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Can you summarize 6.2 VACV Chapter 8?
Banks
Short Summary
The provided legal document content covers three main areas: reserve requirements for banks, practice of giving preference to depositors or creditors, and perfection of security interests in banks. In terms of reserve requirements, every bank is required to maintain a reserve related to its demand deposits and time deposits. The reserve for demand deposits consists of actual cash on hand and balances payable on demand, due from other solvent banks. The reserve for time deposits also consists of actual cash on hand and balances payable on demand due from other solvent banks, with the option to hold up to 100 percent of the reserve in the form of short maturity general obligations of the United States. The Commission has the authority to establish the reserve requirements within certain limits. The reserves required are computed based on average daily deposits over a biweekly period. However, banks that are members of the Federal Reserve System are not relieved from maintaining a reserve fund in accordance with the requirements applicable to such member banks. Regarding the practice of giving preference to depositors or creditors, the document prohibits banks from giving preference to any depositor or creditor by pledging the assets of the bank. However, there are exceptions to this rule, such as pledging assets to secure deposits of trust funds made under specific provisions. Banks are also authorized to deposit securities for the purpose of securing deposits of certain entities, including the United States government, the Commonwealth, and insolvent national bank funds. Additionally, banks are allowed to pledge their assets as security for borrowed money, subject to certain limitations and approval from the Commission. The document also grants authorization for borrowing from Federal Reserve Banks or Federal Home Loan Banks and pledging assets in connection with qualified financial contracts. No specific penalties are mentioned in this document. In terms of the perfection of security interests in banks, the document outlines the methods by which any security interest or interest of ownership in securities sold by a bank subject to an obligation of repurchase may be perfected. The three specified methods include perfection as specified by Title 8.8A or Title 8.9A, designation to the person holding physical custody of the securities, or physical separation on the premises of the bank in a separate drawer, compartment, or other facility. The bank is also allowed to instruct third parties holding such securities regarding their release from pledge or repurchase. The records of the bank must identify the persons who are pledgees or owners of such securities. Book-entry securities held in a bank’s customer-safekeeping account at the Federal Reserve Bank are deemed compliant if they are identified in the bank’s records as required. This document was enacted in 1982 and has been amended multiple times.
Whom does it apply to?
Banks, individuals acting in fiduciary capacities, persons lending money or guaranteeing payments, banks acting in other states as fiduciaries, certain incorporated associations, real estate brokers defined in 54.1-2100
What does it govern?
The provided legal document content covers three main areas: reserve requirements for banks, practice of giving preference to depositors or creditors, and perfection of security interests in banks.
What are exemptions?
No specific exemptions are mentioned in this document.
What are the Penalties?
No specific penalties are mentioned in this document.
Jurisdiction
Virginia