HARRY HUGHES, Governor

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2. More than 50 percent of the voting
rights exercised at the last election of directors of the banking
institution; or

(2) Controls a banking institution through:

(i) Direct or indirect ownership or control of
more than 50 percent of the voting rights;

(ii) Control of the election of a majority of
the directors of the banking institution;

(iii) Direct or indirect ownership or control
of more than 50 percent of the voting rights exercised at the
last election of the directors; or

(iv) The holding of substantially all of the
capital stock of the banking institution by trustees for
stockholders of the organization.

(C) "BANK SERVICE CORPORATION" MEANS A CORPORATION:

(1)  AT LEAST SOME OF THE STOCK OF WHICH IS OWNED BY A
BANKING INSTITUTION; AND

(2)  THAT IS ORGANIZED TO PERFORM BANK SERVICE
CORPORATION ACTIVITIES OF THE TYPE PERMITTED UNDER APPLICABLE
PROVISIONS OF TITLE 12 OF THE UNITED STATES CODE TO A BANK
SERVICE CORPORATION OWNED EXCLUSIVELY BY NATIONAL BANKING
ASSOCIATIONS.

[(c)] (D) "Management" means the directors, trustees, or
other persons exercising similar functions of an association,
corporation, business trust, or other similar organization.

5-405.

(A)  EXCEPT AS PROVIDED IN THIS SECTION OR OTHERWISE
EXPRESSLY PROVIDED BY STATE LAW, A BANKING INSTITUTION MAY NOT
HAVE A BANK SERVICE CORPORATION.

(B)  IF THE BANK COMMISSIONER, AFTER RECEIVING THE ADVICE OF
THE BANKING BOARD, APPROVES, A BANKING INSTITUTION MAY HAVE A
BANK SERVICE CORPORATION.

(C)  ON APPLICATION OF THE BANKING INSTITUTION, A BANK
SERVICE CORPORATION SHALL BE APPROVED IF:

(1) THE BANK COMMISSIONER DETERMINES THAT APPROVAL
IS:

         (I) REASONABLY REQUIRED TO PROTECT THE WELFARE

OF THE GENERAL ECONOMY OF THE STATE AND OF THE BANKING
INSTITUTION; AND