H. B. 4291
(By Delegate Moore, Walter, Reynolds and Azinger)
[Requested by the Division of Banking]
[Introduced February 2, 2010; referred to the
Committee on Banking and Insurance then the Judiciary.]
A BILL to amend and reenact §31A-2-4 of the Code of West Virginia,
1931, as amended,
relating to the requirement of criminal
background investigations including fingerprint checks through
both the West Virginia State Police and the Federal Bureau of
Investigation for every applicant seeking approval to charter
and/or control a state bank, state credit union, or a foreign
bank state agency or representative office, every 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, every applicant
subject to the commissioner's supervision seeking a license to
engage in the business of regulated consumer lending, mortgage
lending or brokering, and every Division of Banking financial
institutions regulatory employee applicant.
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, 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
/or 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.