BILL REQ. #:  S-1207.2 

Read first time 02/07/2003.   Referred to Committee on Financial Services, Insurance & Housing.

     AN ACT Relating to financial institution law parity; amending RCW 32.08.142, 32.08.146, and 32.32.500; reenacting and amending RCW 30.04.215; adding new sections to chapter 30.04 RCW; and adding new sections to chapter 32.08 RCW.

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

NEW SECTION.  Sec. 1   A new section is added to chapter 30.04 RCW to read as follows:
     Notwithstanding any other provisions of law, in addition to all powers, express or implied, that a bank has under the laws of this state, a bank shall have the powers and authorities conferred upon a mutual savings bank under Title 32 RCW, only if:
     (1) The bank notifies the director at least thirty days prior to the exercise of such power or authority by the bank, 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;
     (2) The director finds that the exercise of such powers and authorities by the bank serves the convenience and advantage of depositors, borrowers, or the general public; and
     (3) The director finds that the exercise of such powers and authorities by the bank maintains the fairness of competition and parity between banks and mutual savings banks.
     As used in this section, "powers and authorities" include without limitation powers and authorities in corporate governance and operational matters.
     The restrictions, limitations, and requirements applicable to specific powers or authorities of federally chartered banks shall apply to 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 banks solely under this section.

Sec. 2   RCW 30.04.215 and 1995 c 344 s 2 and 1995 c 134 s 2 are each reenacted and 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 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 ((December 31, 1993)) the effective date of this act.
     (2) A bank 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 unsound practice by the bank 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 is otherwise qualified, he or she shall ((forthwith)) 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 the bank is not otherwise qualified, he or she shall ((forthwith)) immediately 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 has under the laws of this state, a bank shall have the powers and authorities conferred as of August 31, 1994, or a subsequent date not later than the effective date of this act, upon (([a])) a federally chartered bank doing business in this state. A bank may exercise the powers and authorities conferred on a federally chartered bank after ((this date)) the effective date of this act, 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 and federally chartered banks.
     As used in this section, "powers and authorities" include without limitation powers and authorities in corporate governance and operational matters.
     The restrictions, limitations, and requirements applicable to specific powers or authorities of federally chartered banks shall apply to banks 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 solely under this subsection.
     (4) Any activity which may be performed by a bank, 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.

NEW SECTION.  Sec. 3   A new section is added to chapter 30.04 RCW to read as follows:
     Notwithstanding any restrictions, limitations, requirements, or other provisions of law, a financial institution, as defined in RCW 30.22.040(12), may charge, take, receive, or reserve interest, discount or other points, finance charges, or other similar charges on any loan or other extension of credit, at a rate or amount that is equal to, or less than, the maximum rate or amount of interest, discount or other points, finance charges, or other similar charges that national banks located in any other state or states may charge, take, receive, or reserve, under 12 U.S.C. Sec. 85, on loans or other extensions of credit to residents of this state.

NEW SECTION.  Sec. 4   A new section is added to chapter 32.08 RCW to read as follows:
     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 the effective date of this act.
     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.

NEW SECTION.  Sec. 5   A new section is added to chapter 32.08 RCW to read as follows:
     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 conferred upon a national bank after the effective date of this act, only if the director finds that the exercise of such powers and authorities:
     (1) Serves the convenience and advantage of depositors, borrowers, or the general public; and
     (2) Maintains the fairness of competition and parity between mutual savings banks and national banks.
     As used in this section, "powers and authorities" include without limitation powers and authorities in corporate governance and operational matters.
     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.

NEW SECTION.  Sec. 6   A new section is added to chapter 32.08 RCW to read as follows:
     Notwithstanding any restrictions, limitations, and requirements of law, in addition to all powers, express or implied, that a mutual savings bank has under this title, a mutual savings bank has the powers and authorities that a bank has under Title 30. As used in this section, "powers and authorities" include without limitation powers and authorities in corporate governance matters.
     The restrictions, limitations, and requirements applicable to specific powers or authorities of 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.

Sec. 7   RCW 32.08.142 and 1999 c 14 s 18 are each amended to read as follows:
     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 ((a)) any federal mutual savings bank had on July 28, 1985, or a subsequent date not later than ((July 25, 1999)) the effective date of this act. As used in this section, "powers and authorities" include without limitation powers and authorities in corporate governance matters.
     The restrictions, limitations, and requirements applicable to specific powers or authorities of federal mutual savings banks 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.

Sec. 8   RCW 32.08.146 and 1999 c 14 s 19 are each amended to read as follows:
     A mutual savings bank may exercise the powers and authorities granted, after ((July 25, 1999)) the effective date of this act, to federal mutual savings banks or their successors under federal law, only if the director finds that the exercise of such powers and authorities:
     (1) Serves the convenience and advantage of depositors and borrowers; and
     (2) Maintains the fairness of competition and parity between state-chartered savings banks and federal savings banks or their successors under federal law.
     As used in this section, "powers and authorities" include without limitation powers and authorities in corporate governance matters.
     The restrictions, limitations, and requirements applicable to specific powers or authorities of federal mutual savings 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.

Sec. 9   RCW 32.32.500 and 1999 c 14 s 30 are each amended to read as follows:
     (1) A savings bank may merge with, consolidate with, convert into, acquire a branch or branches of, or sell its branch or branches to any depository institution((s)) as defined in 12 U.S.C. Sec. 461 ((or)), any financial institution chartered or authorized to do business under the laws of any state, territory, province, or other jurisdiction of the United States or another nation, or ((to a)) any holding company or subsidiary ((thereof)) of such an institution, subject to the approval of (a) the director of financial institutions if the surviving institution is one chartered under Title 30, 31, 32, or 33 RCW, or (b) if the surviving institution is to be a bank, savings bank, savings and loan association, or other depository institution that is federally chartered under the laws of the United States, the federal regulatory authority having jurisdiction over the transaction under the applicable laws, or (c) if the surviving institution is to be a bank, savings bank, savings and loan association, or other depository or financial institution that is chartered under the laws of another state or territory of the United States, the regulatory authority having jurisdiction over that transaction under the applicable laws, or (d) if the surviving institution is to be a bank, savings bank, savings and loan association, or other depository or financial institution that is chartered under the laws of a nation other than the United States or of a state, territory, province, or other jurisdiction of such nation, the director of financial institutions, or (e) if the surviving institution is to be a bank holding company or financial holding company, the Federal Reserve Board or its successor under 12 U.S.C. Sec. 1842 (a) and (d).
     (2) In the case of a liquidation, acquisition, merger, consolidation, or conversion of a converted savings bank, chapter 32.34 RCW shall apply.
     (3) The concentration limits applicable to these transactions, pursuant to 12 U.S.C. Sec. 1831u(b)(2)(C) with respect to interstate transactions, shall be those imposed pursuant to 12 U.S.C. Sec. 1828(c)(5), as applied by the federal regulatory authority having jurisdiction over that transaction under the applicable law, in lieu of the concentration limits of 12 U.S.C. Sec. 1831u(b)(2)(B).

NEW SECTION.  Sec. 10   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.