ENGROSSED
Senate Bill No. 285
(By Senator Minard)
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[Introduced January 26, 2004; referred to the Committee on
Banking and Insurance; and then to the Committee on the
Judiciary.]
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A BILL to amend and reenact §31A-1-2 of the code of West Virginia,
1931, as amended; to amend and reenact §31A-2-5; and to amend
and reenact §31A-4-1 and §31A-4-5 of said code, all relating
to the ability of a state-chartered bank to organize as a
limited liability company.
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; that §31A-2-5 of said code be amended and
reenacted; and that §31A-4-1 and §31A-4-5 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 words "bank" and "banking institution" mean a
corporation,
limited liability company or association heretofore or
hereafter chartered 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) 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) 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) The word "board" means the West Virginia board of banking
and financial institutions;
(f) 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;
(g) The words "commissioner" or "commissioner of banking" mean
the commissioner of banking of West Virginia;
(h) The word "community" means a city, town or other
incorporated area or, where not so incorporated, a trading area;
(i) The word "department" means the department of banking of
West Virginia;
(j) The words "deputy commissioner" or "deputy commissioner of banking" mean the deputy commissioner of banking of West Virginia;
(k) 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) 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) 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) 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) 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) 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) 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) 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 2. DIVISION OF BANKING.
§31A-2-5. Certificate or license to engage in business; filing of
amendments to charter, bylaws and foreign statutes.
(a) No person shall engage or continue in the business of a
financial institution in this state without a license or
certificate to do so issued in accordance with this section, or
other applicable law, which license or certificate remains
unsuspended, unexpired and unrevoked except that a corporation
which proposes to apply for such license or certificate may secure
its charter, adopt bylaws, elect its directors and officers and
perfect its organization.
(b) No person shall operate an office in West Virginia which
regularly makes consumer loans in this state other than first
mortgage loans unless they are a financial institution, licensed pawnbroker or a federally insured depository institution authorized
and qualified to do business in this state. The purchase of
consumer paper does not constitute the making of consumer loans for
the purposes of this subsection, unless the purchase is made by a
business affiliated with the credit provider pursuant to a standing
arrangement.
(c) Application for such license or certificate shall be upon
such forms and contain such information as the commissioner may
prescribe. In connection with such applications every corporate
financial institution shall file a certified copy of its charter
and bylaws, a statement as to the amount of capital that has been
subscribed and paid in and a statement of its financial condition
duly verified under oath by its president or vice president and its
cashier or secretary as the case may be and every financial
institution other than a corporation shall file a verified
statement of its financial condition.
(d) If the application be that of a West Virginia state
banking institution, the commissioner of banking shall examine the
information, documents and statements submitted and, if he
or she
finds that such banking institution has adopted bylaws which
provide practical, safe, just and equitable rules and methods for
the management of its business and it has complied in all respects
with the provisions of this chapter and other applicable laws, he
or she shall issue to it a certificate or license permitting it to engage in business. If the application be that of a financial
institution other than a banking institution, the commissioner of
banking shall examine the information, documents and statements
submitted and, if he
or she finds that such financial institution
has adequate resources for the proposed business and has provided
practical, safe, just and equitable rules and methods for the
management of its business, and it has complied in all respects
with the provisions of this chapter and other applicable laws, and
that the public convenience and advantage will be promoted by the
issuance of a certificate or license thereto, he
or she shall issue
to it a certificate or license permitting it to engage in business.
Such certificate or license shall be preserved and the original or
copy thereof displayed in all the places of business of such
banking or other financial institution located in this state.
(e) In addition to the requirements of subsections (b) and (c)
of this section, every foreign corporation applying for a license
or certificate to engage in the business of a financial institution
in this state, other than an out-of-state banking institution,
shall file with the commissioner of banking a copy of the bylaws
under which it operates, together with a cite to the statutes of
the jurisdiction where it is organized which pertain to its
organization and powers and the conduct of its business. The
commissioner shall examine the information, documents and
statements submitted by such foreign corporation and if he
or she finds that they provide practical, safe, just and equitable rules
and methods for the management of the business of the corporation,
that it has adequate resources for the proposed business and it has
complied in all respects with the provisions of this chapter and
other applicable laws and that the public convenience and advantage
will be promoted by the issuance of a license or certificate
thereto, he
or she shall issue to such corporation a certificate or
license permitting it to engage in business in this state, which
certificate or license shall authorize such corporation to engage
in the business of the type of financial institution specified
therein, until the thirtieth day of the following June. Thereafter
a new certificate or license shall be secured annually by any such
foreign corporation, except where annual renewal of the license or
certificate is specifically not required for the type of
institution involved. The fee for the original and each additional
license or certificate issued to a foreign corporation shall be one
hundred dollars, unless otherwise provided by statute. A verified
statement of the financial condition of every such foreign
corporation shall be filed with the commissioner before the
issuance of each annual certificate or license. Such certificate
or license shall be preserved and the original or copy thereof
displayed in the West Virginia place of business of such
corporation.
(f) Unless the institution is a federally insured depository institution or it is otherwise provided for by statute, a new
certificate or license shall be secured annually by all domestic
state financial institutions and the fee for the original and each
additional license or certificate shall be one hundred dollars.
(g) No amendment of the charter or bylaws of any domestic or
foreign corporation, other than an out-of-state banking
institution, engaging in business in this state as a financial
institution shall become effective until the proposed change shall
have been submitted to and approved by the commissioner of banking;
but, if the commissioner does not disapprove such proposed change
within twenty days after it is received by him
or her, it shall be
deemed to have been approved.
(h) Unless specifically provided for by this chapter, nothing
contained in this code shall authorize any person to engage in the
banking business in this state except corporations chartered to
conduct a banking business under the laws of West Virginia and
which hold a license or certificate to do so issued under this
section,
limited liability companies organized to conduct a banking
business under the laws of West Virginia and which hold a license
or certificate to do so under this section, or associations
authorized to conduct a banking business in West Virginia under the
laws of the United States and having their principal place of
business in this state.
ARTICLE 4. BANKING INSTITUTIONS AND SERVICES GENERALLY.
§31A-4-1. General corporation laws applicable; charter
applications to be approved by West Virginia board
of banking and financial institutions.
(a) The general corporation laws of the state, including the
provisions of chapter
thirty-one thirty-one-d of the code of West
Virginia, shall govern banking institutions and the chartering
thereof, except as otherwise provided in or where inconsistent with
the provisions of this chapter,
when the banking institutions are
chartered as business corporations.
(b) The provisions of the uniform limited liability company
act, chapter thirty-one-b of the code of West Virginia, shall
govern banking institutions and the organizing thereof, except as
otherwise provided in or where inconsistent with the provisions of
this chapter
when the banking institutions are chartered as limited
liability companies
. Any reference in this chapter to "directors"
of a bank, in the case of limited liability company banks, refers
to the bank's members if the bank is a member-managed company or to
the bank's managers if it is a manager-managed company.
(b) (c) No charter shall issue in this state for any banking
institution unless the application therefor shall have been
submitted to and approved by the West Virginia board of banking and
financial institutions: Provided, That the board may not approve
the application to charter any banking institution unless the
proposed banking institution does business within this state and is subject to the supervision of the commissioner of banking.
§31A-4-5. Requirements and procedure for incorporation of state
banks.
(a) A state bank may be organized by five or more
incorporators, a majority of whom shall be residents of the state
of West Virginia. Such banking institution shall have as a part of
its corporate name or title one or more of the following words
indicative of the business which it is authorized to conduct,
namely, "bank", "banking company", "banking association", "trust
company", "banking and trust company" or "bank and trust company".
The incorporators shall file with the board an agreement of
incorporation, in duplicate, following generally the form
prescribed by the secretary of state for chartering corporations
under the provisions of article one, chapter thirty-one of this
code. The information set forth in the agreement shall include the
following:
(1) The name of the proposed bank;
(2) The community and county in which the bank is to be
located, together with the post office address of the place of
business of the bank;
(3) Whether such bank proposes also to engage in the trust
business;
(4) The name, residence and occupation of each incorporator,
and the amount of capital stock subscribed and paid for by each;
(5) The names of the persons who are to serve as officers and
directors of the banking institution and the official position
proposed to be held by each; and
(6) The total authorized capital stock of the institution.
The agreement of incorporation shall be signed and
acknowledged by each of the incorporators and, when filed with the
board, shall be accompanied by the statutory corporation charter
fees, and an examination and investigation fee of five thousand
dollars payable to the board. However, if the agreement is for the
incorporation of a bank to be organized solely for the purpose of
facilitating the acquisition of another bank, the examination and
investigation fee is five hundred dollars payable to the board.
When transmitting the agreement to the board, the incorporators
shall designate by name and give the address of the attorney, agent
or other responsible party with whom the board may communicate, on
whom the board may call for further information, and to whom the
board may officially report as to action on the agreement so filed
with him or her. The agreement shall constitute and may be
considered and treated by the board as an application for the
board's approval to incorporate and organize a banking institution
in this state.
(b) Notwithstanding the provisions of subsection (a) of this
section, a person may apply to the commissioner to obtain a
certificate of authority to organize and operate as a bank under this chapter as a limited liability company, if that limited
liability company is formed to have perpetual existence,
centralized management, limited liability, free transferability of
interests and the federal deposit insurance corporation has ruled
that a bank so organized will be eligible for federal deposit
insurance.
(c) An existing bank structured as a corporation may apply to
the commissioner to reorganize and operate as a limited liability
company.