BILL REQ. #:  S-4304.1 

Read first time 01/19/2006.   Referred to Committee on Financial Institutions, Housing & Consumer Protection.

     AN ACT Relating to investigating and assessing performance in meeting community credit needs; and amending RCW 30.60.010 and 32.40.010.

BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF WASHINGTON:

Sec. 1   RCW 30.60.010 and 1994 c 92 s 157 are each amended to read as follows:
     (1) In conducting an examination of a bank chartered under Title 30 RCW, the director shall investigate and assess the record of performance of the bank in meeting the credit needs of the bank's entire community, including low and moderate-income neighborhoods. The director ((shall)) may accept, in lieu of an investigation or part of an investigation required by this section, any report or document that the bank is required to prepare or file with one or more federal agencies by the act of Congress entitled the "Community Reinvestment Act of 1977" and the regulations promulgated in accordance with that act, to the extent such reports or documents assist the director in making an assessment based upon the factors outlined in subsection (2) of this section.
     (2) In making an investigation required under subsection (1) of this section, the director shall consider, independent of any federal determination, the following factors in assessing the bank's record of performance:
     (a) Activities conducted by the institution to ascertain credit needs of its community, including the extent of the institution's efforts to communicate with members of its community regarding the credit services being provided by the institution;
     (b) The extent of the institution's marketing and special credit related programs to make members of the community aware of the credit services offered by the institution;
     (c) The extent of participation by the institution's board of directors in formulating the institution's policies and reviewing its performance with respect to the purposes of the Community Reinvestment Act of 1977;
     (d) Any practices intended to discourage applications for types of credit set forth in the institution's community reinvestment act statement(s);
     (e) The geographic distribution of the institution's credit extensions, credit applications, and credit denials, and the geographic distribution, availability, and use of automatic teller machines, point-of-sale terminals, personal computer banking, debit cards or similar electronic facilities or services and any training of customers thereon at each branch of the banking institution, if the institution offers such a service to any of its customers;
     (f) Evidence of prohibited discriminatory or other illegal credit practices;
     (g) The institution's record of opening and closing offices and providing services at offices;
     (h) The institution's participation, including investments, in local community and microenterprise development projects;
     (i) The institution's origination of residential mortgage loans, housing rehabilitation loans, home improvement loans, and small business or small farm loans within its community, or the purchase of such loans originated in its community;
     (j) The institution's participation in governmentally insured, guaranteed, or subsidized loan programs for housing, small businesses, or small farms;
     (k) The institution's ability to meet various community credit needs based on its financial condition, size, legal impediments, local economic condition, and other factors;
     (l) The institution's participation in credit counseling services; and
     (m) Other factors that, in the judgment of the director, reasonably bear upon the extent to which an institution is helping to meet the credit needs of its entire community.
     (3) The director may, in assessing the record of performance, provide for public hearings. The director shall include as part of the examination report, a summary of the results of the assessment required under subsection (1) of this section and shall assign annually to each bank a numerical community reinvestment rating based on a one through five scoring system. Such numerical scores shall represent performance assessments as follows:

Sec. 2   RCW 32.40.010 and 1994 c 92 s 410 are each amended to read as follows:
     (1) In conducting an examination of a savings bank chartered under Title 32 RCW, the director shall investigate and assess the record of performance of the savings bank in meeting the credit needs of the savings bank's entire community, including low and moderate-income neighborhoods. The director ((shall)) may accept, in lieu of an investigation or part of an investigation required by this section, any report or document that the savings bank is required to prepare or file with one or more federal agencies by the act of Congress entitled the "Community Reinvestment Act of 1977" and the regulations promulgated in accordance with that act, to the extent such reports or documents assist the director in making an assessment based upon the factors outlined in subsection (2) of this section.
     (2) In making an investigation required under subsection (1) of this section, the director shall consider, independent of any federal determination, the following factors in assessing the savings bank's record of performance:
     (a) Activities conducted by the institution to ascertain credit needs of its community, including the extent of the institution's efforts to communicate with members of its community regarding the credit services being provided by the institution;
     (b) The extent of the institution's marketing and special credit related programs to make members of the community aware of the credit services offered by the institution;
     (c) The extent of participation by the institution's board of directors or board of trustees in formulating the institution's policies and reviewing its performance with respect to the purposes of the Community Reinvestment Act of 1977;
     (d) Any practices intended to discourage applications for types of credit set forth in the institution's community reinvestment act statement(s);
     (e) The geographic distribution of the institution's credit extensions, credit applications, and credit denials, and the geographic distribution, availability, and use of automatic teller machines, point-of-sale terminals, personal computer banking, debit cards or similar electronic facilities or services and any training of customers thereon at each branch of the banking institution, if the institution offers such a service to any of its customers;
     (f) Evidence of prohibited discriminatory or other illegal credit practices;
     (g) The institution's record of opening and closing offices and providing services at offices;
     (h) The institution's participation, including investments, in local community and microenterprise development projects;
     (i) The institution's origination of residential mortgage loans, housing rehabilitation loans, home improvement loans and small business or small farm loans within its community, or the purchase of such loans originated in its community;
     (j) The institution's participation in governmentally insured, guaranteed, or subsidized loan programs for housing, small businesses, or small farms;
     (k) The institution's ability to meet various community credit needs based on its financial condition, size, legal impediments, local economic condition, and other factors;
     (l) The institution's participation in credit counseling services; and
     (m) Other factors that, in the judgment of the director, reasonably bear upon the extent to which an institution is helping to meet the credit needs of its entire community.
     (3) The director may, in assessing the record of performance, provide for public hearings. The director shall include as part of the examination report, a summary of the results of the assessment required under subsection (1) of this section and shall assign annually to each savings bank a numerical community reinvestment rating based on a one through five scoring system. Such numerical scores shall represent performance assessments as follows: