§ 122 — Examinations of banks and trust companies by directors; employment of assistants

§ 122. Examinations of banks and trust companies by directors;\nemployment of assistants. 1. It shall be the duty of the board of\ndirectors of every bank and every trust company once in each calendar\nyear to examine, or cause a committee of at least three of its members\nto examine, such bank or trust company for the purpose of determining\nits financial condition and reviewing its investment, loan and audit and\ncontrol policies and in such examination particular attention shall be\ngiven to the loans or discounts made directly or indirectly to its\nofficers or directors, or for the benefit of such officers or directors,\nor for the benefit of other corporations of which such officers or\ndirectors are also officers or directors, or in which they have a\nbeneficial interest as stockholders, creditors, or otherwise, with the\nspecial view of ascertaining their safety and present value, and the\nvalue of the collateral security, if any, held in connection therewith,\nand to such other matters as the superintendent may require. Such\ndirectors shall have the power to employ such assistants in making such\nexamination as they may deem necessary, and shall employ the assistance\nof independent auditors if the superintendent deems inadequate the\ninternal auditing and control procedures established by such bank or\ntrust company. The various offices, departments and phases of business\nof any such bank or trust company may be examined as of different dates\nduring the year.\n 2. With respect to any bank or trust company subject to the provisions\nof section one hundred twelve of the Federal Deposit Insurance\nCorporation Act of 1991, as implemented by the provisions of part three\nhundred sixty-three of the rules and regulations of the Federal Deposit\nInsurance Corporation, as they may be amended from time to time,\ncompliance with such provisions shall be deemed to satisfy the\nexamination requirement of this section.\n