Senate Bill No. 583
(By Senators Fanning, Helmick and Minard)
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[Introduced February 14, 2007; referred to the Committee on
Banking and Insurance.]
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A BILL to amend and reenact §31A-1-2 of the Code of West Virginia,
1931, as amended; and to amend and reenact §31A-4-13 of said
code, all relating to prohibiting financial institutions,
state banks and out-of-state banks from establishing or
maintaining a branch in West Virginia on, or within one and
one-half miles of, the premises or property of an affiliate if
that affiliate engages in commercial activity; and defining
the terms "affiliate" and "commercial activities".
Be it enacted by the Legislature of West Virginia:
That §31A-1-2 of the Code of West Virginia, 1931, as amended,
be amended and reenacted; and that §31A-4-13 of said code be
amended and reenacted, all to read as follows:
ARTICLE 1. GENERAL PROVISIONS AND DEFINITIONS.
§31A-1-2. Definitions.
As used in this chapter, unless the context in which used plainly requires a different meaning:
(a) The word "action", in the sense of a judicial proceeding,
means any proceeding in a court of competent jurisdiction in which
rights are adjudicated and determined and shall embrace and include
recoupment, counterclaim, setoff and other related, similar and
summary proceedings;
(b) The word "affiliate" means any company that controls, is
controlled by, or is under common control with another company.
For purposes of this definition, the word "control" shall be
construed consistently with Section 2(a) of the Bank Holding
Company Act, 12 U.S.C. § 1841(a);
(b) (c) The words "bank" and "banking institution" mean a
corporation, limited liability company or association heretofore or
hereafter charted to conduct a banking business under the laws of
the United States or any state, territory, district or possession
thereof, which is authorized in West Virginia to accept deposits
that the depositor has a legal right to withdraw on demand and is
authorized to engage in the business of commercial lending, and
meets the criteria set forth in Section 2(c) of the Bank Holding
Company Act, as amended, 12 U.S.C. §1841(c), and shall embrace and
include a savings bank, savings and loan association, trust company
or an institution combining banking and trust company facilities,
functions and services so chartered or authorized to conduct such
business in this state;
(c) (d) The words "bankers' bank" mean a banking institution,
insured by the federal deposit insurance corporation, the stock of
which is owned exclusively by banks and other depository
institutions, and such banking institution and all subsidiaries
thereof are engaged exclusively in providing services for banks and
other depository institutions and their officers, directors and
employees;
(d) (e) The term "banking business" means the functions,
services and activities contained, detailed and embraced in
sections thirteen and fourteen, article four of this chapter and as
elsewhere defined by law;
(e) (f) The word "Board" means the West Virginia Board of
Banking and Financial Institutions;
(f) (g) The words "branch bank" mean an office or other place
at which a bank performs any or all banking business. For purposes
of this chapter, a branch bank does not include:
(1) A bank's principal place of business;
(2) Any customer bank communication terminals installed and
operated pursuant to section twelve-b, article eight of this
chapter; and
(3) Any loan origination office authorized by section
twelve-c, article eight of this chapter;
(h) The words "commercial activities" mean activities in which
a bank holding company, a financial holding company, a national bank, or a national bank financial subsidiary may not engage under
federal law.
(g) (i) The words "Commissioner" or "Commissioner of Banking"
mean the Commissioner of Banking of West Virginia;
(h) (j) The word "community" means a city, town or other
incorporated area or, where not so incorporated, a trading area;
(i) (k) The word "department" or "division" means the Division
of Banking of West Virginia;
(j) (l)The words "Deputy Commissioner" or "Deputy Commissioner
of Banking" mean the Deputy Commissioner of Banking of West
Virginia;
(k) (m) The word "fiduciary" means any trustee, agent,
executor, administrator, curator, committee, guardian or
conservator, special commissioner, receiver, trustee in bankruptcy,
assignee for creditors or any holder of a similar position of trust
or responsibility;
(l) (n) The words "financial institutions" mean banks,
building and loan associations, industrial banks, industrial loan
companies, supervised lenders, credit unions and all other similar
institutions, whether persons, firms or corporations, which are by
law under the jurisdiction and supervision of the Commissioner of
Banking;
(m) (o) The word "officer", when referring to any financial
institution, means any person designated as such in the bylaws and includes, whether or not so designated, any executive officer, the
chairman of the board of directors, the chairman of the executive
committee and any trust officer, assistant vice president,
assistant treasurer, assistant secretary, assistant trust officer,
assistant cashier, assistant comptroller or any other person who
performs the duties appropriate to those offices and the term
"executive officer" as herein used, when referring to banking
institutions, means an officer of a bank whose duties involve
regular, active and substantial participation in the daily
operations of such institution and who, by virtue of his or her
position, has both a voice in the formulation of the policy of the
bank and responsibility for implementation of the policy, such
responsibility of and functions performed by the individual, and
not his or her title or office, being determinative of whether he
or she is an "executive officer";
(n) (p) The words "out-of-state bank" or "out-of-state banking
institution" mean a bank chartered under the laws of a state or
United States territory, possession or district, other than West
Virginia, or organized under federal law and having its main office
located in a state, United States territory, possession or
district, other than West Virginia;
(o) (q) The words "person" or "persons" mean any individual,
partnership, society, association, firm, institution, company,
public or private corporation, state, governmental agency, bureau, department, division or instrumentality, political subdivision,
county commission, municipality, trust, syndicate, estate or any
other legal entity whatsoever, formed, created or existing under
the laws of this state or any other jurisdiction;
(p) (r) The words "safe-deposit box" mean a safe-deposit box,
vault or other safe-deposit receptacle maintained by a lessor bank
and the rules relating thereto apply to property or documents kept
therein in the bank's vault under the joint control of lessor and
lessee;
(q) (s) The words "state bank" or "state banking institution"
mean, unless the context requires otherwise, a bank chartered under
the laws of West Virginia, as distinguished from either an out-of-
state bank or a national banking association and is also referred
to as a "West Virginia State Bank" or "West Virginia State Banking
Institution"; and
(r) (t) The words "trust business" mean the functions,
services and activities contained, detailed and embraced in section
fourteen, article four of this chapter and as elsewhere defined by
law and as may be included within the meaning of the term "banking
business".
ARTICLE 4. BANKING INSTITUTIONS AND SERVICES GENERALLY.
§31A-4-13. Powers of state banking institutions generally.
(a) Any state-chartered banking institution has and may
exercise all of the powers necessary for, or incidental to, the business of banking and, without limiting or restricting such
general powers, it shall have the right to buy or discount
promissory notes and bonds; negotiate drafts, bills of exchange and
other evidences of indebtedness; borrow money; receive deposits on
such terms and conditions as its officers may prescribe; buy, sell
or exchange bank notes, bullion or coin; loan money on personal or
other security; rent safe-deposit boxes and receive on deposit for
safekeeping jewelry, plate, stocks, bonds and personal property of
whatsoever description; and provide customer services incidental to
the business of banking, including, but not limited to, the
issuance and servicing of and lending money by means of credit
cards as letters of credit or otherwise. Any state-chartered
banking institution may accept, for payment at a future date not to
exceed one year, drafts drawn upon it by its customers. Any
state-chartered banking institution may issue letters of credit,
with a specified expiration date or for a definite term,
authorizing the holders thereof to draw drafts upon it or its
correspondents, at sight or on time. Any such banking institution
may organize, acquire, own, operate, dispose of and otherwise
manage wholly owned subsidiary corporations or entities that are
jointly owned with other insured depository institutions for
purposes incident to the banking powers and services authorized by
this chapter provided any wholly owned or jointly owned entities
are subject to federal and state examination and supervision as if the activities are conducted by the bank.
(b) Any state-chartered banking institution may acquire, own,
hold, use and dispose of real estate which may not be carried on
its books at a value greater than the actual cost: Provided, That
the property must be necessary for the convenient transaction of
its business, including any buildings, office space or other
facilities to rent as a source of income: Provided, however, That
the investment hereafter made may not exceed sixty-five percent of
the amount of its capital stock and surplus, unless the consent in
writing of the Commissioner of Banking is first secured.
(c) Any state-chartered banking institution may acquire, own,
hold, use and dispose of real estate which shall be carried on its
books at the lower of fair value or cost as defined in rules
promulgated by the Commissioner of Banking, subject to the
following limitations:
(1) Such as may be mortgaged to it in good faith as security
for debts in its favor;
(2) Such as may be conveyed to it in satisfaction of debts
previously contracted in the course of its business dealings; and
(3) Such as it may purchase at sales under judgments, decrees,
trust deeds or mortgages in its favor, or may purchase at private
sale, to secure and effectuate the payment of debts due to it.
(d) The value at which any real estate is held may not be
increased by the addition thereto of taxes, insurance, interest, ordinary repairs or other charges which do not materially enhance
the value of the property.
(e) Any real estate acquired by any such banking institution
under subdivisions (2) and (3), subsection (c) of this section
shall be disposed of by the banking institution at the earliest
practicable date, but the officers thereof shall have a reasonable
discretion in the matter of the time to dispose of such property in
order to save the banking institution from unnecessary losses:
Provided, That in every case such property shall be disposed of
within ten years from the time it is acquired by the banking
institution, unless an extension of time is given in writing by the
Commissioner of Banking.
(f) The sale of insurance by state-chartered banking
institutions is subject to the following:
Any state-chartered banking institution having its main or a
branch office in any place the population of which does not exceed
five thousand inhabitants, as shown by the last preceding decennial
census, through its employees or agents, may, from that place or
office, directly or through a controlled subsidiary, act as agent
for any fire, life, casualty, liability or other insurance company
authorized by the authorities of the state to do business in this
state, by soliciting and selling insurance and collecting premiums
on policies issued by such company; and may receive for services so
rendered all permissible fees or commissions as may be agreed upon between the bank and the insurance company for which it may act as
agent: Provided, That no bank may in any case assume or guarantee
the payment on insurance policies issued through its agency by its
principal: Provided, however, That the bank may not guarantee the
truth of any statement made by an insured in filing his, her or its
application for insurance. For purposes of this section, a
"controlled subsidiary" is one in which the state-chartered banking
institution owns at least eighty percent of all classes of stock.
This provision is intended to give state-chartered banking
institutions parity with national banks operating in this state
with regard to the marketing and sale of insurance, notwithstanding
the prohibitions and limitations contained in article eight-c or
elsewhere in this chapter and shall be construed consistently with
interpretations of 12 U. S. C. § 92, the regulations promulgated
thereunder and any successor legislation or regulations.
(g) Any state-chartered banking institution may, through its
employees or agents, market and sell, as agent, annuities either at
its main office or at any of its branches. The marketing and sale
of annuities may be made by the bank, through its employees or
agents, directly, or through a controlled subsidiary as defined in
subsection (f) of this section. This provision is intended to give
state-chartered banks parity with national banks operating in this
state with regard to the sale of annuities, notwithstanding the
prohibitions and limitations contained in article eight-c or elsewhere in this chapter.
(h) Unless waived in writing by the commissioner, a state-
chartered bank may not invest or otherwise expend more of its
capital and surplus calculated at the end of the previous calendar
year on the activities permitted by subsections (f) and (g) of this
section on an aggregate basis together with any of its approved
financially related products and services than would be allowed for
a national bank providing the same services. For purposes of this
section, "approved financially related products and services" means
those products and services offered by a state-chartered bank
pursuant to an approved application submitted under article eight-c
of this chapter.
(i) The commissioner shall promulgate rules in accordance with
chapter twenty-nine-a of this code relating to the sale of
insurance or annuities, including, but not limited to, rules
requiring notice of the intention to engage in such activities and
relating to the policies and procedures state-chartered banking
institutions should adopt in connection with these activities.
(j) Any state-chartered banking institution and its employees
or agents engaged in the sale of insurance or annuities permitted
hereby must also comply with all applicable requirements for the
sale of such products imposed by the West Virginia Commissioner of
Insurance and by any state or federal securities regulator.
(k) No state-chartered banking institution may hereafter invest more than twenty percent of the amount of its capital and
surplus in furniture and fixtures, whether the same be installed in
a building owned by the banking institution, or in quarters leased
by it, unless the consent in writing of the Commissioner of Banking
is first secured.
(l) No financial institution, state bank or out-of-state bank
may establish or maintain a branch in this state on, or within one
and one-half miles of, the premises or property of an affiliate if
the affiliate engages in commercial activities.
NOTE: The purpose of this bill is to prohibit any financial
institution, state bank or out-of-state bank from establishing or
maintaining a branch in West Virginia on, or within one and
one-half miles of, the premises or property of an affiliate, if
that affiliate engages in commercial activity.
Strike-throughs indicate language that would be stricken from
the present law, and underscoring indicates new language that would
be added.
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