New Jersey § 17:9a-450

§ 17:9a-450.

a. In this section: (1) “ Adjusted liabilities, ” when used with respect to a foreign bank, means the liabilities of the bank's business

in this State, excluding: (a) accrued expenses; (b) any liability to an office,

whether in or outside of this State, or subsidiary of the bank; and (c) such other

liabilities as the commissioner may by regulation or order exclude. (2) “ Applicable minimum, ” when used with respect to eligible assets deposited or to be deposited with an approved

depository by a foreign bank, means the amount as the commissioner may from time to

time by regulation or order determine to be necessary for the establishment of sound

financial condition, for the protection of the interests of creditors of the bank's

business in this State, or for the protection of the public interest. However, in the case of a foreign bank which is licensed to establish an agency or

a branch office, the applicable minimum shall in no event be less than the greater

of (a) 5 percent of the adjusted liabilities of the bank or (b) $1,000,000. (3) “ Approved depository, ” when used with respect to a foreign bank, means a bank organized under the laws

of this State or a national bank headquartered in this State which has been selected

by such foreign bank and approved by the commissioner for the purpose of acting as

the approved depository of the foreign bank and which has filed with the commissioner,

in the form as the commissioner may by regulation or order prescribe, an agreement

to comply with all applicable provisions of this section and of any regulation or

order issued under this section. (4) “ Eligible assets ” when used with respect to a foreign bank, means any of the following: (a) Cash. (b) Any investment security which by regulation is eligible for investment by a commercial

bank organized under the Banking Act. (c) Any negotiable certificate of deposit which: (i) has a maturity of not more than

one year, (ii) is payable in the United States, and (iii) is issued by a bank organized

under the laws of a state of the United States, by a national bank, or by a branch

office of a foreign bank which is located in the United States. (d) Any commercial paper which is payable in the United States and which is rated

P-1 or its equivalent by a nationally recognized rating service; provided, however,

that any conflict in rating shall be resolved in favor of the lower rating. (e) Any banker's acceptance which is payable in the United States and which is eligible

for discount with a Federal Reserve bank. (f) Any other asset which the commissioner by regulation or order determines to be

eligible. Notwithstanding the foregoing provisions of this paragraph, “eligible asset,” when

used with respect to a foreign bank, does not include any instrument the issuer of

which: (i) is, or is affiliated with, the foreign bank; (ii) is domiciled in, or

controlled by a bank or other person domiciled in, the same foreign nation as the

foreign bank; or (iii) is, or is controlled by, the foreign nation. For purposes of the foregoing provision, to be “ affiliated ” means to control, to be controlled by, or to be under common control with. b. For purposes of this section: (1) The amount of adjusted liabilities of a foreign bank's business in this State

shall be computed for the period, in the manner, and on the basis as the commissioner

may by regulation or order prescribe. (2) Any eligible asset shall be valued at the lesser of market or par. c. (1) Before any foreign bank is licensed to transact business in this State, the

bank shall deposit, and each foreign bank which is licensed to transact business in

this State shall maintain on deposit, with an approved depository, eligible assets

having a value in an amount not less than the applicable minimum. (2) Whenever a foreign bank which is licensed to transact business in this State ceases

to be so licensed, the bank shall thereafter establish on deposit, with an approved

depository, eligible assets having a value in an amount not less than the applicable

minimum for the period of time the commissioner may determine to be necessary for

the protection of creditors of the bank's business in this State or for the protection

of the public interest. d. (1) No foreign bank which establishes eligible assets on deposit with an approved

depository pursuant to this section shall withdraw any of those eligible assets except

with the prior approval of the commissioner. (2) No approved depository which holds eligible assets on deposit from a foreign bank

pursuant to this section shall release any of those eligible assets except with the

prior approval of the commissioner or as otherwise provided in subsection h. of this

section. e. Any foreign bank which establishes eligible assets on deposit with an approved

depository pursuant to this section shall be entitled to receive any income paid on

such eligible assets, unless the commissioner shall have suspended or revoked its

license to transact business in this State or taken possession of its property and

business in this State. f. (1) Whenever a foreign bank deposits eligible assets with, or withdraws eligible

assets from, an approved depository pursuant to this section, the bank shall do so

in accordance with the procedures and requirements the commissioner may by regulation

or order prescribe. (2) Whenever an approved depository receives, holds, or releases eligible assets pursuant

to this section, the approved depository shall do so in accordance with the procedures

and requirements the commissioner may by regulation or order prescribe and shall file

with the commissioner reports as and when the commissioner may by regulation or order

require. g. Whenever a foreign bank establishes eligible assets on deposit with an approved

depository pursuant to this section: (1) The eligible assets shall be deemed to be pledged to the commissioner for the

benefit of the creditors of the bank's business in this State; and, notwithstanding

any provision of the Uniform Commercial Code, N.J.S. 12A:1-101 et seq. , to the contrary, the commissioner, for the benefit of the creditors, shall be deemed

to have a security interest in those eligible assets. (2) The eligible assets shall be free from any lien, charge, right of setoff, credit,

or preference in connection with any claim of the approved depository against the

bank. h. (1) If the commissioner takes possession of the property and business of a foreign

bank which establishes eligible assets on deposit with an approved depository pursuant

to this section, the approved depository shall, upon order of the commissioner, release

those eligible assets to the commissioner, as liquidator of the property and business

of the bank. (2) If a foreign bank which establishes eligible assets on deposit with an approved

depository pursuant to this section fails to pay any judgment creditor of its business

in this State and the commissioner has not taken possession of the property and business

of the bank, the approved depository shall release the eligible assets to the commissioner,

and the commissioner shall make the disposition of the eligible assets, as a court

of competent jurisdiction of this State or of the United States may order for the

benefit of that judgment creditor. For purposes of this paragraph, “ judgment creditor of its business in this State ” means a person to whom the bank is required to pay money under a judgment which:

(a) arose out of the bank's business in this State; (b) has been entered by a court

of competent jurisdiction of this State or of the United States; (c) has become final,

in that all possibility of direct attack on that judgment by way of appeal, motion

for new trial, motion to vacate, or petition for extraordinary writ has been exhausted;

and (d) has remained unpaid for a period of not less than 60 days after becoming final.