In September, 2015, our firm posted an article on our website explaining the new trust company laws (RSA 383-A and 383-C) that became effective on October 1, 2015:
New Hampshire’s New Trust Company Laws
An overview of NH RSA Chapter 383-A and 383-C as they apply to governing trust companies.
These laws substantially revamped the procedures for the formation of trust companies in New Hampshire. Since that time a number of trust companies have been formed under the new laws.
As attorneys deeply familiar with the new laws and an understanding of the expectations of the New Hampshire Banking Department related to the trust formation application process, we have put together this list of 10 tips for smoothing the process and avoiding delays. Please contact us for more detailed strategic planning for successfully managing the filing process.
Typically, an application for submission takes at least a month or more to assemble the information and put it in proper form. The application is deceptively simple but requires a lot of detail to make the case for a charter. A pre-filing meeting with the banking department is essential to introduce key personnel to the regulators, explain the purpose for the formation of the trust company, learn what concerns the department may have and address them in the application. Once an application is submitted, the department has 30 days to review it for substantial completeness. The application must contain all information that is requested in the application form promulgated by the department to prevent delays.
The critical documents to be submitted with the application are:
The application asks for employment and third party contracts. Frequently, these contracts are not completed by the time of filing. Likewise, board policies have not yet been prepared. So long as they are described in the application, the actual contracts and policies may be submitted during the review stage.
If the location of the proposed trust company is not known, the application should identify the location of the applicant, but note that another location may be selected in the future. While New Hampshire permits a trust company to have its principal office in another state, make certain the other state agrees.
A criminal background check is required for the principals. Fingerprints must be submitted as part of the application. Because it takes time, begin the process at the outset. You may submit the finger print cards prior to filing the application.
The banking department expects at least one of the members of the board will be independent of management. Board members should provide information regarding their experience and knowledge of the trust company’s business to demonstrate they are qualified to manage its affairs.
Once an application is deemed complete, the review stage of the application by statute takes 60 days, but it can take longer if more information is required. Try to submit all material information when making the filing.
The banking department will conduct interviews with the principals. Its preference is in person, but it has conducted telephone interviews under special circumstances.
The approval of a charter from the banking department is a conditional approval. The conditions must be satisfied before a certificate to transact business will be issued by the department. If time is of the essence, the conditions can be anticipated, and arrangements can be in place to comply quickly.
Once the certificate is issued, the trust company can expect to have an examination by the banking department within 8 months to a year afterward.
The trust formation application process will go smoothly and without delays with good planning, communication and attention to detail.
* John Funk is admitted in New Hampshire, Massachusetts, Maine and Vermont. Susan Hollinger is admitted in New Hampshire, Massachusetts and Vermont.