HOUSE BILL REPORT

 

 

                                   SSB 6453

 

 

BYSenate Committee on Financial Institutions & Insurance (originally sponsored by Senators Sellar and Barr)

 

 

Authorizing the supervisor of banking to examine agricultural lenders participating in loan guaranty programs.

 

 

House Committe on Financial Institutions & Insurance

 

Majority Report:  Do pass.  (14)

      Signed by Representatives Dellwo, Chair; Zellinsky, Vice Chair; Chandler, Ranking Republican Member; Baugher, Beck, Crane, Day, Dorn, Inslee, P. King, Nutley, Schmidt, K. Wilson and Winsley.

 

      House Staff:John Conniff (786-7119)

 

 

Rereferred House Committee on Appropriations

 

Majority Report:  Do pass.  (25)

      Signed by Representatives Locke, Chair; Grant, Vice Chair; H. Sommers, Vice Chair; Silver, Ranking Republican Member; Youngsman, Assistant Ranking Republican Member; Belcher, Bowman, Brekke, Brough, Dorn, Ebersole, Ferguson, Hine, Inslee, May, McLean, Nealey, Peery, Rust, Sayan, Spanel, Sprenkle, Valle, Wang and Wineberry.

 

House Staff:      John Conniff (786-7119)

 

 

                       AS PASSED HOUSE FEBRUARY 28, 1990

 

BACKGROUND:

 

Corporations and non-profit corporations created to lend money to agricultural borrowers are eligible for participation in the federal Farmers Home Administration only if the corporation is regulated and examined by a state or federal regulatory agency in the same manner as financial institutions such as banks.  A corporation participating in the Farm Home Administration may issue agricultural loans which are guaranteed by the administration, thereby increasing credit availability for agriculture.

 

SUMMARY:

 

The state supervisor of banking is granted authority to regulate and examine agricultural lenders incorporated under Washington law and qualified to participate in a federal loan guaranty program.

 

An agricultural lender must file an application for a license issued by the supervisor of banking. Any change in the ownership of the lender must be approved by the supervisor.

 

An agricultural lender regulated by the supervisor must adhere to all federal statutes and regulations governing a loan guaranty program in which the lender participates.

 

Agricultural lenders regulated by the supervisor must pay the supervisor's costs in regulating and examining the lender. Fees paid by a lender for regulation are deposited into the supervisor's regulatory account.

 

Lenders must keep such financial records as are required by the supervisor and must file an annual report with the supervisor. In addition, lenders must establish a loan loss reserve account for loans not guaranteed by a federal program.

 

At least once every two years, the supervisor must visit the lender to assure that the lender is in compliance with applicable statutes and regulations. The supervisor may accept audited financial statements in lieu of a full examination but must independently review loans guaranteed by a loan guaranty program.

 

The supervisor may adopt all rules necessary to implement the act, may issue cease and desist orders, may impose fines for violations of the act, and may seek judicial enforcement of the act.

 

A regulated agricultural lender must notify its members annually that investments in the lender are not insured, guaranteed, or protected by any federal or state agency.

 

The sum of $5,000 is appropriated from the general fund to the supervisor's examination fund for the regulatory purposes of the act.

 

Appropriation:    $5,000 from the general fund-state to the bank examination fund.

 

Fiscal Note:      Available.

 

Effective Date:The bill contains an emergency clause and takes effect immediately.

 

House Committee ‑ Testified For:    (Financial Institutions & Insurance) No one.

 

(Appropriations) No one.

 

House Committee - Testified Against:      (Financial Institutions & Insurance) No one.

 

(Appropriations) No one.

 

House Committee - Testimony For:    (Financial Institutions & Insurance) None.

 

(Appropriations) None.

 

House Committee - Testimony Against:      (Financial Institutions & Insurance) None.

 

(Appropriations) None.