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Key: Green = existing Code. Red = new code to be enacted
ENGROSSED
COMMITTEE SUBSTITUTE
FOR
H. B. 4291
(By Delegate Moore, Walter, Reynolds and Azinger)
[Requested by the Division of Banking]
(Originating in the Committee on the Judiciary)
[February 26, 2010]
A Bill
to amend and reenact §31A-2-4 of the Code of West
Virginia, 1931, as amended, relating to criminal background
investigations for applicants seeking approval to engage in
certain banking activities under the jurisdiction of the
Commissioner of Banking; eliminating the requirement that
the investigations be done through both the West Virginia
State Police and the Federal Bureau of Investigation;
providing that applicants provide fingerprints for
submission to the Federal Bureau of Investigation or any
governmental agency or entity authorized to receive such
information for a state, national or international criminal
history check.
Be it enacted by the Legislature of West Virginia:
That §31A-2-4 of the Code of West Virginia, 1931, as
amended, be amended and reenacted to read as follows:
ARTICLE 2. DIVISION OF BANKING.
§31A-2-4. Jurisdiction of commissioner; powers, etc., of
division 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 has supervision and
jurisdiction over state banks, regulated consumer lenders,
residential mortgage lenders and brokers licensed pursuant to
article seventeen, chapter thirty-one of this code, 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 division are hereby vested in the
commissioner. He or she shall be the chief executive officer of
the Division of Banking and is responsible for the division'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 division or
the commissioner.
(b) The commissioner shall:
(1) Maintain an office for the division and there keep a
complete record of all the division's transactions, of the
financial conditions of all financial institutions and records of
the activities of other persons as the commissioner considers
important. Notwithstanding any other provision of this code, heretofore or hereafter enacted, the records relating to the
financial condition of any financial institution and any
information contained in the records shall be confidential for
the use of the commissioner and authorized personnel of the
Division of Banking. No person shall divulge any information
contained in any records except as authorized in this subdivision
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 from the records for good cause, upon imposing
terms and conditions considered 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 the records. Conformity with federal procedures shall
be sought where the institution maintains federal deposit
insurance. The commissioner has and may exercise reasonable
discretion as to the time, manner and extent the other records in
his or her office and the information contained in the records
are 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) Require a criminal background investigation, including
fingerprint checks requiring fingerprints for submission to the
Federal Bureau of Investigation or any governmental agency or
entity authorized to receive such information for a state,
national or international criminal history check, 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) Division 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 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 is not 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: Provided, however, That
where a nonexempt applicant under this subdivision is not a
natural person, the principals of the applicant are subject to
the requirements of this subdivision. 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
considered 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 may:
(1) Provide for the organization of the division and the
procedures and practices of the division and implement the
procedures and practices by the promulgation of rules and forms
as appropriate and the rules shall be promulgated in accordance
with article three, chapter twenty-nine-a of this code;
(2) Employ, direct, discipline, discharge and establish qualifications and duties for all personnel for the division,
including, but not limited to, examiners, assistant examiners,
conservators and receivers, establish the amount and condition of
bonds for the personnel he or she considers appropriate and pay
the premiums on the bonds and, if he or she elects, have all
personnel subject to and under the classified service of the
state personnel division;
(3) 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, 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) Call for and require any data, reports and information
from financial institutions under his or her jurisdiction, at
such times and in such form, content and detail considered
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, supervise the location, organization,
practices and procedures of financial institutions and, without
limitation on the general powers of supervision of financial institutions, require financial institutions to:
(A) Maintain their accounts consistent with rules prescribed
by the commissioner 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 other risks as he or
she may 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 other action that in his or her judgment is
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, receive from any person or persons and
consider any request, petition or application relating to the
organization, location, conduct, services, policies and
procedures of any financial institution and to act on the
request, petition or application in accordance with any
provisions of law applicable thereto;
(8) In connection with the investigations required by
subdivision (3), subsection (b) of this section, issue subpoenas
and subpoenas duces tecum, administer oaths, examine persons
under oath, and hold and conduct hearings. Any subpoenas or
subpoenas duces tecum shall 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 a
hearing may be accompanied by an attorney employed by him or her;
(9) Issue declaratory rulings in accordance with the
provisions of section one, article four, chapter twenty-nine-a of
this code;
(10) 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 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) Implement all of the provisions of this chapter, except the provisions of article three of this chapter, 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) 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 as long as the
rules do not conflict with any rules promulgated by the state's
Attorney General;
(13) Foster and encourage a working relationship between the
Division 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) 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 any other forms and printed materials found by
him or her to be helpful to financial institutions, their
shareholders, depositors and patrons and make reasonable charges
for the copies;
(15) Delegate the powers and duties of his or her office,
other than the powers and duties excepted in this subdivision, to
qualified division personnel who shall act under the direction and supervision of the commissioner and for whose acts he or she
is responsible, but the commissioner may delegate to the deputy
commissioner of banking and to no other division 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 also is responsible. The commissioner
shall:
(A) 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) Order any person to cease engaging in any unsound
practice or procedure which may detrimentally affect any
financial institution or depositor of the financial institution;
(C) 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) 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 could be subject to an order under the
provisions of this chapter. This assurance of voluntary
compliance shall not be considered an admission of violation for
any purpose, except that if a person giving the assurance fails
to comply with its terms, the assurance is prima facie evidence
that prior to this assurance the person engaged in conduct
described in the assurance;
(16) Seek and obtain civil administrative penalties against
any person who violates this chapter, the rules issued pursuant
to this chapter, or any orders lawfully entered by the
commissioner or board of banking and financial institutions in an
amount not more than five thousand dollars per day for each
violation: Provided, That all of the pertinent provisions of
article five, chapter twenty-nine-a of this code shall apply to
any assessment of a penalty under this subsection;
(17) Receive from state banking institutions applications to
change the locations of their principal offices and to approve or
disapprove these applications;
(18) Expend funds in order to promote consumer awareness and
understanding of issues related to residential mortgage lending;
and
(19) Take other action as he or she may consider necessary
to enforce and administer the provisions of this chapter, except
the provisions of article three of this chapter, and all other
laws which he or she is empowered to administer and enforce and
apply to any court of competent jurisdiction for appropriate
orders, writs, processes and remedies.
NOTE: The purpose of this bill is to provide the option of
eliminating duplicitous criminal background investigations with
both the West Virginia State Police and the Federal Bureau of
Investigation.
Strike-throughs indicate language that would be stricken
from the present law, and underscoring indicates new language
that would be added.