H. B. 4248
(By Delegates Ron Thompson, Frich, Hrutkay,
Perry, and H. White)
[Introduced January 30, 2006; referred to the
Committee on the Banking and Insurance then the
Judiciary.]
A BILL to amend and reenact §31A-4-13 of the Code of West Virginia,
1931, as amended, relating to powers of state banking
institutions; and changing investment limitation for state
chartered banks.
Be it enacted by the Legislature of West Virginia:
That §31A-4-13 of the Code of West Virginia, 1931, as amended,
be amended and reenacted to read as follows:
ARTICLE 4. BANKING INSTITUTIONS AND SERVICES GENERALLY.
§31A-4-13. Powers of state banking institutions generally.
(a) Any state-chartered banking institution has and may
exercise all of the powers necessary for, or incidental to, the
business of banking and without limiting or restricting such
general powers, it shall have the right to buy or discount
promissory notes and bonds; negotiate drafts, bills of exchange and
other evidences of indebtedness; borrow money; receive deposits on such terms and conditions as its officers may prescribe; buy, sell
or exchange bank notes, bullion or coin; loan money on personal or
other security; rent safe-deposit boxes and receive on deposit for
safekeeping jewelry, plate, stocks, bonds and personal property of
whatsoever description; and provide customer services incidental to
the business of banking, including, but not limited to, the
issuance and servicing of and lending money by means of credit
cards as letters of credit or otherwise. Any state-chartered
banking institution may accept, for payment at a future date not to
exceed one year, drafts drawn upon it by its customers. Any
state-chartered banking institution may issue letters of credit,
with a specified expiration date or for a definite term,
authorizing the holders thereof to draw drafts upon it or its
correspondents, at sight or on time. Any such banking institution
may organize, acquire, own, operate, dispose of and otherwise
manage wholly owned subsidiary corporations or entities that are
jointly owned with other insured depository institutions for
purposes incident to the banking powers and services authorized by
this chapter provided any wholly owned or jointly owned entities
are subject to federal and state examination and supervision as if
the activities are conducted by the bank.
(b) Any state-chartered banking institution may acquire, own,
hold, use and dispose of real estate which may not be carried on
its books at a value greater than the actual cost: Provided, That the property must be necessary for the convenient transaction of
its business, including any buildings, office space or other
facilities to rent as a source of income: Provided, however, That
the investment hereafter made may not exceed sixty-five percent of
the amount of its capital stock and surplus, unless the consent in
writing of the Commissioner of Banking is first secured.
(c) Any state-chartered banking institution may acquire, own,
hold, use and dispose of real estate which shall be carried on its
books at the lower of fair value or cost as defined in rules
promulgated by the Commissioner of Banking, subject to the
following limitations:
(1) Such as may be mortgaged to it in good faith as security
for debts in its favor;
(2) Such as may be conveyed to it in satisfaction of debts
previously contracted in the course of its business dealings; and
(3) Such as it may purchase at sales under judgments, decrees,
trust deeds or mortgages in its favor, or may purchase at private
sale, to secure and effectuate the payment of debts due to it.
(d) The value at which any real estate is held may not be
increased by the addition thereto of taxes, insurance, interest,
ordinary repairs or other charges which do not materially enhance
the value of the property.
(e) Any real estate acquired by any such banking institution
under subdivisions (2) and (3), subsection (c) of this section shall be disposed of by the banking institution at the earliest
practicable date, but the officers thereof shall have a reasonable
discretion in the matter of the time to dispose of such property in
order to save the banking institution from unnecessary losses:
Provided, That in every case such property shall be disposed of
within ten years from the time it is acquired by the banking
institution, unless an extension of time is given in writing by the
Commissioner of Banking.
(f) The sale of insurance by state-chartered banking
institutions is subject to the following:
Any state-chartered banking institution having its main or a
branch office in any place the population of which does not exceed
five thousand inhabitants, as shown by the last preceding decennial
census, through its employees or agents, may, from that place or
office, directly or through a controlled subsidiary, act as agent
for any fire, life, casualty, liability or other insurance company
authorized by the authorities of the state to do business in this
state, by soliciting and selling insurance and collecting premiums
on policies issued by such company; and may receive for services so
rendered all permissible fees or commissions as may be agreed upon
between the bank and the insurance company for which it may act as
agent: Provided, That no bank may in any case assume or guarantee
the payment on insurance policies issued through its agency by its
principal: Provided, however, That the bank may not guarantee the truth of any statement made by an insured in filing his, her or its
application for insurance. For purposes of this section, a
"controlled subsidiary" is one in which the state-chartered banking
institution owns at least eighty percent of all classes of stock.
This provision is intended to give state-chartered banking
institutions parity with national banks operating in this state
with regard to the marketing and sale of insurance, notwithstanding
the prohibitions and limitations contained in article eight-c or
elsewhere in this chapter, and shall be construed consistently with
interpretations of 12 U.S.C. §92, the regulations promulgated
thereunder, and any successor legislation or regulations.
(g) Any state-chartered banking institution may, through its
employees or agents, market and sell, as agent, annuities, either
at its main office or at any of its branches. The marketing and
sale of annuities may be made by the bank, through its employees or
agents, directly, or through a controlled subsidiary, as defined in
subsection (f) of this section. This provision is intended to give
state-chartered banks parity with national banks operating in this
state with regard to the sale of annuities, notwithstanding the
prohibitions and limitations contained in article eight-c or
elsewhere in this chapter.
(h) Unless waived in writing by the commissioner, a
state-chartered bank may not invest or otherwise expend in excess
of ten percent more of its capital and surplus calculated at the end of the previous calendar year on the activities permitted by
subsections (f) and (g) of this section on an aggregate basis
together with any of its approved financially related products and
services than would be allowed for a national bank providing the
same services. For purposes of this section, approved financially
related products and services means those products and services
offered by a state-chartered bank pursuant to an approved
application submitted under article eight-c of this chapter.
(i) The commissioner shall promulgate rules in accordance with
chapter twenty-nine-a of this code relating to the sale of
insurance or annuities, including, but not limited to, rules
requiring notice of the intention to engage in such activities and
relating to the policies and procedures state-chartered banking
institutions should adopt in connection with these activities.
(j) Any state-chartered banking institution and its employees
or agents engaged in the sale of insurance or annuities permitted
hereby must also comply with all applicable requirements for the
sale of such products imposed by the West Virginia Commissioner of
Insurance and by any state or federal securities regulator.
(k) No state-chartered banking institution may hereafter
invest more than twenty percent of the amount of its capital and
surplus in furniture and fixtures, whether the same be installed in
a building owned by the banking institution, or in quarters leased
by it, unless the consent in writing of the Commissioner of Banking is first secured.
NOTE: The purpose of this bill is to make consistent the
investment limitation for state chartered banks in financially
related activities found in Chapter 31A, Article 8C with other
related provisions of the banking code.
Strike-throughs indicate language that would be stricken from
the present law, and underscoring indicates new language that would
be added.