AN ACT Relating to banks; amending RCW 30.08.140; adding new sections to chapter 30.04 RCW; and repealing RCW 30.04.200.

BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF WASHINGTON:

Sec. 1. Section 30.08.140, chapter 33, Laws of 1955 as amended by section 3, chapter 248, Laws of 1957 and RCW 30.08.140 are each amended to read as follows:

Upon the issuance of a certificate of authority to a bank, the persons named in the articles of incorporation and their successors shall thereupon become a corporation and shall have power:

(1) To adopt and use a corporate seal.

(2) To have succession for the term mentioned in its articles of incorporation.

(3) To make contracts.

(4) To sue and be sued, the same as a natural person.

(5) To elect directors who, subject to the provisions of the corporation's bylaws, shall have power to appoint such officers as may be necessary or convenient, to define their powers and duties and to dismiss them at pleasure, and who shall also have general supervision and control of the affairs of such corporation.

(6) To prescribe by its stockholders bylaws not inconsistent with law, regulating the manner in which its stock shall be transferred, its directors and officers elected or appointed, its stockholders convened for general or special meetings, its property transferred, its general business conducted and the privileges granted to it by law exercised and enjoyed.

(7) To discount and negotiate promissory notes, drafts, bills of exchange and other evidences of debt, to receive deposits of money and commercial paper, to lend money on real or personal security, to buy and sell bullion, coins and bills of exchange.

(8) To take and receive as bailee for hire upon terms and conditions to be prescribed by the corporation, for safekeeping and storage, jewelry, plate, money, specie, bullion, stocks, bonds, mortgages, securities and valuable paper of any kind and other valuable personal property, and to rent vaults, safes, boxes and other receptacles for safekeeping and storage of personal property.

(9) ((~~If the bank be located in a city of not more than five thousand inhabitants,~~)) To act as insurance agent.

(10) To act as securities, commodities, and/or financial futures broker.

(11) To accept drafts or bills of exchange drawn upon it having not more than six months sight to run, which grow out of transactions involving the importation or exportation of goods; or which grow out of transactions involving the domestic shipment of goods, providing shipping documents conveying or securing title are attached at the time of acceptance; or which are secured at the time of acceptance by a warehouse receipt or other such document conveying or securing title to readily marketable staples. No bank shall accept, either in a foreign or a domestic transaction, for any one person, company, firm or corporation, to an amount equal at any one time in the aggregate to more than ten percent of its paid up and unimpaired capital stock and surplus unless the bank is secured by attached documents or by some other actual security growing out of the same transaction as the acceptance; and no bank shall accept such bills to an amount equal at any time in the aggregate to more than one-half of its paid up and unimpaired capital stock and surplus: PROVIDED, HOWEVER, That the supervisor, under such general regulations applicable to all banks irrespective of the amount of capital or surplus, as he may prescribe may authorize any bank to accept such bills to an amount not exceeding at any time in the aggregate one hundred percent of its paid up and unimpaired capital stock and surplus: PROVIDED, FURTHER, That the aggregate of acceptances growing out of domestic transactions shall in no event exceed fifty percent of such capital stock and surplus.

((~~(11)~~)) (12) To accept drafts or bills of exchange drawn upon it, having not more than three months sight to run, drawn under regulations to be prescribed by the supervisor by banks or bankers in foreign countries or dependencies or insular possessions of the United States for the purpose of furnishing dollar exchange as required by the usages of trade in the respective countries, dependencies or insular possessions. Such drafts or bills may be acquired by banks in such amounts and subject to such regulations, restrictions and limitations as may be provided by the supervisor: PROVIDED, HOWEVER, That no bank shall accept such drafts or bills of exchange referred to in this subdivision for any one bank to an amount exceeding in the aggregate ten percent of the paid up and unimpaired capital and surplus of the accepting bank unless the draft or bill of exchange is accompanied by documents conveying or securing title or by some other adequate security, and that no such drafts or bills of exchange shall be accepted by any bank in an amount exceeding at any time the aggregate of one-half of its paid up and unimpaired capital and surplus: PROVIDED FURTHER, That compliance by any bank which is a member of the federal reserve system of the United States with the rules, regulations and limitations adopted by the federal reserve board thereof with respect to the acceptance of drafts or bills of exchange by members of such federal reserve system shall be a sufficient compliance with the requirements of this subdivision or paragraph relating to rules, regulations and limitations prescribed by the supervisor.

((~~(12)~~)) (13) This section is retroactive as of June 10, 1931, and the powers hereby conferred shall inure to the benefit of any bank now holding such certificate, the persons named in the articles of incorporation of said bank and their successors.

NEW SECTION. Sec. 2. A new section is added to chapter 30.04 RCW to read as follows:

(1) No bank may act as insurance agent or as securities, commodities, or financial futures broker unless the bank files an application with the supervisor and the supervisor determines that the bank has a capital to assets ratio of at least seven percent.

In making a determination of such capital ratio, the supervisor shall be guided by the definitions of capital and assets employed by the board of governors of the federal reserve system.

(2) A bank authorized by the supervisor to act as insurance agent or as securities, commodities, or financial futures broker shall cease acting in such capacity no sooner than twelve months from the end of the fiscal year in which the bank's capital to assets ratio is less than seven percent; however, the supervisor may extend the deadline for cessation of such activities as necessary to prevent an unsafe and unsound condition, but in no case beyond twenty-four months from the end of the fiscal year in which the bank's capital to assets ratio is less than seven percent.

(3) A bank that was authorized to act as insurance agent, if the bank was located in a city of not more than five thousand inhabitants, may continue such activity to the same extent authorized before the effective date of this act; however, such bank may not expand such activity unless such bank complies with this section.

NEW SECTION. Sec. 3. A new section is added to chapter 30.04 RCW to read as follows:

The supervisor shall adopt rules necessary to ensure that the bank's activities authorized by section 2 of this act are conducted in a safe and sound manner, and to prevent abuses from tie-ins between products and services offered by the bank.

NEW SECTION. Sec. 4. Section 30.04.200, chapter 33, Laws of 1955 and RCW 30.04.200 are each repealed.