AN ACT Relating to
state-chartered financial institutions parity with federally chartered
financial institutions; amending RCW 30.04.111 and 30.08.180; and reenacting
and amending RCW 30.04.215 and 30.08.190.
BE IT ENACTED BY THE
LEGISLATURE OF THE STATE OF WASHINGTON:
Sec. 1. RCW 30.04.111 and 1994 c
92 s 12 are each amended to read as follows:
The total loans and
extensions of credit by a bank or trust company to a person outstanding at any
one time shall not exceed twenty percent of the capital and surplus of such
bank or trust company. The following loans and extensions of credit shall not
be subject to this limitation:
(1) Loans or extensions
of credit arising from the discount of commercial or business paper evidencing
an obligation to the person negotiating it with recourse;
(2) Loans or extensions
of credit secured by bonds, notes, certificates of indebtedness, or treasury
bills of the United States or by other such obligations wholly guaranteed as to
principal and interest by the United States;
(3) Loans or extensions
of credit to or secured by unconditional takeout commitments or guarantees of
any department, agency, bureau, board, commission, or establishment of the
United States or any corporation wholly owned directly or indirectly by the
United States;
(4) Loans or extensions
of credit fully secured by a segregated deposit account or accounts in the
lending bank;
(5) Loans or extensions
of credit secured by collateral having a readily ascertained market value of at
least one hundred fifteen percent of the outstanding amount of the loan or
extension of credit;
(6) Loans or extensions
of credit secured by bills of lading, warehouse receipts, or similar documents
transferring or securing title to readily marketable staples shall be subject
to a limitation of thirty-five percent of capital and surplus in addition to
the general limitations, if the market value of the staples securing each
additional loan or extension of credit at all times equals or exceeds one
hundred fifteen percent of the outstanding amount of the loan or extension of
credit. The staples shall be fully covered by insurance whenever it is
customary to insure the staples;
(7) The purchase of
bankers' acceptances of the kind described in section 13 of the federal reserve
act and issued by other banks shall not be subject to any limitation based on
capital and surplus;
(8) The unpaid purchase
price of a sale of bank property, if secured by such property.
For the purposes of
this section "capital" shall include the amount of common stock
outstanding and unimpaired, the amount of preferred stock outstanding and
unimpaired, and capital notes or debentures issued pursuant to chapter 30.36
RCW.
For the purposes of
this section "surplus" shall include capital surplus, reflecting the
amounts paid in excess of the par or stated value of capital stock, or amounts
contributed to the bank other than for capital stock, and ((amounts
transferred to surplus from)) undivided profits ((pursuant to resolution
of the board of directors)).
The term
"person" shall include an individual, sole proprietor, partnership,
joint venture, association, trust, estate, business trust, corporation,
sovereign government or agency, instrumentality, or political subdivision
thereof, or any similar entity or organization.
The director may
prescribe rules to administer and carry out the purposes of this section,
including without limitation rules to define or further define terms
used in this section and to establish limits or requirements other than those
specified in this section for particular classes or categories of loans or
extensions of credit, and to determine when a loan putatively made to a person
shall, for purposes of this section, be attributed to another person. In
adopting the rules, the director shall be guided by rulings of the comptroller
of the currency that govern lending limits applicable to national commercial
banks.
Sec. 2. RCW 30.04.215 and 1994 c
256 s 37 and 1994 c 92 s 20 are each reenacted to read as follows:
(1) Notwithstanding any
other provisions of law, in addition to all powers enumerated by this title,
and those necessarily implied therefrom, a bank may engage in other business
activities that have been determined by the board of governors of the federal
reserve system or by the United States Congress to be closely related to the
business of banking, as of December 31, 1993.
(2) A bank that desires
to perform an activity that is not expressly authorized by subsection (1) of
this section shall first apply to the director for authorization to conduct
such activity. Within thirty days of the receipt of this application, the
director shall determine whether the activity is closely related to the
business of banking, whether the public convenience and advantage will be
promoted, whether the activity is apt to create an unsafe or unsound practice
by the bank and whether the applicant is capable of performing such an
activity. If the director finds the activity to be closely related to the
business of banking and the bank is otherwise qualified, he or she shall
forthwith inform the applicant that the activity is authorized. If the
director determines that such activity is not closely related to the business
of banking or the bank is not otherwise qualified, he or she shall forthwith
inform the applicant in writing. The applicant shall have the right to appeal
from an unfavorable determination in accordance with the procedures of the
Administrative Procedure Act, chapter 34.05 RCW. In determining whether a
particular activity is closely related to the business of banking, the director
shall be guided by the rulings of the board of governors of the federal reserve
system and the comptroller of the currency in making determinations in
connection with the powers exercisable by bank holding companies, and the
activities performed by other commercial banks or their holding companies.
(3) ((In addition to
all powers enumerated by this title, and those necessarily implied therefrom, a
bank may engage in other business activities that are determined by the
director, by rule adopted pursuant to chapter 34.05 RCW, to be closely related
to the business of banking, or necessary or convenient thereto, and the exercise
thereof will promote the public convenience and advantage. Provided, however,
that such other business activities shall also have been determined by the
board of governors of the federal reserve system or by the United States
congress to be closely related to the business of banking.)) Notwithstanding
any restrictions, limitations, and requirements of law, in addition to all
powers, express or implied, that a bank has under the laws of this state, a
bank shall have the powers and authorities conferred as of August 31, 1994,
upon federally chartered bank doing business in this state. A bank may
exercise the powers and authorities conferred on a federally chartered bank
after this date, only if the director finds that the exercise of such powers and
authorities:
(a) Serves the
convenience and advantage of depositors, borrowers, or the general public; and
(b) Maintains the
fairness of competition and parity between state-chartered banks and federally
chartered banks.
As used in this
section, "powers and authorities" include without limitation powers
and authorities in corporate governance and operational matters.
The restrictions,
limitations, and requirements applicable to specific powers or authorities of
federally chartered banks shall apply to banks exercising those powers or
authorities permitted under this subsection but only insofar as the
restrictions, limitations, and requirements relate to exercising the powers or
authorities granted banks solely under this subsection.
(4) Any activity which
may be performed by a bank, except the taking of deposits, may be performed by
(a) a corporation or (b) another entity approved by the director, which in
either case is owned in whole or in part by the bank.
Sec. 3. RCW 30.08.180 and 1994 c
92 s 60 are each amended to read as follows:
Every bank and trust
company shall make at least three regular reports each year to the director, as
of the dates which he or she shall designate, according to form prescribed by
him or her, verified by the president, manager or cashier and attested by at
least two directors, which shall exhibit under appropriate heads the resources
and liabilities of such corporation. The dates designated by the director
shall be the dates designated by the comptroller of the currency of the United
States for reports of national banking associations. ((Each such report in
condensed form, to be prescribed by the director, shall be published once in a
newspaper of general circulation, published in a place where the corporation is
located, or if there be no newspaper published in such place, then in some
newspaper published in the same county.))
Every such corporation
shall also make such special reports as the director shall call for.
Sec. 4. RCW 30.08.190 and 1994 c
256 s 51 and 1994 c 92 s 61 are each reenacted and amended to read as follows:
(1) Every regular
report shall be filed with the director within thirty days from the date of
issuance of the notice. Every special report shall be filed with the director
within such time as shall be specified by him or her in the notice therefor.
(2) The director
shall provide a copy of any regular report free of charge to any person that
submits a written request for the report.
(3) Every bank
and trust company which fails to file any report, required to be filed under
subsection (1) of this section and within the time specified, shall be subject
to a penalty of fifty dollars per day for each day's delay. A civil action for
the recovery of any such penalty may be brought by the attorney general in the
name of the state.
