Original Notice.

     Preproposal statement of inquiry was filed as WSR 07-14-138.

     Title of Rule and Other Identifying Information: Amending the rules in chapters 208-680B, 208-680C, and 208-680E WAC, implementing the Escrow Agent Registration Act, chapter 18.44 RCW.

     Hearing Location(s): Highline Community College, South 240th Street and Pacific Highway South, Des Moines, WA 98198, on October 2, 2007, at 1:00 p.m. to 3:00 p.m.

     Date of Intended Adoption: October 25, 2007.

     Submit Written Comments to: Jeannette Terry, P.O. Box 41200, 150 Israel Road, Olympia, WA 98504-1200, e-mail jterry@dfi.wa.gov, fax (360) 586-5068, by October 15, 2007.

     Assistance for Persons with Disabilities: Contact Jeannette Terry by September 21, 2007, TTY (360) 664-8126 or (360) 902-8786.

     Purpose of the Proposal and Its Anticipated Effects, Including Any Changes in Existing Rules: The existing rule on fees, quarterly reports, and the reporting of significant events that impact the escrow business must be amended for clarity and consistency in implementing chapter 18.44 RCW and to reflect current industry practices.

     Statutory Authority for Adoption: RCW 43.320.040, 18.44.410.

     Statute Being Implemented: Chapter 18.44 RCW.

     Rule is not necessitated by federal law, federal or state court decision.

     Name of Proponent: Department of financial institutions, governmental.

     Name of Agency Personnel Responsible for Drafting, Implementation and Enforcement: Cindy Fazio, 150 Israel Road, Olympia, WA, (360) 902-8800.

     No small business economic impact statement has been prepared under chapter 19.85 RCW. The rule amendments will not impose more than minor costs on the businesses impacted by the proposed rules.

     A cost-benefit analysis is not required under RCW 34.05.328. Not applicable to the proposed rules.

August 17, 2007

Deborah Bortner, Director

Division of Consumer Services

OTS-9917.1

AMENDATORY SECTION(Amending WSR 01-12-029, filed 5/29/01, effective 7/1/01)

WAC 208-680B-081   Fee increase.   ((The division intends to increase its fee and assessment rates each year for several bienniums. The division intends to initiate a rule making for this purpose each biennium. This rule provides for an automatic annual increase in the rate of fees and assessments each fiscal year during the 2001-03 biennium.))

     (1) On ((July)) January 1, ((2002)) 2008, the fee and assessment rates under WAC 208-680B-080((, as increased in the prior fiscal year,)) will increase by a percentage rate equal to the fiscal growth factor for the then current fiscal year. As used in this section, "fiscal growth factor" has the same meaning as the term is defined in RCW 43.135.025.

     (2) The director may round off a rate increase under subsection (1) of this section, However, no rate increase may exceed the applicable fiscal growth factor.

     (((3) By June 1 of each year, the director will make available a chart of the new rates that will take effect on the immediately following July 1.))

[Statutory Authority: RCW 18.44.410, 19.146.223, 19.146.225, 19.146.265, 31.04.165, 31.45.200. 01-12-029, § 208-680B-081, filed 5/29/01, effective 7/1/01.]

OTS-9963.2

NEW SECTION
WAC 208-680C-060   Reporting significant events.   (1) Ten days prior notification required. An escrow agent must notify the director in writing ten days prior to a change of the escrow agent's:

     (a) Location or mailing address of the escrow agent office or branch office. See RCW 18.44.061 and WAC 208-680C-040;

     (b) Form of business organization or place of organization (for example, from sole proprietor to corporation);

     (c) Name and mailing address of the out-of-state escrow agent's registered agent; or

     (d) Legal or trade name.

     (2) Ten days post notification required. An escrow agent must notify the director in writing within ten days after an occurrence of any of the following:

     (a) The cancellation or expiration of its Washington state master business license;

     (b) A change in its standing with the state of Washington secretary of state, including the resignation or change of the registered agent;

     (c) The licensed escrow agent filing for bankruptcy;

     (d) The personal bankruptcy of a principal officer or controlling person; or

     (e) The licensed escrow officer or designated escrow officer filing for personal bankruptcy.

     (3) Other notification requirements.

     (a) In the event of an escrow office closure, see WAC 208-680C-045.

     (b) For a transfer involving all or substantially all of its assets, the escrow agent must comply with WAC 208-680B-015(3).

     (c) For a change in principal officer or controlling person of a licensed escrow agent, the escrow agent must comply with WAC 208-680B-015(4) and 208-680B-020(4).

     (d) For changes in designated escrow officer or branch designated escrow officer, see WAC 208-680D-010.

     (e) For termination of a licensed escrow officer, the escrow agent must notify the department within three business days that the escrow officer no longer represents the escrow agent. If the escrow officer was terminated for dishonesty or financial misconduct involving the business, the escrow agent must provide the department with that information. Within ten business days of the termination, the escrow agent must deliver the escrow officer's license to the department. See RCW 18.44.101.

     (f) For the filing of quarterly reports, see WAC 208-680E-025.

     (g) For suit or complaint notification, see WAC 208-680D-070.

     (h) Any changes to the escrow agent's bonds, or the bonds of the escrow agent's licensed escrow officers, as required under RCW 18.44.201, must be reported to the department within five days.

     (i) Within five business days of the escrow agent's license being revoked, surrendered, suspended, or the license expiring, the escrow agent shall notify the principals of preexisting escrows of the action. The contents of the notification must comply with RCW 18.44.465.

[]

OTS-9918.1

AMENDATORY SECTION(Amending WSR 05-03-038, filed 1/10/05, effective 2/10/05)

WAC 208-680E-025   Quarterly reports.   (1) For purposes of determining compliance with chapter 18.44 RCW and chapter 208-680 WAC, each escrow agent shall file with the director, within thirty days following the end of each fiscal quarter, the following:

     (a) A report concerning its operations ((and));

     (b) A report concerning the trust account administration; and ((reconciliation. The report shall be on a form provided by the director and shall include exhibits as specified therein))

     (c) A one page summary of the three way reconciliation from the last month of the quarter.

     All reports must be in a form prescribed by the director.

     (2) As to trust account matters, the designated escrow officer of the escrow agent shall certify under penalty of perjury, in a manner consistent with RCW 9A.72.085, that he or she has reviewed the report and any exhibits filed with it and that the information contained in the report and in any exhibits is true and correct. The chief executive officer or chief financial officer of the escrow agent, or other knowledgeable person acceptable to the director, may certify the information on the report not related to trust account matters.

     (3) Failure to file the report within the time period specified in this rule shall be considered a violation of RCW 18.44.430.

[Statutory Authority: RCW 18.44.410. 05-03-038, § 208-680E-025, filed 1/10/05, effective 2/10/05.]

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