[Rev. 11/21/2013 1:02:36 PM--2013]

CHAPTER 665 - EXAMINATIONS AND REPORTS

GENERAL PROVISIONS

NRS 665.015†††††††††† Commissioner to provide forms for examinations and reports; preservation of reports.

EXAMINATIONS

NRS 665.025†††††††††† Commissioner to make examinations of banks.

NRS 665.035†††††††††† Reports of examination.

NRS 665.045†††††††††† Service and availability of copies of report; correction of conditions.

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

NRS 665.086†††††††††† Examination of records of holding company controlling depository institution; required action to maintain solvency or prevent failure of subsidiary.

NRS 665.095†††††††††† Certified copies of records as evidence.

REPORTS

NRS 665.105†††††††††† Reports to Commissioner: General requirements.

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

MISCELLANEOUS PROVISIONS

NRS 665.125†††††††††† Powers and duties concerning examinations.

NRS 665.130†††††††††† Receipt and certification of reports; disclosure of information prohibited; exception.

NRS 665.133†††††††††† Disclosure of reports and other information obtained from depository institutions; use of information.

NRS 665.135†††††††††† Administration of oaths and summoning of witnesses for purposes of examination.

NRS 665.145†††††††††† Official communications.

NRS 665.155†††††††††† Appraisal of assets of doubtful value.

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

NRS 665.175†††††††††† Removal of officer, director, manager or employee.

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GENERAL PROVISIONS

††††† NRS 665.015  Commissioner to provide forms for examinations and reports; preservation of reports.

††††† 1.  For the purpose of carrying into effect the provisions of this title, the Commissioner shall provide the necessary forms for all examinations and reports as required in this title.

††††† 2.  All reports received by the Commissioner must be preserved in the Commissionerís office.

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

EXAMINATIONS

††††† NRS 665.025  Commissioner to make examinations of banks.  The Commissioner shall make a thorough examination of and into the affairs of every bank doing business under this title, as often as the Commissioner may deem necessary, but at least once within each 18-month period. In lieu thereof, the Commissioner may accept any or all of a report of an examination of a bank made by a federal regulatory agency. If the Commissioner accepts any part of such a report in one 18-month period, the Commissioner shall examine the bank to which the report pertains in the succeeding 18-month period.

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

††††† NRS 665.035  Reports of examination.

††††† 1.  The results of the examinations and inquiries must be reduced to a written report and signed by the Commissioner or the Commissionerís deputies.

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

††††† (a) A full statement of any violation of any of the provisions of this title.

††††† (b) A description of and comment on all assets and liabilities which in the opinion of the Commissioner may be subject to criticism.

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

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

††††† NRS 665.045  Service and availability of copies of report; correction of conditions.  Upon the preparation of the report as provided in NRS 665.035, the Commissioner shall forthwith serve a copy thereof on the president or secretary of the board of directors of the banking corporation or a manager of the banking company, and may make copies available to each member of the board of directors or each manager. If, in the judgment of the Commissioner, the report discloses any violation of the provisions of this title on the part of the bank, or if it appears from the report that there are certain conditions existing which should be corrected by the bank, the Commissioner may, in writing, call the matter to the attention of each member of the board of directors, or each manager, with instructions to correct 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 of the Division of Financial Institutions is designed for use in the supervision of the bank. The bankís copy of the report is the property of the Commissioner and is furnished to the bank solely for its confidential use.

††††† 2.  The bankís directors or managers, in keeping with their responsibilities both to depositors and to stockholders or members, shall thoroughly review the report. Under no circumstances may the bank, or any of its directors, managers, officers or employees disclose or make public in any manner the report or any portion thereof. The report must not be made available to other banking institutions in connection with proposed transactions such as mergers and consolidations. The report must not be made available to a clearing house association, but a bank may voluntarily disclose information concerning its affairs to a clearing house association where a disclosure is through reports 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  Examination of records of holding company controlling depository institution; required action to maintain solvency or prevent failure of subsidiary.  If the Commissioner finds that it is in the public interest and necessary to protect the depositors and other customers of a depository institution the Commissioner may:

††††† 1.  Examine the books and records of the holding company which controls that depository institution and require the holding company to furnish such reports as the Commissioner considers appropriate for the proper supervision of the companyís subsidiaries which are depository institutions; and

††††† 2.  After notice and opportunity for hearing, require the holding company to take any action the Commissioner finds reasonable and necessary to protect the interest of depositors, other customers and creditors of any subsidiary depository institution, to maintain its solvency or to prevent its failure.

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

††††† NRS 665.095  Certified copies of records as evidence.  In all civil actions in the courts of this state wherein any of the records of the Commissioner are involved as evidence or otherwise, a certified copy of such a record signed and sealed by the Commissioner, is admissible in evidence to the same effect as if produced in court at trial by the proper custodian of the records.

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

REPORTS

††††† NRS 665.105  Reports to Commissioner: General requirements.

††††† 1.  Every bank shall make at least four reports each year to the Commissioner at the same times and substantially in the form of similar reports required by the Comptroller of the Currency, the Federal Reserve Bank or the Federal Deposit Insurance Corporation.

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

††††† 3.  The reports must be prepared by the cashier or by any competent person approved by the Commissioner and be verified by the oath or affirmation of the president or vice president, or a manager, and the cashier, the person by whom the reports were prepared, and by at least three of the 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 the close of business on any past day specified by the Commissioner.

††††† (b) Be published in condensed form, according to the requirements of the Commissioner, within 10 days after the report is made, in a newspaper published in the county in which the bank is established, for one insertion, at the expense of the bank. Such proof of publication must be furnished within 5 days after the date of publication as may be required by the Commissioner.

††††† 5.  The Commissioner may call for special reports, which need not be published, from any bank whenever, in the Commissionerís judgment, the reports 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  Penalties for failure to make reports; collection of penalties by civil actions; disposition of money collected.

††††† 1.  Every bank which fails to make and transmit or to publish any report required under this title is subject to a penalty of $50 for each day after the period mentioned in NRS 665.105 that it delays to make and transmit its report or proof of publication.

††††† 2.  Whenever any bank delays or refuses to pay the penalty imposed in this section for a failure to make and transmit or to publish a report, the Commissioner may maintain an action, in the name of the State, against the delinquent bank for the recovery of such penalty. All sums collected 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  Powers and duties concerning examinations.

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

††††† 2.  The officers of every bank shall submit and surrender its books, assets, papers and concerns to the examiners appointed by the 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 the purpose 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 the affairs of such bank, the Commissioner may forthwith take possession of the property and business of the bank and liquidate its affairs in accordance with the provisions of this title.

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

††††† NRS 665.130  Receipt and certification of reports; disclosure of information prohibited; exception.  The Commissioner shall receive and place on file in the Commissionerís office all reports required by law and shall certify all reports required to be published. The reports filed with or prepared by the Division of Financial Institutions and other information obtained from a depository institution are not public records and may not be disclosed, except information concerning financial institutions which by specific statute is made generally available to the public.

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

††††† NRS 665.133  Disclosure of reports and other information obtained from depository institutions; use of information.

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

††††† (a) An agency of the Federal Government or of another state which regulates the financial institution which is the subject of the records or information;

††††† (b) The Director of the Department of Business and Industry for the Directorís confidential use;

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

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

††††† (e) An entity which insures or guarantees deposits;

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

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

††††† (h) Any person to whom the subject of the report has authorized the disclosure;

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

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

††††† 2.  All the reports made available pursuant to this section remain the property of the Division of Financial Institutions, and no person, agency or authority to whom the reports are made available, or any officer, director or employee thereof, may disclose any of the reports or any information contained therein, except in published statistical material that does 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, 20th Special Session, 225)

††††† NRS 665.135  Administration of oaths and summoning of witnesses for purposes of examination.  In making the examinations required by this title, the Commissioner and any appointed examiner may administer oaths to examine any officer, director, manager, agent, employee, customer, depositor, stockholder or member of the bank, or any other person touching the affairs and business of the 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 the examiner and testify 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  Official communications.  Each official communication directed by the Commissioner or any examiner of financial institutions to any bank, or to any officer or manager thereof, relating to an examination or investigation conducted or made by the Commissioner or containing suggestions or recommendations as to the conduct of the bank must, if required by the authority directing it, be submitted by the officer, manager or director receiving it to the executive committee, if there is one, or board of directors or the other managers of the bank and noted in the minutes of the meeting. The receipt and submission of the notice to the executive committee, board of directors, or other managers must be certified to the Commissioner, within such time as the Commissioner may require, by three members of the committee or board or two other managers.

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

††††† NRS 665.155  Appraisal of assets of doubtful value.

††††† 1.  If any assets of a bank are of a doubtful or disputed value, the Commissioner may have an appraisal of such assets made. In making such appraisal, the Commissioner shall designate one agent as an appraiser; the bank shall designate one agent as an appraiser; and the two chosen appraisers shall designate a third.

††††† 2.  The selected appraisers shall make an appraisal of the assets designated as doubtful or disputed, and file a written report of their appraisal with the bank and with the Commissioner. In making such appraisal, 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 the purpose of examination or for the purpose of determining the actual cash market value 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 of such appraisal must be paid by the bank whose assets are appraised.

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

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

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

††††† 1.  Every state bank shall retain its business records for such periods as are or may be prescribed by or in accordance with the terms of this section.

††††† 2.  Each state bank shall retain permanently the minute books of meetings of its stockholders and directors, any analogous formal proceedings of its members or managers, its stock ledger and stock certificate ledger or stubs, its general ledger, its investment ledger, its copies of bank examination reports, and all records which the Commissioner in accordance with this section requires to be retained permanently.

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

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

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

††††† (b) State and federal statutes of limitation applicable to such actions or proceedings.

††††† (c) The availability of information contained in bank records from other sources.

††††† (d) Such other matters as the Commissioner deems pertinent to ensure that the regulations will require banks to retain their records for as short a period as is commensurate with the interests of bank customers and stockholders or members and of the people of this state in having bank records available.

††††† 5.  Any state bank may dispose of any record which has been retained for the period prescribed by or in accordance with the terms of this section for retention of records of its class, and thereafter is under no duty to produce the record in any action or proceeding.

††††† 6.  Any state bank may cause any or all records required to be kept pursuant to this section to be reproduced by the microfilming process, optical disc imaging or any other equivalent technique designed to ensure an accurate reproduction of the original. Any such reproduction has the same effect as the original. Upon completion of such a duplication, the original of any record may be destroyed.

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

††††† (Added to NRS by 1971, 997; A 1983, 1748; 1987, 1924; 1995, 136, 490, 497; 1997, 994; 2011, 28)

††††† NRS 665.175  Removal of officer, director, manager or employee.  The Commissioner 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 to be dishonest, incompetent or reckless in the management of the affairs of the bank, 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)