COMMITTEE SUBSTITUTE
FOR
H. B. 2574
(By Delegates Thompson, Amores, Pulliam, Sprouse,
Given and Kiss)
[Introduced February 20, 1995; referred to the
Committee on Banking and Insurance.]
A BILL to amend and reenact section twelve, article eight,
chapter thirty-one-a of the code of West Virginia, one
thousand nine hundred thirty-one, as amended, relating to
providing state banks parity with national bank agency
powers to conduct certain business.
Be it enacted by the Legislature of West Virginia:
That section twelve, article eight, chapter thirty-one-a of
the code of West Virginia, one thousand nine hundred thirty-one,
as amended, be amended and reenacted 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) Except as otherwise provided herein, no banking
institution shall engage in business at any place other than at
its principal office in this state, at a branch bank in this
state permitted by this section as a customer bank communication
terminal permitted by section twelve-b of this article or at any
loan organization 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, as defined in section two,
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 bank 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 USC 1828, and does not constitute
branch banking; nor shall such activity constitute a violation of
section forty-two, article four of this chapter: Provided,
however, That no banking institution may 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 §31A-8C-2.
(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 such educational
institution located in such 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:
Provided, That 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 one, one
thousand nine hundred eighty-four, was authorized to operate an
off-premises walk-in or drive-in facility, pursuant to the law
then in effect, may, as of the seventh day of June, one thousand
nine hundred eighty-four, operate such facility as a branch bank
and it shall not be necessary, for the continued operation of
such 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 shall be 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 as follows:
(A) After the seventh of June, one thousand nine hundred
eighty-four, within the county in which that banking
institution's principal office is located or within the county in
which that banking institution had prior to January first, one
thousand nine hundred eighty-four, established a branch bank,
pursuant to subdivision (2) of this subsection; and
(B) After the thirty-first of December, one thousand nine
hundred eighty-six, within any county in 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) Notwithstanding any other provision of this chapter to
the contrary, 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 may approve or disapprove the
application of any state banking institution to establish a
branch bank.
(e) The principal office of a banking institution as of the
seventh day of June, one thousand nine hundred eighty-four, shall
continue to be the principal office of such banking institution
for purposes of establishing branch banks under this section,
notwithstanding any subsequent change in the location of such
banking institution's principal office.
(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, provide notice of such application to all banking institutions. A banking institution may, within ten
days after receipt of such notice, file a petition to intervene
and shall, if it so files such 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 and shall collect an examination
and investigation fee of one thousand dollars 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
two thousand five hundred dollars 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 five hundred dollars. The board shall
complete the examination and investigation within ninety days
from the date on which such application and fee are received,
unless the board request in writing additional information and
disclosures concerning the proposed branch bank from the applicant banking institution, in which event such ninety-day
period shall be extended for an additional period of thirty days
plus the number of days between the date of such request and the
date such additional information and disclosures are received.
(i) Upon completion of the examination and investigation
with respect to such 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 such hearing shall 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 such hearing and the
administrative procedures in connection therewith shall be
governed by all of the provisions of article five, chapter
twenty-nine-a of this code, and shall be held at a time and place
set by the board but shall not be less than ten nor more than
thirty days after such notice is given.
(2) At any such hearing a party may represent himself or be
represented by an attorney at law admitted to practice before any
circuit court of this state.
(3) After such 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 such order and accompanying findings
and conclusions shall be served upon all parties to such hearing,
and their attorneys of record, if any.
(j) No state banking institution may establish a branch bank
until the board, following an examination, investigation, notice
and hearing, enters an order approving an application for that
branch bank: Provided, That no such hearing shall be 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) Public convenience and advantage will be promoted by the
establishment of the proposed branch bank;
(2) Local conditions assure reasonable promise of successful
operation of the proposed branch bank and of those banks and
branches thereof already established in the community;
(3) Suitable physical facilities will be provided for the branch bank;
(4) The applicant state-chartered banking institution
satisfies such reasonable and appropriate requirements as to
sound financial condition as the commissioner or board may from
time to time establish by regulation;
(5) 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; and
(6) 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.
(k) Any party who is adversely affected by the order of the
board shall be 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 shall
constitute a misdemeanor offense punishable by applicable
penalties as provided in section fifteen of this article.