10VAC5-130 Virginia Financial Institution Holding Companies

REGULATIONS

Vol. 28 Iss. 20 - June 04, 2012

TITLE 10. FINANCE AND FINANCIAL INSTITUTIONS

STATE CORPORATION COMMISSION

Chapter 130

Final Regulation

REGISTRAR'S NOTICE: The following amendments are exempt from the Virginia Administrative Process Act pursuant to § 2.2-4002 C of the Code of Virginia, which provides that minor changes to regulations published in the Virginia Administrative Code under the Virginia Register Act, Chapter 41 (§ 2.2-4100 et seq.) of Title 2.2 of the Code of Virginia, made by the Virginia Code Commission pursuant to § 30-150, shall be exempt from the provisions of the Virginia Administrative Process Act.

Titles of Regulations: 10VAC5-50. Industrial Loan Associations (amending 10VAC5-50-20, 10VAC5-50-30).

10VAC5-60. Consumer Finance Companies (amending 10VAC5-60-20, 10VAC5-60-30, 10VAC5-60-60).

10VAC5-80. Real Estate Settlement Agent Rules (amending 10VAC5-80-10, 10VAC5-80-20, 10VAC5-80-40).

10VAC5-110. Credit Counseling (amending 10VAC5-110-10, 10VAC5-110-30).

10VAC5-120. Money Order Sellers and Money Transmitters (amending 10VAC5-120-10, 10VAC5-120-50).

10VAC5-130. Virginia Financial Institution Holding Companies (amending 10VAC5-130-10, 10VAC5-130-20).

Statutory Authority:

10VAC5-50: § 6.2-1404 of the Code of Virginia.

10VAC5-60: § 6.2-1535 of the Code of Virginia.

10VAC5-80: § 55-525.20 of the Code of Virginia.

10VAC5-110: § 6.2-2013 of the Code of Virginia.

10VAC5-120: § 6.2-1913 of the Code of Virginia.

10VAC5-130: § 6.2-713 of the Code of Virginia.

Effective Date: June 1, 2012.

Agency Contact: Todd Rose, Senior Counsel, General Counsel's Office, State Corporation Commission, P.O. Box 640, Richmond, VA 23218, telephone [phone], FAX [phone], or email [e-mail].

Summary:

Several chapters of Title 10 of the Virginia Administrative Code pertaining to Finance and Financial Institutions are updated to replace references to Title 6.1 of the Code of Virginia with references to Title 6.2 of the Code of Virginia to reflect the recodification of Title 6.1 of the Code of Virginia in the fall of 2010.

10VAC5-50-20. Surety bond upon all active officers.

A. Every industrial loan association as defined in Chapter 5 14 (§ 6.1-227 6.2-1400 et seq.) of Title 6.1 6.2 of the Code of Virginia shall obtain and keep in force upon all its active officers a bond or bonds in a surety company authorized to do business in this Commonwealth in the penalty of whatever amount is deemed appropriate by its board of directors_;.

B. No bond given pursuant to this section may be cancelled without first giving the Commissioner of Financial Institutions 10 days' written notice of such cancellation, and every such bond shall contain a provision to that effect.

10VAC5-50-30. Schedule prescribing annual fees paid for examination, supervision, and regulation of industrial loan associations.

Pursuant to the provision of Section 6.1-237.4 § 6.2-1414 of the Code of Virginia, the State Corporation Commission hereby promulgates the following schedule prescribing the annual fee to be paid by every industrial loan association for its supervision and regulation, as follows:

SCHEDULE
Asset Interval		Fee
Assets Exceed-ing	But Not Exceed-ing	Pay This Amount	Plus		Assets Exceed-ing
$0	$2 million	$1,200	0
2 million	5 million	1,200	.000900	x	$2 million
5 million	25 million	3,900	.000120	x	5 million
25 million		6,300	.000060	x	25 million

The assessment calculation shall be rounded down to the nearest whole dollar amount. The assessment shall be computed on the basis of the association's total assets as shown by its last Consolidated Report of Condition made as of the close of business for the preceding calendar year as filed with the Bureau of Financial Institutions.

10VAC5-60-20. Time limit for compliance.

Licensees shall have 30 days after the date a loan is paid in full, or a judgment is satisfied, or a borrower's obligation is otherwise terminated to accomplish the acts required by § 6.1-282(4) 6.2-1524 G of the Code of Virginia.

Failure so to comply within that time limit shall constitute a violation of said subdivision the subsection, which violation will result in penalties as provided by law.

10VAC5-60-30. Allotment program loans; applicability; definitions; rules.

A. This chapter applies to all licensees under the Consumer Finance Act (the Act) Chapter 15 (§ 6.2-1500 et seq.) of Title 6.2 of the Code of Virginia making any loan under the Act Chapter 15 of Title 6.2 of the Code of Virginia in connection with which loan a borrower authorizes an allotment and automatic disbursement from an account for the purpose of making any payments required by the loan agreement. Such a loan is referred to herein as an "allotment program loan."

B. As used in this chapter the following terms shall have the following meanings:

"Allotment" means payment of any part of a borrower's military pay to a financial institution as permitted under federal law and regulations.

"Automatic disbursement" means payment, by a financial institution to a licensee, of funds received pursuant to an allotment.

"Borrower" means any person in the United States military service obligated, directly or contingently, to repay a loan made by a licensee.

"Licensee" has the meaning set forth in § 6.1-245 6.2-1500 of the Code of Virginia.

C.1. No licensee shall require any allotment or automatic disbursement, or a borrower's execution of the Allotment Disclosure Form appended to this chapter, as a condition to making a loan under the Act Chapter 15 (§ 6.2-1500 et seq.) of Title 6.2 of the Code of Virginia.

2. A licensee making an allotment program loan shall bear all costs and expenses incident to the allotment and automatic disbursement.

3. When making an allotment program loan, a licensee shall use the Allotment Disclosure Form appended to this chapter. The form shall be printed or typed without alteration on one side of a paper separate from all other papers or documents obtained by the licensee in type of size not less than that known as 12 point. All blanks on the form, other than those blanks to be filled in with the name of the licensee shall be filled in by the borrower and the filled-in form shall be signed and dated by the borrower. The completed form shall be kept in the separate loan file maintained with respect to the loan for the period specified in § 6.1-300 6.2-1533 of the Code of Virginia.

4. No licensee making an allotment program loan shall withhold any part of the proceeds of the loan to be applied to any payment required under the loan.

Attachment: Allotment Disclosure Form

ALLOTMENT DISCLOSURE FORM

1. I, (APPLICANT'S NAME), intend to apply for an allotment of my military pay in the amount of $(AMOUNT) per month to an account in my name at (FINANCIAL INSTITUTION).

2. I also intend to authorize disbursement of funds from my account at (FINANCIAL INSTITUTION) in the amount of $ (AMOUNT) per month for the purpose of making monthly payments on my loan with (FINANCE COMPANY).

3. I am authorizing the allotment and automatic disbursement voluntarily and solely for my own convenience, and acknowledge that (FINANCE COMPANY) has not required me to authorize the allotment or automatic disbursement, or to sign this form, as a condition to making me a loan.

4. I understand that I can cancel the allotment and automatic disbursement at any time, and understand that I am not obligated to pay any fee or charge to any person or company, directly or indirectly, for the allotment or automatic disbursement.

	(Applicant's Signature)		(Date)

10VAC5-60-60. Schedule prescribing annual fees paid for examination, supervision, and regulation of consumer finance licenses.

Pursuant to § 6.1-299.1 6.2-1532 of the Code of Virginia, the following schedule sets the fees to be paid annually by consumer finance licensees for their licenses, and to defray the costs of examination, supervision and regulation of licensed consumer finance offices:

Minimum fee - $300 per office open January 1 of the current calendar year.

In addition to the minimum fee, the following fee based on total assets:

SCHEDULE
Total Assets	Fee
Over $300,000 - $750,000	$.85 per $1,000 or fraction thereof
$750,000 - $2,000,000	$.70 per $1,000 or fraction thereof
Over $2,000,000	$.55 per $1,000 or fraction thereof

The annual fee for each licensee will be computed on the basis of its total assets combined with the total assets of all other businesses conducted in any of its licensed offices as of the close of business December 31 of the preceding calendar year. The amounts of such total assets will be derived from the annual reports which § 6.1-301 6.2-1534 of the Code of Virginia requires licensees to file with the Bureau of Financial Institutions on or before the first day of April of each year.

In accordance with § 6.1-299.1 6.2-1532 of the Code of Virginia, annual fees for any given calendar year will be assessed on or before May 1 of that year and must be paid on or before June 1 of that year. Fees are to be assessed using the foregoing schedule for the calendar year which began January 1, 1983. This fee schedule will be in effect until it is amended or revoked by order of the Commission.

10VAC5-80-10. Definitions.

As used in this chapter:

"Affiliate" means a company the majority of the ownership interest in which is held, directly or indirectly, by a company which owns a financial institution.

"Bureau" means the State Corporation Commission Bureau of Financial Institutions.

"Company" includes natural persons and any and all types of organizations and legal entities.

"Financial institution" has the meaning set forth in § 6.1-2.1 6.2-100 of the Code of Virginia, and includes all such financial institutions authorized to do business in Virginia under Virginia or federal law.

"Party to the real estate transaction" (party) and "settlement agent' have the meanings set forth in § 6.1-2.20 55-525.16 of the Code of Virginia.

"Subsidiary" means a company the majority of the ownership interest in which is held, directly or indirectly, by a financial institution.

10VAC5-80-20. Registration with the Virginia State Bar.

All financial institutions, and their subsidiaries and affiliates, acting in the capacity of a settlement agent shall register with the Virginia State Bar in accordance with the provisions of § 6.1-2.26 55-525.30 of the Code of Virginia.

10VAC5-80-40. Escrow accounts and audits.

All funds received by a financial institution or financial institution subsidiary or affiliate, in the company's capacity of settlement agent and intended for distribution in whole or part to others, shall be deposited in a separate escrow account maintained in a bank, savings institution or credit union authorized to conduct business in Virginia. The company shall have the escrow account audited annually as provided in § 6.1-2.21 E 55-525.20 C of the Code of Virginia and conforming to the American Institute of Certified Public Accountants, Statement on Auditing Standards, Special Reports, and shall file a copy of the audit report with the bureau promptly.

10VAC5-110-10. Definitions.

The following words and terms when used in this chapter shall have the following meanings unless the context clearly indicates otherwise:

"Bureau" means the Bureau of Financial Institutions.

"Commissioner" means the Commissioner of Financial Institutions.

"Bureau," "commissioner," "debt Debt management plan," and "licensee" shall have the meanings ascribed to them in § 6.1-363.2 6.2-2000 of the Code of Virginia.

"Reporting period" means the first six months of a calendar year or the last six months of a calendar year, as the case may be.

10VAC5-110-30. Schedule of annual fees for the examination, supervision, and regulation of credit counseling agencies providing debt management plans.

Pursuant to § 6.1-363.14 6.2-2012 of the Code of Virginia, the commission sets the following schedule of annual fees to be paid by persons licensed under Chapter 10.2 20 (§ 6.1-363.2 6.2-2000 et seq.) of Title 6.1 6.2 of the Code of Virginia. The fees are to defray the costs of examination, supervision, and regulation of licensees by the Bureau of Financial Institutions.

SCHEDULE

If a licensee maintained less than 250 debt management plans for Virginia residents as of December 31 of the calendar year preceding the year of assessment, the licensee shall pay an annual fee of $0 plus $4.33 per debt management plan.

If a licensee maintained 250 or more debt management plans for Virginia residents as of December 31 of the calendar year preceding the year of assessment, the licensee shall pay an annual fee of $500 plus $4.33 per debt management plan.

The fee assessed using the above schedule shall be rounded down to the nearest whole dollar.

Fees shall be assessed on or before June 1 for the current calendar year. The fee shall be paid on or before July 1.

The annual report, due March 25 each year, of each licensee provides the basis for its assessment. In cases where a license has been granted between January 1 and March 25, the licensee's initial annual fee shall be $250.

Fees prescribed and assessed by this schedule are apart from, and do not include, the reimbursement for expenses permitted by subsection B of § 6.1-363.14 6.2-2012 of the Code of Virginia.

10VAC5-120-10. Definitions.

The following words and terms, when used in this chapter, shall have the following meaning unless the context clearly indicates otherwise:

"Money order," "money transmission," and "licensee" have the meaning ascribed to them in § 6.1-370 6.2-1900 of the Code of Virginia.

"Reporting period" means a calendar quarter, the first six months of a calendar year, or the last six months of a calendar year, as the case may be.

10VAC5-120-50. Assessment schedule for the examination and supervision of money order sellers and money transmitters.

Pursuant to subsection B of § 6.1-373 6.2-1905 of the Code of Virginia, the commission sets the following schedule for the annual assessment to be paid by persons licensed under Chapter 12 19 (§ 6.1-370 6.2-1900 et seq.) of Title 6.1 6.2 of the Code of Virginia. The assessment defrays the costs of the examination and supervision of licensees by the Bureau of Financial Institutions.

The annual assessment shall be $0.000047 per dollar of money orders sold and money transmitted by a licensee pursuant to Chapter 12 19 (§ 6.1-370 6.2-1900 et seq.) of Title 6.1 6.2 of the Code of Virginia. The assessment shall be based on the dollar volume of business conducted by a licensee, either directly or through its authorized delegates, during the calendar year preceding the year of the assessment.

The amount calculated using the above schedule shall be rounded down to the nearest whole dollar.

Fees shall be assessed on or before August 1 for the current calendar year. The assessment shall be paid by licensees on or before September 1.

The annual report, due April 15 each year, of each licensee provides the basis for its assessment. In cases where a license has been granted between January 1 and April 15 of the year of the assessment, the licensee's initial annual assessment shall be $0.

Fees prescribed and assessed pursuant to this schedule are apart from, and do not include, the following: (i) the annual license renewal fee of $750 authorized by subsection A of § 6.1-373 6.2-1905 of the Code of Virginia and (ii) the reimbursement for expenses authorized by subsection C of § 6.1-373 6.2-1905 of the Code of Virginia.

10VAC5-130-10. Filing of registration statements required.

Pursuant to the direction of § 6.1-382 6.2-702 of the Code of Virginia, every Virginia financial institution holding company (as defined in § 6.1-381 6.2-700 of the Code of Virginia) which was in existence as of November 1, 1978, shall register not later than December 31, 1978, by filing with the Bureau of Financial Institutions a copy of the registration statement it has filed with a federal agency pursuant to the Bank Holding Company Act (12 USC § 1841 ff et seq.), or pursuant to the Home Owners' Loan Act (12 USC § 1467a).

Any company which becomes a Virginia financial institution holding company after November 1, 1978, shall file with the Bureau of Financial Institutions, within 180 days of its becoming such a company, a copy of the registration statement it files with a federal agency under the provisions of the Bank Holding Company Act (12 USC § 1841 ff et seq.) or under the Home Owners' Loan Act (12 USC § 1467a).

10VAC5-130-20. Reporting by Virginia financial institution holding companies.

Every company which has control over any Virginia financial institution (within the meaning of Chapter 13 7 (§ 6.1-381 6.2-700 et seq.) of Title 6.1 6.2 of the Code of Virginia) shall report annually by filing with the Bureau of Financial Institutions a copy of the report it submits to the federal regulatory agency requiring such reports. Excluded from the reporting requirement herein shall be any such company which, according to an applicable provision of the Bank Holding Company Act (12 USC § 1841 ff et seq.) is exempt from such reporting to a federal agency; or which acquires a controlling interest in a Virginia financial institution solely: (i) in a fiduciary capacity, (ii) in connection with the company's underwriting of securities or proxy solicitation, or (iii) in connection with the company's securing or collecting a debt.

VA.R. Doc. No. R12-2583; Filed May 3, 2012, 2:49 p.m.