AN ACT Relating to financial institutions; amending RCW 62A.4-213; and adding a new chapter to Title 30 RCW.

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

NEW SECTION. Sec. 1. The legislature finds that the joint policy statement issued on March 22, 1984, by the federal home loan bank board, federal deposit insurance corporation, office of the comptroller of the currency and the federal reserve board requesting financial institutions to voluntarily reduce the delay in making funds available after a deposit is made, has failed to resolve problems of delayed availability of customer funds.

The practice by financial institutions in delaying a depositor's ability to withdraw funds results in hardship and other problems for depositors, especially when the institution's policy is inflexible and not disclosed.

This chapter is intended to require all state-chartered financial institutions to comply with specified standards in reducing the delay between a deposit and fund availability and to require the state supervisor of banking and supervisor of savings and loans to publish a list of all federally chartered financial institutions who do not voluntarily comply with such standards, including information disclosing such institution's policies of fund availability.

NEW SECTION. Sec. 2. Unless the context clearly requires otherwise, definitions in this section apply throughout this chapter.

(1) "Financial institution" means:

(a) Any bank or trust company organized under the provisions of Title 30 RCW or federal law;

(b) Any savings bank organized under the provisions of Title 32 RCW or federal law;

(d) Any credit union organized under the provisions of chapter 31.12 RCW or federal law.

(2) "Depository institution" means the financial institution that maintains the account into which the item is deposited.

(3) "Account" means any account with a financial institution and includes a checking, time, interest, or savings account.

(4) "Item" means any instrument for the payment of money even though it is not negotiable, but does not include money.

(5) "Business day" means Monday through Friday except for any legal holidays. In counting business days, the date on which an item is deposited shall be counted as the first business day if the deposit is made before the close of business, as such close of business is determined by the depository institution.

(6) "Local institution" means a financial institution that is located in the same city or town, or that used the same clearing facility, as the branch of the depository institution into which the item is deposited.

NEW SECTION. Sec. 3. With respect to items deposited in an account, all depository institutions shall make the funds for such items available for withdrawal from such account within the periods of time as set forth in this section, the provisions of individual account agreements notwithstanding, except as otherwise provided under sections 4, 5, and 7 of this act.

(1) Except as provided in subsection (2) of this section, the periods of time within which financial institutions shall make funds available are as follows:

(a) For any item drawn on the depository institution, one business day;

(b) For any item drawn on a local institution, other than the depository institution, two business days;

(d) For any item drawn on any other financial institution located in the United States, five business days.

(2) Financial institutions shall make funds available within the following periods of time for the following items:

(a) For any item made out in a face amount of one hundred dollars or less, one business day; or

(b) For first-endorsed items drawn on this state, on any political subdivision thereof, or on the United States treasury, one business day.

NEW SECTION. Sec. 4. The exceptions to the requirements imposed under section 3 of this act are as follows:

(1) In an instance where the depository institution has received notice that funds for an item are not collectible, or where the depository institution has good and sufficient reason to doubt the collectibility of funds for an item, the depository institution may make funds available for such item according to the depository institution's policy.

(2) With respect to items deposited into a new account established with a depository institution, the availability of funds for any item deposited within twenty-one calendar days of the opening of such account shall be subject to the depository institution's policy, so long as such policy makes such funds available for withdrawal on or before the conclusion of the twenty-first calendar day period, or on or before the expiration of the period specified in section 3 of this act for the item.

(3) For any item in an amount greater than two thousand five hundred dollars, other than an item drawn on the depository institution, the availability of funds shall be determined according to the depository institution's policy or, if the customer elects to have the item so cleared, on a collection basis. Any customer depositing an item in an amount greater than two thousand five hundred dollars shall be entitled to have available for withdrawal, within the time period specified in section 3 of this act, two thousand five hundred dollars, if the customer so requests.

(4) The availability of funds shall be governed by the depository institution's policy in the case of any items drawn on an office, including an office of the depository institution, located outside the United States.

NEW SECTION. Sec. 5. Nothing in this chapter shall affect the right of a financial institution as established by applicable law to apply funds in a customer's account to an obligation of the customer.

NEW SECTION. Sec. 6. (1) Each depository institution shall provide clear and conspicuous notice in writing to its account holders of the time periods for the availability of funds as required by this chapter and of the exceptions thereto, together with a statement of the depository institution's policy with respect to the exceptions. Such notifications shall indicate in a conspicuous manner the hour at which the depository institution closes business with respect to items received for deposit. Such notice shall (a) be provided to a potential customer prior to the customer's opening a deposit account, (b) be mailed to all existing customers within three months of the effective date of this act, and (c) be posted in a conspicuous manner at each branch and at each location of automatic teller machines or other devices that accept deposits, regardless of whether such machines or devices are located at a branch of the financial institution.

(2) Any deposit slip or envelope, or any other printed form used in connection with deposits furnished by the depository institution shall contain the following notice, printed in a conspicuous manner: "YOUR DEPOSIT MAY NOT BE AVAILABLE FOR IMMEDIATE WITHDRAWAL. CONSULT POSTED NOTICES FOR FURTHER INFORMATION."

NEW SECTION. Sec. 7. Nothing contained in this chapter shall prevent a depository institution from making funds available for withdrawal within a shorter period of time than that required by this chapter.

NEW SECTION. Sec. 8. Failure to comply with any of the provisions of this chapter shall constitute an unfair or deceptive act under the provisions of chapter 19.86 RCW.

NEW SECTION. Sec. 9. The supervisor of banking and the supervisor of savings and loan associations shall publish a quarterly report listing the financial institutions that are not in compliance with this chapter, the fund availability policy of such institutions, and the reason why the supervisor is unable to obtain the compliance of the financial institution with this chapter.

Sec. 10. Section 4-213, chapter 157, Laws of 1965 ex. sess. and RCW 62A.4-213 are each amended to read as follows:

(1) An item is finally paid by a payor bank when the bank has done any of the following, whichever happens first:

(a) paid the item in cash; or

(b) settled for the item without reserving a right to revoke the settlement and without having such right under statute, clearing house rule or agreement; or

(c) completed the process of posting the item to the indicated account of the drawer, maker or other person to be charged therewith; or

(d) made a provisional settlement for the item and failed to revoke the settlement in the time and manner permitted by statute, clearing house rule or agreement.

Upon a final payment under subparagraphs (b), (c) or (d) the payor bank shall be accountable for the amount of the item.

(2) If provisional settlement for an item between the presenting and payor banks is made through a clearing house or by debits or credits in an account between them, then to the extent that provisional debits or credits for the item are entered in accounts between the presenting and payor banks or between the presenting and successive prior collecting banks seriatim, they become final upon final payment of the item by the payor bank.

(3) If a collecting bank receives a settlement for an item which is or becomes final (subsection (3) of RCW 62A.4-211, subsection (2) of RCW 62A.4-213) the bank is accountable to its customer for the amount of the item and any provisional credit given for the item in an account with its customer becomes final.

(4) Subject to any right of the bank to apply the credit to an obligation of the customer, credit given by a bank for an item in an account with its customer becomes available for withdrawal ((~~as of right~~

~~(a) in any case where the bank has received a provisional settlement for the item,‑-when such settlement becomes final and the bank has had a reasonable time to learn that the settlement is final;~~

~~(b) in any case where the bank is both a depositary bank and a payor bank and the item is finally paid,‑-at the opening of the bank's second banking day following receipt of the item~~)) as provided in sections 3 and 4 of this 1986 act.

(5) A deposit of money in a bank is final when made but, subject to any right of the bank to apply the deposit to an obligation of the customer, the deposit becomes available for withdrawal as of right at the opening of the bank's next banking day following receipt of the deposit.

NEW SECTION. Sec. 11. Sections 1 through 9 of this act shall constitute a new chapter in Title 30 RCW.