Z-293                 _______________________________________________

                                                   SENATE BILL NO. 3602

                        _______________________________________________

State of Washington                              49th Legislature                              1985 Regular Session

By Senators Moore, Sellar and Wojahn; by Department of General Administration request

Read first time 2/5/85 and referred to Committee on Financial Institutions.

AN ACT Relating to savings and loan associations; amending RCW 33.12.060; and adding a new section to chapter 33.40 RCW.

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

        Sec. 1.  Section 35, chapter 235, Laws of 1945 as last amended by section 25, chapter 3, Laws of 1982 and RCW 33.12.060 are each amended to read as follows:

          (1) An association shall make no loan to or sell to or purchase any real property or securities from:

(a) Any director, officer, agent, or employee of an association ((or to or from));

(b) Any former director or incorporator of the association within one year of the termination of the relationship;

(c) Any party involved, either directly or indirectly, in a stock tender offer for acquisition of the association as determined by the supervisor; or

(d) Any public officer or public employee whose duties have to do with the supervision, regulation, or insurance of the association or its savings accounts.

          (2) The provisions of subsection (1) of this section shall not apply to:

          (a) Loans secured by the pledge or assignment of the savings account of the borrowing member;

          (b) Loans made to directors, officers, agents, or employees of the association upon their property which is occupied principally by such director, officer, agent, or employee as a home, the amount of such loan to be based upon the appraised value of said property as established by two independent appraisers who are not officers, agents, directors, employees, or appraisers of the association;

          (c) Loans made to directors, officers, or employees of the association upon their mobile dwelling, which is occupied principally by such director, officer, or employee as a home, the amount of such loan to be based upon the appraised value of the dwelling as established by two independent appraisers who are not directors, officers, employees, or appraisers of the association;

          (d) Loans made to directors, officers, or employees of the association for home or property repairs, alterations, improvements, or additions, or home furnishings or appliances, for a residence which is occupied principally by such director, officer, or employee as a home;

          (e) Loans made to directors, officers, or employees of the association for the payment of expenses of vocational training or college or university education; nor to

          (f) Any other loans made to directors, officers, or employees of the association:  PROVIDED, That the total value of the loans made or obligations acquired under authority of this section for any one director, officer, or employee shall not exceed such amount as prescribed by the supervisor under regulations adopted under the administrative procedure act, chapter 34.04 RCW.  No  loan may be made, credit extended, or obligation acquired unless the board of directors of the association has approved a resolution authorizing the same by a majority vote at a meeting of the board held within sixty days prior to the making or acquisition of the loan or obligation, and the vote and resolution shall be entered in the corporate minutes.

          (3) A loan to or a purchase or sale to or from a partnership or corporation  fifteen percent of which is owned by any one director, officer, agent, or employee of the association or twenty-five percent of which is owned by any combination of directors, officers, agents, or employees of the association shall be deemed a loan to or a purchase or sale to or from such director, officer, agent, or employee within the meaning of this section except when the transaction occurred without the knowledge or against the protest of such director, officer, agent, or employee of the association.

NEW SECTION. Sec. 2.  A new section is added to chapter 33.40 RCWto read as follows:

          The supervisor of savings and loans may appoint provisional officers and directors, in whole or in part, of an association if the supervisor determines that:

          (1) The association has failed to maintain a net worth as required by law;

          (2) An acquisition or merger of the association may be necessary; and

          (3) The continued operation of the association by the existing officers or directors would not be in the best interest of the public or the depositors.