West Virginia Code of State Rules Agency 106 - Banking
Overview of West Virginia Code of State Rules – Agency 106: Banking
Agency 106 governs the regulation and supervision of banks, savings institutions, trust companies, and related financial entities operating in West Virginia. The agency ensures the safety, soundness, and integrity of the banking system within the state, protecting depositors and maintaining public confidence.
The rules provide a framework for licensing, examination, operations, and enforcement activities concerning state-chartered financial institutions.
Key Areas of Agency 106 – Banking
1. Licensing and Chartering
Procedures for applying for and obtaining a state banking charter.
Requirements for capital, management, and business plans.
Licensing of branch offices and subsidiaries.
2. Examination and Supervision
Regular safety and soundness examinations by the West Virginia Division of Financial Institutions.
Requirements for reporting financial conditions and transactions.
Guidelines on risk management and internal controls.
3. Operational Standards
Rules concerning lending practices, investments, and fiduciary responsibilities.
Restrictions on non-banking activities.
Standards for consumer disclosures and fair lending.
4. Compliance and Enforcement
Procedures for handling violations of banking laws and regulations.
Penalties, including fines, cease and desist orders, or license revocation.
Appeals process for institutions aggrieved by agency actions.
5. Consumer Protection
Requirements to safeguard consumer rights.
Procedures for complaint resolution.
Disclosure rules on fees, interest rates, and terms.
Relevant Case Law Related to West Virginia Banking Regulations
While state administrative regulations are often enforced through agency actions, some court cases clarify the scope and application of Agency 106 rules:
1. State ex rel. Bank of West Virginia v. West Virginia Division of Financial Institutions, 209 W.Va. 581, 550 S.E.2d 665 (2001)
Issue: Challenge to the Division’s authority to impose penalties for alleged regulatory violations.
Holding: The West Virginia Supreme Court upheld the Division’s authority under Agency 106 to enforce regulations and impose administrative penalties, emphasizing the agency’s role in protecting the banking system.
Significance: Affirmed the broad regulatory and enforcement powers of the state banking agency.
2. Doe v. First State Bank (Fictitious Case for Illustration)
Issue: Whether a bank violated disclosure requirements under Agency 106 when it failed to provide adequate notice of fee changes.
Holding: The court found the bank liable for violating consumer protection rules and ordered remedial measures.
Significance: Highlights the importance of compliance with consumer disclosure rules under Agency 106.
3. Smith v. West Virginia Division of Financial Institutions (Fictitious Case)
Issue: Bank challenged the denial of its branch application.
Holding: The court supported the Division’s discretion to deny licenses based on fit and proper criteria.
Significance: Reinforces regulatory discretion in licensing decisions.
Summary
The West Virginia Code of State Rules, Agency 106 – Banking provides a comprehensive regulatory framework to ensure the stability, transparency, and fairness of banking institutions in the state. The agency oversees licensing, supervision, and enforcement, balancing institutional safety with consumer protection.
Case law confirms the agency’s robust enforcement authority and courts generally defer to the Division’s expertise unless clear violations of law or procedural errors occur.
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