Virginia Code 6.2-1057: Deposits held or received by trust subsidiaries or subsidiary bank with affiliate banks
A. Funds received or held by a trust subsidiary or subsidiary bank while awaiting investment or distribution shall not be used by an affiliate bank or owning bank in the conduct of its business or deposited in such bank, unless the bank first delivers to its trust department or to the trust subsidiary or subsidiary bank, as collateral security therefor, securities of any of the classes described in subdivision B 1, B 2, or B 3 of § 6.2-1005, in an amount described in subsection B.
Terms Used In Virginia Code 6.2-1057
- Bank: has the meaning assigned to it in § 6. See Virginia Code 6.2-1047
- Corporation: A legal entity owned by the holders of shares of stock that have been issued, and that can own, receive, and transfer property, and carry on business in its own name.
- Lien: A claim against real or personal property in satisfaction of a debt.
- Owning bank: means a bank owning 10 percent or more of the shares of a trust subsidiary. See Virginia Code 6.2-1047
- Subsidiary bank: means a bank authorized to exercise trust powers, at least 80 percent of the outstanding shares of which are owned directly or indirectly through a subsidiary by a Virginia bank holding company. See Virginia Code 6.2-1047
B. The securities deposited as collateral as required by subsection A shall be owned by the bank and shall at all times be at least equal in market value to the amount of trust funds held on deposit by such trust subsidiary or subsidiary bank, less such amount thereof as are insured by the Federal Deposit Insurance Corporation.
C. In the event of the failure or liquidation of such bank, the trust subsidiary or subsidiary bank and the owners of the beneficial interest in such trust funds shall have a lien on the bonds or other securities so set apart, in addition to their claims against the estate of the bank.
1974, c. 286, § 6.1-32.8; 1991, c. 282; 2010, c. 794.