(By Delegates R. M. Thompson, Perry and G. White)[Passed March 7, 2003; in effect ninety days from passage.]AN ACT to amend and reenact section two, article three, chapter thirty-one-a of the code of West Virginia, one thousand nine hundred thirty-one, as amended, relating to the authority of the board of banking and financial institutions to remove directors, officers or employees of financial institutions and prohibit them from participating in the conduct of affairs of other financial institutions.
That section two, article three, 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 3. BOARD OF BANKING AND FINANCIAL INSTITUTIONS.
(a) In addition to other powers conferred by this chapter,
the board has the power to:(1) Regulate its own procedure and practice;(2) Promulgate reasonable rules to implement any provision of
this article in accordance with the provisions of article three,
chapter twenty-nine-a of this code;(3) Advise the commissioner in all matters within his or her
jurisdiction;(4) Study the organization, programs and services of financial
institutions and the laws relating thereto in this state and in
other jurisdictions, and to report and recommend to the governor
and the Legislature all such changes and amendments in laws,
policies and procedures relating thereto as it considers proper; (5) Grant permission and authority to a financial institution:(A) To participate in a public agency hereafter created under
the laws of this state or of the United States, the purpose of
which is to afford advantages or safeguards to financial
institutions or to depositors therein, and to comply with all
lawful requirements and conditions imposed upon those participants;(B) To engage in any financial institution activity, services,
procedures and practices in which financial institutions of the
same type subject to the jurisdiction of the federal government may
hereafter be authorized by federal laws, rules or regulations to
engage, notwithstanding any contrary provision of this code; and(C) To pay interest on demand deposits of the United States or
any agency thereof, if the payment of interest is permitted under any applicable federal law, rule or regulation.Any permission and authority granted by the board pursuant to
this subdivision shall terminate upon the adjournment of the next
regular session of the Legislature, unless the Legislature enacts
legislation authorizing the financial institution participation,
activity, services and procedures or payment of interest with
respect to which such permission and authority were granted, in
which event the permission and authority shall continue in effect
until the effective date of the legislation; and(6) Seek judicial enforcement to compel compliance with any of
its orders and to seek and obtain civil penalties as set forth
under this chapter.(b) The board also has the power, by entering appropriate
orders, to:(1) Restrict the withdrawal of deposits from any financial
institution when, in the judgment of the board, extraordinary
circumstances make the restrictions necessary for the protection of
creditors of and depositors in the affected institution;(2) Compel the holder of shares in any corporate financial
institution to refrain from voting the shares on any matter when,
in the judgment of the board, the order is necessary to protect the
institution against reckless, incompetent or careless management,
to safeguard funds of depositors in the institution or to prevent
willful violation of any applicable law or of any rule and regulation or order issued thereunder. In such a case the shares
of the holder may not be counted in determining the existence of a
quorum or a percentage of the outstanding shares necessary to take
any corporate action;(3) Approve or disapprove applications to incorporate and
organize state banking institutions in accordance with the
provisions of sections six and seven, article four of this chapter;(4) Approve or disapprove applications to incorporate and
organize state-chartered bankers' banks in accordance with the
provisions of sections six and seven, article four of this chapter;(5) Exempt a bankers' bank from any provision of this chapter
if the board finds that the provision is inconsistent with the
purpose for which a bankers' bank is incorporated and organized and
that the welfare of the public or any banking institution or other
financial institution would not be jeopardized thereby;(6) Revoke the certificate of authority, permit, certificate
or license of any state banking institution to engage in business
in this state if that institution fails or refuses to comply with
any order of the commissioner entered pursuant to the provisions of
paragraph (A) or (B), subdivision (15), subsection (c), section
four, article two of this chapter, or at the board's election to
direct the commissioner to apply to any court having jurisdiction
for a prohibitory or mandatory injunction or other appropriate
remedy to compel obedience to such order;(7) Suspend or remove a director, officer or employee of any
financial institution who is or becomes ineligible to hold that
position under any provision of law or rule and regulation or
order, or who willfully disregards or fails to comply with any
order of the board or commissioner made and entered in accordance
with the provisions of this chapter or who is dishonest or grossly
incompetent in the conduct of financial institution business and
prohibit that director, officer or employee from participating in
the affairs of any other financial institution until further order
of the board;(8) To receive from state banking institutions applications to
establish branch banks by the purchase of the business and assets
and assumption of the liabilities of, or merger or consolidation
with, another banking institution, or by the construction, lease or
acquisition of branch bank facilities in an unbanked area; examine
and investigate such applications, to hold hearings thereon, and to
approve or disapprove such applications, all in accordance with
section twelve, article eight of this chapter;(9) Approve or disapprove the application of any state bank to
purchase the business and assets and assume the liabilities of, or
merge or consolidate with, another state banking institution in
accordance with the provisions of section seven, article seven of
this chapter;(10) Approve or disapprove the application of any state bank to purchase the business and assets and assume the liabilities of
a national banking association, or merge or consolidate with a
national banking association to form a resulting state bank in
accordance with the provisions of section seven, article seven of
this chapter; and(11) In addition to any authority granted pursuant to section
twelve, article eight of this chapter, incident to the approval of
an application pursuant to subdivision (7) or (8) of this
subsection, permit the bank the application of which is so approved
to operate its banking business under its name from the premises of
the bank the business and assets of which have been purchased and
the liabilities of which have been assumed by such applicant bank
or with which the applicant bank has merged or consolidated:
Provided, That this permission may be granted only if the board has
made the findings required by subsection (f), section three of this
article and such applicant bank has no common directors or officers
nor common ownership of stock exceeding ten percent of total
outstanding voting stock with the bank whose business and assets
are being purchased and liabilities assumed, or with whom the
applicant bank is being merged; and(12) To receive an appeal from any party who is adversely
affected by an order of the commissioner issued pursuant to section
twelve-d, article eight of this chapter, and hold hearings in
accordance with the provisions of article five, chapter twenty-nine-a of this code.(c) A provision of this section may not be construed to alter,
reduce or modify the rights of shareholders, or obligations of a
banking institution in regard to its shareholders, as set forth in
section one hundred seventeen, article one, chapter thirty-one of
this code and section seven, article seven of this chapter, and
other applicable provisions of this code.(d) Any order entered by the West Virginia board of banking
and financial institutions pursuant to this section is a matter of
public record.