Senate Bill No. 282
(By Senator Minard, Kessler, Helmick and Hunter)
____________
[Introduced January 22, 2002; referred to the Committee
on Banking and Insurance; and then to the Committee on Finance
.]
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A BILL 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 powers
of the commissioner of banking; and changing the
requirement that the commissioner maintain an office at the
capitol complex.
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 an 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 these 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 the
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 This
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 this
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 these applications; and
(18) To take such other action as he or she may deem
consider 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.
NOTE: The purpose of this bill is to give the Commissioner
of Banking the flexibility to locate the Division's office
outside the capitol complex.
Strike-throughs indicate language that would be stricken
from the present law, and underscoring indicates new language
that would be added.