WEST virginia legislature
2016 regular session
Introduced
House Bill 4245
By Delegates Walters, Frich, Westfall, McCuskey, Manchin, Skinner, Rowe, Flanigan, Waxman, Perry and B. White
By Request of the West Virginia Division of Financial Institutions
[Introduced January 25,
2016; Referred
to the Committee on Banking and Insurance then the Judiciary.]
A BILL to amend and reenact §31A-4-20 of the Code of West Virginia, 1931, as amended relating to requiring the cashier or executive officer of a banking institution to provide shareholders with the institution’s most recent year-end audited financial statement and requiring that the board of directors of a bank, or its controlling bank holding company, appoint an outside auditing firm in lieu of having the shareholders appoint a bank examining committee and eliminating the requirement that a bank transmit a copy of an audit report of its financial condition to the division of financial institutions and further eliminating the ability to require the presence of the examining committee or executive committee during an examination.
Be it enacted by the Legislature of West Virginia:
That §31A-4-20 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-4-20. Stockholders'
annual meeting; financial statement; appointment, duties and report of examining
committee; employment of accountants; examiners may require presence of
executive or examining committee outside auditing firm.
(a) The stockholders of
each state banking institution shall meet annually. and At such the
annual meeting it shall be is the duty of the cashier or other
executive officer of such the banking institution to prepare and
submit to the stockholders a clear and concise statement of the financial
condition of the corporation as of the close of business on the last day of the
month next preceding institution’s most recent year-end audited
financial statements. This requirement is satisfied if the banking institution
mails its shareholders annual audited financial statements, which may be
consolidated or combined statements of the banking institution, its holding
company and any subsidiaries, that include a balance sheet as of the end of the
fiscal year, an income statement for that year and a statement of changes in
shareholders’ equity for the year, within one hundred twenty days of the close
of the fiscal year.
(b) At such meeting, the
stockholders present in person or by proxy shall elect an examining committee
composed of not less than three nor more than five persons, each of whom shall
be a stockholder either in such banking institution The board of
directors of the banking institution or, if such banking institution is
controlled by a bank holding company, in that bank holding company shall
appoint an outside auditing firm on an annual basis to serve as the banking
institution’s auditor for the year.
(c) At such time or times
as it may be directed to do so by the written request of the board of directors
or the Commissioner of Banking Financial Institutions, such committee
outside auditing firm shall immediately proceed to examine the condition
of the bank and, upon completion of such examination, shall file its report in
writing with the board of directors. Such report shall set forth in detail all
items included in the assets of the bank which the committee firm
has reason to believe are not of the value at which they appear on the books
and records of the bank, and shall give the value of each of such items
according to its judgment. The board of directors shall cause such report to be
retained as a part of the records of the bank. and shall transmit a duly
authenticated copy thereof to the commissioner of banking
(d) With the consent and
approval of the stockholders, such committee may employ registered or certified
public accountants to make such examination or make the same in conjunction
with any official examination made by any supervisory authority.
(e) (d) The workpapers of any audit, including any
materials associated with an audit of the bank=s
electronic data procedures, shall be made available to the commissioner or to
the examiners of the department of banking Division of Financial
Institutions upon request, and will be accorded confidentiality in
conformity with section four, article two of this chapter.
(f) Any official
examiner of the department of banking may require the presence of the examining
committee or the executive committee during his examination.
NOTE: The purpose of this bill is to replace the obsolete requirement of establishing an examining committee and clarify that a bank must employ an outside auditing firm. It also provides for shareholders to be given the bank’s most recent year-end audited statement at their annual meeting.
Strike-throughs indicate language that would be stricken from a heading or the present law and underscoring indicates new language that would be added.