Senate Bill No. 243
(By Senators Minard, Jenkins and McCabe)
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[Introduced January 23, 2006; referred to the Committee
on Banking and Insurance.]
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A BILL to amend and reenact §31A-8-5 of the Code of West
Virginia, 1931, as amended, relating to allowing banks to
own up to five percent of their own stock.
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 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 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 (1) 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 guilty of a
misdemeanor and subject to penalties provided in section fifteen
of this article.
NOTE: The purpose of this bill is to permit banks to own a
limited amount of their own stock without creating a shell bank
holding company.
Strike-throughs indicate language that would be stricken
from the present law, and underscoring indicates new language
that would be added.