Virginia Law

Article 9. Supervision.

The Commission shall have general supervisory powers with respect to all state associations, state savings banks and their holding companies, foreign savings institutions transacting business in the Commonwealth, savings institution holding companies whose principal place of business is located in the Commonwealth, service corporations that are owned or controlled by one or more state savings banks, service corporations the principal offices of which are located in the Commonwealth or that are owned or controlled by one or more state associations, and any other person who is subject to the provisions of this chapter.

1985, c. 425, § 6.1-194.73; 1991, c. 230, § 6.1-194.139; 2010, c. 794.

A. The Commission may adopt such regulations as it deems appropriate to effect the purposes of this chapter. Before adopting any regulation, the Commission shall give reasonable notice of its content and shall afford interested parties an opportunity to present evidence and be heard, in accordance with the Commission's Rules.

B. The Commission may adopt such regulations as may be necessary to permit state savings institutions to have powers comparable with those of federal savings institutions, regardless of any then existing statute, regulation or court decision limiting or denying such powers to state savings institutions. The requirement of a public hearing shall not automatically apply to regulations adopted under this subsection, but the Commission may have such hearing as it deems appropriate.

C. The Commission may adopt regulations governing savings institution holding companies doing business in the Commonwealth, including the activities of such companies and their subsidiaries.

D. The Commissioner shall publish and mail to each state savings institution and foreign savings institution doing business in the Commonwealth a copy of all regulations of the Commission in effect pertaining to such savings institutions at such times as he may deem proper.

E. Regulations adopted by the Commission shall continue in effect until amended or revoked by the Commission or superseded by action of the General Assembly.

1972, c. 796, § 6.1-195.72; 1985, c. 425, §§ 6.1-194.74, 6.1-194.75, 6.1-194.76, 6.1-194.87; 1990, c. 3; 1991, c. 230, §§ 6.1-194.140, 6.1-194.141, 6.1-194.142; 1996, c. 16; 2010, c. 794.

The Commission shall prepare and make available to each member of the board of directors of every state savings institution a statement describing generally their duties and responsibilities. The statement shall include a brief outline of the examining procedure employed by the Commission, an explanation of the distinction between an examination and an audit, and any information that the Commission deems necessary to apprise the directors of the necessity for an adequate system of internal controls.

Code 1950, § 6-201.59; 1960, c. 402; 1966, c. 584, § 6.1-189; 1972, c. 796, § 6.1-195.69; 1985, c. 425, § 6.1-194.77; 1991, c. 230, § 6.1-194.143; 2010, c. 794.

A. Every state savings institution shall furnish the Commission within 30 days after the close of its fiscal year a statement of its financial condition on forms supplied by the Commission. The statements shall be made in accordance with forms prescribed by the Commission, certified under oath by the president or treasurer of the savings institution, and attested by at least three of its directors. Insofar as practicable, the reports required by this section shall conform to those required of savings institutions insured by any instrumentality of the federal government that insures or regulates savings institutions. The Commission shall allow state savings institutions to submit the statements electronically. Any state association that submits such statements electronically shall maintain a copy of the statement with the required certified signatures affixed.

B. Every state savings institution shall make such other reports as the Commission may from time to time require.

Code 1950, § 6-201.57; 1960, c. 402; 1966, c. 584, § 6.1-187; 1972, c. 796, § 6.1-195.67; 1985, c. 425, § 6.1-194.78; 1991, c. 230, § 6.1-194.144; 1996, c. 14; 1997, c. 407; 2010, c. 794.

A. As used in this section, the term "affiliate of any state savings institution" means any entity (i) of which the state savings institution, directly or indirectly, owns or controls either a majority of the voting shares or more than 50 percent of the number of shares voted for the election of its directors, trustees, or other persons exercising similar functions at the preceding election, or controls in any manner the election of a majority of its directors, trustees, or other persons, exercising similar functions, (ii) of which control is held, directly or indirectly, through stock ownership or in any other manner, by the shareholders of such state savings institution who own or control either a majority of the shares of the state savings institution or more than 50 percent of the number of shares voted for the election of directors of the state savings institution at the preceding election, or by trustees for the benefit of the shareholders of the state savings institution, or (iii) of which a majority of the directors, trustees, or other persons exercising similar functions are directors of the state savings institution.

B. The Commissioner shall, not less than once during any period of three consecutive calendar years, or at such additional times as he deems necessary, with or without previous notice, examine each state savings institution. A copy of the report of all examinations shall be furnished to the savings institution. The report shall be presented by the president or other chief executive officer to the directors at their next meeting.

C. No other copies of a report of examination shall be made except as necessary for review by officers and directors of the state savings institution. Copies of the report made for officers and directors of the savings institution shall not be removed from the premises of such savings institution and shall be destroyed after the review has been completed. The original examination report shall be kept among the records of the Bureau. Upon resolution of the board of directors of a savings institution, examination reports may be inspected in the savings institution by such other persons as the board may specify.

D. In connection with the examination of any state savings institution, the Commission may make or cause to be made an examination of the affiliates of the state savings institution as shall be necessary to ascertain the financial condition of the savings institution and disclose fully the relations between the savings institution and its affiliates and the effect of such relations upon the affairs of the savings institution.

E. Upon written application made to the Commission by the board of directors or by the stockholders representing two-fifths of the total outstanding capital stock of any savings institution incorporated under the laws of and doing business in the Commonwealth, or when, in the judgment of the Commission, it may be necessary for the protection of the public or of persons depositing or dealing with such state savings institution, the Commission shall cause to be made a special examination of such state savings institution. All expenses incident to such special examination may be charged to the state savings institution so examined and shall be paid by the savings institution so charged.

Code 1950, § 6-201.54; 1960, c. 402; 1966, c. 584, § 6.1-184; 1972, c. 796, § 6.1-195.64; 1976, c. 82; 1985, c. 425, § 6.1-194.79; 1991, c. 230, § 6.1-194.145; 1992, c. 224; 1996, c. 80; 1997, c. 50; 2010, c. 794.

A. The officers, directors, and employees of every savings institution doing business in the Commonwealth shall, upon the demand of the person designated by law to make any examination of the institution:

1. Give to such examiner full access to all money, books, papers, notes, bills, and other evidence of debt of the savings institution;

2. Disclose fully and truly all of its indebtedness and liability; and

3. Furnish the examiner with all information that the examiner deems necessary to a full investigation into the affairs of the savings institution.

B. The Commission may examine under oath any and all of the directors, officers, clerks, and employees of a savings institution touching any matter or thing connected with the operation of the savings institution. Any duly authorized examiner shall have the authority to administer oaths to the persons examined.

Code 1950, § 6-201.56; 1960, c. 402; 1966, c. 584, § 6.1-186; 1972, c. 796, § 6.1-195.66; 1985, c. 425, § 6.1-194.80; 1991, c. 230, § 6.1-194.146; 2010, c. 794.

Any officer, director, or agent of a savings institution who knowingly makes a false statement of the condition of the institution to the Commission is guilty of a Class 6 felony.

Code 1950, § 6-201.62; 1960, c. 402; 1966, c. 584, § 6.1-192; 1972, c. 796, § 6.1-195.73; 1985, c. 425, § 6.1-194.81; 1991, c. 230, § 6.1-194.147; 2010, c. 794.

The Commission may require a savings institution doing business in the Commonwealth to have an audit made of its books, records and methods of operation, whenever it appears to the Commission that the system of internal controls is not adequate or that the savings institution is engaging in dangerously unsound practices or that the financial condition of the institution makes it necessary.

Code 1950, § 6-201.58; 1960, c. 402; 1966, c. 584, § 6.1-188; 1972, c. 796, § 6.1-195.68; 1985, c. 425, § 6.1-194.82; 1991, c. 230, § 6.1-194.148; 2010, c. 794.

A. If the Commission finds that: (i) the laws of the Commonwealth are not being fully observed by a savings institution doing business in the Commonwealth; (ii) a savings institution is being operated in an unsafe or unsound manner; (iii) the institution has failed to comply with the lawful orders of the Commission; (iv) the reserve of the institution is insufficient for the protection of account holders; or (v) a savings institution is, or is about to become, insolvent, it shall give immediate notice thereof to the officers and directors of the institution. If necessary to conserve the assets of the institution or to protect the interests of its account holders or the public interest, the Commission may, after reasonable notice to the institution and opportunity for it to be heard:

1. Close the institution for a period not exceeding 60 days, which period may be further extended for a like period or periods as the Commission deems necessary;

2. Require the officers and directors of the institution to liquidate, insofar as is required, its outstanding loans;

3. Require that all lawful orders of the Commission be complied with;

4. Require the institution to make reports daily or at such other times as it may require as to the results achieved in carrying out its orders;

5. Temporarily suspend the right of such institution to receive any further deposits;

6. Without examination, close, for such period or periods as the Commission may deem necessary, any savings institution facing an emergency due to withdrawal of deposits or otherwise, or, without closing such savings institution, grant to it the right to suspend or limit the withdrawal of deposits, for such period as the Commission may determine; or

7. Require that the savings institution desist from those activities that have resulted in the unsafe or unsound operation of the institution.

B. If the Commission determines that a receiver should be appointed for a savings institution, the Commission may close the doors of the institution, take charge of the books, assets and affairs of the institution, and apply to any court in the Commonwealth having jurisdiction to appoint receivers for the appointment of a receiver to take charge of the institution's business and assets. Proceedings for the appointment of a receiver of a savings institution shall not be entertained by any court except on the application of the Commission.

C. In any case where the Commission finds that an insured savings institution is insolvent or about to become insolvent, the Commission may seek the appointment of the Federal Deposit Insurance Corporation as receiver for the savings institution. The court may appoint the Federal Deposit Insurance Corporation as receiver for the savings institution if it finds that to do so would be in the public interest. Upon its being appointed, the Federal Deposit Insurance Corporation shall not be required to post bond, and it shall have as receiver all those powers afforded under federal law.

D. The Commissioner may issue and serve upon an association an order to cease and desist from an unsafe or unsound practice or a violation if, in the opinion of the Commissioner, an association (i) is engaging or has engaged, or there is reasonable cause to believe is about to engage, in an unsafe or unsound practice in conducting the business of the association; or (ii) is violating or has violated, or there is reasonable cause to believe is about to violate, this chapter or any other applicable law, regulation, or order. An order to cease and desist shall contain a statement of the facts constituting the alleged violation or unsafe or unsound practice, and it may require, in terms that may be mandatory or otherwise, an association, its directors, officers, employees, or agents to cease and desist from such violation or practice. The order shall specify the effective date thereof and shall contain a notice to the association of its right to request a hearing on the order in accordance with the Commission's Rules.

E. When the unsafe or unsound practice or the violation specified in an order to cease and desist, or any continuation thereof, is likely to prejudice the interests of the account holders or the stockholders of an association, the Commissioner may issue his order effective immediately. An order to cease and desist shall remain in effect until it is withdrawn by the Commissioner or is terminated by the Commission after a hearing on the matter. A request for hearing under this section shall be given expeditious treatment on the docket of the Commission, and the Commission need not allow for 10 days' notice to the parties.

Code 1950, § 6-201.60; 1960, c. 402; 1966, c. 584, § 6.1-190; 1972, c. 796, § 6.1-195.70; 1983, c. 506; 1985, c. 425, § 6.1-194.83; 1990, c. 3; 2010, c. 794.

A. Whenever any director or officer of a savings institution doing business in the Commonwealth has knowingly continued to violate any law relating to such savings institution or has knowingly continued any unsafe or unsound practice in conducting the business of such institution, after the director or officer, and the board of directors of the institution of which he is a director or officer, have been warned in writing by the Commissioner to discontinue such violation of law or such unsafe or unsound practice, the Commissioner shall certify the facts to the Commission. The Commission shall thereupon enter an order requiring such director or officer to appear before the Commission, within not less than 10 days, to show cause why he should not be removed from office and thereafter restrained from participating in any manner in the management of such savings institution. Such order shall contain a brief statement of the facts certified to the Commission by the Commissioner. A copy of the order shall be served upon the director or officer, and a copy thereof shall be sent by certified or registered mail to each director of the savings institution affected.

B. If, after granting the accused director or officer a reasonable opportunity to be heard, the Commission finds that he has knowingly continued to violate any law relating to the savings institution, or has knowingly continued any unsafe or unsound practice in conducting the business of the institution, after he and the board of directors of the institution of which he is a director or officer have been warned in writing by the Commissioner to discontinue such violation of law or unsafe or unsound practice, the Commission shall enter an order removing the director or officer from office and restraining the director or officer from thereafter participating in any manner in the management of such savings institution. A copy of such order shall be served upon the director or officer and upon the savings institution of which he is a director or officer, whereupon the director or officer shall cease to be a director or officer of the institution and shall thereafter cease to participate in any manner in the management of the institution.

C. Any director or officer removed and restrained under the provisions of this section who thereafter participates in any manner in the management of such savings institution, except as a stockholder therein, is guilty of a Class 6 felony.

1985, c. 425, § 6.1-194.84; 2010, c. 794.

When (i) written application is made to the Commission by the board of directors or by the stockholders representing two-fifths of the total outstanding capital stock of any savings institution incorporated under the laws of and doing business in the Commonwealth, or (ii) in the judgment of the Commission it may be necessary for the protection of the public or of persons depositing or dealing with such savings institution, the Commission shall cause to be made a special examination of such savings institution. All expenses incident to such special examination may be charged to the savings institution so examined and shall be paid by the savings institution so charged.

1990, c. 247, § 6.1-194.84:1; 2010, c. 794.

A. For the purpose of defraying the expenses of supervision and regulation of state savings institutions and foreign savings institutions doing business in the Commonwealth, the Commission shall, on or before July 1 of each year, assess against every such savings institution fees in accordance with a schedule to be set by the Commission. Such schedule shall bear a reasonable relationship to the total assets of various individual savings institutions and to the costs of their respective supervision, regulation, and examination.

B. All fees so assessed shall be paid into the state treasury on or before July 31 following. The Commission shall mail the assessments to each association on or before July 1 of each year.

C. The Commission shall charge a fee:

1. Of $1,800 for investigating an application for authority to establish a branch, if the branch is to be located within the Commonwealth;

2. As prescribed by the Commission for investigating an application for authority to establish a branch if the branch is to be located outside the Commonwealth;

3. Of $1,000 for investigating an application for authority to change the location of an existing main office or branch office;

4. Of $10,000 for investigating an application for a certificate of authority in the case of a state association;

5. As prescribed by the Commission for investigating an application for a certificate of authority in the case of a foreign savings institution;

6. Of $7,500 for investigating an application for merger or consolidation;

7. Of $2,000 for investigating an application for authority to exercise trust powers if such powers are to be exercised through a trust department;

8. Of $10,000 for investigating an application for authority to exercise trust powers if such powers are to be exercised through a trust affiliate or subsidiary;

9. Of $5,000 for investigating an application to convert from a state association to a state savings bank pursuant to subsection B of § 6.2-1143 or from a state bank to a state savings bank pursuant to § 6.2-829; and

10. Of $10,000 for investigating an application for a conversion other than a conversion from a state association or state bank to a state savings bank as provided in subdivision 9.

D. The Commission shall not be entitled to any fees other than as provided in subdivision C 6 for investigating any application to retain existing branches of the applying savings institution as branches of the merged or consolidated institutions. The fee prescribed in subdivision C 6 may be waived by the Commission in the case of supervisory mergers or consolidations made pursuant to § 6.2-1205.

E. Notwithstanding the designation of the several fees set forth in subsection C, the Commission may reduce by regulation or order any such fee or fees, if the Commission concludes that there is a reasonable basis for doing so and that the reduction of the fee will not be detrimental to the effectiveness of the Bureau.

Code 1950, § 6-201.55; 1960, c. 402; 1966, c. 584, § 6.1-185; 1972, c. 796, § 6.1-195.65; 1974, c. 181; 1976, c. 658; 1982, c. 455; 1984, c. 344; 1985, c. 425, § 6.1-194.85; 1986, c. 122; 1987, c. 172; 1988, c. 5; 1991, c. 230, § 6.1-194.149; 1992, c. 283; 1994, c. 331; 1998, c. 19; 2010, c. 794.

A. The Commissioner shall examine the accounts, books, and papers of any person or entity that he has reason to believe is doing the business of a savings institution in the Commonwealth without legal authority to do so. Any person having possession, custody, or control of such accounts, books, and papers refusing to produce such documents for examination by the Commissioner is guilty of a Class 1 misdemeanor.

B. Every person who does the business of a savings institution in the Commonwealth without authority, and every officer and agent of a corporation doing such business without authority who knowingly participates therein, is guilty of a Class 6 felony.

Code 1950, §§ 6-201.50, 6-201.51; 1960, c. 402; 1966, c. 584, §§ 6.1-180, 6.1-181; 1972, c. 796, §§ 6.1-195.60, 6.1-195.61; 1985, c. 425, § 6.1-194.86; 1992, c. 136; 2010, c. 794.

Any savings institution holding company that does not have any subsidiaries that are state savings institutions and that is subject to regulations adopted by the appropriate federal authority shall be deemed to be in substantial compliance with the regulations adopted by the Commission if it is in compliance with the regulations adopted by the appropriate federal authority.

1985, c. 425, § 6.1-194.87; 1990, c. 3; 1996, c. 16; 2010, c. 794.

A. As used in this section:

"Bank" or "savings institution" means institutions incorporated or established under the laws of (i) the Commonwealth, (ii) the United States, or (iii) any other state, which institutions' deposits are insured as required by this title for the issuance of a certificate of authority to do business.

"Insolvent" means that the current book value of liabilities is in excess of the current book value of assets.

B. If the Commission finds that (i) a state savings institution is insolvent, or, in its opinion, the financial stability of a state savings institution is threatened, (ii) the merger or consolidation of such state savings institution into another savings institution or into a bank is desirable for the protection of the stockholders, members or depositors of such association, and that such merger or consolidation is in the public interest, and (iii) an emergency exists, and if the board of directors of such state savings institution approves a plan of merger or consolidation of such savings institution into another savings institution or bank, compliance with the requirements of § 13.1-718 or 13.1-895 shall be dispensed with as to such state savings institution. In such event, the approval by the Commission of such plan of merger or consolidation shall be the equivalent of approval by the holders of more than two-thirds of the outstanding shares of such state savings institution for all purposes of Article 12 (§ 13.1-715.1 et seq.) of Chapter 9 of Title 13.1 or the approval of two-thirds of the members for all purposes of Article 11 (§ 13.1-893.1 et seq.) of Chapter 10 of Title 13.1.

C. If the Commission finds that (i) a state savings institution is insolvent, or in its opinion, the financial stability of a state savings institution is threatened, (ii) the acquisition of the assets and liabilities of such savings institution by another savings institution or by a bank is in the best interests of the stockholders, members or depositors of such state savings institution, and that such acquisition of the assets and liabilities is in the public interest, and (iii) an emergency exists, it may, with the consent of the board of directors of both institutions as to the terms and conditions of such transfer, including the assumption of all or certain liabilities, enter an order transferring some or all of the assets and liabilities of such state savings institution to such other savings institution or bank. In such event, compliance with the provisions of § 13.1-723, 13.1-724, 13.1-899, or 13.1-900 shall not be required, and § 13.1-730 shall not be applicable to such transfer.

D. In the case either of such a merger, consolidation or a transfer of assets and liabilities, the Commission shall provide that prompt notice of its findings, and plan of merger, consolidation or transfer of assets and liabilities, be sent to the stockholders or members of record of such insolvent savings institution or savings institution threatened with financial instability for the purpose of providing such shareholders or members an opportunity to challenge the findings of the Commission and the plan of merger, consolidation or transfer of assets and liabilities. The relevant books and records of such state savings institution shall remain intact and be made available to such shareholders or members for a period of 30 days after such notice is sent. The Commission's findings and plan of merger, consolidation or transfer of assets and liabilities shall become final if a hearing before the Commission is not requested by any such shareholder or member in a written request delivered to the Commission within 15 days after the notice specified by this section is sent. Any such request for a hearing shall contain a statement of the specific grounds for such shareholder's or member's challenge to the Commissioner's findings and plan of merger, or consolidation or transfer of assets and liabilities.

E. If, after a hearing as provided in subsection D, the Commission finds that good cause has been shown for the reversal or modification of its initial findings, or for rescission or modification of its initial plan for merger, consolidation or transfer of assets and liabilities, the Commission shall enter its final order accordingly. If, after such hearing, the Commission affirms its original findings and plan for merger, or consolidation or transfer of assets and liabilities, its order shall be final.

F. Notwithstanding any other provision of law, any institution resulting from a merger, consolidation or a transfer of assets and liabilities under the provisions of this section shall have the right to retain and operate all offices of the institution so merged, consolidated or acquired that were in operation at the time of such merger, or consolidation or acquisition. This section shall not be construed to allow the establishment of additional branches by any institution resulting from such merger, consolidation or transfer than would otherwise be allowed by the laws of the Commonwealth.

G. The Commission shall authorize transactions under this section in the following order of priority:

1. Between financial institutions of the same type located within the Commonwealth;

2. Between financial institutions of different types located within the Commonwealth;

3. Between financial institutions of the same type including depository institutions located outside the Commonwealth; and

4. Between financial institutions of different types including depository institutions located outside the Commonwealth.

H. In considering transactions involving financial institutions located outside the Commonwealth, the Commission shall give priority to plans of merger, consolidation or asset acquisition involving financial institutions located in states adjoining the Commonwealth or located in the District of Columbia.

I. Any institution resulting from a transaction authorized by this section whose main office is located outside of the Commonwealth shall, as a condition of being able to do business in the Commonwealth, allow the Commission to examine such institution from time to time as the Commission deems necessary. In conducting such examinations, the Commission shall have all of the powers provided by this title relating to the examination of financial institutions.

J. The provisions of Article 5 (§ 6.2-1148 et seq.) of this chapter shall not apply to mergers, consolidations, and acquisitions authorized by the provisions of this section.

1983, c. 450, § 6.1-195.70:2; 1985, c. 425, § 6.1-194.88; 1991, c. 230, § 6.1-194.150; 1994, c. 353; 2005, c. 765; 2010, c. 794.