W. Va. Code R. § 106-18-7

Current through Register Vol. XLI, No. 50, December 13, 2024

Section 106-18-7 - Prohibited Conduct at Foreclosure and OREO Sales by Directors, Officers, Employees and Affiliates of a Financial Institution

7.1. Participation As Purchaser -- No director, officer, employee or affiliate of a financial institution shall, either directly or indirectly, purchase property for sale as the result of the financial institution's foreclosure upon that property without the prior approval of the disinterested members of the board of directors of the institution. Provided, however, that such purchase may be made by the institution's directors, officers, employees or affiliates if it is made in the name of, and on behalf of, the institution foreclosing on the property.

7.2. Inside Information -- No director, officer, employee or affiliate of a financial institution shall, in connection with a public foreclosure sale to be conducted by their institution, provide any person with non-public inside information held by the institution for the purpose of assisting that person against others in making a foreclosure sale bid.

7.3. Beneficiary of Foreclosure Sale -- No director, officer, employee or affiliate of a financial institution shall conspire with another person to become the beneficial owner of property purchased by that other person at a foreclosure sale held by the institution. No prior agreement or arrangement shall be made whereby the director, officer, employee or affiliate of a financial institution pledges to purchase the foreclosed property from the buyer at a later date with the purpose of avoiding obtaining prior approval of the institution's board of directors as required in subsection 7.1 of this rule.

7.4. Prohibited Use of Property -- No director, officer, employee or affiliate of a financial institution shall use for any personal purpose other real estate owned by that institution. Nor shall they use the other real estate owned for any business purpose, except as permitted by the procedure in section 4.4 of this rule, or for incidental and temporary use related to the institution's business pending final disposition of the property, where the institution is endeavoring to make bona fide efforts to sell such property. Provided, however, that nothing in this rule prohibits a financial institution from collecting rent or lease payments from any third-party originally owed to the debtor for use of the property pending final disposition of the property, where the institution is endeavoring to make bona fide efforts to sell the property.

7.5. Participation as a Broker -- No director, officer, employee or affiliate of a financial institution shall accept or agree to accept, directly or indirectly, any brokerage fee in connection with the sale by that institution of other real estate owned.

7.6. Violation and Penalty -- Any person violating this section of the rule will be considered in violation of W. Va. Code '31A-8-3 and will be subject to all the penalties provided therefore.

W. Va. Code R. § 106-18-7