WSR 99-02-034

EMERGENCY RULES

DEPARTMENT OF

FINANCIAL INSTITUTIONS

[Filed December 30, 1998, 3:28 p.m., effective December 31, 1998]



Date of Adoption: December 30, 1998.

Purpose: To increase fees of the Division of Banks (DOB), in an amount up to the "fiscal growth factor" for the current fiscal year.

Statutory Authority for Adoption: RCW 30.04.030, 30.04.070, 30.08.095, 33.04.025, 43.320.040.

Under RCW 34.05.350 the agency for good cause finds that immediate adoption, amendment, or repeal of a rule is necessary for the preservation of the public health, safety, or general welfare, and that observing the time requirements of notice and opportunity to comment upon adoption of a permanent rule would be contrary to the public interest.

Reasons for this Finding: As explained in more detail below, recent unforeseen and unprecedented developments threaten the ability of the Division of Banks (DOB), at current funding levels, to carry out its statutory mission, and to reach and maintain a target fund balance, and place at risk the viability of the existing federal-state dual chartering system of bank regulation. DOB's mission is to conduct full financial examinations of state chartered banks at least once during every eighteen-month period, as required by RCW 30.04.060, 32.04.211, and 33.04.020.

(1) In recent months, DOB has lost several of its most experienced examiners to the Federal Deposit Insurance Corporation (FDIC). The FDIC recently modified its long-standing practice and has begun actively recruiting experienced examiners from among state banking divisions. The departure of these examiners represents a reduction of approximately thirty percent of DOB's overall examiner force and a greater portion of its financial examination experience. The primary reason for these staff departures is that the FDIC offers a considerably higher compensation.

DOB is actively working on ways within state personnel rules, with the support and participation of its affected stakeholder groups, to increase the compensation package and career advancement opportunities of its experienced financial examiners. As recognized by DOB and stakeholder trade organizations, it is critical to take immediate steps to obtain adequate resources to support a program designed to attract and retain experienced examiners to prevent further loss of key experienced examiners, within the parameters of Initiative 601.

(2) With the participation and approval of the Office of Financial Management, DOB has established a target fund balance of approximately $900,000 in order to handle reasonable foreseeable contingencies. DOB's financial projections for the next four fiscal years indicate that, absent an annual increase in fees beginning by December 31, 1998, and in each of the four succeeding fiscal years, up to the applicable fiscal growth factor determined by OFM, DOB will be unable to:

Maintain any fund balance, and

Have the resources to provide a reasonable increase in examiner compensation in order to attract and retain experienced financial examiners.

(3) State agencies are expected to raise fees within the fiscal growth factor defined in RCW 43.135.025(6) as necessary to cover basic costs. Modest state mandated salary increases over the last four years have eroded the fund balance to the point where fee increases are required to properly manage the programs of the DOB. Fiscal year 1998 is the first year fund balance targets were not achieved and projections show continued drops in the fund balance every year thereafter regardless of changes to examiner staff compensation.

This rule change allows DOB to address the examiner compensation issue and to maintain an examiner staff capable of carrying out the division mission, including the added examination burdens presented by Year 2000 financial examinations, while addressing the challenge of maintaining an adequate fund balance.

DOB and stakeholder trade associations recognize it is impossible for DOB to build toward the targeted fund balance while maintaining a well-trained and experienced examination staff through increasing financial examiner compensation, without increasing the rate of DOB's fees up to the fiscal growth factor, as of December 31, 1998.

The purpose of this rule is to increase the rate of DOB's fees effective December 31, 1998.

Number of Sections Adopted in Order to Comply with Federal Statute: New 0, amended 0, repealed 0; Federal Rules or Standards: New 0, amended 0, repealed 0; or Recently Enacted State Statutes: New 0, amended 0, repealed 0.

Number of Sections Adopted at Request of a Nongovernmental Entity: New 0, amended 0, repealed 0.

Number of Sections Adopted on the Agency's Own Initiative: New 2, amended 0, repealed 0.

Number of Sections Adopted in Order to Clarify, Streamline, or Reform Agency Procedures: New 0, amended 0, repealed 0.

Number of Sections Adopted Using Negotiated Rule Making: New 0, amended 0, repealed 0; Pilot Rule Making: New 0, amended 0, repealed 0; or Other Alternative Rule Making: New 0, amended 0, repealed 0.

Effective Date of Rule: December 31, 1998.

December 30, 1998

John L. Bley

Director

OTS-2727.3

NEW SECTION



WAC 50-44-035  Increase in charges and fees effective December 31, 1998. Effective December 31, 1998, the rate of charges and fees under WAC 50-12-045, 50-44-020 and 50-44-030 shall be increased as follows:

(1) WAC 50-12-045 (1)(c) and (d) - The fee shall be increased to $104.18 for the issuance and filing of certificates.

(2) WAC 50-12-045 (1)(e) - The fee shall be increased to 52 cents per page.

(3) WAC 50-12-045(2) - The fee shall be increased to $93.76 per employee hour expended.

(4) WAC 50-44-020(1) - The rates shall be increased to the following:




Over But not Over This Amount Plus Of Excess

Over




Million Million Million
0 500 0 .000014668 0
500 1,000 7,334 .000014064 500
1,000 10,000 14,366 .000013855 1,000
10,000 ---- 139,069 .000 10,000


(5) WAC 50-44-020(2) - The rate shall be increased to .000036659 of total asset value.

(6) WAC 50-44-030(1) - The fee shall be increased to $67.71 per hour.

(7) WAC 50-44-030(2) - The fee shall be increased to $93.76 per hour.



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OTS-2729.2

NEW SECTION



WAC 419-14-130  Increase in charges and fees effective December 31, 1998. Effective December 31, 1998, the rate of charges and fees under chapters 419-14 and 419-56 WAC shall be increased as follows:

(1) WAC 419-14-030(1) - The fee shall be increased to $41.67 per hour.

(2) WAC 419-14-030(2) - The fee shall be increased to $46.88 per hour.

(3) WAC 419-14-030(3) - The fee shall be increased to $52.09 per hour.

(4) WAC 419-14-040 - The asset charge shall be increased to $.031254 per thousand dollars of assets.

(5) WAC 419-14-075 - The fee shall be increased to $2,604.50 for the first branch and $520.90 for each additional branch.

(6) WAC 419-14-080 - The fee shall be increased to $52.09 for the home office and for each branch.

(7) WAC 419-14-090 - The fee shall be increased to $62.50 per hour.

(8) WAC 419-14-100 - The fee shall be increased to $52.09 per hour.

(9) WAC 419-14-110 - The fee shall be increased to $52.09 per hour.

(10) WAC 419-14-120 - The fee shall be increased to $5,209.00.

(11) WAC 419-56-070 - The fee shall be increased to $1,041.80.



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Legislature Code Reviser 

Register

Washington State Code Reviser's Office