WEST virginia legislature
2016 regular session
Committee Substitute
for
House Bill 4245
By DELEGATES WALTERS, FRICH, WESTFALL, MCCUSKEY, MANCHIN, SKINNER, ROWE, FLANIGAN, WAXMAN, PERRY AND B. WHITE
[Originating in the Committee on the Judiciary]
A BILL to amend and reenact §31A-4-20 of the Code of West Virginia, 1931, as amended, relating to requirements for the review of the financial condition of state chartered banks; requiring the cashier or executive officer of a state banking institution to provide shareholders with the institution’s most recent fiscal year audited financial statement; authorizing alternative delivery to shareholders and consolidated or combined statements; requiring that the board of directors of a bank, or its controlling bank holding company, appoint an outside independent auditing firm; eliminating the requirement that a bank transmit a copy of an audit report of its financial condition to the division of financial institutions; eliminating the approval required for a shareholder committee to utilize or employ registered or certified public accountants; and eliminating the division examiner’s 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 copy 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 fiscal year audited financial
statements. This requirement is satisfied if the banking institution mails or
otherwise delivers to 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 the 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 independent 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.