Virginia Law

Article 12. Examinations and Reports.

The Commission, as often as it deems necessary in the public interest, shall examine or cause to be examined each bank incorporated under the laws of, and doing business in, the Commonwealth. Such examination shall be conducted at least once in every three-year period.

Code 1950, § 6-106; 1966, c. 584, § 6.1-84; 1976, c. 658; 1996, c. 80; 2010, c. 794.

A. As used in this section, "affiliate" of any bank means any entity (i) of which such bank, 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 bank who own or control either a majority of the shares of such bank or more than 50 percent of the number of shares voted for the election of directors of such bank at the preceding election, or by trustees for the benefit of the shareholders of any such bank, or (iii) of which a majority of the directors, trustees, or other persons exercising similar functions are directors of such bank.

B. The Commission, in connection with the examination of any bank, may make or cause to be made such examination of the affiliates of the bank as shall be necessary to ascertain the financial condition of the bank and to disclose fully the relations between the bank and its affiliates and the effect of such relations upon the affairs of the bank.

Code 1950, § 6-107; 1966, c. 584, § 6.1-85; 2010, c. 794.

The Commission, when (i) written application made to it by the board of directors or by the stockholders representing two-fifths of the total outstanding capital stock of any bank 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 bank, shall make or cause to be made a special examination of the bank. All expenses incident to such special examination may be charged to the bank so examined and shall be paid by the bank so charged.

Code 1950, § 6-108; 1966, c. 584, § 6.1-86; 1976, c. 658; 2010, c. 794.

A. Upon the making of any examination under the provisions of § 6.2-898, 6.2-899, or 6.2-900, the officers, directors and employees of the bank being examined or the affiliate of which is being examined, upon the demand of the person or officer designated to make such examination shall:

1. Give to such examiner full access to all the money, books, papers, notes, bills, and other evidences of debts due to the bank;

2. Disclose fully and accurately all indebtedness and liability thereof; and

3. Furnish all information that the examiner may deem necessary to a full investigation into the affairs of such bank.

B. The examiner shall have the right to examine, under oath, any and all of the directors, officers, clerks, and employees in any manner connected with the operation of any bank touching any matter or thing pertaining to the examination, and for that purpose shall have authority to administer oaths to them.

C. When any bank shall utilize an independent data processing service, the operations of such independent data processing firm and its records pertaining to any bank being examined shall be open to inspection by examiners. Access to such operations and information shall be a prerequisite to the use of such independent data processing services by any bank regulated hereunder.

D. The Commission may impose a civil penalty of not less than $25 but not exceeding $100 per day for each day of noncompliance upon any officer of any bank who it determines, in proceedings commenced in accordance with the Commission's Rules, has refused to give any examiner the information, or refuse to be sworn, as required by this section.

Code 1950, §§ 6-109, 6-128; 1966, c. 584, §§ 6.1-87, 6.1-114; 1974, c. 665; 1976, c. 658; 1988, c. 555; 1997, c. 142; 2010, c. 794.

No prior or advance notice of any examination shall be given any bank or any of its directors, officers, or employees unless the Bureau determines that notice will facilitate and not diminish the effectiveness of an examination.

Code 1950, § 6-110; 1966, c. 584, § 6.1-88; 1976, c. 658; 1978, c. 14; 2010, c. 794.

If it appears to the Commission, from an examination of any bank, that any of the bank's assets are valued by the bank at an amount in excess of their fair and reasonable value, the Commission, after the bank has been given an opportunity for a hearing before the Commission, may require the bank to revalue the assets on the basis of their fair and reasonable value.

Code 1950, § 6-111; 1966, c. 584, § 6.1-89; 2010, c. 794.

A. When any bank is examined under the provisions of this article, a copy of the report of the examination, at any time after its completion, shall be open for inspection by the officers and directors of the bank. No other copies of the report of examination shall be made except as necessary for the inspection. The copies of the report made for officers and directors of the bank shall not be removed from the premises of the bank. The other such copies shall be destroyed after the inspection has been completed. The original examination report shall be retained in the records of the Bureau.

B. Upon resolution of the board of directors of the bank, the report, at any time during the established period, may be inspected in the bank by the officers and directors of any other bank or by any other person designated in the resolution.

Code 1950, § 6-112; 1966, c. 584, § 6.1-90; 1976, c. 658; 1992, c. 224; 2010, c. 794.

Each official communication directed by the Commission or any state bank examiner to any bank, or to any officer thereof, relating to an examination or investigation made or caused to be made by the Commission, or containing suggestions or recommendations as to the conduct of the bank, shall, if required by the Commission or examiner submitting the communication, be submitted by the officer or director of the bank receiving it, to the executive committee or board of directors of the bank. The communication shall be duly noted in the minutes of the meeting of the board or executive committee.

Code 1950, § 6-119; 1966, c. 584, § 6.1-91; 2010, c. 794.

A. If upon the examination of any bank, the Commission ascertains that the banking laws of the Commonwealth are not being fully observed, that any irregularities are being practiced, or that the bank's capital has been or is in danger of being impaired, the Commission shall give immediate notice thereof to the officers and directors of the bank. In addition, if it is deemed necessary in order to conserve the assets of such bank or to protect the interests of depositors and creditors thereof, the Commission may do any one or more of the following:

1. Temporarily suspend the right of such bank to receive any further deposits;

2. Temporarily close such bank, for a period not exceeding 60 days, which period may be further extended for one or more 60-day periods as the Commission may deem necessary;

3. Require the officers and directors of the bank to liquidate its outstanding loans insofar as shall be required;

4. Require that any impairment of the capital stock be made good;

5. Require that any irregularities be promptly corrected;

6. Require the bank to make reports, daily or at such other times as may be required to the Commission, as to the results achieved in carrying out the orders of the Commission; and

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

B. If any bank fails or refuses to comply with any such order of the Commission, or if the Commission shall determine that a receiver for any such bank should be appointed, the Commission may apply for the appointment of a receiver to take charge of the business affairs and assets of the bank and to wind up its affairs as provided in this chapter.

Code 1950, § 6-113; 1966, c. 584, § 6.1-92; 1976, c. 658; 2010, c. 794.

A. Every bank shall make to the Commission statements of its financial condition at such times as the Commission may require. Such statements shall be (i) made in accordance with forms prescribed by the Commission, (ii) certified under oath by the president or cashier of the bank, or, if there is no cashier, by the treasurer, and (iii) attested by at least three of its directors.

B. The Commission shall require all banks doing business in the Commonwealth to make the statements described in subsection A, and at the time prescribed. The Commission shall prepare such forms as may be necessary to carry out the provisions of this section.

C. Whenever the Commission calls for statements, it shall forward to each such bank two forms, one of which, after being properly filled out and certified as required by subsection A, shall be returned to the Commission within a time prescribed by the Commission. The other form, filled out in like manner, shall be filed with the records of the bank. The Commission shall allow banks to submit such statements electronically. Any bank that submits such statements electronically shall maintain a copy of the statement with the required certified signatures affixed.

D. The Commission may require any bank to prepare and submit such other reports and material as it deems necessary to protect and promote the public interest.

E. The Commission may impose a civil penalty of not less than $100 but not exceeding $1,000 per day for each day of noncompliance upon any bank that it determines, in proceedings commenced in accordance with the Commission's Rules, has failed to comply with any of the provisions of this section, for a period of longer than 30 days, after being called upon by the Commission for a statement, or to do such other act as is herein provided.

Code 1950, §§ 6-105, 6-128; 1966, c. 584, §§ 6.1-93, 6.1-114; 1974, c. 665; 1976, c. 658; 1977, c. 257; 1988, c. 555; 1995, c. 561; 1997, cc. 142, 407; 2010, c. 794.

A. For the purpose of defraying the expenses of supervision and regulation of banks, the Commission shall assess against each bank an annual fee. A bank's annual fee shall be calculated according to a schedule set by the Commission. The schedule shall bear a reasonable relationship to the assets of various individual banks and to other factors relating to their respective costs for supervision, regulation, and examination.

B. The Commission shall also charge additional fees:

1. Of $330 per day per examiner during examinations for the supervision and regulation of trust departments;

2. Of $10,000 for investigating an application for a certificate of authority pursuant to § 6.2-816;

3. Of $1,800 for investigating an application for authority to establish a branch pursuant to § 6.2-831 or a facility pursuant to § 6.2-835;

4. Of $7,500 for investigating an application of merger. The Commission shall not be entitled to any further fees for investigating any application to retain existing branches of the applying banks as branches of the merged bank;

5. Of $1,000 for investigating an application for authority to change the location of an existing bank or branch bank; and

6. Of $2,000 for investigating an application for authority to exercise trust powers.

C. Notwithstanding the designation of the fees set forth in subdivisions B 1 through B 6, the Commission may reduce by regulation or order any fee, 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, § 6-122; 1956, c. 176; 1966, c. 584, § 6.1-94; 1972, c. 195; 1973, c. 401; 1974, c. 184; 1976, cc. 554, 658; 1981, c. 520; 1982, c. 455; 1987, c. 172; 1992, c. 283; 1997, c. 141; 1998, c. 19; 2010, c. 794.

A. Except as provided in subsections B and C, all fees and charges assessed pursuant to § 6.2-908 shall be assessed against each bank by the Commission on or before July 1 of each year and shall be paid into the state treasury on or before the following July 31. The Commission shall mail the assessment to each bank on or before July 1 of each year.

B. Fees for investigating applications for a certificate of authority shall be paid before the investigation is made.

C. Fees for the examination of trust departments shall be paid into the state treasury within 30 days after the Commission notifies the bank of the amount of the fee.

D. All fees so assessed shall be a lien on the assets of the bank, and if not paid when due may be recovered in any court of the county or city in which such bank or institution is located having original jurisdiction of civil cases on motion of and in the name of the Commission.

Code 1950, § 6-123; 1956, c. 176; 1966, c. 584, § 6.1-95; 1984, c. 343; 2010, c. 794.

If the Commission is of the opinion that the amounts of the several charges and fees set forth in § 6.2-908 will produce more revenue than is required to cover the costs and expenses to be paid from such charges and fees, the Commission, in its discretion, may reduce on a pro rata basis the amount of such charges and fees.

Code 1950, § 6-124; 1966, c. 584, § 6.1-96; 2010, c. 794.

Every national bank that is now or may be designated as a state depository, so long as it acts as such, shall be subject to the examination provided for state banks, when, in the opinion of the State Treasurer, such examination is necessary for the protection of the Commonwealth. However, no fees or charges shall be imposed upon national banks for such examinations.

Code 1950, § 6-127; 1966, c. 584, § 6.1-99; 2010, c. 794.