H. B. 4266
(By Delegates Ron Thompson, Frich, Hrutkay,
Perry, and H. White)
[Introduced January 30, 2006; referred to the
Committee on Banking and Insurance then the Judiciary.]
A BILL to amend and reenact §31A-8-5 of the Code of West Virginia,
1931, as amended, relating to a bank dealing in its own stock
and providing limitations and exceptions.
Be it enacted by the Legislature of West Virginia:
That §31A-8-5 of the Code of West Virginia, 1931, as amended,
be amended and reenacted to read as follows:
ARTICLE 8. HEARINGS; ADMINISTRATIVE PROCEDURES; JUDICIAL REVIEW;
UNLAWFUL ACTS; PENALTIES.
§31A-8-5. Dealing in own stock; limitations; exceptions.
(a) No banking institution shall may make any loan or discount
any obligation on the security of the shares of its own capital
stock, or be the purchaser or holder of any such shares, except
shares of authorized but unissued stock provided for by the charter
of such the banking institution in accordance with the provisions
of section four, article four of this chapter unless taken as a pledge or purchased to prevent loss upon a debt previously
contracted lawfully and in good faith; and all shares of its stock,
purchased or held in such manner, shall, within six months after
the time of the purchase or pledge, be sold or disposed of at
public or private sale.
(b) Notwithstanding subsection (a) of this section, a banking
institution may hold up to five percent of the outstanding shares
of its own capital stock.
(c) Any banking institution and any officer thereof who
violates any provision of this section shall be is guilty of a
misdemeanor and subject to penalties provided in section fifteen of
this article.
NOTE: The purpose of this bill is to allow banks to own a
limited share of their own stock without creating a shell bank
holding company. The same activity is allowed for national banks.
Strike-throughs indicate language that would be stricken from
the present law, and underscoring indicates new language that would
be added.