2005 Nevada Revised Statutes - Chapter 665 — Examinations and Reports

CHAPTER 665 - EXAMINATIONS AND REPORTS

GENERAL PROVISIONS

NRS 665.015 Commissionerto provide forms for examinations and reports; preservation of reports.

EXAMINATIONS

NRS 665.025 Commissionerto make examinations of banks.

NRS 665.035 Reportsof examination.

NRS 665.045 Serviceand availability of copies of report; correction of conditions.

NRS 665.075 Nature,review and disclosure of contents of report.

NRS 665.086 Examinationof records of holding company controlling depository institution; requiredaction to maintain solvency or prevent failure of subsidiary.

NRS 665.095 Certifiedcopies of records as evidence.

REPORTS

NRS 665.105 Reportsto Commissioner: General requirements.

NRS 665.115 Penaltiesfor failure to make reports; collection of penalties by civil actions;disposition of money collected.

MISCELLANEOUS PROVISIONS

NRS 665.125 Powersand duties concerning examinations.

NRS 665.130 Receiptand certification of reports; disclosure of information prohibited; exception.

NRS 665.133 Disclosureof reports and other information obtained from depository institutions; use ofinformation.

NRS 665.135 Administrationof oaths and summoning of witnesses for purposes of examination.

NRS 665.145 Officialcommunications.

NRS 665.155 Appraisalof assets of doubtful value.

NRS 665.165 Retentionof records and other information; adoption and review of regulations;reproduction of original authorized.

NRS 665.175 Removalof officer, director, manager or employee.

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GENERAL PROVISIONS

NRS 665.015 Commissionerto provide forms for examinations and reports; preservation of reports.

1. For the purpose of carrying into effect theprovisions of this title, the Commissioner shall provide the necessary formsfor all examinations and reports as required in this title.

2. All reports received by the Commissioner must bepreserved in his office.

(Added to NRS by 1971, 994; A 1983, 1743; 1987, 1920)

EXAMINATIONS

NRS 665.025 Commissionerto make examinations of banks. The Commissionershall make a thorough examination of and into the affairs of every bank doingbusiness under this title, as often as the Commissioner may deem necessary, butat least once within each 18-month period. In lieu thereof, the Commissionermay accept any or all of a report of an examination of a bank made by a federalregulatory agency. If the Commissioner accepts any part of such a report in one18-month period, he shall examine the bank to which the report pertains in thesucceeding 18-month period.

(Added to NRS by 1971, 994; A 1979, 955; 1981, 706;1983, 1744; 1987, 1920)

NRS 665.035 Reportsof examination.

1. The results of the examinations and inquiries mustbe reduced to a written report and signed by the Commissioner or his deputies.

2. The report must contain a true and detailedstatement of the condition of a bank, and must also contain:

(a) A full statement of any violation of any of theprovisions of this title.

(b) A description of and comment on all assets andliabilities which in the opinion of the Commissioner may be subject tocriticism.

(c) A classification of assets showing which are ofdoubtful collectibility.

(Added to NRS by 1971, 994; A 1983, 1744; 1987, 1920)

NRS 665.045 Serviceand availability of copies of report; correction of conditions. Upon the preparation of the report as provided in NRS 665.035, the Commissioner shallforthwith serve a copy thereof on the president or secretary of the board ofdirectors of the banking corporation or a manager of the banking company, andmay make copies available to each member of the board of directors or eachmanager. If, in the judgment of the Commissioner, the report discloses any violationof the provisions of this title on the part of the bank, or if it appears fromthe report that there are certain conditions existing which should be correctedby the bank, the Commissioner may, in writing, call the matter to the attentionof each member of the board of directors, or each manager, with instructions tocorrect the condition.

(Added to NRS by 1971, 994; A 1983, 1744; 1987, 1921;1995, 489)

NRS 665.075 Nature,review and disclosure of contents of report.

1. The report of examination made by an examiner ofthe Division of Financial Institutions is designed for use in the supervisionof the bank. The banks copy of the report is the property of the Commissionerand is furnished to the bank solely for its confidential use.

2. The banks directors or managers, in keeping withtheir responsibilities both to depositors and to stockholders or members, shallthoroughly review the report. Under no circumstances may the bank, or any ofits directors, managers, officers or employees disclose or make public in anymanner the report or any portion thereof. The report must not be made availableto other banking institutions in connection with proposed transactions such asmergers and consolidations. The report must not be made available to a clearinghouse association, but a bank may voluntarily disclose information concerningits affairs to a clearing house association where a disclosure is throughreports prepared by the bank or by others at the request of the bank.

(Added to NRS by 1971, 995; A 1983, 1745; 1987, 1921;1995, 489)

NRS 665.086 Examinationof records of holding company controlling depository institution; requiredaction to maintain solvency or prevent failure of subsidiary. If the Commissioner finds that it is in the publicinterest and necessary to protect the depositors and other customers of adepository institution he may:

1. Examine the books and records of the holdingcompany which controls that depository institution and require the holdingcompany to furnish such reports as he considers appropriate for the propersupervision of the companys subsidiaries which are depository institutions;and

2. After notice and opportunity for hearing, requirethe holding company to take any action he finds reasonable and necessary toprotect the interest of depositors, other customers and creditors of anysubsidiary depository institution, to maintain its solvency or to prevent itsfailure.

(Added to NRS by 1985, 2148; A 1987, 1921)

NRS 665.095 Certifiedcopies of records as evidence. In all civilactions in the courts of this state wherein any of the records of theCommissioner are involved as evidence or otherwise, a certified copy of such arecord signed and sealed by the Commissioner, is admissible in evidence to thesame effect as if produced in court at trial by the proper custodian of therecords.

(Added to NRS by 1971, 995; A 1983, 1746; 1987, 1922)

REPORTS

NRS 665.105 Reportsto Commissioner: General requirements.

1. Every bank shall make at least four reports eachyear to the Commissioner at the same times and substantially in the form ofsimilar reports required by the Comptroller of the Currency, the FederalReserve Bank or the Federal Deposit Insurance Corporation.

2. The bank shall make additional reports within 10days after the receipt of a request therefor from the Commissioner.

3. The reports must be prepared by the cashier or byany competent person approved by the Commissioner and be verified by the oathor affirmation of the president or vice president, or a manager, and thecashier, the person by whom the reports were prepared, and by at least three ofthe directors or two other managers.

4. Each report must:

(a) Exhibit in detail, and under the appropriate heads,the resources and liabilities and a profit and loss account of the bank at theclose of business on any past day specified by the Commissioner.

(b) Be published in condensed form, according to therequirements of the Commissioner, within 10 days after the report is made, in anewspaper published in the county in which the bank is established, for oneinsertion, at the expense of the bank. Such proof of publication must befurnished within 5 days after the date of publication as may be required by theCommissioner.

5. The Commissioner may call for special reports,which need not be published, from any bank whenever, in his judgment, thereports are necessary in order to gain complete knowledge of its condition.

(Added to NRS by 1971, 996; A 1983, 272, 1746; 1987,1922; 1995, 489)

NRS 665.115 Penaltiesfor failure to make reports; collection of penalties by civil actions;disposition of money collected.

1. Every bank which fails to make and transmit or topublish any report required under this title is subject to a penalty of $50 foreach day after the period mentioned in NRS665.105 that it delays to make and transmit its report or proof ofpublication.

2. Whenever any bank delays or refuses to pay thepenalty imposed in this section for a failure to make and transmit or topublish a report, the Commissioner may maintain an action, in the name of theState, against the delinquent bank for the recovery of such penalty. All sumscollected by such action must be paid into the State Permanent School Fund.

(Added to NRS by 1971, 996; A 1983, 1747)

MISCELLANEOUS PROVISIONS

NRS 665.125 Powersand duties concerning examinations.

1. The examiners of financial institutions shallverify all reports made to the Commissioner by the officers and directors ofany banking corporation, as required by this title or by the Commissioner.

2. The officers of every bank shall submit andsurrender its books, assets, papers and concerns to the examiners appointed bythe Commissioner, who shall retain the custody and possession of such books,assets, papers and concerns for such length of time as may be required for thepurpose of making an examination as required by this title.

3. If any officer refuses to surrender such books,assets, papers and concerns, or refuses to be examined under oath touching theaffairs of such bank, the Commissioner may forthwith take possession of theproperty and business of the bank and liquidate its affairs in accordance withthe provisions of this title.

(Added to NRS by 1971, 996; A 1983, 1747; 1987, 1922)

NRS 665.130 Receiptand certification of reports; disclosure of information prohibited; exception. The Commissioner shall receive and place on file in hisoffice all reports required by law and shall certify all reports required to bepublished. The reports filed with or prepared by the Division of FinancialInstitutions and other information obtained from a depository institution arenot public records and may not be disclosed, except information concerningfinancial institutions which by specific statute is made generally available tothe public.

(Added to NRS by 1985, 2148; A 1987, 1922; 1995,1552)

NRS 665.133 Disclosureof reports and other information obtained from depository institutions; use ofinformation.

1. The records and information described in NRS 665.130 may be disclosed to:

(a) An agency of the Federal Government or of anotherstate which regulates the financial institution which is the subject of therecords or information;

(b) The Director of the Department of Business andIndustry for his confidential use;

(c) The State Board of Finance for its confidentialuse, if the report or other information is necessary for the State Board ofFinance to perform its duties under this title;

(d) The Department of Taxation for its use in carryingout the provisions of chapter 363A of NRS;

(e) An entity which insures or guarantees deposits;

(f) A public officer authorized to investigate criminalcharges in connection with the affairs of the depository institution;

(g) A person preparing a proposal for merging with oracquiring an institution or holding company, but only after notice of thedisclosure has been given to the institution or holding company;

(h) Any person to whom the subject of the report hasauthorized the disclosure;

(i) Any other person if the Commissioner determines,after notice and opportunity for hearing, that disclosure is in the publicinterest and outweighs any potential harm to the depository institution and itsstockholders, members, depositors and creditors; and

(j) Any court in a proceeding initiated by theCommissioner concerning the financial institution.

2. All the reports made available pursuant to thissection remain the property of the Division of Financial Institutions, and noperson, agency or authority to whom the reports are made available, or anyofficer, director or employee thereof, may disclose any of the reports or anyinformation contained therein, except in published statistical material thatdoes not disclose the affairs of any natural person or corporation.

(Added to NRS by 1985, 2148; A 1987, 1923; 1993,1895; 1995, 1552; 1997, 993; 2003, 20thSpecial Session, 225)

NRS 665.135 Administrationof oaths and summoning of witnesses for purposes of examination. In making the examinations required by this title, theCommissioner and any appointed examiner may administer oaths to examine anyofficer, director, manager, agent, employee, customer, depositor, stockholderor member of the bank, or any other person touching the affairs and business ofthe bank being examined. Any examiner may summon in writing any officer,director, manager, agent, employee, customer, depositor, stockholder or member,or any other person who is a resident of this state, to appear before him andtestify in relation to the affairs and business of the bank.

(Added to NRS by 1971, 997; A 1983, 1747; 1987, 1923;1995, 490; 1997, 994)

NRS 665.145 Officialcommunications. Each official communication directedby the Commissioner or any examiner of financial institutions to any bank, orto any officer or manager thereof, relating to an examination or investigationconducted or made by the Commissioner or containing suggestions orrecommendations as to the conduct of the bank must, if required by theauthority directing it, be submitted by the officer, manager or directorreceiving it to the executive committee, if there is one, or board of directorsor the other managers of the bank and noted in the minutes of the meeting. Thereceipt and submission of the notice to the executive committee, board ofdirectors, or other managers must be certified to the Commissioner, within suchtime as he may require, by three members of the committee or board or two othermanagers.

(Added to NRS by 1971, 997; A 1983, 1748; 1987, 1924;1995, 490)

NRS 665.155 Appraisalof assets of doubtful value.

1. If any assets of a bank are of a doubtful ordisputed value, the Commissioner may have an appraisal of such assets made. Inmaking such appraisal, the Commissioner shall designate one agent as anappraiser; the bank shall designate one agent as an appraiser; and the twochosen appraisers shall designate a third.

2. The selected appraisers shall make an appraisal ofthe assets designated as doubtful or disputed, and file a written report oftheir appraisal with the bank and with the Commissioner. In making suchappraisal, the appraisers shall determine the actual cash market value of such assets.The appraisal, when made, must be accepted as the value of such assets for thepurpose of examination or for the purpose of determining the actual cash marketvalue of such assets.

3. The appraisers must not be interested in any way,either in the bank or as an employee of the Commissioner, and all expenses ofsuch appraisal must be paid by the bank whose assets are appraised.

4. If any bank fails to appoint an appraiser within 10days after the date on which the Commissioner designates an appraiser pursuantto subsection 1, the Commissioner may apply to the district court of the countyin which the bank is located for the appointment of such an appraiser, and thecourt shall make the appointment for the bank.

(Added to NRS by 1971, 997; A 1983, 1748; 1987, 1924)

NRS 665.165 Retentionof records and other information; adoption and review of regulations;reproduction of original authorized.

1. Every state bank shall retain its business recordsfor such periods as are or may be prescribed by or in accordance with the termsof this section.

2. Each state bank shall retain permanently the minutebooks of meetings of its stockholders and directors, any analogous formalproceedings of its members or managers, its stock ledger and stock certificateledger or stubs, its general ledger, its investment ledger, its copies of bankexamination reports, and all records which the Commissioner in accordance withthis section requires to be retained permanently.

3. All other bank records must be retained for suchperiods as the Commissioner may in accordance with this section prescribe.

4. The Commissioner shall, from time to time, adoptregulations classifying all records kept by state banks and prescribe theperiod for which records in each class must be retained. The periods may bepermanent or for a lesser term of years. The Commissioner shall keep suchregulations current and shall review them at least once every 3 years. Inissuing and revising such regulations, the Commissioner shall consider:

(a) Actions at law and administrative proceedings inwhich the production of bank records may be necessary or desirable.

(b) State and federal statutes of limitation applicableto such actions or proceedings.

(c) The availability of information contained in bankrecords from other sources.

(d) Such other matters as the Commissioner deemspertinent to ensure that the regulations will require banks to retain theirrecords for as short a period as is commensurate with the interests of bankcustomers and stockholders or members and of the people of this state in havingbank records available.

5. Any state bank may dispose of any record which hasbeen retained for the period prescribed by or in accordance with the terms ofthis section for retention of records of its class, and thereafter is under noduty to produce the record in any action or proceeding.

6. Any state bank may cause any or all recordsrequired to be kept pursuant to this section to be reproduced by themicrophotographic process, optical disc imaging or any other equivalenttechnique designed to ensure an accurate reproduction of the original. Any suchreproduction has the same effect as the original. Upon completion of such aduplication, the original of any record may be destroyed.

7. To the extent that they are not in contravention ofany law of the United States, the provisions of this section apply to all banksdoing business in this state.

(Added to NRS by 1971, 997; A 1983, 1748; 1987, 1924;1995, 136, 490, 497; 1997, 994)

NRS 665.175 Removalof officer, director, manager or employee. TheCommissioner may require the immediate removal from office of any officer, director,manager or employee of any bank doing business under this title who is found tobe dishonest, incompetent or reckless in the management of the affairs of thebank, or who persistently violates the laws of this state or the lawful orders,instructions and regulations issued by the Commissioner.

(Added to NRS by 1971, 998; A 1983, 1749; 1987, 1925;1995, 491)

 

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