HB 6877 — AN ACT CONCERNING THE BANKING COMMISSIONER'S APPROVAL OF CERTAIN BANK REAL ESTATE IMPROVEMENTS AND ALTERATIONS.

House ofBill Representatives General Assembly File No.

1476877 JanuaryPublic Session,Act 2025 House Bill No.

687725-11 HouseAN ofACT Representatives,CONCERNING MarchTHE 19,BANKING 2025COMMISSIONER'S TheAPPROVAL CommitteeOF onCERTAIN BankingBANK reportedREAL throughESTATE REP.IMPROVEMENTS AND ALTERATIONS.

DOUCETTE of the 13th Dist., Chairperson of the Committee on the part of the House, that the bill ought to pass.

AN ACT CONCERNING THE BANKING COMMISSIONER'S APPROVAL OF CERTAIN BANK REAL ESTATE IMPROVEMENTS AND ALTERATIONS.

Such approval shall not be required in case of the alteration or improvement of real estate already owned or leased by the bank or a corporation controlled by [it] the bank as provided in subsection (d) of section 36a-276, if (i) the bank is adequately capitalized, as defined in 12 CFR 324.403, as amended from time to time, and is not the subject of a pending formal enforcement action by (I) the commissioner under section 36a-50, or (II) the Federal Deposit Insurance Corporation, or (ii) the expenditure for such purposes does not in any one calendar year HB6877exceed /five Fileper No.cent of the bank's capital and surplus or seven hundred fifty thousand dollars, whichever is less;

147Governor's 1Action: HB6877 File No.

147Approved exceedMay five29, per2025 cent of the bank's capital and surplus or seven hundred fifty thousand dollars, whichever is less;

This act shall take effect as follows and shall amend the following sections:

Section 1 October 1, 2025 36a-250(a)(33)(A) BA Joint Favorable HB6877 / File No.

147 2 HB6877 File No.

147 The following Fiscal Impact Statement and Bill Analysis are prepared for the benefit of the members of the General Assembly, solely for purposes of information, summarization and explanation and do not represent the intent of the General Assembly or either chamber thereof for any purpose.

In general, fiscal impacts are based upon a variety of informational sources, including the analyst’s professional knowledge.

Whenever applicable, agency data is consulted as part of the analysis, however final products do not necessarily reflect an assessment from any specific department.

OFA Fiscal Note State Impact:

None Municipal Impact:

None Explanation Thebill,whichaddsanexceptiontotherequirementthatConnecticut banks obtain the Department of Banking's approval before altering or improvingtheirbusinessrealestate,isnotanticipatedtoresultinafiscal impact to the state or municipalities.

The Out Years State Impact:

None Municipal Impact:

None HB6877 / File No.

147 3 HB6877 File No.

147 OLR Bill Analysis HB 6877 AN ACT CONCERNING THE BANKING COMMISSIONER'S APPROVAL OF CERTAIN BANK REAL ESTATE IMPROVEMENTS AND ALTERATIONS.

SUMMARY The bill adds a second exception to the state requirement that Connecticut banks obtain the banking commissioner’s written approval before altering or improving their business real estate.

Under this exception, no approvalis needed for altering or improving business real estate that a Connecticut bank, or a corporation controlled by it, already owns or leases so long as the bank is (1) adequately capitalized under federal law and (2) not the subject of a pending formal enforcement action by the banking commissioner or the Federal Deposit Insurance Corporation.

Under existing law, Connecticut banks may generally acquire, alter, or improve real estate for present or future use in the bank’s business with the banking commissioner’s written approval.

However, approval is not required for altering or improving business real estate that the bank, or a corporation controlled by it, already owns or leases if the expenditure for the alterations or improvements does not, in any one calendar year, exceed 5% of the bank’s capital and surplus or $750,000, whichever is less.

The bill also makes technical and conforming changes.

EFFECTIVE DATE:

October 1, 2025 APPLICABILITY Bylaw,a“Connecticut bank”isa Connecticut-charteredororganized bank and trust company, savings bank, or savings and loan association HB6877 / File No.

147 4 HB6877 File No.

147 (CGS § 36a-2(13)).

Under existing law and the bill, a bank controls a corporation (making the corporation’s real estate eligible for the exceptions) if the bank owns or holds at least 51% of the equity securities issued by the corporation, unless the banking commissioner determines that a lesser percentage constitutes effective working control (CGS § 36a-276(d)).

Subject to other conditions and provisions, a Connecticut bank is generally considered “adequately capitalized” if it has a:

1.

total risk-based capital ratio of at least 8%, 2.

Tier 1 risk-based capital ratio of at least 6%, 3.

common equity Tier 1 capital ratio of at least 4.5%, and 4.

leverage ratio of at least 4% (12 C.F.R.

§ 324.403(b)).

COMMITTEE ACTION Banking Committee Joint Favorable Yea 12 Nay 0 (03/06/2025) HB6877 / File No.