Cyndie Romer

This Act, known as the “Delaware Banking Modernization Act of 2026,” amends Title 5 of the Delaware Code to update and modernize various provisions of the Delaware Banking Code. The Act addresses digital assets, expands the State Bank Commissioner’s authority, modernizes corporate governance and organizational requirements for state-chartered banks and trust companies, facilitates interstate trust company operations and conversions, and expands the authority of out-of-state financial institutions to act as fiduciaries in Delaware. The following is a section-by-section summary of the Act’s provisions:
Section 1 provides that the Act may be cited as the “Delaware Banking Modernization Act of 2026.”
Section 2 amends § 101 of Title 5 to add two new defined terms to the Delaware Banking Code’s general definitions. First, it adds a definition of “Digital Asset,” which means any digital representation of value recorded on a cryptographically-secured distributed ledger or similar technology, including virtual currency. Second, it adds a definition of “Virtual Currency,” which means a digital representation of value used as a medium of exchange, unit of account, or store of value that is not money and is not denominated in money. The definition excludes loyalty or rewards program credits that cannot be exchanged for money or bank credit, and digital representations of value issued by a publisher and used solely within an online game or game platform.
Section 3 amends § 103 of Title 5 to expressly authorize the State Bank Commissioner to contract for and procure additional independent consulting, legal, technical, and professional services as needed to discharge the duties of the office.
Section 4 amends § 167 of Title 5, which governs the definitions applicable to the change-of-control subchapter for Delaware-chartered banks and trust companies. The amendment makes two changes to the definition of “Control.” First, it modifies the presumption-of-control provision that applies when a person acquires 10 percent or more of a class of voting stock—replacing the phrase “an aggregate” proportion with “a greater” proportion and the word “the” with “that” to clarify the ownership comparison standard. Second, it adds new authority for the State Bank Commissioner to permit the establishment of banks and trust companies authorized to exercise all or fewer than all of the powers conferred by Title 5, including institutions whose powers are limited in their articles of association and by order of the Commissioner. The Commissioner is also authorized to promulgate regulations to carry out this authority, including adopting different application forms with varying requirements based on the risk profile of the proposed activities.
Section 5 amends § 701 of Title 5 to clarify the application of Chapter 7 to banks and trust companies. It expressly authorizes the State Bank Commissioner to approve the establishment of institutions with "all or less than all" of the powers typically conferred by the chapter, including those with powers limited by their articles of association. It further grants the Commissioner regulatory authority to adopt different application requirements based on the underlying risks and proposed activities of the institution.
Section 6 amends § 723 of Title 5 to provide that the articles of association of a state-chartered bank must state the number of directors, or the manner of fixing such number, which in no case may be fewer than five. This amendment adds flexibility by permitting the articles to specify a method for determining the number of directors rather than requiring a fixed number to be stated.
Section 7 amends § 728 of Title 5 to update the information required in a bank’s articles of organization. The amendment modernizes the address requirement by replacing “residence and post-office address” with “business, post office or mailing address” for each officer of the corporation, reflecting contemporary address conventions.
Section 8 amends § 742(a) of Title 5 to clarify that the number of directors constituting a bank’s board shall be “fixed by, or in the manner provided in,” the articles of association, rather than merely “specified in” the articles. This change is parallel to the amendment made in Section 5 and provides greater organizational flexibility while maintaining the five-director minimum.
Section 9 amends § 761 of Title 5, which governs a bank’s authority to hold and manage personal property in a fiduciary capacity, by adding a new subsection (c) providing that “personal property” for purposes of that subchapter includes digital assets. This amendment ensures that Delaware-chartered banks exercising fiduciary powers may hold and administer digital assets on behalf of customers.
Section 10 amends § 777 of Title 5 to remove a restriction on limited purpose trust companies that previously required such entities to be operated in a manner that would not attract customers from the general public to the substantial detriment of existing Delaware banks or trust companies. Removal of this provision is intended to eliminate a potentially anti-competitive restriction and facilitate the establishment of new limited purpose trust companies in Delaware.
Section 11 amends § 783 of Title 5, which governs the merger of state banks and the conversion of national banks into state banks, by adding two new subsections. New subsection (b) provides that in a bank merger, all fiduciary appointments, designations, and nominations—including positions as trustee, executor, administrator, custodian, and guardian—automatically vest in the resulting bank without any court order, while preserving the right of any interested party to seek a judicial determination regarding continuation of fiduciary service. New subsection (c) provides the same automatic vesting of fiduciary rights for conversions of national banks or federal savings associations into state banks.
Section 12 amends the title of Subchapter VII of Chapter 7 of Title 5 to rename it “Merger, Consolidation or Conversion with or of Out-of-State Banks and Out-of-State Trust Companies.” The amendment adds “Conversion” and “Out-of-State Trust Companies” to the subchapter title to reflect the expanded scope of the provisions contained in Sections 12 through 16 of this Act.
Section 13 amends § 795 of Title 5 to add five new defined terms applicable to the interstate merger and conversion subchapter: (1) “Delaware state trust company,” meaning any trust company chartered under the laws of Delaware; (2) “Out-of-state trust company,” meaning an out-of-state state trust company or an out-of-state national trust bank; (3) “Out-of-state state trust company,” meaning any trust company chartered under another state’s laws that is not engaged in the business of receiving non-trust deposits; (4) “Out-of-state national trust bank,” meaning a national bank whose operations are limited to trust company activities not located in Delaware; and (5) “Trust Company,” meaning either a Delaware state trust company or an out-of-state trust company.
Section 14 amends § 795A of Title 5 to broaden the express statement of legislative intent for the interstate banking subchapter. In addition to permitting interstate branching by merger under the Riegle-Neal Interstate Banking and Branching Efficiency Act of 1994, the amendment adds the stated intent of facilitating the relocation of out-of-state banks and out-of-state trust companies to Delaware.
Section 15 amends § 795B of Title 5 to add a new subsection (d) permitting a Delaware state trust company, with prior written approval of the State Bank Commissioner, to establish, maintain, and operate branch offices, trust offices, or other places of business in other states pursuant to an interstate merger or conversion transaction in which the Delaware state trust company is the resulting entity.
Section 16 amends § 795D of Title 5, which governs mergers and conversions resulting in a Delaware state bank, to add parallel provisions for out-of-state trust company mergers and conversions resulting in a Delaware state trust company. New subsection (c) authorizes out-of-state state banks to convert into Delaware state banks and out-of-state trust companies to convert into limited purpose trust companies with prior written approval of the State Bank Commissioner, subject to applicable federal and home-state law. New subsection (d) establishes a deemed-approval mechanism if the Commissioner takes no action within 30 days of receiving a completed conversion application. New subsection (e) sets forth the required application materials for a converting institution. New subsection (f) specifies that the legal effect of an approved conversion follows the procedures of Title 8, Chapter 1 (for corporations) or Title 6, Chapter 18 (for limited liability companies), as applicable. New subsection (g) conditions Commissioner approval on satisfaction that adequate provision has been made for successors to any fiduciary positions held by a merging or converting institution that will not exercise trust powers following the transaction. New subsections (h) and (i) provide for the automatic vesting of fiduciary appointments in the resulting bank or trust company following a merger or conversion, respectively, mirroring the provisions added to § 783 by Section 9 of this Act.
Section 17 amends § 795I of Title 5 to add a new subsection (c) expressly authorizing a Delaware state trust company to conduct activities at any branch office or other place of business outside Delaware that are permissible for a Delaware state trust company and permissible under the laws of the state where the office is located.
Section 18 amends § 913 of Title 5, which addresses the authority of national banks to act as fiduciaries in Delaware, to add a new subsection (b) extending comparable authority to banks and trust companies organized under the laws of any other state. Specifically, an out-of-state bank or trust company that is duly authorized under its home state’s laws and organizational documents to act in a fiduciary capacity may be appointed by will, deed of trust, or other agreement as executor, guardian, trustee, or other fiduciary in Delaware—but only to the extent that the laws of the institution’s home state confer reciprocal fiduciary powers on Delaware-chartered banks and trust companies.
Section 19 amends § 1622 of Title 5, which governs articles of association for savings banks, to parallel the amendment made to § 723 in Section 5 of this Act. The amendment requires the articles of association to state the number of directors, or the manner of fixing such number, which in no case may be fewer than five.
Section 20 amends § 1627 of Title 5 to parallel the amendment to § 728 made in Section 6 of this Act, updating the address information required in a savings bank’s articles of organization from “residence and post-office address” to “business, post office or mailing address” for each officer.
Section 21 amends § 1642(a) of Title 5 to parallel the amendment to § 742(a) made in Section 7 of this Act, clarifying that the number of directors for a savings bank board shall be “fixed by, or in the manner provided in,” the articles of association rather than merely “specified in” the articles, while retaining the five-director minimum.
Section 22 amends § 1661 of Title 5, which governs the authority of savings banks to hold personal property in a fiduciary capacity, to add a new subsection (c) providing that “personal property” for purposes of that subchapter includes digital assets, paralleling the amendment made to § 761 in Section 8 of this Act.
The Act is effective immediately and must be implemented upon the earlier of one year post-enactment or the issuance of final regulations.