CHAPTER 433

An Act to amend and reenact §§ 6-10, 6-20, 6-146, 6-152, 6-164, 6-204, 6-206,
6-286, 6-242, 6-250 and 6-251 of the Code of Virginia, relating to the
incorporation of banks, building and loan associations, credit unions
and industrial loan associations, the merger and consolidation of banks
and the conversion of such corporations, dissolution thereof and deposit
requirements in order to conform the provisions of such sections as
presently existing to proposed revisions of the Code of Virginia relat-
ang to the law of corporations, and to repeal § 6-12.1 of the Code of
Virginia, relating to the amendment of bank charters to abolish cumu-
lative voting.

[S 18]

Approved March 30, 1956

Be it enacted by the General Assembly of Virginia:

1. That § 6-10 of the Code of Virginia is hereby amended and reenacted
as follows:

§ 6-10. How incorporated; by what laws governed.—Banks of dis-
count and deposit, and corporations formed for the conduct of a general
banking business, may be incorporated according to the provisions of
Chapter 3 of * Article 1 of Title 13.1, and shall be subject to all the general
duties and restrictions and shall have all the general powers, * contained
in Chapters 1 through 12 of Article 1 of Title 13.1, except as otherwise
provided in this chapter and except that no such corporation need comply
with the provisions of subdivision (a) of § 13.1-6.

All banks and banking institutions, including savings banks, savings
societies, and savings institutions, now chartered and existing, or that may
hereafter be chartered, under the laws of this State, shall be governed by
the provisions of this chapter, and so far as not in conflict with this chapter,
the provisions of Chapters* 1 through 12 of Article 1 of Title 18.1, except
so far as may be otherwise expressly provided in the charter of any such
bank or banking institution, heretofore incorporated ; but nothing contained
in this chapter shall apply to any bank heretofore chartered under the
laws of this State but having no place of business within this State and
conducting its entire business outside of this State. .

2. That § 6-20 of the Code of Virginia is hereby amended and reenacted
as follows:

§ 6-20. Merger or consolidation with other state or national banks.—
Any bank organized and doing business under the laws of this State may
be merged or consolidated with another bank organized and doing business
under the laws of this State, upon compliance with the provisions of*
Chapter 5 of Article 1 of Title 13.1 of this Code relating to mergers or
consolidations of corporations, except that * the provisions of § 13.1-75
shall not apply. Except as otherwise provided in this Chapter, such merger
or consolidation shall have the effect prescribed in § 13.1-74 of this Code.
Any bank organized and doing business under the laws of this State may
be merged or consolidated with a national banking association doing busi-
ness in this State by following the procedures in such case made and pro-
vided by federal law. .

8. That § 6-146 of the Code of Virginia is hereby amended and reenacted
as follows: ;

§ 6-146. Applicability of certain general corporation laws.—The pro-
visions of Title 13.1 shall apply to all building and loan associations in-
corporated under the laws of Virginia, in all cases not inconsistent with
the provisions of this chapter.

4. That § 6-152 of the Code of Virginia is hereby amended and reenacted
as follows:

§ 6-152. Incorporation, etc., certain powers.—Any number of persons,
not less than five, may hereafter form a building and loan association for
the purpose of encouraging industry, frugality, saving and home owner-
ship among its members, upon being incorporated as provided in Chap 3
of Article 1 of Title 18.1. Building and loan associations heretofore or
hereafter formed thereunder or under any other general, or under any
special, act shall have the right to lend to their shareholders or to other
persons the money accumulated from time to time, and the right to pur-
chase land or erect houses, and to sell, convey, lease or mortgage the same
at their discretion, when previously approved by the Commission, to their
shareholders or others for the benefit of their shareholders.

5. That § 6-164 of the Code of Virginia is hereby amended and reenacted
as follows:

§ 6-164. Conversion of federal savings and loan associations into
state associations; procedure.—Any federal association organized under
the laws of the United States and doing business in this State may become
a State association with all the powers and subject to all the obligations
and duties imposed by the provisions of this chapter, provided such federal
association has authority by virtue of any law of the United States to
dissolve its organization as a federal association. A federal association
desiring to become a State association shall comply with the following
requirements:

(1) It shall take such action, in the manner prescribed or authorized
by the laws of the United States, as will make certain its dissolution as a
federal association effective at a specified future date;

(2) The required number of its directors shall thereafter and before
the time when its dissolution becomes effective, organize a corporation
according to the provisions of Chapter 8 of Article 1 of Title 13.1 and to
the provisions of this chapter with the same officers and directors as those
of the federal association; and

(3) Application for a certificate of authority to do business under
§ 6-154 must be made attaching thereto, as a part thereof, (i) a statement
of its financial condition, on forms prescribed by the Commission, as of the
close of business the day preceding the date of the application, (ii) copies
of the written authority of stockholders or shareholders, (iii) copies of the
resolutions fixing the date on which its dissolution as a federal association
will become effective, (iv) proper verification of such documentary matters
by the affidavit of the president or of a vice-president of the federal asso-
ciation.

6. That § 6-204 of the Code of Virginia is hereby amended and reenacted
as follows:

§ 6-204. Incorporation—Any eight persons, resident of this State,
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may, by executing and filing* the articles provided for in Chapter three of *
Article 1 of Title 18.1, except as otherwise herein provided, establish a
corporation for the purpose of accumulating and investing the savings of
its members, making loans to members for provident purposes, and gen-
erally conducting a credit union as hereinafter provided. Every corpora-
tion organized under this chapter shall include in the corporate name the
ye WOXUs “credit union” as well as some other distinguishing word or
words.

7. That § 6-206 of the Code of Virginia is hereby amended and reenacted
as follows: . ;

§ 6-206. Voluntary dissolution—Any credit union may dissolve in
accordance with the provisions of Title 13.1 pertinent thereto.

8. That § 6-236 of the Code of Virginia is hereby amended and reenacted
as follows:

§ 6-236. Deposit requirements.—In addition to such other provisions
or requirements of Title 13.1 as may be initially applicable to face amount
certificate companies, or as may be required of such companies by the
Commission, under and in pursuance of, the provisions of such title, the
Commission may, in the public interest, or for the protection of investors,
after ten days’ notice and an opportunity to be heard, require, by rule,
regulation or order, any company which proposes to issue, or which has
issued and has outstanding, face amount certificates in this State, except
such companies as are required pursuant to some law of the United States
to deposit and, in pursuance of such requirement, have deposited securities
for the protection of certificate holders in accordance with the require-
ments of that law, to deposit and maintain, upon such terms and condi-
tions as the Commission prescribes and as are appropriate for the pro-
tection of investors, with the State Treasurer, qualified investments in an
aggregate amount and value equal to the liability, from time to time, of
the company to certificate holders in this State. The Commission may
also, upon entry of an order instituting a proceeding which has for its
purpose the determination of the matter of necessity for a deposit, or at
any time during the pendency of any such proceeding, take such steps, by
temporary injunction or otherwise, as are deemed necessary in the public
interest and for the protection of the interests of investors. But should
such company maintain deposits in a central fund for the protection of
its investors, wherever they may be located, in a manner satisfactory to
the Commission, such deposit may be in lieu of any deposit which would
otherwise be directed to be made in this State for the protection of Virginia
investors as hereinbefore provided. The acceptance of a central fund in
lieu of deposit as hereinbefore provided for shall not operate to preclude
the exercise of the powers conferred upon the Commission by this section
at any time the Commission may deem such exercise necessary or appro-
priate for the protection of investors.

9. That § 6-242 of the Code of Virginia is hereby amended and reenacted
as follows:

§ 6-242. How incorporated.—Corporations for the conduct of the
industrial loan business may be formed according to the provisions of Title
18.1, and shall be subject to all the restrictions and have all the general
powers in such Title contained, except as herein otherwise provided.

10. That §§ 6-250 and 6-251 of the Code of Virginia are hereby amended
and reenacted as follows:

§ 6-250. Powers.—In addition to the general powers conferred upon
corporations under the provisions of Title 13.1, every such association shall
have the power to lend money to any person, firm or corporation to be
repaid in periodical instalments, secured by the obligation of such person,
firm or corporation, or by any other security, subject to the limitations and
612 ACTS OF ASSEMBLY ([vA., 1956

restrictions hereinafter set forth; provided, however, that no loans shall
be made for a longer period than ten years, nor for a greater amount
in the aggregate to any person, firm or corporation than twenty per cen-
tum of the paid in capital stock and surplus of such association.

§ 6-251. Limitation of powers.—No such corporation shall have, use,
or enjoy any powers except those conferred by Title 13.1, and by this
chapter, and such other powers as are necessarily incident thereto.

11. That § 6-12.1 of the Code of Virginia is hereby repealed.
12. That the provisions hereof shall become effective January one, nine-
teen hundred fifty-seven.