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Enrolled Version - Final Version House Bill 4096 History

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Key: Green = existing Code. Red = new code to be enacted
ENROLLED

COMMITTEE SUBSTITUTE

FOR

H. B. 4096

(By Delegates Thompson, Jenkins, Kominar,

H. White, Heck, Hunt and Tomblin)


[Passed March 14, 1998; in effect ninety days from passage.]


AN ACT to amend and reenact section four, article two, chapter thirty-one-a of the code of West Virginia, one thousand nine hundred thirty-one, as amended, relating to the duty of banking commissioner to require criminal background investigations of certain applicants regulated by the banking division.

Be it enacted by the Legislature of West Virginia:
That section four, article two, 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 2. DIVISION OF BANKING.
§31A-2-4. Jurisdiction of commissioner; powers, etc., of department transferred to commissioner; powers and duties of commissioner.

(a) Subject to the powers vested in the board by article three of this chapter, the commissioner shall have supervision and jurisdiction over state banks, regulated consumer lenders, second mortgage lenders and brokers, credit unions, and all other persons now or hereafter made subject to his or her supervision or jurisdiction. All powers, duties, rights and privileges vested in the department are hereby vested in the commissioner. He or she shall be the chief executive officer of the department of banking and shall be responsible for the department's organization, services and personnel, and for the orderly and efficient administration, enforcement and execution of the provisions of this chapter and all laws vesting authority or powers in or prescribing duties or functions for the department or the commissioner.
(b) The commissioner shall:
(1) Maintain the office for the department at the state capitol, and there keep a complete record of all the department's transactions, of the financial conditions of all financial institutions and such records of the activities of other persons as the commissioner may deem important. Notwithstanding any other provision of the code of West Virginia, heretofore or hereafter enacted, the records relating to the financial condition of any financial institution and any information contained therein shall be confidential for the use of the commissioner and authorized personnel of the department of banking. No person shall divulge any information contained in any such records except as hereafter authorized in response to a valid subpoena or subpoena duces tecum issued pursuant to law in a criminal proceeding or in a civil enforcement action brought by the state or federal regulatory authorities. Subpoenas shall first be directed to the commissioner, who shall authorize disclosure of relevant records and information therefrom for good cause, upon imposing terms and conditions as are deemed necessary to protect the confidential nature of the records, the financial integrity of the financial institution or the person to which the records relate, and the legitimate privacy interests of any individual named in such records. Conformity with federal procedures shall be sought where the institution maintains federal deposit insurance. The commissioner shall have and may exercise reasonable discretion as to the time, manner and extent the other records in his or her office and the information contained therein shall be available for public examination;
(2) Require all financial institutions to comply with all the provisions of this chapter and other applicable laws, or any rule promulgated or order issued thereunder;
(3) Investigate all alleged violations of this chapter and all other laws which he or she is required to enforce and of any rule promulgated or order issued thereunder; and
(4)(1) Require a criminal background investigation, including fingerprint checks, of each: (A) Applicant seeking approval to charter and/or control a state bank, state credit union, or a foreign bank state agency or representative office; (B) applicant seeking a license to engage in the business of money transmission, currency exchange, or other activity regulated under article two, chapter thirty-two-a of this code; (C) applicant subject to the commissioner's supervision seeking a license to engage in the business of regulated consumer lending, mortgage lending or brokering; and (D) department of banking financial institutions regulatory employee applicant, to be made through the West Virginia state police and the federal bureau of investigation: Provided, That where the applicant is a company or entity already subject to supervision and regulation by the federal reserve board or other federal bank, thrift or credit union regulator, or is a direct or indirect subsidiary of a company or entity subject to such supervision and regulation, or where the applicant is a company subject to the supervision and regulation of the federal securities and exchange commission whose stock is publicly traded on a registered exchange or through the national association of securities dealers automated quotation system, or the applicant is a direct or indirect subsidiary of such a company, the investigation into criminal background shall not be so required. The provisions of this subdivision are not applicable to applicants seeking interim bank charters organized solely for the purpose of facilitating the acquisition of another bank pursuant to section five, article four of this chapter.
(2) Where a nonexempt applicant hereunder is not a natural person, the principals of the applicant shall be subject to the requirements of subdivision (1) of this subsection. As used in this subdivision, the term "principals" means the chief executive officer, regardless of title, managing partner if a partnership, members of the organizing group if no chief executive officer has yet been appointed, trustee, or other person controlling the conduct of the affairs of a licensee. A person controlling ten percent or more of the stock of any corporate applicant shall be deemed to be a principal under this provision.
(c) In addition to all other authority and powers vested in the commissioner by provisions of this chapter and other applicable laws, the commissioner is authorized and empowered:
(1) To provide for the organization of the department and the procedures and practices thereof and implement the same by the promulgation of rules and forms as appropriate, which rules shall be promulgated in accordance with article three, chapter twenty-nine-a of this code;
(2) To employ, direct, discipline, discharge and establish qualifications and duties for all personnel for the department, including, but not limited to, examiners, assistant examiners, conservators and receivers, to establish the amount and condition of bonds for such thereof as he or she deems appropriate and to pay the premiums thereon, and if he or she so elects, to have all such personnel subject to and under the classified service of the state personnel department;
(3) To cooperate with organizations, agencies, committees and other representatives of financial institutions of the state in connection with schools, seminars, conferences and other meetings to improve the responsibilities, services and stability of the financial institutions;
(4) In addition to the examinations required by section six of this article, to inspect, examine and audit the books, records, accounts and papers of all financial institutions at such times as circumstances in his or her opinion may warrant;
(5) To call for and require all such data, reports and information from financial institutions under his or her jurisdiction, at such times and in such form, content and detail, deemed necessary by him or her in the faithful discharge of his or her duties and responsibilities in the supervision of the financial institutions;
(6) Subject to the powers vested in the board by article three of this chapter, to supervise the location, organization, practices and procedures of financial institutions and, without limitation on the general powers of supervision thereof, to require financial institutions to:
(A) Maintain their accounts consistent with such regulations as he or she may prescribe and in accordance with generally accepted accounting practices;
(B) Observe methods and standards which he or she may prescribe for determining the value of various types of assets;
(C) Charge off the whole or any part of an asset which at the time of his or her action could not lawfully be acquired;
(D) Write down an asset to its market value;
(E) Record or file writings creating or evidencing liens or other interests in property;
(F) Obtain financial statements from prospective and existing borrowers;
(G) Obtain insurance against damage and loss to real estate and personal property taken as security;
(H) Maintain adequate insurance against such other risks as he or she may deem and determine to be necessary and appropriate for the protection of depositors and the public;
(I) Maintain an adequate fidelity bond or bonds on its officers and employees;
(J) Take such other action as may in his or her judgment be required of the institution in order to maintain its stability, integrity and security as required by law and all rules promulgated by him or her; and
(K) Verify any or all asset or liability accounts;
(7) Subject to the powers vested in the board by article three of this chapter, to receive from any person or persons and to consider any request, petition or application relating to the organization, location, conduct, services, policies and procedures of any financial institution and to act thereupon in accordance with any provisions of law applicable thereto;
(8) In connection with the investigations required by subdivision (3), subsection (b) of this section, to issue subpoenas and subpoenas duces tecum, administer oaths, examine persons under oath, and hold and conduct hearings, any such subpoenas or subpoenas duces tecum to be issued, served and enforced in the manner provided in section one, article five, chapter twenty-nine-a of this code. Any person appearing and testifying at such a hearing may be accompanied by an attorney employed by him or her;
(9) To issue declaratory rulings in accordance with the provisions of section one, article four, chapter twenty-nine-a of this code;
(10) To study and survey the location, size and services of financial institutions, the geographic, industrial, economic and population factors affecting the agricultural, commercial and social life of the state, and the needs for reducing, expanding or otherwise modifying the services and facilities of financial institutions in the various parts of the state, and to compile and keep current data thereon to aid and guide him or her in the administration of the duties of his or her office;
(11) To implement all of the provisions of this chapter (except the provisions of article three) and all other laws which he or she is empowered to administer and enforce by the promulgation of rules in accordance with the provisions of article three, chapter twenty-nine-a of this code;
(12) To implement the provisions of chapter forty-six-a of this code applicable to consumer loans and consumer credit sales by the promulgation of rules in accordance with the provisions of article three, chapter twenty-nine-a of this code so long as said rules do not conflict with any rules promulgated by the state's attorney general;
(13) To foster and encourage a working relationship between the department of banking and financial institutions, credit, consumer, mercantile and other commercial and finance groups and interests in the state in order to make current appraisals of the quality, stability and availability of the services and facilities of financial institutions;
(14) To provide to financial institutions and the public copies of the West Virginia statutes relating to financial institutions, suggested drafts of bylaws commonly used by financial institutions, and such other forms and printed materials as may be found by him or her to be helpful to financial institutions, their shareholders, depositors and patrons, and to make reasonable charges therefor;
(15) To delegate the powers and duties of his or her office, other than the powers and duties in this subsection hereinafter excepted, to qualified department personnel, who shall act under the direction and supervision of the commissioner and for whose acts he or she shall be responsible, but the commissioner may delegate to the deputy commissioner of banking and to no other department personnel the following powers, duties and responsibilities, all of which are hereby granted to and vested in the commissioner and for all of which the commissioner shall likewise be responsible:
(A) To order any person to cease violating any provision or provisions of this chapter or other applicable law or any rule promulgated or order issued thereunder;
(B) To order any person to cease engaging in any unsound practice or procedure which may detrimentally affect any financial institution or depositor thereof;
(C) To revoke the certificate of authority, permit or license of any financial institution except a banking institution in accordance with the provisions of section thirteen of this article; and
(D) To accept an assurance in writing that the person will not in the future engage in the conduct alleged by the commissioner to be unlawful, which conduct could be subject to an order under the provisions of this chapter. Such assurance of voluntary compliance shall not be considered an admission of violation for any purpose, except that if a person giving such assurance fails to comply with its terms, the assurance is prima facie evidence that prior to such assurance the person engaged in conduct described in such assurance;
(16) To seek and obtain from courts, civil penalties against any person who violates this chapter, the rules issued pursuant thereto, or any orders lawfully entered by the commissioner or board of banking and financial institutions in an amount not less than fifty dollars nor more than five thousand dollars for each violation;
(17) To receive from state banking institutions applications to change the locations of their principal offices and to approve or disapprove such applications; and
(18) To take such other action as he or she may deem necessary to enforce and administer the provisions of this chapter (except the provisions of article three) and all other laws which he or she is empowered to administer and enforce, and to apply to any court of competent jurisdiction for appropriate orders, writs, processes and remedies.
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