H. B. 4063
(By Delegates Ron Thompson, H. White and Perry)
[Introduced January 20, 2006; referred to the
Committee on Banking and Insurance then the Judiciary.]
A BILL to amend and reenact §31A-4-2 of the Code of West Virginia,
1931, as amended, relating to banks; authorizing use of
certain banking terms in connection with the name of a
business; authorizing Commissioner of Banking to conduct
investigations and initiate enforcement actions relating to
unauthorized use of certain banking terms likely to result in
confusion to the public.
Be it enacted by the Legislature of West Virginia:
That §31A-4-2 of the Code of West Virginia, 1931, as amended,
be amended and reenacted to read as follows:
ARTICLE 4. BANKING INSTITUTIONS AND SERVICES GENERALLY.
§31A-4-2. Use of terms; unlawfully engaging in banking business;
penalties; enforcement.
(a) No person doing business in this state, except a banking
institution, a person authorized by the commissioner under the terms of this section or an insurer licensed pursuant to article
three, chapter thirty-three of this code under a name including the
terms set forth herein as of the thirty-first day of December, two
thousand three, may use or advertise in connection with such
business, or as a designation or title thereof, the term "bank,"
"banker," "banking," "banking company," "industrial bank," "savings
bank" or "trust company" and the Insurance Commissioner shall
notify the commissioner of each insurer so licensed. No person
doing business in this state except a banking institution or a
person authorized by the commissioner under this article may engage
in the banking or trust business in this state. A nonbanking
subsidiary of a bank holding company or a nonbanking subsidiary of
a banking institution having a bank branch or bank main office in
this state that provides trust services pursuant to section
fourteen of this article may use the term "trust company" in its
title and advertising. A trust entity owned jointly by federally
insured depository institutions located within this state and
authorized by the commissioner to operate in this state may use the
term "trust company" in its title and advertising.
(b) It is unlawful for any such person other than banking
institutions, as herein excepted, to advertise or hold himself,
herself, itself or themselves, as the case may be, out to the
public in any manner indicating, directly, indirectly or by
implication, that any of them is are engaged in the banking or trust business or is authorized and approved to engage therein in
this state. A nonbanking subsidiary of a bank holding company or
nonbanking subsidiary of a banking institution having a bank branch
or bank main office in this state that provides trust services
pursuant to section fourteen of this article may hold itself out to
the public as engaged in the trust business. A trust entity owned
jointly by federally insured depository institutions located within
this state and authorized by the commissioner to operate in this
state may hold itself out to the public as engaged in the trust
business.
(c) The commissioner may authorize a person to utilize use the
term "bank," "banker," "banking" or "banc" in connection with
nonprofit organizations or medical businesses where the term would
have a common meaning separate and apart from a financial
institution and would not result in confusion to the public (e.g.,
food bank; medical databank); and in connection with bank holding
companies or their nonbanking affiliates where the term denotes the
entities' common affiliation and would not result in confusion to
the public. The commissioner may also authorize a person to use
the term "bank," "banker," "banking" or "banc" in connection with
the name of a business if the commissioner finds that there is
little likelihood of confusion to the public because the business
is using a family surname belonging to a principal or former
principal of that business or because the business is not a banking institution as defined by this chapter.
(d) Any violation of the provisions of this section
constitutes is a misdemeanor offense, punishable as provided in
section fifteen, article eight of this chapter.
(e) The Commissioner of Banking, or any one or more banking
institutions, acting individually or jointly on the commissioner's
own initiative or upon receiving a written complaint alleging that
the provisions of this section are being violated, may conduct an
investigation to determine whether the unauthorized use of terms
listed in this section is likely to result in confusion to the
public. If the commissioner determines that unauthorized use is
likely to result in confusion to the public, the commissioner may
petition the circuit court of the county in which any violation of
the provisions of this section occur or are threatened to occur for
injunction or other appropriate judicial remedies for enforcement
of the provisions hereof of this section and the prevention of
further or continued violations thereof of this section.
NOTE: The purpose of this bill is to expand the authority of
the Commissioner of Banking concerning use of certain banking terms
in connection with the name of a business. The bill also
authorizes the commissioner to conduct investigations and initiate
enforcement actions relating to the unauthorized use of certain
banking terms likely to result in confusion to the public.
Strike-throughs indicate language that would be stricken from
the present law, and underscoring indicates new language that would
be added.