Montana Eliminates All Non-Bond Options for Foreign Trust Companies

Montana Eliminates All Non-Bond Options for Foreign Trust Companies

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Date Enacted: 2/17/2015

Montana foreign fiduciary bonding laws have changed. Prior to the HB 66 changes, foreign banks weren’t required to hold surety bonds when they were appointed as a guardian, trustee or conservator; however, the revised act requires surety bonds in these instances.

Trustees and conservators will now need to learn how to get their bond and insurance to operate legally.

New Surety Bond Requirement for Foreign Banks

In the past, foreign financial institutions (in this case referring to any institution based outside of Montana) were able to show a cash backing when becoming a trustee, guardian or conservator. The revision to this Montana bill now allows only one type of financial backing. Foreign trusts must now purchase a surety bond to meet the trustee requirements. Other forms of security will no longer be accepted.

The enactment of these changes may present the question of what a surety bond is and how to purchase one. To define a surety bond simply, it is a three party contractual agreement that ensures all parties (but most specifically the bond purchaser) will see the contract through to its end. These bonds can be purchased through a surety bond agency, like JW Surety Bonds.

Other Notable Changes:

Changes To Reporting

New Surety Bond Requirement for Foreign Banks

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Reports will still be made three times a year, but institutions will no longer receive a call for them. Instead, reports will be submitted 30 days after the “past day” as dictated by the relevant department.

Electronic submission will be deemed successful merely by the fact that the submission is transmitted without fail to the appropriate federal banking authority. The bank making the report must keep the signature page of said report on file permanently and be able to produce it for review by the department at any time.

Non-depository trust companies which aren’t insured by the federal deposit insurance corporation are required to send the call reports directly to the department. These reports can be made either in hard copy or “imaged” form.

Confidentiality Penalties

Many reports and statements are confidential. These confidential documents and any communication about them will remain confidential; however, the federal banking authority may make some information public.

The only time that confidential information can be divulged to those not associated with the department is in exchanges with federal financial regulatory agencies and state financial regulatory agencies. Prosecuting officials need warrants to obtain information.

Check out the full revised Montana Fiduciary Trust Bonding Act for more details.

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