Nrs: Chapter 657 - General Provisions

Link to law: https://www.leg.state.nv.us/NRS/NRS-657.html
Published: 2015

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[Rev. 11/21/2013 1:01:41

PM--2013]



TITLE 55 - BANKS AND RELATED ORGANIZATIONS

CHAPTER 657 - GENERAL PROVISIONS

GENERAL PROVISIONS

NRS 657.005           Definitions.



NRS 657.016           “Bank,”

“commercial bank,” “banking company” and “banking corporation” defined.

NRS 657.026           “Commissioner”

defined.

NRS 657.035           “Demand

deposits” defined.

NRS 657.037           “Depository

institution” defined.

NRS 657.039           “Derivative

transaction” defined.

NRS 657.040           “Division

of Financial Institutions” defined.

NRS 657.045           “Insolvency”

defined.

NRS 657.055           “Net

earnings” defined.

NRS 657.058           “Nevada”

defined.

NRS 657.064           “Savings

deposit” defined.

NRS 657.070           “Stockholders’

equity” and “members’ equity” defined.

NRS 657.075           “Surplus”

defined.

NRS 657.085           “Time

deposit” defined.

NRS 657.095           Applicability

of chapters 78, 86

and 92A of NRS.

MISCELLANEOUS

NRS 657.105           Effect

of title on powers, privileges, duties and restrictions of corporations,

companies, associations and natural persons.

NRS 657.120           Fees

and charges: Imposition and collection by financial institution; limitations.

NRS 657.130           Committees

to review compliance: Definitions; confidentiality and privilege.

NRS 657.140           Loan

agreements: Certain provisions for recovery prohibited; exceptions.

FINANCIAL INSTITUTIONS

General Provisions

NRS 657.150           Definitions.

NRS 657.160           “Financial

institution” defined.

NRS 657.170           “License”

defined.

 

Licenses; Business Names; Investigations

NRS 657.180           License

to operate or manage: Additional requirements; fingerprints; grounds for

refusal to issue license.

NRS 657.190           Suspension

or revocation of license to operate or manage: Additional grounds.

NRS 657.200           Use

or change of business name; prohibitions.

NRS 657.210           Authorization

of Commissioner to investigate business; free access required; compelling

attendance of witnesses.

 

Exploitation of Older Persons or Vulnerable Persons

NRS 657.220           Definitions.

NRS 657.230           “Designated

reporter” defined.

NRS 657.240           “Exploitation”

defined.

NRS 657.250           “Older

person” defined.

NRS 657.260           “Reasonable

cause to believe” defined.

NRS 657.270           “Vulnerable

person” defined.

NRS 657.280           Training;

reporting to designated reporter.

NRS 657.290           Designated

reporter: Designation; duty to report; immunity.

_________

 

GENERAL PROVISIONS

      NRS 657.005  Definitions.  As

used in this title, unless the context otherwise requires, the words and terms

defined in NRS 657.016 to 657.085,

inclusive, have the meanings ascribed to them in those sections.

      (Added to NRS by 1971, 965; A 1985, 737, 2148; 1987, 1897; 1995, 1549; 1997, 974; 2013, 636)

      NRS 657.016  “Bank,” “commercial bank,” “banking company” and “banking

corporation” defined.  “Bank,”

“commercial bank,” “banking company” or “banking corporation” means a

corporation or limited-liability company that is chartered by this State,

another state or the United States and conducts the business of receiving money

as demand deposits or otherwise carries on a banking or banking and trust

business. The terms do not include a thrift company engaged in business

pursuant to chapter 677 of NRS.

      (Added to NRS by 1971, 965; A 1985, 737; 1989, 2031; 1995, 473, 1549; 1997, 974)

      NRS 657.026  “Commissioner” defined.  “Commissioner”

means the Commissioner of Financial Institutions.

      (Added to NRS by 1987, 1897)

      NRS 657.035  “Demand deposits” defined.  “Demand

deposits” means all deposits the immediate withdrawal of which can be legally

required upon a proper written request for such payment.

      (Added to NRS by 1971, 965)

      NRS 657.037  “Depository institution” defined.  “Depository

institution” means any bank, savings and loan association, savings bank, thrift

company, credit union or other institution, whether chartered by this State,

another state or the Federal Government, which:

      1.  Holds or receives deposits, savings or

share accounts;

      2.  Issues certificates of deposit; or

      3.  Provides to its customers other

depository accounts which are subject to withdrawal by checks, drafts or other

instruments or by electronic means to effect payment to a third party.

      (Added to NRS by 1985, 2147; A 1989, 2032; 1995, 1549)

      NRS 657.039  “Derivative transaction” defined.  “Derivative

transaction” has the meaning ascribed to it in 12 U.S.C. § 84(b)(3).

      (Added to NRS by 2013, 636)

      NRS 657.040  “Division of Financial Institutions” defined.  “Division of Financial Institutions” means the

Division of Financial Institutions of the Department of Business and Industry.

      (Added to NRS by 1983, 1721; A 1993, 1894)

      NRS 657.045  “Insolvency” defined.  “Insolvency”

means one or more of the following:

      1.  When a bank cannot meet its deposit

liabilities as they become due in the regular course of business.

      2.  When the actual cash market value of a

bank’s assets is insufficient to pay its liabilities to depositors and other

creditors.

      3.  When a bank’s reserve falls under the

amount required by this title, and it fails to make good such reserve within 30

days after being required to do so by the Commissioner.

      4.  When the undivided profits and surplus

are inadequate to cover losses of the bank and the stockholders’ or members’

equity of the bank has been reduced below the requirements of law.

      (Added to NRS by 1971, 965; A 1983, 1721; 1987, 1897; 1997, 974)

      NRS 657.055  “Net earnings” defined.  “Net

earnings” means the excess of the gross earnings of any bank over the expenses

and losses chargeable against such earnings.

      (Added to NRS by 1971, 965)

      NRS 657.058  “Nevada” defined.  “Nevada”

when used to modify:

      1.  The word “bank” or the term “depository

institution” means organized under the laws of this State; and

      2.  The term “national bank” means having

its headquarters within this State.

      (Added to NRS by 1995, 1549)

      NRS 657.064  “Savings deposit” defined.  “Savings

deposit” means a deposit or account:

      1.  With respect to which the depository

institution may require the depositor to give written notice of withdrawal not

less than 7 days before a withdrawal, but from which the depositor may

otherwise make withdrawals without giving written notice; and

      2.  Which is not payable on a specific date

or at the expiration of a specified time after the date of deposit.

      (Added to NRS by 1985, 737)

      NRS 657.070  “Stockholders’ equity” and “members’ equity” defined.  “Stockholders’ equity” or “members’ equity”

means the capital, surplus and retained earnings of a bank.

      (Added to NRS by 1997, 974)

      NRS 657.075  “Surplus” defined.  “Surplus”

means a fund created pursuant to the provisions of this title by a bank from

payments by stockholders or members or from the bank’s net earnings or

undivided profits which, to the amount specified and by any additions thereto

set apart and designated as such, is not available for the payment of dividends

and cannot be used for the payment of expenses or losses while the bank has

undivided profits.

      (Added to NRS by 1971, 965; A 1995, 473)

      NRS 657.085  “Time deposit” defined.  “Time

deposit” means a deposit which:

      1.  The depositor does not have a right to

withdraw for a period of 7 days or more after the date of deposit; and

      2.  Is payable at the expiration of a

specified time not less than 7 days after the date of deposit.

      (Added to NRS by 1971, 965; A 1985, 737)

      NRS 657.095  Applicability of chapters 78,

86 and 92A of

NRS.  The provisions of chapters 78, 86

and 92A of NRS that are not in conflict

with this title are hereby adopted as a part of this title.

      (Added to NRS by 1971, 966; A 1995, 473; 1997, 975)

MISCELLANEOUS

      NRS 657.105  Effect of title on powers, privileges, duties and restrictions

of corporations, companies, associations and natural persons.

      1.  The powers, privileges, duties and

restrictions conferred and imposed upon any corporation, company, association

or natural person, existing and doing business under the laws of this State,

are hereby abridged, enlarged or modified, as each particular case may require,

to conform to the provisions of this title, notwithstanding anything to the

contrary in its respective articles of incorporation, articles of organization

or charter.

      2.  As used in this section, “doing

business under the laws of this State” does not include the lending of money to

a person who is not a resident of this State, whether or not the bank which

extended the credit or serviced the loan is located in this State.

      (Added to NRS by 1971, 966; A 1989, 2032; 1995, 473)

      NRS 657.120  Fees and charges: Imposition and collection by financial

institution; limitations.

      1.  A financial institution may impose and

collect a fee or charge, not to exceed an amount specified in or limited by

specific statute, for any service it provides to a customer, if the fee or

charge is clearly and conspicuously disclosed in writing to the customer before

the customer receives the service. A financial institution must provide a

customer with written notice of any increase in the fee or charge at least 10

days before the increase becomes effective.

      2.  A fee or charge for the presentation

for payment, on a single business day, of multiple checks drawn by a customer

on an account for which there is an insufficient balance to pay all the checks,

must be determined as if the checks drawn in a single series or class were

presented:

      (a) In the order the checks were written;

      (b) From the lowest check number to the highest

check number; or

      (c) In order of ascending amounts, the check for

the smallest sum being presented first.

      3.  As used in this section, “financial

institution” means an institution licensed pursuant to the provisions of this

title or title 56 or chapter 645B, 645E or 649

of NRS, or a similar institution chartered or licensed pursuant to federal law.

      (Added to NRS by 1989, 566; A 1999, 3809)

      NRS 657.130  Committees to review compliance: Definitions; confidentiality

and privilege.

      1.  As used in this section, unless the

context otherwise requires:

      (a) “Committee to review compliance” means one or

more persons assigned or engaged by a financial institution to test, review or

evaluate its conduct, transactions or potential transactions, policies or

procedures for the purpose of monitoring and improving or enforcing compliance

with state and federal statutes and regulations requiring safe, sound and fair

lending practices, including, without limitation, acts concerning equal credit

opportunity, fair housing, fair lending, flood zone protection, housing and

financial discrimination, truth in lending and financial reporting to federal

or state regulatory agencies.

      (b) “Financial institution” means an institution

licensed pursuant to the provisions of this title or title 56 or chapter 645B or 645E

of NRS, or a similar institution chartered or licensed pursuant to federal law.

The term includes, without limitation, a holding company, affiliate or

subsidiary of such an institution.

      2.  Except as otherwise voluntarily

authorized by the financial institution:

      (a) A document prepared for or created by a

committee to review compliance is confidential and privileged, and is not

subject to discovery or admissible in evidence in a civil action of this State,

even if it has been submitted to a governmental or regulatory agency of this

State, the United States or a foreign government.

      (b) A member of a committee to review compliance

or a person who acted under the direction of the committee cannot be required

to testify in a civil action concerning the contents of a document described in

paragraph (a) or concerning the discussions or conclusions of, or the actions

taken by, the committee.

      (Added to NRS by 1995, 1784; A 1999, 3809)

      NRS 657.140  Loan agreements: Certain provisions for recovery prohibited;

exceptions.

      1.  Except as otherwise provided in

subsection 2, a financial institution shall not include in any loan agreement a

provision that allows the financial institution to recover, take, appropriate

or otherwise apply as a setoff against any debt or liability owing to the

financial institution under the loan agreement money from an account unrelated

to the loan agreement to the extent the money is exempt from execution pursuant

to paragraph (y) of subsection 1 of NRS

21.090.

      2.  The provisions of subsection 1 do not

apply to a provision in a loan agreement that specifically authorizes automatic

withdrawals from an account.

      3.  The provisions of this section may not

be varied by agreement, and the rights conferred by this section may not be

waived. Any provision included in an agreement that conflicts with this section

is void.

      4.  As used in this section:

      (a) “An account unrelated to the loan agreement”

includes, without limitation, an account pledged as security under the loan agreement,

unless the specific account pledged as security is conspicuously described in

the loan agreement.

      (b) “Financial institution” means an institution

licensed pursuant to the provisions of this title or title 56 or chapter 645B, 645E

or 649 of NRS, or a similar institution

chartered or licensed pursuant to federal law.

      (Added to NRS by 2005, 382; A 2007, 3027)

FINANCIAL INSTITUTIONS

General Provisions

      NRS 657.150  Definitions.  As

used in NRS 657.150 to 657.290,

inclusive, unless the context otherwise requires, the words and terms defined

in NRS 657.160 and 657.170

have the meanings ascribed to them in those sections.

      (Added to NRS by 2005, 1841; A 2007, 1490)

      NRS 657.160  “Financial institution” defined.  “Financial

institution” means a depository institution or any other institution regulated

pursuant to this title. The term includes, without limitation, a holding

company, affiliate or subsidiary of such an institution.

      (Added to NRS by 2005, 1841)

      NRS 657.170  “License” defined.  “License”

means any license, certificate, registration, permit or similar type of

authorization.

      (Added to NRS by 2005, 1841)

Licenses; Business Names; Investigations

      NRS 657.180  License to operate or manage: Additional requirements;

fingerprints; grounds for refusal to issue license.

      1.  In addition to any other requirements

set forth by specific statute, each person who applies for a license to operate

a financial institution and each person who will serve as a director, officer,

manager or member acting in a managerial capacity for such a financial

institution must submit:

      (a) Proof satisfactory to the Commissioner that

the person:

             (1) Has a good reputation for honesty,

trustworthiness and integrity and is competent to transact the business of the

financial institution in a manner which protects the interests of the general

public.

             (2) Has not made a false statement of

material fact on the application.

             (3) Has not committed any of the acts

specified in subsection 2.

             (4) Has not had a license to operate a

financial institution suspended or revoked within the 10 years immediately

preceding the date of the application.

             (5) Has not been convicted of, or entered

a plea of nolo contendere to, a felony or any crime involving fraud,

misrepresentation or moral turpitude.

      (b) A complete set of his or her fingerprints and

written permission authorizing the Division of Financial Institutions to

forward the fingerprints to the Central Repository for Nevada Records of

Criminal History for submission to the Federal Bureau of Investigation for its

report.

      2.  In addition to any other lawful

reasons, the Commissioner may refuse to issue a license to operate a financial

institution if the person who applies for the license or any person who will

serve as a director, officer, manager or member acting in a managerial capacity

for the financial institution:

      (a) Has committed or participated in any act

which, if committed or done by a holder of a license, would be grounds for the

suspension or revocation of the license.

      (b) Has previously been refused a license to

operate a financial institution or has had such a license suspended or revoked.

      (c) Has participated in any act which was a basis

for the refusal or revocation of a license to operate a financial institution.

      (d) Has falsified any of the information

submitted to the Commissioner in support of the application for the license.

      (Added to NRS by 2005, 1841)

      NRS 657.190  Suspension or revocation of license to operate or manage:

Additional grounds.  In addition to

any other lawful reasons, the Commissioner may suspend or revoke a license to

operate a financial institution if the person who holds the license or any

person who serves as a director, officer, manager or member acting in a

managerial capacity for the financial institution has engaged in any act that

would be grounds for denying a license pursuant to NRS

657.180.

      (Added to NRS by 2005, 1842)

      NRS 657.200  Use or change of business name; prohibitions.

      1.  A financial institution must obtain the

approval of the Commissioner before using or changing a business name.

      2.  A financial institution shall not:

      (a) Use any business name which is identical or

similar to a business name used by another financial institution or which may

mislead or confuse the public.

      (b) Use any printed forms which may mislead or

confuse the public.

      (Added to NRS by 2005, 1842)

      NRS 657.210  Authorization of Commissioner to investigate business; free

access required; compelling attendance of witnesses.

      1.  For the purpose of discovering

violations of this title or of securing information lawfully required under

this title, the Commissioner or the Commissioner’s duly authorized

representatives may at any time investigate the business and examine the books,

accounts, papers and records used therein of:

      (a) Any licensee;

      (b) Any other person engaged in an activity for

which a license is required pursuant to the provisions of this title; and

      (c) Any person whom the Commissioner has

reasonable cause to believe is violating or is about to violate any provision

of this title, whether or not the person claims to be within the authority or

beyond the scope of this title.

      2.  For the purpose of examination, the

Commissioner or the Commissioner’s authorized representatives must have and be

given free access to the offices and places of business, files, safes and

vaults of such persons.

      3.  The Commissioner may require the

attendance of any person and examine the person under oath regarding:

      (a) Any transaction or business regulated

pursuant to the provisions of this title; or

      (b) The subject matter of any audit, examination,

investigation or hearing.

      (Added to NRS by 2005, 1842)

Exploitation of Older Persons or Vulnerable Persons

      NRS 657.220  Definitions.  As

used in NRS 657.220 to 657.290,

inclusive, unless the context otherwise requires, the words and terms defined

in NRS 657.230 to 657.270,

inclusive, have the meanings ascribed to them in those sections.

      (Added to NRS by 2007, 1488)

      NRS 657.230  “Designated reporter” defined.  “Designated

reporter” means a person designated by a financial institution to receive

reports of known or suspected exploitation of an older person or vulnerable

person pursuant to NRS 657.290.

      (Added to NRS by 2007, 1488)

      NRS 657.240  “Exploitation” defined.  “Exploitation”

has the meaning ascribed to it in subsection 2 of NRS 200.5092.

      (Added to NRS by 2007, 1488)

      NRS 657.250  “Older person” defined.  “Older

person” has the meaning ascribed to it in subsection 5 of NRS 200.5092.

      (Added to NRS by 2007, 1488)

      NRS 657.260  “Reasonable cause to believe” defined.  “Reasonable

cause to believe” has the meaning ascribed to it in NRS 200.50925.

      (Added to NRS by 2007, 1489)

      NRS 657.270  “Vulnerable person” defined.  “Vulnerable

person” has the meaning ascribed to it in subsection 7 of NRS 200.5092.

      (Added to NRS by 2007, 1489)

      NRS 657.280  Training; reporting to designated reporter.

      1.  Each financial institution shall

provide training concerning the identification and reporting of the suspected

exploitation of an older person or vulnerable person to each officer and

employee of the financial institution who:

      (a) May, as part of his or her regular duties for

the financial institution, come into direct contact with an older person or

vulnerable person; or

      (b) May review or approve the financial

documents, records or transactions of an older person or vulnerable person in

connection with providing financial services to the older person or vulnerable

person.

      2.  The training required pursuant to

subsection 1 must be provided as soon as reasonably practicable, but not later

than 6 months after the officer or employee is employed by the financial

institution.

      3.  The training required pursuant to

subsection 1 must include, without limitation:

      (a) An explanation of the conduct which constitutes

exploitation of an older person or vulnerable person;

      (b) The manner in which exploitation of an older

person or vulnerable person may be recognized;

      (c) Information concerning the manner in which

reports of exploitation are investigated; and

      (d) Instruction concerning when and how to report

known or suspected exploitation of an older person or vulnerable person.

      4.  An officer or employee who has observed

or has knowledge of an incident that is directly related to a transaction or

matter which is within his or her scope of practice and which reasonably

appears to be exploitation of an older person or vulnerable person shall report

the known or suspected exploitation to the designated reporter.

      (Added to NRS by 2007, 1489)

      NRS 657.290  Designated reporter: Designation; duty to report; immunity.

      1.  Each financial institution shall

designate a person or persons to whom an officer or employee of the financial

institution must report known or suspected exploitation of an older person or

vulnerable person.

      2.  If an officer or employee reports known

or suspected exploitation of an older person to a designated reporter and,

based on such a report or based on his or her own observations or knowledge,

the designated reporter knows or has reasonable cause to believe that an older

person has been exploited, the designated reporter shall:

      (a) Except as otherwise provided in subsection 3,

report the known or suspected exploitation of the older person to:

             (1) The local office of the Aging and

Disability Services Division of the Department of Health and Human Services;

             (2) A police department or sheriff’s

office;

             (3) The county’s office for protective

services, if one exists in the county where the suspected action occurred; or

             (4) A toll-free telephone service

designated by the Aging and Disability Services Division of the Department of

Health and Human Services; and

      (b) Make such a report as soon as reasonably

practicable.

      3.  If the designated reporter knows or has

reasonable cause to believe that the exploitation of the older person involves

an act or omission of the Aging and Disability Services Division, another

division of the Department of Health and Human Services or a law enforcement

agency, the designated reporter shall make the report to an agency other than

the one alleged to have committed the act or omission.

      4.  If an officer or employee reports known

or suspected exploitation of a vulnerable person to a designated reporter and,

based on such a report or based on his or her own observations or knowledge,

the designated reporter knows or has reasonable cause to believe that a

vulnerable person has been exploited, the designated reporter shall:

      (a) Except as otherwise provided in subsection 5,

report the known or suspected exploitation of the vulnerable person to a law

enforcement agency; and

      (b) Make such a report as soon as reasonably

practicable.

      5.  If the designated reporter knows or has

reasonable cause to believe that the exploitation of the vulnerable person

involves an act or omission of a law enforcement agency, the designated

reporter shall make the report to a law enforcement agency other than the one

alleged to have committed the act or omission.

      6.  In accordance with the provisions of

subsection 3 of NRS 239A.070, in

making a report pursuant to this section, a designated reporter may:

      (a) Disclose any facts or information that form

the basis of the determination that the designated reporter knows or has

reasonable cause to believe that an older person or vulnerable person has been

exploited, including, without limitation, the identity of any person believed

to be involved in the exploitation of the older person or vulnerable person;

and

      (b) Provide any financial records or other

documentation relating to the exploitation of the older person or vulnerable

person.

      7.  An officer, employee and the designated

reporter are entitled to the immunity from liability set forth in NRS 200.5096 for making a report in good

faith.

      (Added to NRS by 2007, 1489)