Chap. 179.—An ACT to amend and re-enact section 71 of an act entitled an act
to revise, collate and codify into one act the general statutes of the Common-
wealth relating to banks and banking, which act shall constitute and be desig-
nated and cited as the Virginia Banking Act, and to repeal all Code sections
and all acts and parts of acts inconsistent therewith, and to provide penalties
for the violations thereof, approved March 27, 1928, as heretofore amended,
relating to trust companies. [H B 87]

Approved March 27, 1934

I. Be it enacted by the General Assembly of Virginia, That section
seventy-one of an act entitled an act to revise, collate and codify
into one act the general statutes of the Commonwealth relating to banks
and banking, which act shall constitute and be designated and cited as
the Virginia Banking Act, and to repeal all Code sections and all acts
and parts of acts inconsistent therewith, and to provide penalties for
the violations thereof, approved March twenty-seventh, nineteen hun-
dred and twenty-eight, as heretofore amended, be amended and re-
enacted so as to read as follows:

Section 71. All banks which are authorized to do a trust business,
and all trust companies heretofore and hereafter chartered, shall have
the powers and be subject to regulations and restrictions conferred or
imposed upon companies authorized to do a general banking business in
this State, and shall in addition thereto have the following rights,
powers and privileges:

(a) To act as agent for any person, corporation, municipality or
state for the collection or disbursement of interest, or income or prin-
cipal of securities.

(b) To act as the fiscal or transfer agent of any state, municipality,
body politic or corporate, and in such capacity to receive and disburse
money ; to transfer, register and countersign certificates of stock, bonds

or other evidences of indebtedness, and to act as agent of any corpora-
tion. foreign or domestic, for any lawful purpose.

(c) To act as trustee under any mortgage or bond issued by any
individual, municipality, body politic or corporate, and accept and
execute any other municipal or corporate trust not inconsistent with
the laws of this State.

(d) To accept trusts from and execute trusts for married women,
in respect to their separate property, and to be their agent in the man-
agement of such property, or to transact any business in relation thereto.

(e) To act as guardian, receiver, or trustee of the estate of any
minor and as depository of any money paid into court, whether for the
benefit of any minor or other person, corporation or party.

(f) To take, accept and execute any and all such lawful trusts,
duties and powers in regard to the holding and management and dis-
position of any estate, real and personal, and the rents and profits
thereof, or the sale or lease thereof, as may be granted or confided
to it by any court of record, judge or clerk, or by any person, corpora-
tion, municipality or other authority, and it shall be accountable to all
parties in interest for the faithful discharge of every such trust, duty
or power which it may so accept.

(g) To take, accept and execute any and all such trusts and powers
of whatever nature and description as may be conferred upon or
entrusted or committed to it by any person or persons, or atly body
politic or corporate, or by other authority, by grant, assignment, trans-
fer, devise, bequest or otherwise, which may be entrusted or committed
or transferred to it or vested in it by order of any court of ‘record,
judge or clerk, and to receive and hold any property or estate, real or
personal, which may be the subject of any such trust.

(h) To act as executor under the last will and testament or ad-
ministrator of the estate of any deceased person; or as guardian of
any infant; or as committee of the estate of any insane person, idiot or
habitual drunkard, or trustee or committee for any convict in the peni-
tentiary, under appointment of any court of record, judge or clerk
thereof, having jurisdiction of the estate of such deceased person,
infant, insane person, idiot, habitual drunkard or convict.

(i) To guarantee the fidelity and diligent performance of their
duty by persons or corporations holding places of private or public
profit or trust in all cases where individual bonds are not required by
law, to guarantee the title to real or personal estate or become security
on any bond given by any person or corporation against loss or dam-
age by reason of any risk, assumed, by insuring the fidelity or diligent
performance of duty of any person or corporation, or by guaranteeing
or becoming surety on any bonds; provided, however, that bonds guar-
anteed shall not be included as resources in calculating assessments
under section fifty-eight of this act.

(j) No bank or trust company of this State, with a minimum un-
impaired capital stock of fifty thousand dollars or more, shall be re-
quired by any officer or court of this State to give security upon appoint-
ment to or acceptance of any office of trust which it may, by law, be
authorized to execute; provided, however, that no bank or trust com-
pany shall qualify on an estate having a value in excess of its combined
unimpaired capital and surplus without giving bond for such excess.

(k) In all cases where any bank or trust company in this State shall
be appointed to act as trustee, executor or administrator of any estate
or guardian for any infant, or in any other fiduciary capacity, it shall
be lawful for the president, vice-president, cashier, treasurer, secretary,
or any other officer of such trust company to take and subscribe for
such corporation any and all oaths required to be taken or subscribed
by such executor, administrator, trustee, guardian, or other fiduciary.

(1) Nothing in this section shall ever be construed as authorizing
the creation of a trust not lawful as between individuals nor to prohibit
the deposit of funds by court and fiduciaries in banks of deposit and
discount and savings banks.

(m) Every State bank which obtains permission from the State
Corporation Commission to do a trust business, and every trust com-
pany permitted to do commercial banking, shall establish a separate
trust department. Such department shall be established before such
bank or trust company undertakes to act in any fiduciary Capacity and
shall be placed under the management of an officer or officers whose
duties shall be prescribed by the board of directors of the bank or trust
company by either an amendment to the by-laws of the bank or trust
company or by a resolution duly entered in the minutes of the board of
directors.

(n) Funds received or held in the trust department of a bank or
trust company awaiting investment or distribution may be deposited in
the commercial or savings department of the bank or trust company to
the credit of the bank or trust company trust department; provided
that the bank first delivers to the trust department, as collateral security
therefor securities of any of the following classes:

(1) Bonds, notes, or certificates of indebtedness of the United
States ; or

(2) Other securities of the classes in which fiduciaries are author-
ized or permitted to invest trust funds, as set forth in section fifty-
four hundred and thirty-one of the Code of Virginia: or

(3) Other readily marketable bonds, notes, and/or debentures,
commonly known as investment securities, meeting the following re-
quirements :

(a) That the issue be of a sufficiently large total to make market-
ability possible;

(b) Such a public distribution of the securities must have been
provided for or made in a manner to protect or insure the market-
ability of the issue;

(c) That the trust agreement under which the security is issued

provides for a trustee independent of the obligor, which trustee must be
a bank or trust company.

The securities so deposited as collateral shall be owned by the bank
or trust company and shall at all times be at least equal in market value
to the amount of trust funds so deposited in the said commercial or
savings department.

(0) The securities and investments held in each trust shall be kept
separate and distinct from the securities owned by the bank and sepa-
rate and distinct one from another. ‘Trust securities and investments
shall be placed in the joint custody of two or more officers or other
employees designated by the board of directors of the bank or trust
company, and said joint custody shall be interpreted to mean that
neither of such officers shall have access alone at any time to such
securities and investments, and all such officers and employees shall be
bonded.

(p) Where the instrument creating the trust does not specify the
character or class of investments to be made, and does not expressly
invest in the bank, its officers or its directors a discretion in the matter
of investments, funds held in trust shall be invested in any securities
in which corporate or individual fiduciaries may lawfully invest, as set
forth in section fifty-four hundred and thirty-one of the Code of Vir-
ginia.

(q) In the event of the failure or liquidation of such bank or
trust company the owners of the funds held in trust for investment
shall have a lien on the bonds or other securities so set apart in addi-
tion to their claim against the estate of the bank.

(r) Any trust company or any bank doing a trust business, failing
to comply with the provisions imposed by paragraphs (m) and/or
(n) and/or (0) of this section may be stispended and/or prohibited
from doing a trust business by the State Corporation Commission.

i