BILL REQ. #:  S-1741.1 

Read first time 02/14/2007.   Referred to Committee on Financial Institutions & Insurance.

     AN ACT Relating to interstate branching; and amending RCW 30.38.005, 30.38.010, 30.38.015, 32.04.020, and 32.04.030.

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

Sec. 1   RCW 30.38.005 and 2005 c 348 s 1 are each amended to read as follows:
     As used in this chapter, unless a different meaning is required by the context, the following words and phrases have the following meanings:
     (1) "Bank" means any national bank, state bank, and district bank, as those terms are defined in 12 U.S.C. Sec. 1813(a), and any savings association, as defined in 12 U.S.C. Sec. 1813(b).
     (2) "Bank holding company" has the meaning set forth in 12 U.S.C. Sec. 1841(a)(1), and also means a savings and loan holding company, as defined in 12 U.S.C. Sec. 1467a.
     (3) "Bank supervisory agency" means:
     (a) Any agency of another state with primary responsibility for chartering and supervising banks; and
     (b) The office of the comptroller of the currency, the federal deposit insurance corporation, the board of governors of the federal reserve system, and any successor to these agencies.
     (4) "Control" shall be construed consistently with the provisions of 12 U.S.C. Sec. 1841(a)(2).
     (5) "Home state" means with respect to a:
     (a) State bank, the state by which the bank is chartered; or
     (b) Federally chartered bank, the state in which the main office of the bank is located under federal law.
     (6) "Home state regulator" means, with respect to an out-of-state state bank, the bank supervisory agency of the state in which the bank is chartered.
     (7) "Host state" means a state, other than the home state of a bank, in which the bank maintains, or seeks to establish and maintain a branch.
     (8) "Interstate combination" means the:
     (a) Merger or consolidation of banks with different home states, and the conversion of branches of any bank involved in the merger or consolidation into branches of the resulting bank; or
     (b) Purchase of all or substantially all of the assets, including all or substantially all of the branches, of a bank whose home state is different from the home state of the acquiring bank.
     (9) "Out-of-state bank" means a bank whose home state is a state other than Washington.
     (10) "Out-of-state state bank" means a bank chartered under the laws of any state other than Washington.
     (11) "Resulting bank" means a bank that has resulted from an interstate combination under this chapter.
     (12) "State" means any state of the United States, the District of Columbia, any territory of the United States, Puerto Rico, Guam, American Samoa, the Trust Territory of the Pacific Islands, the Virgin Islands, and the Northern Mariana Islands.
     (13) "Washington bank" means a bank whose home state is Washington.
     (14) "Washington state bank" means a bank organized under Washington banking law.
     (15) "Branch" means ((an office of a bank through which it receives deposits, other than its principal office)) a place of business, other than the principal office of a bank, operated by the bank or by an affiliate of the bank, through which the bank receives deposits or establishes an arrangement for the affiliate to place deposits or to facilitate the placement of deposits of third parties with the bank. Any of the functions or services authorized to be engaged in by a bank may be carried out in an authorized branch office.
     (16) "De novo branch" means a branch of a bank located in a host state which:
     (a) Is originally established by the bank as a branch; and
     (b) Does not become a branch of the bank as a result of:
     (i) The acquisition of another bank or a branch of another bank; or
     (ii) A merger, consolidation, or conversion involving any such bank or branch.

Sec. 2   RCW 30.38.010 and 2005 c 348 s 2 are each amended to read as follows:
     (1) An out-of-state bank may engage in banking in this state without violating RCW 30.04.280 only if the conditions and filing requirements of this chapter are met and the bank was lawfully engaged in banking in this state on June 6, 1996, or the bank's in-state banking activities:
     (a) Resulted from an interstate combination pursuant to RCW 30.49.125 or 32.32.500, provided that if the resulting bank's branch is to be located on the premises of an affiliate of the bank, the affiliate engages only in activities that are considered to be financial in nature pursuant to 12 U.S.C. Sec. 1843(k) or are permitted for the affiliate under 12 U.S.C. Sec. 1467a(c)(9)(C);
     (b) Resulted from a relocation of a head office of a state bank pursuant to 12 U.S.C. Sec. 30 and RCW 30.04.215(3);
     (c) Resulted from a relocation of a main office of a national bank pursuant to 12 U.S.C. Sec. 30;
     (d) Resulted from the establishment of a branch of a savings bank in compliance with RCW 32.04.030(((2))) (6); or
     (e) Resulted from interstate branching under RCW 30.38.015.
Nothing in this section affects the authorities of alien banks as defined by RCW 30.42.020 to engage in banking within this state.
     (2) The director, consistent with 12 U.S.C. Sec. 1831u(b)(2)(D), may approve an interstate combination if the standard on which the approval is based does not discriminate against out-of-state banks, out-of-state bank holding companies, or subsidiaries of those banks or holding companies.

Sec. 3   RCW 30.38.015 and 2005 c 348 s 3 are each amended to read as follows:
     (1) An out-of-state bank that does not have a branch in Washington may, under this chapter, establish and maintain:
     (a) A de novo branch in this state; or
     (b) A branch in this state through the acquisition of a branch.
     (2) An out-of-state bank desiring to establish and maintain a de novo branch or to acquire a branch in this state shall provide written application of the proposed transaction to the director, accompanied by the fee prescribed by the director, not later than three days after the date of filing with the responsible federal bank supervisory agency for approval to establish or acquire the branch.
     (3) The director may not approve an application under subsection (2) of this section unless it is found that:
     (a) In the case of a de novo branch((,)):
     (i) When the branch is to be located on the premises of an affiliate of the bank, the affiliate engages only in activities that are considered to be financial in nature pursuant to 12 U.S.C. Sec. 1843(k) or are permitted for the affiliate under 12 U.S.C. Sec. 1467a(c)(9)(C); and
     (ii) The laws of the home state of the out-of-state bank permit Washington banks to establish and maintain de novo branches in that state under substantially the same, or at least as favorable, terms and conditions as set forth in this chapter; or
     (b) In the case of a branch established through the acquisition of a branch, the laws of the home state of the out-of-state bank permit Washington banks to establish and maintain branches in that state through the acquisition of branches under terms and conditions that are substantially the same, or at least as favorable, as set forth in this chapter.

Sec. 4   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.
     (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 of the savings bank, operated by the savings bank or an affiliate of the savings bank, at which employees of the savings bank take deposits or there exists an arrangement for the affiliate to place deposits or to facilitate the placement of deposits of third parties with the savings bank. 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.
     (5) "De novo branch" means a branch of a savings bank which:
     (a) Is originally established by the savings bank as a branch; and
     (b) Does not become a branch of the savings bank as a result of:
     (i) The acquisition of another bank or a branch of another savings bank; or
     (ii) A merger, consolidation, or conversion involving any such savings bank or branch.

Sec. 5   RCW 32.04.030 and 2005 c 348 s 4 are each amended to read as follows:
     (1) A savings bank may not, without the written approval of the director, establish and operate branches in any place.
     (2) A savings bank headquartered in this state desiring to establish a branch shall file a written application with the director, who shall approve or disapprove the application.
     (3) The director's approval shall be conditioned on a finding that the savings bank has a satisfactory record of compliance with applicable laws and has a satisfactory financial condition. In making such findings, the director may rely on an application in the form filed with the federal deposit insurance corporation pursuant to 12 U.S.C. Sec. 1828(d). If the application for a branch is not approved, the savings bank shall have the right to appeal in the same manner and within the same time as provided by RCW 32.08.050 and 32.08.060. The savings bank when delivering the application to the director shall transmit to the director a check in an amount established by rule to cover the expense of the investigation. A savings bank headquartered in this state shall not move its headquarters or any branch more than two miles from its existing location without prior approval of the director. On or before the date on which it opens any office at which it will transact business in any state, territory, province, or other jurisdiction, a savings bank shall give written notice to the director of the location of this office. No such notice shall become effective until it has been delivered to the director.
     (4) The board of trustees of a savings bank, after notice to the director, may discontinue the operation of a branch. The savings bank shall keep the director informed in the matter and shall notify the director of the date operation of the branch is discontinued.
     (5) A savings bank that is headquartered in this state and is operating branches in another state, territory, province, or other jurisdiction may provide copies of state examination reports and reports of condition of the savings bank to the regulator having oversight responsibility with regard to its operations in that other jurisdiction, including the regulator of savings associations in the event such a savings bank is transacting savings and loan business pursuant to RCW 32.08.142 in that other jurisdiction.
     (6) No savings bank headquartered in another state may establish, or acquire pursuant to RCW 32.32.500, and operate branches as a savings bank in any place within the state unless:
     (a) The savings bank has filed with the director an agreement to comply with the requirements of RCW 30.38.040 for periodic reports by the savings bank or by the appropriate state superintendent or equivalent regulator of the savings bank under the laws of the state in which the savings bank is incorporated, unless the laws expressly require the provision of all the reports to the director;
     (b) The savings bank has filed with the director (i) a duly executed instrument in writing, by its terms of indefinite duration and irrevocable, appointing the director and his or her successors its true and lawful attorney, upon whom all process in any action or proceeding against it in a cause of action arising out of business transacted by such savings bank in this state, may be served with the same force and effect as if it were a domestic corporation and had been lawfully served with process within the state, and (ii) a written certificate of designation, which may be changed from time to time by the filing of a new certificate of designation, specifying the name and address of the officer, agent, or other person to whom such process shall be forwarded by the director;
     (c) The savings bank has supplied the director with such information as he or she shall require by rule, not to exceed the information on which the director may rely in approving a branch application pursuant to this section by a savings bank headquartered in this state; ((and))
     (d) The laws of the state in which the out-of-state savings bank is chartered permit savings banks chartered under this title to establish or acquire, and maintain branches in that state, under terms and conditions that are substantially the same as, or at least as favorable to, the terms and conditions for the chartering of savings banks and acquisition and maintenance of branches under this title; and
     (e) In the case of a de novo branch of a savings bank, if the branch is to be located on the premises of an affiliate of the savings bank, the affiliate must engage only in activities that are considered to be financial in nature pursuant to 12 U.S.C. Sec. 1843(k) or are permitted for the affiliate under 12 U.S.C. Sec. 1467a(c)(9)(C).
     (7) A savings bank headquartered in another state may not establish and operate branches as a foreign savings association in any place within the state except upon compliance with chapter 33.32 RCW.
     (8) Notwithstanding any provision of this title to the contrary((,)):
     (a) If the resulting institution of an out-of-state depository institution which is the result of an interstate combination pursuant to RCW 30.49.125 or 32.32.500 branches into the state of Washington and establishes or maintains a branch located on the premises of an affiliate of the resulting institution, the affiliate may engage only in activities that are considered to be financial in nature pursuant to 12 U.S.C. Sec. 1843(k) or are permitted for the affiliate under 12 U.S.C. Sec. 1467a(c)(9)(C); and
     (b) An out-of-state depository institution may not branch in the state of Washington, unless a Washington state bank, bank holding company, savings bank, savings bank holding company, savings and loan association, or savings and loan holding company is permitted to branch in the state in which that out-of-state depository institution is chartered or in which its principal office is located, under terms and conditions that are substantially the same as, or at least as favorable to entry as, the terms and conditions for branching of savings banks under this title. As used in this subsection (8), "out-of-state depository institution" means a bank as defined in RCW 30.38.005 or ((bank)) the holding company((, or a converted mutual savings bank or the holding company of a mutual savings)) of such a bank, which is chartered in or whose principal office is located in another state((, or a savings and loan association or the holding company of a savings and loan association, which is chartered in another state)).