Nevada Administrative Code Chapter 665 - Banks: Examination and Reports
Nevada Administrative Code – Chapter 665: Banks: Examination and Reports
Purpose:
NAC Chapter 665 regulates the supervision, examination, and reporting requirements of banks in Nevada. Its goal is to ensure banks operate safely, comply with laws, maintain accurate records, and protect depositors and the financial system.
1. Authority and Scope
NAC 665 applies to all state-chartered banks and trust companies in Nevada.
It gives the Financial Institutions Division (FID) the power to:
Examine banks,
Require reports,
Enforce compliance with state banking laws.
These regulations complement Nevada Revised Statutes (NRS) Chapter 666, which sets the statutory framework for banks.
2. Bank Examinations (General Provisions)
Frequency and Purpose
Banks are subject to regular examinations by the FID, usually once every 12–18 months, depending on size and risk profile.
Purpose of examinations:
Evaluate financial condition, capital adequacy, and liquidity.
Check management practices, internal controls, and corporate governance.
Ensure compliance with laws, regulations, and policies.
Detect fraud, unsafe practices, or operational weaknesses.
Types of Examinations
Full-scope examinations – comprehensive reviews of financials, operations, lending, and governance.
Limited or targeted examinations – focused on a specific area, e.g., cybersecurity, loan portfolio, or compliance.
Examiner Authority
Examiners may:
Inspect books, records, and accounts,
Interview bank officers and employees,
Review policies, procedures, and contracts.
Banks are required to provide access to requested materials promptly.
3. Reports to Be Submitted by Banks
Banks must submit regular reports to the FID, which may include:
Financial Statements – including balance sheets, income statements, and capital ratios.
Call Reports – periodic reports detailing:
Loans, deposits, investments,
Asset quality,
Risk-weighted capital ratios.
Audit Reports – independent audits may be required annually or as requested.
Special Reports – on:
Loan losses,
Compliance with anti-money laundering (AML) regulations,
Large transactions or unusual activities.
4. Required Recordkeeping
Banks must maintain accurate records of:
Deposits and withdrawals,
Loans and collateral,
Investments and securities,
Correspondence with regulators.
Records must be kept for at least 5 years, or longer if required by law.
5. Enforcement and Compliance
The FID can issue directives if a bank fails to comply, including:
Cease-and-desist orders for unsafe practices,
Fines or penalties for violations,
Requiring corrective action plans.
Noncompliance may also affect:
Bank charters,
Management licenses,
Ability to operate in Nevada.
6. Confidentiality
Examiners’ reports and bank-submitted information are confidential.
Disclosure is allowed only:
To law enforcement agencies,
In judicial proceedings,
As authorized by NRS Chapter 666.
7. Examples of Reporting Requirements in Practice
Quarterly financial reports – balance sheets, income statements, loan portfolios.
Annual audit report – certified by independent auditors to ensure accuracy.
Call reports – submitted to the state regulator, showing risk exposure.
Notice of large transactions – banks must report unusual transfers over a threshold to prevent fraud or money laundering.
Cybersecurity incident reports – if customer data or bank systems are compromised.
8. Key Takeaways
NAC 665 ensures transparency, safety, and sound management in Nevada banks.
Banks must cooperate with regulatory examinations and timely reporting.
Violations can result in penalties, corrective action, or loss of charter.
The regulations cover financial health, governance, risk management, and compliance.
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