State Law Update: North Carolina Overhauls Banking Statute

Examination Bank Compliance

On June 21, North Carolina Governor Bev Perdue signed Senate Bill 816, which rewrites substantial portions of the state’s banking laws. The bill derives from a Joint Legislative Study Commission report, which found several deficiencies in the state’s existing state banking laws. In particular, the report found that the state’s banking laws (i) needed to be modernized in the wake of the Dodd-Frank Act and other changes in federal law, (ii) encouraged banks to avoid the burden of the banking law by forming holding companies under the more liberal standards of the North Carolina Business Corporation Act, and (iii) failed to address changes in banks’ capital needs. To remedy these and other issues, the bill revises several parts of the existing law, including: (i) the size and composition of the Banking Commission, (ii) the rules regarding bank governance, powers, and operations, and (iii) the framework for bank supervision and liquidation.