Colorado § 11-44-109 - Examination by commissioner - procedure - penalty.

§ 11-44-109. Examination by commissioner - procedure - penalty.

(1) At such intervals as the commissioner determines to be necessary or desirable in order to ascertain that each association is conducting its business in a safe and authorized manner, the commissioner or the commissioner's deputy or employee shall visit the home office and branch offices that the commissioner deems necessary and examine the affairs of every domestic association doing business in this state. The commissioner's deputy or employee, before making such an examination, shall produce a document that includes the signature and seal of the commissioner and a statement concerning the commissioner's authority to make the examination. The commissioner or the commissioner's deputy may administer oaths and examine under oath any director, officer, employee, or agent of any association concerning the business and affairs of the association. If the association has neither been audited by a registered or certified public accountant, in the manner and by auditors satisfactory to the commissioner, within the twelve-month period immediately preceding the date of the examination or within the period that has elapsed since the last examination, whichever is greater, nor adopted and maintained an internal audit program acceptable to the federal deposit insurance corporation or its successor and the division, the examination by the division must include an audit. The cost, as computed by the division, of the audit shall be paid by the association audited; except that the division shall not charge for making an audit when the audit has been made by reason of collaboration as provided in section 11-41-117.

(1.5) In lieu of making the commissioner's own examination, the commissioner may accept the examination report prepared by an appropriate federal regulatory authority.

(2) When, in the judgment of the commissioner, the condition of an association renders it necessary or expedient to make an extra examination or devote any extraordinary attention to the association's affairs, the commissioner may make any extra examinations and devote any necessary extra attention to the conduct of the association's affairs and may cause a registered or certified public accountant, appointed by the commissioner, to make an audit or examination of the association's business and affairs. In any such case, the association shall pay a reasonable fee based on actual cost to be affixed by the commissioner for all extra services rendered by the division or by the accountant. A copy of the commissioner's report on each examination must be furnished to the association examined, and each director must note on the report that the director has read the report.

(3) The commissioner or the commissioner's deputy shall annually examine the affairs of every foreign association doing business in this state, and for every such examination made outside this state, a reasonable expense and the actual traveling expenses incurred shall be paid by the association examined. If the commissioner deems it necessary, the commissioner may cause a public accountant, appointed by the commissioner, to make an audit or examination of the association's business and affairs, and, in any such case, the association shall pay a reasonable price to be fixed by the commissioner for the extra services rendered by the accountant. If a foreign association fails to pay the costs incurred in the examination, the costs shall be paid by the state treasurer upon the order of the commissioner, and the amount paid becomes a first lien upon all the assets and property of the association and may be recovered by suit by the attorney general on behalf of the state and restored to the fund from which the costs were paid.

(4) For the purpose of the examinations provided for in this section, the commissioner and the commissioner's deputy or any other person authorized by the commissioner to make the examination:

(a) Has free access to all books and papers of the association that relate to its business and to the books and papers kept by any officer, agent, or employee relating to the association or upon which any record of its business is kept;

(b) May summon witnesses and administer oaths or affirmations in the examination of the directors, officers, agents, or employees of any association or any other person in relation to an association's affairs, transactions, and conditions; and

(c) May require and compel the production of records, books, papers, contracts, or other documents by court action if necessary.

(5) Any person who knowingly or willfully testifies falsely in reference to any matter material to said examination is guilty of perjury in the second degree and, upon conviction thereof, shall be punished accordingly; and any person who willfully refuses or fails to attend, answer, or produce books or papers, or who refuses to give said commissioner or the commissioner's deputy or the person authorized by the commissioner full and truthful information and answer in writing to any inquiry or question made in writing by said commissioner or deputy or the person authorized by the commissioner in regard to the business carried on by such association or other matters under investigation, or who refuses or willfully fails to appear and testify under oath before the commissioner, the commissioner's deputy, or the person authorized by the commissioner commits a class 2 misdemeanor.

(6) Any director, officer, agent, or employee of any association who knowingly or willfully makes any false certificate, entry, or memorandum upon any of the books or the papers of any association or upon any statement filed or offered to be filed in the division of financial services of this state or used in the course of any examination, inquiry, or investigation, with the intent to deceive the commissioner, the commissioner's deputy, or any person employed or appointed by the commissioner to make such examination, inquiry, or investigation commits a class 2 misdemeanor.

Source: L. 33: p. 337, § 8. CSA: C. 25, § 54. L. 39: p. 250, § 22. CRS 53: § 122-6-9. L. 55: p. 765, § 1. L. 57: p. 650, § 2. C.R.S. 1963: § 122-5-9. L. 69: p. 1021, § 1. L. 71: p. 1147, § 5. L. 72: p. 567, § 44. L. 84: (1) amended and (1.5) added, p. 381, § 11, effective May 11. L. 89: (6) amended, p. 618, § 6, effective July 1. L. 2004: (1) and (1.5) amended, pp. 151, 140, §§ 60, 24, effective July 1. L. 2021: (5) and (6) amended, (SB 21-271), ch. 462, p. 3151, § 127, effective March 1, 2022. L. 2024: (1) to (4) amended, (HB 24-1381), ch. 350, p. 2381, § 48, effective August 7.

Cross references: For the penalty for a class 2 misdemeanor, see § 18-1.3-501.