Request By:
Hon. David W. Harper
Hirn, Reed, Harper & Eisinger
2450 Meidinger Tower
Louisville, Kentucky 40202
Opinion
Opinion By: FREDERIC J. COWAN, ATTORNEY GENERAL; NATHAN GOLDMAN, ASSISTANT ATTORNEY GENERAL
In your letter to the Attorney General you ask whether a bank holding company ("BHC") in county A may form and acquire a de novo federal savings association in county B without violating KRS 289.905(1).
KRS 289.905(1) states:
"Any individual, or any Kentucky savings and loan association holding company, may acquire control of one (1) or more savings and loan associations or savings and loan association holding companies wherever located, except that no individual who on July 15, 1988, controls a savings and loan association or savings and loan association holding company wherever located, and no savings and loan association holding company wherever located, shall acquire, directly or indirectly, control of a Kentucky savings and loan association if the Kentucky savings and loan association was chartered after July 15, 1988 and if, at the time of the acquisition, the Kentucky savings and loan association has been in existence less than five (5) years. The provision of this subsection shall not prohibit the organization of a one (1) savings and loan association holding company for the purpose of acquiring control of a savings and loan association even if the savings and loan association was chartered aftedr July 15, 1988, and has been in existence less than five (5) years at the time of the acquisition. "
This provision was enacted in 1988 (Acts 1988, ch. 156, § 2). There are no cases which interpret it. By its clear terms, it prohibits any individual or Kentucky savings and loan association holding company ("SLAHC") from acquiring a savings and loan association which was chartered after July 15, 1988, and has been in existence less than five years.
KRS 289.900(3) defines "individual" as: "A natural person, partnership, association, business trust, voting trust, or similar organization. Individual does not include a corporation." We assume that BHC is a corporation. Consequently, it would not be considered an individual for purposes of KRS 289.905(1).
"Savings and loan association holding company" is defined at KRS 289.900(7) as having "the meaning accorded the term in the Federal Savings and Loan Holding Company act, 12 U.S.C. Sec. 1730a(a)(1)(D), as amended, except that the term shall include mutual savings and loan association holding companies organized pursuant to Section 408 of the National Housing Act, 12 U.S.C. Sec. 1730a(s), as amended." BHC is not a savings and loan association holding company for the purposes of KRS 289.905(1).
Since the statute speaks only in terms of individuals and savings and loan association holding companies, the statute is inapplicable to the situation you raise. Since there is no other statute which would be applicable, the proposed transaction is not prohibited. Therefore, it would be our opinion that the proposed transaction does not violate Kentucky law.