{"formats":[{"name":"JSON","format":"json","url":"\/downloads\/2025\/code-json\/6.2-890.json"},{"name":"Plain Text","format":"text","url":"\/downloads\/2025\/code-text\/6.2-890.txt"},{"name":"XML","format":"xml","url":"\/downloads\/2025\/code-xml\/6.2-890.xml"},{"name":"HTML","format":"html","url":"\/downloads\/2025\/code-html\/6.2-890.html"}],"law_id":83974,"edition_id":1,"section_id":83974,"structure_id":16492,"section_number":"6.2-890","catch_line":"Preferences by pledging assets","history":"Code 1950, \u00a7\u00a7 6-64, 6-65, 6-66; 1966, c. 584, \u00a7\u00a7 6.1-78, 6.1-79, 6.1-80; 1974, c. 665; 1982, cc. 112, 411; 1989, c. 376; 1993, c. 182; 1994, c. 7; 1996, c. 306; 2010, c. 794; 2013, c. 205.","full_text":"A\n\nNo bank shall give preference to any depositor or creditor by pledging the assets of such bank, except as otherwise authorized by subsection B, or except to secure deposits of trust funds made pursuant to the provisions of § 6.2-1005 or 6.2-1057.B\n\nNotwithstanding the provisions of subsection A, any bank:1\n\nMay deposit securities for the purpose of securing deposits of:\n\t\t\t\ta. The United States government and its agencies;\n\t\t\t\tb. The Commonwealth, any other state where the bank has a branch office, or any agency or political subdivision thereof;\n\t\t\t\tc. Insolvent national bank funds as permitted under 12 U.S.C. § 192;\n\t\t\t\td. Proceeds of sale of United States obligations as permitted under 31 U.S.C. § 771; and\n\t\t\t\te. Bankruptcy funds deposited under the provisions of 11 U.S.C. § 345;2\n\nMay deposit securities for the purpose of securing sureties on surety bonds furnished to secure deposits listed in subdivision 1, or may, in lieu of depositing such securities to secure deposits pursuant to subdivision 1 b, by its board of directors, adopt a resolution before such public funds are deposited therein, to the effect that, in the event of the insolvency or failure of such bank, such public funds thereafter deposited therein shall, in the distribution of the assets of such bank, be paid in full before any other depositors shall be paid deposits thereafter made therein. The adoption of such resolution shall be deemed to constitute an obligation binding on such bank;3\n\nIs authorized to pledge its assets as security for amounts of borrowed money which shall not, without the approval of the Commission given in advance in writing, exceed in the aggregate the amount of the capital, surplus, and undivided profits of such bank actually paid in or earned and remaining undiminished by losses or otherwise. The amount of assets pledged for the security of such a loan shall not, without such approval, exceed 150 percent of the amount borrowed. No loan in excess of the amount so permitted made to any such bank shall be invalid or illegal as to the lender, even though made without the consent of the Commission. Rediscounting with or without guarantee or endorsement of notes, drafts, bills of exchange, or loans is hereby authorized and shall not be limited by the terms of this section, and shall not be considered as borrowed money within the meaning of this section;4\n\nIs authorized to borrow from a Federal Reserve Bank or a Federal Home Loan Bank and to rediscount with and sell to a Federal Reserve Bank or a Federal Home Loan Bank any and all notes, drafts, bills of exchange, acceptances, and other securities, and to give security for all money so borrowed and for all liabilities incurred by the discount of such notes, drafts, bills of exchange and other securities without restriction in like manner and to the same extent as national banks may lawfully do under the acts of Congress and regulations of the Board of Governors of the Federal Reserve System and the Federal Housing Finance Board; and5\n\nIs authorized to pledge its assets in connection with qualified financial contracts, which transactions shall be governed by this subdivision and not subdivision 3. The amount of assets pledged for obligations under such contracts shall not exceed 150 percent of the amount of the obligations, without the consent of the Commission, and the qualified financial contract shall be in writing and approved by the board of directors of such bank or an appropriate committee, which approval shall be reflected in the minutes of such board or committee. At the time any qualified financial contracts consisting of retail repurchase agreements are sold by a state bank, the market value of the underlying security must be at least equal to the amount of the aggregate purchase price paid by the purchasers of the retail repurchase agreements. As used in this subdivision, “qualified financial contract” means a qualified financial contract as defined in 12 U.S.C. § 1821 (e)(8)(D)(i), as the same may be amended, and any contract or transaction that the Commissioner determines to be a qualified financial contract for purposes of this section.","order_by":null,"text":{"0":{"id":300972,"text":"No bank shall give preference to any depositor or creditor by pledging the assets of such bank, except as otherwise authorized by subsection B, or except to secure deposits of trust funds made pursuant to the provisions of § 6.2-1005 or 6.2-1057.","type":"section","prefixes":["A"],"prefix":"A","entire_prefix":"A","prefix_anchor":"A","level":1,"next_prefix":"B"},"1":{"id":300973,"text":"Notwithstanding the provisions of subsection A, any bank:","type":"section","prefixes":["B"],"prefix":"B","entire_prefix":"B","prefix_anchor":"B","level":1,"prior_prefix":"A","next_prefix":"B1"},"2":{"id":300974,"text":"May deposit securities for the purpose of securing deposits of:\n\t\t\t\ta. The United States government and its agencies;\n\t\t\t\tb. The Commonwealth, any other state where the bank has a branch office, or any agency or political subdivision thereof;\n\t\t\t\tc. Insolvent national bank funds as permitted under 12 U.S.C. § 192;\n\t\t\t\td. Proceeds of sale of United States obligations as permitted under 31 U.S.C. § 771; and\n\t\t\t\te. Bankruptcy funds deposited under the provisions of 11 U.S.C. § 345;","type":"section","prefixes":["B","1"],"prefix":"1","entire_prefix":"B1","prefix_anchor":"B1","level":2,"prior_prefix":"B","next_prefix":"B2"},"3":{"id":300975,"text":"May deposit securities for the purpose of securing sureties on surety bonds furnished to secure deposits listed in subdivision 1, or may, in lieu of depositing such securities to secure deposits pursuant to subdivision 1 b, by its board of directors, adopt a resolution before such public funds are deposited therein, to the effect that, in the event of the insolvency or failure of such bank, such public funds thereafter deposited therein shall, in the distribution of the assets of such bank, be paid in full before any other depositors shall be paid deposits thereafter made therein. The adoption of such resolution shall be deemed to constitute an obligation binding on such bank;","type":"section","prefixes":["B","2"],"prefix":"2","entire_prefix":"B2","prefix_anchor":"B2","level":2,"prior_prefix":"B1","next_prefix":"B3"},"4":{"id":300976,"text":"Is authorized to pledge its assets as security for amounts of borrowed money which shall not, without the approval of the Commission given in advance in writing, exceed in the aggregate the amount of the capital, surplus, and undivided profits of such bank actually paid in or earned and remaining undiminished by losses or otherwise. The amount of assets pledged for the security of such a loan shall not, without such approval, exceed 150 percent of the amount borrowed. No loan in excess of the amount so permitted made to any such bank shall be invalid or illegal as to the lender, even though made without the consent of the Commission. Rediscounting with or without guarantee or endorsement of notes, drafts, bills of exchange, or loans is hereby authorized and shall not be limited by the terms of this section, and shall not be considered as borrowed money within the meaning of this section;","type":"section","prefixes":["B","3"],"prefix":"3","entire_prefix":"B3","prefix_anchor":"B3","level":2,"prior_prefix":"B2","next_prefix":"B4"},"5":{"id":300977,"text":"Is authorized to borrow from a Federal Reserve Bank or a Federal Home Loan Bank and to rediscount with and sell to a Federal Reserve Bank or a Federal Home Loan Bank any and all notes, drafts, bills of exchange, acceptances, and other securities, and to give security for all money so borrowed and for all liabilities incurred by the discount of such notes, drafts, bills of exchange and other securities without restriction in like manner and to the same extent as national banks may lawfully do under the acts of Congress and regulations of the Board of Governors of the Federal Reserve System and the Federal Housing Finance Board; and","type":"section","prefixes":["B","4"],"prefix":"4","entire_prefix":"B4","prefix_anchor":"B4","level":2,"prior_prefix":"B3","next_prefix":"B5"},"6":{"id":300978,"text":"Is authorized to pledge its assets in connection with qualified financial contracts, which transactions shall be governed by this subdivision and not subdivision 3. The amount of assets pledged for obligations under such contracts shall not exceed 150 percent of the amount of the obligations, without the consent of the Commission, and the qualified financial contract shall be in writing and approved by the board of directors of such bank or an appropriate committee, which approval shall be reflected in the minutes of such board or committee. At the time any qualified financial contracts consisting of retail repurchase agreements are sold by a state bank, the market value of the underlying security must be at least equal to the amount of the aggregate purchase price paid by the purchasers of the retail repurchase agreements. As used in this subdivision, “qualified financial contract” means a qualified financial contract as defined in 12 U.S.C. § 1821 (e)(8)(D)(i), as the same may be amended, and any contract or transaction that the Commissioner determines to be a qualified financial contract for purposes of this section.","type":"section","prefixes":["B","5"],"prefix":"5","entire_prefix":"B5","prefix_anchor":"B5","level":2,"prior_prefix":"B4"}},"ancestry":[{"id":16492,"edition_id":1,"name":"Reserves","identifier":"10","label":"article","depth":4,"order_by":1,"parent_id":13791,"metadata":{},"date_created":"2026-06-26 04:21:02","date_modified":"2026-06-26 04:21:02","permalink":{"id":265101,"object_type":"structure","relational_id":16492,"identifier":"10","token":"6.2\/II\/8\/10","url":"\/6.2\/II\/8\/10\/","edition_id":1,"permalink":0,"preferred":1}},{"id":13791,"edition_id":1,"name":"Banks","identifier":"8","label":"chapter","depth":3,"order_by":1,"parent_id":13000,"metadata":{},"date_created":"2026-06-26 03:45:53","date_modified":"2026-06-26 03:45:53","permalink":{"id":265065,"object_type":"structure","relational_id":13791,"identifier":"8","token":"6.2\/II\/8","url":"\/6.2\/II\/8\/","edition_id":1,"permalink":0,"preferred":1}},{"id":13000,"edition_id":1,"name":"Depository Institutions and Trust Organizations","identifier":"II","label":"subtitle","depth":2,"order_by":1,"parent_id":12852,"metadata":{},"date_created":"2026-06-26 03:44:07","date_modified":"2026-06-26 03:44:07","permalink":{"id":263685,"object_type":"structure","relational_id":13000,"identifier":"II","token":"6.2\/II","url":"\/6.2\/II\/","edition_id":1,"permalink":0,"preferred":1}},{"id":12852,"edition_id":1,"name":"Financial Institutions and Services","identifier":"6.2","label":"title","depth":1,"order_by":1,"parent_id":null,"metadata":{},"date_created":"2026-06-26 03:43:56","date_modified":"2026-06-26 03:43:56","permalink":{"id":263249,"object_type":"structure","relational_id":12852,"identifier":"6.2","token":"6.2","url":"\/6.2\/","edition_id":1,"permalink":0,"preferred":1}}],"structure_contents":[{"id":81272,"structure_id":16492,"section_number":"6.2-889","catch_line":"Required reserves","url":"\/6.2-889\/","token":"6.2\/II\/8\/10\/6.2-889","metadata":false},{"id":83974,"structure_id":16492,"section_number":"6.2-890","catch_line":"Preferences by pledging assets","url":"\/6.2-890\/","token":"6.2\/II\/8\/10\/6.2-890","metadata":false},{"id":69781,"structure_id":16492,"section_number":"6.2-891","catch_line":"Perfection of certain security interests","url":"\/6.2-891\/","token":"6.2\/II\/8\/10\/6.2-891","metadata":false},{"id":74900,"structure_id":16492,"section_number":"6.2-892","catch_line":"Federal deposit insurance a credit towards certain required bonds","url":"\/6.2-892\/","token":"6.2\/II\/8\/10\/6.2-892","metadata":false}],"previous_section":{"id":81272,"structure_id":16492,"section_number":"6.2-889","catch_line":"Required reserves","url":"\/6.2-889\/","token":"6.2\/II\/8\/10\/6.2-889","metadata":false},"next_section":{"id":69781,"structure_id":16492,"section_number":"6.2-891","catch_line":"Perfection of certain security interests","url":"\/6.2-891\/","token":"6.2\/II\/8\/10\/6.2-891","metadata":false},"metadata":false,"official_url":"https:\/\/law.lis.virginia.gov\/vacode\/6.2-890\/","history_text":"

The record of this law\u2019s original creation isn\u2019t available online. It has been modified 9 times. Those modifications are cataloged by \u201cThe Acts of Assembly,\u201d a state publication, by year and chapter. Those modifications that can be read on the General Assembly\u2019s website will be linked accordingly. Those modifications are as follows: in 1966, chapter 584; in 1974, chapter 665; in 1982, chapters 112 and 411; in 1989, chapter 376; in 1993, chapter 182; in 1994, chapter 7<\/a>; in 1996, chapter 306<\/a>; in 2010, chapter 794<\/a>; in 2013, chapter 205<\/a>.<\/p>","references":false,"refers_to":[{"id":86464,"section_number":"6.2-1005","catch_line":"Deposit or other use of trust funds","order_by":null,"url":"\/6.2-1005\/"}],"permalink":{"id":265107,"object_type":"law","relational_id":83974,"identifier":"6.2-890","token":"6.2\/II\/8\/10\/6.2-890","url":"\/6.2-890\/","edition_id":1,"permalink":0,"preferred":1},"url":"\/6.2-890\/","token":"6.2\/II\/8\/10\/6.2-890","dublin_core":{"Title":"Preferences by pledging assets","Type":"Text","Format":"text\/html","Identifier":"\u00a7 6.2-890","Relation":"Code of Virginia"},"html":"\n\t\t\t\t\t\t

A.<\/span> No bank<\/span> shall give preference to any depositor or creditor<\/span> by pledging the assets<\/span> of such bank<\/span>, except as otherwise authorized by subsection B, or except to secure deposits of trust funds made pursuant to the provisions of § 6.2-1005<\/a> or 6.2-1057<\/a>. <\/i><\/a><\/p><\/section>\n\t\t\t\t\t\t

B.<\/span> Notwithstanding the provisions of subsection A, any bank<\/span>: <\/i><\/a><\/p><\/section>\n\t\t\t\t\t\t

1.<\/span> May deposit securities for the purpose of securing deposits of:\n\t\t\t\ta. The United States government and its agencies;\n\t\t\t\tb. The Commonwealth, any other state where the bank<\/span> has a branch office, or any agency or political subdivision thereof;\n\t\t\t\tc. Insolvent national bank<\/span> funds as permitted under 12 U.S.C. § 192;\n\t\t\t\td. Proceeds of sale of United States obligations as permitted under 31 U.S.C. § 771; and\n\t\t\t\te. Bankruptcy<\/span> funds deposited under the provisions of 11 U.S.C. § 345; <\/i><\/a><\/p><\/section>\n\t\t\t\t\t\t

2.<\/span> May deposit securities for the purpose of securing sureties on surety<\/span> bonds<\/span> furnished to secure deposits listed in subdivision 1, or may, in lieu of depositing such securities to secure deposits pursuant to subdivision 1 b, by its board of directors, adopt a resolution before such public funds are deposited therein, to the effect that, in the event of the insolvency or failure of such bank<\/span>, such public funds thereafter deposited therein shall, in the distribution of the assets<\/span> of such bank<\/span>, be paid in full before any other depositors shall be paid deposits thereafter made therein. The adoption of such resolution shall be deemed to constitute an obligation binding on such bank<\/span>; <\/i><\/a><\/p><\/section>\n\t\t\t\t\t\t

3.<\/span> Is authorized to pledge its assets<\/span> as security for amounts of borrowed money which shall not, without the approval of the Commission<\/span> given in advance in writing, exceed in the aggregate the amount of the capital, surplus, and undivided profits of such bank<\/span> actually paid in or earned and remaining undiminished by losses or otherwise. The amount of assets<\/span> pledged for the security of such a loan shall not, without such approval, exceed 150 percent of the amount borrowed. No loan in excess of the amount so permitted made to any such bank<\/span> shall be invalid or illegal as to the lender, even though made without the consent of the Commission<\/span>. Rediscounting with or without guarantee or endorsement of notes, drafts, bills of exchange, or loans is hereby authorized and shall not be limited by the terms of this section, and shall not be considered as borrowed money within the meaning of this section; <\/i><\/a><\/p><\/section>\n\t\t\t\t\t\t

4.<\/span> Is authorized to borrow from a Federal Reserve Bank<\/span> or a Federal Home Loan Bank<\/span> and to rediscount with and sell to a Federal Reserve Bank<\/span> or a Federal Home Loan Bank<\/span> any and all notes, drafts, bills of exchange, acceptances, and other securities, and to give security for all money so borrowed and for all liabilities incurred by the discount of such notes, drafts, bills of exchange and other securities without restriction in like manner and to the same extent as national banks<\/span> may lawfully do under the acts of Congress and regulations of the Board of Governors of the Federal Reserve System and the Federal Housing Finance Board; and <\/i><\/a><\/p><\/section>\n\t\t\t\t\t\t

5.<\/span> Is authorized to pledge its assets<\/span> in connection with qualified financial contracts<\/span>, which transactions shall be governed by this subdivision and not subdivision 3. The amount of assets<\/span> pledged for obligations under such contracts shall not exceed 150 percent of the amount of the obligations, without the consent of the Commission<\/span>, and the qualified financial contract<\/span> shall be in writing and approved by the board of directors of such bank or an appropriate committee, which approval shall be reflected in the minutes of such board or committee. At the time any qualified financial contracts<\/span> consisting of retail repurchase agreements are sold by a state bank<\/span>, the market value of the underlying security must be at least equal to the amount of the aggregate purchase price paid by the purchasers of the retail repurchase agreements. As used in this subdivision, “qualified financial contract<\/span>” means a qualified financial contract<\/span> as defined in 12 U.S.C. § 1821 (e)(8)(D)(i), as the same may be amended, and any contract or transaction that the Commissioner<\/span> determines to be a qualified financial contract<\/span> for purposes of this section. <\/i><\/a><\/p><\/section>","plain_text":" CODE OF VIRGINIA\n\nPREFERENCES BY PLEDGING ASSETS (\u00a7 6.2-890)\n\nA. No bank shall give preference to any depositor or creditor by pledging the\nassets of such bank, except as otherwise authorized by subsection B, or except\nto secure deposits of trust funds made pursuant to the provisions of §\n6.2-1005 or 6.2-1057.\n\nB. Notwithstanding the provisions of subsection A, any bank:\n\n 1. May deposit securities for the purpose of securing deposits of:\n \t\t\t\ta. The United States government and its agencies;\n \t\t\t\tb. The Commonwealth, any other state where the bank has a branch office,\n or any agency or political subdivision thereof;\n \t\t\t\tc. Insolvent national bank funds as permitted under 12 U.S.C. § 192;\n \t\t\t\td. Proceeds of sale of United States obligations as permitted under 31\n U.S.C. § 771; and\n \t\t\t\te. Bankruptcy funds deposited under the provisions of 11 U.S.C. §\n 345;\n\n 2. May deposit securities for the purpose of securing sureties on surety bonds\n furnished to secure deposits listed in subdivision 1, or may, in lieu of\n depositing such securities to secure deposits pursuant to subdivision 1 b, by\n its board of directors, adopt a resolution before such public funds are\n deposited therein, to the effect that, in the event of the insolvency or\n failure of such bank, such public funds thereafter deposited therein shall, in\n the distribution of the assets of such bank, be paid in full before any other\n depositors shall be paid deposits thereafter made therein. The adoption of\n such resolution shall be deemed to constitute an obligation binding on such\n bank;\n\n 3. Is authorized to pledge its assets as security for amounts of borrowed\n money which shall not, without the approval of the Commission given in advance\n in writing, exceed in the aggregate the amount of the capital, surplus, and\n undivided profits of such bank actually paid in or earned and remaining\n undiminished by losses or otherwise. The amount of assets pledged for the\n security of such a loan shall not, without such approval, exceed 150 percent\n of the amount borrowed. No loan in excess of the amount so permitted made to\n any such bank shall be invalid or illegal as to the lender, even though made\n without the consent of the Commission. Rediscounting with or without guarantee\n or endorsement of notes, drafts, bills of exchange, or loans is hereby\n authorized and shall not be limited by the terms of this section, and shall\n not be considered as borrowed money within the meaning of this section;\n\n 4. Is authorized to borrow from a Federal Reserve Bank or a Federal Home Loan\n Bank and to rediscount with and sell to a Federal Reserve Bank or a Federal\n Home Loan Bank any and all notes, drafts, bills of exchange, acceptances, and\n other securities, and to give security for all money so borrowed and for all\n liabilities incurred by the discount of such notes, drafts, bills of exchange\n and other securities without restriction in like manner and to the same extent\n as national banks may lawfully do under the acts of Congress and regulations\n of the Board of Governors of the Federal Reserve System and the Federal\n Housing Finance Board; and\n\n 5. Is authorized to pledge its assets in connection with qualified financial\n contracts, which transactions shall be governed by this subdivision and not\n subdivision 3. The amount of assets pledged for obligations under such\n contracts shall not exceed 150 percent of the amount of the obligations,\n without the consent of the Commission, and the qualified financial contract\n shall be in writing and approved by the board of directors of such bank or an\n appropriate committee, which approval shall be reflected in the minutes of\n such board or committee. At the time any qualified financial contracts\n consisting of retail repurchase agreements are sold by a state bank, the\n market value of the underlying security must be at least equal to the amount\n of the aggregate purchase price paid by the purchasers of the retail\n repurchase agreements. As used in this subdivision, “qualified financial\n contract” means a qualified financial contract as defined in 12 U.S.C.\n § 1821 (e)(8)(D)(i), as the same may be amended, and any contract or\n transaction that the Commissioner determines to be a qualified financial\n contract for purposes of this section.\n\nHISTORY: Code 1950, \u00a7\u00a7 6-64, 6-65, 6-66; 1966, c. 584, \u00a7\u00a7 6.1-78, 6.1-79,\n6.1-80; 1974, c. 665; 1982, cc. 112, 411; 1989, c. 376; 1993, c. 182; 1994, c.\n7; 1996, c. 306; 2010, c. 794; 2013, c. 205.","edition":{"id":1,"name":"2025","slug":"2025","date_created":"2026-06-21 22:39:22","date_modified":"2026-06-21 22:39:22","current":1,"order_by":1,"last_import":null}}