Code of Virginia

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Code of Virginia
Title 6.2. Financial Institutions and Services
Chapter 8. Banks
9/28/2021

Article 1. General Provisions.

§ 6.2-800. Definitions.

As used in this chapter, unless the context requires a different meaning:

"Bank" means a corporation authorized by statute to accept deposits and to hold itself out to the public as engaged in the banking business in the Commonwealth.

"Bankers' bank" means a bank whose shares are owned exclusively by either (i) financial institutions that have or are eligible for insurance of deposits by a federal agency or (ii) financial institution holding companies as defined in § 6.2-700 or savings institution holding companies as defined in § 6.2-1100 owning any financial institution described in clause (i), provided that no such financial institution or holding company owns, directly or indirectly, more than five percent of the issued and outstanding voting shares of any bankers' bank.

"Bank holding company" means any corporation (i) that directly or indirectly owns, controls, or holds with power to vote, 25 percent or more of the voting shares of one or more banks or of a corporation that is or becomes a bank holding company by virtue of this definition, (ii) that controls in any manner the election of a majority of the directors of one or more banks, or (iii) for the benefit of whose shareholders or members 25 percent or more of the voting shares of one or more banks or bank holding companies is held by trustees. For the purpose of this definition, any successor to any such corporation shall be deemed to be a bank holding company from the date as of which such successor corporation becomes a bank holding company. Notwithstanding the foregoing, (a) a bank shall not be a bank holding company by virtue of its ownership or control of shares in a fiduciary capacity except where such shares are held for the benefit of the shareholders of such banks, (b) a corporation shall not be a bank holding company by virtue of its ownership or control of its shares acquired by it in connection with its underwriting of securities and which are held only for such period of time as will permit the sale thereof upon a reasonable basis, (c) a corporation formed for the sole purpose of participating in a proxy solicitation shall not be a bank holding company by virtue of its control of voting rights or shares acquired in the course of such solicitation, and (d) a corporation shall not be a bank holding company if at least 80 percent of its total assets are composed of holdings in the field of agriculture.

"FDIC" means the Federal Deposit Insurance Corporation.

"International banking facility" means a set of assets and liability accounts segregated on the books and records of the bank, or an adjacent or other subsidiary that includes only international banking facility time deposits and international banking facility extensions of credit. The facility may either be located within Virginia or outside the territorial United States. "International banking facility" has the meaning assigned to it by the laws of the United States or the regulations of the Board of Governors for the Federal Reserve System.

"State bank" means a bank incorporated under the laws of the Commonwealth and that has its principal place of business in the Commonwealth.

"Trust business" has the meaning assigned to it in § 6.2-1000.

"Trust company" has the meaning assigned to it in § 6.2-1000.

Code 1950, §§ 6-6, 6-27.1, 6-66; 1962, c. 404; 1966, c. 584, §§ 6.1-4, 6.1-80; 1974, c. 665; 1982, c. 411; 1983, c. 453, § 6.1-11.2; 1987, c. 556; 1989, cc. 376, 650, § 6.1-6.1; 1993, cc. 182, 432; 1994, c. 7; 1996, cc. 218, 306; 2006, c. 633; 2010, c. 794.

§ 6.2-801. Application of chapter.

The provisions of this chapter shall apply to all state banks, and so far as constitutionally permissible, to all banks organized under the laws of the United States doing business in Virginia.

Code 1950, §§ 6-6, 6-27.1; 1962, c. 404; 1966, c. 584, § 6.1-4; 1974, c. 665; 1987, c. 556; 1993, c. 432; 2010, c. 794.

§ 6.2-802. Effect of chapter on certain banks.

A. Nothing in this chapter shall be construed to change or affect any privilege granted by charter to any bank incorporated before June 15, 1910, nor to affect the legality of any investment made or transaction had prior to June 18, 1928, pursuant to any provisions of law in force when such investment was made or transaction occurred.

B. No provision of this chapter other than § 6.2-803 shall apply to any bank chartered prior to June 15, 1910, under the laws of the Commonwealth but having no place of business within the Commonwealth and conducting its entire business outside of the Commonwealth.

Code 1950, § 6-8; 1966, c. 584, § 6.1-7; 2010, c. 794.

§ 6.2-803. Entities authorized to engage in banking business.

A. No person, except (i) corporations duly chartered and already conducting banking business in the Commonwealth under authority of the laws of the Commonwealth or the United States, (ii) corporations that shall hereafter be incorporated under, and authorized to conduct banking business in the Commonwealth under authority of, the laws of the Commonwealth, (iii) corporations that shall hereafter be authorized to do business in the Commonwealth under the banking laws of the United States, and (iv) banks authorized, after July 1, 1995, to establish and operate one or more branches in the Commonwealth under Article 6 (§ 6.2-836 et seq.) or Article 7 (§ 6.2-849 et seq.) of this chapter, shall engage in the banking business in the Commonwealth. No foreign corporation, except as permitted in Chapter 7 (§ 6.2-700 et seq.), shall engage in a banking business in the Commonwealth.

B. Nothing in this chapter shall prevent:

1. An individual from qualifying and acting as trustee, personal representative, guardian, conservator, committee or in any other fiduciary capacity;

2. Any person from (i) lending money on real estate and personal security or collateral, (ii) guaranteeing the payment of bonds, notes, bills and other obligations, or (iii) purchasing or selling stocks and bonds;

3. Any bank organized under the laws of the Commonwealth from qualifying and acting in another state as trustee, personal representative, guardian of a minor, conservator, or committee or in any other fiduciary capacity, when permitted so to do by the laws of such other state; or

4. An incorporated association that is authorized to sell burial association group life insurance certificates in the Commonwealth, as described in the definition of limited burial insurance authority in § 38.2-1800, the principal purpose of which is to assist its members in (i) financial planning for their funerals and burials and (ii) obtaining insurance for the payment, in whole or in part, for funeral, burial, and related expenses, from serving as trustee of a trust established pursuant to § 54.1-2822.

C. Nothing in this section shall be construed:

1. To prevent banks organized in the Commonwealth and chartered under the laws of the United States from transacting business in the Commonwealth; or

2. To prevent a real estate broker as defined in § 54.1-2100 from owning or operating a bank provided that the requirements of this chapter are met.

Code 1950, § 6-9; 1966, c. 584, § 6.1-5; 1985, c. 544; 1995, c. 301; 1997, c. 801; 1999, c. 835; 2003, cc. 536, 558, 910; 2007, c. 621; 2010, c. 794.

§ 6.2-804. Amendment of powers of state banks by regulation of the Commission.

A. In addition to the powers specifically granted to banks by the provisions of this chapter, the Commission may by regulation amend the powers of state banks so as to allow such state banks to engage in any activity in which a bank subject to the jurisdiction of the federal government may be authorized by federal legislation or regulation to engage.

B. The Commission, by regulation, may specify the activities that are permitted to be conducted at a location that is not authorized as a branch under § 6.2-831, in order to allow a state bank to engage in any activity in which a bank subject to the jurisdiction of the federal government may engage at a location other than a branch.

C. Regulations authorized by this section shall be adopted as provided in the Commission's Rules.

1968, c. 325, § 6.1-5.1; 1975, c. 81; 1987, c. 556; 1997, c. 111; 2010, c. 794.

§ 6.2-805. Commission authorized to confer on state banks power to make charges comparable to those permitted to national banking associations.

In addition to the permissible interest rates and charges that banks specifically, and lenders generally, are granted the power to charge by this title, the Commission may, by order, from time to time confer upon state banks the power to take, receive, reserve, and charge on any loan or discount made, at a rate of one per centum in excess of the discount rate on 90-day commercial paper in effect at the Federal Reserve Bank for the fifth Federal Reserve District. The Commission may thereby confer upon state banks the power to make charges that are comparable to those permitted under any federal statute or regulation to any national banking association.

1975, c. 80, § 6.1-5.2; 2010, c. 794.

§ 6.2-806. Saturday closing of banks.

Any bank, including national banking associations and federal reserve banks, may permit any one or more or all of its offices to remain closed on any one or more or all Saturdays, as the bank, by resolution of its board of directors, may from time to time determine. Any Saturday on which an office of a bank remains closed, as herein permitted, shall constitute a legal holiday as to such office. Any act authorized, required or permitted to be performed at, by or with respect to any such office on a Saturday on which the office is so closed may be performed on the next succeeding business day. No liability or loss of rights of any kind shall result from such delay.

Code 1950, § 2-20.1; 1952, c. 56; 1954, c. 273; 1956, cc. 38, 108, 366; 1958, c. 103; 1959, Ex. Sess., cc. 11, 65, 66; 1960, cc. 24, 588; 1962, c. 2; 1966, c. 677, § 2.1-23; 2001, c. 844, § 6.1-5.1; 2010, c. 794.

§ 6.2-807. Discoverability or admissibility of compliance review committee documents.

A. As used in this section, "compliance review committee" means a committee appointed by the board of directors of a bank for the purpose of evaluating and improving the bank's compliance with federal and state laws and adherence to its own established ethical and financial standards, and includes any other person when that person acts in an investigatory capacity at the direction of a compliance review committee.

B. Any records, reports, or other documents created by a compliance review committee are confidential and shall not be discoverable or admissible in evidence in any civil action unless, upon motion, the trial court determines in its discretion that there has been an abuse of the provisions of this section.

C. Any records, reports, or other documents produced by a compliance review committee and delivered to a federal or state governmental agency remain confidential and shall not be discoverable or admissible in evidence in any civil action, except to the extent that applicable law provides that such records, reports or other documents are not protected from disclosure.

D. In no event shall the existence of or any action by a compliance review committee serve as a basis or justification for delay of, or limit upon, the discovery process set forth in state or federal rules.

E. The work product created by any person acting in an investigatory capacity at the direction of a compliance review committee prior to his participation in the work of the compliance review committee or at the direction of the compliance review committee shall be subject to the rules governing discovery in accordance with the Rules of the Virginia Supreme Court.

F. This section shall not be construed to limit the discovery or admissibility:

1. In any civil action of any records, reports or other documents that are not created by a compliance review committee; or

2. Of any factual information which may be reviewed by a compliance review committee.

1994, c. 201, §§ 6.1-2.16, 6.1-2.17, 6.1-2.18; 2010, c. 794.