Subject to the approval of the commissioner, one or more depository financial services loan companies may form and own a service corporation only under the following conditions:

(1) The depository financial services loan company or companies participating in the formation of the service corporation are in and will remain in a safe and sound condition, and the depository financial services loan company’s or companies’ solvency will not be adversely affected by the formation or ownership of the service corporation;

Terms Used In Hawaii Revised Statutes 412:9-403

  • Appeal: A request made after a trial, asking another court (usually the court of appeals) to decide whether the trial was conducted properly. To make such a request is "to appeal" or "to take an appeal." One who appeals is called the appellant.
  • Assets: (1) The property comprising the estate of a deceased person, or (2) the property in a trust account.
  • Capital: means :

    (1) The aggregate par value or other amount received and allocated to the issued and outstanding capital stock of a financial institution; or

    (2) The total amount of a credit union's outstanding and unimpaired membership shares or share accounts. See Hawaii Revised Statutes 412:1-109

  • Capital stock: means the units of interest, whether or not having a par value, common or preferred, legally issued by a financial institution or other corporation, which represents a fractional ownership interest in the institution or corporation. See Hawaii Revised Statutes 412:1-109
  • Commissioner: means the commissioner of financial institutions of this State. See Hawaii Revised Statutes 412:1-109
  • Company: means any corporation, partnership, trust (business or otherwise), association, joint venture, pool syndicate, unincorporated organization, or any form of business entity not specifically listed herein and, unless specifically excluded, a financial institution; provided that "company" does not mean any trust existing on July 1, 1993, which under its terms must terminate within twenty-five years, or not later than twenty-one years and ten months after the death of individuals living on the effective date of the trust. See Hawaii Revised Statutes 412:1-109
  • Corporation: A legal entity owned by the holders of shares of stock that have been issued, and that can own, receive, and transfer property, and carry on business in its own name.
  • Liabilities: The aggregate of all debts and other legal obligations of a particular person or legal entity.
  • surplus: includes retained earnings, whether or not transferred or allocated to surplus. See Hawaii Revised Statutes 412:1-109
(2) A depository financial services loan company may not own or invest in any capital stock, securities, or other interest of a service corporation if, together with its investment in the capital stock, securities, or other interest of any other service corporations, its aggregate outstanding investment in all service corporations will exceed fifty per cent of the depository financial services loan company’s capital and surplus;
(3) No service corporation may be formed except upon written approval by the commissioner of an application submitted in a form satisfactory to the commissioner. The approval shall be subject to the written acknowledgment by the applicant that the service corporation shall be subject to:

(A) The supervision of the commissioner;
(B) Examination pursuant to this section; and
(C) Any other terms and conditions as the commissioner deems appropriate;
(4) Every service corporation shall permit the commissioner to examine its books, records, and activities from time to time, to the extent and whenever the commissioner deems necessary to determine the propriety of any investment by a depository financial services loan company in the service corporation and whether the activities of the service corporation pose a significant risk of loss to the parent depository financial services loan company. The service corporation shall pay the entire cost of the examination. In addition, a service corporation, at its sole expense, shall cause an independent audit to be made of its books, records, and activities if and when deemed necessary by the commissioner;
(5) A service corporation may engage in any activity permitted to its parent depository financial services loan company and any other activity as the commissioner may approve;
(6) A service corporation may engage in permitted activities directly or through one or more subsidiaries or joint ventures;
(7) Whenever a service corporation engages in an activity that is not permitted under this section, and because of the activity a depository financial services loan company’s investment in the service corporation would be improper, within ninety days following written notice from the commissioner to the depository financial services loan company:

(A) The improper activity shall be discontinued; or
(B) The depository financial services loan company shall divest itself of its ownership or investment in the service corporation.

The service corporation or the depository financial services loan company may appeal the commissioner’s decision and request a hearing in accordance with chapter 91; and

(8) The depository financial services loan company shall notify the commissioner in writing within five days of closing a service corporation. The notification shall provide the date of closing, the reasons for the closure, and the means by which the assets and liabilities of the service corporation were disposed.

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