KRS 286.1-440: Appointment of examiners -- Oath -- Restrictions on debt and stock

ownership -- Contracts for services of agency's examiners.

(1) (a) The commissioner shall appoint a sufficient number of examiners and

assistant examiners to examine all ins titutions coming under the supervision

of the department.

(b) A salary schedule for examiners and assistant examiners shall be prepared by

the commissioner and presented to the secretary of the Finance and

Administration Cabinet for approval.

(2) The commi ssioner, the deputy commissioner, and each examiner shall take the

constitutional oath of office.

(3) (a) Neither the commissioner, nor the deputy commissioner, nor any examiner or

assistant examiner shall be:

1. Indebted, directly or indirectly, as borrow er, indorser, surety, or

guarantor to any financial institution under his or her supervision or

subject to his or her examination;

2. A director, officer, or employee of a financial institution under his or her

supervision or subject to his or her examination; or

3. Engaged, or become interested, in the:

a. Sale of securities as a business; or

b. Negotiation of loans for others.

(b) Any financial institution to which any person becomes indebted in violation

of this subsection shall immediately, upon notice of the violation or possible

violation, report the fact to:

1. The commissioner; or

2. If the debtor is or may be the commissioner , the secretary of the Public

Protection Cabinet.

(c) Subject to paragraph (d) of this subsection, any person who violates this

subsection may be removed from office.

(d) An order of removal under paragraph (c) of this subsection shall not be issued

without notice to the person, opportunity for a hearing, and written findings of

fact and conclusions of law in accordance with KRS Chapter 13B.

(4) No person shall be assigned to examine the affairs of any bank or trust company in

a county in which he or she ho lds stock in either a state or national bank or trust

company.

(5) (a) The commissioner may enter into contracts with any bank supervisory agency

that has concurrent jurisdiction over a state bank or the branch of an out -of-

state bank operating in this state to:

1. Engage the services of the agency's examiners at a reasonable rate of

compensation; or

2. Provide the services of the commissioner's examiners to the agency at a

reasonable rate of compensation.

(b) Any contract entered into pursuant to this subs ection shall be deemed a sole

source contract under the provisions of KRS 45A.095.