ENROLLED
Senate Bill No. 503
(By Senators Minard, Jenkins and McCabe)
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[Passed April 8, 2009; in effect ninety days from passage.]
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AN ACT to amend and reenact §31A-8-12 and §31A-8-12d of the Code of
West Virginia, 1931, as amended, all relating to branching
procedures; and creating a definition for "sound financial
condition".
Be it enacted by the Legislature of West Virginia:
That §31A-8-12 and §31A-8-12d of the Code of West Virginia,
1931, as amended, be amended and reenacted, all to read as follows:
ARTICLE 8. HEARINGS; ADMINISTRATIVE PROCEDURES; JUDICIAL REVIEW;
UNLAWFUL ACTS; PENALTIES.
§31A-8-12. Procedure for authorization of branch banks; temporary
offices at colleges and universities; limitations and
restrictions; examinations and hearings; standards of
review; penalties for violation of section.
(a) A banking institution may not engage in business in this
state at any place other than at its principal office in this state, at a branch bank in this state, at a customer bank
communication terminal permitted by section twelve-b of this
article or at any loan origination office permitted by section
twelve-c of this article:
(1) Acceptance of a deposit or allowing a withdrawal at the
banking offices of any subsidiary affiliate, as defined in section
one, article eight-a of this chapter, for credit or debit to the
customer's account at any other subsidiary of the same bank holding
company is permissible and does not constitute branch banking. In
addition, the conduct of activity at branch offices as an agent for
any bank subsidiary of the same bank holding company shall be
permitted to the same extent allowed by federal law for national
banks pursuant to 12 U. S. C.§1828 and does not constitute branch
banking; nor does this activity constitute a violation of section
forty-two, article four of this chapter. However, a banking
institution may not utilize that agency relationship to evade state
consumer protection laws, including usury laws, or any other
applicable laws of this state or to conduct any activity that is
not financially related as that term is defined by section two,
article eight-c of this chapter;
(2) A banking institution located in a county where there is
also a higher educational institution as defined in section two,
article one, chapter eighteen-b of this code may establish a
temporary business office on the campus of any educational institution located in the county for the limited purposes of
opening accounts and accepting deposits for a period not in excess
of four business days per semester, trimester or quarter. However,
prior to opening any temporary office, a banking institution must
first obtain written permission from the institution of higher
education. The term "business days", for the purpose of this
subsection, means days exclusive of Saturdays, Sundays and legal
holidays as defined in section one, article two, chapter two of
this code;
(3) Any banking institution which on January 1, 1984, was
authorized to operate an off-premises walk-in or drive-in facility,
pursuant to the law then in effect, may, as of June 7, 1984,
operate such facility as a branch bank and it is not necessary, for
the continued operation of the branch bank, to obtain additional
approvals, notwithstanding the provisions of subsection (d) of this
section and subdivision (6), subsection (b), section two, article
three of this chapter.
(b) Except for a bank holding company, it is unlawful for any
individual, partnership, society, association, firm, institution,
trust, syndicate, public or private corporation, or any other legal
entity, or combination of entities acting in concert, to directly
or indirectly own, control or hold with power to vote, twenty-five
percent or more of the voting shares of each of two or more banks,
or to control in any manner the election of a majority of the directors of two or more banks.
(c) A banking institution may establish branch banks either
by:
(1) The construction, lease or acquisition of branch bank
facilities within any county of this state; or
(2) The purchase of the business and assets and assumption of
the liabilities of, or merger or consolidation with, another
banking institution.
(d) Subject to and in furtherance of the board's authority
under the provisions of subdivision (6), subsection (b), section
two, article three of this chapter and subsection (g) of this
section, the board, by order, may approve or disapprove the
application of any state banking institution to establish a branch
bank.
(e) The main office or a branch of a West Virginia state
banking institution may not be relocated without the approval by
order of the commissioner.
(f) Any banking institution which is authorized to establish
branch banks pursuant to this section may provide the same banking
services and exercise the same powers at each such branch bank as
may be provided and exercised at its principal banking house.
(g) The board shall, upon receipt of any application to
establish a branch bank under the provisions of this section,
provide notice of the application to all banking institutions. A banking institution may, within ten days after receipt of the
notice, file a petition to intervene and shall, if it files a
petition, thereupon become a party to any hearing relating thereto
before the board.
(h) The commissioner shall prescribe the form of the
application for a branch bank under the provisions of this section
and shall collect an examination and investigation fee of $500 for
each filed application for a branch bank that is to be established
by the construction, lease or acquisition of a branch bank facility
and $500 for a branch bank that is to be established by the
purchase of the business and assets and assumption of the
liabilities of or merger or consolidation with another banking
institution. Notwithstanding the above, if the merger or
consolidation is between an existing banking institution and a bank
newly incorporated solely for the purpose of facilitating the
acquisition of the existing banking institution, the commissioner
shall collect an examination and investigation fee of $100. The
commissioner may require an examination of a financial institution
or an office of a financial institution that is being merged into
a state-chartered bank. If an examination is required, the
applicant is responsible for paying the examination costs at a rate
of $50 per examiner hour. The board shall complete the examination
and investigation within ninety days from the date on which the
application and fee are received, unless the board requests in writing additional information and disclosures concerning the
proposed branch bank from the applicant banking institution. If
the board makes that request, the ninety-day period shall be
extended for an additional period of thirty days plus the number of
days between the date of the request and the date the additional
information and disclosures are received.
(i) Upon completion of the examination and investigation with
respect to the application, the board shall, if a hearing be
required pursuant to subsection (j) of this section, forthwith give
notice and hold a hearing pursuant to the following provisions:
(1) Notice of hearing must be given to the banking institution
with respect to which the hearing is to be conducted in accordance
with the provisions of section two, article seven, chapter twenty-
nine-a of this code and the hearing and the administrative
procedures in connection therewith are governed by all of the
provisions of article five, chapter twenty-nine-a of this code and
must be held at a time and place set by the board but may not be
less than ten nor more than thirty days after the notice is given;
(2) At the hearing a party may represent himself or herself or
be represented by an attorney at law admitted to practice before
any circuit court of this state;
(3) After the hearing and consideration of all the testimony
and evidence, the board shall make and enter an order approving or
disapproving the application, which order shall be accompanied by findings of fact and conclusions of law as specified in section
three, article five, chapter twenty-nine-a of this code and a copy
of the order and accompanying findings and conclusions shall be
served upon all parties to the hearing and their attorneys of
record, if any.
(j) A state banking institution may not establish a branch
bank until the board, following an examination, investigation,
notice and hearing, enters an order approving an application for
that branch bank. However, a hearing is not required with respect
to any application to establish a branch bank which is approved by
the board unless a banking institution has timely filed a petition
to intervene pursuant to subsection (g) of this section. The order
shall be accompanied by findings of fact that:
(1) The applicant state-chartered banking institution
satisfies such reasonable and appropriate requirements as to sound
financial condition. For purposes of this subdivision, "sound
financial condition" means that a state banking institution meets
the required minimum level to be adequately capitalized for each
capital measure as determined by its primary federal regulator and
is not subject to supervisory action by either a state or federal
financial regulatory agency;
(2) The establishment of the proposed branch bank would not
result in a monopoly, nor be in furtherance of any combination or
conspiracy to monopolize the business of banking in any section of this state;
(3) The establishment of the proposed branch bank would not
have the effect in any section of the state of substantially
lessening competition, nor tend to create a monopoly or in any
other manner be in restraint of trade, unless the anticompetitive
effects of the establishment of that proposed branch bank are
clearly outweighed in the public interest by the probable effect of
the establishment of the proposed branch bank in meeting the
convenience and needs of the community to be served by that
proposed branch bank;
(4) The applicant state-chartered banking institution meets a
satisfactory standard of compliance with federal and state
community reinvestment act requirements as evidenced by its most
recent state or federal examination;
(5) The applicant state-chartered banking institution meets a
satisfactory standard of compliance with federal and state consumer
compliance law and regulations as evidenced by its most recent
state or federal regulatory examination;
(6) The applicant state-chartered banking institution meets
acceptable standards for investment in premises and fixed assets as
permitted by section thirteen, article four of this chapter; and
(7) The applicant state-chartered banking institution does not
present a significant supervisory concern or raise a significant
legal or policy issue by filing the application.
(k) Any party who is adversely affected by the order of the
board is entitled to judicial review thereof in the manner provided
in section four, article five, chapter twenty-nine-a of this code.
Any such party adversely affected by a final judgment of a circuit
court following judicial review as provided in the foregoing
sentence may seek review thereof by appeal to the Supreme Court of
Appeals in the manner provided in article six, chapter twenty-nine-
a of this code.
(l) Pursuant to the resolution of its board of directors and
with the prior written approval of the commissioner, a state
banking institution may discontinue the operation of a branch bank
upon at least thirty days' prior public notice given in such form
and manner as the commissioner prescribes.
(m) Any violation of any provision of this section is a
misdemeanor offense punishable by applicable penalties as provided
in section fifteen of this article.
§31A-8-12d. Expedited procedure for authorization of de novo
branch banks.
(a) As an alternative to using the procedures established in
subdivisions (g) through (j), section twelve of this article, a
banking institution desiring to establish a branch bank by de novo
construction or lease may file a notice, containing information as
prescribed by the commissioner, of its intent which must be
received by the commissioner at least thirty-five days prior to the date on which the proposed branch will be established accompanied
by a fee of $250. The commissioner must provide written notice of
his or her acceptance or rejection of the branch notice prior to
the expiration of the 35-day period. However, if the commissioner
requests additional information from the branching institution, the
period for the commissioner's consideration of the notice shall be
extended an additional fifteen days from the time the information
requested is received by the commissioner.
(b) A state banking institution may not establish a branch
bank under this section until the commissioner provides written
approval of the notice for that branch bank. The commissioner's
approval or rejection of the notice must be accompanied by findings
of fact on whether the applicant bank:
(1) Satisfies such reasonable and appropriate requirements as
to sound financial condition. For purposes of this subdivision,
"sound financial condition" means that a state banking institution
meets the required minimum level to be well capitalized for each
capital measure as determined by its primary federal regulator and
is not subject to supervisory action by either a state or federal
financial regulatory agency;
(2) Meets a satisfactory standard of compliance with federal
and state community reinvestment act requirements as evidenced by
its most recent state or federal examination;
(3) Meets a satisfactory standard of compliance with federal and state consumer compliance law and regulations as evidenced by
its most recent state or federal regulatory examination;
(4) Meets the acceptable standards for investment in premises
and fixed assets as permitted by section thirteen, article four of
this chapter; and
(5) Does not present a significant supervisory concern or
raise a significant legal or policy issue by filing the
application.
(c) Any party who is adversely affected by an action of the
commissioner taken pursuant to the criteria established by
subsection (b) of this section may appeal within ten business days
of the commissioner's decision to the Board of Banking and
Financial Institutions which must, after holding a hearing pursuant
to the provisions of subdivision (12), subsection (b), section two,
article three of this chapter, affirm, reverse or modify the order
of the commissioner. Any party who is adversely affected by an
order of the Board of Banking and Financial Institutions issued
pursuant to the provisions of this subsection is entitled to
judicial review in the same manner as provided by the provisions of
subsection (k), section twelve of this article.
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