirement of subsection (2) of this section may be fulfilled if: (a) As required by the banking board and its rules, the controlling bank holding company is audited or examined in a directors' examination annually at intervals of not more than fifteen months and the trust company is included in the annual audit or directors' examination of the bank holding company by that firm; (b) A report of the audit or directors' examination for the controlling bank holding company, and any related management letters and documents, is completed and submitted to the banking board within the time frames, in the form, and containing such information as the banking board may require in its rules; and (c) An annual internal examination of the trust company is prepared by the internal examination staff of the controlling bank holding company, which shall be submitted to the banking board immediately upon its request. (4) (a) Every trust company shall make and file with the commissioner not less than three reports during each calendar year according to the form that may be prescribed by the commissioner, verified by the oath of either the president, the vice-president, the cashier, or the secretary and attested by the signature of three or more of the directors. Each such report must exhibit in detail, as may be required by the commissioner, the resources and liabilities of the trust company at the close of business on the date specified by the commissioner. (b) Such reports shall be transmitted to the commissioner within thirty days after the request therefor. the cashier, or the secretary and attested by the signature of three or more of the directors. Each such report must exhibit in detail, as may be required by the commissioner, the resources and liabilities of the trust company at the close of business on the date specified by the commissioner. (b) Such reports shall be transmitted to the commissioner within thirty days after the request therefor. (c) The commissioner has power to call for special reports from any particular trust company if, in the commissioner's judgment, such reports are necessary to a full and complete knowledge of its condition. No such special report, nor any summary thereof, shall be required to be published. The reports required by, and filed pursuant to, this section shall be in lieu of all others required by law from trust companies. Every trust company that fails to comply with this section shall pay to the commissioner a penalty in an amount set by the banking board pursuant to section 11-102-104 for each day's delay. The commissioner, for valid reasons and good cause, may waive such penalty. (5) Any person who becomes a director, executive officer, or other person who, directly or indirectly, is responsible for the management, control, or operations of a trust company shall within ninety days thereafter file a report with the banking board containing: A statement describing any civil or criminal offenses affecting such person's qualification to serve in such capacity with respect to which such person has been found guilty or liable by any federal or state court or federal or state regulatory agency; such biographical information as the banking board shall require; and such other information as the banking board shall require pursuant to its rules. If any statement contained in such report subsequently becomes inaccurate or misleading in any way, such person shall file an amended report within thirty days after the date on which the statement in the report first becomes inaccurate or misleading. A person who fails to comply with this subsection (5) shall be required by the banking board to pay a penalty in an amount set by the banking board by rule, which must not exceed one hundred dollars per day, and such penalties shall be deposited in the general fund. The banking board, for valid reasons and good cause, may waive such penalty. (6) If a trust company changes any executive officer, director, or other person who, directly or indirectly, is responsible for the management, control, or operations of the trust company, such changes shall be reported to the banking board within sixty days, and the trust company shall provide such information concerning such person as may be requested by the banking board on such forms as the banking board may require, including information about the reasons for termination from any prior employment and whether such person was charged or convicted of any civil or criminal offenses enumerated in subsection (5) of this section. A trust company, its directors, executive officers, employees, or agents, or any other persons are immune from civil liability due to compliance with the requirements of this subsection (6). The purpose of such information is to inform the banking board of the qualifications of such person as they may affect the safety and soundness of the trust company. The information shall be treated as confidential under this article 109. A trust company that fails to comply with this subsection (6) shall be required by the banking board to pay a penalty in an amount set by the banking board by rule, which must not exceed one hundred dollars per day, and such penalties shall be deposited in the general fund. The banking board, for valid reasons and good cause, may waive such penalty.

C.R.S. § 11-109-501 Directors' meetings - duties

11-109-501. Directors' meetings - duties. (1) The board of directors of a trust company shall meet at least quarterly. A special meeting of the board of directors may be called by the banking board. The board of directors shall maintain minutes of each meeting including the record of attendance. A director who fails to attend three consecutive meetings of the board of directors shall cease to be a director unless such absence is satisfactorily explained to the banking board. (2) The board of directors shall establish the policies and procedures necessary for the proper exercise of fiduciary powers by the trust company. In discharging this responsibility, the board of directors may assign, by action duly entered in the minutes, the administration of the trust company's powers as the board of directors may consider proper to assign to any director, officer, employee, or committee as it may designate. (3) The board of directors of a trust company may declare dividends from retained earnings and from other components of capital specifically approved by the banking board so long as the declaration is made in compliance with the rules established by the banking board.

C.R.S. § 11-109-502 Director and officer insurance and fidelity bonds - legislative declaration

11-109-502. Director and officer insurance and fidelity bonds - legislative declaration. (1) The general assembly hereby finds, determines, and declares that the following is enforceable and in conformity with the public policy of this state, as expressed in this article, including the provisions of section 11-101-102: (a) Any insurance policy, form, contract, endorsement, or certificate in effect or issued on or after April 30, 1993, that provides insurance coverage to directors or officers, or both, of a trust company but that does not grant coverage or that excludes coverage for claims made by any depository insurance organization or other state or federal corporation, organization, entity, or agency acting as receiver, conservator, or liquidator of such trust company, whether in its own name or in behalf of any other person or entity; or (b) Any fidelity bond, financial institution bond, or depository institution bond in effect or issued on or after April 30, 1993, that provides for termination of such bond upon the taking over of any trust company by a receiver or other liquidator or by state or federal officials. (2) No provision of this article shall be construed to contravene or modify the expressed public policy set forth in this section. (3) The directors of a trust company shall: (a) Require good and sufficient fidelity bonds on all active officers and employees, whether or not they draw salary or compensation, which bonds must provide for indemnity to the trust company on account of any losses sustained by it as the result of any dishonest, fraudulent, or criminal conduct by them acting independently or in collusion or combination with any person. The bonds may be in individual, schedule, or blanket form, and the trust company shall pay the premiums for the bonds. (b) Require suitable insurance protection to the trust company against burglary, robbery, theft, and other insurable hazards to which the trust company may be exposed in the operations of its business on the premises or elsewhere; and (c) Prescribe, at least once in each calendar year, the amount or penal sum of the bonds and policies specified in this section and the sureties or underwriters thereon after giving due and careful consideration to all known elements and factors constituting such risk or hazard. The directors shall record the action in the board's minutes.

C.R.S. § 11-109-601 Penalty for noncompliance with the law

11-109-601. Penalty for noncompliance with the law. It is unlawful for any person to carry on or conduct in this state a trust company business, or to advertise or hold oneself out as being engaged in or doing a trust company business or to use the word "trust" or words "trust company" in connection with a business unless such person has complied with the provisions of this article 109 or other laws of this state specifically authorizing a fiduciary or trust business. A person who violates this section commits a class 2 misdemeanor.

C.R.S. § 11-109-602 Assessment of civil money penalties by banking board

11-109-602. Assessment of civil money penalties by banking board. (1) (a) (I) After notice and a hearing as provided in article 4 of title 24 and after making a determination that no other appropriate governmental agency has taken similar action against such person for the same act or practice, the banking board may assess against and collect a civil penalty from: (A) Any person who has violated any final cease-and-desist order issued by the banking board pursuant to section 11-109-104 (1)(c); and (B) A trust company that, or any executive officer, director, employee, agent, or other person participating in the conduct of the affairs of such trust company who, violates or knowingly permits any person to violate any of the provisions of this article 109 or any rule promulgated pursuant to this article 109 or engages or participates in any unsafe or unsound practice in connection with a trust company. The civil money penalty must not exceed five thousand dollars per day for each day such violation continues. This provision shall include, but not be limited to, the following violations: Making, or causing to be made, delinquent payment of assessments under this section; submitting, or causing to be submitted, delinquent reports, including but not limited to call reports; or knowingly submitting, or causing to be submitted, to the banking board any report or statement that contains materially false or misleading information. (II) The banking board may, at its option and upon waiver of the right to a public hearing by a respondent, close to the public any hearing concerning an assessment of a civil money penalty, an order of suspension or removal from office, an order to cease and desist from any unlawful or unsafe and unsound practices, or any other formal enforcement action by the banking board. (b) For the purposes of this section, a violation shall include, but is not limited to, any action, by any person alone or with another person, that causes, brings about, or results in the participation in, counseling of, or aiding or abetting of a violation. (2) Civil money penalties shall be assessed by written notice of assessment of a civil money penalty served upon the person to be assessed. The notice of assessment of a civil money penalty shall state the amount of the penalty, the period for payment, the legal authority for the assessment, and the matters of fact or law constituting the grounds for assessment. The notice of assessment of a civil money penalty shall constitute a final order for purposes of judicial review pursuant to section 24-4-106, C.R.S. (3) The banking board may determine the amount of any civil money penalty assessed against any executive officer, director, employee, agent, or other person participating in the affairs of a trust company, except as expressly limited by this article 109. In determining the amount of the civil money penalty to be assessed, the banking board shall consider the good faith of the person assessed, the gravity of the violation, any previous violations by the person assessed, the nature and extent of any past violations, and such other matters as the banking board may deem appropriate; except that the civil money penalty must not exceed five thousand dollars per day for each day the person assessed remains in violation. (4) Civil money penalties assessed pursuant to this section shall be due and payable and collected within thirty days after the notice of assessment of a civil money penalty is issued by the banking board; except that the banking board may, in its discretion, compromise, modify, or set aside any civil money penalty. Any civil money penalty collected pursuant to this section shall be transmitted to the state treasurer, who shall credit the same to the general fund.

C.R.S. § 11-109-603 No indemnification or insurance against civil money penalties

11-109-603. No indemnification or insurance against civil money penalties. Notwithstanding any other provision of law, no trust company shall indemnify or insure any executive officer, director, employee, agent, or person participating in the conduct of affairs of such trust company against civil money penalties.

C.R.S. § 11-109-604 Removal of director, officer, or other person

11-109-604. Removal of director, officer, or other person. (1) The banking board may serve any executive officer, director, employee, agent, or other person participating in the conduct of the affairs of a trust company with a written notice of its intention to remove the person from office whenever the banking board determines: (a) That any such person has committed any violation of this article, a rule of the banking board, or a cease-and-desist order of the banking board that has become final; has engaged or participated in any unsafe or unsound practice in connection with a trust company; or has committed or engaged in any act, omission, or practice that constitutes a breach of fiduciary duty to the trust company; and (b) (I) That the trust company has suffered or probably will suffer substantial financial loss or other damage or that the interests of its customers could be seriously prejudiced by reason of such violation or practice or breach of fiduciary duty or offense; or (II) That such person has received financial gain by reason of such violation, practice, breach of fiduciary duty, or offense; or (III) That such violation is one involving personal dishonesty on the part of such person or one that demonstrates a willful or continuing disregard for the safety or soundness of the trust company. (2) Whenever the banking board determines that an executive officer, director, employee, agent, or other person participating in the conduct of the affairs of a trust company, by conduct or practice with respect to another trust company or business institution that results in substantial financial loss or other damage, has evidenced either personal dishonesty or a willful or continuing disregard for the trust company's safety and soundness, and, in addition, has evidenced unfitness to continue the person's relationship with the trust company, the banking board may serve upon the person a written notice of its intention to remove the person from office or to prohibit such person's further participation in any manner in the conduct of the affairs of any Colorado state-chartered trust company or bank. (3) A notice of intention to remove a director, executive officer, or other person from office or to prohibit such person's participation in the conduct of the affairs of a trust company must contain a statement of the facts constituting grounds for removal and must fix a time and place at which a hearing shall be held thereon. Such hearing shall be fixed for a date not earlier than thirty days nor later than sixty days after the date of service of such notice, unless an earlier or a later date is set by the banking board at the request of such director or executive officer or other person and for good cause shown. Unless such director, executive officer, or other person appears at the hearing in person or by a duly authorized representative, the person shall be deemed to have consented to the issuance of an order of removal or prohibition as specified in the notice issued pursuant to subsection (1) or (2) of this section. In the event of such consent or, if, upon the record made at any such hearing, the banking board finds that any of the grounds specified in such notice have been established, the banking board may issue such orders of suspension or removal from office as it may deem appropriate. Any such order shall become effective at the expiration of thirty days after service upon such trust company and the director, executive officer, or other person concerned except in the case of an order issued upon consent, which shall become effective at the time specified therein. Such order remains effective and enforceable except to such extent as it is stayed, modified, terminated, or set aside by action of the banking board or a reviewing court.

C.R.S. § 11-109-605 Suspension of director, officer, or other person

11-109-605. Suspension of director, officer, or other person. (1) The banking board may suspend an executive officer, director, employee, agent, or other person participating in the conduct of the affairs of a trust company who becomes ineligible to hold the person's position, or who after receipt of an order of the banking board to cease and desist violates this article 109 or a lawful rule or order issued under this article 109, or who is dishonest, or who is reckless or grossly incompetent in the conduct of trust business, or who may be subject to removal under section 11-109-604. It is a criminal offense for any such person, after receipt of a suspension order, to perform any duty or exercise any power of any trust company until the banking board vacates such suspension order. A suspension order must specify the grounds thereof. A copy of the order shall be sent to the trust company concerned and to each member of its board of directors. (2) Ten days' notice, by certified mail, return receipt requested, and hearing shall be provided to any trust company affected by an action of the banking board in advance of any action taken by the banking board pursuant to this section. In cases found by the banking board to involve extraordinary circumstances requiring immediate action, the banking board may take such action, without notice or hearing, but shall promptly afford a subsequent hearing, upon application to rescind the action taken.

C.R.S. § 11-109-606 Informal enforcement authority

11-109-606. Informal enforcement authority. The banking board, or the commissioner if so authorized by the banking board, shall have authority to initiate informal actions to enforce the provisions of this article. In this regard the banking board or the commissioner may, in its or the commissioner's discretion, enter into written agreements such as a memorandum of understanding with, or an informal commitment letter from, or a strongly worded letter of reprimand to any trust company or any executive officer, director, employee, agent, or other person participating in the conduct of the affairs of the trust company.

C.R.S. § 11-109-607 Receipt of deposits while insolvent

11-109-607. Receipt of deposits while insolvent. It is a criminal offense if a trust company receives any deposit while insolvent or an officer, director, or employee knows, or in the proper performance of the officer's, director's, or employee's duty should know, of such insolvency and receives or authorizes the receipt of such deposit, and if such trust company or person has knowingly concealed or misstated material facts regarding the insolvency of the trust company from or to the banking board, commissioner, or division of banking.

C.R.S. § 11-109-701 Discontinuance of trust business - voluntary liquidation and dissolution

11-109-701. Discontinuance of trust business - voluntary liquidation and dissolution. (1) A trust company may discontinue its trust business upon furnishing to the banking board satisfactory evidence of its release and discharge from all trust-related obligations and trusts that it has undertaken or that have been imposed by law. Thereupon, the banking board shall cancel the charter, and such trust company shall not be permitted to use the word "trust" in its name or in connection with its business. (2) (a) With the approval of the banking board, a trust company may liquidate and dissolve. The banking board shall grant such approval if it appears that the proposal to liquidate and dissolve has been approved by a vote of two-thirds of the outstanding voting stock of the trust company at a meeting called for that purpose and that the trust company is solvent and has sufficient liquid assets to pay off depositors and creditors immediately. (b) (I) Upon approval by the banking board, the trust company shall forthwith cease to do business, shall have only the powers necessary to effect an orderly liquidation, and shall proceed to pay its depositors and creditors and to wind up its affairs. (II) Within thirty days after the approval, a notice of liquidation shall be sent by mail to each depositor and creditor, at the address of such person as shown in the records of the trust company. The notice shall be posted conspicuously on the premises of the trust company and shall be published in such a manner as the banking board may require. With each notice, the trust company shall send a statement of the amount shown in the records of the trust company to be the claim of the depositor or creditor. The notice shall require that claims of depositors and creditors, if the amount claimed differs from the amount stated in the notice to be due, be filed with the trust company before a specified date not earlier than sixty days thereafter, in accordance with the procedure prescribed in the notice. (III) The approval of an application for liquidation shall not impair any right of a depositor or creditor to payment in full, and all lawful claims of creditors and depositors shall promptly be paid. (IV) Any assets remaining after the discharge of all obligations shall be distributed to the stockholders in accordance with their respective interests. No such distribution shall be made before all claims of depositors and creditors have been paid or any funds payable to a depositor or creditor and unclaimed have been transmitted to the banking board, or, in the case of any disputed claim, the trust company has transmitted to the banking board a sum adequate to meet any liability that may be judicially determined. (c) Any unclaimed distribution to a stockholder or depositor shall be held until ninety days after the final distribution and then transmitted to the banking board. Such unclaimed money shall be held by the banking board for six years and, unless sooner claimed by the person entitled thereto, shall be transferred to the treasury of the county in which the trust company is located. The county treasurer and the county treasurer's successors shall hold such money in trust for a period of six years, unless the money is sooner paid out to the beneficial owner. Any money remaining in the fund six years after such money is paid into the treasury of the county, for the recovery of which no action is pending, shall be transferred to the general fund of the county, and all rights of the beneficial owners therein to recover such money shall be forever barred. (d) If the banking board finds that the assets will be insufficient for the full discharge of all obligations or that completion of the liquidation has been unduly delayed, the banking board may take possession and complete the liquidation in the manner provided in this article for involuntary liquidations. all rights of the beneficial owners therein to recover such money shall be forever barred. (d) If the banking board finds that the assets will be insufficient for the full discharge of all obligations or that completion of the liquidation has been unduly delayed, the banking board may take possession and complete the liquidation in the manner provided in this article for involuntary liquidations. (e) The banking board may require reports of the progress of liquidation. If the banking board is satisfied that the liquidation has been properly completed, it shall cancel the charter and enter an order of dissolution.

C.R.S. § 11-109-702 Involuntary liquidation

11-109-702. Involuntary liquidation. (1) Except as otherwise provided in this article, only the banking board may take possession of a trust company if, after a hearing before the banking board, it finds: The trust company's capital is inadequate; the trust company's business is being conducted in an unlawful or unsound manner; the trust company is unable to continue normal operations; or the control of the trust company has been assumed by any person or persons convicted of fraud or a felony involving moral turpitude or financial dealings in this state or any other jurisdiction, or by any partnership, association, or corporation controlled, directly or indirectly, by any person so convicted, unless the banking board determines that such person has been duly rehabilitated or otherwise that the trust company will be honestly and efficiently managed. (2) (a) The banking board shall take possession of a trust company by posting upon the premises a notice reciting that it is assuming possession pursuant to this article and the time, not earlier than the posting of the notice, when its possession shall be deemed to commence. A copy of the notice shall be filed in the district court of the county in which the trust company is located. The commissioner shall notify the federal deposit insurance corporation of taking possession of any trust company that is a member of such corporation. (b) When the banking board has taken possession of a trust company, the commissioner is vested with the full and exclusive power of control, including the power to stop or to limit the payment of the trust company's obligations; to employ any necessary assistants, including legal counsel, after possession of the trust company has been taken; to execute any instrument in the name of the trust company; to commence, defend, and conduct in the trust company's name any action or proceeding to which it may be a party; to terminate the commissioner's possession by restoring the trust company to its board of directors and stockholders upon conditions prescribed by the banking board; and to reopen a closed trust company or liquidate the trust company in accordance with this article 109. As soon as practicable after the banking board takes possession, the commissioner shall make an inventory of the assets and file a copy thereof with the court in which the notice of possession was filed. (c) For six months after the posting of the notice of possession and while the banking board's possession continues, there shall be a postponement of the date upon which any period of limitation fixed by statute or agreement would otherwise expire on a claim or right of action of the trust company, or upon which a review must be taken or a pleading or other document must be filed by the trust company in any pending action or proceeding. the notice of possession and while the banking board's possession continues, there shall be a postponement of the date upon which any period of limitation fixed by statute or agreement would otherwise expire on a claim or right of action of the trust company, or upon which a review must be taken or a pleading or other document must be filed by the trust company in any pending action or proceeding. (d) If, in the opinion of the banking board, an emergency exists that may result in serious losses to the customers, it may take possession of a trust company without a prior hearing. Within ten days after the banking board has taken possession, any interested person may file an application with the banking board for an order vacating such possession. The banking board shall grant the application if it finds its action was unauthorized. (3) For the purposes of this article, a trust company shall be deemed to be closed when the banking board has closed the trust company for business for the purpose of liquidation. The banking board shall mail notice of its intent to liquidate the trust company to the directors, stockholders, and depositors at their addresses as shown on the records of the trust company, and the commissioner shall proceed to liquidate the trust company. The banking board may appoint a liquidator to conduct the liquidation of the affairs of any trust company. The liquidator shall perform all of the duties required of the commissioner under this article and shall make such periodic reports as the banking board shall require. If the trust company is a member of the federal deposit insurance corporation, the banking board may offer the position of liquidator to the federal deposit insurance corporation, which may decline in their discretion. The liquidator may employ such other assistants and legal counsel at such reasonable compensation as the liquidator shall determine to be necessary. All expenses incident to the liquidation shall be paid out of the assets of the trust company. The liquidator and any assistants shall provide a bond executed by a surety company authorized to do business in this state, running to the people of the state of Colorado, that meets with the approval of the banking board, for the faithful discharge of their duties in connection with such liquidation and the accounting for all moneys coming into their hands. The cost of such bond shall be paid from the assets of the trust company. Suit may be maintained on such bond by any person injured by a breach of the conditions thereof. (4) No judgment, lien, or attachment shall be executed upon any asset of the trust company while it is in the possession of the banking board. Upon the election of the commissioner, in connection with a liquidation: (a) Any nonconsensual lien or attachment, other than an attorney's or mechanic's lien, obtained upon any asset of the trust company during the banking board's possession, or within four months prior to commencement thereof, shall be vacated and voided, except liens created by the banking board while in possession; (b) Any transfer of an asset of the trust company made after or in contemplation of its insolvency, with intent to effect or that results in a preference, shall be voided. (5) With the approval of the court in which notice of possession has been filed, the commissioner may borrow money in the name of the trust company and may pledge its assets as security for the loan. (6) All necessary and reasonable expenses of the banking board's possession of a trust company and of its liquidation shall be paid from the assets thereof.

C.R.S. § 11-109-703 Emergency grant of new charter

11-109-703. Emergency grant of new charter. In addition to powers regarding liquidation, the banking board may, in the interest of protecting the public and the depositors of a closed trust company with its principal office in this state, issue a new trust company charter to qualified individuals for the same location as the closed trust company, contingent upon the new trust company assuming full liability for such deposits of the closed trust company as may be transferred to it. Under such conditions, a new charter may be issued summarily without the publication of notice, without the holding of a public hearing, and without complying with any of the other provisions and procedures specified in this article.

C.R.S. § 11-109-704 Liquidation by commissioner - procedure

11-109-704. Liquidation by commissioner - procedure. (1) In liquidating a trust company, the commissioner may exercise any power of the trust company and shall collect all assets, debts, and claims belonging to the trust company. Unless the commissioner obtains the approval of the court in which notice of possession has been filed by petition setting forth the material facts and upon such notice to the officers, directors, or stockholders in such form as the court may require, the commissioner shall not: (a) Sell any asset of the trust company having a value in excess of five hundred dollars; (b) Compromise or release any claim if the amount of the claim exceeds five hundred dollars, exclusive of interest; (c) Make any payment on any claim, other than a claim upon an obligation incurred by the commissioner, before preparing and filing a schedule of the commissioner's determinations in accordance with this article 109. (2) Within six months after the commencement of liquidation, the commissioner may, by election, terminate any executory contract for services or advertising to which the trust company is a party or any obligation of the trust company as a lessee. A lessor who receives at least sixty days' notice of the commissioner's election to terminate the lease shall have no claim for rent, other than rent accrued to the date of termination, nor for damages for such termination. (3) The right of any agency of the United States insuring savings obligations to be subrogated to the rights of depositors upon payment of their claims shall not be less extensive than the law of the United States requires as a condition of the authority to issue such insurance or make such payments to depositors of trust companies. (4) As soon after the commencement of liquidation as is practicable, the commissioner shall send notice of the liquidation to each known depositor, creditor, and bailor of property held by the trust company at the address shown in the records of the trust company. The notice shall also be published once a week for three successive weeks, in a newspaper of general circulation in the city or county in which the trust company is located. With each notice, the commissioner shall send a statement of the amount shown in the records of the trust company to be the claim of the depositor, creditor, or bailor. The notice shall demand that property held by the trust company as bailee be withdrawn by the person entitled thereto and the claim of a depositor or creditor, if the amount claimed differs from the amount stated in the notice to be due, be filed with the commissioner before a specified date, not earlier than sixty days thereafter, in accordance with the procedure prescribed in the notice. (5) Any unclaimed property, including the contents of safe deposit boxes, held by the trust company as bailee and certified inventories thereof shall be held by the commissioner for six years unless sooner claimed by the person entitled to such property. After six years the commissioner may sell or otherwise appropriately dispose of the property. The proceeds of a sale shall be transferred and disposed of in accordance with the provisions of subsection (10) of this section. (6) Within six months after the last day specified in the notice for the filing of claims, or within such longer period as may be allowed by the court in which notice of possession has been filed, the commissioner shall: (a) Reject any claim if the commissioner determines the invalidity thereof; (b) Determine the amount, if any, owing to each known creditor or depositor and the priority class of such claim under this article; (c) Prepare a schedule of the commissioner's determinations for filing in the court in which notice of possession was filed; ch notice of possession has been filed, the commissioner shall: (a) Reject any claim if the commissioner determines the invalidity thereof; (b) Determine the amount, if any, owing to each known creditor or depositor and the priority class of such claim under this article; (c) Prepare a schedule of the commissioner's determinations for filing in the court in which notice of possession was filed; (d) Notify each person whose claim has not been allowed in full and publish once a week for three successive weeks, in a newspaper of general circulation in the city or county in which the trust company is located, a notice of the time when and the place where the schedule of determinations will be available for inspection and the date, not sooner than thirty days thereafter, when the commissioner will file the schedule in court. If there is no newspaper of general circulation in such city or county, then publication shall be in the newspaper of general circulation published nearest thereto. (7) Within twenty days after the filing of the commissioner's schedule, the federal deposit insurance corporation or any creditor, depositor, or stockholder may file an objection to any determination made that adversely affects or may adversely affect such objector. Any objections so filed shall be heard and determined by the court upon such notice to the commissioner and interested claimants as the court may prescribe. If the objection is sustained, the court shall direct an appropriate modification of the schedule. After filing the schedule, the commissioner may, from time to time, make partial distribution to the holders of claims that are undisputed or have been allowed by the court if a proper reserve is established for the payment of disputed claims. As soon as is practicable after the determination of all objections, the commissioner shall make final distribution. (8) (a) The following claims shall have priority in the order specified: Obligations incurred by the commissioner; wages and salaries of officers and employees earned during the three-month period preceding the commissioner's possession in an amount not exceeding five thousand dollars for any one person; fees and assessments due to the commissioner; amounts that the federal deposit insurance corporation are entitled to receive on account of their subrogation to the claims of depositors; all other claims for savings obligations; claims of secured creditors to the extent of the value of their collateral; and all other claims. (b) After the payment of all other claims, the commissioner shall pay claims otherwise proper that were not filed within the time prescribed. If the sum available for any class is insufficient to provide payment in full, such sum shall be distributed to the claimants in the class pro rata. (9) Any assets remaining after all claims have been paid shall be distributed to the stockholders in accordance with their respective interests. (10) Unclaimed funds remaining after final distribution has been made by the commissioner shall be retained for six years by the commissioner unless sooner claimed by the owner. At the expiration of such period, the remaining sum shall be transferred to the treasury of the county in which the trust company is located. The county treasurer and the county treasurer's successors shall hold such money in trust for a period of six years, unless the money is sooner paid out to the beneficial owner or owners or a suit is instituted to recover such money or a portion thereof. Any money remaining in the fund six years after such money is paid into the treasury of the county, for the recovery of which no action is pending, shall be transferred to the general fund of the county, and all rights of the former beneficial owners of such money to recover the money shall be forever barred. icial owner or owners or a suit is instituted to recover such money or a portion thereof. Any money remaining in the fund six years after such money is paid into the treasury of the county, for the recovery of which no action is pending, shall be transferred to the general fund of the county, and all rights of the former beneficial owners of such money to recover the money shall be forever barred. (11) When the final distribution of the proceeds of liquidation has been made in accordance with this article, the commissioner shall file an account with the court in which notice of possession was filed. Upon approval thereof, the commissioner shall be relieved of liability in connection with the liquidation and shall cancel the charter.

C.R.S. § 11-109-801 Appeals procedure

11-109-801. Appeals procedure. Any trust company aggrieved and directly affected by an order or rule of the banking board, issued under this article, may seek a review in the district court of this state in and for the county in which the trust company is located, within thirty days after receipt of written notice of the issuance of such order or rule. The filing of such a petition for review shall not, of itself, stay enforcement of an order or rule, but the court, upon a finding that irreparable injury would otherwise result, may order a stay upon such terms as it deems proper. The court may affirm the order of the banking board or may direct said banking board to take any action deemed proper. No person shall be subjected to any civil or criminal liability for any act or omission made in good faith reliance upon a then existing order or rule of the banking board, notwithstanding a subsequent decision by a court invalidating the order or rule.

C.R.S. § 11-109-802 Injunctions - appeals

11-109-802. Injunctions - appeals. (1) Whenever the banking board has taken possession of a trust company and the trust company deems itself aggrieved thereby, such trust company, within ten days after such taking, may apply to the court in which notice of possession has been filed to enjoin further proceedings. After citing the banking board to show cause why further proceedings should not be enjoined and after a hearing, the court may dismiss the application of the trust company or may enjoin the banking board from further liquidation proceedings and direct the banking board to surrender possession of the trust company. (2) An appeal may be taken by the banking board or by the trust company from the judgment of the court in the manner provided by law for appeals from judgments of the district court. An appeal from the judgment does not operate as a stay of judgment. If the appeal is taken by the banking board, no bond need be given, but if the appeal is taken by the trust company, a bond shall be given as required by the Colorado rules of civil procedure.

C.R.S. § 11-109-901 Reserves against deposits

11-109-901. Reserves against deposits. Trust companies that are subject to reserve provisions of the "Federal Reserve Act" shall maintain such reserves against deposits as may be required by the "Federal Reserve Act", but, in addition thereto, the banking board may by rule impose reserve requirements that it deems prudent and sound on trust companies, including trust companies not subject to reserve provisions of the "Federal Reserve Act". In promulgating these rules, the banking board shall consider all relevant factors, including without limitation, the factors set forth in section 11-101-102.

C.R.S. § 11-109-902 Investments

11-109-902. Investments. (1) In addition to other investments expressly authorized by this article or the rules promulgated by the banking board, a trust company may purchase: (a) Obligations that satisfy the requirements of this article or the rules promulgated by the banking board for loans for state banks; (b) Obligations of, or fully guaranteed by, the United States, a state of the United States, or the Dominion of Canada; (c) Obligations of the international bank for reconstruction and redevelopment; (d) Farm loan bonds issued by any federal land bank organized pursuant to an act of congress approved July 17, 1916, entitled: "An Act to provide capital for agricultural development, to create standard forms of investment based upon farm mortgages, to furnish a market for United States bonds, to create government depositories and financial agents for the United States, and for other purposes." and known as the "Federal Farm Loan Act", and acts amendatory thereto. Such farm loan bonds shall be accepted as security for all public deposits and in all cases where bonds are required by law to be deposited with any department or public official of this state, but this section shall not be so construed as to prohibit such moneys or deposits from being invested in such other securities provided for by law. (e) General obligations of a territory of the United States, a province of the Dominion of Canada, or a political subdivision or instrumentality of a state or territory of the United States; (f) Obligations of a corporation chartered by the United States or a state thereof doing business in the United States; or an authority organized under state law, an interstate compact, or by substantially identical legislation adopted by two or more states if any of the foregoing under this paragraph (f) are approved by the banking board for investment; (g) Revenue obligations issued to provide, enlarge, or improve electric power, gas, water and sewer facilities by any city or town having a population of not less than two thousand people at the time of the investment, located in any state in the United States or territories thereof; (h) Such other obligations as the general assembly has designated or may from time to time designate as legal investments for public funds; (i) The capital stock of other corporations, including the stock of a corporation regulated under the federal "Investment Company Act of 1940", as amended, 15 U.S.C. section 80a-1 et seq., and the land or lands and building or buildings in which the business of the trust company is carried on, including its trust company offices, other property in the same building to rent as a source of income, and fixtures, and furniture, safe deposit vaults and boxes, and other personal property such as may be appropriate to carry on its business. (2) A trust company may, to the extent that banks subject to the laws of the federal government are permitted so to do and to the extent permitted by the rules of the banking board, purchase shares of stock in small business investment companies organized under Public Law No. 85-699, 85th Congress, known as the "Small Business Investment Act of 1958", as amended, but in no event shall any trust company hold shares in small business investment companies in an amount aggregating more than three percent of the trust company's capital and surplus. (3) No limitation or prohibition otherwise imposed by any provision of state law relating to trust companies shall prevent a trust company from investing not more than ten percent of the trust company's capital as defined in the rules promulgated by the banking board in a bank service corporation as defined in 12 U.S.C. 1861 to 1865, inclusive, and as amended, subject to the rights, powers, and limitations contained therein, and such investment by trust companies is expressly authorized to the extent permitted by the rules of the banking board. ing not more than ten percent of the trust company's capital as defined in the rules promulgated by the banking board in a bank service corporation as defined in 12 U.S.C. 1861 to 1865, inclusive, and as amended, subject to the rights, powers, and limitations contained therein, and such investment by trust companies is expressly authorized to the extent permitted by the rules of the banking board. (4) A trust company may acquire or retain an equity investment in a subsidiary of which the trust company is the majority owner, so long as the subsidiary is engaged in activities that are allowed pursuant to this article. (5) Notwithstanding any restrictions upon investments in obligations, powers, or activities contained in this article, a trust company may invest in any obligation, exercise such powers, and engage in such activities that such trust company could legally acquire, exercise, and engage in were it operating as a national bank at the time such investment was made, such powers were exercised, or such activities were engaged in, to the extent permitted by the rules promulgated by the banking board. (6) A trust company may invest an amount not exceeding ten percent of its capital as defined in the rules promulgated by the banking board in the stock of any bank or bank holding company that provides services solely to depository institutions and their shareholders, directors, officers, and employees, wherein the ownership of stock of the bank or bank holding company, except for any stock required by law to be owned by directors of the bank or bank holding company, is restricted to banks, trust companies, or bank holding companies. The amount of stock owned by a trust company in any such bank or bank holding company shall not be in excess of five percent of the voting shares of such bank or bank holding company. (7) (a) A trust company may directly engage in activities that are primarily investments in real estate or may acquire and hold the voting stock of one or more corporations the activities of which are primarily investments in real estate. Such activities may include subdividing and developing real property and building residential housing or commercial improvements on such property and may also include owning, renting, leasing, managing, operating for income, or selling such property. Such property shall be entered on the books at not more than cost or fair market value, whichever is less. The total of all investments made by a trust company pursuant to the authority of this subsection (7) shall not exceed ten percent of its capital. (b) Upon finding that such restrictions are necessary according to the criteria set forth in section 11-101-102, the banking board may adopt rules that restrict the total investments of a trust company under this subsection (7) to a percentage less than ten percent of the trust company's capital. Nothing in this subsection (7) shall authorize a trust company to contravene a lawful order of the banking board or commissioner with respect to investments by the trust company in real estate or corporations engaging in real estate activities. A trust company that intends to initiate a program of investments under the authority of this subsection (7) shall give sixty days' advance notice to the division of banking of such intent; except that such notice may be waived in the banking board's discretion where such notice is impracticable or unnecessary. The trust company shall also notify the division within ten days after the commencement of the investment program. If similar notices are required by the trust company's federal supervisory agency, the same form of notice may be used for purposes of notice under this subsection (7).

C.R.S. § 11-109-903 Substitution of trust companies

11-109-903. Substitution of trust companies. Trust companies created under this article may participate in the transfer of trust assets in the case of a substitution of one fiduciary for another under the provisions of sections 11-101-401, 11-106-105, and 11-106-106.

C.R.S. § 11-109-904 Laws governing individuals apply

11-109-904. Laws governing individuals apply. A trust company in the exercise of its fiduciary powers shall be subject to the same duties, liabilities, and penalties as an individual fiduciary acting in like capacity.

C.R.S. § 11-109-905 Separation of fiduciary funds

11-109-905. Separation of fiduciary funds. A trust company shall keep fiduciary funds and investments separate and apart from its own assets. All investments made as a fiduciary shall be so designated so that fiduciary funds may be clearly identified.

C.R.S. § 11-109-906 Funds awaiting investment or distribution

11-109-906. Funds awaiting investment or distribution. Funds held by a trust company in a fiduciary capacity that are awaiting investment or distribution shall not be held uninvested or undistributed any longer than is reasonable for the proper management of the account. Funds held in trust by a trust company awaiting investment or distribution may, unless prohibited by the instrument creating the trust, be deposited in an account with the trust company as provided in section 11-109-201 (1)(d).

C.R.S. § 11-109-907 Extensions of credit

11-109-907. Extensions of credit. (1) A trust company shall not make any loans or extensions of credit except as provided in subsection (2) of this section. (2) A trust company may: (a) Make a loan or extend credit to its officers, directors, and employees if such loan or credit is adequately secured and does not involve more than the normal risk of default or present other unfavorable features. Any loan or extension of credit in excess of twenty-five thousand dollars shall be subject to prior approval by the banking board. (b) Establish with one or more broker-dealers margin accounts in its name as fiduciary or custodian for the benefit of the owners or beneficiaries of such accounts.

C.R.S. § 11-109-908 Fiduciary accounts - duties of trust companies - rules

11-109-908. Fiduciary accounts - duties of trust companies - rules. (1) Before accepting a fiduciary account, a trust company shall review the prospective account to determine whether the trust company can properly administer the account. (2) Upon the acceptance of a fiduciary account for which a trust company has investment discretion, the trust company shall conduct a prompt review of all assets of the account to evaluate whether the assets are appropriate for the account. (3) At least once during every calendar year, a trust company shall conduct a review of all assets of each fiduciary account for which the trust company has investment discretion to evaluate whether the assets are appropriate, individually and collectively, for the account. (4) The board shall promulgate rules regarding what assets are appropriate for purposes of subsections (2) and (3) of this section.

Source: Open US Law by Vaquill AI (CC BY 4.0)URL: https://leg.colorado.gov/sites/default/files/images/olls/crs2024-title-11.docxFetched: 10/6/2026