SENATE BILL REPORT

SB 5258

BYSenators Moore and McDermott

Revising the powers of banks.

Senate Committee on Financial Institutions

Senate Hearing Date(s):January 29, 1987; March 3, 1987

Majority Report:  That Substitute Senate Bill No. 5258 be substituted therefor, and the substitute bill do pass.

      Signed by Senators Moore, Chairman; McDermott, Metcalf, Pullen, von Reichbauer.

Senate Staff:Stephanie Yates (786-7416)

                  December 31, 1987

AS REPORTED BY COMMITTEE ON FINANCIAL INSTITUTIONS, MARCH 3, 1987

BACKGROUND:

State-chartered savings banks and savings and loan associations are permitted to engage in nonbanking activities.  State-chartered banks and nationally-chartered banks are limited to activities that are closely related to the business of banking, with the exception of conducting insurance agency activities in towns of less than 5,000 people, selling credit-related insurance, and providing discount securities brokerage services.

SUMMARY:

State-chartered banks are permitted to engage in nonbanking activities, subject to the prior authorization of the Supervisor of Banking.

EFFECT OF PROPOSED SUBSTITUTE:

State-chartered banks with deposits insured by the Federal Deposit Insurance Corporation are authorized to exercise the powers given state-chartered savings banks, but only with the prior authorization of the Supervisor.  State-chartered banks may engage in insurance agency activities if otherwise permitted by state law, or by federal law and authorized by rule by the Supervisor.

Fiscal Note:      none requested

Senate Committee - Testified: Pete McDougal; Keith Hopper, Washington State Bankers Association; Dave Langley, Community Bank of Renton; Tom Oldfield; Senator Alex Deccio, sponsor; Bob Dickson, Washington Bankers Association; Geoff Gibbs, Securities Industry Association; Frank Keller, Independent Insurance Producers of Washington