2019 US Virgin Islands Code
Title 9 - Banking
Chapter 11 - Banking Transactions and Conduct of Business
Subchapter I - Banking Transactions and Conduct of Business
§ 121. General powers of banks and foreign banks
- In addition to the general powers conferred upon domestic corporations or other organizational entities the structures of which are used by banks under the laws of the United States Virgin Islands, every bank, and, with respect to business done at any branches established in the United States Virgin Islands and without limitation or restriction upon the powers exercised by it outside the Virgin Islands every foreign bank, every bank holding company, financial institution holding company, or financial holding company authorized to do business in this Territory shall have power, directly or indirectly through one or more authorized agents, subsidiaries or other affiliates, joint ventures, bank holding companies, financial holding companies, financial institution holding companies, or any combination thereof, subject to compliance with applicable federal law, to offer the following products and services and engage in the following activities to such extent, on such terms, and subject to such terms and conditions as may be determined by the exercise of the business judgment of such person, persons or other entity or entities as may have decision making authority for such entity to:
(1) Purchase, sell, discount and negotiate bills of exchange, drafts, promissory notes and other negotiable paper; to make loans for a specified term or on demand to natural or artificial persons on personal, collateral or “mortgage” security, or secured by goods in warehouse or standing crops; and to contract loans and advances with the Government of the United States Virgin Islands or its dependencies. When the loan is a personal loan, it shall be within the powers of the bank or foreign bank to determine, in each case, whether the note shall bear one or more signatures; provided, that where the loan is secured by a “mortgage” on real property, the aggregate total of such loans may not exceed the aggregate paid-in capital stock and the legal reserve of the institution, nor exceed the aggregate total of its deposits in savings accounts and term accounts and advances, if any, from the Federal Home Loan Bank system, whichever is greater; and provided, further, that this limitation is not applicable when a “mortgage” is given by a borrower as additional and secondary collateral and merely to secure the loan in last instance, nor is it applicable to loans secured under the National Housing Act nor to loans guaranteed by the Veterans Administration; provided there exists a binding obligation on the part of the Federal Government or the government of any state or the Government of the United States Virgin Islands or its instrumentalities or agencies, or any public or private retirement system or any financial institution of proved economic solvency, to buy such loans. A loan secured by real property shall be deemed to include a loan on unimproved real estate.
(2) Receive deposits and keep accounts current, with or without interest; provided that no interest shall be paid on demand deposits.
(3) Buy and sell drafts and deal in gold and silver; receive securities on deposit and make collections and payments for account of others.
(4) Raise funds on its own surety, or on that of another bank or foreign bank, partnership or individual, or on securities belonging to such bank or foreign bank, or otherwise to negotiate such securities when advisable; pledge assets as collateral to secure deposit of funds of the Governments of the United States and of the United States Virgin Islands, and subdivisions and dependencies thereof, including courts of justice.
(5) Buy bonds of other financial, agricultural, railroad, public utility or industrial companies, and to dispose of such bonds whenever it shall be deemed advisable to do so. A bank or foreign bank may also take charge of the liquidation of the business of partnerships or companies of any kind.
(6) Buy interest-bearing bonds and obligations of the Government of the United States, states or municipalities of the United States, or of the Government of the United States Virgin Islands or its dependencies, the interest on which is not in arrears, and to sell the same whenever it shall be deemed advisable.
(7) Issue obligations secured by real property or mortgages owned by such bank or foreign bank.
(8) Purchase, hold and receive by conveyance any real property for the following purposes, but for no others:
(A) Such as may be necessary for its accommodation in the transaction of its business, and for other offices of hire in the same building, or the purchase of accommodations for its personnel;
(B) Such as shall be conveyed to it in satisfaction of personal or mortgage debts previously contracted in the course of its dealings;
(C) Such as may be purchased or acquired at sales under judgments, decrees, or mortgages held by the bank or foreign bank, or as may be purchased or acquired to secure debts due it.
(9) Establish and conduct a savings department.
(10) Take, accept and comply with or execute all kinds of trusts that may lawfully be committed to it, acting as trustee in all cases prescribed by law, receiving deposits of money in trust for any special and specific purpose whatever; act as executor, administrator, registrar of stocks and bonds, guardian of estates, assignee, receiver, or committee of estates of lunatics or in any other fiduciary capacity; and in general, to carry out all kinds of trusts or other fiduciary transactions with ample power and authority; It being understood, That in order to carry out these acts, the bank or foreign bank shall previously deposit with the Lieutenant Governor such sum as may be promulgated by the Banking Board, payable in cash or in bonds of the United States Virgin Islands or Federal Government. After such deposit has been made, the Banking Board shall issue a license to such bank or foreign bank in order that it may act as trustee in all such trusts as are granted or committed to it. This chapter in no way changes or alters the provisions of any law relating to trust companies.
(11) Purchase and hold the stock of small business investment companies authorized to operate under the Small Business Investment Act, as amended, and the stock of economic development corporations created pursuant to chapter 11 of Title 13 of this Code, in an amount not aggregating more than ten (10%) percent of the banks capital and surplus.
(12) Transact any other business proper for this class of institutions. But no bank shall transact any business except such as is incidental, necessary and preliminary to its organization, until it has been authorized by the Banking Board to commence the business of banking.
(13) Employ, affiliate with or hire as a third-party agent an insurance producer or consultant if the producer or consultant is duly licensed under title 22 Virgin Islands Code. A bank may:
(A) establish criteria for acceptance or rejection of insurance policies based on the identity, reputation, history or other information about the issuer; as authorized by law;
(B) accept or make any payment of brokerage commissions or fees for insurance agency or brokerage services; and
(C) allow discounts for purchase of more than one product or service, including loans or other extensions of credit provided that anti-tying prohibitions are observed.
(14) Sell, offer, or any other manner be a party to or otherwise make available debt cancellation contracts.
(15) To control or hold an interest in a subsidiary that engages in any activity permissible for a national bank to conduct through an operating or financial subsidiary.
(16) To engage in any activity or to control or hold an interest in a subsidiary that engages in any activity determined to be permissible for an insured state or territorial bank or the subsidiary of an insured state or territorial bank under the laws of any state or territory by the FDIC pursuant to 12 U.S.C. section 1831a, provided that at least sixty (60) days prior to doing so written notice has been filed with the Banking Board and the Banking Board has approved.
(17) To assess fees and charges to the extent and subject to the same terms and conditions as are applicable to national banks in accordance with 12 CFR §§ 4001 or 4002.
(18) To establish, acquire and hold interests in a subsidiary or affiliate engaged in activities permissible under the federal Gramm Leach Bliley Act, as amended, and the Bank Service Corporation Act.
(19) To offer and provide any services that:
(A) constitute the business of banking as defined in this title or by or pursuant to federal law, rule or regulation or are incidental or complementary to the business of banking or such services of a financial nature; or
(B) are deemed to be financial in nature in accordance with 12 U.S.C. § 1843(k)(1)(a) as amended; or
(C) to exercise any power and offer any product or service or engage in any activity, and acquire and retain the shares or other interests of any company engaged in any activity that is at the time authorized or permitted to any bank, savings and loan, or other financial institution in any state or territory of the United States, provided that at least sixty (60) days prior to commencement of any such power, product, service or activity or the acquisition of any company engaged or having the right to engage in or otherwise offer any such product, service, power or activity, the financial entity, has filed with the Banking Board written notice stating its intent to exercise such power, offer such product or service, or engage in such activity and setting forth the authority under which the authority to exercise, offer or engage in such power, product, service or activity is asserted, and the Banking Board has approved.
(20) To issue and process credit cards, provided that no credit franchisor, system, network or issuer shall impose on any Virgin Islands financial entity any requirements for membership or otherwise doing business with such credit card franchisor, system, network or issue which are different from the requirements it imposes on any federally insured depository institution located in any of the states comprising the United States of America.
(21) To exercise all powers necessary or convenient to effect the purposes for which it is organized or further the business in which it is lawfully engaged.
(22) While acting as a creditor, to make insurance available, provided that where the indebtedness is secured by a mortgage on real estate and where a separate charge is made to the debtor for that insurance, the insurer shall make the insurance available jointly to the debtor and not more than one comaker of the indebtedness, provided that both are individually and jointly liable to repay the indebtedness. The foregoing shall not be deemed to restrict the insurer's right to require all debtors to meet the requirements of the applicable policy in order to become insured. Nothing in this subsection shall prohibit the insurance on the life of one debtor only, if desired by the debtor, or curtail the right of the debtor to decline such insurance coverage, unless otherwise appropriately required by the creditor in accordance with the law.
(23) To sell, or arrange through a licensed third party, for the sale of annuities purchased from a licensed insurance company and may share commissions in connection with the sale of annuities pursuant to the provisions of title 22 Virgin Islands Code. An employee of such an entity, must be licensed in accordance with title 22 Virgin Islands Code before engaging in any of the activities concerning the sale of annuities authorized by this subsection.
(24) To establish, acquire or invest in the capital stock, obligations or other securities of a service corporation, or otherwise participate in or utilize the service of such a corporation. A service corporation in this Territory may be owned by one or more financial institutions authorized to engage in the business of banking in this Territory. The stock of a service corporation in this Territory pursuant to this section may be owned only by institutions engaged in the business of banking and authorized to do business in this Territory. The maximum amount of investment in any one such service corporation may not exceed 20% of the investor institution's total capital and reserves or its total surplus account. The aggregate investment of any financial institution in all service corporations may not exceed 50% of its total capital and reserves or its total surplus account. For purposes of applying the legal lending limit prescribed in this title, a bank's investment in a service corporation, if majority owned, must be consolidated with the bank on a line-for-line basis proportionate to the bank's ownership interest in the service corporation. A financial institution seeking to invest in one or more service corporations shall notify the Banking Board in writing at least 30 days prior to such investment. If the services are to be performed for the public, as well as other financial institutions, the financial institution shall so state in its application with the Board. In addition to the criteria set forth by law, the Board may also consider the type of institution making application and the competitive effect of the proposed transaction.
