Virginia Law

Article 2. Incorporation and Powers.

A. A bank may be incorporated under the Virginia Stock Corporation Act (§ 13.1-601 et seq.), but need not comply with the provisions of subsection A of § 13.1-630.

B. Except as otherwise provided in this chapter, a bank shall:

1. Have all the powers conferred on corporations, and be subject to all restrictions imposed on corporations, by the Virginia Stock Corporation Act;

2. Not issue its shares for any consideration except money at least equal in amount to the par value of its shares; and

3. Not issue no-par stock.

Code 1950, § 6-10; 1956, c. 433; 1966, c. 584, § 6.1-6; 1987, c. 556; 2010, c. 794.

A. A bank may be incorporated as provided in § 6.2-808 for the purpose of becoming a bankers' bank.

B. Except as specifically provided in this section or by regulation or order of the Commission, a bankers' bank shall be vested with all of the powers and subject to all of the restrictions imposed upon a bank.

C. Notwithstanding any other provision in this title to the contrary, a bankers' bank shall only accept deposits from or make loans to (i) a financial institution which has or is eligible for insurance of deposits by a federal agency, (ii) a bank in organization that has applied for insurance of deposits by a federal agency, (iii) a financial institution holding company as defined in § 6.2-700 or a savings institution holding company as defined in § 6.2-1100 owning an entity described in clause (i) or (ii), (iv) the officers, directors and employees of any such financial institution, bank in organization or holding company, (v) any person referred to a bankers' bank by a financial institution or by a bank in organization that has applied for insurance of deposits by a federal agency, or (vi), with the prior approval of the Commissioner and subject to such conditions as the Commissioner may impose, other persons.

D. A bankers' bank may form a bank holding company upon compliance with the provisions of Chapter 7 (§ 6.2-700 et seq.) and any applicable federal law.

E. A bankers' bank may purchase investments or securities of governments or private corporations which are traded on the open market such as are authorized to any other bank organized under the provisions of this chapter.

1989, c. 650, § 6.1-6.1; 1996, c. 218; 2006, c. 633; 2010, c. 794.

The powers, privileges, duties and restrictions conferred and imposed upon any bank existing and doing business under the laws of the Commonwealth are abridged, enlarged or modified, as each particular case may require, to conform to the provisions of this chapter.

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

Any bank that has been or is hereafter incorporated under the laws of the Commonwealth, at its election, may become a member bank of the Federal Reserve Bank System, subject to the provisions of the Federal Reserve Act (P.L. 63-43, 38 Stat. 251) as it may be amended to permit a bank to become a member, or the Federal Home Loan Bank System, subject to the provisions of the Federal Home Loan Bank Act (P.L. 72-304, 47 Stat. 785) as it may be amended to permit a bank to become a member, or both. Upon becoming a member of either system, the bank shall be vested with all powers conferred upon state member banks of such systems by the terms of such acts. The powers shall be exercised subject to all restrictions and limitations imposed by the Federal Reserve Act or the Federal Home Loan Bank Act, or by regulations of the Federal Reserve Board or the Federal Housing Finance Board, respectively, adopted pursuant to such acts. The right is expressly reserved to revoke or amend the powers conferred pursuant to this section. The Commission may disclose to the Federal Reserve Board, or to examiners duly appointed by it, all information in reference to the affairs of any bank which has become, or desires to become a member of the system.

Code 1950, § 6-24; 1966, c. 584, § 6.1-8; 1993, c. 182; 2010, c. 794.

A. As used in this section, "insured bank" has the meaning assigned to it in § 12-B of the Federal Reserve Act (12 U.S.C. § 1813 (h)), as amended.

B. All records, reports, reports of examinations, and information relating to insured banks shall be open to the inspection of, and made available to, the officers and duly accredited agents of the Federal Deposit Insurance Corporation so long as like records, reports, and information in the possession or under the control of the Federal Deposit Insurance Corporation are, by federal statute, made available and subject to inspection by the Commission.

Code 1950, § 6-25; 1966, c. 584, § 6.1-9; 2010, c. 794.

A bank may contract with the principal of any elementary or secondary school, if authorized to do so by the school board in any locality where the bank has a location, for the bank to participate in a school thrift or savings plan. A participating bank may accept deposits at the school either by its own collector or by any representative of the school who becomes the agent of the bank for such purpose.

Code 1950, § 6-23.1; 1954, c. 160; 1966, c. 584, § 6.1-10; 2010, c. 794.

A. Every bank shall have power to exercise, by its board of directors or duly authorized officers or agents, subject to law, all incidental powers that are necessary to carry on the business of banking, by:

1. Discounting and negotiating bills of exchange, promissory notes, drafts, and other evidences of debt;

2. Receiving deposits;

3. Buying and selling exchange, coin, and bullion;

4. Loaning money on real property, personal property, security, or collateral;

5. Guaranteeing the payment of bonds, bills, notes and other obligations that have six months or fewer until maturity;

6. Rediscounting paper;

7. Purchasing and selling bonds;

8. Acting as agent in the sale of insurance and annuities;

9. Dealing in or making a market in securities;

10. Providing financial, investment, or economic advisory services;

11. Providing other products and services deemed by the Commission to be financial in nature;

12. Engaging directly in those activities in which a controlled subsidiary corporation of a bank is authorized to engage pursuant to §§ 6.2-885 and 6.2-888 in accordance with the requirements of such sections, provided that a bank, or a controlled subsidiary corporation of a bank, that transacts business as a real estate brokerage firm shall be subject to the provisions of § 6.2-888;

13. Establishing an international banking facility, either as a division of the bank or as a separate corporate entity under § 6.2-885; and

14. Utilizing armored vehicles or other vehicles to provide adequate protection for the funds transported for receipt of deposits of its customers or to deliver currency and coin.

B. In addition to the permissible business authorized by subsection A, the Commission may, upon the Commission's finding that an emergency exists, confer by order upon banks such temporary powers as the Commission may determine to be in the public interest. Such powers as are conferred may be (i) authorized for a limited period of time, (ii) granted selectively to fewer than all banks, and (iii) revoked by further order of the Commission.

Code 1950, § 6-23; 1966, c. 584, § 6.1-11; 1968, c. 727, § 6.1-41.1; 1978, c. 683, § 6.1-11.1, c. 453, § 6.1-11.2; 1987, c. 352; 2005, c. 320; 2010, c. 794.

Every bank doing business in the Commonwealth is authorized temporarily to suspend its usual business during a period of actual or threatened enemy attack, civil insurrection or riot, affecting the community in which such institution is doing business or other emergency justifying temporary closing such as fire, flood, or hurricane.

Code 1950, § 6-30; 1966, c. 584, § 6.1-12; 1970, c. 15; 2010, c. 794.

A. Before any bank shall begin business it shall obtain from the Commission a certificate of authority authorizing it to do so. Prior to the issuance of such certificate, the Commission shall ascertain:

1. That all of the provisions of law have been complied with;

2. That financially responsible individuals have subscribed for capital stock and surplus in an amount deemed by the Commission to be sufficient to warrant successful operation. The amount of capital stock shall not be less than $2 million, except that the capital stock shall not be less than $500,000 for any trust company incorporated for the sole purpose of exercising fiduciary powers authorized by the provisions of Article 3 (§ 6.2-819 et seq.) of this chapter. The minimum capital stock requirement under this subdivision shall apply when a bank is being organized to begin business;

3. That oaths of all the directors have been taken and filed in accordance with the provisions of § 6.2-863;

4. That, in its opinion, the public interest will be served by banking facilities or additional banking facilities, as the case may be, in the community where the bank is proposed. The addition of such facilities shall be deemed in the public interest if, based on all relevant evidence and information, advantages such as, but not limited to, increased competition, additional convenience, or gains in efficiency outweigh possible adverse effects such as, but not limited to, diminished or unfair competition, undue concentration of resources, conflicts of interests, or unsafe or unsound practices;

5. That the corporation is formed for no other reason than a legitimate banking business;

6. That the moral fitness, financial responsibility, and business qualifications of individuals named as officers and directors of the proposed bank are sufficient to command the confidence of the community where the bank is proposed;

7. That the bank's deposits are to be insured by a federal agency up to the limits of the insurance provided thereby; and

8. Anything else deemed pertinent.

B. The minimum capital stock requirement specified in subdivision A 2 shall not apply when this section is referred to or used in connection with:

1. The conversion of an operating savings institution or national bank to a state bank;

2. The reorganization of an operating bank under a holding company;

3. The issuance of a certificate of authority to a holding company to facilitate its merger with and into its subsidiary bank;

4. The issuance of a certificate of authority to a holding company to facilitate the merger of its subsidiary bank with and into the holding company;

5. The issuance of a certificate of authority to a holding company to facilitate the merger of both the holding company and its subsidiary bank with and into a newly formed entity; or

6. The issuance of a certificate of authority to a resulting bank following a merger described in subdivision B 3, B 4, or B 5, provided that such merger does not result in or involve a change of control as defined in § 6.2-701.

Code 1950, § 6-31; 1966, c. 584, § 6.1-13; 1973, c. 454; 1976, c. 658; 1979, c. 57; 1983, c. 193; 1989, c. 751; 1989, Sp. Sess., cc. 4, 7; 1992, c. 460; 1996, c. 26; 1998, c. 18; 2010, c. 794; 2014, cc. 221, 372.

A. Subscriptions to the capital stock of a bank shall be paid in money at not less than par. No bank shall begin business until the amounts specified in its certificate of authority to commence business have been received by the bank.

B. All money received for subscriptions to or for purchases of stock of a bank before it opens for business shall be deposited in an escrow account in an insured financial institution or invested in United States government obligations, under the joint control of two organizing directors of the bank. Such funds, together with any income thereon, shall be remitted to the bank on the day it opens for business. If the bank is denied a certificate of authority or is refused insurance of accounts, or it otherwise is determined that the bank will not open for business, such funds, after payment of any amount owing for expenses in connection with such attempted organization, including reasonable consulting fees, attorney fees, salaries, filing fees, and other expenses, shall be refunded to subscribers or shareholders.

C. The requirement that capital stock be paid in money shall not be construed to prohibit the establishment, as otherwise authorized by law, of stock option plans, stock purchase plans, and restricted stock award plans, and the issuance of stock pursuant to such plans. Such plans shall be established only after the bank has opened for business, and shall be approved by a majority vote of the bank's shareholders. In no event shall any stock option be granted at a price which is less than 100 percent of the fair market value per share of the stock.

Code 1950, § 6-34; 1964, c. 58; 1966, c. 584, § 6.1-14; 1980, c. 659; 2010, c. 794; 2011, c. 240; 2019, cc. 253, 254.

Repealed by Acts 2019, cc. 253 and 254, cl. 2, effective July 1, 2019.

A. As used in this section, unless the context requires a different meaning:

"Bank" has the same meaning as provided in § 6.2-800.

"Custody services" means the role of a bank in the safekeeping and custody of various customer assets.

"Self-assessment" has the same meaning as provided in § 6.2-947.

"Virtual currency" means an electronic representation of value intended to be used as a medium of exchange, unit of account, or store of value. "Virtual currency" does not exist in a physical form; it is intangible and exists only on the blockchain or distributed ledger associated with a particular virtual currency. The owner of virtual currency holds cryptographic keys associated with the specific unit of virtual currency in a digital wallet, which allows the rightful owner of the virtual currency to access and utilize it.

B. A bank may provide its customers with virtual currency custody services so long as the bank has adequate protocols in place to effectively manage risks and comply with applicable laws. Prior to a bank offering virtual currency custody services, the bank shall carefully examine the risks involved in offering such services through a methodical self-assessment process. If the bank decides to move forward with offering such services, the bank shall:

1. Implement effective risk management systems and controls to measure, monitor, and control relevant risks associated with custody of digital assets such as virtual currency;

2. Confirm that it has adequate insurance coverage for such services; and

3. Maintain a service provider oversight program, to the extent that the bank engages with a service provider to provide virtual currency custody services, to address risks to service provider relationships as a result of engaging in virtual currency custody services.

C. A bank may provide virtual currency custody services in either a nonfiduciary or fiduciary capacity.

In providing such services in a nonfiduciary capacity, the bank shall act as a bailee, taking possession of the customer's asset for safekeeping while legal title remains with the customer, meaning that the customer retains direct control over the keys associated with their virtual currency.

In providing such services in a fiduciary capacity, a bank is required to possess trust powers as described in § 6.2-819 and have a trust department pursuant to § 6.2-821. Acting in a fiduciary capacity, the bank shall require customers to transfer their virtual currencies to the control of the bank by creating new private keys to be held by the bank. In its fiduciary capacity, a bank shall have authority to manage virtual currency assets as it would any other type of asset held in such capacity.

2022, c. 623.