SENATE BILL REPORT

                   SB 6007

               As Passed Senate, March 13, 1997

Title:  An act relating to the limitation on the operating expenses of mutual savings banks.

Brief Description:  Eliminating the operating expenses limitation on mutual savings banks.

Sponsors:  Senators Winsley and Finkbeiner.

Brief History:

Committee Activity:  Financial Institutions, Insurance & Housing:  3/4/97 [DP].

Passed Senate, 3/13/97, 49-0.

SENATE COMMITTEE ON FINANCIAL INSTITUTIONS, INSURANCE & HOUSING

Majority Report:  Do pass.

  Signed by Senators Winsley, Chair; Benton, Vice Chair; Finkbeiner, Heavey and Prentice.

Staff:  Dave Cheal (786-7576)

Background:  Mutual savings banks are limited by law to spending no more than 3 percent of average assets in any calendar year on operation and management expenses.  The limitation for smaller mutual savings banks, with under $500 million in deposits, is 6 percent of average assets.

Summary of Bill:  The statutory limitation is repealed.

Appropriation:  None.

Fiscal Note:  Not requested.

Effective Date:  Ninety days after adjournment of session in which bill is passed.

Testimony For:  The limitation does not provide a useful or meaningful guideline.  Banks could spend below this amount and still be unsound.  Other depository institutions do not have this limitation, with the exception of credit unions, and a bill is making its way through the  Legislature to repeal that limitation.

Testimony Against:  None.

Testified:  Lyle Jacobsen, Washington Savings League (pro).