SECTION 85:10-7-1. Examination procedures

(a)   In addition to the requirements set forth in Section 714(C) of the Code, the annual examination must be made in accordance with the minimum examination procedures outlined in this section.

(b)   The examination shall be performed by:

(1)   qualified directors who are members of the board of directors but not officers or employees of the bank or trust company and who are in fact reasonably independent and have demonstrated his or her capability to perform said examination. A director, to be considered reasonably independent cannot:

(A)   be an immediate family member of active officers or employees of the bank or trust company,

(B)   have any outstanding loans with the bank or trust company which have been criticized or specially mentioned by one of the examining agencies,

(C)   have been determined by the Commissioner not to be independent of the management for any other reason; or

(2)   Certified public accountants, an independent examiner who has demonstrated a capacity to perform said examination and who is in fact independent, or persons whose proficiency has been certified by a nationally recognized certification authority, and who:

(A)   are not connected with the bank or trust company as an officer, director, attorney or employee, or as a member of the immediate family of an officer, director, attorney or employee of the bank or trust company,

(B)   are not beneficial owners, directly or indirectly, of any of the shares of stock of the bank or trust company,

(C)   have no proprietary interest in any partnership, corporation, firm or other entity that controls the bank or trust company, directly or indirectly,

(D)   do not have any outstanding loans to themselves, their partners, their firms or their families, unless such loans are adequately disclosed in the report to the board of directors, disclosing the name of the borrower, the amount, security pledged and appraisal or market value of the security,

(E)   do not make entries or postings on the books of the bank, or perform any other operational functions for the bank, except such functions for which prior approval was requested and obtained in writing from the Commissioner, and except a correspondent bank whose operational functions are subject to supervision by the bank regulatory agencies, and

(F)   can and do specifically specify in the report that he/she has met the test of independence as stated above and that he/she is in fact independent. Where a bank or trust company is part of a consolidated company audit done by certified public accountants meeting the criteria of Subsection 2 (A) through (E) of this Section, the internal audit staff of the parent company shall also be acceptable.

[Source: Amended at 15 Ok Reg 2952, eff 7-15-98; Amended at 25 Ok Reg 1064, eff 5-25-08]