H-1158 _______________________________________________
HOUSE BILL NO. 936
_______________________________________________
State of Washington 49th Legislature 1985 Regular Session
By Representatives Crane, Barrett, Wang, Holland, P. King, K. Wilson, Jacobsen and Winsley
Read first time 2/8/85 and referred to Committee on Financial Institutions & Insurance.
AN ACT Relating to loans; amending RCW 33.12.012 and 31.12.136; adding new sections to chapter 64.04 RCW; creating a new section; and providing an effective date.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF WASHINGTON:
NEW SECTION. Sec. 1. It is the intent of the legislature by enacting this measure to exercise the full extent of the authority it retains under 12 U.S.C. Sec. 1701j-3.
NEW SECTION. Sec. 2. A new section is added to chapter 64.04 RCW to read as follows:
For purposes of this act:
(1) "Due-on-sale clause" means a contract provision which authorizes a lender, at its option, to declare due and payable sums secured by the lender's security instrument if all or any part of the property, or an interest therein, securing the real property loan is sold or transferred without the lender's prior written consent;
(2) "Lender" means a person or government agency making a real property loan, or any assignee or transferee, in whole or in part, of such a person or agency; and
(3) "Real property loan" means a mortgage, loan, advance, deed of trust, or credit sale secured by a lien on real property, the stock allocated to a dwelling unit in a cooperative housing corporation, or a modular home or a mobile home as defined in RCW 82.52.010.
NEW SECTION. Sec. 3. A new section is added to chapter 64.04 RCW to read as follows:
(1) Except as provided in subsection (2) of this section, no lender, other than a national bank, federal savings and loan association, federal savings bank, or federal credit union, may enter into or enforce a contract containing a due-on-sale clause with respect to a real property loan.
(2) A lender may require any successor or transferee of the borrower to meet customary credit standards applied to loans secured by similar property, and the lender may declare the loan due and payable pursuant to the terms of the contract upon transfer to any successor or transferee of the borrower who fails to meet such customary credit standards.
Sec. 4. Section 1, chapter 87, Laws of 1981 as amended by section 23, chapter 3, Laws of 1982 and RCW 33.12.012 are each amended to read as follows:
(1) Except as provided in subsection (2) of this section, notwithstanding any other provision of law, in addition to all powers, express or implied, that an association has under this title, an association may exercise any of the powers conferred as of February 25, 1982, upon a federal savings and loan association doing business in this state.
(2) An association may not enter into or enforce a contract containing a due-on-sale clause except as permitted by section 3 of this 1985 act.
Sec. 5. Section 15, chapter 31, Laws of 1984 and RCW 31.12.136 are each amended to read as follows:
(1) Except as provided in subsection (4) of this section, notwithstanding any other provision of law, a credit union may exercise any of the powers or authority conferred as of July 1, 1984, upon a federal credit union doing business in this state.
(2) Except as provided in subsection (4) of this section, in addition to the powers conferred under subsection (1) of this section, the supervisor may by rule authorize credit unions to exercise any of the powers conferred at the time of the adoption of the rule upon a federal credit union doing business in this state if the supervisor finds that the exercise of power serves the convenience and advantage of depositors and borrowers of state-chartered credit unions, and maintains the fairness of competition and parity between state- chartered credit unions and federal-chartered credit unions.
(3) Before exercising a power under subsection (1) or (2) of this section, the board of a credit union shall adopt a resolution identifying and formally adopting that power.
(4) A credit union may not enter into or enforce a contract containing a due-on-sale clause except as permitted by section 3 of this 1985 act.
NEW SECTION. Sec. 6. This act shall take effect October 15, 1985, which is three years after the date of enactment of the Garn-St. Germain Depository Institutions Act of 1982.
NEW SECTION. Sec. 7. If any provision of this act or its application to any person or circumstance is held invalid, the remainder of the act or the application of the provision to other persons or circumstances is not affected.