H. B. 2098
(By Delegates Farris and Beane)
[Introduced January 20, 1995; referred to the
Committee on Banking and Insurance then the
Judiciary.]
A BILL to amend article four, 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
forty-five, relating to banks and banking; banking
institutions and services generally; compliance review
committees established by banking institutions; and
declaring that certain reports generated by these committees
to be confidential and nondiscoverable or admissible in
evidence.
Be it enacted by the Legislature of West Virginia:
That article four, 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
forty-five, to read as follows:
ARTICLE 4. BANKING INSTITUTIONS AND SERVICES GENERALLY.
§31A-4-45. Compliance review committees.
(a) The Legislature hereby finds and declares that:
(1) The Legislature desires to encourage and promote strong
internal self-evaluation programs by banking institutions in West
Virginia;
(2) It is in the best interest of the citizens and bank
customers of this state to encourage candor in self-evaluative
analyses conducted by banking institutions to promote fair and
sound lending policies, asset quality and adherence to federal
and state regulatory requirements, all of which in turn promotes
overall soundness of West Virginia's banking institutions.
(b) For purposes of this section, the following words have
the meanings defined:
(1) "Banking institution" means a state chartered or
federally chartered financial institution insured by the federal
deposit insurance corporation located in this state that is authorized to maintain deposit accounts.
(2) "Compliance review committee" means an audit, loan
review or a compliance committee appointed by the board of
directors of a banking institution; or, any other person to the
extent that person acts in an investigatory capacity at the
direction of a compliance review committee.
(3) "Compliance review documents" means any and all
documents prepared for or created by a compliance review
committee.
(4) "Loan review committee" means a person or group of
persons who, on behalf of a banking institution, reviews loans
held by the institution for the purposes of assessing the credit
quality of the loans, compliance with the institution's loan
policies, and compliance with applicable laws and regulations.
(5) "Person" means an individual, group of individuals,
board, committee, partnership, firm, association, corporation or
other entity.
(c) This section applies to a compliance review committee
whose functions are to evaluate and seek to improve:
(1) Loan underwriting standards;
(2) Asset quality;
(3) Financial reporting to federal or state regulatory
agencies; or
(4) Compliance with federal or state statutory or regulatory
requirements.
(d) Except as provided in subsection (e) of this section:
(1) Compliance review documents are confidential and are not
discoverable or admissible in evidence in any civil action
arising out of or relating to matters evaluated by thee
compliance review committee; and
(2) Compliance review documents delivered to a federal or
state governmental agency remain confidential and are not
discoverable or admissible in evidence in any civil action
arising out of or relating to matters evaluated by the compliance
review committee.
(e) The above subsection (d) of this section does not apply
to any information required by statute or regulation to be
maintained by or provided to a governmental agency while the
information is in the possession of the governmental agency to
the extent applicable law expressly authorizes its disclosure.
(f) This section may not be construed to limit the discovery
or admissibility in any civil action as to any documents that are
not compliance review documents.
NOTE: The purpose of this bill is to provide that certain
reports (compliance review documents) generated by compliance
review committees of banking institutions are confidential and
not discoverable or admissible in evidence in civil actions that
arise out of, or are related to matters evaluated by the banking
institution's compliance review committee.
This section is new; therefore, strike-throughs and
underscoring have been omitted.