H. B. 2538
(By Delegates Williams, Flanigan, Beane and L. White)
[Introduced March 10, 1993; referred to the
Committee on Banking and Insurance.]
A BILL to amend article two, chapter thirty-one-a of the code of
West Virginia, one thousand nine hundred thirty-one, as
amended, by adding thereto a new section, designated section
four-a; and to amend and reenact section nine, article two;
and section two, article three of said chapter, all relating
to making orders of the commissioner of banking and West
Virginia board of banking public records.
Be enacted by the Legislature of West Virginia:
That article two, chapter thirty-one-a of the code of West
Virginia, one thousand nine hundred thirty-one, as amended, be
amended by adding thereto a new section, designated section four-
a; that section nine, article two; and section two, article three
of said chapter be amended and reenacted, all to read as follows:
ARTICLE 2. DIVISION OF BANKING.
§31A-2-4a. Orders of the commissioner of banking to be made
public.
Any order entered by the commissioner of banking against anyperson:
(1) To cease violating any provision or provisions of this
chapter or other applicable law or rule and regulation
promulgated or order issued thereunder;
(2) To cease engaging in any unsound practice or procedure
which may detrimentally affect any financial institution;
(3) To revoke the certificate of authority, permit or
license of any financial institution; and
(4) To take such other action as the commissioner of banking
may deem necessary to enforce and administer the provisions of
this chapter and all other laws which the commissioner is
empowered to enforce;
is a matter of public record.
§31A-2-9. Correction of violations of law, irregularities and
unsound practices; disposition of doubtful assets and
past-due obligations; stockholders' meetings.
Whenever it appears that any law, rule and regulation or
order applicable to any financial institution is being violated,
or that any irregularities exist or unsound practices or
procedures are being engaged in, it shall be the duty of the
commissioner of banking to promptly call the same to the
attention of the officers and directors of the financial
institution offending and to demand that the same be promptly
corrected; and he
or she may require a sworn statement from the
said officers and directors covering the matter of all such
violations and of all such irregularities, unsound practices orprocedures to be furnished to him
or her as often as he
or she
may deem necessary, until he is satisfied that such violations
have ceased and that the irregularities, unsound practices or
procedures complained of have been corrected. Such reports shall
not be made public,
except as necessary as part of any order or
other enforcement action or proceeding.
If any such institution owns any asset, the value of which,
in the judgment of the commissioner of banking, is questionable,
or owns past-due obligations, the commissioner of banking may
require the assets of doubtful value to be at once converted into
money or charged off of the books of the financial institution at
the expiration of three months from the date of such order; or
require legal proceedings to be at once instituted for the
collection of any past-due obligations to the financial
institution or that they be charged off.
Upon the written notice of the commissioner of banking, the
directors of any financial institution shall call a general
meeting of the stockholders thereof to consider such matters as
the commissioner may prescribe. Notice of such meeting shall be
given in accordance with applicable statutes and the bylaws of
the financial institution. The expense of such meeting and
notice thereof shall be borne by the financial institution whose
stockholders are so required to convene.
ARTICLE 3. BOARD OF BANKING AND FINANCIAL INSTITUTIONS.
§31A-3-2. General powers and duties.
(a) In addition to other powers conferred by this chapter,the board shall have the power to:
(1) Regulate its own procedure and practice;
(2) Promulgate reasonable rules
and regulations to implement
any provision of this article, such rules
and regulations to be
promulgated in accordance with the provisions of article three,
chapter twenty-nine-a of this code;
(3) Advise the commissioner in all matters within his
jurisdiction;
(4) Study the organization, programs and services of
financial institutions and the laws relating thereto in this
state and in other jurisdictions, and to report and recommend to
the governor and the Legislature all such changes and amendments
in laws, policies and procedures relating thereto as may be by it
deemed proper; and
(5) Grant permission and authority to a financial
institution:
(A) To participate in a public agency hereafter created
under the laws of this state or of the United States, the purpose
of which is to afford advantages or safeguards to financial
institutions or to depositors therein, and to comply with all
lawful requirements and conditions imposed upon such
participants;
(B) To engage in any financial institution activity,
services, procedures and practices in which financial
institutions of the same type subject to the jurisdiction of the
federal government may hereafter be authorized by federal laws,rules or regulations to engage, notwithstanding any contrary
provision of this code;
(C) To pay interest on demand deposits of the United States
or any agency thereof, if the payment of such interest shall be
permitted under any applicable federal law, rule or regulation.
Any permission and authority granted by the board pursuant
to this subdivision (5) shall cease and terminate upon the
adjournment of the next regular session of the Legislature,
unless the Legislature shall at such session enact legislation
authorizing the financial institution participation, activity,
services and procedures or payment of interest with respect to
which such permission and authority were granted, in which event
such permission and authority shall continue in effect until the
effective date of such legislation.
(b) The board shall further have the power, by entering
appropriate orders, to:
(1) Restrict the withdrawal of deposits from any financial
institution when, in the judgment of the board, extraordinary
circumstances make such restrictions necessary for the protection
of creditors of and depositors in the affected institution;
(2) Compel the holder of shares in any corporate financial
institution to refrain from voting said shares on any matter
when, in the judgment of the board, such order is necessary to
protect the institution against reckless, incompetent or careless
management, to safeguard funds of depositors in the institution,
or to prevent willful violation of any applicable law or of anyrule and regulation or order issued thereunder. In such a case
the shares of such a holder shall not be counted in determining
the existence of a quorum or a percentage of the outstanding
shares necessary to take any corporate action;
(3) Approve or disapprove applications to incorporate and
organize state banking institutions in accordance with the
provisions of sections six and seven, article four of this
chapter;
(4) Approve or disapprove applications to incorporate and
organize state-chartered bankers' banks in accordance with the
provisions of sections six and seven, article four of this
chapter;
(5) Exempt a bankers' bank from any provision of this
chapter if the board finds that such provision is inconsistent
with the purpose for which a bankers' bank is incorporated and
organized and that the welfare of the public or any banking
institution or other financial institution would not be
jeopardized thereby;
(6) Revoke the certificate of authority, permit, certificate
or license of any state banking institution to engage in business
in this state if such institution shall fail or refuse to comply
with any order of the commissioner entered pursuant to the
provisions of paragraph (A) or (B), subdivision (14), subsection
(c), section four, article two of this chapter, or at the board's
election to direct the commissioner to apply to any court having
jurisdiction for a prohibitory or mandatory injunction or otherappropriate remedy to compel obedience to such order;
(7) Suspend or remove a director, officer or employee of any
financial institution who is or becomes ineligible to hold such
position under any provision of law or rule and regulation or
order, or who willfully disregards or fails to comply with any
order of the board or commissioner made and entered in accordance
with the provisions of this chapter or who is dishonest or
grossly incompetent in the conduct of financial institution
business;
(8) To receive from state banking institutions applications
to establish branch banks by the purchase of the business and
assets and assumption of the liabilities of, or merger or
consolidation with, another banking institution, or by the
construction, lease or acquisition of branch bank facilities in
an unbanked area; examine and investigate such applications, to
hold hearings thereon, and to approve or disapprove such
applications, all in accordance with section twelve, article
eight of this chapter;
(9) Approve or disapprove the application of any state bank
to purchase the business and assets and assume the liabilities
of, or merge or consolidate with, another state banking
institution in accordance with the provisions of section seven,
article seven of this chapter;
(10) Approve or disapprove the application of any state bank
to purchase the business and assets and assume the liabilities of
a national banking association, or merge or consolidate with anational banking association to form a resulting state bank in
accordance with the provisions of section seven, article seven of
this chapter;
and
(11) In addition to any authority granted pursuant to
section twelve, article eight of this chapter, incident to the
approval of an application pursuant to subdivision (7) or
subdivision (8) of this subsection (b), permit the bank the
application of which is so approved to operate its banking
business under its name from the premises of the bank the
business and assets of which have been purchased and the
liabilities of which have been assumed by such applicant bank or
with which such applicant bank has merged or consolidated:
Provided, That such permission may be granted only if the board
has made the findings required by subsection (f), section three
of this article and such applicant bank has no common directors
or officers nor common ownership of stock exceeding ten percent
of total outstanding voting stock with the bank whose business
and assets are being purchased and liabilities assumed, or with
whom such applicant bank is being merged.
and
(12) (c) No provision of this section shall be construed to
alter, reduce or modify the rights of shareholders, or
obligations of a banking institution in regard to its
shareholders, as set forth in section one hundred seventeen,
article one, chapter thirty-one of this code and section seven,
article seven of this chapter, and other applicable provisions of
this code.
(d) Any order entered by the West Virginia board of banking
and financial institutions pursuant to this section is a matter
of public record.
NOTE: The purpose of this bill is to make orders by the
commissioner of banking and West Virginia board of banking public
documents.
§31A-2-4a is new; therefore, strike-throughs and
underscoring have been omitted.
Strike-throughs indicate language that would be stricken
from the present law, and underscoring indicates new language
that would be added.