BILL REQ. #: Z-0885.5
| State of Washington | 61st Legislature | 2010 Regular Session |
Read first time 01/13/10. Referred to Committee on Financial Institutions, Housing & Insurance.
AN ACT Relating to state-chartered commercial banks, trust companies, savings banks, and their holding companies; amending RCW 30.04.010, 30.04.020, 30.04.030, 30.04.050, 30.04.060, 30.04.070, 30.04.075, 30.04.111, 30.04.127, 30.04.215, 30.04.217, 30.04.450, 30.04.455, 30.04.460, 30.04.470, 30.04.475, 30.12.040, 30.12.042, 30.12.044, 30.12.047, 30.12.070, 30.12.090, 30.12.100, 30.12.190, 30.12.240, 30.44.010, 30.44.020, 30.44.030, 30.44.100, 30.44.110, 30.44.160, 30.44.270, 30.46.010, 32.04.020, 32.04.070, 32.04.100, 32.04.110, 32.04.211, 32.04.220, 32.04.250, 32.04.260, 32.04.270, 32.04.290, 32.08.153, 32.16.090, 32.16.093, 32.16.095, 32.16.097, 32.16.140, 32.20.285, 32.24.040, 32.24.050, 32.24.060, 32.24.070, 32.24.080, and 32.24.090; adding a new section to chapter 23B.01 RCW; adding a new section to chapter 23B.14 RCW; adding a new section to chapter 30.12 RCW; adding a new section to chapter 32.04 RCW; adding a new section to chapter 32.08 RCW; adding a new section to chapter 32.16 RCW; adding a new section to chapter 32.24 RCW; adding a new chapter to Title 32 RCW; repealing RCW 30.04.310; prescribing penalties; and declaring an emergency.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF WASHINGTON:
NEW SECTION. Sec. 1 A new section is added to chapter 23B.01 RCW
to read as follows:
For those corporations that have a certificate of authority, are
applying for, or intend to apply for a certificate of authority from
the department of financial institutions as a bank, trust company, or
the holding company thereof, under Title 30 RCW, or as a savings bank
or holding company thereof, under Title 32 RCW, or for any other
corporation or other entity which is or purports to be a bank, savings
bank, savings and loan association, trust company, industrial loan
bank, credit union, bank holding company, financial services holding
company, or savings and loan holding company, whenever under this
chapter corporate records are required to be filed with the secretary
of state, the records shall be filed with the department of financial
institutions.
NEW SECTION. Sec. 2 A new section is added to chapter 23B.14 RCW
to read as follows:
For any corporation or other entity that has, is applying for, or
intends to apply for a certificate of authority from the department of
financial institutions as a bank, trust company, or the holding company
thereof, under Title 30 RCW, or as a savings bank or holding company
thereof, under Title 32 RCW, or for any other corporation or other
entity which is or purports to be a bank, savings bank, savings and
loan association, trust company, industrial loan bank, credit union,
bank holding company, financial holding company, or savings and loan
holding company, whenever under this chapter corporate records are
required to be filed with the secretary of state, the records shall be
filed with the department of financial institutions.
Sec. 3 RCW 30.04.010 and 1997 c 101 s 3 are each amended to read
as follows:
Unless the context clearly requires otherwise, the definitions in
this section apply throughout this title.
(1) (("Banking" shall include the soliciting, receiving or
accepting of money or its equivalent on deposit as a regular
business.)) "Adequately capitalized," "critically undercapitalized,"
"significantly undercapitalized," "undercapitalized," and "well-capitalized," respectively, have meanings consistent with the
definitions these same terms have under the prompt corrective action
provisions of the federal deposit insurance act, 12 U.S.C. Sec. 1831o,
and applicable enabling rules of the federal deposit insurance
corporation.
(2) "Bank," unless a different meaning appears from the context,
means any corporation organized under the laws of this state engaged in
banking, other than a trust company, savings association, or a mutual
savings bank.
(3) "Bank holding company" means a bank holding company under
authority of the federal bank holding company act.
(4) "Banking" includes the soliciting, receiving or accepting of
money or its equivalent on deposit as a regular business.
(5) "Branch" means any established office of deposit, domestic or
otherwise, maintained by any bank or trust company other than its head
office. "Branch" does not mean a machine permitting customers to leave
funds in storage or communicate with bank employees who are not located
at the site of the machine, unless employees of the bank at the site of
the machine take deposits on a regular basis. An office or facility of
an entity other than the bank shall not be deemed to be established by
the bank, regardless of any affiliation, accommodation arrangement, or
other relationship between the other entity and the bank.
(((4))) (6) "Department" means the Washington state department of
financial institutions.
(7) "Director" means the director of the department.
(8) "Financial holding company" means a financial services holding
company under authority of the federal bank holding company act.
(9) "Foreign bank" and "foreign banker" includes:
(a) Every corporation not organized under the laws of the territory
or state of Washington doing a banking business, except a national
bank;
(b) Every unincorporated company, partnership or association of two
or more individuals organized under the laws of another state or
country, doing a banking business;
(c) Every other unincorporated company, partnership or association
of two or more individuals, doing a banking business, if the members
thereof owning a majority interest therein or entitled to more than
one-half of the net assets thereof are not residents of this state; or
(d) Every nonresident of this state doing a banking business in his
or her own name and right only.
(10) "Holding company" means a bank holding company or financial
holding company of a bank organized under chapter 30.08 RCW or
converted to a state bank under chapter 30.49 RCW, or a holding company
of a trust company authorized to do business under this title.
(11) "Person" includes a firm, association, partnership, or
corporation, or the plural thereof, whether resident, nonresident,
citizen or not.
(12) The term "trust business" shall include the business of doing
any or all of the things specified in RCW 30.08.150 (2), (3), (4), (5),
(6), (7), (8), (9), (10) and (11).
(((5))) (13) "Trust company," unless a different meaning appears
from the context, means any corporation ((organized under the laws of
this state engaged)), other than a bank, savings bank or savings
association, organized and chartered as a trust company under this
title for the purpose of engaging in trust business.
(((6) "Person" unless a different meaning appears from the context,
shall include a firm, association, partnership or corporation, or the
plural thereof, whether resident, nonresident, citizen or not.))
(7) "Director" means the director of financial institutions.
(8) "Foreign bank" and "foreign banker" shall include:
(a) Every corporation not organized under the laws of the territory
or state of Washington doing a banking business, except a national
bank;
(b) Every unincorporated company, partnership or association of two
or more individuals organized under the laws of another state or
country, doing a banking business;
(c) Every other unincorporated company, partnership or association
of two or more individuals, doing a banking business, if the members
thereof owning a majority interest therein or entitled to more than
one-half of the net assets thereof are not residents of this state;
(d) Every nonresident of this state doing a banking business in his
or her own name and right only.
Sec. 4 RCW 30.04.020 and 1994 c 256 s 32 are each amended to read
as follows:
(1) The name of every bank shall contain the word "bank" and the
name of every trust company shall contain the word "trust," or the word
"bank." Except as provided in RCW 33.08.030 or as otherwise authorized
by this section or approved by the director, ((no person except:)) only a national bank((
(a);)) , federal savings bank, a bank or trust company authorized
by ((
(b) Athe laws of this state;)) this title, savings bank under Title 32 RCW, bank holding
company or financial holding company, a holding company authorized by
this title or Title 32 RCW, or a foreign or alien corporation or other
legal person authorized by this title ((
(c) A corporation established under RCW 31.30.010;
(d) Aso)) to do so, shall:
(((i))) (a) Use as a part of his or its name or other business
designation, as a prominent syllable within a word comprising all or a
portion of its name or other business designation, or in any manner as
if connected with his or its business or place of business any of the
following words or the plural thereof, to wit: "bank," "banking,"
"banker," "bancorporation," "bancorp," or "trust((.))," or any foreign
language designations thereof, including, by way of example, "banco" or
"banque."
(((ii))) (b) Use any sign ((at or about his or its place of
business or use or circulate any advertisement,)), logo, or marketing
message, in any media, or use any letterhead, billhead, note, receipt,
certificate, blank, form, or any written ((or)), printed ((or part
written and part printed paper)), electronic or internet-based
instrument or ((article)) material representation whatsoever, directly
or indirectly indicating that the business of such person is that of a
bank or trust company.
(2) A foreign corporation or other foreign domiciled legal person,
whose name contains the words "bank," "banker," "banking,"
"bancorporation," "bancorp," or "trust," or the foreign language
equivalent thereof, or whose articles of incorporation empower it to
engage in banking or to engage in a trust business, may not engage in
banking or in a trust business in this state unless the corporation or
other legal person (a) is expressly authorized to do so under this
title, under federal law, or by the director, and (b) complies with all
applicable requirements of ((chapter 23B.15 RCW)) Washington state law
regarding foreign corporations and other foreign legal persons. If an
activity would not constitute "transacting business" within the meaning
of RCW 23B.15.010(1) or chapter 23B.18 RCW, then the activity shall not
constitute banking or engaging in a trust business. Nothing in this
subsection shall prevent operations by an alien bank in compliance with
chapter 30.42 RCW.
(3) This section shall not prevent a lender approved by the United
States secretary of housing and urban development for participation in
any mortgage insurance program under the National Housing Act from
using the words "mortgage banker" or "mortgage banking" in the conduct
of its business, but only if both words are used together in either of
the forms which appear in quotations in this sentence.
(4) ((Every)) Any individual or legal person, or director, officer
or manager of such legal person, who((, and every director and officer
of every corporation which, to the knowledge of such director or
officer)) knowingly violates any provision of this section shall be
guilty of a gross misdemeanor.
Sec. 5 RCW 30.04.030 and 1994 c 92 s 8 are each amended to read
as follows:
(1) The director shall have power to adopt uniform rules in
accordance with the administrative procedure act, chapter 34.05 RCW, to
govern examinations and reports of banks ((and)), trust companies, and
holding companies and the form in which they shall report their assets,
liabilities, and reserves, charge off bad debts and otherwise keep
their records and accounts, and otherwise to govern the administration
of this title. The director shall mail a copy of the rules to each
bank and trust company at its principal place of business.
(2) The director shall have the power, and broad administrative
discretion, to administer and interpret the provisions of this title to
facilitate the delivery of financial services to the citizens of the
state of Washington by the banks ((and)), trust companies and holding
companies subject to this title.
Sec. 6 RCW 30.04.050 and 1955 c 33 s 30.04.050 are each amended
to read as follows:
((Every bank and trust company and their officers, employees, and
agents shall comply with the rules and regulations. The violation of
any rule or regulation in addition to any other penalty provided in
this title, shall subject the offender to a penalty of one hundred
dollars for each offense, to be recovered by the attorney general in a
civil action in the name of the state. Each day's continuance of the
violation shall be a separate and distinct offense.)) (1) Each bank and
trust company, and their directors, officers, employees, and agents,
shall comply with:
(a) This title and chapter 11.100 RCW as applicable to each of
them;
(b) The rules adopted by the department with respect to banks and
trust companies;
(c) Any lawful direction or order of the director;
(d) Any lawful supervisory agreement with the director; and
(e) The applicable statutes, rules and regulations administered by
the board of governors of the federal reserve system, the federal
deposit insurance corporation, or their successor agencies, with
respect to banks or trust companies.
(2) Each holding company, and its directors, officers, employees,
and agents, shall comply with:
(a) The provisions of this title that are applicable to each of
them;
(b) The rules adopted by the department with respect to holding
companies;
(c) Any lawful direction or order of the director;
(d) Any lawful supervisory agreement with the director; and
(e) The applicable statutes, rules, and regulations administered by
the board of governors of the federal reserve system, or its successor
agency, with respect to holding companies, the violation of which would
result in an unsafe and unsound practice or material violation of law
with respect to the subsidiary bank or trust company of the holding
company.
(3) The violation of any supervisory agreement, direction, order,
statute, rule or regulation referenced in this section, in addition to
any other penalty provided in this title, shall, at the option of the
director, subject the offender to a penalty of up to ten thousand
dollars for each offense, payable upon issuance of any order or
directive of the director, which may be recovered by the attorney
general in a civil action in the name of the department.
Sec. 7 RCW 30.04.060 and 1994 c 92 s 9 are each amended to read
as follows:
(1) The director, assistant director, program manager, or an
examiner shall visit each bank and each trust company at least once
every eighteen months, and oftener if necessary, or as otherwise
required by the rules and interpretations of applicable federal banking
examination authorities, for the purpose of making a full investigation
into the condition of such corporation, and for that purpose they are
hereby empowered to administer oaths and to examine under oath any
director, officer, employee, or agent of such corporation.
(2) The director may make such other full or partial examinations
as deemed necessary and may examine any bank holding company that owns
any portion of a bank or trust company chartered by the state of
Washington and obtain reports of condition for any bank holding company
that owns any portion of a bank or trust company chartered by the state
of Washington.
(3) The director may visit and examine into the affairs of any
nonpublicly held corporation in which the bank, trust company, or bank
holding company has an investment or any publicly held corporation the
capital stock of which is controlled by the bank, trust company, or
bank holding company; may appraise and revalue such corporations'
investments and securities; and shall have full access to all the
books, records, papers, securities, correspondence, bank accounts, and
other papers of such corporations for such purposes.
(4) The director may, in his or her discretion, accept in lieu of
the examinations required in this section the examinations conducted at
the direction of the federal reserve board or the federal deposit
insurance corporation.
(5) Any willful false swearing in any examination is perjury in the
second degree.
(((2))) (6) The director may enter into cooperative and reciprocal
agreements with the bank regulatory authorities of the United States,
any state, the District of Columbia, or any trust territory of the
United States for the periodic examination of domestic bank holding
companies owning banking institutions in other states, the District of
Columbia, or trust territories, and subsidiaries of such domestic bank
holding companies, or of out-of-state bank holding companies owning a
bank or trust company the principal operations of which are conducted
in this state. The director may accept reports of examination and
other records from such authorities in lieu of conducting his or her
own examinations. The director may enter into joint actions with other
regulatory bodies having concurrent jurisdiction or may enter into such
actions independently to carry out his or her responsibilities under
this title and assure compliance with the laws of this state.
(7) Copies from the records, books, and accounts of a bank, trust
company, or holding company shall be competent evidence in all cases,
equal with originals thereof, if there is annexed to such copies an
affidavit taken before a notary public or clerk of a court under seal,
stating that the affiant is the officer of the bank, trust company, or
holding company having charge of the original records, and that the
copy is true and correct and is full so far as the same relates to the
subject matter therein mentioned.
Sec. 8 RCW 30.04.070 and 1994 c 92 s 10 are each amended to read
as follows:
The director shall collect from each bank, ((mutual)) savings bank,
trust company ((or industrial loan company)), savings association,
holding company under Title 30 RCW, holding company under Title 32 RCW,
business development company under chapter 31.24 RCW, agricultural
lender under chapter 31.35 RCW, and small business lender under chapter
31.40 RCW, for each examination of its condition the estimated actual
cost of such examination.
Sec. 9 RCW 30.04.075 and 2005 c 274 s 251 are each amended to
read as follows:
(1) All examination reports and all information obtained by the
director and the director's staff in conducting examinations of banks,
trust companies, or alien banks, and information obtained by the
director and the director's staff from other state or federal bank
regulatory authorities with whom the director has entered into
agreements pursuant to RCW 30.04.060(2), and information obtained by
the director and the director's staff relating to examination and
supervision of bank holding companies owning a bank in this state or
subsidiaries of such holding companies, is confidential and privileged
information and shall not be made public or otherwise disclosed to any
person, firm, corporation, agency, association, governmental body, or
other entity.
(2) Subsection (1) of this section notwithstanding, the director
may furnish all or any part of examination reports, work papers,
supervisory agreements or directives, orders, or other information
obtained in the conduct of an examination or investigation prepared by
the director's office to:
(a) Federal agencies empowered to examine state banks, trust
companies, or alien banks;
(b) Bank regulatory authorities with whom the director has entered
into agreements pursuant to RCW 30.04.060(2), and other bank regulatory
authorities who are the primary regulatory authority or insurer of
accounts for a bank holding company owning a bank, trust company, or
national banking association the principal operations of which are
conducted in this state or a subsidiary of such holding company;
provided that the director shall first find that the reports of
examination to be furnished shall receive protection from disclosure
comparable to that accorded by this section;
(c) Officials empowered to investigate criminal charges subject to
legal process, valid search warrant, or subpoena. If the director
furnishes any examination report to officials empowered to investigate
criminal charges, the director may only furnish that part of the report
which is necessary and pertinent to the investigation, and the director
may do this only after notifying the affected bank, trust company, or
alien bank and any customer of the bank, trust company, or alien bank
who is named in that part of the examination or report ordered to be
furnished unless the officials requesting the report first obtain a
waiver of the notice requirement from a court of competent jurisdiction
for good cause;
(d) The examined bank, trust company, or alien bank, or holding
company thereof;
(e) The attorney general in his or her role as legal advisor to the
director;
(f) Liquidating agents of a distressed bank, trust company, or
alien bank;
(g) A person or organization officially connected with the bank as
officer, director, attorney, auditor, or independent attorney or
independent auditor;
(h) The Washington public deposit protection commission as provided
by RCW 39.58.105;
(i) Organizations insuring or guaranteeing the shares of, or
deposits in, the bank or trust company; or
(j) Other persons as the director may determine necessary to
protect the public interest and confidence.
(3) All examination reports, work papers, supervisory agreements or
directives, orders, and other information obtained in the conduct of an
examination or investigation furnished under subsections (2) and (4) of
this section shall remain the property of the department of financial
institutions, and be confidential and no person, agency, or authority
to whom reports are furnished or any officer, director, or employee
thereof shall disclose or make public any of the reports or any
information contained therein except in published statistical material
that does not disclose the affairs of any individual or corporation:
PROVIDED, That nothing herein shall prevent the use in a criminal
prosecution of reports furnished under subsection (2) of this section.
(4) The examination report made by the department of financial
institutions is designed for use in the supervision of the bank, trust
company, or alien bank. The report shall remain the property of the
director and will be furnished to the bank, trust company, or alien
bank solely for its confidential use. Under no circumstances shall the
bank, trust company, or alien bank or any of its directors, officers,
or employees disclose or make public in any manner the report or any
portion thereof, to any person or organization not connected with the
bank as officer, director, employee, attorney, auditor, or candidate
for executive office with the bank. The bank may also, after execution
of an agreement not to disclose information in the report, disclose the
report or relevant portions thereof to a party proposing to acquire or
merge with the bank.
(5) Examination reports and information obtained by the director
and the director's staff in conducting examinations, or obtained from
other state and federal bank regulatory authorities with whom the
director has entered into agreements pursuant to RCW 30.04.060(2), or
relating to examination and supervision of bank holding companies
owning a bank, trust company, or national banking association the
principal operations of which are conducted in this state or a
subsidiary of such holding company, or information obtained as a result
of applications or investigations pursuant to RCW 30.04.230, shall not
be subject to public disclosure under chapter 42.56 RCW.
(6) In any civil action in which the reports are sought to be
discovered or used as evidence, any party may, upon notice to the
director, petition the court for an in camera review of the report.
The court may permit discovery and introduction of only those portions
of the report which are relevant and otherwise unobtainable by the
requesting party. This subsection shall not apply to an action brought
or defended by the director.
(7) This section shall not apply to investigation reports prepared
by the director and the director's staff concerning an application for
a new bank or trust company or an application for a branch of a bank,
trust company, or alien bank: PROVIDED, That the director may adopt
rules making confidential portions of the reports if in the director's
opinion the public disclosure of the portions of the report would
impair the ability to obtain the information which the director
considers necessary to fully evaluate the application.
(8) Except to the extent permitted by subsection 2 of this section,
any regulatory enforcement action against a bank, trust company, or
holding company, including any supervisory agreement, direction,
consent order, final order, or other information related to the
regulatory enforcement action, is confidential and privileged and not
subject to public disclosure under chapter 42.56 RCW.
(9) Notwithstanding any other provision of this section or other
applicable law, a bank, trust company, alien bank, or holding company
is not in violation of this section on account of its compliance with
required reporting to the federal securities and exchange commission,
including the disclosure of any order of the director.
(10) Every person who violates any provision of this section shall
be guilty of a gross misdemeanor.
Sec. 10 RCW 30.04.111 and 1995 c 344 s 1 are each amended to read
as follows:
(1) 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))) (a) 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))) (b) 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))) (c) 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))) (d) Loans or extensions of credit fully secured by a
segregated deposit account or accounts in the lending bank;
(((5))) (e) 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))) (f) 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))) (g) 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))) (h) The unpaid purchase price of a sale of bank property,
if secured by such property.
(2) 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.
(3) 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 undivided profits.
((The term)) (4) For the purposes of this section, "person"
((shall)) includes 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.
(5) 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, or successor federal banking regulator, that govern
lending limits applicable to national ((commercial)) banks. In lieu of
the adoption by the department of a rule applicable to specific types
of transactions, a bank, unless otherwise approved by the director,
shall conform to all applicable rulings of the comptroller of the
currency, or successor federal banking regulator, which (a) relate to
national banks, (b) govern such specific types of transactions, and (c)
are consistent with this section and the department's adopted rules.
Sec. 11 RCW 30.04.127 and 1994 c 92 s 15 are each amended to read
as follows:
(1) A bank or trust company, alone or in conjunction with other
entities, may form, incorporate, or invest in corporations or other
entities, whether or not such other corporation or entity is related to
the bank or trust company's business. The aggregate amount of funds
invested, or used in the formation of corporations or other entities
under this section shall not exceed ten percent of the assets or fifty
percent of the net worth, whichever is less, of the bank or trust
company. For purposes of this subsection, "net worth" means the
aggregate of capital, surplus, undivided profits, and all capital notes
and debentures which are subordinate to the interest of depositors.
(2) A bank or trust company may engage in an activity permitted
under this section only with the prior authorization of the director
and subject to such requirements, restrictions, or other conditions as
the director may adopt by rule, order, directive, standard, policy,
memorandum or other written communication with regard to the activity.
In approving or denying a proposed activity, the director shall
consider the financial and management strength of the institution, the
convenience and needs of the public, and whether the proposed activity
should be conducted through a subsidiary or affiliate of the bank. The
director may not authorize under this section and no bank or trust
company may act as an insurance or travel agent unless otherwise
authorized by state statute.
Sec. 12 RCW 30.04.215 and 2003 c 24 s 2 are each amended 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 or trust company 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 July 27, 2003.
(2) A bank or trust company 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)) and
unsound practice by the bank or trust company 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
or trust company is otherwise qualified, he or she shall immediately
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 that the bank or trust company is not otherwise qualified,
he or she shall promptly 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) Notwithstanding any restrictions, limitations, and requirements
of law, in addition to all powers, express or implied, that a bank or
trust company has under the laws of this state, a bank or trust company
shall have ((the powers and authorities)) each and every power and
authority conferred as of ((August 31, 1994)) July 28, 1985, or ((a))
as of any subsequent date not later than July 27, 2003, upon ((a)) any
federally chartered bank doing business in this state. A bank or trust
company may exercise the powers and authorities conferred on a
federally chartered bank after July 27, 2003, 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 or trust companies and federally chartered banks.
(4) As used in this section, "powers and authorities" include
without limitation powers and authorities in corporate governance and
operational matters.
(5) The restrictions, limitations, and requirements applicable to
specific powers or authorities of federally chartered banks shall apply
to banks or trust companies 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 or trust companies solely under this
subsection.
(((4))) (6) The director may require a bank or trust company to
provide notice to the director prior to implementation of a plan to
develop, improve, or continue holding real estate, including
capitalized and operating leases, acquired through any means in full or
partial satisfaction of a debt previously contracted, under
circumstances which a national bank would be required to provide notice
to the comptroller of the currency prior to implementation of such a
plan. The director may adopt rules or issue orders, directives,
standards, policies, memoranda, or other official communications to
specify guidance with regard to the exercise of the powers and
authorities to expend such funds as are needed to enable a bank or
trust company to recover its total investment to the fullest extent
authorized for a national bank under the national bank act, 12 U.S.C.
Sec. 29.
(7) Any activity which may be performed by a bank or trust company,
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 or trust company.
Sec. 13 RCW 30.04.217 and 2003 c 24 s 1 are each amended to read
as follows:
(1) Notwithstanding any other provisions of law, in addition to all
powers, express or implied, that a bank or trust company has under the
laws of this state, a bank or trust company shall have the powers and
authorities conferred upon a ((mutual)) savings bank under Title 32
RCW, only if:
(((1))) (a) The bank or trust company notifies the director at
least thirty days prior to the exercise of such power or authority by
the bank or trust company, unless the director waives or modifies this
requirement for notice as to the exercise of a power, authority, or
category of powers or authorities by the bank or trust company;
(((2))) (b) The director finds that the exercise of such powers and
authorities by the bank or by the trust company serves the convenience
and advantage of depositors, borrowers, or the general public; and
(((3))) (c) The director finds that the exercise of such powers and
authorities by the bank or by the trust company maintains the fairness
of competition and parity between banks or trust companies and mutual
savings banks.
(2) As used in this section, "powers and authorities" include
without limitation powers and authorities in corporate governance and
operational matters.
(3) The restrictions, limitations, and requirements applicable to
specific powers or authorities of mutual savings banks shall apply to
banks or trust companies exercising those powers or authorities
permitted under this section but only insofar as the restrictions,
limitations, and requirements relate to exercising the powers or
authorities granted banks or trust companies solely under this section.
NEW SECTION. Sec. 14 RCW 30.04.310 (Penalty -- General) and 1994
c 92 s 28, 1988 c 25 s 1, & 1985 c 30 s 137 are each repealed.
Sec. 15 RCW 30.04.450 and 1994 c 92 s 31 are each amended to read
as follows:
(1) The director may issue and serve a notice of charges upon a
bank or trust company ((a notice of charges if)) when in the opinion of
the director ((any bank or trust company)):
(a) ((Is engaging or)) It has engaged in an unsafe ((or)) and
unsound practice ((in conducting the)) related to the conduct of
business of the bank or trust company;
(b) ((Is violating or)) It has violated ((the law, rule, or any
condition imposed in writing by the director in connection with the
granting of any application or other request by the bank or trust
company or any written agreement made with the director)) any provision
of RCW 30.04.050; or
(c) ((Is about to do the)) It is planning, attempting, or currently
conducting any act((s)) prohibited in (a) or (b) of this subsection
((when the opinion that the threat exists is based upon reasonable
cause)).
(2) The director may issue and serve a notice of charges upon a
holding company when, in the opinion of the director:
(a) The holding company has committed a violation of RCW
30.04.050(2);
(b) The conduct of the holding company has resulted in an unsafe
and unsound practice at the bank or trust company or a violation of any
provision of RCW 30.04.050 by the bank or trust company; or
(c) The holding company is planning, attempting, or currently
conducting any act prohibited in (a) or (b) of this subsection.
(3) The notice shall contain a statement of the facts constituting
the alleged violation or violations or the practice or practices and
shall fix a time and place at which a hearing will be held to determine
whether an order to cease and desist should issue against the bank
((or)), trust company, or holding company. The hearing shall be set
not earlier than ten days ((nor)) or later than thirty days after
service of the notice unless a later date is set by the director at the
request of the bank ((or)), trust company, or holding company.
(4) Unless the bank ((or)), trust company, or holding company shall
appear at the hearing by a duly authorized representative it shall be
deemed to have consented to the issuance of the cease and desist order.
In the event of this consent or if upon the record made at the hearing
the director finds that any violation or practice specified in the
notice of charges has been established, the director may issue and
serve upon the bank ((or)), trust company, or holding company an order
to cease and desist from the violation or practice. The order may
require the bank ((or)), trust company, or holding company, and its
directors, officers, employees, and agents to cease and desist from the
violation or practice and may require the bank, trust company, or
holding company to take affirmative action to correct the conditions
resulting from the violation or practice.
(((3))) (5) A cease and desist order shall become effective at the
expiration of ten days after the service of the order upon the bank or
trust company concerned except that a cease and desist order issued
upon consent shall become effective at the time specified in the order
and shall remain effective as provided therein unless it is stayed,
modified, terminated, or set aside by action of the director or a
reviewing court.
Sec. 16 RCW 30.04.455 and 1994 c 92 s 32 are each amended to read
as follows:
((Whenever the director determines that the acts specified in RCW
30.04.450 or their continuation is likely to cause insolvency or
substantial dissipation of assets or earnings of the bank or trust
company or to otherwise seriously prejudice the interests of its
depositors, the director may also issue a temporary order requiring the
bank or trust company to cease and desist from the violation or
practice. The order shall become effective upon service on the bank or
trust company and shall remain effective unless set aside, limited, or
suspended by a court in proceedings under RCW 30.04.460 pending the
completion of the administrative proceedings under the notice and until
such time as the director shall dismiss the charges specified in the
notice or until the effective date of a cease and desist order issued
against the bank or trust company under RCW 30.04.450.)) (1) The
director may also issue a temporary order requiring a bank or trust
company, or its holding company, or both, to cease and desist from any
action or omission, as specified in RCW 30.04.450, or its continuation,
which the director has determined:
(a) Constitutes an unsafe and unsound practice or a material
violation of RCW 30.04.050 affecting the bank or trust company;
(b) Has resulted in the bank or trust company being less than
adequately capitalized; or
(c) Is likely to cause insolvency or substantial dissipation of
assets or earnings of the bank or trust company, or to otherwise
seriously prejudice the interests of its depositors or trust
beneficiaries.
(2) The order is effective upon service on the bank, trust company,
or holding company, and remains in effect unless set aside, limited, or
suspended by the superior court in proceedings under RCW 30.04.460
pending the completion of the administrative proceedings under the
notice and until such time as the director dismisses the charges
specified in the notice or until the effective date of a cease and
desist order issued against the bank, trust company, or holding company
under RCW 30.04.450.
Sec. 17 RCW 30.04.460 and 1977 ex.s. c 178 s 3 are each amended
to read as follows:
(1) Within ten days after a bank ((or)), trust company, or holding
company has been served with a temporary cease and desist order, the
bank ((or)), trust company, or holding company may apply to the
superior court in the county of its principal place of business for an
injunction setting aside, limiting, or suspending the order pending the
completion of the administrative proceedings pursuant to the notice
served under RCW 30.04.455.
(2) The superior court shall have jurisdiction to issue the
injunction.
Sec. 18 RCW 30.04.470 and 1994 c 92 s 34 are each amended to read
as follows:
(1) Any administrative hearing provided in RCW 30.04.450 or
30.12.042 ((may)) must be ((held at such place as is designated by the
director and shall be)) conducted in accordance with chapter 34.05 RCW
and held at the place designated by the director, and may be conducted
by the department. The hearing shall be private unless the director
determines that a public hearing is necessary to protect the public
interest after fully considering the views of the party afforded the
hearing.
(2) Within sixty days after the hearing, the director shall render
a decision which shall include findings of fact upon which the decision
is based and shall issue and serve upon each party to the proceeding an
order or orders consistent with RCW 30.04.450 or 30.12.042, as the case
may be.
(3) Unless a petition for review is timely filed in the superior
court of the county of the principal place of business of the affected
bank or trust company under subsection (((2))) (5) of this section and
until the record in the proceeding has been filed as therein provided,
the director may at any time modify, terminate, or set aside any order
upon such notice and in such manner as he or she shall deem proper.
Upon filing the record, the director may modify, terminate, or set
aside any order only with permission of the court.
(4) The judicial review provided in this section ((for an order
shall be)) is exclusive for orders issued under RCW 30.04.450 and
30.12.042.
(((2))) (5) Any party to the proceeding or any person required by
an order issued under RCW 30.04.450, 30.04.455, 30.04.465, or 30.12.042
to refrain from any of the violations or practices stated therein may
obtain a review of any order served under subsection (1) of this
section other than one issued upon consent by filing in the superior
court of the county of the principal place of business of the affected
bank or trust company within ten days after the date of service of the
order a written petition praying that the order of the director be
modified, terminated, or set aside. A copy of the petition shall be
immediately served upon the director and the director shall then file
in the court the record of the proceeding. The court shall have
jurisdiction upon the filing of the petition, which jurisdiction shall
become exclusive upon the filing of the record to affirm, modify,
terminate, or set aside in whole or in part the order of the director
except that the director may modify, terminate, or set aside an order
with the permission of the court. The judgment and decree of the court
shall be final, except that it shall be subject to appellate review
under the rules of court.
(((3))) (6) The commencement of proceedings for judicial review
under subsection (((2))) (5) of this section shall not operate as a
stay of any order issued by the director unless specifically ordered by
the court.
(((4))) (7) Service of any notice or order required to be served
under RCW 30.04.450, 30.04.455, 30.12.040 or 30.12.042 shall be
accomplished in the same manner as required for the service of process
in civil actions in superior courts of this state.
Sec. 19 RCW 30.04.475 and 1994 c 92 s 35 are each amended to read
as follows:
(1) The director may apply to the superior court of the county of
the principal place of business of the bank or trust company affected
for the enforcement of any effective and outstanding order issued under
RCW 30.04.450, 30.04.455, 30.04.465, or 30.12.042, and the court shall
have jurisdiction to order compliance therewith.
(2) No court shall have jurisdiction to affect by injunction or
otherwise the issuance or enforcement of any order or to review,
modify, suspend, terminate, or set aside any order except as provided
in RCW 30.04.460, 30.04.465, and 30.04.470.
Sec. 20 RCW 30.12.040 and 1994 c 92 s 64 are each amended to read
as follows:
((The director may serve upon a director, officer, or employee of
any bank or trust company a written notice of the director's intention
to remove the person from office or to prohibit the person from
participation in the conduct of the affairs of the bank or trust
company, or both, whenever:)) (1) The director may
issue and serve a board director, officer, or employee of a bank or
trust company with written notice of intent to remove the person from
office or employment or to prohibit the person from participating in
the conduct of the affairs of the bank or trust company or any other
depository institution, trust company, bank holding company, thrift
holding company, or financial holding company doing business in this
state whenever, in the opinion of the director:
(1) In the opinion of the director any director, officer, or
employee of any bank or trust company has committed or engaged in:
(a) Any violation of law or rule or of a cease and desist order
which has become final;
(b) Any unsafe or unsound practice in connection with the bank or
trust company; or
(c) Any act, omission, or practice which constitutes a breach of
his or her fiduciary duty as director, officer, or employee; and
(2) The director determines that:
(a) The bank or trust company has suffered or may suffer
substantial financial loss or other damage; or
(b) The interests of its depositors could be seriously prejudiced
by reason of the violation or practice or breach of fiduciary duty; and
(c) The violation or practice or breach of fiduciary duty is one
involving personal dishonesty, recklessness, or incompetence on the
part of the director, officer, or employee.
(a) Reasonable cause exists to believe the person has committed a
material violation of law, an unsafe and unsound practice, or a
violation or practice involving a breach of fiduciary duty, personal
dishonesty, recklessness, or incompetence; and
(b) The bank, trust company, or holding company has suffered or is
likely to suffer substantial financial loss or other damage; or
(c) The interests of depositors or trust beneficiaries could be
seriously prejudiced by reason of the violation or practice.
(2) The director may issue and serve a board director, officer, or
employee of a holding company with written notice of intent to remove
the person from office or employment or to prohibit the person from
participating in the conduct of the affairs of the holding company, its
subsidiary bank or trust company, or any other depository institution,
trust company, bank holding company, thrift holding company, or
financial holding company doing business in this state whenever, in the
opinion of the director:
(a) Reasonable cause exists to believe the person has committed a
material violation of law, an unsafe and unsound practice, or a
violation or practice involving a breach of fiduciary duty, personal
dishonesty, recklessness, or incompetence; and
(b) The subsidiary bank or trust company has suffered or is likely
to suffer substantial financial loss or other damage; or
(c) The interests of depositors or trust beneficiaries of the
subsidiary bank or trust company could be seriously prejudiced by
reason of the violation or practice.
NEW SECTION. Sec. 21 A new section is added to chapter 30.12 RCW
to read as follows:
The director may serve written notice of charges under RCW
30.12.040 to suspend a person from further participation in any manner
in the conduct of the affairs of a bank, trust company, or holding
company, if the director determines that such an action is necessary
for the protection of the bank or trust company, or the interests of
the depositors or trust beneficiaries of the bank or trust company.
Any suspension notice issued by the director is effective upon service,
and unless the superior court of the county of its principal place of
business issues a stay of the order, remains in effect and enforceable
until:
(1) The director dismisses the charges contained in the notice
served to the person; or
(2) The effective date of a final order for removal of the person
under RCW 30.12.040.
Sec. 22 RCW 30.12.042 and 1994 c 92 s 65 are each amended to read
as follows:
(1) A notice of an intention to remove a director, officer, or
employee from office or to prohibit his or her participation in the
conduct of the affairs of a bank ((or)), trust company, or holding
company shall contain a statement of the facts which constitute grounds
therefor and shall fix a time and place at which a hearing will be
held. The hearing shall be set not earlier than ten days ((nor)) or
later than thirty days after the date of service of the notice unless
an earlier or later date is set by the director at the request of the
director, officer, or employee for good cause shown or of the attorney
general of the state.
(2) Unless the director, officer, or employee appears at the
hearing personally or by a duly authorized representative, the person
shall be deemed to have consented to the issuance of an order of
removal or prohibition or both. In the event of such consent or if
upon the record made at the hearing the director finds that any of the
grounds specified in the notice have been established, the director may
issue such orders of removal from office or prohibition from
participation in the conduct of the affairs of the bank ((or)), trust
company, or holding company as the director may consider appropriate.
(3) Any order shall become effective at the expiration of ten days
after service upon the bank, trust company, or holding company and the
director, officer, or employee concerned except that an order issued
upon consent shall become effective at the time specified in the order.
(4) An order shall remain effective except to the extent it is
stayed, modified, terminated, or set aside by the director or a
reviewing court.
Sec. 23 RCW 30.12.044 and 1994 c 92 s 66 are each amended to read
as follows:
If at any time because of the removal of one or more directors
under this chapter there shall be on the board of directors of a bank
((or)), trust company, or holding company less than a quorum of
directors, all powers and functions vested in or exercisable by the
board shall vest in and be exercisable by the director or directors
remaining until such time as there is a quorum on the board of
directors. If all of the directors of a bank ((or)), trust company, or
holding company are removed under this chapter, the director shall
appoint persons to serve temporarily as directors until such time as
their respective successors take office.
Sec. 24 RCW 30.12.047 and 1994 c 92 s 67 are each amended to read
as follows:
Any present or former director, officer, or employee of a bank
((or)), trust company, or holding company, or any other person against
whom there is outstanding an effective final order served upon the
person and who participates in any manner in the conduct of the affairs
of the bank ((or)), trust company, or holding company involved; or who
directly or indirectly solicits or procures, transfers or attempts to
transfer, or votes or attempts to vote any proxies, consents, or
authorizations with respect to any voting rights in the bank ((or)),
trust company, or holding company; or who, without the prior approval
of the director, votes for a director or serves or acts as a director,
officer, employee, or agent of any bank ((or)), trust company, or
holding company shall upon conviction for a violation of any order, be
guilty of a gross misdemeanor punishable as prescribed under chapter
9A.20 RCW, as now or hereafter amended.
Sec. 25 RCW 30.12.070 and 1994 c 92 s 70 are each amended to read
as follows:
The director may at any time, if in his or her judgment excessive,
unsafe, or improvident loans are being made or are likely to be made by
a bank or trust company to any of its directors or officers or the
directors or officers of its holding company, or to any corporation,
copartnership or association of which such director is a stockholder,
member, co-owner, or in which such director is financially interested,
or like discounts of the notes or obligations of any such director,
corporation, copartnership or association are being made or are likely
to be made, require such bank or trust company to submit to him or her
for approval all proposed loans to, or discounts of the note or
obligation of, any such director, officer, corporation, copartnership
or association, and thereafter such proposed loans and discounts shall
be reported upon such forms and with such information concerning the
desirability and safety of such loans or discounts and of the
responsibility and financial condition of the person, corporation,
copartnership or association to whom such loan is to be made or whose
note or obligation is to be discounted and of the amount and value of
any collateral that may be offered as security therefor, as the
director may require, and no such loan or discount shall be made
without his or her written approval thereon.
Sec. 26 RCW 30.12.090 and 2003 c 53 s 186 are each amended to
read as follows:
Every person who shall knowingly subscribe to or make or cause to
be made any false statement or false entry in the books of any bank
((or)), trust company, or holding company, or shall knowingly subscribe
to or exhibit any false or fictitious paper or security, instrument or
paper, with the intent to deceive any person authorized to examine into
the affairs of any bank ((or)) trust company, or holding company, or
shall make, state, or publish any false statement of the amount of the
assets or liabilities of any bank ((or)), trust company, or holding
company, is guilty of a class B felony punishable according to chapter
9A.20 RCW.
Sec. 27 RCW 30.12.100 and 2003 c 53 s 187 are each amended to
read as follows:
Every officer, director, or employee or agent of any bank ((or)),
trust company, or holding company who, for the purpose of concealing
any fact or suppressing any evidence against himself or herself, or
against any other person, abstracts, removes, mutilates, destroys or
secretes any paper, book or record of any bank ((or)), trust company,
or holding company, or of the director, or of anyone connected with his
or her office, is guilty of a class B felony punishable according to
chapter 9A.20 RCW.
Sec. 28 RCW 30.12.190 and 1989 c 220 s 2 are each amended to read
as follows:
(1) Every person who shall knowingly violate, or knowingly aid or
abet the violation of any provision of RCW 30.04.010, 30.04.030,
30.04.050, 30.04.060, 30.04.070, 30.04.075, 30.04.111, 30.04.120,
30.04.130, 30.04.180, 30.04.210, 30.04.220, 30.04.280, ((30.04.290,))
30.04.300, 30.08.010, 30.08.020, 30.08.030, 30.08.040, 30.08.050,
30.08.060, 30.08.080, 30.08.090, 30.08.095, ((30.08.110, 30.08.120,))
30.08.140, 30.08.150, 30.08.160, 30.08.180, 30.08.190, 30.12.010,
30.12.020, 30.12.030, 30.12.060, 30.12.070, 30.12.130, 30.12.180,
30.12.190, 30.16.010, 30.20.060, ((30.40.010,)) 30.44.010, 30.44.020,
30.44.030, 30.44.040, 30.44.050, 30.44.060, 30.44.070, 30.44.080,
30.44.090, 30.44.100, 30.44.130, 30.44.140, 30.44.150, 30.44.160,
30.44.170, 30.44.240, 30.44.250, ((43.19.020, 43.19.030, 43.19.050, and
43.19.090)) 43.320.060, 43.320.070, 43.320.080, and 43.320.100, and
((every person)) any director, officer, or employee of a bank, trust
company, or holding company who fails to perform any act which it is
therein made his or her duty to perform, shall be guilty of a
misdemeanor. ((No person))
(2) A director, officer, or employee of a bank, trust company, or
holding company who has been convicted for the violation of the banking
laws of this or any other state or of the United States shall not be
permitted to engage in or become ((an officer or official)) or remain
a board director, officer, or employee of any bank ((or)), trust
company, or holding company organized and existing under the laws of
this state, or of any other depository institution, trust company, bank
holding company, thrift holding company, or financial holding company
doing business in this state.
Sec. 29 RCW 30.12.240 and 1994 c 92 s 73 are each amended to read
as follows:
If the directors of any bank, trust company, or holding company
shall knowingly violate, or knowingly permit any of the officers,
agents, or ((servants)) employees of the bank or trust company to
violate any of the provisions of this title or any lawful regulation or
directive of the director, and if the directors are aware that such
facts and circumstances constitute such violations, then each director
who participated in or assented to the violation is personally and
individually liable for all damages which the state or any insurer of
the deposits of the bank or trust company, or any trust beneficiary of
the trust company, sustains due to the violation.
Sec. 30 RCW 30.44.010 and 1994 c 92 s 107 are each amended to
read as follows:
((Whenever it shall in any manner appear to the director that any
bank or trust company has violated any provision of law or is
conducting its business in an unsafe manner or that it refuses to
submit its books, papers, or concerns to lawful inspection or that any
director or officer thereof refuses to submit to examination on oath
touching its concerns, or that it has failed to carry out any
authorized order or direction of an examiner)) (1) Under the
circumstances set forth in subsection (2) of this section, the director
may give to a bank or trust company a notice to correct an unsafe
condition of the bank or trust company ((so offending or delinquent or
whose director or officer is thus offending or delinquent to correct
such offense or delinquency)); and if such bank or trust company fails
to comply with the terms of such notice within thirty days from the
date of its issuance or within such further time as the director may
allow, then the director may take possession of such bank or trust
company as in the case of insolvency.
(2) The director is authorized to give notice and take possession
of a bank or trust company, as described in subsection (1) of this
section, under the following circumstances:
(a) The obligations to its creditors, depositors, members, trust
beneficiaries, if applicable, and others exceed its assets;
(b) It has willfully violated a supervisory directive, cease and
desist order, or other authorized directive or order of the director;
(c) It has concealed its books, papers, records, or assets, or
refused to submit its books, records, or affairs to any examiner of the
department or the federal deposit insurance corporation;
(d) It is likely to be unable to pay its obligations or meet its
depositors' demands in the normal course of business;
(e) It ceases to have deposit insurance acceptable to the director;
(f) It fails to submit a capital restoration plan acceptable to the
department within a time previously called for or materially fails to
implement a capital restoration plan that was previously submitted and
accepted by the department; or
(g) It is critically undercapitalized or otherwise has
substantially insufficient capital.
Sec. 31 RCW 30.44.020 and 1994 c 92 s 108 are each amended to
read as follows:
(1) Whenever it shall in any manner appear to the director that any
offense or delinquency referred to in RCW 30.44.010 ((renders)) has
resulted in a bank or trust company ((in an unsound or unsafe condition
to continue its business or that its capital or surplus is reduced or
impaired below the amount required by its articles of incorporation or
by this title)) being critically undercapitalized with no reasonably
foreseeable prospect of recovery, or that it has suspended payment of
its obligations or is insolvent, the director may notify such bank or
trust company to levy an assessment on its stock or otherwise to make
good such impairment or offense or other delinquency within such time
and in such manner as ((he or she)) the director may specify, or if
((he or she)) the director deems necessary ((he or she)), the director
may take possession thereof without notice.
(2) The board of directors of any such bank or trust company, with
the consent of the holders of record of two-thirds of the capital stock
expressed either in writing or by vote at a stockholders' meeting
called for that purpose, shall have power and authority to levy such
assessment upon the stockholders pro rata and to forfeit the stock upon
which any such assessment is not paid, in the manner prescribed in RCW
30.12.180.
Sec. 32 RCW 30.44.030 and 1994 c 92 s 109 are each amended to
read as follows:
Within ten days after the director takes possession thereof, a bank
or trust company may serve a notice upon the director to appear before
the superior court of the county wherein such corporation is located
and at a time to be fixed by ((said)) the court, which shall not be
less than five nor more than fifteen days from the date of the service
of such notice, to show cause why ((such corporation)) the director's
action taking possession of the bank or trust company should not be
((restored to the possession of its assets)) affirmed. Upon the return
day of such notice, or such further day as the matter may be continued
to, the court shall summarily hear said cause and shall dismiss the
same, if it be found that possession was taken by the director in good
faith and for cause, but if it find that no cause existed for the
taking possession of such ((corporation)) bank or trust company, it
shall require the director to restore such bank or trust company to
possession of its assets and enjoin ((him or her)) the director from
further interference therewith without cause.
Sec. 33 RCW 30.44.100 and 1994 c 92 s 116 are each amended to
read as follows:
No receiver shall be appointed by any court for any bank or trust
company, nor shall any assignment of any bank or trust company for the
benefit of creditors be valid, excepting only that a court otherwise
having jurisdiction may in case of imminent necessity appoint a
temporary receiver to take possession of and preserve the assets of
such corporation. Immediately upon any such appointment, the clerk of
such court shall notify the director ((by telegraph and mail)) in
writing of such appointment and the director shall forthwith take
possession of such bank or, trust company, as in case of insolvency,
and ((such)) the temporary receiver shall upon demand of the director
surrender up to him or her such possession and all assets which shall
have come into the ((hands)) possession of such receiver. The director
shall in due course pay such receiver out of the assets of such
corporation such amount as the court shall allow.
Sec. 34 RCW 30.44.110 and 2003 c 53 s 190 are each amended to
read as follows:
(1) Every transfer of its property or assets by any bank or trust
company ((in this state)), made (a) in contemplation of insolvency((,))
or after it shall have become insolvent, (b) within ninety days before
the date the director takes possession of such bank or trust company
under RCW 30.44.010, 30.44.020, 30.44.100 or 30.44.160, or the federal
deposit insurance corporation is appointed as receiver or liquidator of
such bank under RCW 30.44.270, and (c) with a view to the preference of
one creditor over another((,)) or to prevent the equal distribution of
its property and assets among its creditors, shall be void.
(2) Every director, officer, or employee of a bank or trust company
making any such transfer of assets is guilty of a class B felony
punishable according to chapter 9A.20 RCW.
Sec. 35 RCW 30.44.160 and 1994 c 92 s 120 are each amended to
read as follows:
((Any)) (1) Subject to the consent of the director, a bank or trust
company may voluntarily stipulate and consent to an order taking
possession and thereby place itself under the control of the director
to be liquidated ((as herein provided by posting)) and be made subject
to receivership as provided in this chapter.
(2) Upon issuance of such order taking possession, the bank or
trust company shall post a notice on its door as follows: "This bank
(trust company) is in the ((hands)) possession of the ((State))
Director of the Washington State Department of Financial Institutions."
((Immediately upon the posting of such notice, the officers of such
corporation shall notify the director thereof by telegraph and mail.))
(3) The posting of such notice or the taking possession of any bank
or trust company by the director shall be sufficient to place all of
its assets and property of every nature in his or her possession and
bar all attachment proceedings.
Sec. 36 RCW 30.44.270 and 1994 c 92 s 131 are each amended to
read as follows:
(1) The federal deposit insurance corporation is hereby authorized
and empowered to be and act without bond as receiver or liquidator of
any bank or trust company the deposits in which are to any extent
insured by that corporation and of which the director shall have ((been
closed on account of inability to meet the demands of its depositors))
taken possession pursuant to RCW 30.44.010, 30.44.020, or 30.44.160.
(2) In the event of such closing, the director may appoint the
federal deposit insurance corporation as receiver or liquidator of such
bank or trust company.
(3) If the corporation accepts such appointment, it shall have and
possess all the powers and privileges provided by the laws of this
state with respect to a liquidator of a bank or trust company, its
depositors and other creditors, and be subject to all the duties of
such liquidator, except insofar as such powers, privileges, or duties
are in conflict with the provisions of the federal deposit insurance
act, as now or hereafter amended.
Sec. 37 RCW 30.46.010 and 1994 c 92 s 133 are each amended to
read as follows:
((For the purposes of this chapter the following terms shall be
defined as follows:)) The definitions in this section apply throughout
this chapter unless the context clearly requires otherwise.
(1) "Unsafe condition" shall mean and include, but not be limited
to, any one or more of the following circumstances:
(a) If a ((bank's capital is impaired or impairment of capital is
threatened)) bank or trust company is less than well capitalized;
(b) If a bank or trust company violates the applicable provisions
of Title 30 RCW or any other law or regulation applicable to banks or
trust companies;
(c) If a bank or trust company conducts a fraudulent or
questionable practice in the conduct of its business that endangers
((the)) a bank's or trust company's reputation or threatens its
solvency;
(d) If a bank or trust company conducts its business in an unsafe
or unauthorized manner;
(e) If a bank or trust company violates any conditions of its
charter or any agreement entered with the director; or
(f) If a bank or trust company fails to carry out any authorized
order or direction of the examiner or the director.
(2) "Exceeded its powers" shall mean and include, but not be
limited to the following circumstances:
(a) If a bank or trust company has refused to permit examination of
its books, papers, accounts, records, or affairs by the director,
assistant director, or duly commissioned examiners; or
(b) If a bank or trust company has neglected or refused to observe
an order of the director to make good, within the time prescribed, any
impairment of its capital.
(3) "Consent" includes and means a written agreement by the bank or
trust company to either supervisory direction or conservatorship under
this chapter.
Sec. 38 RCW 32.04.020 and 1999 c 14 s 13 are each amended to read
as follows:
Unless the context clearly requires otherwise, the definitions in
this section apply throughout this title.
(1) ((The use of the term "savings bank" or "mutual savings bank"
refers to savings banks organized under chapter 32.08 or 32.35 RCW or
converted under chapter 32.32 or 33.44 RCW.))
"Adequately capitalized," "critically undercapitalized," "significantly
undercapitalized," "undercapitalized," and "well-capitalized,"
respectively, have meanings consistent with the definitions these same
terms have under the prompt corrective action provisions of the federal
deposit insurance act, 12 U.S.C. Sec. 1831o, or any successor federal
statute, and applicable enabling rules of the federal deposit insurance
corporation.
(2) The use of the words "mutual savings" as part of a name under
which business of any kind is or may be transacted by any person, firm,
or corporation, except such as were organized and in actual operation
on June 9, 1915, or as may be thereafter operated under the
requirements of this title is hereby prohibited.
(3) The use of the term "director" refers to the director of
financial institutions.
(4) The use of the word "branch" refers to an established office or
facility other than the principal office, at which employees of the
savings bank take deposits. The term "branch" does not refer to a
machine permitting customers to leave funds in storage or communicate
with savings bank employees who are not located at the site of that
machine, unless employees of the savings bank at the site of that
machine take deposits on a regular basis. An office of an entity other
than the savings bank is not established by the savings bank,
regardless of any affiliation, accommodation arrangement, or other
relationship between the other entity and the savings bank.
(2) "Bank holding company" means a bank holding company under
authority of the federal bank holding company act.
(3) "Branch" means an established office or facility other than the
principal office, at which employees of the savings bank take deposits.
"Branch" does not mean a machine permitting customers to leave funds in
storage or communicate with savings bank employees who are not located
at the site of that machine, unless employees of the savings bank at
the site of that machine take deposits on a regular basis. An office
of an entity other than the savings bank is not established by the
savings bank, regardless of any affiliation, accommodation arrangement,
or other relationship between the other entity and the savings bank.
(4) "Department" means the Washington state department of financial
institutions.
(5)"Director" means the director of the department.
(6) "Financial holding company" means a financial services holding
company under the authority of the federal bank holding company act.
(7) "Holding company" means a bank holding company, financial
holding company, or thrift holding company of a savings bank organized
under chapter 32.08 RCW, converted from a mutual savings bank to a
stock savings bank under chapter 32.32 RCW, or converted to a state
savings bank under chapter 32.34 RCW.
(8) "Mutual savings" when used as part of a name under which
business of any kind is or may be transacted by any person, firm, or
corporation, except such as were organized and in actual operation on
June 9, 1915, or as may be thereafter operated under the requirements
of this title is hereby prohibited.
(9) "Savings bank" or "mutual savings bank" means savings banks
organized under chapter 32.08 or 32.35 RCW or converted under chapter
32.32 or 33.44 RCW.
(10) "Thrift holding company" means a thrift institution holding
company under authority of laws and rules administered by the federal
office of thrift supervision, or its successor agency.
NEW SECTION. Sec. 39 A new section is added to chapter 32.04 RCW
to read as follows:
(1) Each savings bank and its directors, officers, employees, and
agents, shall comply with:
(a) This title and chapter 11.100 RCW as applicable to each of
them;
(b) The rules adopted by the department with respect to savings
banks;
(c) Any lawful direction or order of the director;
(d) Any lawful supervisory agreement with the director; and
(e) The applicable statutes, rules, and regulations administered by
the board of governors of the federal reserve system, the federal
office of thrift supervision, and the federal deposit insurance
corporation with respect to savings banks and holding companies.
(2) Each holding company, and its directors, officers, employees,
and agents, shall comply with:
(a) The provisions of this title that are applicable to each of
them;
(b) The rules of the department that are applicable with respect to
holding companies;
(c) Any lawful direction or order of the director;
(d) Any lawful supervisory agreement with the director; and
(e) The applicable statutes, rules, and regulations administered by
the board of governors of the federal reserve system or the federal
office of thrift supervision, or applicable successor agency, with
respect to holding companies, the violation of which would result in an
unsafe and unsound practice or material violation of law with respect
to the subsidiary savings bank of the holding company.
(3) The violation of any supervisory agreement, directive, order,
statute, rule, or regulation referenced in this section, in addition to
any other penalty provided in this title, shall, at the option of the
director, subject the offender to a penalty of up to ten thousand
dollars for each offense, payable upon issuance of any order or
directive of the director, which may be recovered by the attorney
general in a civil action in the name of the department.
Sec. 40 RCW 32.04.070 and 1955 c 13 s 32.04.070 are each amended
to read as follows:
Copies from the records, books, and accounts of a savings bank and
its holding company shall be competent evidence in all cases, equal
with originals thereof, if there is annexed to such copies an affidavit
taken before a notary public or clerk of a court under seal, stating
that the affiant is the officer of the savings bank or holding company
having charge of the original records, and that the copy is true and
correct and is full so far as the same relates to the subject matter
therein mentioned.
Sec. 41 RCW 32.04.100 and 2003 c 53 s 194 are each amended to
read as follows:
Every person who knowingly subscribes to or makes or causes to be
made any false statement or false entry in the books of any savings
bank or its holding company, or knowingly subscribes to or exhibits any
false or fictitious security, document or paper, with the intent to
deceive any person authorized to examine into the affairs of any
savings bank or its holding company, or makes or publishes any false
statement of the amount of the assets or liabilities of any such
savings bank or its holding company is guilty of a class B felony
punishable according to chapter 9A.20 RCW.
Sec. 42 RCW 32.04.110 and 2003 c 53 s 195 are each amended to
read as follows:
Every board trustee or director, officer, employee, or agent of any
savings bank or its holding company who for the purpose of concealing
any fact suppresses any evidence against himself or herself, or against
any other person, or who abstracts, removes, mutilates, destroys, or
secretes any paper, book, or record of any savings bank or its holding
company, or of the director, or anyone connected with his or her office
is guilty of a class B felony punishable according to chapter 9A.20
RCW.
Sec. 43 RCW 32.04.211 and 1994 c 92 s 300 are each amended to
read as follows:
(1) The director, assistant director, or an examiner shall visit
each savings bank at least once every eighteen months, and oftener if
necessary, or as otherwise required by the rules and interpretations of
applicable federal banking examination authorities, for the purpose of
making a full investigation into the condition of such corporation, and
for that purpose they are hereby empowered to administer oaths and to
examine under oath any director, officer, employee, or agent of such
corporation.
(2) The director may make such other full or partial examinations
as deemed necessary and may examine any holding company that owns any
portion of a savings bank chartered by the state of Washington and
obtain reports of condition for any holding company that owns any
portion of a savings bank chartered by the state of Washington.
(3) The director may visit and examine into the affairs of any
nonpublicly held corporation in which the savings bank or its holding
company has an investment or any publicly held corporation the capital
stock of which is controlled by the savings bank or its holding
company; may appraise and revalue such corporations' investments and
securities; and shall have full access to all the books, records,
papers, securities, correspondence, bank accounts, and other papers of
such corporations for such purposes. ((The director may, in his or her
discretion, accept in lieu of the examinations required in this section
the examinations conducted at the direction of the federal reserve
board or the Federal Deposit Insurance Corporation.))
(4) Any willful false swearing in any examination is perjury in the
second degree.
(((2))) (5) The director may enter into cooperative and reciprocal
agreements with the bank regulatory authorities of the United States,
any state, the District of Columbia, or any trust territory of the
United States for the periodic examination of domestic savings banks or
holding companies owning banking institutions in other states, the
District of Columbia, or trust territories, and subsidiaries of such
domestic savings banks and holding companies, or of out-of-state
holding companies owning a savings bank the principal operations of
which are conducted in this state. ((The director may accept reports
of examination and other records from such authorities in lieu of
conducting his or her own examinations.))
(6) The director may, in his or her discretion, accept in lieu of
the examinations required in this section the examinations and reports
conducted, as applicable, at the direction of the board of governors of
the federal reserve system, the federal office of thrift supervision,
the federal deposit insurance corporation, any successor federal thrift
regulator or thrift holding company regulator, or other authorities,
domestic, foreign, or alien.
(7) The director may enter into joint actions with other
regulatory bodies having concurrent jurisdiction or may enter into such
actions independently to carry out his or her responsibilities under
this title and assure compliance with the laws of this state.
Sec. 44 RCW 32.04.220 and 2005 c 274 s 258 are each amended to
read as follows:
(1) All examination reports and all information obtained by the
director and the director's staff in conducting examinations of
((mutual)) savings banks, and information obtained by the director and
the director's staff from other state or federal bank regulatory
authorities with whom the director has entered into agreements pursuant
to RCW 32.04.211, and information obtained by the director and the
director's staff relating to examination and supervision of holding
companies owning a savings bank in this state or subsidiaries of such
holding companies, is confidential and privileged information and shall
not be made public or otherwise disclosed to any person, firm,
corporation, agency, association, governmental body, or other entity.
(2) Subsection (1) of this section notwithstanding, the director
may furnish all or any part of examination reports, work papers, final
orders, or other information obtained in the conduct of an examination
or investigation prepared by the director's office to:
(a) Federal agencies empowered to examine ((mutual)) savings banks;
(b) Bank regulatory authorities with whom the director has entered
into agreements pursuant to RCW 32.04.211, and other bank regulatory
authorities who are the primary regulatory authority or insurer of
accounts for a holding company owning a savings bank the principal
operations of which are conducted in this state or a subsidiary of such
holding company; provided that the director shall first find that the
reports of examination to be furnished shall receive protection from
disclosure comparable to that accorded by this section;
(c) Officials empowered to investigate criminal charges subject to
legal process, valid search warrant, or subpoena. If the director
furnishes any examination report to officials empowered to investigate
criminal charges, the director may only furnish that part of the report
which is necessary and pertinent to the investigation, and the director
may do this only after notifying the affected ((mutual)) savings bank
and any customer of the ((mutual)) savings bank who is named in that
part of the report of the order to furnish the part of the examination
report unless the officials requesting the report first obtain a waiver
of the notice requirement from a court of competent jurisdiction for
good cause;
(d) The examined savings bank or holding company thereof;
(e) The attorney general in his or her role as legal advisor to the
director;
(f) Liquidating agents of a distressed savings bank;
(g) A person or organization officially connected with the savings
bank as officer, director, attorney, auditor, or independent attorney
or independent auditor;
(h) The Washington public deposit protection commission as provided
by RCW 39.58.105;
(i) Organizations insuring or guaranteeing the shares of, or
deposits in, the savings bank; or
(j) Other persons as the director may determine necessary to
protect the public interest and confidence.
(3) All examination reports, work papers, final orders, and other
information obtained in the conduct of an examination or investigation
furnished under subsections (2) and (4) of this section shall remain
the property of the department of financial institutions, and be
confidential, and no person, agency, or authority to whom reports are
furnished or any officer, director, or employee thereof shall disclose
or make public any of the reports or any information contained therein
except in published statistical material that does not disclose the
affairs of any individual or corporation: PROVIDED, That nothing
herein shall prevent the use in a criminal prosecution of reports
furnished under subsection (2) of this section.
(4) The examination report made by the department of financial
institutions is designed for use in the supervision of the ((mutual))
savings bank, and the director may furnish a copy of the report to the
((mutual)) savings bank examined. The report shall remain the property
of the director and will be furnished to the ((mutual)) savings bank
solely for its confidential use. Under no circumstances shall the
((mutual)) savings bank or any of its trustees, officers, or employees
disclose or make public in any manner the report or any portion
thereof, to any person or organization not connected with the savings
bank as officer, director, employee, attorney, auditor, or candidate
for executive office with the bank. The savings bank may also, after
execution of an agreement not to disclose information in the report,
disclose the report or relevant portions thereof to a party proposing
to acquire or merge with the savings bank.
(5) Examination reports and information obtained by the director
and the director's staff in conducting examinations, or from other
state and federal bank regulatory authorities with whom the director
has entered into agreements pursuant to RCW 32.04.211, or relating to
examination and supervision of holding companies owning a savings bank
the principal operations of which are conducted in this state or a
subsidiary of such holding company, shall not be subject to public
disclosure under chapter 42.56 RCW.
(6) In any civil action in which the reports are sought to be
discovered or used as evidence, any party may, upon notice to the
director, petition the court for an in camera review of the report.
The court may permit discovery and introduction of only those portions
of the report which are relevant and otherwise unobtainable by the
requesting party. This subsection shall not apply to an action brought
or defended by the director.
(7) This section shall not apply to investigation reports prepared
by the director and the director's staff concerning an application for
a new ((mutual)) savings bank or an application for a branch of a
((mutual)) savings bank: PROVIDED, That the director may adopt rules
making confidential portions of the reports if in the director's
opinion the public disclosure of the portions of the report would
impair the ability to obtain the information which the director
considers necessary to fully evaluate the application.
(8) Except to the extent permitted by subsection (2) of this
section, any regulatory enforcement action against a savings bank or
holding company, including any supervisory agreement, direction,
consent order, final order, or other information related to the
regulatory enforcement action is confidential and privileged and not
subject to public disclosure under chapter 42.56 RCW.
(9) Notwithstanding any other provision of this section or other
applicable law, a savings bank or holding company shall not be in
violation of any provision of this section on account of its compliance
with required reporting to the federal securities and exchange
commission, including the disclosure of any order of the director.
(10) Every person who violates any provision of this section shall
((forfeit the person's office or employment and)) be guilty of a gross
misdemeanor.
Sec. 45 RCW 32.04.250 and 1994 c 92 s 302 are each amended to
read as follows:
(1) The director may issue and serve a notice of charges upon a
((mutual)) savings bank ((a notice of charges if)) when, in the opinion
of the director ((any mutual savings bank)):
(a) ((Is engaging or)) It has engaged in an unsafe ((or)) and
unsound practice in conducting or in relation to ((the)) its business
((of the mutual savings bank));
(b) ((Is violating or)) It has violated ((the law, rule, or any
condition imposed in writing by the director in connection with the
granting of any application or other request by the mutual savings bank
or any written agreement made with the director)) any provision of
section 39 of this act; or
(c) ((Is about to do the)) It is planning, attempting, or currently
conducting any act((s)) prohibited in (a) or (b) of this subsection
((when the opinion that the threat exists is based upon reasonable
cause)).
(2) The director may issue and serve a notice of charges upon a
holding company when, in the opinion of the director:
(a) The holding company has committed a violation of section 39(2)
of this act;
(b) The conduct of the holding company has resulted in an unsafe
and unsound practice at the savings bank or a violation of any
provision of section 39 of this act by the savings bank; or
(c) The holding company is planning, attempting, or currently
conducting any act prohibited in (a) or (b) of this subsection.
(3) The notice shall contain a statement of the facts constituting
the alleged violation or violations or the practice or practices and
shall fix a time and place at which a hearing will be held to determine
whether an order to cease and desist should issue against the
((mutual)) savings bank or holding company. The hearing shall be set
not earlier than ten days ((nor)) or later than thirty days after
service of the notice, unless a later date is set by the director at
the request of the ((mutual)) savings bank or holding company.
(4) Unless the ((mutual)) savings bank or holding company shall
appear at the hearing by a duly authorized representative, it shall be
deemed to have consented to the issuance of the cease and desist order.
In the event of this consent or if upon the record made at the hearing
the director finds that any violation or practice specified in the
notice of charges has been established, the director may issue and
serve upon the ((mutual)) savings bank or holding company an order to
cease and desist from the violation or practice. The order may require
the ((mutual)) savings bank or holding company, and its trustees,
officers, employees, and agents, to cease and desist from the violation
or practice and may require the ((mutual)) savings bank or holding
company to take affirmative action to correct the conditions resulting
from the violation or practice.
(((3))) (5) A cease and desist order shall become effective at the
expiration of ten days after the service of the order upon the
((mutual)) savings bank or holding company concerned, except that a
cease and desist order issued upon consent shall become effective at
the time specified in the order and shall remain effective as provided
therein, unless it is stayed, modified, terminated, or set aside by
action of the director or a reviewing court.
Sec. 46 RCW 32.04.260 and 1994 c 92 s 303 are each amended to
read as follows:
((Whenever the director determines that the acts specified in RCW
32.04.250 or their continuation is likely to cause insolvency or
substantial dissipation of assets or earnings of the mutual savings
bank or to otherwise seriously prejudice the interest of its
depositors, the director may also issue a temporary order requiring the
mutual savings bank to cease and desist from the violation or practice.
The order shall become effective upon service on the mutual savings
bank and, unless set aside, limited, or suspended by a court in
proceedings under RCW 32.04.270, shall remain effective pending the
completion of the administrative proceedings under the notice and until
such time as the director shall dismiss the charges specified in the
notice or until the effective date of a cease and desist order issued
against the mutual savings bank under RCW 32.04.250.)) (1) The director
may also issue a temporary order requiring a savings bank or its
holding company, or both, to cease and desist from any action or
omission, as specified in RCW 32.04.250, or its continuation, which the
director has determined:
(a) Constitutes an unsafe and unsound practice, or a material
violation of section 39 of this act affecting the savings bank;
(b) Has resulted in the savings bank being less than adequately
capitalized; or
(c) Is likely to cause insolvency or substantial dissipation of
assets or earnings of the savings bank, or to otherwise seriously
prejudice the interests of the savings bank's depositors.
(2) The order is effective upon service on the savings bank or
holding company, and remains effective unless set aside, limited, or
suspended by the superior court in proceedings under RCW 32.04.270
pending the completion of the administrative proceedings under the
notice and until such time as the director dismisses the charges
specified in the notice or until the effective date of a cease and
desist order issued against the savings bank or holding company under
RCW 32.04.250.
Sec. 47 RCW 32.04.270 and 1979 c 46 s 3 are each amended to read
as follows:
(1) Within ten days after a ((mutual)) savings bank or holding
company has been served with a temporary cease and desist order, the
((mutual)) savings bank or holding company may apply to the superior
court in the county of its principal place of business for an
injunction setting aside, limiting, or suspending the order pending the
completion of the administrative proceedings pursuant to the notice
served under RCW 32.04.250.
(2) The superior court shall have jurisdiction to issue the
injunction.
Sec. 48 RCW 32.04.290 and 1994 c 92 s 305 are each amended to
read as follows:
(1) Any administrative hearing provided in RCW 32.04.250 or
32.16.093 ((may be held at such place as is designated by the director
and shall be conducted in accordance with chapter 34.05 RCW)) must be
conducted in accordance with chapter 34.05 RCW and held at the place
designated by the director, and may be conducted by the department.
The hearing shall be private unless the director determines that a
public hearing is necessary to protect the public interest after fully
considering the views of the party afforded the hearing.
(2) Within sixty days after the hearing, the director shall render
a decision which shall include findings of fact upon which the decision
is based and shall issue and serve upon each party to the proceeding an
order or orders consistent with RCW 32.04.250 or 32.16.093, as the case
may be.
(3) Unless a petition for review is timely filed in the superior
court of the county of the principal place of business of the affected
mutual savings bank under subsection (((2))) (5) of this section, and
until the record in the proceeding has been filed as provided therein,
the director may at any time modify, terminate, or set aside any order
upon such notice and in such manner as he or she shall deem proper.
Upon filing the record, the director may modify, terminate, or set
aside any order only with permission of the court.
(4) The judicial review provided in this section shall be exclusive
for orders issued under RCW 32.04.250 and 32.16.093.
(((2))) (5) Any party to the proceeding or any person required by
an order, temporary order, or injunction issued under RCW 32.04.250,
32.04.260, 32.04.280, or 32.16.093 to refrain from any of the
violations or practices stated therein may obtain a review of any order
served under subsection (1) of this section other than one issued upon
consent by filing in the superior court of the county of the principal
place of business of the affected mutual savings bank within ten days
after the date of service of the order a written petition praying that
the order of the director be modified, terminated, or set aside. A
copy of the petition shall be immediately served upon the director and
the director shall then file in the court the record of the proceeding.
The court shall have jurisdiction upon the filing of the petition,
which jurisdiction shall become exclusive upon the filing of the
record, to affirm, modify, terminate, or set aside in whole or in part
the order of the director except that the director may modify,
terminate, or set aside an order with the permission of the court. The
judgment and decree of the court shall be final, except that it shall
be subject to appellate review under the rules of court.
(((3))) (6) The commencement of proceedings for judicial review
under subsection (((2))) (5) of this section shall not operate as a
stay of any order issued by the director unless specifically ordered by
the court.
(((4))) (7) Service of any notice or order required to be served
under RCW 32.04.250, 32.04.260, or 32.16.093, or under RCW 32.16.090,
as now or hereafter amended, shall be accomplished in the same manner
as required for the service of process in civil actions in superior
courts of this state.
Sec. 49 RCW 32.08.153 and 2003 c 24 s 4 are each amended to read
as follows:
(1) Notwithstanding any restrictions, limitations, and requirements
of law, in addition to all powers, express or implied, that a mutual
savings bank has under the laws of this state, a mutual savings bank
shall have ((the powers and authorities that national banks had on July
27, 2003)) each and every power and authority that any national bank
had on July 28, 1985, or on any subsequent date not later than July 27,
2003.
(2) The restrictions, limitations, and requirements applicable to
specific powers or authorities of national banks apply to mutual
savings banks exercising those powers or authorities permitted under
this section but only insofar as the restrictions, limitations, and
requirements relate to exercising the powers or authorities granted
mutual savings banks solely under this section. The director may
require such a savings bank to provide notice prior to implementation
of a plan to develop, improve, or continue holding an individual parcel
of real estate, including capitalized and operating leases, acquired
through any means in full or partial satisfaction of a debt previously
contracted, under circumstances in which a national bank would be
required to provide notice to the comptroller of the currency prior to
implementation of such a plan. The director may adopt rules, orders,
directives, standards, policies, memoranda or other communications to
specify guidance with regard to the exercise of the powers and
authorities to expend such funds as are needed to enable such a savings
bank to recover its total investment, to the fullest extent authorized
for a national bank under the national bank act, 12 U.S.C. Sec. 29.
NEW SECTION. Sec. 50 A new section is added to chapter 32.08 RCW
to read as follows:
A mutual savings bank may exercise the powers and authorities
granted, after July 27, 2003, to national banks or their successors
under federal law, only if the director finds that the exercise of such
powers and authorities:
(a) Serves the convenience and advantage of depositors and
borrowers; and
(b) Maintains the fairness of competition and parity between state-chartered mutual savings banks and national banks or their successors
under federal law.
(2) The restrictions, limitations, and requirements applicable to
specific powers or authorities of national banks or their successors
under federal law shall apply to mutual savings banks exercising those
powers or authorities permitted under this section but only insofar as
the restrictions, limitations, and requirements relate to exercising
the powers or authorities granted mutual savings banks solely under
this section.
(3) As used in this section, "powers and authorities" include
without limitation powers and authorities in corporate governance
matters.
Sec. 51 RCW 32.16.090 and 1994 c 92 s 331 are each amended to
read as follows:
((Whenever the director finds that:)) The director may issue and serve a board director, officer, or
employee of a savings bank with written notice of intent to remove the
person from office or employment or to prohibit the person from
participating in the conduct of the affairs of the savings bank or any
other depository institution, trust company, bank holding company,
thrift holding company, or financial holding company doing business in
this state whenever, in the opinion of the director:
(1) Any trustee, officer, or employee of any mutual savings bank
has committed or engaged in:
(a) A violation of any law, rule, or cease and desist order which
has become final;
(b) Any unsafe or unsound practice in connection with the mutual
savings bank; or
(c) Any act, omission, or practice which constitutes a breach of
his or her fiduciary duty as trustee, officer, or employee; and
(2) The director determines that:
(a) The mutual savings bank has suffered or may suffer substantial
financial loss or other damage; or
(b) The interests of its depositors could be seriously prejudiced
by reason of the violation, practice, or breach of fiduciary duty; and
(3) The director determines that the violation, practice, or breach
of fiduciary duty is one involving personal dishonesty, recklessness,
or incompetence on the part of the trustee, officer, or employee;
Then the director may serve upon the trustee, officer, or employee
of any mutual savings bank a written notice of the director's intention
to remove the person from office or to prohibit the person from
participation in the conduct of the affairs of the mutual savings
bank.
(1)(a) Reasonable cause exists to believe the person has committed
a material violation of law, an unsafe and unsound practice, or a
violation or practice involving a breach of fiduciary duty, personal
dishonesty, recklessness, or incompetence; and
(b) The bank, trust company, or holding company has suffered or is
likely to suffer substantial financial loss or other damage; or
(c) The interests of depositors or trust beneficiaries could be
seriously prejudiced by reason of the violation or practice.
(2) The director may issue and serve a board director, officer, or
employee of a holding company of a savings bank with written notice of
intent to remove the person from office or employment or to prohibit
the person from participating in the conduct of the affairs of the
holding company, its subsidiary bank, or any other depository
institution, trust company, bank holding company, thrift holding
company, or financial holding company doing business in this state
whenever, in the opinion of the director:
(a) Reasonable cause exists to believe the person has committed a
material violation of law, an unsafe and unsound practice, or a
violation or practice involving a breach of fiduciary duty, personal
dishonesty, recklessness, or incompetence; and
(b) The subsidiary savings bank has suffered or is likely to suffer
substantial financial loss or other damage; or
(c) The interests of depositors or trust beneficiaries of the
subsidiary savings bank could be seriously prejudiced by reason of the
violation or practice.
NEW SECTION. Sec. 52 A new section is added to chapter 32.16 RCW
to read as follows:
The director may serve written notice of charges under RCW
32.16.090 to suspend a person from further participation in any manner
in the conduct of the affairs of a savings bank or holding company, if
the director determines that such an action is necessary for the
protection of the savings bank or holding company, or the interests of
the depositors. Any suspension notice issued by the director is
effective upon service, and unless the superior court of the county of
its principal place of business issues a stay of the order, remains in
effect and enforceable until:
(1) The director dismisses the charges contained in the notice
served to the person; or
(2) The effective date of a final order for removal of the person
under RCW 32.16.093.
Sec. 53 RCW 32.16.093 and 1994 c 92 s 332 are each amended to
read as follows:
(1) A notice of an intention to remove a board trustee or director,
officer, or employee from office or to prohibit his or her
participation in the conduct of the affairs of a ((mutual)) savings
bank or holding company shall contain a statement of the facts which
constitute grounds therefor and shall fix a time and place at which a
hearing will be held. The hearing shall be set not earlier than ten
days ((nor)) or later than thirty days after the date of service of the
notice unless an earlier or later date is set by the director at the
request of the board trustee or director, officer, or employee for good
cause shown or at the request of the attorney general of the state.
(2) Unless the board trustee or director, officer, or employee
appears at the hearing personally or by a duly authorized
representative, the person shall be deemed to have consented to the
issuance of an order of removal or prohibition or both. In the event
of such consent or if upon the record made at the hearing the director
finds that any of the grounds specified in the notice have been
established, the director may issue such orders of removal from office
or prohibition from participation in the conduct of the affairs of the
((mutual)) savings bank or holding company as the director may consider
appropriate.
(3) Any order under this section shall become effective at the
expiration of ten days after service upon the ((mutual)) savings bank
or holding company and the trustee, director, officer, or employee
concerned except that an order issued upon consent shall become
effective at the time specified in the order.
An order shall remain effective except to the extent it is stayed,
modified, terminated, or set aside by the director or a reviewing
court.
Sec. 54 RCW 32.16.095 and 1994 c 92 s 333 are each amended to
read as follows:
If at any time because of the removal of one or more trustees or
directors under this chapter there shall be on the board of trustees or
board of directors of a ((mutual)) savings bank less than a quorum of
trustees or directors, all powers and functions vested in, or
exercisable by the board shall vest in, and be exercisable by the
trustee or trustees or director or directors remaining, until such time
as there is a quorum on the board of trustees or board of directors.
If all of the trustees or directors of a ((mutual)) savings bank are
removed under this chapter, the director shall appoint persons to serve
temporarily as trustees or directors until such time as their
respective successors take office.
Sec. 55 RCW 32.16.097 and 1994 c 92 s 334 are each amended to
read as follows:
Any present or former trustee, board director, officer, or employee
of a ((mutual)) savings bank or holding company or any other person
against whom there is outstanding an effective final order issued under
RCW 32.16.093, which order has been served upon the person, and who, in
violation of the order, (1) participates in any manner in the conduct
of the affairs of the ((mutual)) savings bank or holding company
involved; or (2) directly or indirectly solicits or procures, transfers
or attempts to transfer, or votes or attempts to vote any proxies,
consents, or authorizations with respect to any voting rights in the
((mutual)) savings bank or holding company; or (3) without the prior
approval of the director, votes for a board trustee or director or
serves or acts as a trustee, director, officer, employee, or agent of
any ((mutual)) savings bank or holding company, shall be guilty of a
gross misdemeanor, and, upon conviction, shall be punishable as
prescribed under chapter 9A.20 RCW.
Sec. 56 RCW 32.16.140 and 1994 c 92 s 335 are each amended to
read as follows:
If the trustees or directors of any savings bank or holding company
shall knowingly violate, or knowingly permit any of the officers,
agents, or ((servants)) employees of the savings bank or holding
company to violate any of the provisions of this title or any lawful
regulation or directive of the director, and if the trustees or
directors are aware that such facts and circumstances constitute such
violations, then each trustee or director who participated in or
assented to the violation is personally and individually liable for all
damages which the state or any insurer of the deposits of the savings
bank sustains due to the violation.
Sec. 57 RCW 32.20.285 and 1981 c 86 s 5 are each amended to read
as follows:
((A mutual)) Subject to such requirements, restrictions, or other
conditions as the director may adopt by rule, order, directive,
standard, policy, memorandum or other communication with regard to the
investment, a savings bank may invest its funds in such real estate,
improved or unimproved, and its fixtures and equipment, as the savings
bank shall purchase either alone or with others or through ownership of
interests in entities holding such real estate. The savings bank may
improve property which it owns, and rent, lease, sell, and otherwise
deal in such property, the same as any other owner thereof. The total
amount a ((mutual)) savings bank may invest pursuant to this section
shall not exceed twenty percent of its funds. No officer or board
trustee or director of the savings bank shall own or hold any interest
in any property in which the savings bank owns an interest, and in the
event the bank owns an interest in property hereunder with or as a part
of another entity, no officer or board trustee or director of the
savings bank shall own more than two and one-half percent of the equity
or stock of any entity involved, and all of the officers and board
trustees or directors of the savings bank shall not own more than five
percent of the equity or stock of any entity involved.
Sec. 58 RCW 32.24.040 and 1994 c 92 s 342 are each amended to
read as follows:
((Whenever it appears to the director that any mutual savings bank
is conducting its business in an unsafe manner or that it refuses to
submit its books, papers, or concerns to lawful inspection, or that any
trustee or officer thereof refuses to submit to examination on oath
touching its concerns, or that it has failed to carry out any
authorized order or direction of the director, such)) (1) Under the
circumstances set forth in subsection (2) of this section, the director
may give to a savings bank notice ((to the mutual)) of unsafe condition
of the savings bank ((so offending or delinquent or whose trustee or
officer is thus offending or delinquent to correct such offense or
delinquency,)); and if the ((mutual)) savings bank fails to comply with
the terms of such notice within thirty days from the date of its
issuance, or within such further time as the director may allow, then
the director may take possession of such ((mutual)) savings bank as in
the case of insolvency.
(2) The director is authorized to give notice and take possession
of a savings bank, as described in subsection (1) of this section,
under the following circumstances:
(a) The obligations to its creditors, depositors, members, trust
beneficiaries, if applicable, and others exceed its assets;
(b) It has willfully violated a supervisory directive, cease and
desist order, or other authorized directive or order of the director;
(c) It has concealed its books, papers, records, or assets, or
refused to submit its books, records, or affairs to any examiner of the
department;
(d) It is likely to be unable to pay its immediate obligations or
meet its depositors' immediate demands in the normal course of
business;
(e) It ceases to have deposit insurance acceptable to the director;
(f) It fails to submit a capital restoration plan acceptable to the
department within a time previously called for or materially fails to
implement a capital restoration plan that was previously submitted and
accepted by the department; or
(g) It is critically undercapitalized or otherwise has
substantially insufficient capital.
Sec. 59 RCW 32.24.050 and 1994 c 92 s 343 are each amended to
read as follows:
(1) Whenever it appears to the director that any offense or
delinquency referred to in RCW 32.24.040 ((renders a mutual)) has
resulted in a savings bank ((in an unsound or unsafe condition to
continue its business)) being critically undercapitalized with no
reasonably foreseeable prospect of recovery, or that it has suspended
payment of its obligations, or is insolvent, ((such)) the director may
notify such savings bank to levy an assessment on its stock, if any, or
otherwise to make good such impairment or offense or other delinquency
within such time and in such manner as the director may specify, or if
the director deems necessary, the director may take possession thereof
without notice.
(2) Upon taking possession of any ((mutual)) savings bank, the
director shall forthwith proceed to liquidate the business, affairs,
and assets thereof and such liquidation shall be had in accordance with
the provisions of law governing the liquidation of insolvent banks and
((trust companies)) savings banks.
Sec. 60 RCW 32.24.060 and 1994 c 92 s 344 are each amended to
read as follows:
Within ten days after the director takes possession thereof, a
mutual savings bank may serve notice upon such director to appear
before the superior court in the county wherein such corporation is
located, at a time to be fixed by ((said)) the court, which shall not
be less than five nor more than fifteen days from the date of the
service of such notice, to show cause why ((such corporation)) the
director's action taking possession of the savings bank should not be
((restored to the possession of its assets)) affirmed. Upon the return
day of such notice, or such further day as the matter may be continued
to, the court shall summarily hear ((said)) the cause and shall dismiss
the same, if it finds that possession was taken by the director in good
faith and for cause, but if it finds that no cause existed for ((the))
taking possession of ((such corporation)) the savings bank, it shall
require the director to restore the savings bank to the possession of
its assets and enjoin ((him or her)) the director from further
interference therewith without cause.
Sec. 61 RCW 32.24.070 and 1994 c 92 s 345 are each amended to
read as follows:
No receiver shall be appointed by any court for any ((mutual))
savings bank, nor shall any assignment of any such bank for the benefit
of creditors be valid, excepting only that a court otherwise having
jurisdiction may in case of imminent necessity appoint a temporary
receiver to take possession of and preserve the assets of the
((mutual)) savings bank. Immediately upon any such appointment, the
clerk of the court shall notify the director ((by telegram and mail))
in writing of such appointment and the director shall ((forthwith))
immediately take possession of the ((mutual)) savings bank, as in case
of insolvency, and the temporary receiver shall upon demand of the
director surrender up to him or her such possession and all assets
which have come into his or her ((hands)) possession. The director
shall in due course pay such receiver out of the assets of the
((mutual)) savings bank such amount as the court shall allow.
NEW SECTION. Sec. 62 A new section is added to chapter 32.24 RCW
to read as follows:
(1) Subject to the consent of the director, a savings bank may
voluntarily stipulate and consent to an order taking possession and
thereby place itself under the control of the director to be liquidated
and be made subject to receivership as provided in this chapter.
(2) Upon issuance of such order taking possession, the savings bank
shall post a notice on its door as follows: "This savings bank is in
the possession of the Director of the Washington State Department of
Financial Institutions."
(3) The posting of such notice or the taking possession of any
savings bank by the director shall be sufficient to place all of its
assets and property of every nature in the director's possession and
bar all attachment proceedings.
Sec. 63 RCW 32.24.080 and 2003 c 53 s 196 are each amended to
read as follows:
(1) Every transfer of its property or assets by any ((mutual))
savings bank ((in this state)), made (a) after it has become insolvent,
(b) within ninety days before the date the director takes possession of
such savings bank under RCW 32.24.040, 32.24.050, or section 62 of this
act, or the federal deposit insurance corporation is appointed as
receiver or liquidator of such savings bank under RCW 32.24.090, and
(c) with the view to the preference of one creditor over another or to
prevent equal distribution of its property and assets among its
creditors, shall be void.
(2) Every trustee or board director, officer, or employee knowingly
making any such transfer ((described in subsection (1) of this
section)) of assets is guilty of a class B felony punishable according
to chapter 9A.20 RCW.
Sec. 64 RCW 32.24.090 and 1994 c 92 s 347 are each amended to
read as follows:
(1) The federal deposit insurance corporation is hereby authorized
and empowered to be and act without bond as receiver or liquidator of
any ((mutual)) savings bank the deposits in which are to any extent
insured by that corporation and which the director shall have ((been
closed on account of inability to meet the demands of its depositors))
taken possession pursuant to RCW 32.24.040, 32.24.050, or section 62 of
this act.
(2) In the event of such closing, the director may appoint the
federal deposit insurance corporation as receiver or liquidator of such
((mutual)) savings bank.
(3) If the corporation accepts such appointment, it shall have and
possess all the powers and privileges provided by the laws of this
state with respect to a liquidator of a mutual savings bank, its
depositors and other creditors, and be subject to all the duties of
such liquidator, except insofar as such powers, privileges, or duties
are in conflict with the provisions of the federal deposit insurance
act, as now or hereafter amended.
NEW SECTION. Sec. 65 The definitions in this section apply
throughout this chapter unless the context clearly requires otherwise.
(1) "Unsafe condition" means and includes, but is not limited to,
any one or more of the following circumstances:
(a) If a savings bank is less than well capitalized;
(b) If a savings bank or holding company violates the provisions of
Title 32 RCW or any other law or regulation applicable to savings
banks;
(c) If a savings bank conducts a fraudulent or questionable
practice in the conduct of its business that endangers the savings
bank's reputation or threatens its solvency;
(d) If a savings bank conducts its business in an unsafe or
unauthorized manner;
(e) If a savings bank violates any conditions of its charter or any
agreement entered with the director; or
(f) If a savings bank fails to carry out any authorized order or
direction of the examiner or the director.
(2) "Exceeded its powers" means and includes, but is not limited to
the following circumstances:
(a) If a savings bank has refused to permit examination of its
books, papers, accounts, records, or affairs by the director, assistant
director, or duly commissioned examiners; or
(b) If a savings bank has neglected or refused to observe an order
of the director to make good, within the time prescribed, any
impairment of its capital.
(3) "Consent" means and includes a written agreement by the savings
bank to either supervisory direction or conservatorship under this
chapter.
NEW SECTION. Sec. 66 If upon examination or at any other time it
appears to the director that any savings bank is in an unsafe condition
and its condition is such as to render the continuance thereof
hazardous to the public or to its depositors or trust beneficiaries and
creditors, or if such savings bank appears to have exceeded its powers
or has failed to comply with the law, or if such savings bank gives its
consent, then the director shall upon his or her determination (1)
notify the savings bank of his or her determination, (2) furnish to the
savings bank a written list of the director's requirements to abate his
or her determination, and (3) if the director makes further
determination to directly supervise, he or she shall notify the savings
bank that it is under the supervisory direction of the director and
that the director is invoking the provisions of this chapter. If
placed under supervisory direction the savings bank shall comply with
the lawful requirements of the director within such time as provided in
the notice of the director, subject however, to the provisions of this
chapter. If the savings bank fails to comply within such time the
director may appoint a conservator as hereafter provided.
NEW SECTION. Sec. 67 During the period of supervisory direction
the director may appoint a representative to supervise such savings
bank and may provide that the savings bank may not do any of the
following during the period of supervisory direction, without the prior
approval of the director or the appointed representative:
(1) Dispose of, convey, or encumber any of the assets;
(2) Withdraw any of its bank accounts;
(3) Lend any of its funds;
(4) Invest any of its funds;
(5) Transfer any of its property; or
(6) Incur any debt, obligation, or liability.
NEW SECTION. Sec. 68 After the period of supervisory direction
specified by the director for compliance, if he or she determines that
such savings bank has failed to comply with the lawful requirements
imposed, upon due notice and hearing by the department or by consent of
the savings bank, the director may appoint a conservator, who shall
immediately take charge of such savings bank and all of its property,
books, records, and effects. The conservator shall conduct the
business of the savings bank and take such steps toward the removal of
the causes and conditions which have necessitated such order, as the
director may direct. During the pendency of the conservatorship the
conservator shall make such reports to the director from time to time
as may be required by the director, and shall be empowered to take all
necessary measures to preserve, protect, and recover any assets or
property of such savings bank, including claims or causes of actions
belonging to or which may be asserted by such bank, and to deal with
the same in his or her own name as conservator, and shall be empowered
to file, prosecute, and defend any suit and suits which have been filed
or which may thereafter be filed by or against such savings bank which
are deemed by the conservator to be necessary to protect all of the
interested parties for a property affected thereby. The director, or
any newly appointed assistant, may be appointed to serve as
conservator. If the director, however, is satisfied that such savings
bank is not in condition to continue business in the interest of its
depositors or creditors under the conservator under this section, the
director may proceed with appropriate remedies provided by other
provisions of this title.
NEW SECTION. Sec. 69 All costs incident to supervisory direction
and the conservatorship shall be fixed and determined by the director
and shall be a charge against the assets of the savings bank to be
allowed and paid as the director may determine.
NEW SECTION. Sec. 70 During the period of the supervisory
direction and during the period of conservatorship, the savings bank
may request the director to review an action taken or proposed to be
taken by the representative or conservator; specifying wherein the
action complained of is believed not to be in the best interest of the
savings bank, and such request shall stay the action specified pending
review of such action by the director. Any order entered by the
director appointing a representative and providing that the savings
bank shall not do certain acts as provided in sections 67 and 68 of
this act, any order entered by the director appointing a conservator,
and any order by the director following the review of an action of the
representative or conservator under this section shall be subject to
review in accordance with the administrative procedure act of the state
of Washington.
NEW SECTION. Sec. 71 Any suit filed against a savings bank, or
its conservator, after the entrance of an order by the director placing
such savings bank in conservatorship and while such order is in effect,
shall be brought in the superior court of the county of its principal
place of business and not elsewhere. The conservator appointed for
such savings bank may file suit in the superior court of the county of
its principal place of business or other court of competent
jurisdiction against any person for the purpose of preserving,
protecting, or recovering any asset or property of such savings bank,
including claims or causes of action belonging to or which may be
asserted by such savings bank.
NEW SECTION. Sec. 72 The conservator shall serve for such time
as is necessary to accomplish the purposes of the conservatorship as
intended by this chapter. If rehabilitated, the rehabilitated savings
bank shall be returned to management or new managements under such
conditions as are reasonable and necessary to prevent recurrence of the
condition which occasioned the conservatorship.
NEW SECTION. Sec. 73 If the director determines to act under
authority of this chapter, the sequence of his or her acts and
proceedings shall be as set forth in this chapter. However, it is the
purpose and substance of this chapter to authorize administrative
discretion, to allow the director administrative discretion in the
event of unsound banking operations, and in furtherance of that purpose
the director is hereby authorized to proceed with regulation either
under this chapter or under any other applicable provisions of law or
under this chapter in connection with other law, either as such law is
now existing or is hereinafter enacted, and it is so provided.
NEW SECTION. Sec. 74 Sections 65 through 73 of this act
constitute a new chapter in Title
NEW SECTION. Sec. 75 If any provision of this act or its
application to any person or circumstance is held invalid, the
remainder of the act or the application of the provision to other
persons or circumstances is not affected.
NEW SECTION. Sec. 76 This act is necessary for the immediate
preservation of the public peace, health, or safety, or support of the
state government and its existing public institutions, and takes effect
immediately.