WSR 13-20-125 PROPOSED RULES DEPARTMENT OF FINANCIAL INSTITUTIONS [Filed October 1, 2013, 4:40 p.m.]
Original Notice.
Preproposal statement of inquiry was filed as WSR 13-16-027.
Title of Rule and Other Identifying Information: This rule amends and consolidates all rule making regarding semi-annual assessments, hourly examination fees, and other fees and charges in chapter 208-544 WAC. This rule also makes technical changes to chapter 208-544 WAC for purposes of clarity (including plain-language amendments and additions), and repeals WAC 208-512-045 for redundancy purposes.
Hearing Location(s): Department of Financial Institutions, 2033 Sixth Avenue, Suite 1030, Seattle, WA 98121, on November 6, 2013, at 10:00 a.m.
Date of Intended Adoption: November 12, 2013.
Submit Written Comments to: Ali Higgs, P.O. Box 41200, Olympia, WA 98504-1200, e-mail ali.higgs@dfi.wa.gov, fax (360) 753-6070, by November 6, 2013.
Assistance for Persons with Disabilities: Contact Angela Nutt by November 1, 2013, TTY (360) 664-8126 or (360) 960-8704.
Purpose of the Proposal and Its Anticipated Effects, Including Any Changes in Existing Rules: The proposed rule making amends chapter 208-544 WAC (and repeals WAC 208-512-045) to (1) provide for semi-annual assessments of nondepositary trust companies, (2) adjust the hourly examination fee schedule and other charges for all of the division of banks' regulated institutions, (3) establish and/or clarify miscellaneous service charges, and (4) make technical changes for purposes of clarity (including plain-language amendments and additions).
Reasons Supporting Proposal: This rule promotes equalization between the different types of chartered entities based on considerations of asset size, examination hours, and services provided. The rule consolidates all provisions related to semi-annual assessments, hourly examination fees, and other charges for work and services in a single location in chapter 208-544 WAC.
Statutory Authority for Adoption: RCW 43.320.040.
Rule is not necessitated by federal law, federal or state court decision.
Name of Proponent: Department of financial institutions, governmental.
Name of Agency Personnel Responsible for Drafting: Ali Higgs, 150 Israel Road, Tumwater, WA 98501, (360) 902-8704; Implementation: Susan Dumontet, 150 Israel Road, Tumwater, WA 98501, (360) 902-8704; and Enforcement: Richard M. Riccobono, 150 Israel Road, Tumwater, WA 98501, (360) 902-8704.
No small business economic impact statement has been prepared under chapter 19.85 RCW. This rule does not impose more than a minor cost on any individual business, including small businesses, as defined under RCW 19.85.020 (2) and (3).
A cost-benefit analysis is not required under RCW 34.05.328. The department of financial institutions is not one of the agencies listed in RCW 34.05.328 (5)(a)(i) as being required to file a cost-benefit analysis.
October 1, 2013
Richard M. Riccobono
Division of Banks Director
NEW SECTION
WAC 208-544-001 Scope.
This chapter establishes the rules mandated by RCW 30.04.070 for the collection of authorized fees and charges from regulated institutions. These rules apply unless the director makes a finding that their application in a specific case would be inconsistent with the division's mission to foster sound economic growth and sustainable economic prosperity in the state of Washington or with the principles of collection found in WAC 208-544-005.
NEW SECTION
WAC 208-544-002 Definitions.
Unless the context clearly requires otherwise, the definitions used in this section apply throughout this chapter. (1) "Agricultural lender" has the definition given in RCW 31.35.020(1). (2) "Alien bank" has the definition given in RCW 30.42.020(1). (3) "Bank" has the definition given in RCW 30.04.010(2). (4) "Bank holding company" has the definition given in RCW 30.04.010(3). (5) "Branch" has the definition given in RCW 30.04.010(5). (6) "Business development company" has the definition given in RCW 31.24.010(6). (7) "Commercial bank" is a bank as defined under subsection (3) of this section. (8) "Department" means the department of financial institutions. (9) "Development credit corporation" means an entity organized under chapter 31.20 RCW. (10) "Director" means the director of the division of banks of the department of financial institutions. (11) "Division" means the division of banks of the department of financial institutions. (12) "Financial holding company" has the definition given in RCW 30.04.010(8). (13) "Foreign bank" has the definition given in RCW 30.04.010(9). (14) "OCC" means the Office of the Comptroller of the Currency, as created under the National Bank Act of 1863. (15) "OFM" means the office of financial management created by RCW 43.41.050. (16) "Regulated institution" means an alien bank, agricultural lender, bank, bank holding company, business development company, commercial bank, financial holding company, foreign bank, savings bank, small business administration 7(a) lender, thrift holding company, trust company, or other institution over which the department of financial institutions has regulatory authority over. (17) "Report of condition" includes the FDIC Call Report, or a regulated institution's quarterly balance sheet and income statement. (18) "Savings bank" has the definition given in RCW 32.04.020(9), which includes a mutual savings bank and stock savings bank. (19) "Small business administration 7(a) lender" means an entity licensed under chapter 31.40 RCW. (20) "Thrift holding company" has the definition given in RCW 32.04.020(10). (21) "Trust company" has the definition given in RCW 30.04.010(14).
AMENDATORY SECTION (Amending WSR 00-17-141, filed 8/22/00, effective 9/22/00)
WAC 208-544-005 Determination of collection method—Principles.
When determining ((a revision to)) the collection method for authorized fees and charges, the director shall consider, but not be limited to, the following principles((.)): (1) The revenue ((to be)) collected shall be sufficient to allow the division ((of banks to achieve its statutory mission)) to examine institutions within all required time periods((.)); (2) Regulatory costs shall be apportioned in a manner consistent with the ((state of Washington's overall policy commitments to rural and economically distressed areas, promoting)) division's statutory mission to promote and provide the delivery of financial services to ((those)) rural and economically distressed areas((.)); (3) No industry or regulated institution shall bear a disproportionate share of regulatory costs((.)); (4) ((There shall be a significant correlation between assessments and examination costs across institutions. (5))) The division ((of banks)) shall have sufficient resources to maintain a competent and motivated staff((. (6) Such)); and (5) Any other principles ((as)) the director ((may)) deems relevant.
AMENDATORY SECTION (Amending WSR 00-17-141, filed 8/22/00, effective 9/22/00)
WAC 208-544-010 Collection of examination costs—Collection method.
The ((requirement of RCW 30.04.070 and 30.08.095 that the director)) division shall collect ((from each bank, mutual savings bank, stock savings bank, trust company, or industrial loan company, the costs of the division, shall be met in accordance with the procedures established in this chapter. Costs shall be recouped by)) the following ((methods)): (1) A semiannual assessment based on asset ((charges)) size in order to recoup ((nondirect bank examination)) the indirect costs related ((expenses (RCW 30.08.095, giving the director the authority to charge for other services rendered), and)) to the examination of regulated institutions as specified in WAC 208-544-020; (2) An hourly charge for the ((estimated actual)) direct cost of examinations determined by ((a)) the rate specified ((herein times the number of hours spent by division personnel in regular or extraordinary examinations)) in WAC 208-544-030; and (3) Fees for services as specified in WAC 508-544-040, 208-544-045, and 208-544-050.
AMENDATORY SECTION (Amending WSR 00-17-141, filed 8/22/00, effective 9/22/00)
WAC 208-544-020 Semiannual asset charge—Assessment.
((A semiannual charge for assets will be used to recoup nondirect bank examination related expenses (RCW 30.08.095).)) (1) The semiannual ((charge for assets will)) assessment shall be computed ((upon)) using the asset value reflected in the most recent report of condition. The director may adjust such rates if the director determines that a disproportionate amount of revenue is being collected. The rate of ((such)) charge ((shall be as)) is set forth in the following schedules: (((1))) (a) Commercial banks, ((mutual)) savings banks, ((and stock)) savings associations, and alien banks. ((The rate of such charge shall be based on the total asset value as reflected in the report of condition due for that period provided, the director may adjust such rates if the director determines that a disproportionate amount of revenue is being collected by such rate. In no event shall the amount of revenue collected from any one bank exceed one hundred thirty-three thousand four hundred ninety dollars per assessment period.
(2) Alien banks. The rate of such charge shall be .000035189 of the total asset value as reflected in the report of condition due for that period provided, the director may adjust such rate if the director determines that a disproportionate amount of revenue is being collected by such rate. (3) The director's office shall forward by United States mail a notice to each financial institution showing the manner of calculating the asset charge due and a worksheet for such purposes. The notices shall be mailed each June and December. The asset charge shall be calculated by the financial institution and forwarded to the division of banks with the applicable report. A completed copy of the worksheet shall be included with the assessment. An additional two hundred dollar penalty shall be assessed if the amount is not paid by the time such report of condition or notice of assessment is due.))
(b) Trust companies.
(2) Assessments and statements of condition shall be remitted to the division in accordance with the following: (a) The division shall provide an official notice of assessment to each financial institution in the months of June and December of each calendar year. (b) The financial institution shall calculate the assessment amount due using the most recent statement of condition. (c) The assessment payment shall be remitted to the division in accordance within the dates specified by the notice along with the statement of condition used to calculate the assessment. (d) A fifty dollar fee shall be charged for each day a regulated institution fails to file the assessment payment and statement of condition after the deadline to file has passed, as set out under RCW 30.08.190(3).
AMENDATORY SECTION (Amending WSR 00-17-141, filed 8/22/00, effective 9/22/00)
WAC 208-544-030 Hourly fees and charges—Regular, including extraordinary examination and special examinations.
(1) Each ((bank, mutual savings bank, trust company, alien bank, or industrial loan company)) regulated institution shall pay to the ((director the following fees: (1) For regular examinations, including extraordinary examinations for the express purpose of examining unusual conditions or circumstances, including extensions of regular examinations wherein conditions may warrant extension of time required in the examination beyond normal allotted time and such other reviews as determined by the director; sixty-five dollars per hour. The director may charge the actual cost of examinations performed under personal service contracts by third parties. (2) For electronic data processing examination, trust examination, or other examination requiring specialized expertise, ninety dollars per hour. Electronic data processing centers and trust companies are exempt from the asset assessment provisions of WAC 208-544-020(1) if such centers or companies are not a part of the assets of the bank as reported in the report of condition.)) division hourly fees in the amount of eighty-three dollars for regular examinations. This includes safety and soundness, information technology, trust, and any other examination requiring specialized expertise. (a) The hourly rate applies to extraordinary examinations for the purpose of examining unusual conditions or circumstances, extensions of regular examinations, and any other reviews as determined by the director. (b) The division may charge the actual cost of examinations performed under personal service contracts by third parties. (2) The division may collect examination fees for out-of-state banks doing business in the state of Washington (host state) through a cooperative agreement with the home state under RCW 30.04.060. (a) Fees may be collected directly from the out-of-state institution or may be collected from the home state. (b) Such fees shall be agreed upon before the examination begins. (3) The ((director)) division shall ((submit a)) provide to the institution an itemized statement ((for the foregoing)) outlining the charges ((following the)) upon completion of any applicable examination((, and)). The charges contained in the statement shall be paid ((not)) no later than thirty days after ((submission)) the billing date of such statement. (4) ((These charges shall become effective for invoicing that occurs after the effective date of this rule, provided such invoicing relates to examinations occurring on or after July 1, 1991.)) The division may require a lump sum payment in advance to cover the anticipated cost of review and investigation of the activities described in this section. In no event shall the lump sum payment required under this section exceed the actual cost incurred under those subsections.
NEW SECTION
WAC 208-544-040 Certificate and secretary of state filing fees.
(1) The division shall collect one hundred dollars for issuing each of the following: (a) Branch certificates; (b) Certificates of increase or decrease of capital stock; (c) Certificates of authority; (d) Certificates of corporate existence; and (e) Any other certificates issued by the division. (2) The division shall collect the following for filing documents with the secretary of state: (a) One hundred dollars for filing articles of incorporation, amendments thereof, or any other documents filed with the secretary of state. (b) Any amounts billed directly to the division by the secretary of state relating to subsection (2)(a) of this section.
NEW SECTION
WAC 208-544-045 Additional services fees.
(1) The division shall collect hourly fees in the amount of eighty-three dollars plus actual expenses for all services attendant to: (a) The chartering of a new regulated institution; (b) The conversion of an existing nonstate chartered institution to a Washington state chartered institution; (c) The establishment of an office or bureau by an alien bank in Washington state; (d) The acquisition and control of more than five percent of the shares of voting stock or substantially all of the assets of a bank, trust company, national banking association, or bank holding company, where the principal operations are conducted within this state by an out-of-state bank holding company; (e) The issuance or filing of a notice of change of control; (f) Requests for division approval to use words indicating bank or trust company in a company name under RCW 30.04.020; (g) Meeting attendance by division personnel with the board of directors or senior management of a regulated institution; (h) Off-site monitoring of a regulated institution; (i) Voluntary or involuntary liquidation under chapter 30.44 RCW; (j) Acting as conservator of a bank or trust company under chapter 30.46 RCW; (k) Investigation into, and the resolution of, consumer complaints; (l) Any inquiry made to the division by a person, company, or regulated institution that is not in the normal course of business; (m) Investigation into, and subsequent enforcement action(s) against, individuals, companies, or otherwise, that are operating an unlicensed bank or trust business in the state of Washington; (n) Applications submitted to the division by an existing regulated institution to: (i) Merge, consolidate, reorganize, or convert to another charter type; (ii) Establish a new branch; (iii) Relocate the main office or an existing branch; (iv) Purchase or sell an existing branch; (v) Confer trust powers on an existing state-chartered bank; (vi) Change the legal name of the regulated institution. (o) Any other activity the director deems relevant or necessary. (2) The division shall collect per page for furnishing copies of papers filed with the division in accordance with the fees set out in WAC 208-12-090.
NEW SECTION
WAC 208-544-055 Legal fees.
The division may collect the following legal fees: (1) Hourly fees in the amount of eighty-three dollars for legal opinions rendered interpreting statutes and rules; (2) Pass-through costs for legal assistance rendered by an assistant attorney general or special counsel related to a specific regulated institution. (a) The division shall notify a regulated institution before the division incurs expense for legal assistance that may be charged to the regulated institution under this section. (b) The charges shall be paid no later than thirty days after the billing date of the rendered legal assistance. (c) This section shall not govern the claim of attorney's fees in a judicial proceeding between the division and a regulated institution. Legal fees relating to such actions are governed by the Washington Administrative Procedure Act, chapter 34.05 RCW.
AMENDATORY SECTION (Amending WSR 00-17-141, filed 8/22/00, effective 9/22/00)
WAC 208-544-060 Banking fund—Minimum cash balance.
(1) The director ((shall maintain)) may make a finding that a minimum cash balance ((in the banking fund (RCW 43.19.095))) of at least one month's allotment be maintained in the banking fund as set out in RCW 43.320.110. One month's allotment is ((based upon)) the current biennium budget divided by twenty-four months. (2) In the event the banking fund balance drops below ((this figure)) the required amount, the director ((shall)) may declare the next semiannual asset assessment due((; payment within thirty days of such declaration)). The ((director)) department shall bill each institution based on the most current report of condition ((and)). Payment is due within thirty days of such declaration and shall be in lieu of the next regularly scheduled asset assessment.
REPEALER
The following sections of the Washington Administrative Code are repealed:
REPEALER
The following section of the Washington Administrative Code is repealed:
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