Delaware’s banking laws could soon get their most significant overhaul in years under legislation known as the “Delaware Banking Modernization Act of 2026,” which aims to update and modernize numerous provisions of the Delaware Banking Code.
The bill, a substitute for an earlier version, differs from the original in two key ways: it requires a greater-than-majority vote for passage, and it sets a timeline for one of its sections to take effect — either one year after the law is enacted or when the State Banking Commissioner announces that final regulations have been published, whichever comes first.
One of the most notable changes in the legislation is its treatment of digital assets. The bill formally defines “Digital Asset” as any digital representation of value recorded on a cryptographically secured distributed ledger or similar technology, including virtual currency. It also defines “Virtual Currency” as a digital representation of value used as a medium of exchange, a unit of account, or a store of value — but not actual money. The definitions exclude loyalty or rewards program credits that cannot be converted to money or bank credit, as well as digital representations issued by publishers for use solely within online games or gaming platforms.
Under the legislation, Delaware-chartered banks with fiduciary powers would be explicitly permitted to hold and manage digital assets on behalf of customers. The same authority would be extended to savings banks.
The bill also expands the powers of the State Bank Commissioner in several ways. The Commissioner would be authorized to hire outside consultants, legal professionals, and technical experts as needed. The Commissioner would also gain new authority to approve the creation of banks and trust companies with limited powers, and could adopt different application requirements depending on the risk level of the proposed activities.
On the corporate governance side, the legislation updates address requirements in bank and savings bank organizational documents, replacing outdated language referencing “residence and post-office address” with “business, post office or mailing address.” It also adds flexibility in how banks and savings banks can set the size of their boards of directors — allowing the articles of association to specify a method for determining the number of directors, rather than requiring a fixed number, while still maintaining a minimum of five directors.
The bill streamlines what happens to fiduciary appointments — such as trustee, executor, administrator, custodian, and guardian positions — when banks merge or when national banks or federal savings associations convert into state banks. Under the new provisions, those appointments would automatically transfer to the resulting institution without requiring a court order, though interested parties could still seek a judicial review.
The legislation also makes it easier for out-of-state banks and trust companies to relocate to Delaware or merge with Delaware institutions. New definitions are established for various types of trust companies, and the State Bank Commissioner would be given authority to approve Delaware state trust companies opening offices in other states as part of interstate merger or conversion transactions.
Additionally, the bill extends fiduciary authority in Delaware to banks and trust companies organized under the laws of other states — but only if those states grant the same reciprocal powers to Delaware-chartered institutions.
A provision removing a restriction on limited purpose trust companies is also included. Previously, such entities were required to operate in a way that would not attract customers from the general public to the substantial detriment of existing Delaware banks or trust companies. The bill eliminates that requirement, with the stated goal of removing what lawmakers describe as a potentially anti-competitive barrier.
Most sections of the bill would take effect immediately upon enactment. Because the legislation touches on Delaware’s general corporation law, it requires the affirmative vote of two-thirds of the members elected to each chamber of the General Assembly under the Delaware Constitution.
