BILL REQ. #:  Z-0687.1 



_____________________________________________ 

SENATE BILL 6135
_____________________________________________
State of Washington63rd Legislature2014 Regular Session

By Senators Benton, Mullet, Hatfield, Hobbs, and Fain; by request of Department of Financial Institutions

Read first time 01/16/14.   Referred to Committee on Financial Institutions, Housing & Insurance.



     AN ACT Relating to the modernization, clarification, reorganization, and amendment of the laws respecting the charter and regulation of Washington state nondepository trust companies, fiduciary activities and trust business of state commercial banks, alien banks, state savings banks, and state savings associations, and fiduciary activities and trust business of other trust institutions and persons engaging in trust business in this state; amending RCW 30.04.010, 30.04.020, 30.04.025, 30.04.030, 30.04.050, 30.04.060, 30.04.070, 30.04.075, 30.04.111, 30.04.120, 30.04.127, 30.04.129, 30.04.140, 30.04.212, 30.04.214, 30.04.215, 30.04.220, 30.04.225, 30.04.230, 30.04.232, 30.04.240, 30.04.260, 30.04.285, 30.04.330, 30.04.375, 30.04.380, 30.04.390, 30.04.400, 30.04.405, 30.04.410, 30.04.450, 30.04.455, 30.04.460, 30.04.465, 30.04.470, 30.04.475, 30.04.500, 30.04.505, 30.04.510, 30.04.515, 30.04.555, 30.04.560, 30.04.570, 30.08.020, 30.08.025, 30.08.030, 30.08.055, 30.08.060, 30.08.070, 30.08.080, 30.08.081, 30.08.084, 30.08.086, 30.08.087, 30.08.140, 30.08.140, 30.08.150, 30.08.180, 30.12.020, 30.12.025, 30.12.030, 30.12.040, 30.12.0401, 30.12.042, 30.12.044, 30.12.047, 30.12.060, 30.12.070, 30.12.090, 30.12.100, 30.12.110, 30.12.180, 30.12.190, 30.12.205, 30.12.220, 30.12.240, 30.16.010, 30.20.005, 30.20.025, 30.20.060, 30.20.090, 30.22.041, 30.22.120, 30.22.130, 30.22.190, 30.22.220, 30.32.010, 30.32.020, 30.32.030, 30.32.040, 30.36.010, 30.36.020, 30.36.030, 30.36.040, 30.38.010, 30.38.030, 30.38.070, 30.42.020, 30.42.060, 30.42.070, 30.42.090, 30.42.105, 30.42.115, 30.42.120, 30.42.130, 30.42.155, 30.42.280, 30.42.310, 30.42.340, 30.44.010, 30.44.020, 30.44.030, 30.44.040, 30.44.050, 30.44.100, 30.44.110, 30.44.120, 30.44.150, 30.44.160, 30.44.170, 30.44.180, 30.44.190, 30.44.200, 30.44.210, 30.44.220, 30.44.230, 30.44.240, 30.44.250, 30.44.270, 30.44.280, 30.46.010, 30.46.020, 30.46.030, 30.46.040, 30.46.050, 30.46.060, 30.46.070, 30.46.080, 30.46.090, 30.49.020, 30.49.070, 30.49.125, 30.56.050, 30.56.060, 32.08.210, and 33.12.010; amending 2013 c 76 s 33 (uncodified); reenacting and amending RCW 30.04.125, 30.04.130, 30.04.180, 30.04.210, 30.08.010, 30.08.082, 30.08.090, 30.08.092, 30.08.190, 30.12.010, and 30.22.040; adding a new section to chapter 32.04 RCW; adding a new section to chapter 33.04 RCW; adding new titles to the Revised Code of Washington to be codified as Title 30A and 30B RCW; creating new sections; recodifying RCW 30.04.010, 30.04.020, 30.04.025, 30.04.030, 30.04.045, 30.04.050, 30.04.060, 30.04.070, 30.04.075, 30.04.111, 30.04.112, 30.04.120, 30.04.125, 30.04.127, 30.04.129, 30.04.130, 30.04.140, 30.04.180, 30.04.210, 30.04.212, 30.04.214, 30.04.215, 30.04.217, 30.04.220, 30.04.225, 30.04.230, 30.04.232, 30.04.238, 30.04.240, 30.04.260, 30.04.280, 30.04.285, 30.04.295, 30.04.300, 30.04.330, 30.04.375, 30.04.380, 30.04.390, 30.04.395, 30.04.400, 30.04.405, 30.04.410, 30.04.450, 30.04.455, 30.04.460, 30.04.465, 30.04.470, 30.04.475, 30.04.500, 30.04.505, 30.04.510, 30.04.515, 30.04.550, 30.04.555, 30.04.560, 30.04.565, 30.04.570, 30.04.575, 30.04.600, 30.04.605, 30.04.610, 30.04.650, 30.04.901, 30.08.010, 30.08.020, 30.08.025, 30.08.030, 30.08.040, 30.08.050, 30.08.055, 30.08.060, 30.08.070, 30.08.080, 30.08.081, 30.08.082, 30.08.083, 30.08.084, 30.08.086, 30.08.087, 30.08.088, 30.08.090, 30.08.092, 30.08.140, 30.08.150, 30.08.160, 30.08.170, 30.08.180, 30.08.190, 30.12.010, 30.12.020, 30.12.025, 30.12.030, 30.12.040, 30.12.0401, 30.12.042, 30.12.044, 30.12.045, 30.12.046, 30.12.047, 30.12.060, 30.12.070, 30.12.090, 30.12.100, 30.12.110, 30.12.115, 30.12.120, 30.12.130, 30.12.180, 30.12.190, 30.12.205, 30.12.220, 30.12.230, 30.12.240, 30.16.010, 30.20.005, 30.20.025, 30.20.060, 30.20.090, 30.22.010, 30.22.020, 30.22.030, 30.22.040, 30.22.041, 30.22.050, 30.22.060, 30.22.070, 30.22.080, 30.22.090, 30.22.100, 30.22.110, 30.22.120, 30.22.130, 30.22.140, 30.22.150, 30.22.160, 30.22.170, 30.22.180, 30.22.190, 30.22.200, 30.22.210, 30.22.220, 30.22.230, 30.22.240, 30.22.245, 30.22.250, 30.22.260, 30.22.900, 30.22.901, 30.22.902, 30.24.080, 30.32.010, 30.32.020, 30.32.030, 30.32.040, 30.36.010, 30.36.020, 30.36.030, 30.36.040, 30.36.050, 30.38.005, 30.38.010, 30.38.015, 30.38.020, 30.38.030, 30.38.040, 30.38.050, 30.38.060, 30.38.070, 30.38.080, 30.38.900, 30.42.010, 30.42.020, 30.42.030, 30.42.040, 30.42.050, 30.42.060, 30.42.070, 30.42.080, 30.42.090, 30.42.100, 30.42.105, 30.42.115, 30.42.120, 30.42.130, 30.42.140, 30.42.145, 30.42.150, 30.42.155, 30.42.160, 30.42.170, 30.42.180, 30.42.190, 30.42.200, 30.42.210, 30.42.220, 30.42.230, 30.42.240, 30.42.250, 30.42.260, 30.42.270, 30.42.280, 30.42.290, 30.42.300, 30.42.310, 30.42.320, 30.42.330, 30.42.340, 30.42.900, 30.43.005, 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, 30.44.110, 30.44.120, 30.44.130, 30.44.140, 30.44.150, 30.44.160, 30.44.170, 30.44.180, 30.44.190, 30.44.200, 30.44.210, 30.44.220, 30.44.230, 30.44.240, 30.44.250, 30.44.260, 30.44.270, 30.44.280, 30.46.010, 30.46.020, 30.46.030, 30.46.040, 30.46.050, 30.46.060, 30.46.070, 30.46.080, 30.46.090, 30.46.100, 30.49.010, 30.49.020, 30.49.030, 30.49.040, 30.49.050, 30.49.060, 30.49.070, 30.49.080, 30.49.090, 30.49.100, 30.49.110, 30.49.120, 30.49.125, 30.49.130, 30.56.010, 30.56.020, 30.56.030, 30.56.040, 30.56.050, 30.56.060, 30.56.070, 30.56.080, 30.56.090, 30.56.100, 30.60.010, 30.60.020, 30.60.030, 30.60.900, 30.60.901, 30.98.010, 30.98.020, 30.98.030, 30.98.040, 30.98.050, and 30.98.060; repealing RCW 30.08.155, 30.53.010, 30.53.020, 30.53.030, 30.53.040, 30.53.050, 30.53.060, 30.53.070, and 30.53.080; prescribing penalties; providing an effective date; providing a contingent effective date; and providing a contingent expiration date.

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

NEW SECTION.  Sec. 1   FINDINGS AND PURPOSE. The legislature declares that:
     (1) Banking institutions and trust companies provide essential and valuable fiduciary management services to consumers, businesses, and nonprofit organizations in the state of Washington;
     (2) There is a critical public need to encourage and promote the revitalization and growth of the state's financial sector and realize its potential as an alternative global financial services hub;
     (3) The fulfillment of this potential can best be achieved by taking measures to:
     (a) Clarify prudential standards of professional fiduciary management to provide assurances to state, national, and international owners and managers of wealth;
     (b) Promote flexibility in the management of asset portfolios to respond to ever changing global conditions; and
     (c) Provide certainty and clear expectations for owners of wealth, asset managers, and their respective advisors;
     (4) Banking institutions and nondepositary trust companies in the state of Washington will be better prepared to continue providing professional fiduciary management services effectively if laws of the state's banking institutions and nondepositary trust companies are modernized, clarified, reorganized and, with respect to some situations, amended;
     (5) There is a need for improved services and reduced costs for trust institution clients and customers and other consumers in this state through modernization of state law to clarify and thereby promote the delegation by trust institutions of fiduciary functions to qualified third-party professionals, to authorize clients to designate any trust institution to act for them, and to protect the public from excessive fees or undisclosed conflicts of interest of trust institutions and their affiliates;
     (6) Properly capitalized and professionally managed trusts and trust companies serving only family members and their affiliated entities, which operate privately and do not hold themselves out to, nor provide services to, the general public, should continue to operate without the necessity of being chartered or regulated by the department of financial institutions;
     (7) The authority of the department of financial institutions needs to be clarified, preserved, and assured as the primary instrument of assuring the safety and soundness of banking institutions and nondepositary trust companies acting as fiduciaries and engaging in trust business in this state;
     (8) Nondepository trust companies should continue to act as fiduciaries and otherwise engage in trust business in this state, so long as they are properly capitalized, competently managed by persons of integrity, and supervised by the department of financial institutions so as to ensure that such trust companies are operated in compliance with law, in a safe and sound manner, and in a manner which protects trust settlors, trust beneficiaries, and the general public in this state; and
     (9) The creation of a comprehensive trust institutions act serves the convenience and advantage of Washington state trust settlors and trust beneficiaries, and the state's general public, and preserves and maintains the fairness of competition and parity between Washington state-chartered banking institutions and trust companies, and federally chartered and out-of-state state-chartered banking institutions and trust companies.

NEW SECTION.  Sec. 2   NEW TITLE. Sections 101 through 261 of this act constitute a new title in the Revised Code of Washington to be codified as Title 30A RCW.

NEW SECTION.  Sec. 3   NEW TITLE. Sections 301 through 406 of this act constitute a new title in the Revised Code of Washington to be codified as Title 30B RCW.

NEW SECTION.  Sec. 4   RECODIFICATION. RCW 30.04.010, 30.04.020, 30.04.025, 30.04.030, 30.04.045, 30.04.050, 30.04.060, 30.04.070, 30.04.075, 30.04.111, 30.04.112, 30.04.120, 30.04.125, 30.04.127, 30.04.129, 30.04.130, 30.04.140, 30.04.180, 30.04.210, 30.04.212, 30.04.214, 30.04.215, 30.04.217, 30.04.220, 30.04.225, 30.04.230, 30.04.232, 30.04.238, 30.04.240, 30.04.260, 30.04.280, 30.04.285, 30.04.295, 30.04.300, 30.04.330, 30.04.375, 30.04.380, 30.04.390, 30.04.395, 30.04.400, 30.04.405, 30.04.410, 30.04.450, 30.04.455, 30.04.460, 30.04.465, 30.04.470, 30.04.475, 30.04.500, 30.04.505, 30.04.510, 30.04.515, 30.04.550, 30.04.555, 30.04.560, 30.04.565, 30.04.570, 30.04.575, 30.04.600, 30.04.605, 30.04.610, 30.04.650, 30.04.901, 30.08.010, 30.08.020, 30.08.025, 30.08.030, 30.08.040, 30.08.050, 30.08.055, 30.08.060, 30.08.070, 30.08.080, 30.08.081, 30.08.082, 30.08.083, 30.08.084, 30.08.086, 30.08.087, 30.08.088, 30.08.090, 30.08.092, 30.08.140, 30.08.150, 30.08.160, 30.08.170, 30.08.180, 30.08.190, 30.12.010, 30.12.020, 30.12.025, 30.12.030, 30.12.040, 30.12.0401, 30.12.042, 30.12.044, 30.12.045, 30.12.046, 30.12.047, 30.12.060, 30.12.070, 30.12.090, 30.12.100, 30.12.110, 30.12.115, 30.12.120, 30.12.130, 30.12.180, 30.12.190, 30.12.205, 30.12.220, 30.12.230, 30.12.240, 30.16.010, 30.20.005, 30.20.025, 30.20.060, 30.20.090, 30.22.010, 30.22.020, 30.22.030, 30.22.040, 30.22.041, 30.22.050, 30.22.060, 30.22.070, 30.22.080, 30.22.090, 30.22.100, 30.22.110, 30.22.120, 30.22.130, 30.22.140, 30.22.150, 30.22.160, 30.22.170, 30.22.180, 30.22.190, 30.22.200, 30.22.210, 30.22.220, 30.22.230, 30.22.240, 30.22.245, 30.22.250, 30.22.260, 30.22.900, 30.22.901, 30.22.902, 30.24.080, 30.32.010, 30.32.020, 30.32.030, 30.32.040, 30.36.010, 30.36.020, 30.36.030, 30.36.040, 30.36.050, 30.38.005, 30.38.010, 30.38.015, 30.38.020, 30.38.030, 30.38.040, 30.38.050, 30.38.060, 30.38.070, 30.38.080, 30.38.900, 30.42.010, 30.42.020, 30.42.030, 30.42.040, 30.42.050, 30.42.060, 30.42.070, 30.42.080, 30.42.090, 30.42.100, 30.42.105, 30.42.115, 30.42.120, 30.42.130, 30.42.140, 30.42.145, 30.42.150, 30.42.155, 30.42.160, 30.42.170, 30.42.180, 30.42.190, 30.42.200, 30.42.210, 30.42.220, 30.42.230, 30.42.240, 30.42.250, 30.42.260, 30.42.270, 30.42.280, 30.42.290, 30.42.300, 30.42.310, 30.42.320, 30.42.330, 30.42.340, 30.42.900, 30.43.005, 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, 30.44.110, 30.44.120, 30.44.130, 30.44.140, 30.44.150, 30.44.160, 30.44.170, 30.44.180, 30.44.190, 30.44.200, 30.44.210, 30.44.220, 30.44.230, 30.44.240, 30.44.250, 30.44.260, 30.44.270, 30.44.280, 30.46.010, 30.46.020, 30.46.030, 30.46.040, 30.46.050, 30.46.060, 30.46.070, 30.46.080, 30.46.090, 30.46.100, 30.49.010, 30.49.020, 30.49.030, 30.49.040, 30.49.050, 30.49.060, 30.49.070, 30.49.080, 30.49.090, 30.49.100, 30.49.110, 30.49.120, 30.49.125, 30.49.130, 30.56.010, 30.56.020, 30.56.030, 30.56.040, 30.56.050, 30.56.060, 30.56.070, 30.56.080, 30.56.090, 30.56.100, 30.60.010, 30.60.020, 30.60.030, 30.60.900, 30.60.901, 30.98.010, 30.98.020, 30.98.030, 30.98.040, 30.98.050, and 30.98.060 are each recodified as sections in Title 30A RCW (the new title created under section 2 of this act).

NEW SECTION.  Sec. 5   EFFECTIVE DATE. This act takes effect January 5, 2015. The director of financial institutions may immediately take such steps as are necessary to ensure that this act is implemented on its effective date.

NEW SECTION.  Sec. 101   This title may be known and cited as the Washington commercial bank act.

Sec. 102   RCW 30.04.010 and 2013 c 76 s 1 are each amended to read as follows:
     Unless the context clearly requires otherwise, the definitions in this section apply throughout this title.
     (1) "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.
     (6) "Corporation," in reference to a bank authorized under this title, means either a corporation operating as a bank authorized under this title or a limited liability company operating as a bank under this title pursuant to the requirements of RCW 30.08.025 (as recodified by this act).
     (7)
"Department" means the Washington state department of financial institutions.
     (((7))) (8) "Director" means the director of the department.
     (((8))) (9) "Financial holding company" means a financial services holding company under authority of the federal bank holding company act.
     (((9))) (10) "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))) (11) "Holding company" means a bank holding company or financial holding company of a bank organized under chapter 30.08 RCW (as recodified by this act) 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)) (as recodified by this act).
     (((11))) (12) "Law firm" means a partnership, professional limited liability corporation, professional limited liability partnership, or similar entity whose partners, members, or shareholders are exclusively attorneys-at-law.
     (((12))) (13) "Person" means an individual or an entity including, but not limited to, a sole proprietorship, firm, association, general partnership or joint venture, limited liability company, limited liability partnership, trust, or corporation, or the plural thereof, whether resident, nonresident, citizen, or not.
     (((13))) (14) The term "trust business," in relation to a bank, 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))) section 329(1) (b) through (k) of this act, together with any other activity authorized for a state trust company by the director pursuant to section 329(1)(q) of this act that the director designates as trust business.
     (((14))) (15) "Trust company," unless a different meaning appears from the context, means any corporation or limited liability company, other than a bank, savings bank, or savings association, organized and chartered as a trust company under ((this title)) Title 30B RCW (the new title created under section 3 of this act) for the purpose of engaging in trust business.

Sec. 103   RCW 30.04.020 and 2010 c 88 s 4 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, only a national bank, federal savings bank, a bank or trust company ((authorized by 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 to do so, shall:
     (a) Use as a part of his (([or her])) or her 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 her])) or her 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."
     (b) Use any sign, logo, or marketing message, in any media, or use any letterhead, billhead, note, receipt, certificate, blank, form, or any written, printed, electronic or internet-based instrument or 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 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 (as recodified by this act).
     (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) Any individual or legal person, or director, officer(([,])), or manager of such legal person, who knowingly violates any provision of this section shall be guilty of a gross misdemeanor.

Sec. 104   RCW 30.04.025 and 2003 c 24 s 3 are each amended 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))) (8) (as recodified by this act), 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. However, this section does not authorize any subsidiary of a bank, of a ((trust company, of a mutual)) savings bank, of a savings and loan association, or of a credit union to charge, take, receive, or reserve interest, discount or other points, finance charges, or other similar charges on any loan or other extension of credit, unless the subsidiary is itself a bank, ((trust company, mutual)) savings bank, savings and loan association, or credit union.

Sec. 105   RCW 30.04.030 and 2010 c 88 s 5 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, 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, trust companies(([,])), and holding companies subject to this title.

Sec. 106   RCW 30.04.050 and 2010 c 88 s 6 are each amended to read as follows:
     (1) Each bank ((and trust company,)) and ((their)) its directors, officers, employees, and agents, shall comply with:
     (a) This title ((and chapter 11.100 RCW)) and Title 30B RCW (the new title created under section 3 of this act) 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. 107   RCW 30.04.060 and 2010 c 88 s 7 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.
     (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. 108   RCW 30.04.070 and 2013 c 76 s 2 are each amended to read as follows:
     (1) In order to cover the costs of the operation of the department's division of banks and to establish and maintain a reasonable reserve for the division of banks, the department may charge and collect the costs of examination, filing and other service fees, and semiannual charges for recoupment of nondirect expenses related to the examination of financial institutions regulated by the department, as provided for in this section.
     (2) The director shall collect from each bank, savings bank, trust company, savings association, holding company under this title, 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:
     (a) For each examination of its condition the estimated actual cost of such examination; and
     (b) For services in relation to required filings, applications, requests for waiver, investigations, approvals, determinations, certifications, agreements, actions, directives, and orders made by or to the director.
     (3) In addition to collecting the estimated actual cost of examination and other fees authorized by subsection (2) of this section, the director may collect a semiannual charge for recoupment of nondirect expenses related to the examination of a bank ((or trust company)) under this title, a trust company, a savings bank under Title 32 RCW, and a savings association under Title 33 RCW, based upon the assets of the bank, savings bank, or savings association, or assets under management of the trust company, which shall be computed upon the asset value reflected in the institution's most recent report of condition. The rate must be the same for banks, savings banks, and savings associations, and there may be a separate rate for trust companies that must be the same for all trust companies.
     (4) Every bank or trust company, savings bank, savings association, holding company, business development company, state agricultural lender, or state small business lender shall also pay to the secretary of state for filing any instrument the same fees as are required of general corporations for filing corresponding instruments, and also the same license fees as are required of general corporations.
     (5) The director shall establish, set, and adjust by rule the amount of all fees and charges authorized by subsections (2) and (3) of this section.

Sec. 109   RCW 30.04.075 and 2010 c 88 s 9 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))) (6) (as recodified by this act), 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))) (6) (as recodified by this act), 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))) (6) (as recodified by this act), 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 (as recodified by this act), 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) 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.
     (9) Every person who violates any provision of this section shall be guilty of a gross misdemeanor.

Sec. 110   RCW 30.04.111 and 2013 c 76 s 3 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)). A loan or extension of credit made by a bank ((or trust company)) does not violate this section if the loan or extension of credit would qualify for an exception to the lending limit for a national bank under rules adopted by the United States office of the comptroller of the currency, or successor federal agency with authority over national banks and federal savings associations.
     (2) For the purposes of this section, the terms "borrower," "capital and surplus," "derivative transaction," "loans and extensions of credit," and "person" shall have the same meaning as those terms are defined in section 32.2 of Title 12 of the United States code of federal regulations, 12 C.F.R. Sec. 32.2, except that "loans and extensions of credit" also includes repurchase agreements, reverse repurchase agreements, securities lending transactions, or securities borrowing transactions between a bank and a borrower if the federal deposit insurance corporation requires such treatment for a state insured bank or the board of governors of the federal reserve system requires such treatment for member state banks.
     (3) The director may prescribe rules to administer and carry out the purposes of this section, including without limitation rules (a) to define or further define terms used in this section, (b) to establish limits or requirements other than those specified in this section for particular classes or categories of loans and extensions of credit, (c) to determine when a loan putatively made to a person shall, for purposes of this section, be attributed to another person, (d) to set standards for computation of time in relation to determining limits on loans and extensions of credit, and (e) to implement and incorporate other changes in limits on loans and extensions of credit necessary to conform to federal statute and rule required or otherwise authorized by this section. In adopting the rules, the director shall be guided by rulings of the United States comptroller of the currency, or successor federal banking regulator, that govern limits on loans and extensions of credit applicable to national banks and federal savings associations. 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 (i) relate to national banks and federal savings associations, (ii) govern such specific types of transactions or circumstances, and (iii) are consistent with this section and the department's adopted rules.
     (4)(a) A loan or extension of credit that was within the limit on loans and extensions of credit when made is not a violation but will be treated as nonconforming if the loan or extension of credit is no longer in conformity with the bank's ((or trust company's)) limit on loans and extensions of credit because:
     (i) The bank's ((or trust company's)) capital has declined, borrowers have subsequently merged or formed a common enterprise, lenders have merged, or the limit on loans and extensions of credit or capital rules have changed; or
     (ii) Collateral securing the loan or extension of credit, in order to satisfy the requirements of an exception to the limit, has declined in value.
     (b) A bank ((or trust company)) shall make reasonable efforts to bring a loan or extension of credit that is nonconforming under (a)(i) of this subsection into conformity with the bank's ((or trust company's)) limit on loans and extensions of credit unless to do so would be inconsistent with safe and sound banking practices.
     (c) A bank ((or trust company)) must bring a loan or extension of credit that is nonconforming under (a)(ii) of this subsection into conformity with the bank's limit on loans and extensions of credit within thirty calendar days, except when judicial proceedings, regulatory actions, or other extraordinary circumstances beyond the bank's ((or trust company's)) control prevent the bank or trust company from taking action.
     (d) Notwithstanding any provision of this subsection (4), the director may by rule or interpretation prescribe standards for treatment of nonconforming extensions of credit that are derivatives transactions, repurchase agreements, reverse repurchase agreements, securities lending transactions, or securities borrowing transactions, and may, if required for state insured banks or member state banks, rely upon rules or interpretations of the federal deposit insurance corporation or the board of governors of the federal reserve system, as applicable.
     (5) Notwithstanding any provision of this section to the contrary, in the event that a bank's capital declines sufficiently to seriously impair the bank's ability to effectively operate in its marketplace or serve the needs of its customers or the community in which it is located, the director may, upon written application and in the exercise of the director's discretion, grant the bank temporary permission to fund loans and extensions of credit in excess of the bank's limit on loans and extensions of credit under this section. In the exercise of discretion, the director may further specify conditions for granting such emergency exception and may limit emergency lending authority under this section to particular types or classes of loans and extensions of credit.
     (6) Notwithstanding any provision of this section to the contrary, the director, in the exercise of discretion, may grant an exception to the limit on loans and extensions of credit otherwise required by this section, based on extenuating facts and circumstances. In deciding whether to grant an exception under this subsection, the director shall consider:
     (a) The proposed transaction for which the exception is sought;
     (b) How the requested exception would affect the capital adequacy and safety and soundness of the requesting bank if the exception is not granted or, if the exception is granted, if the proposed borrower should ultimately default;
     (c) How the requested exception would affect the loan portfolio diversification of the requesting bank;
     (d) The competency of management to handle the proposed transaction and any resulting safety and soundness issues;
     (e) The marketability and value of the proposed collateral; and
     (f) The extenuating facts and circumstances that warrant an exception in light of the purpose of limit on loans and extensions of credit set forth in this section.

Sec. 111   RCW 30.04.120 and 1994 c 92 s 13 are each amended to read as follows:
     The shares of stock of every bank ((and trust company)) shall be deemed personal property. No such corporation shall hereafter make any loan or discount on the security of its own capital stock, nor be the purchaser or holder of any such shares, unless such security or purchase shall be necessary to prevent loss upon a debt previously contracted in good faith; in which case the stocks so purchased or acquired shall be sold at public or private sale, or otherwise disposed of, within six months from the time of its purchase or acquisition. Except as hereinafter provided or otherwise permitted by law, nothing herein contained shall authorize the purchase by any such bank ((or trust company)) for its own account of any shares of stock of any corporation, except a federal reserve bank of which such corporation shall become a member, and then only to the extent required by such federal reserve bank: PROVIDED, That any bank ((or trust company)) may purchase, acquire and hold shares of stock in any other corporation which shares have been previously pledged as security to any loan or discount made in good faith and such purchase shall be necessary to prevent loss upon a debt previously contracted in good faith and stock so purchased or acquired shall be sold at public or private sale or otherwise disposed of within two years from the time of its purchase or acquisition. Any time limit imposed in this section may be extended by the director upon cause shown. Banks ((and trust companies)) are authorized to make loans on the security of the capital stock of a bank ((or trust company)) other than the lending corporation.

Sec. 112   RCW 30.04.125 and 1994 c 256 s 33 and 1994 c 92 s 14 are each reenacted and amended to read as follows:
     Unless otherwise prohibited by law, any state bank ((or trust company)) may invest in the capital stock of corporations organized to conduct the following businesses:
     (1) A safe deposit business: PROVIDED, That the amount of investment does not exceed fifteen percent of its capital stock and surplus, without the approval of the director;
     (2) A corporation holding the premises of the bank or its branches: PROVIDED, That without the approval of the director, the investment of such stock shall not exceed, together with all loans made to the corporation by the bank, a sum equal to the amount permitted to be invested in the premises by RCW 30.04.210 (as recodified by this act);
     (3) Stock in a small business investment company licensed and regulated by the United States as authorized by the small business act, Public Law 85-536, 72 Statutes at Large 384, in an amount not to exceed five percent of its capital and surplus without the approval of the director;
     (4) Capital stock of a banking service corporation or corporations. The total amount that a bank may invest in the shares of such corporation may not exceed ten percent of its capital and surplus without the approval of the director. A bank service corporation may not engage in any activity other than those permitted by the bank service corporation act, 12 U.S.C. Sec. 1861, et seq., as subsequently amended and in effect on December 31, 1993. The performance of any service, and any records maintained by any such corporation for a bank, shall be subject to regulation and examination by the director and appropriate federal agencies to the same extent as if the services or records were being performed or maintained by the bank on its own premises;
     (5) Capital stock of a federal reserve bank to the extent required by such federal reserve bank;
     (6) A corporation engaging in 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;
     (7) A governmentally sponsored corporation engaged in secondary marketing of loans and the stock of which must be owned in order to participate in its marketing activities;
     (8) A corporation in which all of the voting stock is owned by the bank and that engages exclusively in nondeposit-taking activities that are authorized to be engaged in by the bank or trust company;
     (9) A bank ((or trust company)) may purchase for its own account shares of stock of a bank or a holding company that owns or controls a bank if the stock of the bank or company is owned exclusively, except to the extent directly qualifying shares are required by law, by depository institutions and the bank or company and all subsidiaries thereof are engaged exclusively in providing services for other depository institutions and their officers, directors, and employees. In no event may the total amount of such stock held by a bank ((or trust company)) in any bank or bank holding company exceed at any time ten percent of its capital stock and paid-in and unimpaired surplus, and in no event may the purchase of such stock result in a bank ((or trust company)) acquiring more than twenty-five percent of any class of voting securities of such bank or company. Such a bank or bank holding company shall be called a "banker's bank."

Sec. 113   RCW 30.04.127 and 2010 c 88 s 11 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's ((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. 114   RCW 30.04.129 and 1985 c 301 s 2 are each amended to read as follows:
     Any bank ((or trust company)) may invest in obligations issued or guaranteed by any multilateral development bank in which the United States government formally participates. Such investment in any one multilateral development bank shall not exceed five percent of the bank's ((or trust company's)) paid-in capital and surplus.

Sec. 115   RCW 30.04.130 and 1994 c 256 s 34 and 1994 c 92 s 16 are each reenacted and amended to read as follows:
     Based on examinations directed pursuant to RCW 30.04.060 (as recodified by this act) or other appropriate information, all assets or portion thereof that the director may have required a bank ((or trust company)) to charge off shall be charged off. No bank ((or trust company)) shall enter or at any time carry on its books any of its assets or liabilities at a valuation contrary to generally accepted accounting principles.

Sec. 116   RCW 30.04.140 and 2011 c 336 s 744 are each amended to read as follows:
     No bank ((or trust company)) shall pledge or hypothecate any of its securities or assets to any depositor, except that it may qualify as depositary for United States deposits, or other public funds, or funds held in trust and deposited by any public officer by virtue of his or her office, or as a depository for the money of estates under the statutes of the United States pertaining to bankruptcy or funds deposited by a trustee or receiver in bankruptcy appointed by any court of the United States or any referee thereof, or funds held by the United States or the state of Washington, or any officer thereof in trust, or for funds of corporations owned or controlled by the United States, and may give such security for such deposits as are required by law or by the officer making the same; and it may give security to its trust department for deposits with itself which represent trust funds invested in savings accounts or which represent fiduciary funds awaiting investment or distribution.

Sec. 117   RCW 30.04.180 and 1994 c 256 s 35 and 1994 c 92 s 17 are each reenacted and amended to read as follows:
     No bank ((or trust company)) shall declare or pay any dividend to an amount greater than its retained earnings, without approval from the director. The director shall in his or her discretion have the power to require any bank ((or trust company)) to suspend the payment of any and all dividends until all requirements that may have been made by the director shall have been complied with; and upon such notice to suspend dividends no bank ((or trust company)) shall thereafter declare or pay any dividends until such notice has been rescinded in writing. A dividend is payable in cash, property, or capital stock, but the restrictions on the payment of a dividend (other than restrictions imposed by the director pursuant to his or her authority to require the suspension of the payment of any or all dividends) do not apply to a dividend payable by the bank ((or trust company)) solely in its own capital stock. For purposes of this section, "retained earnings" shall be determined by generally accepted accounting principles.

Sec. 118   RCW 30.04.210 and 1994 c 256 s 36 and 1994 c 92 s 18 are each reenacted and amended to read as follows:
     A bank ((or trust company)) may purchase, hold, and convey real estate for the following purposes:
     (1) Such as shall be necessary for the convenient transaction of its business, including with its banking offices other space in the same building to rent as a source of income: PROVIDED, That any bank ((or trust company)) shall not invest for such purposes more than the greater of: (a) Fifty percent of its capital, surplus, and undivided profits; or (b) one hundred twenty-five percent of its capital stock without the approval of the director.
     (2) Such as shall be purchased or conveyed to it in satisfaction, or on account of, debts previously contracted in the course of its business.
     (3) Such as it shall purchase at sale under judgments, decrees, liens, or mortgage foreclosures, from debts owed to it.
     (4) Such as a trust company receives in trust or acquires pursuant to the terms or authority of any trust.
     (5) Such as it may take title to or for the purpose of investing in real estate conditional sales contracts.
     (6) Such as shall be purchased, held, or conveyed in accordance with RCW 30.04.212 (as recodified by this act) granting banks the power to invest directly or indirectly in unimproved or improved real estate.

Sec. 119   RCW 30.04.212 and 1994 c 92 s 19 are each amended to read as follows:
     (1) In addition to the powers granted under RCW 30.04.210 (as recodified by this act) and subject to the limitations and restrictions contained in this section and in RCW 30.60.010 and 30.60.020 (as recodified by this act), a bank:
     (a) May acquire any interest in unimproved or improved real property;
     (b) May construct, alter, and manage improvements of any description on real estate in which it holds a substantial equity interest.
     (2) The powers granted under subsection (1) of this section do not include, and a bank may not:
     (a) Manage any real property in which the bank does not own a substantial equity interest;
     (b) Engage in activities of selling, leasing, or otherwise dealing in real property as an agent or broker; or
     (c) Acquire any equity interest in any one to four-family dwelling that is used as a principal residence by the owner of the dwelling; however, this shall not prohibit a bank from making loans secured by such dwelling where all or part of the bank's anticipated compensation results from the appreciation and sale of such dwelling.
     (3) The aggregate amount of funds invested under this section shall not exceed two percent of a bank's capital, surplus, and undivided profits. Such percentage amount shall be increased based upon the most recent community reinvestment rating assigned to a bank by the director in accordance with RCW 30.60.010 (as recodified by this act), as follows:
     (a) Excellent performance:       Increase to 10%
     (b) Good performance:       Increase to 8%
     (c) Satisfactory performance:       Increase to 6%
     (d) Inadequate performance:       Increase to 3%
     (e) Poor performance:       No increase
     (4) For purposes of this section only, each bank will be deemed to have been assigned a community reinvestment rating of "1" for the period beginning with January 1, 1986, and ending December 31, 1986. Thereafter, each bank will be assigned an annual rating in accordance with RCW 30.60.010 (as recodified by this act), which rating shall remain in effect for the next succeeding year and until the director has conducted a new investigation and assigned a new rating for the next succeeding year, the process repeating on an annual basis.
     (5) No bank may at any time be required to dispose of any investment made in accordance with this section due to the fact that the bank is not then authorized to acquire such investment, if such investment was lawfully acquired by the bank at the time of acquisition.
     (6) The director shall limit the amount that may be invested in a single project or investment and may adopt any rule necessary to the safe and sound exercise of powers granted by this section.

Sec. 120   RCW 30.04.214 and 1985 c 329 s 6 are each amended to read as follows:
     (1) An amount equal to ten percent of the aggregate amount invested in real estate in accordance with RCW 30.04.212 (as recodified by this act) shall be placed in qualifying community investments as defined in subsection (2) of this section.
     (2) "Qualifying community investment" means any direct or indirect investment or extension of credit made by a bank in projects or programs designed to develop or redevelop areas in which persons with low or moderate incomes reside, designed to meet the credit needs of such low or moderate-income areas, or that primarily benefits low and moderate-income residents of such areas. The term includes, but is not limited to, any of the following within the state of Washington:
     (a) Investments in governmentally insured, guaranteed, subsidized, or otherwise sponsored programs for housing, small farms, or businesses that address the needs of the low and moderate-income areas.
     (b) Investments in residential mortgage loans, home improvements loans, housing rehabilitation loans, and small business or small farm loans originated in low and moderate-income areas, or the purchase of such loans originated in low and moderate-income areas.
     (c) Investments for the preservation or revitalization of urban or rural communities in low and moderate-income areas.
     The term does not include personal installment loans, loans made to purchase, or loans secured by an automobile.
     (3) A qualifying community investment made by an entity that wholly owns a bank, is wholly owned by a bank, or is wholly owned by an entity that wholly owns the bank is deemed to have been made by a bank to satisfy the requirements of subsection (1) of this section.

Sec. 121   RCW 30.04.215 and 2013 c 76 s 4 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 28, 2013.
     (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 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 has under the laws of this state, a bank shall have the powers and authorities conferred as of July 28, 1985, or as of any subsequent date not later than July 28, 2013, upon any federally chartered bank doing business in this state. A bank may exercise the powers and authorities conferred on a federally chartered bank after July 28, 2013, 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.
     (4) Notwithstanding any other provisions of law, a bank has the powers and authorities that an out-of-state state bank operating a branch in Washington has if the director finds that the exercise of such powers and authorities serves the convenience and advantage of depositors and borrowers, or the general public, and maintains the fairness of competition and parity between state-chartered banks and out-of-state state banks.
     (5) As used in this section, "powers and authorities" include without limitation powers and authorities in corporate governance and operational matters.
     (6) The restrictions, limitations, and requirements applicable to specific powers and authorities of federally chartered banks and out-of-state state banks, as applicable, shall apply to banks exercising those powers and authorities permitted under this section but only insofar as the restrictions, limitations, and requirements relate to exercising the powers and authorities granted banks solely under this section.
     (7) The director may require a bank 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.
     (8) 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. 122   RCW 30.04.220 and 1994 c 92 s 21 are each amended to read as follows:
     Every corporation, which on March 10, 1917, was actually and publicly engaged in banking or trust business in this state in full compliance with the laws hereof, which were in force immediately prior to March 10, 1917, may, if it otherwise complies with the provisions of this title, continue its said business, subject to the terms and regulations hereof and without amending its articles of incorporation, although its name and the amount of its capital stock, the number or length of terms of its directors or the form of its articles of incorporation do not comply with the requirements of this title: PROVIDED,
     (1) That any such bank, which was by the director lawfully permitted to operate, although its capital stock was not fully paid in, shall pay in the balance of its capital stock at such times and in such amounts as the director may require;
     (2) That, except with written permission of the director, any bank ((or trust company)) which shall amend its articles of incorporation must in such event comply with all the requirements of this title.

Sec. 123   RCW 30.04.225 and 1986 c 279 s 11 are each amended to read as follows:
     In the absence of an express prohibition in its articles of incorporation, the making of contributions or gifts for the public welfare, or for charitable, scientific, or educational purposes by a state bank ((or trust company)) is within its powers and shall be deemed to inure to the benefit of the bank.

Sec. 124   RCW 30.04.230 and 2005 c 274 s 252 are each amended to read as follows:
     (1) A corporation or association organized under the laws of this state or licensed to transact business in the state may acquire any or all shares of stock of any bank((, trust company,)) or national banking association. Nothing in this section shall be construed to prohibit the merger, consolidation, or reorganization of a bank ((or trust company)) in accordance with this title.
     (2) Unless the terms of this section or RCW 30.04.232 (as recodified by this act) are complied with, an out-of-state bank holding company shall not acquire more than five percent of the shares of the voting stock or all or substantially all of the assets of a bank((, trust company,)) or national banking association the principal operations of which are conducted within this state.
     (3) As used in this section a "bank holding company" means a company that is a bank holding company as defined by the Bank Holding Company Act of 1956, as amended (12 U.S.C. Sec. 1841 et seq.). An "out-of-state bank holding company" is a bank holding company that principally conducts its operations outside this state, as measured by total deposits held or controlled by its bank subsidiaries on the date on which it became a holding company. A "domestic bank holding company" is a bank holding company that principally conducts its operations within this state, as measured by total deposits held or controlled by its bank subsidiaries on the date on which it became a bank holding company.
     (4) Any such acquisition referred to under subsection (2) of this section by an out-of-state bank holding company requires the express written approval of the director. Approval shall not be granted unless and until the following conditions are met:
     (a) An out-of-state bank holding company desiring to make an acquisition referred to under subsection (2) of this section and the bank, ((trust company,)) national banking association, or domestic bank holding company parent thereof, if any, proposed to be acquired shall file an application in writing with the director. The director shall by rule establish the fee schedule to be collected from the applicant in connection with the application. The fee shall not exceed the cost of processing the application. The application shall contain such information as the director may prescribe by rule as necessary or appropriate for the purpose of making a determination under this section. The application and supporting information and all examination reports and information obtained by the director and the director's staff in conducting its investigation shall be confidential and privileged and not subject to public disclosure under chapter 42.56 RCW. The application and information may be disclosed to federal bank regulatory agencies and to officials empowered to investigate criminal charges, subject to legal process, valid search warrant, or subpoena. In any civil action in which such application or information is sought to be discovered or used as evidence, any party may, upon notice to the director and other parties, petition for an in camera review. The court may permit discovery and introduction of only those portions that are relevant and otherwise unobtainable by the requesting party. The application and information shall be discoverable in any judicial action challenging the approval of an acquisition by the director as arbitrary and capricious or unlawful.
     (b) The director shall find that:
     (i) The bank((, trust company,)) or national banking association that is proposed to be acquired or the domestic bank holding company controlling such bank((, trust company,)) or national banking association is in such a liquidity or financial condition as to be in danger of closing, failing, or insolvency. In making any such determination the director shall be guided by the criteria developed by the federal regulatory agencies with respect to emergency acquisitions under the provisions of 12 U.S.C. Sec. 1828(c);
     (ii) There is no state bank((, trust company,)) or national banking association doing business in the state of Washington or domestic bank holding company with sufficient resources willing to acquire the entire bank((, trust company,)) or national banking association on at least as favorable terms as the out-of-state bank holding company is willing to acquire it;
     (iii) The applicant out-of-state bank holding company has provided all information and documents requested by the director in relation to the application; and
     (iv) The applicant out-of-state bank holding company has demonstrated an acceptable record of meeting the credit needs of its entire community, including low and moderate income neighborhoods, consistent with the safe and sound operation of such institution.
     (c) The director shall consider:
     (i) The financial institution structure of this state; and
     (ii) The convenience and needs of the public of this state.
     (5) Nothing in this section may be construed to prohibit, limit, restrict, or subject to further regulation the ownership by a bank of the stock of a bank service corporation or a banker's bank.

Sec. 125   RCW 30.04.232 and 1996 c 2 s 3 are each amended to read as follows:
     (1) In addition to an acquisition pursuant to RCW 30.04.230 (as recodified by this act), an out-of-state bank holding company may acquire more than five percent of the voting stock or all or substantially all of the assets of a bank((, trust company,)) or national banking association, the principal operations of which are conducted within this state, if the bank((, trust company,)) or national banking association or its predecessor, the voting stock of which is to be acquired, shall have been conducting business for a period of not less than five years.
     (2) The director, consistent with 12 U.S.C. Sec. 1842(d)(2)(D), may approve an acquisition 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.
     (3) As used in this section, the terms "bank holding company," "domestic bank holding company," and "out-of-state bank holding company" shall have the meanings provided in RCW 30.04.230 (as recodified by this act).

Sec. 126   RCW 30.04.240 and 2013 c 76 s 6 are each amended to read as follows:
     (1) A person authorized under this title or Title 30B RCW (the new title created under section 3 of this act) to engage in a trust business shall maintain in its office a trust department in which it shall keep books and accounts of its trust business, separate and apart from its other business. Such books and accounts shall specify the cash, securities and other properties, real and personal, held in each trust, and such securities and properties shall be at all times segregated from all other securities and properties except as otherwise provided in this section.
     (2) Any person connected with a bank ((or trust company)) who shall, contrary to this section or any other provision of law, commingle any funds or securities of any kind held by such corporation in trust, for safekeeping or as agent for another, with the funds or assets of the corporation is guilty of a class B felony punishable according to chapter 9A.20 RCW.
     (3) Notwithstanding any other provisions of law, any fiduciary holding securities in its fiduciary capacity or any state bank((,)) or national bank((, or trust company)) holding securities as fiduciary or as custodian for a fiduciary is authorized to deposit or arrange for the deposit of such securities: (a) In a clearing corporation (as defined in Article 8 of the Uniform Commercial Code, chapter 62A.8 RCW); (b) within another state bank, national bank, or trust company having trust power whether located inside or outside of this state; or (c) within itself. When such securities are so deposited, certificates representing securities of the same class of the same issuer may be merged and held in bulk in the name of the nominee of such clearing corporation or state bank, national bank, or trust company holding the securities as the depository, with any other such securities deposited in such clearing corporation or depository by any person, regardless of the ownership of such securities, and certificates of small denomination may be merged into one or more certificates of larger denomination. The records of such fiduciary and the records of such state bank, national bank, or trust company as a fiduciary or as custodian for a fiduciary shall at all times show the name of the party for whose account the securities are so deposited. Ownership of, and other interests in, such securities may be transferred by bookkeeping entries on the books of such clearing corporation, state bank, national bank, or trust company without physical delivery or alteration of certificates representing such securities. A state bank, national bank, or trust company so depositing securities pursuant to this section shall be subject to such rules and regulations as, in the case of state-chartered banks ((and trust companies)), the director and, in the case of national banking associations, the comptroller of the currency may from time to time issue. A state bank((,)) or national bank((, or trust company)) acting as custodian for a fiduciary shall, on demand by the fiduciary, certify in writing to the fiduciary the securities so deposited by such state bank((,)) or national bank((, or trust company)) in such clearing corporation or state bank, national bank, or trust company acting as such depository for the account of such fiduciary. A fiduciary shall, on demand by any party to a judicial proceeding for the settlement of such fiduciary's account or on demand by the attorney for such party, certify in writing to such party the securities deposited by such fiduciary in such clearing corporation or state bank, national bank, or trust company acting as such depository for its account as such fiduciary.
     This subsection shall apply to any fiduciary holding securities in its fiduciary capacity, and to any state bank((,)) or national bank((, or trust company)) holding securities as a custodian, managing agent, or custodian for a fiduciary, acting on March 14, 1973 or who thereafter may act regardless of the date of the agreement, instrument, or court order by which it is appointed and regardless of whether or not such fiduciary, custodian, managing agent, or custodian for a fiduciary owns capital stock of such clearing corporation.

Sec. 127   RCW 30.04.260 and 2013 c 76 s 7 are each amended to read as follows:
     (1) No person, other than an attorney-at-law or law firm as permitted by other law, which advertises that it will furnish legal advice, construct or prepare wills, or do other legal work for its customers, shall be permitted to act as executor, administrator, or guardian; and such person whose officers or agents shall solicit legal business shall be ineligible for a period of one year thereafter to be appointed executor, administrator, or guardian in any of the courts of this state.
     (2) Any person authorized under this title or Title 30B RCW (the new title created under section 3 of this act) to engage in a trust business, which advertises that it will furnish legal advice, construct or prepare wills, or do other legal work for its customers, and any officer, agent, or employee of such person who shall solicit legal business is guilty of a gross misdemeanor.

Sec. 128   RCW 30.04.285 and 2007 c 167 s 1 are each amended to read as follows:
     (1) The director's approval of a branch within the United States or any territory of the United States or in any foreign country shall be conditioned on a finding by the director that the bank has a satisfactory record of compliance with applicable laws and has a satisfactory financial condition. A bank chartered under this title may exercise any powers and authorities at any branch outside Washington that are permissible for a bank operating in that state where the branch is located, except to the extent those activities are expressly prohibited by the laws of this state or by any rule or order of the director applicable to the state bank. However, the director may waive any limitation in writing with respect to powers and authorities that the director determines do not threaten the safety or soundness of the state bank.
     (2) An out-of-state bank may acquire, establish, or maintain a branch in Washington within one mile of an affiliate commercial location only to the same extent permitted for a Washington bank under applicable state and federal law. For purposes of this subsection, "bank" means any national bank, state bank, and district bank, as defined in 12 U.S.C. Sec. 1813(a); "out-of-state bank" means a bank whose home state is a state other than Washington; and "Washington bank" means a bank whose home state is Washington. "Home state" has the same meaning as defined in RCW 30.38.005 (as recodified by this act).

Sec. 129   RCW 30.04.330 and 1955 c 33 s 30.04.330 are each amended to read as follows:
     Any bank, which term for the purpose of this section shall include but not be limited to any state bank, national bank or association, mutual savings bank, savings and loan association, ((trust company,)) federal reserve bank, federal home loan bank, and federal savings and loan association, federal credit union, and state credit union doing business in this state, may remain closed on Saturdays and any Saturday on which a bank remains closed shall be, with respect to such bank, a holiday and not a business day. Any act, authorized, required or permitted to be performed at or by or with respect to any bank, as herein defined, on a Saturday, may be performed on the next succeeding business day, and no liability or loss of rights of any kind shall result from such closing.

Sec. 130   RCW 30.04.375 and 1982 c 86 s 1 are each amended to read as follows:
     Any bank ((or trust company)) may invest in the stock or participation certificates of production credit associations, federal intermediate credit banks and the stock or other evidences of participation of federal land banks in amounts consistent with safe and sound practice in conducting the business of the ((trust company or)) bank.

Sec. 131   RCW 30.04.380 and 1986 c 279 s 13 are each amended to read as follows:
     Any bank ((or trust company)) may invest an amount not exceeding ten per centum of its paid-in capital stock and surplus in the stock of one or more banks or corporations chartered under the laws of the United States, or of any state thereof, and principally engaged in international or foreign banking, or banking in a dependency or insular possession of the United States, either directly or through the agency, ownership or control of local institutions in foreign countries, or in such dependencies or insular possessions.

Sec. 132   RCW 30.04.390 and 1986 c 279 s 14 are each amended to read as follows:
     Any bank ((or trust company)) may acquire and hold, directly or indirectly, stock or other evidence of indebtedness or ownership in one or more banks organized under the law of a foreign country or a dependency or insular possession of the United States.

Sec. 133   RCW 30.04.400 and 1977 ex.s. c 246 s 1 are each amended to read as follows:
     As used in RCW 30.04.400 through 30.04.410 (as recodified by this act), the following words shall have the following meanings:
     (1) "Control" means directly or indirectly alone or in concert with others to own, control, or hold the power to vote twenty-five percent or more of the outstanding stock or voting power of the "controlled" entity;
     (2) "Acquiring party" means the person acquiring control of a bank through the purchase of stock; and
     (3) "Person" means any individual, corporation, partnership, association, business trust, or other organization.

Sec. 134   RCW 30.04.405 and 1994 c 92 s 29 are each amended to read as follows:
     (1) It is unlawful for any person to acquire control of a bank until thirty days after filing with the director a copy of the notice of change of control required to be filed with the federal deposit insurance corporation or a completed application. The notice or application shall be under oath and contain substantially all of the following information plus any additional information that the director may prescribe as necessary or appropriate in the particular instance for the protection of bank depositors, borrowers, or shareholders and the public interest:
     (a) The identity, banking and business experience of each person by whom or on whose behalf acquisition is to be made;
     (b) The financial and managerial resources and future prospects of each person involved in the acquisition;
     (c) The terms and conditions of any proposed acquisition and the manner in which the acquisition is to be made;
     (d) The source and amount of the funds or other consideration used or to be used in making the acquisition, and a description of the transaction and the names of the parties if any part of these funds or other consideration has been or is to be borrowed or otherwise obtained for the purpose of making the acquisition;
     (e) Any plan or proposal which any person making the acquisition may have to liquidate the bank, to sell its assets, to merge it with any other bank, or to make any other major change in its business or corporate structure for management;
     (f) The identification of any person employed, retained, or to be compensated by the acquiring party, or by any person on its behalf, who makes solicitations or recommendations to shareholders for the purpose of assisting in the acquisition and a brief description of the terms of the employment, retainer, or arrangement for compensation; and
     (g) Copies of all invitations for tenders or advertisements making a tender offer to shareholders for the purchase of their stock to be used in connection with the proposed acquisition.
     (2) Notwithstanding any other provision of this section, a bank or domestic bank holding company as defined in RCW 30.04.230 (as recodified by this act) need only notify the director of an intent to acquire control and the date of the proposed acquisition of control at least thirty days before the date of the acquisition of control.
     (3) When a person, other than an individual or corporation, is required to file an application under this section, the director may require that the information required by subsection (1)(a), (b), and (f) of this section be given with respect to each person, as defined in RCW 30.04.400(3) (as recodified by this act), who has an interest in or controls a person filing an application under this subsection.
     (4) When a corporation is required to file an application under this section, the director may require that information required by subsection (1)(a), (b), and (f) of this section be given for the corporation, each officer and director of the corporation, and each person who is directly or indirectly the beneficial owner of twenty-five percent or more of the outstanding voting securities of the corporation.
     (5) If any tender offer, request, or invitation for tenders or other agreements to acquire control is proposed to be made by means of a registration statement under the Securities Act of 1933 (48 Stat. 74, 15 U.S.C., Sec. 77(a)), as amended, or in circumstances requiring the disclosure of similar information under the Securities Exchange Act of 1934 (48 Stat. 881, 15 U.S.C., Sec. 78(a)), as amended, the registration statement or application may be filed with the director in lieu of the requirements of this section.
     (6) Any acquiring party shall also deliver a copy of any notice or application required by this section to the bank proposed to be acquired within two days after the notice or application is filed with the director.
     (7) Any acquisition of control in violation of this section shall be ineffective and void.
     (8) Any person who willfully or intentionally violates this section or any rule adopted pursuant thereto is guilty of a gross misdemeanor pursuant to chapter 9A.20 RCW. Each day's violation shall be considered a separate violation, and any person shall upon conviction be fined not more than one thousand dollars for each day the violation continues.

Sec. 135   RCW 30.04.410 and 2005 c 274 s 253 are each amended to read as follows:
     (1) The director may disapprove the acquisition of a bank ((or trust company)) within thirty days after the filing of a complete application pursuant to RCW 30.04.405 (as recodified by this act) or an extended period not exceeding an additional fifteen days if:
     (a) The poor financial condition of any acquiring party might jeopardize the financial stability of the bank or might prejudice the interests of the bank depositors, borrowers, or shareholders;
     (b) The plan or proposal of the acquiring party to liquidate the bank, to sell its assets, to merge it with any person, or to make any other major change in its business or corporate structure or management is not fair and reasonable to the bank's depositors, borrowers, or stockholders or is not in the public interest;
     (c) The banking and business experience and integrity of any acquiring party who would control the operation of the bank indicates that approval would not be in the interest of the bank's depositors, borrowers, or shareholders;
     (d) The information provided by the application is insufficient for the director to make a determination or there has been insufficient time to verify the information provided and conduct an examination of the qualification of the acquiring party; or
     (e) The acquisition would not be in the public interest.
     (2) An acquisition may be made prior to expiration of the disapproval period if the director issues written notice of intent not to disapprove the action.
     (3) The director shall set forth the basis for disapproval of any proposed acquisition in writing and shall provide a copy of such findings and order to the applicants and to the bank involved. Such findings and order shall not be disclosed to any other party and shall not be subject to public disclosure under chapter 42.56 RCW unless the findings and/or order are appealed pursuant to chapter 34.05 RCW.
     (4) Whenever such a change in control occurs, each party to the transaction shall report promptly to the director any changes or replacement of its chief executive officer, or of any director, that occurs in the next twelve-month period, including in its report a statement of the past and present business and professional affiliations of the new chief executive officer or directors.

Sec. 136   RCW 30.04.450 and 2010 c 88 s 15 are each amended to read as follows:
     (1) The director may issue and serve a notice of charges upon a bank ((or trust company)) when in the opinion of the director:
     (a) It has engaged in an unsafe and unsound practice related to the conduct of business of the bank ((or trust company));
     (b) It has violated any provision of RCW 30.04.050 (as recodified by this act); or
     (c) It is planning, attempting, or currently conducting any act prohibited in (a) or (b) of this subsection.
     (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) (as recodified by this act);
     (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 (as recodified by this act) 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((, trust company,)) or holding company. The hearing shall be set not earlier than ten days 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((, trust company,)) or holding company.
     (4) Unless the bank((, 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((, trust company,)) or holding company an order to cease and desist from the violation or practice. The order may require the bank((, 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.
     (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. 137   RCW 30.04.455 and 2010 c 88 s 16 are each amended to read as follows:
     (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 (as recodified by this act), or its continuation, which the director has determined:
     (a) Constitutes an unsafe and unsound practice or a material violation of RCW 30.04.050 (as recodified by this act) 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 (as recodified by this act) 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 (as recodified by this act).

Sec. 138   RCW 30.04.460 and 2010 c 88 s 17 are each amended to read as follows:
     (1) Within ten days after a bank((, trust company,)) or holding company has been served with a temporary cease and desist order, the bank((, 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 (as recodified by this act).
     (2) The superior court shall have jurisdiction to issue the injunction.

Sec. 139   RCW 30.04.465 and 1994 c 92 s 33 are each amended to read as follows:
     In the case of a violation or threatened violation of a temporary cease and desist order issued under RCW 30.04.455 (as recodified by this act), the director may apply to the superior court of the county of the principal place of business of the bank ((or trust company)) for an injunction to enforce the order, and the court shall issue an injunction if it determines that there has been a violation or threatened violation.

Sec. 140   RCW 30.04.470 and 2010 c 88 s 18 are each amended to read as follows:
     (1) Any administrative hearing provided in RCW 30.04.450 or 30.12.042 (as recodified by this act) 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 30.04.450 or 30.12.042 (as recodified by this act), 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 (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 is exclusive for orders issued under RCW 30.04.450 and 30.12.042 (as recodified by this act).
     (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 (as recodified by this act) 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.
     (6) The commencement of proceedings for judicial review under subsection (5) of this section shall not operate as a stay of any order issued by the director unless specifically ordered by the court.
     (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 (as recodified by this act) shall be accomplished in the same manner as required for the service of process in civil actions in superior courts of this state.

Sec. 141   RCW 30.04.475 and 2010 c 88 s 19 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 (as recodified by this act), 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 (as recodified by this act).

Sec. 142   RCW 30.04.500 and 1977 ex.s. c 301 s 10 are each amended to read as follows:
     RCW 30.04.505 through 30.04.515 (as recodified by this act) shall be known and may be cited as the "fairness in lending act".

Sec. 143   RCW 30.04.505 and 1977 ex.s. c 301 s 11 are each amended to read as follows:
     As used in RCW 30.04.505 through 30.04.515 (as recodified by this act):
     (1) "Financial institution" means any bank ((or trust company, mutual)), savings bank, credit union, mortgage company, or savings and loan association which operates or has a place of business in this state whether regulated by the state or federal government.
     (2) "Particular type of loan" refers to a class of loans which is substantially similar with respect to the following:
     (a) FHA, VA, or conventional ((as defined in RCW 19.106.030(2))) loans;
     (b) Uniform or nonuniform payment;
     (c) Uniform or nonuniform rate of interest;
     (d) Purpose; and
     (e) The location of the real estate offered as security for the loan as being inside or outside of that financial institution's lending area.
     (3) "Varying the terms of a loan" includes, but is not limited to the following practices:
     (a) Requiring a greater down payment than is usual for the particular type of a loan involved;
     (b) Requiring a shorter period of amortization than is usual for the particular type of loan involved;
     (c) Charging a higher interest rate than is usual for the particular type of loan involved;
     (d) A deliberate underappraisal of the value of the property offered as security.

Sec. 144   RCW 30.04.510 and 1977 ex.s. c 301 s 12 are each amended to read as follows:
     Subject to RCW 30.04.515 (as recodified by this act), it shall be unlawful for any financial institution, in processing any application for a loan to be secured by a single-family residence to:
     (1) Deny or vary the terms of a loan on the basis that a specific parcel of real estate offered as security is located in a specific geographical area, unless building, remodeling, or continued habitation in such specific geographical area is prohibited or restricted by any local, state, or federal law or rules or regulations promulgated thereunder.
     (2) Utilize lending standards that have no economic basis.

Sec. 145   RCW 30.04.515 and 1977 ex.s. c 301 s 13 are each amended to read as follows:
     Nothing contained in RCW 30.04.505 through 30.04.510 (as recodified by this act) shall preclude a financial institution from considering sound underwriting practices in processing any application for a loan to any person. Such practices shall include the following:
     (1) The willingness and the financial ability of the borrower to repay the loan.
     (2) The market value of any real estate and of any other item of property proposed as security for any loan.
     (3) Diversification of the financial institution's investment portfolio.

Sec. 146   RCW 30.04.555 and 1994 c 256 s 38 are each amended to read as follows:
     A reorganization authorized under RCW 30.04.550 (as recodified by this act) shall be carried out in the following manner:
     (1) A plan of reorganization specifying the manner in which the reorganization shall be carried out must be approved by a majority of the entire board of directors of the banking corporation. The plan shall specify the name of the acquiring corporation, the amount of cash, securities of the bank holding company, other consideration, or any combination thereof to be paid to the shareholders of the reorganizing corporation in exchange for their shares of the stock of the corporation. The plan shall also specify the exchange date or the manner in which such exchange date shall be determined, the manner in which the exchange shall be carried out, and such other matters, not inconsistent with this chapter, as shall be determined by the board of directors of the corporation.
     (2) The plan of reorganization shall be submitted to the shareholders of the reorganizing corporation at a meeting to be held on the call of the directors. Notice of the meeting of shareholders at which the plan shall be considered shall be given by prepaid first-class mail at least twenty days before the date of the meeting, to each stockholder of record of the banking corporation. The notice shall state that dissenting shareholders will be entitled to payment of the value of only those shares which are voted against approval of the plan.

Sec. 147   RCW 30.04.560 and 1994 c 92 s 37 are each amended to read as follows:
     If the shareholders approve the reorganization by a two-thirds vote of each class of shares entitled to vote under the terms of such shares, and if it is thereafter approved by the director and consummated, any shareholder of the banking corporation who has voted shares against such reorganization at such meeting or has given notice in writing at or prior to such meeting to the banking corporation that he or she dissents from the plan of reorganization and has not voted in favor of the reorganization, shall be entitled to receive the value of the shares determined as provided in RCW 30.04.565 (as recodified by this act). Such dissenter's rights must be exercised by making written demand which shall be delivered to the corporation at any time within thirty days after the date of shareholder approval, accompanied by the surrender of the appropriate stock certificates.

Sec. 148   RCW 30.04.570 and 1994 c 92 s 39 are each amended to read as follows:
     The reorganization and exchange authorized by RCW 30.04.550 through 30.04.570 (as recodified by this act) shall become effective as follows:
     (1) If the board of directors and shareholders of the state banking corporation and the board of directors of the acquiring corporation approve the plan of reorganization, then both corporations shall apply for the approval of the director, providing such information as the director by rule may prescribe.
     (2) If the director approves the reorganization, the director shall issue a certificate of reorganization to the state banking corporation.
     (3) Upon the issuance of a certificate of reorganization by the director, or on such later date as shall be provided for in the plan of reorganization, the shares of the state banking corporation shall be deemed to be exchanged in accordance with the plan of reorganization, subject to the rights of dissenters under RCW 30.04.560 and 30.04.565 (as recodified by this act).

NEW SECTION.  Sec. 149   (1) Notwithstanding any provisions of this title, wherever notice by publication is required by a bank, such notice may be undertaken by internet publication upon terms and conditions that the director may adopt by rule.
     (2) Notice to shareholders required under this title may be undertaken by electronic means in the same manner as permitted for general business corporations under RCW 23B.01.410.

Sec. 150   RCW 30.08.010 and 1994 c 256 s 41 and 1994 c 92 s 42 are each reenacted and amended to read as follows:
     When authorized by the director, as hereinafter provided, one or more natural persons, citizens of the United States, may incorporate a bank ((or trust company)) in the manner herein prescribed. No bank ((or trust company)) shall incorporate for less amount nor commence business unless it has a paid-in capital stock, surplus and undivided profits in the amount as may be determined by the director after consideration of the proposed location, management, and the population and economic characteristics for the area, the nature of the proposed activities and operation of the bank ((or trust company)), and other factors deemed pertinent by the director. Each bank ((and trust company)) shall before commencing business have subscribed and paid into it in the same manner as is required for capital stock, an amount equal to at least ten percent of the capital stock above required, that shall be carried in the undivided profit account and may be used to defray organization and operating expenses of the company. Any sum not so used shall be transferred to the surplus fund of the company before any dividend shall be declared to the stockholders.

Sec. 151   RCW 30.08.020 and 1999 c 14 s 11 are each amended to read as follows:
     Persons desiring to incorporate a bank ((or trust company)) shall file with the director a notice of their intention to organize a bank ((or trust company)) in such form and containing such information as the director shall prescribe by rule, together with proposed articles of incorporation, which shall be submitted for examination to the director at his or her office.
     The proposed articles of incorporation shall state:
     (1) The name of such bank ((or trust company)).
     (2) The city, village or locality and county where the head office of such corporation is to be located.
     (3) The nature of its business((, whether that of a commercial bank, or a trust company)).
     (4) The amount of its capital stock, which shall be divided into shares of a par or no par value as may be provided in the articles of incorporation.
     (5) The names and places of residence and mailing addresses of the persons who as directors are to manage the corporation until the first annual meeting of its stockholders.
     (6) If there is to be preferred or special classes of stock, a statement of preferences, voting rights, if any, limitations and relative rights in respect of the shares of each class; or a statement that the shares of each class shall have the attributes as shall be determined by the bank's board of directors from time to time with the approval of the director.
     (7) Any provision granting the shareholders the preemptive right to acquire additional shares of the bank and any provision granting shareholders the right to cumulate their votes.
     (8) Any provision, not inconsistent with law, which the incorporators elect to set forth in the articles of incorporation for the regulation of the affairs of the corporation, including any provision restricting the transfer of shares, any provision which under this title is required or permitted to be set forth in the bylaws, and any provision permitted by RCW 23B.17.030.
     (9) Any provision the incorporators elect to so set forth, not inconsistent with law or the purposes for which the bank is organized, or any provision limiting any of the powers granted in this title.
     It shall not be necessary to set forth in the articles of incorporation any of the corporate powers granted in this title. The articles of incorporation shall be signed by all of the incorporators.

Sec. 152   RCW 30.08.025 and 2011 c 52 s 1 are each amended to read as follows:
     (1) Notwithstanding any other provision of this title, if the conditions of this section are met, a bank((, a trust company,)) or a holding company of a bank ((or a trust company,)) may be organized as, or convert to, a limited liability company under the Washington limited liability company act, chapter 25.15 RCW. As used in this section, "bank" includes an applicant to become a bank or holding company of a bank((, "trust company" includes an applicant to become a trust company,)) and "holding company" means a holding company of a bank ((or trust company)).
     (2)(a) Before a bank((, trust company,)) or holding company may organize as, or convert to, a limited liability company, the bank((, trust company,)) or holding company must obtain approval of the director.
     (b)(i) To obtain approval under this section from the director, the bank((, trust company,)) or holding company must file a request for approval with the director at least ninety days before the day on which the bank((, trust company,)) or holding company becomes a limited liability company.
     (ii) If the director does not disapprove the request for approval within ninety days from the day on which the director receives the request, the request is considered approved.
     (iii) When taking action on a request for approval filed under this section, the director may:
     (A) Approve the request;
     (B) Approve the request subject to terms and conditions the director considers necessary; or
     (C) Disapprove the request.
     (3) To approve a request for approval, the director must find that the bank((, trust company,)) or holding company:
     (a) Will operate in a safe and sound manner; and
     (b) Has the following characteristics:
     (i) The certificate of formation and limited liability company require or set forth that the duration of the limited liability company is perpetual;
     (ii) The bank((, trust company,)) or holding company is not otherwise subject to automatic termination, dissolution, or suspension upon the happening of some event other than the passage of time;
     (iii) The exclusive authority to manage the bank, trust company, or holding company is vested in a board of managers or directors that:
     (A) Is elected or appointed by the owners;
     (B) Is not required to have owners of the bank, trust company, or holding company included on the board;
     (C) Possesses adequate independence and authority to supervise the operation of the bank, trust company, or holding company; and
     (D) Operates with substantially the same rights, powers, privileges, duties, and responsibilities as the board of directors of a corporation;
     (iv) Neither state law, nor the bank's((, trust company's,)) or holding company's operating agreement, bylaws, or other organizational documents provide that an owner of the bank((, trust company,)) or holding company is liable for the debts, liabilities, and obligations of the bank((, trust company,)) or holding company in excess of the amount of the owner's investment;
     (v) Neither state law, nor the bank's((, trust company's,)) or holding company's operating agreement, bylaws, or other organizational documents require the consent of any other owner of the bank((, trust company,)) or holding company in order for any owner to transfer an ownership interest in the bank((, trust company,)) or holding company, including voting rights;
     (vi) The bank((, trust company,)) or holding company is able to obtain new investment funding if needed to maintain adequate capital;
     (vii) The bank((, trust company,)) or holding company is able to comply with all legal and regulatory requirements for a federally insured depository bank((, trust company,)) or holding company of a federally insured depository bank, under applicable federal and state law; and
     (viii) A bank((, trust company,)) or holding company that is organized as a limited liability company shall maintain the characteristics listed in this subsection (3)(b) during such time as it is authorized to conduct business under this title as a limited liability company.
     (4)(a) All rights, privileges, powers, duties, and obligations of a bank((, trust company,)) or holding company, that is organized as a limited liability company, and its members and managers are governed by the Washington limited liability company act, chapter 25.15 RCW, except:
     (i) To the extent chapter 25.15 RCW is in conflict with federal law or regulation respecting the organization of a federally insured depository institution as a limited liability company, such federal law or regulation supersedes the conflicting provisions contained in chapter 25.15 RCW in relation to a bank((, trust company,)) or holding company organized as a limited liability company pursuant to this section; and
     (ii) Without limitation, the following are inapplicable to a bank((, trust company,)) or holding company organized as a limited liability company:
     (A) Permitting automatic dissolution or suspension of a limited liability company as set forth in RCW 25.15.270(1), pursuant to a statement of limited duration which, though impermissible under subsection (3)(b)(i) of this section, has been provided for in a certificate of formation;
     (B) Permitting automatic dissolution or suspension of a limited liability company, pursuant to the limited liability company agreement, as set forth in RCW 25.15.270(2);
     (C) Permitting dissolution of the limited liability company agreement based upon agreement of all the members, as set forth in RCW 25.l5.270(3);
     (D) Permitting dissociation of all the members of the limited liability company, as set forth in RCW 25.l5.270(4); and
     (E) Permitting automatic dissolution or suspension of a limited liability company, pursuant to operation of law, as otherwise set forth in chapter 25.15 RCW.
     (b) Notwithstanding (a) of this subsection:
     (i) For purposes of transferring a member's interests in the bank((, trust company,)) or holding company, a member's interest in the bank((, trust company,)) or holding company is treated like a share of stock in a corporation; and
     (ii) If a member's interest in the bank((, trust company,)) or holding company is transferred voluntarily or involuntarily to another person, the person who receives the member's interest obtains the member's entire rights associated with the member's interest in the bank((, trust company,)) or holding company including all economic rights and all voting rights.
     (c) A bank((, trust company,)) or holding company may not by agreement or otherwise change the application of (a) of this subsection to the bank((, trust company,)) or holding company.
     (5)(a) Notwithstanding any provision of chapter 25.15 RCW or this section to the contrary, all voting members remain liable and responsible as fiduciaries of a bank((, trust company,)) or holding company organized as a limited liability company, regardless of resignation, dissociation, or disqualification, to the same extent that directors of a bank((, trust company,)) or holding company organized as a corporation would be or remain liable or responsible to the department and applicable federal banking regulators; and
     (b) If death, incapacity, or disqualification of all members of the limited liability company would result in a complete dissociation of all members, then the bank, ((trust company,)) holding company, or ((all three)) both, as applicable is deemed nonetheless to remain in existence for purposes of the department or an applicable federal regulator, or both, having standing under RCW 30.44.270 (as recodified by this act) or applicable federal law, or both, to exercise the powers and authorities of a receiver for the bank((, trust company,)) or holding company.
     (6) For the purposes of this section, and unless the context clearly requires otherwise, for the purpose of applying chapter 25.15 RCW to a bank((, trust company,)) or holding company organized as a limited liability company:
     (a) "Articles of incorporation" includes a limited liability company's certificate of formation, as that term is used in RCW 25.15.005(1) and 25.15.070, and a limited liability company agreement as that term is used in RCW 25.15.005(5);
     (b) "Board of directors" includes one or more persons who have, with respect to a bank((, trust company,)) or holding company described in subsection (1) of this section, authority that is substantially similar to that of a board of directors of a corporation;
     (c) "Bylaws" includes a limited liability company agreement as that term is defined in RCW 25.15.005(5);
     (d) "Corporation" includes a limited liability company organized under chapter 25.15 RCW;
     (e) "Director" includes any of the following of a limited liability company:
     (i) A manager;
     (ii) A director; or
     (iii) Other person who has, with respect to the bank((, trust company,)) or holding company described in subsection (1) of this section, authority substantially similar to that of a director of a corporation;
     (f) "Dividend" includes distributions made by a limited liability company under RCW 25.15.215;
     (g) "Incorporator" includes the person or persons executing the certificate of formation as provided in RCW 25.15.085(1);
     (h) "Officer" includes any of the following of a bank((, trust company,)) or holding company:
     (i) An officer; or
     (ii) Other person who has, with respect to the bank((, trust company,)) or holding company, authority substantially similar to that of an officer of a corporation;
     (i) "Security," "shares," or "stock" of a corporation includes a membership interest in a limited liability company and any certificate or other evidence of an ownership interest in a limited liability company; and
     (j) "Stockholder" or "shareholder" includes an owner of an equity interest in a bank((, trust company,)) or holding company, including a member as defined in RCW 25.15.005(8) and 25.15.115.

Sec. 153   RCW 30.08.030 and 1994 c 92 s 44 are each amended to read as follows:
     When the notice of intention to organize and proposed articles of incorporation complying with the foregoing requirements have been received by the director, together with the fees required by law, the director shall ascertain from the best source of information at his or her command and by such investigation as he or she may deem necessary, whether the character, responsibility and general fitness of the persons named in such articles are such as to command confidence and warrant belief that the business of the proposed bank ((or trust company)) will be honestly and efficiently conducted in accordance with the intent and purpose of this title, whether the resources in the neighborhood of such place and in the surrounding country afford a reasonable promise of adequate support for the proposed bank and whether the proposed bank ((or trust company)) is being formed for other than the legitimate objects covered by this title.

Sec. 154   RCW 30.08.055 and 1994 c 256 s 53 are each amended to read as follows:
     A bank ((or trust company)) amending its articles of incorporation shall deliver articles of amendment to the director for filing as required for articles of incorporation. The articles of amendment shall set forth:
     (1) The name of the bank ((or trust company));
     (2) The text of each amendment adopted;
     (3) The date of each amendment's adoption;
     (4) If the amendment was adopted by the incorporators or board of directors without shareholder action, a statement to that effect and that shareholder action was not required; and
     (5) If shareholder action was required, a statement that the amendment was duly approved by the shareholders in accordance with the provisions of RCW 30.08.090 (as recodified by this act).

Sec. 155   RCW 30.08.060 and 1994 c 92 s 47 are each amended to read as follows:
     Before any bank ((or trust company)) shall be authorized to do business, and within ninety days after approval of the articles of incorporation or such other time as the director may allow, it shall furnish proof satisfactory to the director that such corporation has a paid-in capital in the amount determined by the director, that the requisite surplus or reserve fund has been accumulated or paid in cash, and that it has in good faith complied with all the requirements of law and fulfilled all the conditions precedent to commencing business imposed by this title. If so satisfied, and within thirty days after receipt of such proof, the director shall issue under his or her hand and official seal, in triplicate, a certificate of authority for such corporation. The certificate shall state that the corporation therein named has complied with the requirements of law, that it is authorized to transact the business of a bank ((or trust company, or both, as the case may be)): PROVIDED, HOWEVER, That the director may make his or her issuance of the certificate to a bank ((or trust company)) authorized to accept deposits, conditional upon the granting of deposit insurance by the federal deposit insurance corporation, and in such event, shall set out such condition in a written notice which shall be delivered to the corporation.
     One of the triplicate certificates shall be transmitted by the director to the corporation and one of the other two shall be filed by the director in the office of the secretary of state and shall be attached to the articles of incorporation: PROVIDED, HOWEVER, That if the issuance of the certificate is made conditional upon the granting of deposit insurance by the federal deposit insurance corporation, the director shall not transmit or file the certificate until such condition is satisfied.

Sec. 156   RCW 30.08.070 and 1994 c 92 s 48 are each amended to read as follows:
     Every corporation heretofore or hereafter authorized by the laws of this state to do business as a bank ((or trust company)), which corporation shall have failed to organize and commence business within six months after certificate of authority to commence business has been issued by the director, shall forfeit its rights and privileges as such corporation, which fact the director shall certify to the secretary of state, and such certificate of forfeiture shall be filed and recorded in the office of the secretary of state in the same manner as the certificate of authority: PROVIDED, That the director may, upon showing of cause satisfactory to him or her, issue an order under his or her hand and seal extending for not more than three months the time within which such organization may be effected and business commenced, such order to be transmitted to the office of the secretary of state and filed and recorded therein.

Sec. 157   RCW 30.08.080 and 1999 c 14 s 12 are each amended to read as follows:
     At any time not less than one year prior to the expiration of the time of the existence of any bank ((or trust company)), it may by written application to the director, signed and verified by a majority of its directors and approved in writing by the owners of not less than two-thirds of its capital stock, apply to the director for leave to file amended articles of incorporation, extending its time of existence. Prior to acting upon such application, the director shall make such investigation of the applicant as he or she deems necessary. If the director determines that the applicant is in sound condition, that it is conducting its business in a safe manner and in compliance with law and that no reason exists why it should not be permitted to continue, he or she shall issue to the applicant a certificate authorizing it to file amended articles of incorporation extending the time of its existence until such time as it be dissolved by the act of its shareholders owning not less than two-thirds of its stock, or until its certificate of authority becomes revoked or forfeited by reason of violation of law, or until its affairs be taken over by the director for legal cause and finally wound up by him or her. Otherwise the director shall notify the applicant that he or she refuses to grant such certificate. The applicant may appeal from such refusal in the same manner as in the case of a refusal to grant an original certificate of authority. Otherwise the determination of the director shall be conclusive.
     Upon receiving a certificate, as hereinabove provided, the applicant may file amended articles of incorporation, extending the time of its existence for the term authorized, to which shall be attached a copy of the certificate of the director. Such articles shall be filed in the same manner and upon payment of the same fees as for original articles of incorporation.
     Should any bank ((or trust company)) fail to continue its existence in the manner herein provided and be not previously dissolved, the director shall at the end of its original term of existence immediately take possession thereof and wind up the same in the same manner as in the case of insolvency.

Sec. 158   RCW 30.08.081 and 1994 c 256 s 52 are each amended to read as follows:
     (1) Shares of a bank ((or trust company)) may, but need not be, represented by certificates. Unless this title expressly provides otherwise, the rights and obligations of shareholders are identical whether or not their shares are represented by certificates. At a minimum, each share certificate must state the information required to be stated and must be signed as provided in RCW 23B.06.250 and/or 23B.06.270 for corporations.
     (2) Unless the articles of incorporation or bylaws provide otherwise, the board of directors of a bank ((or trust company)) may authorize the issue of some or all of the shares of any or all of its classes or series without certificates. The authorization does not affect shares already represented by certificates until they are surrendered to the bank ((or trust company)).
     (3) Within a reasonable time after the issue or transfer of shares without certificates, the bank ((or trust company)) shall send the shareholder a written statement of the information required to be stated on certificates under subsection (1) of this section.

Sec. 159   RCW 30.08.082 and 1994 c 256 s 44 and 1994 c 92 s 50 are each reenacted and amended to read as follows:
     (1) Notwithstanding any other provisions of law and if so authorized by its articles of incorporation or amendments thereto made in the manner provided in the case of a capital increase, any bank ((or trust company)) may, pursuant to action taken by its board of directors from time to time with the approval of the director, issue shares of preferred or special classes of stock with the attributes and in such amounts and with such par value, if any, as shall be determined by the board of directors from time to time with the approval of the director. No increase of preferred stock shall be valid until the amount thereof shall have been subscribed and actually paid in.
     (2) If provided in its articles of incorporation, a bank ((or trust company)) may issue shares of preferred or special classes having any one or several of the following provisions:
     (a) Subjecting the shares to the right of the bank ((or trust company)) to repurchase or retire any such shares at the price fixed by the articles of incorporation for the repurchase or retirement thereof;
     (b) Entitling the holders thereof to cumulative, noncumulative, or partially cumulative dividends;
     (c) Having preference over any other class or classes of shares as to the payment of dividends;
     (d) Having preference in the assets of the bank ((or trust company)) over any other class or classes of shares upon the voluntary or involuntary liquidation of the bank ((or trust company));
     (e) Having voting or nonvoting rights; and
     (f) Being convertible into shares of any other class or into shares of any series of the same or any other class, except a class having prior or superior rights and preferences as to dividends or distribution of assets upon liquidation.

Sec. 160   RCW 30.08.084 and 1994 c 92 s 52 are each amended to read as follows:
     Notwithstanding any other provisions of law, whether relating to restriction upon the payment of dividends upon capital stock or otherwise, the holders of shares of preferred or special classes of stock shall be entitled to receive such dividends on the purchase price received by the bank ((or trust company)) for such stock as may be provided by the articles of incorporation or by the board of directors of the bank ((or trust company)) with the approval of the director.
     No dividends shall be declared or paid on common stock until cumulative dividends, if any, on the shares of preferred or special classes of stock shall have been paid in full; and, if the director takes possession of a bank ((or trust company)) for purposes of liquidation, no payments shall be made to the holders of the common stock until the holders of the shares of preferred or special classes of stock shall have been paid in full such amount as may be provided under the terms of said shares plus all accumulated dividends, if any.

Sec. 161   RCW 30.08.086 and 1986 c 279 s 25 are each amended to read as follows:
     If any part of the capital of a bank ((and trust company)) consists of preferred stock, the determination of whether or not the capital of such bank is impaired and the amount of such impairment shall be based on the value of its stock as established at the time it was issued, or its par value, if any, even though the amount which the holders of such preferred stock shall be entitled to receive in the event of retirement or liquidation shall be in excess of the originally established value or the par value of such preferred stock.

Sec. 162   RCW 30.08.087 and 1994 c 256 s 45 are each amended to read as follows:
     Any bank ((or trust company)) may provide in its articles of incorporation or amendments thereto for authorized but unissued shares of its capital stock. The shares may be issued for such consideration as shall be established by the board from time to time and all consideration received therefor shall be allocated to the capital stock or surplus of the corporation.

Sec. 163   RCW 30.08.090 and 1994 c 256 s 47 and 1994 c 92 s 54 are each reenacted and amended to read as follows:
     Unless the articles of incorporation provide otherwise, the board of directors of a bank ((or trust company)) may, by majority vote, amend the bank's ((or trust company's)) articles of incorporation without shareholder action as follows:
     (1) If the bank ((or trust company)) has only one class of shares outstanding, to provide, change, or eliminate any provision with respect to the par value of any class of shares;
     (2) To delete the name and address of the initial directors;
     (3) If the bank ((or trust company)) has only one class of shares outstanding, solely to change the number of authorized shares to effectuate a split of, or stock dividend in, the bank's ((or trust company's)) own shares, or solely to do so and to change the number of authorized shares in proportion thereto;
     (4) To change the bank's ((or trust company's)) name; or
     (5) To make any other change expressly permitted by this title to be made without shareholder action.
     Other amendments to a bank's ((or trust company's)) articles of incorporation, in a manner not inconsistent with the provisions of this title, require the affirmative vote of the stockholders representing two-thirds of each class of shares entitled to vote under the terms of the shares at a regular meeting, or special meeting duly called for that purpose in the manner prescribed by the bank's ((or trust company's)) bylaws. No amendment shall be made whereby a bank becomes a trust company unless such bank first receives permission from the director.

Sec. 164   RCW 30.08.092 and 1994 c 256 s 48 and 1994 c 92 s 55 are each reenacted and amended to read as follows:
     A bank ((or trust company)) may increase or decrease its capital stock by amendment to its articles of incorporation. No issuance of capital stock shall be valid, until the amount thereof shall have been actually paid in. No reduction of the capital stock shall be made to an amount less than is required for capital by the director.

Sec. 165   RCW 30.08.140 and 2013 c 76 s 9 are each amended to read as follows:
     Upon the issuance of a certificate of authority to a bank, the persons named in the articles of incorporation and their successors shall thereupon become a corporation and shall have power:
     (1) To adopt and use a corporate seal;
     (2) To have perpetual succession;
     (3) To make contracts;
     (4) To sue and be sued, the same as a natural person;
     (5) To elect directors who, subject to the provisions of the corporation's bylaws, shall have power to appoint such officers as may be necessary or convenient, to define their powers and duties and to dismiss them at pleasure, and who shall also have general supervision and control of the affairs of such corporation;
     (6) To make and alter bylaws, not inconsistent with its articles of incorporation or with the laws of this state, for the administration and regulation of its affairs;
     (7) To invest and reinvest its funds in marketable obligations evidencing the indebtedness of any person, copartnership, association, or corporation in the form of bonds, notes, or debentures commonly known as investment securities except as may by regulation be limited by the director;
     (8) To discount and negotiate promissory notes, drafts, bills of exchange and other evidences of debt, to receive deposits of money and commercial paper, to lend money secured or unsecured, to issue all forms of letters of credit, to buy and sell bullion, coins and bills of exchange;
     (9) To take and receive as bailee for hire upon terms and conditions to be prescribed by the corporation, for safekeeping and storage, jewelry, plate, money, specie, bullion, stocks, bonds, mortgages, securities and valuable paper of any kind and other valuable personal property, and to rent vaults, safes, boxes and other receptacles for safekeeping and storage of personal property;
     (10) If the bank be located in a city of not more than five thousand inhabitants, to act as insurance agent. A bank exercising this power may continue to act as an insurance agent notwithstanding a change of the population of the city in which it is located;
     (11) To accept drafts or bills of exchange drawn upon it having not more than six months sight to run, which grow out of transactions involving the importation or exportation of goods; or which grow out of transactions involving the domestic shipment of goods, providing shipping documents conveying or securing title are attached at the time of acceptance; or which are secured at the time of acceptance by a warehouse receipt or other such document conveying or securing title to readily marketable staples. No bank shall accept, either in a foreign or a domestic transaction, for any one person, company, firm or corporation, to an amount equal at any one time in the aggregate to more than ten percent of its paid up and unimpaired capital stock and surplus unless the bank is secured by attached documents or by some other actual security growing out of the same transaction as the acceptance; and no bank shall accept such bills to an amount equal at any time in the aggregate to more than one-half of its paid up and unimpaired capital stock and surplus: PROVIDED, HOWEVER, That the director, under such general regulations applicable to all banks irrespective of the amount of capital or surplus, as the director may prescribe may authorize any bank to accept such bills to an amount not exceeding at any time in the aggregate one hundred percent of its paid up and unimpaired capital stock and surplus: PROVIDED, FURTHER, That the aggregate of acceptances growing out of domestic transactions shall in no event exceed fifty percent of such capital stock and surplus;
     (12) To accept drafts or bills of exchange drawn upon it, having not more than three months sight to run, drawn under regulations to be prescribed by the director by banks or bankers in foreign countries or dependencies or insular possessions of the United States for the purpose of furnishing dollar exchange as required by the usages of trade in the respective countries, dependencies or insular possessions. Such drafts or bills may be acquired by banks in such amounts and subject to such regulations, restrictions and limitations as may be provided by the director: PROVIDED, HOWEVER, That no bank shall accept such drafts or bills of exchange referred to in this subdivision for any one bank to an amount exceeding in the aggregate ten percent of the paid up and unimpaired capital and surplus of the accepting bank unless the draft or bill of exchange is accompanied by documents conveying or securing title or by some other adequate security, and that no such drafts or bills of exchange shall be accepted by any bank in an amount exceeding at any time the aggregate of one-half of its paid up and unimpaired capital and surplus: PROVIDED FURTHER, That compliance by any bank which is a member of the federal reserve system of the United States with the rules, regulations and limitations adopted by the federal reserve board thereof with respect to the acceptance of drafts or bills of exchange by members of such federal reserve system shall be a sufficient compliance with the requirements of this subdivision or paragraph relating to rules, regulations and limitations prescribed by the director;
     (13) To have and exercise all powers necessary or convenient to effect its purposes;
     (14) To serve as custodian of an individual retirement account and pension and profit sharing plans qualified under internal revenue code section 401(a), the assets of which are invested in deposits of the bank ((or trust company)) or are invested, pursuant to directions from the customer owning the account, in securities traded on a national securities market: PROVIDED, That the bank ((or trust company)) shall accept no investment responsibilities over the account unless it is granted trust powers by the director;
     (15) To be a limited partner in a limited partnership that engages in only such activities as are authorized for the bank.

Sec. 166   RCW 30.08.140 and 2013 c 76 s 10 are each amended to read as follows:
     Upon the issuance of a certificate of authority to a bank, the persons named in the articles of incorporation and their successors shall thereupon become a corporation and shall have power:
     (1) To adopt and use a corporate seal;
     (2) To have perpetual succession;
     (3) To make contracts;
     (4) To sue and be sued, the same as a natural person;
     (5) To elect directors who, subject to the provisions of the corporation's bylaws, shall have power to appoint such officers as may be necessary or convenient, to define their powers and duties and to dismiss them at pleasure, and who shall also have general supervision and control of the affairs of such corporation;
     (6) To make and alter bylaws, not inconsistent with its articles of incorporation or with the laws of this state, for the administration and regulation of its affairs;
     (7) To invest and reinvest its funds in marketable obligations evidencing the indebtedness of any person, copartnership, association, or corporation in the form of bonds, notes, or debentures commonly known as investment securities except as may by regulation be limited by the director;
     (8) To discount and negotiate promissory notes, drafts, bills of exchange and other evidences of debt, to receive deposits of money and commercial paper, to lend money secured or unsecured, to issue all forms of letters of credit, to buy and sell bullion, coins and bills of exchange;
     (9) To take and receive as bailee for hire upon terms and conditions to be prescribed by the corporation, for safekeeping and storage, jewelry, plate, money, specie, bullion, stocks, bonds, mortgages, securities and valuable paper of any kind and other valuable personal property, and to rent vaults, safes, boxes and other receptacles for safekeeping and storage of personal property;
     (10) If the bank be located in a city of not more than five thousand inhabitants, to act as insurance agent. A bank exercising this power may continue to act as an insurance agent notwithstanding a change of the population of the city in which it is located;
     (11) To accept drafts or bills of exchange drawn upon it having not more than six months sight to run, which grow out of transactions involving the importation or exportation of goods; or which grow out of transactions involving the domestic shipment of goods, providing shipping documents conveying or securing title are attached at the time of acceptance; or which are secured at the time of acceptance by a warehouse receipt or other such document conveying or securing title to readily marketable staples. No bank shall accept, either in a foreign or a domestic transaction, for any one person, company, firm or corporation, to an amount equal at any one time in the aggregate to more than ten percent of its paid up and unimpaired capital stock and surplus unless the bank is secured by attached documents or by some other actual security growing out of the same transaction as the acceptance; and no bank shall accept such bills to an amount equal at any time in the aggregate to more than one-half of its paid up and unimpaired capital stock and surplus: PROVIDED, HOWEVER, That the director, under such general regulations applicable to all banks irrespective of the amount of capital or surplus, as the director may prescribe may authorize any bank to accept such bills to an amount not exceeding at any time in the aggregate one hundred percent of its paid up and unimpaired capital stock and surplus: PROVIDED, FURTHER, That the aggregate of acceptances growing out of domestic transactions shall in no event exceed fifty percent of such capital stock and surplus;
     (12) To accept drafts or bills of exchange drawn upon it, having not more than three months sight to run, drawn under regulations to be prescribed by the director by banks or bankers in foreign countries or dependencies or insular possessions of the United States for the purpose of furnishing dollar exchange as required by the usages of trade in the respective countries, dependencies or insular possessions. Such drafts or bills may be acquired by banks in such amounts and subject to such regulations, restrictions and limitations as may be provided by the director: PROVIDED, HOWEVER, That no bank shall accept such drafts or bills of exchange referred to in this subdivision for any one bank to an amount exceeding in the aggregate ten percent of the paid up and unimpaired capital and surplus of the accepting bank unless the draft or bill of exchange is accompanied by documents conveying or securing title or by some other adequate security, and that no such drafts or bills of exchange shall be accepted by any bank in an amount exceeding at any time the aggregate of one-half of its paid up and unimpaired capital and surplus: PROVIDED FURTHER, That compliance by any bank which is a member of the federal reserve system of the United States with the rules, regulations and limitations adopted by the federal reserve board thereof with respect to the acceptance of drafts or bills of exchange by members of such federal reserve system shall be a sufficient compliance with the requirements of this subdivision or paragraph relating to rules, regulations and limitations prescribed by the director;
     (13) To have and exercise all powers necessary or convenient to effect its purposes;
     (14) To serve as custodian of an individual retirement account and pension and profit sharing plans qualified under internal revenue code section 401(a), the assets of which are invested in deposits of the bank ((or trust company)) or are invested, pursuant to directions from the customer owning the account, in securities traded on a national securities market: PROVIDED, That the bank ((or trust company)) shall accept no investment responsibilities over the account unless it is granted trust powers by the director;
     (15) To be a limited partner in a limited partnership that engages in only such activities as are authorized for the bank;
     (16) To conduct a promotional contest of chance as authorized in RCW 9.46.0356(l)(b), as long as the conditions of RCW 9.46.0356(5) and 30.22.260 (as recodified by this act) are complied with to the satisfaction of the director.

Sec. 167   RCW 30.08.150 and 2011 c 336 s 746 are each amended to read as follows:
     (1) Upon the issuance of a certificate of authority to a ((trust company)) bank, the persons named in the articles of incorporation and their successors shall ((thereupon become a corporation and shall)) have the power((:
     (1) To execute all the powers and possess all the privileges conferred on banks.
     (2) To act as fiscal or transfer agent of the United States or of any state, municipality, body politic, or corporation and in such capacity to receive and disburse money.
     (3) To transfer, register, and countersign certificates of stock, bonds, or other evidences of indebtedness and to act as attorney-in-fact or agent of any corporation, foreign or domestic, for any purpose, statutory or otherwise.
     (4) To act as trustee under any mortgage, or bonds, issued by any municipality, body politic, or corporation, foreign or domestic, or by any individual, firm, association, or partnership, and to accept and execute any municipal or corporate trust.
     (5) To receive and manage any sinking fund of any corporation upon such terms as may be agreed upon between such corporation and those dealing with it.
     (6) To collect coupons on or interest upon all manner of securities, when authorized so to do, by the parties depositing the same.
     (7) To accept trusts from and execute trusts for married persons in respect to their separate property and to be their agent in the management of such property and to transact any business in relation thereto.
     (8) To act as receiver or trustee of the estate of any person, or to be appointed to any trust by any court, to act as assignee under any assignment for the benefit of creditors of any debtor, whether made pursuant to statute or otherwise, and to be the depositary of any moneys paid into court.
     (9) To be appointed and to accept the appointment of executor of, or trustee under, the last will and testament, or administrator with or without the will annexed, of the estate of any deceased person and to be appointed and to act as guardian of the estate of lunatics, idiots, persons of unsound mind, minors and habitual drunkards: PROVIDED, HOWEVER, That the power hereby granted to trust companies to act as guardian or administrator, with or without the will annexed, shall not be construed to deprive parties of the prior right to have issued to them letters of guardianship, or of administration, as such right now exists under the law of this state.
     (10) To execute any trust or power of whatever nature or description that may be conferred upon or entrusted or committed to it by any person or by any court or municipality, foreign or domestic corporation, and any other trust or power conferred upon or entrusted or committed to it by grant, assignment, transfer, devise, bequest, or by any other authority and to receive, take, use, manage, hold, and dispose of, according to the terms of such trusts or powers any property or estate, real or personal, which may be the subject of any such trust or power.
     (11) Generally to execute trusts of every description not inconsistent with law.
     (12) To purchase, invest in, and sell promissory notes, bills of exchange, bonds, debentures, and mortgages and when moneys are borrowed or received for investment, the bonds or obligations of the company may be given therefor, but no trust company hereafter organized shall issue such bonds: PROVIDED, That no trust company which receives money for investment and issues the bonds of the company therefor shall engage in the business of banking or receiving of either savings or commercial deposits: AND PROVIDED, That it shall not issue any bond covering a period of more than ten years between the date of its issuance and its maturity date: AND PROVIDED FURTHER, That if for any cause, the holder of any such bond upon which one or more annual rate installments have been paid, shall fail to pay the subsequent annual rate installments provided in said bond such holder shall, on or before the maturity date of said bond, be paid not less than the full sum which he or she has paid in on account of said bond
)) to engage in trust business and other business the same as a state trust company as set forth in section 329(1) (b) through (q) of this act.
     (2) Notwithstanding the powers of a trust business set forth in section 329(1) (b) through (k) of this act and as the director may designate by rule pursuant to section 329(1)(q) of this act, a bank shall notify the director prior to commencing trust business, and comply with additional preconditions as may be required by the board of governors of the federal reserve system, the federal deposit insurance corporation, or by rule adopted by the director.
     (3) A bank under this title is deemed to be a trust company for purposes of authorization to be a personal representative under RCW 11.36.010
.

Sec. 168   RCW 30.08.180 and 1995 c 344 s 3 are each amended to read as follows:
     Every bank ((and trust company)) shall make at least three regular reports each year to the director, as of the dates which he or she shall designate, according to form prescribed by him or her, verified by the president, manager or cashier and attested by at least two directors, which shall exhibit under appropriate heads the resources and liabilities of such corporation. The dates designated by the director shall be the dates designated by the comptroller of the currency of the United States for reports of national banking associations.
     Every such corporation shall also make such special reports as the director shall call for.

Sec. 169   RCW 30.08.190 and 1995 c 344 s 4 and 1995 c 134 s 6 are each reenacted and amended to read as follows:
     (1) Every regular report shall be filed with the director within thirty days from the date of issuance of the notice. Every special report shall be filed with the director within such time as shall be specified by him or her in the notice therefor.
     (2) The director shall provide a copy of any regular report free of charge to any person that submits a written request for the report.
     (3) Every bank ((and trust company)) which fails to file any report, required to be filed under subsection (1) of this section and within the time specified, shall be subject to a penalty of fifty dollars per day for each day's delay. A civil action for the recovery of any such penalty may be brought by the attorney general in the name of the state.

Sec. 170   RCW 30.12.010 and 1994 c 256 s 54 and 1994 c 92 s 62 are each reenacted and amended to read as follows:
     Every bank ((and trust company)) shall be managed by not less than five directors, who need not be residents of this state. Directors shall be elected by the stockholders and hold office for such term as is specified in the articles of incorporation, not exceeding three years, and until their successors are elected and have qualified. In the first instance the directors shall be those named in the articles of incorporation and afterwards, those elected at the annual meeting of the stockholders to be held at least once each year on a day to be specified by the bank's ((or trust company's)) bylaws. Shareholders may not cumulate their votes unless the articles of incorporation specifically so provide. If for any cause no election is held at that time, it may be held at an adjourned meeting or at a subsequent meeting called for that purpose in the manner prescribed by the corporation's bylaws. The directors shall meet at least once each quarter and whenever required by the director. A majority of the then serving board of directors shall constitute a quorum for the transaction of business. At all stockholders' meetings, each share shall be entitled to one vote, unless the articles of incorporation provide otherwise. Any stockholder may vote in person or by written proxy.
     Each director, so far as the duty devolves upon him or her, shall diligently and honestly administer the affairs of such corporation and shall not knowingly violate or willingly permit to be violated any provision of law applicable to such corporation. Vacancies in the board of directors shall be filled by the board.

Sec. 171   RCW 30.12.020 and 1994 c 256 s 55 are each amended to read as follows:
     All meetings of the stockholders of any bank ((or trust company)), except organization meetings and meetings held with the consent of all stockholders, must be held in the county in which the head office or any branch of the corporation is located. Meetings of the directors of any bank ((or trust company)) may be held either within or without this state. Every such corporation shall keep records in which shall be recorded the names and residences of the stockholders thereof, the number of shares held by each, and also the transfers of stock, showing the time when made, the number of shares and by whom transferred. In all actions, suits and proceedings, said records shall be prima facie proof of the facts shown therein. All of the corporate books, including the certificate book, stockholders' ledger and minute book or a copy thereof shall be kept at the corporation's principal place of business. Any books, record, and minutes may be in written form or any other form capable of being converted to written form within a reasonable time.

Sec. 172   RCW 30.12.025 and 1986 c 279 s 32 are each amended to read as follows:
     Any person who has been a shareholder of record at least six months immediately preceding his or her demand or who is the holder of record of at least five percent of all the outstanding shares of a bank ((or trust company)), upon written demand stating the purpose thereof, has the right to examine, in person, or by agent or attorney, at any reasonable time or times, for any proper purpose, the bank's ((or trust company's)) minutes of the proceedings of its shareholders, its shareholder records, and its existing publicly available records. The person is entitled to make extracts therefrom, except that the person is not entitled to view or make extracts of any portion of minutes that refer or relate to information which is confidential.
     Any officer or agent who, or a bank ((or trust company)) that, refuses to allow any such shareholder or his or her agent or attorney, to examine and make extracts from its minutes of the proceedings of its shareholders, record of shareholders, or existing publicly available books and records, for any proper purpose, shall be liable to the shareholder for actual damages or other remedy afforded the shareholder by law.
     It is a defense to any action for penalties under this section that the person suing therefor has, within two years: (1) Sold or offered for sale any list of shareholders for shares of such bank ((or trust company)) or any other bank ((or trust company)); (2) aided or abetted any person in procuring any list of shareholders for any such purpose; (3) improperly used any information secured through any prior examination of existing publicly available books and records, or minutes, or record of shareholders of such bank ((or trust company)) or any other bank ((or trust company)); or (4) not acted in good faith or for a proper purpose in making his or her demand.
     Nothing in this section impairs the power of any court of competent jurisdiction, upon proof by a shareholder of proper purpose, irrespective of the period of time during which the shareholder has been a shareholder of record, and irrespective of the number of shares held by him or her, to compel the production for examination by the shareholder of the existing publicly available books and records, minutes, and record of shareholders of a bank ((or trust company)).
     Upon the written request of any shareholder of a bank ((or trust company)), the bank ((or trust company)) shall mail to the shareholder its most recent financial statements showing in reasonable detail its assets and liabilities and the results of its operations. As used in this section, "shareholder" includes the holder of voting trust certificates for shares.

Sec. 173   RCW 30.12.030 and 1994 c 92 s 63 are each amended to read as follows:
     (1) Except as otherwise permitted by the director under specified terms and conditions, the board of directors of each bank ((and trust company)) shall direct and require good and sufficient surety company fidelity bonds issued by a company authorized to engage in the insurance business in the state of Washington on all active officers and employees, whether or not they draw salary or compensation, which bonds shall provide for indemnity to such bank ((or trust company)), on account of any losses sustained by it as the result of any dishonest, fraudulent or criminal act or omission committed or omitted by them acting independently or in collusion or combination with any person or persons. Such bonds may be individual, schedule or blanket form, and the premiums therefor shall be paid by the bank ((or trust company)).
     (2) The said directors shall also direct and require suitable insurance protection to the bank ((or trust company)) against burglary, robbery, theft and other similar insurance hazards to which the bank ((or trust company)) may be exposed in the operations of its business on the premises or elsewhere.
     The said directors shall be responsible for prescribing at least once in each year the amount or penal sum of such bonds or policies and the sureties or underwriters thereon, after giving due consideration to all known elements and factors constituting such risk or hazard. Such action shall be recorded in the minutes of the board of directors.

Sec. 174   RCW 30.12.040 and 2010 c 88 s 20 are each amended to read as follows:
     (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:
     (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.

Sec. 175   RCW 30.12.0401 and 2010 c 88 s 21 are each amended to read as follows:
     The director may serve written notice of charges under RCW 30.12.040 (as recodified by this act) 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 (as recodified by this act).

Sec. 176   RCW 30.12.042 and 2010 c 88 s 22 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((, 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 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((, 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. 177   RCW 30.12.044 and 2010 c 88 s 23 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((, 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((, 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. 178   RCW 30.12.047 and 2010 c 88 s 24 are each amended to read as follows:
     Any present or former director, officer, or employee of a bank((, 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((, 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((, 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((, 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. 179   RCW 30.12.060 and 1994 c 92 s 69 are each amended to read as follows:
     (1) Any bank ((or trust company)) shall be permitted to make loans to any employee of such corporation, or to purchase, discount or acquire, as security or otherwise, the obligation or debt of any employee to any other person, to the same extent as if the employee were in no way connected with the corporation. Any bank ((or trust company)) shall be permitted to make loans to any officer of such corporation, or to purchase, discount or acquire, as security or otherwise, the obligation or debt of any officer to any other person: PROVIDED, That the total value of the loans made and obligation acquired for any one officer shall not exceed such amount as shall be prescribed by the director pursuant to regulations adopted in accordance with the Administrative Procedure Act, chapter 34.05 RCW, as now or hereafter amended: AND PROVIDED FURTHER, That no such loan shall be made, or obligation acquired, in excess of five percent of a bank's capital and unimpaired surplus or twenty-five thousand dollars, whichever is larger, unless a resolution authorizing the same shall be adopted by a vote of a majority of the board of directors of such corporation prior to the making of such loan or discount, and such vote and resolution shall be entered in the corporate minutes. In no event shall the loan or obligation acquired exceed five hundred thousand dollars in the aggregate without prior approval by a majority of the corporation's board of directors. No loan in excess of five percent of a bank's capital and unimpaired surplus or twenty-five thousand dollars, whichever is larger, shall be made by any bank ((or trust company)) to any director of such corporation nor shall the note or obligation in excess of five percent of a bank's capital and unimpaired surplus or twenty-five thousand dollars, whichever is larger, of such director be discounted by any such corporation, or by any officer or employee thereof in its behalf, unless a resolution authorizing the same shall be adopted by a vote of a majority of the entire board of directors of such corporation exclusive of the vote of such interested director, and such vote and resolution shall be entered in the corporate minutes. In no event may the loan or obligation acquired exceed five hundred thousand dollars in the aggregate without prior approval by a majority of the corporation's board of directors.
     Each bank ((or trust company)) shall at such times and in such form as may be required by the director, report to the director all outstanding loans to directors of such bank ((or trust company)).
     The amount of any endorsement or agreement of suretyship or guaranty of any such director to the corporation shall be construed to be a loan within the provisions of this section. Any modification of the terms of an existing obligation (excepting only such modifications as merely extend or renew the indebtedness) shall be construed to be a loan within the meaning of this section.
     (2) "Unimpaired surplus," as used in this section, consists of the sum of the following amounts:
     (a) Fifty percent of the reserve for possible loan losses;
     (b) Subordinated notes and debentures;
     (c) Surplus;
     (d) Undivided profits; and
     (e) Reserve for contingencies and other capital reserves, excluding accrued dividends on preferred stock.

Sec. 180   RCW 30.12.070 and 2010 c 88 s 25 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. 181   RCW 30.12.090 and 2010 c 88 s 26 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((, 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(([,] 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((, trust company,)) or holding company, is guilty of a class B felony punishable according to chapter 9A.20 RCW.

Sec. 182   RCW 30.12.100 and 2010 c 88 s 27 are each amended to read as follows:
     Every officer, director, or employee or agent of any bank((, 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((, 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. 183   RCW 30.12.110 and 1986 c 279 s 35 are each amended to read as follows:
     No officer, director, agent, employee or stockholder of any bank ((or trust company)) shall, directly or indirectly, receive a bonus, commission, compensation, remuneration, gift, speculative interest or gratuity of any kind from any person, firm or corporation other than the bank or as allowed by RCW 30.12.115 (as recodified by this act) for granting, procuring or endeavoring to procure, for any person, firm or corporation, any loan by or out of the funds of such bank ((or trust company)) or the purchase or sale of any securities or property for or on account of such bank ((or trust company)) or for granting or procuring permission for any person, firm or corporation to overdraw any account with such bank ((or trust company)). Any person violating this section shall be guilty of a gross misdemeanor.

Sec. 184   RCW 30.12.180 and 1994 c 92 s 72 are each amended to read as follows:
     Whenever the director shall notify the board of directors of a bank ((or trust company)) to levy an assessment upon the stock of such corporation and the holders of two-thirds of the stock shall consent thereto, such board shall, within ten days from the issuance of such notice, adopt a resolution for the levy of such assessment, and shall immediately upon the adoption of such resolution serve notice upon each stockholder, personally or by mail, at his or her last known address, to pay such assessment; and that if the same be not paid within twenty days from the date of the issuance of such notice, his or her stock will be subject to sale and all amounts previously paid thereon shall be subject to forfeiture. If any stockholder fail within said twenty days to pay the assessment as provided in this section, it shall be the duty of the board of directors to cause a sufficient amount of the capital stock of such stockholder to be sold to make good the deficiency. The sale shall be held at such time and place as shall be designated by the board of directors and shall be either public or private, as the board shall deem best. At any time after the expiration of sixty days from the expiration of said twenty-day period the director may require any stock upon which the assessment remains unpaid to be canceled and deducted from the capital of the corporation. If such cancellation shall reduce the capital of the corporation below the minimum required by this title or its articles of incorporation the capital shall, within thirty days thereafter be increased to the required amount by original subscription, in default of which the director may take possession of such corporation in the manner provided by law in case of insolvency.

Sec. 185   RCW 30.12.190 and 2010 c 88 s 28 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, 30.04.300, 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,)) 30.08.140, 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, 30.44.010, 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 (as recodified by this act), 43.320.060, 43.320.070, 43.320.080, and 43.320.100, and 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.
     (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 or remain a board director, officer, or employee of any bank, 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. 186   RCW 30.12.205 and 1986 c 279 s 37 are each amended to read as follows:
     Subject to any restrictions in its articles of incorporation and in accordance with and subject to the provisions of RCW 30.08.088 (as recodified by this act), the board of directors of a bank ((or trust company)) may grant options entitling the holders thereof to purchase from the corporation shares of any class of its stock. The instrument evidencing the option shall state the terms upon which, the time within which, and the price at which such shares may be purchased from the corporation upon the exercise of such option. If any such options are granted by contract, or are to be granted pursuant to a plan, to officers or employees of the bank ((or trust company)), then the contract or the plan shall require the approval, within twelve months of its approval by the board of directors, of the holders of a majority of its voting capital stock. Subsequent amendments to any such contract or plan which do not change the price or duration of any option, the maximum number of shares which may be subject to options, or the class of employees eligible for options may be made by the board of directors without further shareholder approval.
     Subject to any restrictions in its articles of incorporation, the board of directors of a bank ((or trust company)) shall have the authority to enter into any plans or contracts providing for compensation for its officers and employees, including, but not being limited to, incentive bonus contracts, stock purchase or bonus plans and profit sharing plans.

Sec. 187   RCW 30.12.220 and 1979 c 106 s 8 are each amended to read as follows:
     The articles of incorporation of any bank ((or trust company)) organized under this title may limit or permit the preemptive rights of a shareholder to acquire unissued shares of the corporation and may thereafter by amendment limit, deny, or grant to shareholders of any class of stock the preemptive right to acquire additional shares of the corporation whether then or thereafter authorized.

Sec. 188   RCW 30.12.240 and 2010 c 88 s 29 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 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. 189   RCW 30.16.010 and 1955 c 33 s 30.16.010 are each amended to read as follows:
     No director, officer, agent or employee of any bank ((or trust company)) shall certify a check unless the amount thereof actually stands to the credit of the drawer on the books of such corporation and when certified must be charged to the account of the drawer. Every violation of this provision shall be a gross misdemeanor. Any such check so certified by a duly authorized person shall be a good and valid obligation of the bank ((or trust company)) in the hands of an innocent holder.

Sec. 190   RCW 30.20.005 and 1994 c 92 s 74 are each amended to read as follows:
     Deposits made by individuals in a national bank, state bank((, trust company,)) or other banking institution subject to the supervision of the director are governed by chapter 30.22 RCW (as recodified by this act).

Sec. 191   RCW 30.20.025 and 1985 c 305 s 2 are each amended to read as follows:
     Each person making a deposit in a bank ((or trust company)) shall be given a receipt that shall show or in conjunction with the deposit slip can be used to trace the name of the bank ((or trust company)), the name of the account, the account number, the date, and the amount deposited. If specifically requested by the depositor when making the deposit, the receipt must expressly show the name of the bank ((or trust company)), the date, the amount deposited, plus either the name of the account or the account number or both the name of the account and the account number.

Sec. 192   RCW 30.20.060 and 1996 c 2 s 8 are each amended to read as follows:
     A bank ((or trust company)) shall repay all deposits to the depositor or his or her lawful representative when required at such time or times and with such interest as the regulations of the corporation shall prescribe. These regulations shall be prescribed by the directors of the bank ((or trust company)) and may contain provisions with respect to the terms and conditions upon which any account or deposit will be maintained by the bank ((or trust company)). These regulations and any amendments shall be available to depositors on request, and shall be posted in a conspicuous place in the principal office and each branch in this state or, if the regulations and any amendments are not so posted, a description of changes in the regulations after an account is opened shall be mailed to depositors pursuant to 12 U.S.C. Sec. 4305(c) or otherwise. All these rules and regulations and all amendments shall be binding upon all depositors. At the option of the bank, a passbook shall be issued to each savings account depositor, or a record maintained in lieu of a passbook. A deposit contract may be adopted by the bank ((or trust company)) in lieu of or in addition to account rules and regulations and shall be enforceable and amendable in the same manner as account rules and regulations or as provided in the deposit contract. A copy of the contract shall be provided to the depositor.

Sec. 193   RCW 30.20.090 and 1994 c 92 s 75 are each amended to read as follows:
     Notice to any national bank, state bank, ((trust company, mutual)) savings bank, or bank under the supervision of the director, doing business in this state of an adverse claim to a deposit standing on its books to the credit of any person may be disregarded without liability by said bank ((or trust company)) unless said adverse claimant shall also either procure a restraining order, injunction or other appropriate process against said bank ((or trust company)) from a court of competent jurisdiction in a cause therein instituted by him or her wherein the person to whose credit the deposit stands is made a party and served with summons or shall execute to said bank ((or trust company)), in form and with sureties acceptable to it, a bond, in an amount which is double either the amount of said deposit or said adverse claim, whichever is the lesser, indemnifying said bank ((or trust company)) from any and all liability, loss, damage, costs and expenses, for and on account of the payment of such adverse claim or the dishonor of the check or other order of the person to whose credit the deposit stands on the books of said bank ((or trust company)): PROVIDED, That where the person to whose credit the deposit stands is a fiduciary for such adverse claimant, and the facts constituting such relationship, and also the facts showing reasonable cause of belief on the part of said claimant that the said fiduciary is about to misappropriate said deposit, are made to appear by the affidavit of such claimant, the bank ((or trust company)) shall without liability refuse to deliver such property for a period of not more than five business days from the date that the bank received the adverse claimant's affidavit, without liability for the sufficiency or truth of the facts alleged in the affidavit, after which time the claim shall be treated as any other claim under this section.
     This section shall not apply to accounts subject to chapter 30.22 RCW (as recodified by this act).

Sec. 194   RCW 30.22.040 and 2011 c 336 s 747 and 2011 c 303 s 4 are each reenacted and amended to read as follows:
     Unless the context of this chapter otherwise requires, the terms contained in this section have the meanings indicated.
     (1) "Account" means a contract of deposit between a depositor or depositors and a financial institution; the term includes a checking account, savings account, certificate of deposit, savings certificate, share account, savings bond, and other like arrangements.
     (2) "Actual knowledge" means written notice to a manager of a branch of a financial institution, or an officer of the financial institution in the course of his or her employment at the branch, pertaining to funds held on deposit in an account maintained by the branch received within a period of time which affords the financial institution a reasonable opportunity to act upon the knowledge.
     (3) "Agency account" means an account to which funds may be deposited and from which payments may be made by an agent designated by a depositor. In the event there is more than one depositor named on an account, each depositor may designate the same or a different agent for the purpose of depositing to or making payments of funds from a depositor's account.
     (4) "Agent" means a person designated by a depositor or depositors in a contract of deposit or other document to have the authority to deposit and to make payments from an account in the name of the depositor or depositors.
     (5) "Depositor," when utilized in determining the rights of individuals to funds in an account, means an individual who owns the funds. When utilized in determining the rights of a financial institution to make or withhold payment, and/or to take any other action with regard to funds held under a contract of deposit, "depositor" means the individual or individuals who have the current right to payment of funds held under the contract of deposit without regard to the actual rights of ownership thereof by these individuals. A trust or P.O.D. account beneficiary becomes a depositor only when the account becomes payable to the beneficiary by reason of having survived the depositor or depositors named on the account, depending upon the provisions of the contract of deposit.
     (6) "Depositor's funds" or "funds of a depositor" means the amount of all deposits belonging to or made for the benefit of a depositor, less all withdrawals of the funds by the depositor or by others for the depositor's benefit, plus the depositor's prorated share of any interest or dividends included in the current balance of the account and any proceeds of deposit life insurance added to the account by reason of the death of a depositor.
     (7) "Director" means the director of the department of financial institutions or his or her designee.
     (8) "Financial institution" means a bank, trust company, mutual savings bank, savings and loan association, or credit union authorized to do business and accept deposits in this state under state or federal law.
     (9) "Individual" means a human being; "person" includes an individual, corporation, partnership, limited partnership, joint venture, trust, or other entity recognized by law to have separate legal powers.
     (10) "Joint account with right of survivorship" means an account in the name of two or more depositors and which provides that the funds of a deceased depositor become the property of one or more of the surviving depositors.
     (11) "Joint account without right of survivorship" means an account in the name of two or more depositors and which contains no provision that the funds of a deceased depositor become the property of the surviving depositor or depositors.
     (12) "Payment(s)" of sums on deposit includes withdrawal, payment by check or other directive of a depositor or his or her agent, any pledge of sums on deposit by a depositor or his or her agent, any set-off or reduction or other disposition of all or part of an account balance, and any payments to any person under RCW 30.22.120, 30.22.140, 30.22.150, 30.22.160, 30.22.170, 30.22.180, 30.22.190, 30.22.200, and 30.22.220 (as recodified by this act).
     (13) "Promotional contest of chance" means a promotional contest conducted pursuant to RCW 9.46.0356(1)(b).
     (14) "Proof of death" means a certified or authenticated copy of a death certificate, or photostatic copy thereof, purporting to be issued by an official or agency of the jurisdiction where the death purportedly occurred, or a certified or authenticated copy of a record or report of a governmental agency, domestic or foreign, that a person is dead. In either case, the proofs constitute prima facie proof of the fact, place, date, and time of death, and identity of the decedent and the status of the dates, circumstances, and places disclosed by the record or report.
     (15) "Request" means a request for withdrawal, or a check or order for payment, which complies with all conditions of the account, including special requirements concerning necessary signatures and regulations of the financial institution; but if the financial institution conditions withdrawal or payment on advance notice, for purposes of this chapter the request for withdrawal or payment is treated as immediately effective and a notice of intent to withdraw is treated as a request for withdrawal.
     (16) "Single account" means an account in the name of one depositor only.
     (17) "Trust or P.O.D. account beneficiary" means a person or persons, other than a codepositor, who has or have been designated by a depositor or depositors to receive the depositor's funds remaining in an account upon the death of a depositor or all depositors.
     (18) "Trust and P.O.D. accounts" means accounts payable on request to a depositor during the depositor's lifetime, and upon the depositor's death to one or more designated beneficiaries, or which are payable to two or more depositors during their lifetimes, and upon the death of all depositors to one or more designated beneficiaries. The term "trust account" does not include deposits by trustees or other fiduciaries where the trust or fiduciary relationship is established other than by a contract of deposit with a financial institution.
     (19) "Withdrawal" means payment to a person pursuant to check or other directive of a depositor.

Sec. 195   RCW 30.22.041 and 1995 c 186 s 1 are each amended to read as follows:
     The definitions in this section apply throughout this section and RCW 30.22.240 and 30.22.245 (as recodified by this act).
     (1) "Customer" means any person, partnership, limited partnership, corporation, trust, or other legal entity that is transacting or has transacted business with a financial institution, that is using or has used the services of an institution, or for which a financial institution has acted or is acting as a fiduciary.
     (2) "Financial institution" means state and national banks and trust companies, state and federal savings banks, state and federal savings and loan associations, and state and federal credit unions.
     (3) "Law enforcement officer" means an employee of a public law enforcement agency organized under the authority of a county, city, or town and designated to obtain deposit account information by the chief law enforcement officer of that agency.

Sec. 196   RCW 30.22.120 and 1981 c 192 s 12 are each amended to read as follows:
     In making payments of funds deposited in an account, a financial institution may rely conclusively and entirely upon the form of the account and the terms of the contract of deposit at the time the payments are made. A financial institution is not required to inquire as to either the source or the ownership of any funds received for deposit to an account, or to the proposed application of any payments made from an account. Unless a financial institution has actual knowledge of the existence of dispute between depositors, beneficiaries, or other persons claiming an interest in funds deposited in an account, all payments made by a financial institution from an account at the request of any depositor to the account and/or the agent of any depositor to the account in accordance with this section and RCW 30.22.140, 30.22.150, 30.22.160, 30.22.170, 30.22.180, 30.22.190, 30.22.200, and 30.22.220 (as recodified by this act) shall constitute a complete release and discharge of the financial institution from all claims for the amounts so paid regardless of whether or not the payment is consistent with the actual ownership of the funds deposited in an account by a depositor and/or the actual ownership of the funds as between depositors and/or the beneficiaries of P.O.D. and trust accounts, and/or their heirs, successors, personal representatives, and assigns.

Sec. 197   RCW 30.22.130 and 1981 c 192 s 13 are each amended to read as follows:
     The protection accorded to financial institutions under RCW 30.22.120, 30.22.140, 30.22.150, 30.22.160, 30.22.170, 30.22.180, 30.22.190, 30.22.200, 30.22.210, and 30.22.220 (as recodified by this act) shall have no bearing on the actual rights of ownership to deposited funds by a depositor, and/or between depositors, and/or by and between beneficiaries of trust and P.O.D. accounts, and their heirs, successors, personal representatives, and assigns.

Sec. 198   RCW 30.22.190 and 1989 c 220 s 3 are each amended to read as follows:
     In each case, where it is provided in RCW 30.22.180 (as recodified by this act) that a financial institution may make payment of funds deposited in an account to the personal representative of the estate of a deceased depositor or beneficiary, the financial institution may make payment of the funds to the following persons under the circumstances provided:
     (1) In those instances where the deceased depositor left a surviving spouse, and the deceased depositor and the surviving spouse shall have executed a community property agreement which by its terms would include funds of the deceased depositor remaining in the account, a financial institution may make payment of all funds in the name of the deceased spouse to the surviving spouse upon receipt of a certified copy of the community property agreement as recorded in the office of a county auditor of the state and an affidavit of the surviving spouse that the community property agreement was validly executed and in full force and effect upon the death of the depositor.
     (2) In those instances where the balance of the funds in the name of a deceased depositor does not exceed two thousand five hundred dollars, payment of the decedent's funds remaining in the account may be made to the surviving spouse, next of kin, funeral director, or other creditor who may appear to be entitled thereto upon receipt of proof of death and an affidavit to the effect that no personal representative has been appointed for the deceased depositor's estate. As a condition to the payment, a financial institution may require such waivers, indemnity, receipts, and acquittance and additional proofs as it may consider proper.
     (3) In those instances where the person entitled presents an affidavit which meets the requirements of chapter 11.62 RCW.
     A person receiving a payment from a financial institution pursuant to subsections (2) and (3) of this section is answerable and accountable therefor to any personal representative of the deceased depositor's estate wherever and whenever appointed.

Sec. 199   RCW 30.22.220 and 1981 c 192 s 22 are each amended to read as follows:
     Notwithstanding RCW 30.22.210 (as recodified by this act), a financial institution may, without liability, pay or permit withdrawal of any funds on deposit in an account to a depositor and/or agent of a depositor and/or trust or P.O.D. account beneficiary, and/or other person claiming an interest therein, even when the financial institution has actual knowledge of the existence of the dispute, if the adverse claimant shall execute to the financial institution, in form and with security acceptable to it, a bond in an amount which is double either the amount of the deposit or the adverse claim, whichever is the lesser, indemnifying the financial institution from any and all liability, loss, damage, costs, and expenses, for and on account of the payment of the adverse claim or the dishonor of the check or other order of the person in whose name the deposit stands on the books of the financial institution: PROVIDED, That where the person in whose name the deposit stands is a fiduciary for the adverse claimant, and the facts constituting such relationship, and also the facts showing reasonable cause of belief on the part of the claimant that the fiduciary is about to misappropriate the deposit, are made to appear by the affidavit of the claimant, the financial institution shall, without liability, refuse to deliver the property for a period of not more than five business days from the date that the financial institution receives the adverse claimant's affidavit, without liability for the sufficiency or truth of the facts alleged in the affidavit, after which time the claim shall be treated as any other claim under this section.

Sec. 200   RCW 30.32.010 and 1955 c 33 s 30.32.010 are each amended to read as follows:
     Any bank((, trust company)) or mutual savings bank may become a member of the federal reserve system of the United States and to that end may comply with all laws of the United States and all rules, regulations and requirements promulgated pursuant thereto, including the investment of its funds in the stock of a federal reserve bank; and any bank((, trust company)) or mutual savings bank, whether a member of the federal reserve system or not, may invest its funds in the stock of the Federal Deposit Insurance Corporation created by the act of congress approved June 16, 1933, and may participate in the insurance of bank deposits and obligate itself for the cost of such participation by assessments or otherwise in accordance with the laws of the United States.

Sec. 201   RCW 30.32.020 and 1955 c 33 s 30.32.020 are each amended to read as follows:
     Any savings and loan association, building and loan association, bank, ((trust company,)) savings bank, or mutual savings bank may become a member of and invest its funds in the bonds and/or the capital stock of a federal home loan bank, and vote such stock in the manner prescribed by its board of directors.

Sec. 202   RCW 30.32.030 and 1955 c 33 s 30.32.030 are each amended to read as follows:
     Any such bank, ((trust company,)) insurance company, or association, may borrow from any home loan bank and as security for borrowing may pledge therewith the notes, mortgages, trust deeds which it holds as shall be required by federal law, and under such rules and regulations as shall be adopted by a federal home loan bank.

Sec. 203   RCW 30.32.040 and 1955 c 33 s 30.32.040 are each amended to read as follows:
     Any such bank, ((trust company,)) insurance company, or association, may designate a federal home loan bank as a depositary for its funds.

Sec. 204   RCW 30.36.010 and 1955 c 33 s 30.36.010 are each amended to read as follows:
     Capital notes or debentures, where used in this chapter, shall mean notes or other obligations issued by a bank((, trust company)) or mutual savings bank, for money obtained and used as additional capital or to replace impaired capital stock: PROVIDED, Such notes or other obligations are subordinate to the rights of depositors and other creditors.
     The term "capital" where used in this chapter shall mean capital stock and/or capital notes.

Sec. 205   RCW 30.36.020 and 1994 c 92 s 76 are each amended to read as follows:
     With the approval of the director, any bank((, trust company)) or mutual savings bank may at any time, through action of its board of directors or trustees, issue and sell its capital notes or debentures. Such capital notes or debentures shall be subordinate to the claims of depositors and other creditors. The holders of capital notes or debentures issued by a bank ((or trust company)) shall have such conversion rights as may be provided in the articles of incorporation with the approval of the director.

Sec. 206   RCW 30.36.030 and 1994 c 92 s 77 are each amended to read as follows:
     Where any bank((, trust company)) or mutual savings bank has issued and has outstanding capital notes or debentures, it may carry its capital stock on its books at a sum less than par, and it shall not be considered impaired so long as the amount of such capital notes or debentures equals or exceeds the impairment as found by the director.

Sec. 207   RCW 30.36.040 and 1994 c 92 s 78 are each amended to read as follows:
     Before such capital notes or debentures are retired or paid by the bank((, trust company)) or mutual savings bank, any existing impairment of its capital stock must be overcome or corrected to the satisfaction of the director.

Sec. 208   RCW 30.38.010 and 2013 c 76 s 12 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 (as recodified by this act) only if the conditions and filing requirements of this chapter are met and the bank was lawfully engaged in banking in this state on July 22, 2010, or the bank's in-state banking activities:
     (a) Resulted from an interstate combination pursuant to RCW 30.49.125 (as recodified by this act) or 32.32.500;
     (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) (as recodified by this act);
     (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(6); or
     (e) Resulted from interstate branching under RCW 30.38.015 (as recodified by this act).
Nothing in this section affects the authorities of alien banks as defined by RCW 30.42.020 (as recodified by this act) 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. 209   RCW 30.38.030 and 1996 c 2 s 13 are each amended to read as follows:
     (1) If authorized to engage in banking in this state under RCW 30.38.010 (as recodified by this act), an out-of-state bank may maintain and operate the branches in Washington of a Washington bank with which the out-of-state bank or its predecessors engaged in an interstate combination.
     (2) The out-of-state bank may establish or acquire and operate additional branches in Washington to the same extent that any Washington bank may establish or acquire and operate a branch in Washington under applicable federal and state law.
     (3) The out-of-state state bank may, at such branches, unless otherwise limited by the bank's home state law, exercise any powers and authorities that are authorized under the laws of this state for Washington state banks.
     (4) The out-of-state state bank may, at these branches, exercise additional powers and authorities that are authorized under the laws of its home state, only if the director determines in writing that the exercise of the additional powers and authorities in this state will not threaten the safety and soundness of banks in this state and serves the convenience and needs of Washington consumers. Washington state banks also may exercise the powers and authorities under RCW 30.08.140(16) (as recodified by this act) or 32.08.140(15).

Sec. 210   RCW 30.38.070 and 1996 c 2 s 17 are each amended to read as follows:
     (1) Any out-of-state state bank that will be the resulting bank pursuant to an interstate combination involving any bank with branches in Washington, if RCW 30.49.125(5) (as recodified by this act) does not apply, shall notify the director of the proposed combination not later than three days after the date of filing of an application for the combination with the responsible federal bank supervisory agency, and shall submit a copy of the application to the director and pay applicable application fees, if any, required by the director. In lieu of notice from the out-of-state state bank the director may accept notice from the bank's home state regulator. The director has the authority to waive any procedures required by Washington merger laws if the director finds that the provision is in conflict with the applicable federal law or in conflict with the applicable law of the state of the resulting bank.
     (2) An out-of-state state bank that has established and maintains a branch in this state pursuant to this chapter shall give at least thirty days' prior written notice or, in the case of an emergency transaction, shorter notice as is consistent with the applicable state or federal law, to the director of any transaction that would cause a change of control with respect to the bank or any bank holding company that controls the bank, with the result that an application would be required to be filed pursuant to the federal change in bank control act of 1978, as amended, 12 U.S.C. Sec. 1817(j), or the federal bank holding company act of 1956, as amended, 12 U.S.C. Sec. 1841 et seq., or any successor statutes. In lieu of notice from the out-of-state state bank the director may accept notice from the bank's home state regulator.

Sec. 211   RCW 30.42.020 and 1994 c 92 s 80 are each amended to read as follows:
     For the purposes of this chapter, the following terms shall be defined as follows:
     (1) "Alien bank" means a bank organized under the laws of a foreign country and having its principal place of business in that country, the majority of the beneficial ownership and control of which is vested in citizens of countries other than the United States of America.
     (2) "Office" means a branch or agency of an alien bank carrying on business in this state pursuant to this chapter.
     (3) "Branch" means an office of an alien bank that is exercising the powers authorized by RCW 30.42.105, 30.42.115, and 30.42.155 (as recodified by this act).
     (4) "Agency" means an office of an alien bank that is exercising the powers authorized by RCW 30.42.180 (as recodified by this act).
     (5) "Bureau" means an alien bank's operation in this state exercising the powers authorized by RCW 30.42.230 (as recodified by this act).

Sec. 212   RCW 30.42.060 and 1994 c 92 s 82 are each amended to read as follows:
     An alien bank shall not hereafter open an office in this state until it has met the following conditions:
     (1) It has filed with the director an application in such form and containing such information as shall be prescribed by the director.
     (2) It has designated the director by a duly executed instrument in writing, its agent, upon whom process in any action or proceeding arising out of a transaction with the Washington office may be served. Such service shall have the same force and effect as if the alien bank were a Washington corporation and had been lawfully served with process within the state. The director shall forward by mail, postage prepaid, a copy of every process served upon him or her under the provisions of this subdivision, addressed to the manager or agent of such bank at its office in this state.
     (3) It has allocated and assigned to its office within this state paid-in capital of not less than two hundred thousand dollars or such larger amounts as the director in his or her discretion may require.
     (4) It has filed with the director a letter from its chief executive officer guaranteeing that the alien bank's entire capital and surplus is and shall be available for all liabilities and obligations of its office doing business in this state.
     (5) It has paid the fees required by law and established by the director pursuant to RCW ((30.08.095)) 30.04.070 (as recodified by this act).
     (6) It has received from the director his or her certificate authorizing the transaction of business in conformity with this chapter.

Sec. 213   RCW 30.42.070 and 1994 c 92 s 83 are each amended to read as follows:
     The capital allocated as required in RCW 30.42.060(3) (as recodified by this act) shall be maintained within this state at all times in cash or in director approved interest bearing bonds, notes, debentures, or other obligations: (1) Of the United States or of any agency or instrumentality thereof, or guaranteed by the United States; or (2) of this state, or of a city, county, town, or other municipal corporation, or instrumentality of this state or guaranteed by this state, or such other assets as the director may approve. Such capital shall be deposited with a bank qualified to do business in and having its principal place of business within this state, or in a national bank qualified to engage in banking in this state. Such bank shall issue a written receipt addressed and delivered to the director reciting that such deposit is being held for the sole benefit of the United States domiciled creditors of such alien bank's Washington office and that the same is subject to his or her order without offset for the payment of such creditors. For the purposes of this section, the term "creditor" shall not include any other offices, branches, subsidiaries, or affiliates of such alien bank. Subject to the approval of the director, reasonable arrangements may be made for substitution of securities. So long as it shall continue business in this state in conformance with this chapter and shall remain solvent, such alien bank shall be permitted to collect all interest and/or income from the assets constituting such allocated capital.
     Should any securities so depreciate in market value and/or quality as to reduce the deposit below the amount required, additional money or securities shall be deposited promptly in amounts sufficient to meet such requirements. The director may make an investigation of the market value and of the quality of any security deposited at the time such security is presented for deposit or at any time thereafter. The director may make such charge as may be reasonable and proper for such investigation.

Sec. 214   RCW 30.42.090 and 1994 c 92 s 85 are each amended to read as follows:
     The director may give or withhold his or her approval of an application by an alien bank to establish an office in this state at his or her discretion. The director's decision shall be based on the information submitted to his or her office in the application required by RCW 30.42.060 (as recodified by this act) and such additional investigation as the director deems necessary or appropriate. Prior to granting approval to said application, the director shall have ascertained to his or her satisfaction that all of the following are true:
     (1) The proposed location offers a reasonable promise of adequate support for the proposed office;
     (2) The proposed office is not being formed for other than legitimate objects;
     (3) The proposed officers of the proposed office have sufficient banking experience and ability to afford reasonable promise of successful operation;
     (4) The reputation and financial standing of the alien bank is such as to command the confidence and warrant belief that the business of the proposed office will be conducted honestly and efficiently in accordance with the intent and purpose of this chapter, as set forth in RCW 30.42.010 (as recodified by this act);
     (5) The principal purpose of establishing such office shall be within the intent of this chapter.
     The director shall not grant an application for an office of an alien bank unless the law of the foreign country under which laws the alien bank is organized permits a bank with its principal place of business in this state to establish in that foreign country a branch, agency or similar operation.

Sec. 215   RCW 30.42.105 and 1994 c 92 s 87 are each amended to read as follows:
     An approved branch of an alien bank shall have the same power to make loans and guarantee obligations as a state bank chartered pursuant to this title ((30 RCW)): PROVIDED, HOWEVER, That the base for computing the applicable loan limitation shall be the entire capital and surplus of the alien bank. The director may adopt rules limiting the amount of loans to full-time employees of the branch.

Sec. 216   RCW 30.42.115 and 1994 c 92 s 88 are each amended to read as follows:
     (1) Any branch of an alien bank that received approval of its branch application pursuant to RCW 30.42.090 (as recodified by this act), or that had filed its branch application pursuant to RCW 30.42.060 (as recodified by this act), on or before July 27, 1978, and any approved branch of an alien bank that has designated Washington as its home state pursuant to section 5 of the International Banking Act of 1978, shall have the same power to solicit and accept deposits as a state bank chartered pursuant to this title ((30 RCW)), except that acceptance of initial deposits of less than one hundred thousand dollars shall be limited to deposits of the following:
     (a) Any business entity, including any corporation, partnership, association, or trust, that engages in commercial activity for profit: PROVIDED, That there shall be excluded from this category any such business entity that is organized under the laws of any state or the United States, is majority-owned by United States citizens or residents, and has total assets, including assets of majority owned subsidiaries, of less than one million five hundred thousand dollars as of the date of the initial deposit;
     (b) Any governmental unit, including the United States government, any state government, any foreign government and any political subdivision or agency of the foregoing;
     (c) Any international organization which is composed of two or more nations;
     (d) Any draft, check, or similar instrument for the transmission of funds issued by the branch;
     (e) Any depositor who is not a citizen of the United States and who is not a resident of the United States at the time of the initial deposit;
     (f) Any depositor who established a deposit account on or before July 1, 1982, and who has continuously maintained the deposit account since that date: PROVIDED, That this subparagraph (f) of this subsection shall be effective only until July 1, 1985;
     (g) Any other person: PROVIDED, That the amount of deposits under this subparagraph (g) of this subsection may not exceed four percent of the average of the branch's deposits for the last thirty days of the most recent calendar quarter, excluding deposits in the branch of other offices, branches, agencies, or wholly owned subsidiaries of the alien bank.
     (2) As used in subsection (1) of this section, "initial deposit" means the first deposit transaction between a depositor and the branch. Different deposit accounts that are held by a depositor in the same right and capacity may be added together for purposes of determining the dollar amount of that depositor's initial deposit.
     (3) Approved branches of alien banks, other than those described in subsection (1) of this section, may solicit and accept deposits only from foreign governments and their agencies and instrumentalities, persons, or entities conducting business principally at their offices or establishments abroad, and such other deposits that:
     (a) Are to be transmitted abroad;
     (b) Consist of collateral or funds to be used for payment of obligations to the branch;
     (c) Consist of the proceeds of collections abroad that are to be used to pay for exported or imported goods or for other costs of exporting or importing or that are to be periodically transferred to the depositor's account at another financial institution;
     (d) Consist of the proceeds of extensions of credit by the branch; or
     (e) Represent compensation to the branch for extensions of credit or services to the customer.
     (4) A branch may accept deposits, subject to the limitations set forth in subsections (1) and (3) of this section, only upon the same terms and conditions (including nature and extent of such deposits, withdrawal, and the payment of interest thereon) that banks organized under the laws of this state which are members of the Federal Reserve System may accept such deposits. Any branch that is not subject to reserve requirements under regulations of the Federal Reserve Board shall maintain deposit reserves in this state, pursuant to rules adopted by the director, to the same extent they must be maintained by banks organized under the laws of this state which are members of the Federal Reserve System.

Sec. 217   RCW 30.42.120 and 1994 c 92 s 89 are each amended to read as follows:
     A branch shall not commence to transact in this state the business of accepting deposits or transact such business thereafter unless it has met the following requirements:
     (1) It has obtained federal deposit insurance corporation insurance covering its eligible deposit liabilities within this state, or in lieu thereof, made arrangements satisfactory to the director for maintenance within this state of additional capital equal to not less than five percent of its deposit liabilities, computed on the basis of the average daily net deposit balances covering semimonthly periods as prescribed by the director. Such additional capital shall be deposited in the manner provided in RCW 30.42.070 (as recodified by this act).
     (2) It holds in this state currency, bonds, notes, debentures, drafts, bills of exchange, or other evidences of indebtedness or other obligations payable in the United States or in United States funds or, with the approval of the director, in funds freely convertible into United States funds or such other assets as are approved by the director, in an amount not less than one hundred percent of the aggregate amount of liabilities of such alien bank payable at or through its office in this state. When calculating the value of the assets so held, credit shall be given for the amounts deposited pursuant to RCW 30.42.060(3) and 30.42.120(1) (as recodified by this act), but there shall be excluded all amounts due from the head office and any other branch, agency, or other office or wholly-owned subsidiary of the bank, except those amounts due from such offices or subsidiaries located within the United States and payable in United States dollars.
     (3) If deposits are not insured by the federal deposit insurance corporation, then that fact shall be disclosed to all depositors pursuant to rules of the director.
     (4) If the branch conducts an international banking facility, the deposits of which are exempt from reserve requirements of the federal reserve banking system, the liabilities of that facility shall be excluded from the deposit and other liabilities of the branch for the purposes of subsection (1) of this section.

Sec. 218   RCW 30.42.130 and 1994 c 92 s 90 are each amended to read as follows:
     The director may take possession of the office of an alien bank for the reasons stated and in the manner provided in chapter 30.44 RCW (as recodified by this act). Upon the director taking such possession of a branch, no deposit liabilities of which are insured by the federal deposit insurance corporation, the amounts deposited pursuant to RCW 30.42.120(1) (as recodified by this act) shall thereupon become the property of the director, free and clear of any and all liens and other claims, and shall be held by the director in trust for the United States domiciled depositors of the office in this state of such alien bank. Upon obtaining the approval of the superior court of Thurston county, the director shall reduce such deposited capital to cash and as soon as practicable distribute it to such depositors.
     If sufficient cash is available, such distribution shall be in equal amounts to each such depositor: PROVIDED, That no such depositor receives more than the amount of his or her deposit or an amount equal to the maximum amount insured by the federal deposit insurance corporation, whichever is less. If sufficient cash is not available, such distribution shall be on a pro rata basis to each such depositor: PROVIDED, That no such depositor receives more than the maximum amount insured by the federal deposit insurance corporation. If any cash remains after such distribution, it shall be distributed pro rata to those depositors whose deposits have not been paid in full: PROVIDED, That no depositor receives more than the amount of his deposit. For purposes of this section, the term "depositor" shall not include any other offices, subsidiaries or affiliates of such alien bank.
     The term "deposit" as used in this section shall mean the unpaid balance of money or its equivalent received or held by the branch in the usual course of its business and for which it has given or is obligated to give credit, either conditionally or unconditionally to a demand, time or savings account, or which is evidenced by its certificate of deposit, or a check or draft drawn against a deposit account and certified by the branch, or a letter of credit or traveler's checks on which the branch is primarily liable.
     Claims of depositors and creditors shall be made and disposed of in the manner provided in chapter 30.44 RCW (as recodified by this act) in the event of insolvency or inability of the bank to pay its creditors in this state. The capital deposit of the bank shall be available for claims of depositors and creditors. The claims of depositors and creditors shall be paid from the capital deposit in the following order or priority:
     (1) Claims of depositors not paid from the amounts deposited pursuant to RCW 30.42.120(1) (as recodified by this act);
     (2) Claims of Washington domiciled creditors;
     (3) Other creditors domiciled in the United States; and
     (4) Creditors domiciled in foreign countries.
     The director shall proceed in accordance with and have all the powers granted by chapter 30.44 RCW (as recodified by this act).

Sec. 219   RCW 30.42.155 and 1982 c 95 s 5 are each amended to read as follows:
     (1) In addition to the taking of deposits and making of loans as provided in this chapter, a branch of an alien bank shall have the power only to carry out these other activities:
     (a) Borrow funds from banks and other financial institutions;
     (b) Make investments to the same extent as a state bank chartered pursuant to this title ((30 RCW));
     (c) Buy and sell foreign exchange;
     (d) Receive checks, bills, drafts, acceptances, notes, bonds, coupons, and other securities for collection abroad and collect such instruments in the United States for customers abroad;
     (e) Hold securities in safekeeping for, or buy and sell securities upon the order and for the risk of, customers abroad;
     (f) Act as paying agent for securities issued by foreign governments or other organizations organized under foreign law and not qualified under the laws of the United States, or of any state or the District of Columbia, to do business in the United States;
     (g) In order to prevent loss on debts previously contracted a branch may acquire shares in a corporation: PROVIDED, That the shares are disposed of as soon as practical but in no event later than two years from the date of acquisition;
     (h) Issue letters of credit and create acceptances;
     (i) Act as paying agent or trustee in connection with revenue bonds issued pursuant to chapter 39.84 RCW, in which the user is: (i) A corporation organized under the laws of a country other than the United States, or a subsidiary or affiliate owned or controlled by such a corporation; or (ii) a corporation, partnership, or other business organization, the majority of the beneficial ownership of which is owned by persons who are citizens of a country other than the United States and who are not residents of the United States, and any subsidiary or affiliate owned or controlled by such an organization; or in which the bank purchases twenty-five percent or more of the bond issue. For the purposes of chapter 39.84 RCW, such an alien bank shall be deemed to possess trust powers.
     (2) In addition to the powers and activities expressly authorized by this section, a branch shall have the power to carry on such additional activities which are necessarily incidental to the activities expressly authorized by this section.

Sec. 220   RCW 30.42.280 and 1973 1st ex.s. c 53 s 28 are each amended to read as follows:
     The directors or other governing body of an alien bank and the officers and employees of its office in this state shall be subject to all of the duties, responsibilities and restrictions to which the directors, officers and employees of a bank organized under the laws of this state are subject insofar as such duties, responsibilities and restrictions are not inconsistent with the intent of this chapter. An officer or employee of the office of an alien bank doing business in this state pursuant to this chapter may be removed for the reasons stated and in the manner provided in RCW 30.12.040((, as now or hereafter amended)) (as recodified by this act).

Sec. 221   RCW 30.42.310 and 1994 c 92 s 101 are each amended to read as follows:
     An alien bank licensed to maintain an office or bureau in this state pursuant to this chapter may apply to the director for leave to change the location of its office or bureau. Such applications shall be accompanied by an investigation fee as established in accordance with RCW 30.42.330 (as recodified by this act). Leave for a change of location shall be granted if the director finds that the proposed new location offers reasonable promise of adequate support for the office.

Sec. 222   RCW 30.42.340 and 1973 1st ex.s. c 53 s 34 are each amended to read as follows:
     (1) Any branch of an alien bank that is conducting business in this state on July 16, 1973 pursuant to RCW 30.04.300 (as recodified by this act) shall not be subject to the provisions of this chapter, and shall continue to conduct its business pursuant to RCW 30.04.300 (as recodified by this act).
     (2) Except as provided in subsection (1) of this section, any alien bank that is conducting business in this state on July 16, 1973 shall be subject to the provisions of this chapter: PROVIDED, That any such alien bank which has operated an agency or similar operation in this state for at least the five years immediately preceding such effective date shall not be denied a certificate to operate an agency.

Sec. 223   RCW 30.44.010 and 2010 c 88 s 30 are each amended to read as follows:
     (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)); 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. 224   RCW 30.44.020 and 2010 c 88 s 31 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 (as recodified by this act) has resulted in a bank ((or trust company)) 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 the director may specify, or if the director deems necessary, 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 (as recodified by this act).

Sec. 225   RCW 30.44.030 and 2010 c 88 s 32 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 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 the director's action taking possession of the bank ((or trust company)) should not be 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 bank ((or trust company)), it shall require the director to restore such bank ((or trust company)) to possession of its assets and enjoin the director from further interference therewith without cause.

Sec. 226   RCW 30.44.040 and 1994 c 92 s 110 are each amended to read as follows:
     Upon taking possession of any bank ((or trust company)), the director shall forthwith give written notice thereof to all persons having possession of any assets of such corporation. No person knowing of the taking of such possession by the director shall have a lien or charge for any payment thereafter advanced or clearance thereafter made or liability thereafter incurred against any of the assets of such corporation.

Sec. 227   RCW 30.44.050 and 1994 c 92 s 111 are each amended to read as follows:
     Upon taking possession of any bank ((or trust company)), the director shall proceed to collect the assets thereof and to preserve, administer and liquidate the business and assets of such corporation. With the approval of the superior court of the county in which such corporation is located, he or she may sell, compound or compromise bad or doubtful debts, and upon such terms as the court shall direct borrow, mortgage, pledge or sell all or any part of the real estate and personal property of such corporation. He or she shall deliver to each purchaser or lender an appropriate deed, mortgage, agreement of pledge or other instrument of title or security. If real estate is situated outside of said county, a certified copy of the orders authorizing and confirming the sale or mortgage thereof shall be filed for record in the office of the auditor of the county in which such property is situated. He or she may appoint special assistants and other necessary agents to assist in the administration and liquidation of such corporation, a certificate of such appointment to be filed with the clerk of the county in which such corporation is located. He or she shall require each special assistant to give a surety company bond, conditioned as he or she shall provide, the premium of which shall be paid out of the assets of such corporation. He or she may also employ an attorney for legal assistance in such administration and liquidation.

Sec. 228   RCW 30.44.100 and 2010 c 88 s 33 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 in writing of such appointment and the director shall forthwith take possession of such bank ((or, trust company)), 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 shall have come into the 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. 229   RCW 30.44.110 and 2010 c 88 s 34 are each amended to read as follows:
     (1) Every transfer of its property or assets by any bank ((or trust company)), 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 (as recodified by this act), or the federal deposit insurance corporation is appointed as receiver or liquidator of such bank under RCW 30.44.270 (as recodified by this act), 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. 230   RCW 30.44.120 and 2003 c 53 s 191 are each amended to read as follows:
     An officer, director, or employee of any bank ((or trust company)) who shall fraudulently receive for it any deposit, knowing that such bank or trust company is insolvent, is guilty of a class B felony punishable according to chapter 9A.20 RCW.

Sec. 231   RCW 30.44.150 and 1994 c 92 s 119 are each amended to read as follows:
     Any dividends to depositors or other creditors of such bank ((or trust company)) remaining uncalled for and unpaid in the hands of the director for six months after order of final distribution, shall be deposited in a bank ((or trust company)) to his or her credit, in trust for the benefit of the persons entitled thereto and subject to the supervision of the court shall be paid by him or her to them upon receipt of satisfactory evidence of their right thereto.
     All moneys so deposited remaining unclaimed for five years after deposit shall escheat to the state for the benefit of the permanent school fund and shall be paid by the director into the state treasury. It shall not be necessary to have the escheat adjudged in a suit or action.

Sec. 232   RCW 30.44.160 and 2010 c 88 s 35 are each amended to read as follows:
     (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 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 possession of the Director of the Washington State Department of Financial Institutions."
     (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. 233   RCW 30.44.170 and 1994 c 92 s 121 are each amended to read as follows:
     Any bank ((or trust company)) may, upon receipt of written permission from the director, go into voluntary liquidation by a vote of its stockholders owning two-thirds of its capital stock. When such liquidation is authorized, the directors of such corporation shall publish in a newspaper published in the place where such corporation is located, once a week for four consecutive weeks, a notice requiring creditors of such corporation to present their claims against it for payment.

Sec. 234   RCW 30.44.180 and 1994 c 92 s 122 are each amended to read as follows:
     Whenever any bank ((or trust company)) shall voluntarily liquidate, any dividends to depositors or other creditors of such bank ((or trust company)) remaining uncalled for and unpaid at the conclusion of the liquidation shall be transmitted to the director and shall be deposited by him or her in a bank or trust company to his or her credit in trust for the benefit of the persons entitled thereto, and shall be paid by him or her to them upon receipt of satisfactory evidence of their right thereto.
     All moneys so deposited remaining unclaimed for five years after deposit shall escheat to the state for the benefit of the permanent school fund and shall be paid by the director into the state treasury. It shall not be necessary to have the escheat adjudged in a suit or action.

Sec. 235   RCW 30.44.190 and 1994 c 92 s 123 are each amended to read as follows:
     Whenever any bank ((or trust company)) shall be liquidated, voluntarily or involuntarily, and shall retain in its possession at the conclusion of the liquidation, uncalled for and unclaimed personal property left with it for safekeeping, such property shall, in the presence of at least one witness, be inventoried by the liquidating agent and sealed in separate packages, each package plainly marked with the name and last known address of the person in whose name the property stands on the books of the bank ((or trust company)). If the property is in safe deposit boxes, such boxes shall be opened by the liquidating agent in the presence of at least one witness, and the property inventoried, sealed in packages and marked as above required. All the packages shall be transmitted to the director, together with certificates signed by the liquidating agent and witness or witnesses, listing separately the property standing in the name of any one person on the books of the bank ((or trust company)), together with the date of inventory, and name and last known address of the person in whose name the property stands.

Sec. 236   RCW 30.44.200 and 1994 c 92 s 124 are each amended to read as follows:
     Upon receiving possession of the packages, the director shall cause them to be opened in the presence of at least one witness, the property reinventoried, and the packages resealed, and held for safekeeping. The liquidated bank, its directors, officers, and shareholders, and the liquidating agent shall thereupon be relieved of responsibility and liability for the property so delivered to and received by the director. The director shall send immediately to each person in whose name the property stood on the books of the liquidated bank ((or trust company)), at his or her last known address, in a securely closed, postpaid and registered letter, a notice that the property listed will be held in his or her name for a period of not less than two years. At any time after the mailing of such notice, and before the expiration of two years, such person may require the delivery of the property so held, by properly identifying himself or herself and offering evidence of his or her right thereto, to the satisfaction of the director.

Sec. 237   RCW 30.44.210 and 1994 c 92 s 125 are each amended to read as follows:
     After the expiration of two years from the time of mailing the notice, the director shall mail in a securely closed postpaid registered letter, addressed to the person at his or her last known address, a final notice stating that two years have elapsed since the sending of the notice referred to in RCW 30.44.200 (as recodified by this act), and that the director will sell all the property or articles of value set out in the notice, at a specified time and place, not less than thirty days after the time of mailing the final notice. Unless the person shall, on or before the day mentioned, claim the property, identify himself or herself and offer evidence of his or her right thereto, to the satisfaction of the director, the director may sell all the property or articles of value listed in the notice, at public auction, at the time and place stated in the final notice: PROVIDED, That a notice of the time and place of sale has been published once within ten days prior to the sale in a newspaper of general circulation in the county where the sale is held. Any such property held by the director, the owner of which is not known, may be sold at public auction after it has been held by the director for two years, provided, that a notice of the time and place of sale has been published once within ten days prior to the sale in a newspaper of general circulation in the county where the sale is held.

Sec. 238   RCW 30.44.220 and 1994 c 92 s 126 are each amended to read as follows:
     The proceeds of such sale shall be deposited by the director in a bank ((or trust company)) to his or her credit, in trust for the benefit of the person entitled thereto, and shall be paid by him or her to such person upon receipt of satisfactory evidence of his or her right thereto.
     All moneys so deposited remaining unclaimed for five years after deposit shall escheat to the state for the benefit of the permanent school fund and shall be paid by the director into the state treasury. It shall not be necessary to have the escheat adjudged in a suit or action.

Sec. 239   RCW 30.44.230 and 1994 c 92 s 127 are each amended to read as follows:
     Whenever the personal property held by a liquidated bank ((or trust company)) shall consist either wholly or in part, of documents, letters, or other papers of a private nature, such documents, letters, or papers shall not be sold, but shall be retained by the director for a period of five years, and, unless sooner claimed by the owner, may be thereafter destroyed in the presence of the director and at least one other witness.

Sec. 240   RCW 30.44.240 and 1994 c 92 s 128 are each amended to read as follows:
     A bank ((or trust company)) may for the purpose of voluntary liquidation transfer its assets and liabilities to another bank ((or trust company)), by a vote, or with the written consent of the stockholders of record owning two-thirds of its capital stock, but only with the written consent of the director and upon such terms and conditions as he or she may prescribe. Upon any such transfer being made, or upon the liquidation of any such corporation for any cause whatever or upon its being no longer engaged in the business of a bank ((or trust company)), the director shall terminate its certificate of authority, which shall not thereafter be revived or renewed. When the certificate of authority of any such corporation shall have been revoked, it shall forthwith collect and distribute its remaining assets, and when that is done the director shall certify the fact to the secretary of state, whereupon the corporation shall cease to exist and the secretary of state shall note that fact upon his or her records.

Sec. 241   RCW 30.44.250 and 1994 c 92 s 129 are each amended to read as follows:
     Whenever the director has taken possession of a bank ((or trust company)) for any cause, he or she may wind up such corporation and cancel its certificate of authority, unless enjoined from so doing, as herein provided. Or if at any time within ninety days after taking possession, he or she shall determine that all impairment and delinquencies have been made good, and that it is safe and expedient for such corporation to reopen, he or she may permit such corporation to reopen upon such terms and conditions as he or she shall prescribe. Before being permitted to reopen, every such corporation shall pay all of the expenses of the director, as herein elsewhere defined.

Sec. 242   RCW 30.44.270 and 2010 c 88 s 36 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 taken possession pursuant to RCW 30.44.010, 30.44.020, or 30.44.160 (as recodified by this act).
     (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. 243   RCW 30.44.280 and 1994 c 92 s 132 are each amended to read as follows:
     The pendency of any proceedings for judicial review of the director's actions in taking possession and control of a bank ((or trust company)) and its assets for the purpose of liquidation shall not operate to defer, delay, impede, or prevent the payment or acquisition by the federal deposit insurance corporation of the deposit liabilities of the bank ((or trust company)) which are insured by the corporation. During the pendency of any proceedings for judicial review, the director shall make available to the federal deposit insurance corporation such facilities in or of the bank ((or trust company)) and such books, records, and other relevant data of the bank ((or trust company)) as may be necessary or appropriate to enable the corporation to pay out or to acquire the insured deposit liabilities of the bank ((or trust company)). The federal deposit insurance corporation and its directors, officers, agents, and employees, and the director and his or her agents and employees shall be free from liability to the bank ((or trust company)), its directors, stockholders, and creditors for or on account of any action taken in connection herewith.

Sec. 244   RCW 30.46.010 and 2010 c 88 s 37 are each amended to read 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 ((or trust company)) is less than well capitalized;
     (b) If a bank ((or trust company)) violates the applicable provisions of ((Title 30 RCW)) this title 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 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. 245   RCW 30.46.020 and 2013 c 76 s 14 are each amended to read as follows:
     (1) If upon examination or at any other time it appears to the director that any bank ((or trust company)) is in an unsafe condition and its condition is such as to render the continuance of its business hazardous to the public or to its depositors and creditors, or if such bank ((or trust company)) appears to have exceeded its powers or has failed to comply with the law, or if such bank ((or trust company)) gives its consent, then the director shall upon his or her determination (a) notify the bank ((or trust company)) of his or her determination, and (b) furnish to the bank ((or trust company)) a written list of the director requirements to abate his or her determination, and (c) if the director makes further determination to directly supervise, notify the bank ((or trust company)) 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 bank ((or trust company)) 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 bank ((or trust company)) fails to comply within such time the director may appoint a conservator as hereafter provided.
     (2) A person appointed as conservator by the director pursuant to this chapter is immune from criminal, civil, and administrative liability for any act done in good faith in the performance of the duties of conservator.

Sec. 246   RCW 30.46.030 and 2013 c 76 s 15 are each amended to read as follows:
     During the period of supervisory direction the director may appoint a representative to supervise such bank ((or trust company)) and may provide that the bank ((or trust company)) 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, excluding trust assets under management;
     (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.

Sec. 247   RCW 30.46.040 and 2013 c 76 s 16 are each amended to read as follows:
     After the period of supervisory direction specified by the director for compliance, if he or she determines that such bank ((or trust company)) has failed to comply with the lawful requirements imposed, upon due notice and hearing or by consent of the bank, the director may appoint a conservator, who shall immediately take charge of such bank ((or trust company)) and all of its property, books, records, and effects. The conservator shall conduct the business of the bank ((or trust company)) 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 bank ((or trust company)), 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 bank ((or trust company)) 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 bank ((or trust company)) is not in condition to continue business in the interest of its customers under the conservator as above provided, the director may proceed with appropriate remedies provided by other provisions of this title.

Sec. 248   RCW 30.46.050 and 2013 c 76 s 17 are each amended to read as follows:
     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 bank ((or trust company)), excluding trust assets under management, to be allowed and paid as the director may determine.

Sec. 249   RCW 30.46.060 and 2013 c 76 s 18 are each amended to read as follows:
     During the period of the supervisory direction and during the period of conservatorship, the bank ((or trust company)) 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 bank ((or trust company)), 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 bank ((or trust company)) shall not do certain acts as provided in RCW 30.46.030 and 30.46.040 (as recodified by 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 as herein above provided shall be subject to review in accordance with the administrative procedure act of the state of Washington.

Sec. 250   RCW 30.46.070 and 2013 c 76 s 19 are each amended to read as follows:
     Any suit filed against a bank or its conservator ((or a trust company or its conservator)), after the entrance of an order by the director placing such bank ((or trust company)) in conservatorship and while such order is in effect, shall be brought in the superior court of Thurston county and not elsewhere. The conservator appointed hereunder for such bank ((or trust company)) may file suit in any superior court or other court of competent jurisdiction against any person for the purpose of preserving, protecting, or recovering any asset or property of such bank ((or trust company)) including claims or causes of action belonging to or which may be asserted by such bank.

Sec. 251   RCW 30.46.080 and 2013 c 76 s 20 are each amended to read as follows:
     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 bank ((or trust company)) 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.

Sec. 252   RCW 30.46.090 and 2013 c 76 s 21 are each amended to read as follows:
     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 ((or trust company)) 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.

Sec. 253   RCW 30.49.020 and 1955 c 33 s 30.49.020 are each amended to read as follows:
     This section is applicable where there is to be a resulting national bank.
     Nothing in the law of this state shall restrict the right of a state bank to merge with or convert into a resulting national bank. The action to be taken by such merging or converting state bank and its rights and liabilities and those of its shareholders shall be the same as those prescribed at the time of the action for national banks merging with or converting into a resulting state bank by the law of the United States, and not by the law of this state, except that a vote of the holders of two-thirds of each class of voting stock of a state bank shall be required for the merger or conversion, and that on conversion by a state into a national bank the rights of dissenting stockholders shall be those specified in RCW 30.49.090 (as recodified by this act).
     Upon the completion of the merger or conversion, the franchise of any merging or converting state bank shall automatically terminate.

Sec. 254   RCW 30.49.070 and 1994 c 92 s 145 are each amended to read as follows:
     Except as provided in RCW 30.49.100 (as recodified by this act), a national bank located in this state which follows the procedure prescribed by the laws of the United States to convert into a state bank shall be granted a state charter by the director if he or she finds that the bank meets the standards as to location of offices, capital structures, and business experience and character of officers and directors for the incorporation of a state bank.
     The national bank may apply for such charter by filing with the director a certificate signed by its president and cashier and by a majority of the entire board of directors, setting forth the corporate action taken in compliance with the provisions of the laws of the United States governing the conversion of a national to a state bank, and the articles of incorporation, approved by the stockholders, for the government of the bank as a state bank.

Sec. 255   RCW 30.49.125 and 1996 c 2 s 9 are each amended to read as follows:
     (1) This section is applicable where the resulting bank would have branches inside and outside the state of Washington.
     (2) As used in this section, unless a different meaning is required by the context, the following words and phrases have the following meanings:
     (a) "Combination" means a merger or consolidation, or purchase or sale of all or substantially all of the assets, including all or substantially all of the branches.
     (b) "Out-of-state bank" means a bank, as defined in 12 U.S.C. Sec. 1813(a), which is chartered under the laws of any state other than this state, or a national bank, the main office of which is located in any state other than this state.
     (c) "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.
     (3) A bank chartered under this title may engage in a combination or purchase and assumption of one or more branches of an out-of-state bank with an out-of-state bank with the prior approval of the director if the combination or purchase and assumption would result in a bank chartered under this title. Upon notice to the director a bank chartered under this title and an out-of-state bank may engage in a combination if the combination would result in an out-of-state bank. However, that combination shall comply with applicable Washington law as determined by the director, including but not limited to applicable state merger laws, and the conditions and requirements of this section.
     (4) Applications for the director's approval under subsection (3) of this section shall be on a form prescribed by the director and conditioned upon payment of ((the)) a fee prescribed pursuant to RCW ((30.08.095)) 30.04.070 (as recodified by this act). If the director finds that (a) the proposed combination will not be detrimental to the safety and soundness of the applicant or the resulting bank, (b) any new officers and directors of the resulting bank are qualified by character, experience, and financial responsibility to direct and manage the resulting bank, and (c) the proposed merger is consistent with the convenience and needs of the communities to be served by the resulting bank in this state and is otherwise in the public interest, the director shall approve the interstate combination and the operation of branches outside of Washington by the applicant bank. This transaction may be consummated only after the applicant has received evidence of the director's written approval.
     (5) Any out-of-state bank that will be the resulting bank pursuant to an interstate combination involving a bank chartered under this title shall notify the director of the proposed combination not later than three days after the date of filing of an application for the combination with the responsible federal bank supervisory agency, and shall submit a copy of that application to the director and pay applicable filing fees, if any, required by the director. In lieu of notice from the proposed resulting bank the director may accept notice from the bank's supervisory agency having primary responsibility for the bank. The director shall have the authority to waive any procedures required by Washington merger laws if the director finds that the procedures are in conflict with applicable federal law or in conflict with the applicable law of the state of the resulting bank.
     (6) Subject to RCW 30.38.010(2) (as recodified by this act), the deposit concentration limits stated in 12 U.S.C. Sec. 1831u(b)(2)(B) shall apply to the combination of an out-of-state bank and a nonaffiliated out-of-state bank or bank organized under this title or under the national bank act if the combination is an interstate merger transaction ((as defined by 12 U.S.C. Sec. 1831u(f)(6))).
     (7) A combination resulting in the acquisition, by an out-of-state bank that does not have branches in this state, of a bank organized under this title or the national bank act, shall not be permitted under this chapter unless the bank to be acquired, or its predecessors, have been in continuous operation, on the date of the combination, for a period of at least five years.

Sec. 256   RCW 30.56.050 and 1994 c 92 s 153 are each amended to read as follows:
     At the request of the directors of a bank, the director may propose a plan for its reorganization, if in his or her judgment it would be for the best interests of the bank's creditors and of the community which the bank serves. The plan may contemplate such temporary ratable reductions of the demands of depositors and other creditors as would leave its reserve adequate and its capital and surplus unimpaired after the charging off of bad and doubtful debts; and also may contemplate a postponement of payments as in a case falling within RCW 30.56.020 (as recodified by this act). The plan shall be fully described in a writing, the original of which shall be filed in the office of the director and several copies of which shall be furnished the bank, where one or more copies shall be kept available for inspection by stockholders, depositors and other creditors.

Sec. 257   RCW 30.56.060 and 1994 c 92 s 154 are each amended to read as follows:
     If, within ninety days after the filing of the plan, creditors having unsecured demands against the bank aggregating not less than three-fourths of the amount of the unsecured demands of all its creditors, approved the plan, the director shall have power to declare the plan to be in effect. Thereupon the unsecured demands of creditors shall be ratably reduced according to the plan and appropriate debits shall be made in the books. The right of a secured creditor to enforce his or her security shall not be affected by the operation of the plan, but the amount of any deficiency to which he or she may be entitled shall be reduced as unsecured demands were reduced. If the plan contemplates a temporary postponement of payments, RCW 30.56.020, 30.56.030 and 30.56.040 (as recodified by this act) shall be applicable, and the bank shall comply therewith and conduct its affairs accordingly.

NEW SECTION.  Sec. 258   CONSTRUCTION. The provisions of this title, insofar as they are substantially the same as statutory provisions repealed by this act and relating to the same subject matter, shall be construed as restatements and continuations, and not as new enactments.

NEW SECTION.  Sec. 259   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. 260   This title does not affect the legality of investments, made prior to January 5, 2015, or of transactions had before January 5, 2015, pursuant to any provisions of law in force when such investments were made or transactions had.

NEW SECTION.  Sec. 261   DIRECTOR'S SUBPOENAS. (1) The director or authorized assistants may apply for and obtain a superior court order approving and authorizing a subpoena in advance of its issuance. The application may be made in the county where the subpoenaed person resides or is found, or the county where the subpoenaed documents, records, or evidence are located, or in Thurston county. The application must:
     (a) State that an order is sought under this section;
     (b) Adequately specify the documents, records, evidence, or testimony; and
     (c) Include a declaration made under oath that an investigation is being conducted for a lawfully authorized purpose related to an investigation within the department's authority and that the subpoenaed documents, records, evidence, or testimony are reasonably related to an investigation within the department's authority.
     (2) When an application under this section is made to the satisfaction of the court, the court must issue an order approving the subpoena. An order under this subsection constitutes authority of law for the agency to subpoena the documents, records, evidence, or testimony.
     (3) The director or authorized assistants may seek approval and a court may issue an order under this section without prior notice to any person, including the person to whom the subpoena is directed and the person who is the subject of an investigation. An application for court approval is subject to the fee and process set forth in RCW 36.18.012(3).
     (4) Subsections (1) through (3) of this section are applicable to the director's enforcement authority under this title against persons engaged in unauthorized banking activity and persons, other than a bank authorized under this title, whom the director has reason to believe are in violation of this title. This section does not limit the authority of the director to investigate or examine a bank authorized under this title without applying for or obtaining a superior court order or issuing a subpoena pursuant to this section.

Sec. 262   2013 c 76 s 33 (uncodified) is amended to read as follows:
     Sections 7 and 8, chapter 303, Laws of 2011 ((and)), sections 10 and 25, chapter 76, Laws of 2013, and section 166, chapter . . ., Laws of 2014 (section 166 of this act) take effect when the director of the department of financial institutions finds that a federal regulatory agency has, through federal law, regulation, or official regulatory interpretation, interpreted federal law to permit banks operating under the authority of Title 30 (as recodified by this act) or 32 RCW to conduct a promotional contest of chance as defined in RCW 30.22.040 (as recodified by this act). If the contingency occurs, the director shall notify the chief clerk of the house of representatives, the secretary of the senate, and the office of the code reviser.

NEW SECTION.  Sec. 263   The following acts or parts of acts are each repealed:
     (1) RCW 30.08.155 (Powers and authorities of trust companies--Federally chartered trust companies -- Out-of-state state trust companies -- Findings of director) and 2013 c 76 s 11 & 1998 c 45 s 2;
     (2) RCW 30.53.010 (Definitions) and 1994 c 256 s 59;
     (3) RCW 30.53.020 (Approval by director -- Required) and 1994 c 256 s 60;
     (4) RCW 30.53.030 (Contents of merger agreement -- Approval by each board of directors -- Requirements for director's approval) and 1994 c 256 s 61;
     (5) RCW 30.53.040 (Approval by stockholders -- Voting -- Notice) and 1994 c 256 s 62;
     (6) RCW 30.53.050 (Effective date of merger -- Certificate of merger) and 1994 c 256 s 63;
     (7) RCW 30.53.060 (Resulting trust company -- Property, rights, powers, and duties) and 1994 c 256 s 64;
     (8) RCW 30.53.070 (Dissenting shareholders -- May receive value in cash -- Appraisal) and 1998 c 45 s 3 & 1994 c 256 s 65; and
     (9) RCW 30.53.080 (Valuation of assets -- Books of merging trust company) and 1994 c 256 s 66.

NEW SECTION.  Sec. 264   Section 165 of this act expires when the contingency under section 262 of this act has occurred.

GENERAL PROVISIONS

NEW SECTION.  Sec. 301   SHORT TITLE. This title may be known and cited as the Washington trust institutions act.

NEW SECTION.  Sec. 302   DEFINITIONS. Unless the context clearly requires otherwise, the definitions in this section apply throughout this title.
     The definitions in this section shall be liberally construed to accomplish the purposes of this title. Additional definitions, as applicable, are contained elsewhere in this title. The department may adopt by rule other definitions to accomplish the purposes of this title.
     (1) "Account" means the client relationship established with a trust company involving the transfer of funds or property to the trust company, including a relationship in which the trust company acts as trustee, executor, administrator, guardian, custodian, conservator, bailee, receiver, registrar, or agent, but excluding a relationship in which the trust company acts solely in an advisory capacity.
     (2) "Administer" with respect to real or tangible personal property means, as an agent or in another representative capacity, to possess, purchase, sell, lease, insure, safekeep, or otherwise manage the property.
     (3) "Affiliate" means a company that directly or indirectly controls, is controlled by, or is under common control with a trust institution or other company.
     (4) "Authorized trust institution" means a trust institution with authority to engage in trust business in Washington state pursuant to statute.
     (5) "Bank" has the meaning set forth in 12 U.S.C. Sec. 1813(h); provided that the term "bank" does not include any "foreign bank" as defined in 12 U.S.C. Sec. 3101(7), except for any such foreign bank organized under the laws of a territory of the United States, Puerto Rico, Guam, American Samoa, or the Virgin Islands, the deposits of which are insured by the federal deposit insurance corporation.
     (6) "Bank supervisory agency" means:
     (a) Any agency of another state with primary responsibility for chartering and supervising a trust institution; 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.
     (7) "Capital" has the meaning ascribed to that term by generally accepted accounting principles and applicable rules of the financial accounting standards board, and includes surplus and undivided profits.
     (8) "Charter" means a charter or other certificate of authority issued by the director or a bank supervisory agency authorizing a trust institution to engage in business in its home state.
     (9) "Client" means a person to whom a trust institution owes a duty or obligation under a trust or other account administered by the trust institution or as an advisor or agent, regardless of whether the trust institution owes a fiduciary duty to the person. The term includes the noncontingent beneficiaries of an account.
     (10) "Company" includes a bank, trust company, corporation, limited liability company, partnership, association, business trust, or another trust.
     (11) "Conservator" means the director or an agent of the director exercising the powers and duties provided by section 386 of this act.
     (12) "Control" means:
     (a) The ownership of or ability or power to vote, directly, acting through one or more other persons, or otherwise indirectly, more than twenty-five percent of the outstanding shares of a class of voting securities of a state trust company or other company;
     (b) The ability to control the election of a majority of the board of a state trust company or other company;
     (c) The power to exercise, directly or indirectly, a controlling influence over the management or policies of the state trust company or other company as determined by the director after notice and an opportunity for hearing; or
     (d) The conditioning of the transfer of more than twenty-five percent of the outstanding shares or participation shares of a class of voting securities of a state trust company or other company on the transfer of more than twenty-five percent of the outstanding shares of a class of voting securities of another state trust company or other company.
     (13) "Custodial account" means an account, established by a person with a bank as defined in 26 U.S.C. Sec. 408(n), or with another person approved by the internal revenue service as satisfying the requirements to be a nonbank trustee or a nonbank passive trustee set forth in United States treasury regulations under 26 U.S.C. Sec. 408, that is governed by an instrument concerning the establishment or maintenance, or both, of an individual retirement account, qualified retirement plan, Archer medical savings account, health savings account, Coverdell education savings account, any similar retirement or savings vehicle permitted under the internal revenue code of 1986, or as otherwise defined by the director by rule.
     (14) "Department" means the department of financial institutions.
     (15) "Depository institution" means any company chartered to act as a fiduciary and included for any purpose within any of the definitions of "insured depository institution" as set forth in 12 U.S.C. Sec. 1813(c)(2) and (3).
     (16) "Director" means the director of financial institutions.
     (17) "Fiduciary record" means a matter written, transcribed, recorded, received, or otherwise in the possession or control of a trust company, whether in physical or electronic form, that is necessary to preserve information concerning an act or event relevant to an account or a client of a trust company.
     (18) "Foreign bank" means a foreign bank, as defined in section 1(b)(7) of the international banking act of 1978, chartered to act as a fiduciary in a state other than Washington state. As used in this title, "foreign bank" excludes an alien bank authorized to do business in this state under chapter 30.42 RCW (as recodified by this act).
     (19) "Home state" means:
     (a) With respect to a federally chartered trust institution and a foreign bank, the state in which such institution maintains its principal office; and
     (b) With respect to any other trust institution, the state which chartered such institution.
     (20) "Home state regulator" means the trust institutions supervisory agency with primary responsibility for chartering and supervising an out-of-state trust institution.
     (21) "Host state" means a state, other than the home state of a trust institution, or a foreign country in which the trust institution maintains or seeks to acquire or establish an office.
     (22) "Insolvent" means a circumstance or condition in which a state trust company:
     (a) Has actual cash market value of its assets which are insufficient to pay its liabilities to its creditors;
     (b) Is unable or lacks the means to meet its current obligations as they come due in the regular and ordinary course of business, even if the value of its assets exceeds its liabilities;
     (c) Sells or attempts to sell substantially all of its assets other than as provided in section 381 of this act or merges or attempts to merge substantially all of its assets or business with another entity other than as provided by chapter 30B.-- RCW (sections 387 through 396 of this act); or
     (d) Attempts to dissolve or liquidate without approval of the director under chapter 30B.-- RCW (sections 376 through 381 of this act);
     (e) After demand in writing by the director, fails to cure any deficiency in its reserves as required by statute or rule;
     (f) After written demand by the director, the stockholders fail to cure within the time prescribed by the director an impairment of the state trust company's capital or surplus; or
     (g) Is insolvent within the meaning of the United States bankruptcy code.
     (23) "Instrument" means a revocable or irrevocable trust document created inter vivos or testamentary or any custodial account agreement.
     (24) "Internet trust business" means a trust business that holds itself out as a trustee or fiduciary to the general public of this state by means of the internet or other electronic means.
     (25) "Law firm" means a professional service corporation, professional limited liability company, or limited liability partnership, that is duly organized under the laws of this state and whose shareholders, members, or partners, respectively, are exclusively attorneys.
     (26) "Limited liability trust company" means an entity organized under the limited liability company act of this state that is chartered as a trust company under this title.
     (27) "Loans and extensions of credit" means direct or indirect advances of funds by a state trust company to a person that are conditioned on the obligation of the person to repay the funds or that are repayable from specific property pledged by or on behalf of the person.
     (28) "Manager" means a person elected to the board of a limited liability trust company.
     (29) "Officer" means the presiding officer of the board, the principal executive officer, or another officer appointed by the board of a state trust company or other company, or a person or group of persons acting in a comparable capacity for the state trust company or other company.
     (30) "Out-of-state trust institution" means a trust institution that is not a state trust company under this title.
     (31) "Person" means an individual, a company, or any other legal entity.
     (32) "Principal shareholder" means a person who owns or has the ability or power to vote, directly, acting through one or more other persons, or otherwise indirectly, ten percent or more of the outstanding shares or participation shares of any class of voting securities of a state trust company or other company.
     (33) "Private trust" has the meaning set forth in section 397 of this act.
     (34) "Private trust company" has the meaning set forth in section 397 of this act.
     (35) "Savings association" means a depository institution, other than a credit union, that is not a bank.
     (36) "Shares" means the units into which the proprietary interests of a state trust company are divided or subdivided by means of classes, series, relative rights, or preferences.
     (37) "State" means a state of the United States, the District of Columbia, a 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.
     (38) "State bank" means a bank authorized under Title 30A (the new title created under section 2 of this act) or 32 RCW to engage in trust business or an alien bank chartered or authorized under chapter 30.42 RCW (as recodified by this act) to engage in trust business in this state.
     (39) "State savings association" means a savings association chartered or otherwise authorized under Title 33 RCW to act as a fiduciary by Washington state.
     (40) "State trust company" means a corporation or a limited liability company organized or reorganized under this title, including a trust company organized under the laws of Washington state before the effective date of this section.
     (41) "State trust institution," as used in chapter 30B.-- RCW (sections 333 through 345 of this act), means a state trust company or an out-of-state trust institution engaged in trust business in this state.
     (42) "Subsidiary" means a company that is controlled by another person. Subsidiary includes a subsidiary of a subsidiary and a lower tier subsidiary.
     (43) "Trust business" means the holding out by a person to the public by advertisement, solicitation, or other means that the person is available to perform the powers of a state trust company set forth in section 329(1) (b) through (k) of this act, together with any other activity authorized for a state trust company by the director pursuant to section 329(1)(q) of this act that the director designates as trust business.
     (44) "Trust company" means a state trust company or any other company chartered to act as a fiduciary that is neither a depository institution nor a foreign bank.
     (45) "Trust department" means that group or groups of officers and employees of a trust company organized under the supervision of officers or employees to whom are designated by the board of directors the performance of the fiduciary responsibilities of the trust company, whether or not the group or groups are so named.
     (46) "Trust deposits" means the client funds held by a state trust company and authorized to be deposited with itself pending investment, distribution, or payment of debts on behalf of the client.
     (47) "Trust institution" means a depository institution, foreign bank, or trust company.
     (48) "Unauthorized trust activity" means to engage in trust business in this state without authority or exemption under this title.

NEW SECTION.  Sec. 303   NAME OF TRUST INSTITUTION--USE OF TRUST IN NAME. (1) A state trust company or out-of-state trust institution may register any name with the department in connection with establishing an office or otherwise engaged in trust business in this state pursuant to this title, except that the director may determine that a name proposed to be registered is potentially misleading to the public and require the registrant to select a name which is not potentially misleading.
     (2) Use of trust as part of a person's name, trademark, or service mark in connection with transacting business with the public, or as part of advertising by any person to the public, is subject to the prohibitions and restrictions under RCW 30.04.020 (as recodified by this act).

NEW SECTION.  Sec. 304   RULES--ADMINISTRATION AND INTERPRETATION OF TITLE. (1) The director has the power to adopt rules, as he or she determines necessary and appropriate, to implement the purposes and provisions of this title in accordance with the administrative procedure act, chapter 34.05 RCW.
     (2) The director has the power, and broad administrative discretion, to administer and interpret the provisions of this title to facilitate the delivery of trust business and fiduciary services to the citizens of the state of Washington by trust businesses and other persons.

NEW SECTION.  Sec. 305   PERSONS AUTHORIZED TO ACT AS A FIDUCIARY. Subject to the conditions, restrictions, limitations, and requirements of this title, the following persons are authorized trust institutions in Washington state:
     (1) A state trust company with a certificate of authority from the director to exercise the powers of a state trust company pursuant to chapter 30B.-- RCW (sections 321 through 332 of this act);
     (2) A state bank under Title 30 RCW (as recodified by this act) exercising trust business powers under the authority of the director;
     (3) A state bank under Title 32 RCW exercising trust business powers under the authority of the director;
     (4) A state savings association organized under Title 33 RCW exercising trust business powers under authority of Title 33 RCW as permitted by the director;
     (5) A national bank authorized by the comptroller of the currency to act as a fiduciary in this state pursuant to 12 U.S.C. Sec. 92a;
     (6) A federally chartered savings bank or savings association authorized by the comptroller of the currency to act as a fiduciary in this state;
     (7) An out-of-state state-chartered bank with a branch in this state established or maintained pursuant to and with trust powers under applicable law of a home state;
     (8) An out-of-state trust institution with a trust office authorized by the director pursuant to this title;
     (9) An alien bank under chapter 30.42 RCW (as recodified by this act) authorized by the director to act as a fiduciary or engage in trust business in this state pursuant to this title;
     (10) A private trust or private trust company exempt from the regulation of the department under chapter 30B.-- RCW (sections 397 through 400 of this act); or
     (11) An exempt person under this title pursuant to section 306 of this act.

NEW SECTION.  Sec. 306   ACTIVITIES NOT REQUIRING CERTIFICATE OF AUTHORITY OR APPROVAL UNDER THIS TITLE. Notwithstanding any other provision of this title, a person is exempt from the requirement of a certificate of authority or approval under this title, or from regulation by the director pursuant to this title, if the person is:
     (1) An individual, sole proprietor, or general partnership or joint venture composed of individuals;
     (2) Engaging in business in this state (a) as a national banking association or (b) as a federal mutual savings bank, federal stock savings bank, or federal savings and loan association under authority of the office of the comptroller of the currency;
     (3) Acting in a manner otherwise authorized by law and within the scope of authority as an agent of a trust institution with respect to an activity which is not an unauthorized trust activity;
     (4) Acting as a fiduciary solely by reason of being appointed by a court to perform the duties of a trustee, guardian, conservator, or receiver;
     (5) While holding oneself out to the public as an attorney-at-law, law firm, or limited license legal technician, performing a service customarily performed as an attorney-at-law, law firm, or limited license legal technician in a manner approved and authorized by the supreme court of the state of Washington;
     (6) Acting as an escrow agent pursuant to the escrow agent registration act, chapter 18.44 RCW, or in one's capacity as an authorized title agent under Title 48 RCW;
     (7) Acting as trustee under a deed of trust delivered only as security for the payment of money or for the performance of another act;
     (8) Receiving and distributing rents and proceeds of sale as a licensed real estate broker on behalf of a principal in a manner authorized by the Washington department of licensing;
     (9) Engaging in a securities transaction or providing an investment advisory service in the capacity of a licensed and registered broker-dealer, investment advisor, or registered representative thereof, provided the activity is regulated by the department or the United States securities and exchange commission;
     (10) Engaging in the sale and administration of an insurance product by an insurance company or agent licensed by the office of the insurance commissioner to the extent that the activity is regulated by the office of the insurance commissioner;
     (11) Acting as trustee under a voting trust as provided by Washington state law;
     (12) Acting as trustee by a public, private, or independent institution of higher education or a university system authorized under Washington state law, including its affiliated foundations or corporations, with respect to endowment funds or other funds owned, controlled, provided to, or otherwise made available to such institution with respect to its educational or research purposes;
     (13) Acting as a private trust or private trust company to the extent exempt from regulation of the department as set forth in chapter 30B.-- RCW (sections 397 through 400 of this act); or
     (14) Engaging in other activities expressly excluded from the application of this title by rule of the director.

NEW SECTION.  Sec. 307   PERSONS SUBJECT TO THE REQUIREMENT OF A CERTIFICATE OF AUTHORITY OR APPROVAL UNDER THIS TITLE. (1) A person may not engage in unauthorized trust activity in this state.
     (2) As a condition of engaging in trust business in this state, an out-of-state trust institution is required to obtain approval from the director and is subject to all other requirements of chapter 30B.-- RCW (sections 366 through 375 of this act).
     (3) As a condition of engaging in trust business in this state, a person, other than an out-of-state trust institution or an exempt person under section 306 of this act, is required to organize and obtain a certificate of authority as a state trust company pursuant to chapter 30B.-- RCW (sections 321 through 332 of this act).
     (4) A person who violates the requirements of subsection (2) or (3) of this section, as applicable, engages in unauthorized trust activity and is subject to enforcement by the director as set forth in chapter 30B.-- RCW (sections 333 through 345 of this act).

NEW SECTION.  Sec. 308   CONFIDENTIALITY OF EXAMINATION INFORMATION. This title does not limit the privileges, immunities, and requirements of RCW 42.56.400(6), 30.04.075 (as recodified by this act), 32.04.220, and 33.04.110 in relation to trust companies, state banks, and state savings associations.

NEW SECTION.  Sec. 309   LIMITS ON LOANS TO INSIDERS AND AFFILIATES--EXCEPTIONS. (1) A state trust company may not make loans or extensions of credit, nor extend leases, to any person except in relation to nonfiduciary corporate funds and only as set forth in this section.
     (2) Unless authorized by subsection (4) of this section, a state trust company may make loans or leases to insiders only to the extent permitted for state banks under federal reserve board regulation O, 12 C.F.R. Part 215.
     (3) Unless authorized by subsection (4) of this section, a state trust company may make loans or leases to affiliates as may be reasonably determined by the director by rule. In the absence of rule making to the contrary, the director shall be guided by sections 23a and 23b of the federal reserve act, 12 U.S.C. Secs. 371c and 371c-1, and federal reserve board regulation W, 12 C.F.R. Part 223, governing the permissibility of loans and leases to affiliates by state banks that are members of the federal reserve.
     (4) Notwithstanding any other provision of this section, a state trust company may make loans or extensions of credit, or extend leases, in relation to nonfiduciary corporate funds, subject to approval of the director upon written application.
     (5) The director may adopt rules interpreting this section and may impose further conditions and restrictions on loans and extensions of credit by state trust companies not inconsistent with this section.

NEW SECTION.  Sec. 310   TRANSACTIONS IN STATE TRUST COMPANY SHARES. (1) A state trust company may acquire its own shares if:
     (a) The amount of its capital is sufficient to fully absorb the acquisition of the shares under regulatory accounting principles; or
     (b) The state trust company obtains the prior written approval of the director.
     (2) A state trust company may acquire a lien upon its own shares if:
     (a) The aggregate amount of indebtedness so secured is less than the amount of the state trust company's capital; or
     (b) The state trust company obtains the prior written approval of the director.

NEW SECTION.  Sec. 311   INVESTMENT OF CORPORATE FUNDS--SECURITIES. A state trust company may invest its nonfiduciary corporate funds in investments other than real estate, including securities, that are permissible for state banks under Title 30 RCW (as recodified by this act), and as may be made applicable for state trust companies by rule of the director.

NEW SECTION.  Sec. 312   INVESTMENT IN CORPORATIONS--SUBSIDIARIES. Except as otherwise provided by this chapter or rules adopted under this chapter, a state trust company may invest in corporations, limited liability companies, and other entities, and may acquire or establish a subsidiary to conduct any activity that may lawfully be conducted through the form of organization chosen for the subsidiary, in accordance with that which is permissible for state banks under RCW 30.04.125 and 30.04.127 (as recodified by this act).

NEW SECTION.  Sec. 313   PLEDGE OF ASSETS. A state trust company may not pledge or create a lien on any of its assets except to secure the repayment of money borrowed or as otherwise specifically authorized or required by rules adopted under this chapter. An act, deed, conveyance, pledge, or contract in violation of this section is void.

NEW SECTION.  Sec. 314   INVESTMENT IN STATE TRUST COMPANY FACILITIES. A state trust company may purchase, hold, and convey real estate, including facilities, for the purposes permissible for state banks under RCW 30.04.210 (as recodified by this act).

NEW SECTION.  Sec. 315   SEPARATION OF TRUST RECORDS--RECORDKEEPING. (1) A state trust company shall keep its fiduciary records separate and distinct from other records of the state trust company.
     (2) The fiduciary records must contain all material information relative to each account as appropriate under the circumstances.
     (3) A state trust company shall comply with all other conditions and requirements for state banks engaging in trust business and the deposit of securities as set forth in RCW 30.04.240 (as recodified by this act).

NEW SECTION.  Sec. 316   LEGAL SERVICES, ADVERTISING OF--PENALTY. RCW 30.04.260 (as recodified by this act) applies to this title.

NEW SECTION.  Sec. 317   ACQUISITION OF CONTROL. Unless otherwise authorized by the director, a state trust company shall conform to all conditions and requirements concerning acquisition of control or change of control the same as if the state trust company were a state bank, as set forth in RCW 30.04.400 through 30.04.410 (as recodified by this act), inclusive.

NEW SECTION.  Sec. 318   CHOICE OF LAW CLAUSES. When there is a choice of law clause contained in a governing instrument in which a state trust company is a party, the choice of law of any state agreed to by the parties to such instrument shall control the interpretation and enforcement of the trust or custodial agreement comprising such instrument.

NEW SECTION.  Sec. 319   CHOICE OF LAW WHEN INSTRUMENT SILENT. Except as set forth in section 318 of this act, choice of law is governed by RCW 11.98.005.

NEW SECTION.  Sec. 320   PUBLIC NOTICE BY ELECTRONIC MEANS. (1) Notwithstanding any provisions of this title, wherever notice by publication is required by a trust institution, such notice may be undertaken by internet publication upon terms and conditions that the director may prescribe by rule.
     (2) Notice to shareholders required under this title may be undertaken by electronic means in the same manner as permitted for general business corporations under RCW 23B.01.410.

ORGANIZATION AND POWERS

NEW SECTION.  Sec. 321   WHO MAY ORGANIZE A STATE TRUST COMPANY. Subject to the other provisions of this chapter, one or more persons may organize a state trust company.

NEW SECTION.  Sec. 322   FORMATION--ISSUANCE OF CERTIFICATE OF AUTHORITY--AMENDMENT OF ARTICLES, ETC. Except as set forth in this chapter or as may be prescribed by rule of the director, RCW 30.08.020, 30.08.040, 30.08.050, 30.08.055, 30.08.060, 30.08.070, 30.08.081, 30.08.082, 30.08.083, 30.08.084, 30.08.086, 30.08.087, 30.08.088, 30.08.090, 30.08.092, and 30.08.170 (as recodified by this act) shall, in relation to state trust companies, govern the formation, furnishing of notice, approval or refusal of articles of organization, effect of failure to commence business, issuance and treatment of shares or equity, rights of preferred or special shareholders, determination of capital impairment, treatment of authorized unissued shares, amendment of articles of organization, authorization of increase or decrease of stock or equity, and appointment of nominees for the holding of securities, the same as if a state trust company were a state bank under Title 30 RCW (as recodified by this act).

NEW SECTION.  Sec. 323   LIMITED LIABILITY COMPANY--ORGANIZATION OR CONVERSION--APPROVAL OF DIRECTOR--CONDITIONS--APPLICATION OF CHAPTER 25.15 RCW--DEFINITIONS. (1) The provisions of RCW 30.08.025 (as recodified by this act) shall govern the organization, conversion, approval of the director, and other matters incidental to the formation and operation of a state trust company as a limited liability company.
     (2) The director may adopt rules necessary to clarify, interpret, and implement this section.

NEW SECTION.  Sec. 324   APPLICATION FOR STATE TRUST COMPANY CERTIFICATE OF AUTHORITY. (1) An application to organize a state trust company charter must be made under oath and in the form required by the director and must be supported by information, data, records, and opinions of counsel that the director requires.
     (2) The application must be accompanied by all fees and deposits required by statute or by rule of the director.
     (3) The director shall issue a certificate of authority to a state trust company charter only on proof that one or more viable markets exist within or outside of this state that may be served in a profitable manner by the establishment of the proposed state trust company. In making such a determination, the director shall:
     (a) Examine the business plan which shall be submitted as part of the application for a state trust company charter; and
     (b) Consider:
     (i) The market or markets to be served;
     (ii) Whether the proposed organizational and capital structure and amount of initial capitalization is adequate for the proposed business and location;
     (iii) Whether the anticipated volume and nature of business indicates a reasonable probability of success and profitability based on the market sought to be served;
     (iv) Whether the proposed officers, directors, and managers, or managing participants, as a group, have sufficient fiduciary experience, ability, standing, competence, trustworthiness, and integrity to justify a belief that the proposed state trust company will operate in compliance with law and that success of the proposed state trust company is probable;
     (v) Whether each principal shareholder or participant has sufficient experience, ability, standing, competence, trustworthiness, and integrity to justify a belief that the proposed state trust company will be free from improper or unlawful influence or interference with respect to the state trust company's operation in compliance with law; and
     (vi) Whether the organizers are acting in good faith.
     (4) The failure of an applicant to furnish required information, data, opinions of counsel, other material, or the required fee is considered an abandonment of the application.

NEW SECTION.  Sec. 325   NOTICE AND INVESTIGATION OF APPLICATION. (1) The director shall notify the organizers when the application is complete and accepted for filing and all required fees and deposits have been paid. Promptly after this notification, the organizers shall publish notice of the application and solicit comments in a form specified by the director at locations reasonably necessary to solicit the views of potentially affected persons specified by the director by rule.
     (2) At the expense of the organizers, the director shall investigate the application and inquire into the identity and character of each proposed director, manager, officer, managing participant, and principal shareholder or participant. The director shall prepare a written report of the investigation, and any person may request a copy of the nonconfidential portions of the application and written report under chapter 42.56 RCW.
     (3) Rules adopted under this chapter may specify the confidential or nonconfidential character of information obtained by the department under this section.
     (4) The financial statement of a proposed officer, director, manager, or managing participant is confidential and not subject to public disclosure under chapter 42.56 RCW.

NEW SECTION.  Sec. 326   REQUIRED CAPITAL. (1) The director shall at time of application, to organize a state trust company, determine the minimum required initial capitalization of a proposed state trust company in the manner provided for in section 324(3)(b)(ii) of this act and as further provided in this section.
     (2) The director may consider the following safety and soundness factors when determining minimum required capital, including, but not limited to:
     (a) The nature and type of business conducted;
     (b) The nature and degree of liquidity in assets held in a corporate capacity;
     (c) The amount of fiduciary assets under management;
     (d) The type of fiduciary assets held and the depository of such assets;
     (e) The complexity of fiduciary duties and degree of discretion undertaken;
     (f) The competence and experience of management;
     (g) The extent and adequacy of internal controls;
     (h) The presence or absence of annual unqualified audits by an independent certified public accountant;
     (i) The reasonableness of business plans for retaining or acquiring additional capital;
     (j) The existence and adequacy of insurance obtained or held by the trust company for the purpose of protecting its clients, trust beneficiaries, and settlors;
     (k) The history of operating losses, if any;
     (l) The history of loss, if any, in relation to fiduciary or custodial accounts; and
     (m) The amount of support from the state trust company's parent or affiliate.
     (3) The effective date of a written finding requiring an existing state trust company to increase its capital must be stated in the written finding as on or after the thirty-first day after the date the written finding is mailed or delivered. Unless the state trust company requests a hearing before the director before the effective date of the written finding, the order becomes effective and is final and nonappealable. This subsection does not prohibit an application to reduce capital requirements of a proposed or an existing state trust company.
     (4) Subject to subsection (2) of this section, a state trust company to which the director issues a certificate of authority shall at all times maintain capital in at least the amount required under subsection (1) of this section, plus any additional amount or less any reduction the director directs under subsection (2) of this section.
     (5) Notwithstanding any provision of this section, the director may establish by rule safety and soundness standards for minimum required capital, additional required capital, and reduction of capital, for a proposed or existing state trust company.

NEW SECTION.  Sec. 327   CAPITAL NOTES OR DEBENTURES. (1) With the prior written approval of the director, any state trust company may at any time, through action of its board of directors, issue and sell its capital notes or debentures, which shall be subordinate to the claims of depositors and other creditors.
     (2) Unless otherwise approved by the director, a state trust company shall conform to all other conditions and requirements of chapter 30.36 RCW (as recodified by this act) governing capital notes and debentures of state banks.

NEW SECTION.  Sec. 328   APPLICATION OF GENERAL BUSINESS CORPORATION LAWS. (1) Notwithstanding any other provision of this title, a state trust company shall be deemed a distinct species of corporation or limited liability trust company whose charter may be granted, conditioned, canceled, or revoked only by the department.
     (2) Title 23B RCW applies to a state trust company to the extent not inconsistent with this title or the business of a state trust company, except that:
     (a) Any reference to the secretary of state means the director unless the context requires otherwise; and
     (b) The right of shareholders or participants to cumulative voting in the election of directors or managers exists only if granted by the state trust company's articles of association.
     (3) Unless expressly authorized by this title or a rule of the department, a state trust company may not take an action authorized by Title 23B RCW or chapter 25.15 RCW regarding its corporate status, capital structure, or a matter of corporate governance, of the type for which Title 23B RCW or chapter 25.15 RCW would require a filing with the secretary of state if the state trust company were a business corporation, without first submitting the filing to the director for the same purposes for which it otherwise would be required to be submitted to the secretary of state.
     (4) The department may adopt rules to limit or refine the applicability of subsection (2) of this section to a state trust company or to alter or supplement the procedures and requirements of Title 23B RCW or chapter 25.15 RCW applicable to an action taken under this chapter.

NEW SECTION.  Sec. 329   POWERS OF A STATE TRUST COMPANY. (1) Upon the issuance of a certificate of authority to a state trust company as prescribed in this chapter, the persons named in the articles of incorporation and their successors shall thereupon become a corporation or limited liability company and may engage in trust business and other business, including without limitation:
     (a) Subject to section 328 of this act, exercising the powers of a Washington business corporation under Title 23B RCW or a Washington limited liability company under chapter 25.15 RCW reasonably necessary or helpful to enable exercise of its specific powers under this title;
     (b) Receiving for safekeeping personal property of every description;
     (c) Acting as assignee, bailee, conservator, custodian, recordkeeper, escrow agent, registrar, receiver, or transfer agent;
     (d) Acting as financial advisor, investment advisor or manager, agent, or attorney-in-fact in any agreed upon capacity;
     (e) Accepting or executing trusts, including:
     (i) Acting as trustee under a written agreement;
     (ii) Receiving money or other property in its capacity as trustee for investment in real or personal property;
     (iii) Acting as trustee and performing the fiduciary duties committed or transferred to it by a valid and applicable court order;
     (iv) Acting as trustee of the estate of a deceased person;
     (v) Acting as trustee for a minor or incapacitated person;
     (vi) Acting as a trustee of collective investment funds or common trust funds; or
     (vii) Acting as a trustee of statutory or similar trusts;
     (f) Administering in any other fiduciary capacity real or tangible personal property;
     (g) Acting as an executor, administrator, guardian, or conservator;
     (h) Acting as an assignee, receiver, agent, or custodian;
     (i) Acting pursuant to valid and applicable court order as executor or administrator of the estate of a deceased person or as a guardian or conservator for a minor or incapacitated person;
     (j) Acting in any capacity in which one exercises investment discretion on behalf of another;
     (k) Exercising any incidental power or ancillary that is reasonably necessary to enable it to fully exercise, according to commonly accepted fiduciary customs and usages, the trust powers authorized by this title;
     (l) Acting as a manager of a limited liability company, limited liability partnership, or similar entity;
     (m) Acting as the registrar of stocks and bonds;
     (n) Acting as an escrow agent, escrow holder, or managing agent;
     (o) Acting as a corporate bond and transfer paying agent;
     (p) Acting as a sponsoring or other member of any clearing corporation with respect to securities or other property; or
     (q) Acting in any other capacity or for any other activity as determined or approved by the director.
     (2) The director may prescribe rules for the safe and sound exercise of the powers enumerated in subsection (1) of this section.
     (3) A state bank, to the extent authorized under Title 30 (as recodified by this act) or 32 RCW, as applicable, or a state savings association, to the extent authorized under Title 33 RCW, may exercise all of the powers and authorities of a state trust company under this title, including in relation to corporate governance matters.

NEW SECTION.  Sec. 330   ADDITIONAL POWERS OF A STATE TRUST COMPANY--FEDERAL AND INTERSTATE PARITY. (1) Notwithstanding any restrictions, limitations, and requirements of law, in addition to all powers, express or implied, that a state trust company has under the laws of this state, a state trust company has the powers and authorities conferred as of the effective date of this section, upon a federally chartered trust company doing business in this state. A state trust company may exercise the powers and authorities conferred on a federally chartered trust company after this date only if the director finds that the exercise of such powers and authorities:
     (a) Serves the convenience and advantage of trustors and beneficiaries, or the general public; and
     (b) Maintains the fairness of competition and parity between state trust companies and federally chartered trust companies.
     (2) Notwithstanding any other provisions of law, a state trust company has the trust-related and fiduciary-related powers and authorities of an out-of-state trust institution approved by the director under chapter 30B.-- RCW (sections 366 through 375 of this act).
     (3) As used in this section, "powers and authorities" include without limitation powers and authorities in corporate governance and operational matters.
     (4) The restrictions, limitations, and requirements applicable to specific powers and authorities of federally chartered trust companies and out-of-state state trust institutions, as applicable, shall apply to state 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 trust companies solely under this section.
     (5) Notwithstanding any other provisions of law, in addition to all powers enumerated by this title, and those necessarily implied therefrom, a state 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 the effective date of this section.
     (6) A state trust company that desires to perform an activity that is not authorized by subsection (5) 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 and unsound practice by the state 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 state 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 state 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.

NEW SECTION.  Sec. 331   SCOPE OF REGULATED ACTIVITIES OF A STATE TRUST COMPANY. Notwithstanding the definition of "trust business" as set forth in section 302 of this act, the director has the authority to regulate the exercise of all powers and authorities of a state trust company which are enumerated in section 329 of this act and which may be conferred by way of parity under section 372 of this act.

NEW SECTION.  Sec. 332   INTERNET TRUST BUSINESS. (1) A person engaged in trust business in this state by use of the internet is subject to regulation by the department under this title, unless it is:
     (a) An out-of-state trust institution approved under chapter 30B.-- RCW (sections 366 through 375 of this act) or acting under authority of section 402 of this act; or
     (b) An exempt person under section 306 of this act.
     (2) The director may adopt rules specific to the regulation of internet trust businesses in the interest of protecting Washington state citizens.

DIRECTOR'S AUTHORITY--SUPERVISION AND EXAMINATION--ENFORCEMENT

NEW SECTION.  Sec. 333   DIRECTOR SUPERVISION OVER AUTHORIZED TRUST INSTITUTIONS. (1) In addition to his or her supervision authority over the trust business of state banks and state savings associations, the director shall exercise supervision authority over state trust companies and also over out-of-state trust institutions to the extent provided for in cooperative agreements made by the director with the home states of out-of-state trust institutions pursuant to section 372 of this act.
     (2) The director shall execute and enforce through the department and such other agents as exist on or after the effective date of this section, all laws which exist on or after the effective date of this section relating to state trust companies and out-of-state trust institutions engaged in trust business in this state.
     (3) For the more complete and thorough enforcement of the provisions of this title, the department is authorized to adopt rules not inconsistent with the provisions of this title, as may, in its opinion, be necessary to carry out the provisions of this title and as may be further necessary to insure safe and sound management of trust institutions under its supervision taking into consideration the appropriate interest of the creditors, stockholders, participants, and the public in their relations with such trust institutions.
     (4) A state trust company shall conduct its business in a manner consistent with all laws relating to trust companies, and all rules, regulations, and instructions that may be adopted or issued by the department.

NEW SECTION.  Sec. 334   FEE FOR EXAMINATION. Examination and investigation fees, together with semiannual assessments of state trust companies and all other miscellaneous fees for trust institutions, are governed by RCW 30.04.070 (as recodified by this act) of the Washington commercial bank act and by rules adopted by the director.

NEW SECTION.  Sec. 335   DIRECTOR TO ACT UNDER AUTHORITY OF THE DEPARTMENT'S DIVISION OF BANKS. All the powers, duties, and functions granted to or imposed upon the director under this title shall be exercised under the direction and supervision of the department's division of banks, subject to the delegation, oversight, and supervision of the director. Wherever provision is made in any law in effect on the effective date of this section authorizing and permitting the director to adopt rules and regulations with respect to any actions or things required to be done under this title, such rules and regulations shall be made by the department's division of banks, and the words "the director" used in such statutes authorizing the director to make rules and regulations, shall be construed to mean the department's division of banks, and the words "department" substituted in such statutes for "director."

NEW SECTION.  Sec. 336   GENERALLY ACCEPTED ACCOUNTING PRINCIPLES. Unless otherwise provided for by rule of the director or other applicable rule or regulation, a state trust company shall conform to generally accepted accounting principles and applicable rules of the financial accounting standards board.

NEW SECTION.  Sec. 337   EXAMINATION STANDARDS FOR STATE TRUST COMPANIES. The director is authorized to adopt rules governing the examination standards for state trust companies and other persons subject to investigation and examination under this title, including the application by rule of examination standards of other federal and state financial institutions regulators and standards adopted incident to cooperative agreements made by the director under section 372 of this act.

NEW SECTION.  Sec. 338   DUTIES OF PERSONS SUBJECT TO AUTHORITY OF DIRECTOR--VIOLATIONS. (1) Each person subject to the authority of the director, its subsidiaries, and their respective directors, officers, employees, and agents, shall comply with:
     (a) This title;
     (b) The rules adopted by the director pertaining to this title;
     (c) Any lawful directive or order of the director;
     (d) Any lawful supervisory agreement with the director or supervisory directive of the director; and
     (e) All applicable federal laws and regulations affecting trust institutions subject to the authority of the director.
     (2) Each holding company of a person subject to the authority of the director, 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 director with respect to such holding companies;
     (c) Any lawful direction or order of the director;
     (d) Any lawful supervisory agreement with the director; and
     (e) All applicable federal laws and regulations affecting trust institutions subject to the authority of the director.
     (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.

NEW SECTION.  Sec. 339   GOVERNING ADMINISTRATIVE LAW AND PROCEDURE. The powers and duties of the director and required practices and procedures of the department with respect to all enforcement authority conferred by this title shall be subject to the Washington administrative procedure act, chapter 34.05 RCW, consistent with the administrative procedures applicable to enforcement actions against banks, their holding companies, and their officers, directors, employees, and agents, as set forth in Title 30 RCW (as recodified by this act), including but not limited to the following:
     (1) Notice of administrative charges under RCW 30.04.450 (as recodified by this act);
     (2) The provisions relating to grounds for, procedure for obtaining, and the effective date of emergency temporary orders under RCW 30.04.455 through 30.04.465 (as recodified by this act), inclusive;
     (3) Enforcement of department orders under RCW 30.04.470 and 30.04.475 (as recodified by this act);
     (4) Grounds for removal of officers, directors, and employees under RCW 30.12.040 (as recodified by this act);
     (5) Procedure for suspension of an officer, director, or employee under RCW 30.12.0401 (as recodified by this act); and
     (6) Notice of charges for removal of officers, directors, and employees under RCW 30.04.042 (as recodified by this act).

NEW SECTION.  Sec. 340   ADMINISTRATIVE ORDERS--PENALTIES FOR VIOLATION. In addition to any other powers conferred by this title, the director shall have the power, consistent with the requirements of section 339 of this act, to:
     (1) Order any person under authority of the director under this title, its holding company, its subsidiary, or any of their directors, officers, employees, or agents to cease and desist violating any provision of this title or any lawful rule;
     (2) Order any authorized trust institution, its holding company, its subsidiary, or any of their directors, officers, employees, or agents to cease and desist from a course of conduct that is unsafe or unsound and which is likely to cause insolvency or dissipation of assets or is likely to jeopardize or otherwise seriously prejudice the interests of the public in their relationship with the authorized trust institution;
     (3) Order any person to cease engaging in an unauthorized trust activity; and
     (4) Enter any order pursuant to section 373 of this act.

NEW SECTION.  Sec. 341   SUSPENSION AND REMOVAL OF DIRECTORS, OFFICERS, AND EMPLOYEES. The director has the power to require the suspension and removal from office of any officer, director, or employee of any trust institution subject to the director's authority, its holding company, or its subsidiary, who shall be found to be dishonest, incompetent, or reckless in the management of the affairs of the institution, or who persistently violates the laws of this state or the lawful orders, instructions, and rules issued or adopted by the department.

NEW SECTION.  Sec. 342   SUBPOENA POWER AND EXAMINATION UNDER OATH. The director shall have the power to subpoena witnesses, compel their attendance, require the production of evidence, administer oaths, and examine any person under oath in connection with any subject related to a duty imposed or a power vested in the director.

NEW SECTION.  Sec. 343   EFFECT OF FINAL ORDERS AGAINST OFFICERS, DIRECTORS, EMPLOYEES, AND AGENTS. Any present or former director, officer, or employee of a trust institution or holding company under authority of the director, 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 a trust institution 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 trust institution, 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, savings association, 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.

NEW SECTION.  Sec. 344   DIRECTOR'S AUTHORITY TO PROTECT THE PUBLIC AND STATE TRUST INSTITUTIONS. (1) Notwithstanding any other provision of this title, the director may by rule or order prohibit any person from engaging in a trust business in this state contrary to the requirements of this title if the conduct of the trust business in this state by such person harms or is likely to harm the general public, or if it adversely affects the business of state trust institutions.
     (2) The director may issue a temporary cease and desist order against such person in the manner provided for in this chapter if the general public or state trust institutions are likely to be substantially injured by delay in issuing a cease and desist order.
     (3) An order or rule made by the director pursuant to this section may require that any applicable person obtain a certificate of authority under chapter 30B.-- RCW (sections 321 through 332 of this act) as a condition of continuing to engage in a trust business in this state, subject to meeting all qualifications for grant of a state trust company certificate of authority under this title.
     (4) This section does not apply to a person conducting business pursuant to section 306 of this act, except for a person identifiable solely by reason of section 306(1) of this act.

NEW SECTION.  Sec. 345   DIRECTOR'S SUBPOENAS. (1) The director or authorized assistants may apply for and obtain a superior court order approving and authorizing a subpoena in advance of its issuance. The application may be made in the county where the subpoenaed person resides or is found, or the county where the subpoenaed documents, records, or evidence are located, or in Thurston county. The application must:
     (a) State that an order is sought under this section;
     (b) Adequately specify the documents, records, evidence, or testimony; and
     (c) Include a declaration made under oath that an investigation is being conducted for a lawfully authorized purpose related to an investigation within the department's authority and that the subpoenaed documents, records, evidence, or testimony are reasonably related to an investigation within the department's authority.
     (2) When an application under this section is made to the satisfaction of the court, the court must issue an order approving the subpoena. An order under this subsection constitutes authority of law for the agency to subpoena the documents, records, evidence, or testimony.
     (3) The director or authorized assistants may seek approval and a court may issue an order under this section without prior notice to any person, including the person to whom the subpoena is directed and the person who is the subject of an investigation. An application for court approval is subject to the fee and process set forth in RCW 36.18.012(3).
     (4) Subsections (1) through (3) of this section are applicable to the director's enforcement authority under this title against persons engaged in unauthorized trust activity and persons, other than a state trust company authorized under this title, whom the director has reason to believe are in violation of this title. This section does not limit the authority of the director to investigate or examine a state trust company authorized under this title without applying for or obtaining a superior court order or issuing a subpoena pursuant to this section.

STATE TRUST COMPANIES--BOARD OF
DIRECTORS, OFFICERS, AND SHAREHOLDERS

NEW SECTION.  Sec. 346   VOTING SECURITIES HELD BY STATE TRUST COMPANY. (1) Voting securities of a state trust company held by the state trust company in a fiduciary capacity under a will or trust, whether registered in its own name or in the name of its nominee, may not be voted in the election of directors or managers or on a matter affecting the compensation of directors, managers, officers, or employees of the state trust company in that capacity, unless:
     (a) Under the terms of the will or trust, the manner in which the voting securities are to be voted may be determined by a donor or beneficiary of the will or trust and the donor or beneficiary actually makes the determination in the matter at issue;
     (b) The terms of the will or trust expressly direct the manner in which the securities must be voted to the extent that no discretion is vested in the state trust company as fiduciary; or
     (c) The securities are voted solely by a cofiduciary that is not an affiliate of the state trust company, as if the cofiduciary were the sole fiduciary.
     (2) Voting securities of a state trust company that cannot be voted under this section are considered to be authorized but unissued for purposes of determining the procedures for and results of the affected vote.

NEW SECTION.  Sec. 347   BYLAWS. (1) A state trust company shall adopt bylaws and may amend its bylaws from time to time for the purposes and in accordance with the procedures set forth in the Washington business corporation act.
     (2) A limited liability trust company in which management is retained by the participants is not required to adopt bylaws if provisions required by law to be contained in the bylaws are contained in the articles of association or the participation agreement. If a limited liability trust company has adopted bylaws which designate each full liability participant, the limited liability trust company shall file with the director a copy of the bylaws. Solely that portion of the bylaws designating each full liability participant is a public record.

NEW SECTION.  Sec. 348   BOARD OF DIRECTORS, MANAGERS, OR MANAGING PARTICIPANTS. (1) The board of a state trust company must consist of not fewer than five directors, managers, or managing participants. Except for a limited liability trust company in which management has been retained by its participants, the principal executive officer of the state trust company is a member of the board. The principal executive officer acting in the capacity of board member is the board's presiding officer unless the board elects a different presiding officer to perform the duties as designated by the board.
     (2) Unless the director consents otherwise in writing, a person may not serve as director, manager, or managing participant of a state trust company if:
     (a) The state trust company incurs an unreimbursed loss attributable to a charged-off obligation of or holds a judgment against the person or an entity that was controlled by the person at the time of funding and at the time of default on the loan that gave rise to the judgment or charged-off obligation;
     (b) The person has been convicted of a felony; or
     (c) The person has violated a provision of Washington state law, relating to loan of trust funds and purchase or sale of trust property by the trustee, and the violation has not been corrected.
     (3) If a state trust company other than a limited liability trust company operated by managing participants does not elect directors or managers before the sixty-first day after the date of its regular annual meeting, the director may appoint a conservator under this title to operate the state trust company and elect directors or managers, as appropriate. If the conservator is unable to locate or elect persons willing and able to serve as directors or managers, the director may close the state trust company for liquidation.
     (4) A vacancy on the board that reduces the number of directors, managers, or managing participants to fewer than five must be filed not later than the thirtieth day after the date the vacancy occurs. A limited liability trust company with fewer than five managing participants must add one or more new participants or elect a board of managers of not fewer than five persons to resolve the vacancy. After thirty days after the date the vacancy occurs, the director may appoint a conservator under this title to operate the state trust company and elect a board of not fewer than five persons to resolve the vacancy. If the conservator is unable to locate or elect five persons willing and able to serve as directors or managers, the director may close the state trust company for liquidation.
     (5) Before each term to which a person is elected to serve as a director or manager of a state trust company, or annually for a person who is a managing participant, the person shall submit an affidavit for filing in the minutes of the state trust company stating that the person, to the extent applicable:
     (a) Accepts the position and is not disqualified from serving in the position;
     (b) Will not violate or knowingly permit an officer, director, manager, managing participant, or employee of the state trust company to violate any law applicable to the conduct of business of the state trust company; and
     (c) Will diligently perform the duties of the position.
     (6) An advisory director or manager is not considered a director if the advisory director or manager:
     (a) Is not elected by the shareholders or participants of the state trust company;
     (b) Does not vote on matters before the board or a committee of the board and is not counted for purposes of determining a quorum of the board or committee; and
     (c) Provides solely general policy advice to the board.

NEW SECTION.  Sec. 349   REQUIRED BOARD MEETINGS. The board of a state trust company shall hold at least one regular meeting each quarter. At each regular meeting the board shall review and approve the minutes of the prior meeting and review the operations, activities, and financial condition of the state trust company. The board may designate committees from among its members to perform these duties and approve or disapprove the committees' reports at each regular meeting. All actions of the board must be recorded in its minutes.

NEW SECTION.  Sec. 350   OFFICERS. (1) The board shall annually appoint the officers of the state trust company, who serve at the pleasure of the board. The state trust company must have a principal executive officer primarily responsible for the execution of board policies and operation of the state trust company and an officer responsible for the maintenance and storage of all corporate books and records of the state trust company and for required attestation of signatures. These positions may not be held by the same person. The board may appoint other officers of the state trust company as the board considers necessary.
     (2) Unless expressly authorized by a resolution of the board recorded in its minutes, an officer or employee may not create or dispose of a state trust company asset or create or incur a liability on behalf of the state trust company.
     (3) Unless otherwise approved by the director, the chief executive officer, the president, the chief operating officer, or the chief financial officer of a state trust company must be a Washington state resident.

NEW SECTION.  Sec. 351   CERTAIN CRIMINAL OFFENSES. (1) An officer, director, manager, managing participant, employee, shareholder, or participant of a state trust company commits an offense if the person knowingly:
     (a) Conceals information or a fact, or removes, destroys, or conceals a book or record of the state trust company for the purpose of concealing information or a fact from the director or an agent of the director; or
     (b) For the purpose of concealing, removes or destroys any book or record of the state trust company that is material to a pending or anticipated legal or administrative proceeding.
     (2) An officer, director, manager, managing participant, or employee of a state trust company commits an offense if the person knowingly makes a false entry in the books or records or in any report or statement of the state trust company.
     (3) An offense under this section is a class B felony.

NEW SECTION.  Sec. 352   BOARD'S RESPONSIBILITY. The board of a state trust company is responsible for the proper exercise of fiduciary powers by the state trust company and each matter pertinent to the exercise of fiduciary powers, including:
     (1) The determination of policies;
     (2) The investment and disposition of property held in a fiduciary capacity; and
     (3) The direction and review of the actions of each officer, employee, and committee used by the state trust company in the exercise of its fiduciary powers.

NEW SECTION.  Sec. 353   BONDING REQUIREMENTS. The board of a state trust company shall require protection and indemnity for clients in reasonable amounts consistent with the bonding requirements for a state bank under RCW 30.12.030 (as recodified by this act) and as may further be established by rule adopted under this chapter, against dishonesty, fraud, defalcation, forgery, theft, and other similar insurable losses, with corporate insurance or surety companies.

NEW SECTION.  Sec. 354   REPORTS OF APPARENT CRIME. A trust company that is the victim of a robbery, has a shortage of corporate or fiduciary funds in excess of five thousand dollars, or is the victim of an apparent or suspected misapplication of its corporate or fiduciary funds or property in any amount by a director, manager, managing participant, officer, or employee shall report such robbery, shortages, or apparent or suspected misapplication to the director within forty-eight hours after the time it is discovered. The initial report may be oral if the report is promptly confirmed in writing. The trust company or a director, manager, managing participant, officer, employee, or agent is not subject to liability for defamation or another charge resulting from information supplied in the report.

NEW SECTION.  Sec. 355   ADMINISTRATION OF FIDUCIARY POWERS. (1)(a) The board of directors is responsible for the proper exercise of fiduciary powers by the trust company. All matters pertinent thereto, including the determination of policies, the investment and disposition of property held in a fiduciary capacity, and the direction and review of the actions of all officers, employees, and committees utilized by the trust company in the exercise of its fiduciary powers, are the responsibility of the board. In discharging this responsibility, the board of directors may assign, by action duly entered in the minutes, the administration of such of the trust company's fiduciary powers as it may consider proper to assign to such directors, officers, employees, or committees as it may designate.
     (b) A fiduciary account may not be accepted without the prior approval of the board, or of the directors, officers, or committees to whom the board may have designated the performance of that responsibility.
     (c) A written record shall be made of such acceptances and of the relinquishment or closing out of all fiduciary accounts. Upon the acceptance of an account for which the trust company has investment responsibilities a prompt review of the assets shall be made. The board shall also ensure that at least once during every calendar year thereafter, all the assets held in or for each fiduciary account where the bank has investment responsibilities are reviewed to determine the advisability of retaining or disposing of such assets.
     (2) All officers and employees taking part in the operation of the state trust institution shall be adequately bonded.
     (3) Every qualified fiduciary subject to this section and exercising fiduciary powers in this state shall designate, employ, or retain legal counsel who shall be readily available to pass upon fiduciary matters and to advise the trust company and its state trust institution.
     (4)(a) The state trust institution may utilize personnel and facilities of other departments of the trust company or its affiliates, and other departments of the trust company may utilize the personnel and facilities of the state trust institution or its affiliates only to the extent not prohibited by law and as long as the separate identity of the state trust institution is preserved.
     (b) Pursuant to a written agreement, a trust company exercising fiduciary powers may perform services related to the exercise of fiduciary powers for another trust company or other entity, and may purchase services related to the exercise of fiduciary powers from another trust company or other entity.
     (5) Fiduciary records shall be kept separate and distinct from other records of the trust company and maintained in compliance with section 315 of this act. All fiduciary records shall be kept and retained for such time as to enable the fiduciary to furnish such information or reports with respect thereto as may be required by the director.
     (6) Every such fiduciary shall keep an adequate record of all pending litigation to which it is a party in connection with its exercise of fiduciary powers.

NEW SECTION.  Sec. 356   AUDIT COMMITTEE. A committee of directors, exclusive of any active officers of the trust company, shall at least once during each calendar year make suitable audits of the state trust institution or cause suitable audits to be made by auditors responsible only to the board of directors, and at such time shall ascertain whether the department has been administered in accordance with law, this section, and sound fiduciary principles. The board of directors may elect, in lieu of such periodic audits, to adopt an adequate continuous audit system. A report of the audits and examination required under this section, together with the action taken thereon, shall be noted in the minutes of the board of directors.

NEW SECTION.  Sec. 357   SHAREHOLDERS--ACTIONS AUTHORIZED WITHOUT MEETINGS--WRITTEN CONSENT. (1) Any action required by this title to be taken at a meeting of the shareholders of a state trust company, or any action that may be taken at a meeting of such shareholders, may be taken without a meeting if a consent in writing, setting forth the action so taken, is signed by all of the shareholders entitled to vote with respect to the subject matter thereof.
     (2) The consent has the same force and effect as a unanimous vote of shareholders and may be stated as such in any articles or documents filed under this title.

NEW SECTION.  Sec. 358   DIRECTORS, COMMITTEES--ACTIONS AUTHORIZED WITHOUT MEETINGS--WRITTEN CONSENT. (1) Unless otherwise provided by the articles of incorporation or bylaws, any action required by this title to be taken at a meeting of the directors of a state trust company, or any action which may be taken at any meeting of the directors or of a committee, may be taken without a meeting if consented to in writing or by electronic transmission, setting forth the action so taken, shall be signed by all of the directors, or all of the members of the committee, as the case may be. Such consent has the same effect as a unanimous vote.
     (2) For purposes of this section, the term "electronic transmission" means any form of communication not involving the transmission of paper that creates a record that may be retained, retrieved, and reviewed by a recipient thereof and that may be directly reproduced in paper form by such recipient through an automated process.

NEW SECTION.  Sec. 359   DIRECTORS, COMMITTEES--MEETINGS AUTHORIZED BY CONFERENCE TELEPHONE OR SIMILAR COMMUNICATIONS EQUIPMENT. Except as may be otherwise restricted by the articles of incorporation or bylaws of a state trust company, members of its board of directors or any committee designated by its board of directors may participate in a meeting of the board or committee by means of a conference telephone or similar communications equipment by means of which all persons participating in the meeting can hear each other at the same time. Participation by such means shall constitute presence, in person, at a meeting.

STATE TRUST COMPANIES--TRUST DEPOSITS AND COMMON TRUST FUNDS

NEW SECTION.  Sec. 360   GENERAL PROHIBITION ON DEPOSIT TAKING. Except as authorized by this chapter or other governing law, a trust company may not take or hold deposits of funds in this state unless:
     (1) It is authorized to do business in this state as a depository institution; and
     (2) Complies with all applicable federal and state laws and regulations respecting the taking and handling of monetary deposits.

NEW SECTION.  Sec. 361   TRUST DEPOSITS AS A CLIENT INVESTMENT--SECURITY FUND. (1) The director may establish by rule a plan for the safe and sound deposit of trust funds by a state trust company with itself as an investment, if:
     (a) The investment of the trust deposits is authorized in writing by the settlor or the beneficiary;
     (b) The state trust company maintains as security for the trust deposits a separate fund of securities, which are permissible for trust investments, under control of a federal reserve bank or a clearing corporation, either in this state or elsewhere;
     (c) The total market value of the security is at all times at least equal to the amount of the deposit;
     (d) The separate fund is designated as security for trust deposits;
     (e) The separate fund is maintained under the control of a bank or government agency; and
     (f) The state trust company complies with such other terms and conditions as the director may establish by rule in the interest of safety and soundness and protection of the public.
     (2) A state trust company may make periodic withdrawals from or additions to the securities fund required by subsection (1) of this section as long as the required value is maintained.
     (3) Income from the securities in the fund belongs to the state trust company.

NEW SECTION.  Sec. 362   COMMON TRUST FUNDS. (1) Consistent with RCW 11.102.010, a state trust company may establish common trust funds to provide investment to itself as a fiduciary.
     (2) The director may adopt rules to administer and carry out this section and RCW 11.102.010, including but not limited to rules to establish investment and participation limitations, disclosure of fees, audit requirements, limit or expand investment authority for particular classes or categories of securities or other property, advertising, exemptions, and other requirements that may be necessary to carry out this section.

STATE TRUST COMPANIES--PRUDENTIAL FIDUCIARY STANDARDS

NEW SECTION.  Sec. 363   PRUDENTIAL FIDUCIARY STANDARDS. (1) Except to the extent federal preemption of state law is applicable in relation to trusts governed under the federal employment retirement income security act, a state trust company acting as a trustee or other fiduciary shall comply with all applicable provisions of this title and with chapters 11.97, 11.98, 11.100, 11.102, 11.104A, 11.106, and 11.108 RCW, and with chapter 11.110 RCW, in the case of a charitable trust.
     (2) The director has broad administrative authority to establish by rule or interpretation principles-based standards for examination, supervision, and enforcement of a state trust company by the department in relation to compliance with this title, including subsection (1) of this section.

NEW SECTION.  Sec. 364   FEE DETERMINATION. (1) The compensation arrangement between a client and a trustee or any other fiduciary pursuant to this title shall be at arm's length and any compensation pursuant to such arrangement shall be a reasonable amount with respect to the services rendered.
     (2) This section does not apply to arrangements not involving trust or client assets.

NEW SECTION.  Sec. 365   DISCLOSURE OF CONFLICTS OF INTEREST. In addition to the provisions set out in RCW 11.98.078, if a conflict of interest may reasonably be expected to have a material adverse impact on the trustee's judgment in its provision of services to such client, the trustee must provide a reasonable disclosure of such conflict to such client.

OUT-OF-STATE TRUST INSTITUTIONS

NEW SECTION.  Sec. 366   TRUST BUSINESS AT A TRUST OFFICE. An out-of-state trust institution that meets the requirements of this chapter is not required to maintain a physical trust office in this state. An out-of-state trust institution that does not operate a trust office in this state and that meets the requirements of this chapter may establish and maintain a new trust office in this state.

NEW SECTION.  Sec. 367   PREEXISTING APPROVED OUT-OF-STATE TRUST INSTITUTIONS. Notwithstanding any other provision of this title, an out-of-state trust institution that complies with sections 368(1) and 402 of this act is exempt from the requirements of sections 369 and 370 of this act.

NEW SECTION.  Sec. 368   TRUST BUSINESS OF OUT-OF-STATE TRUST INSTITUTION--PREREQUISITE OF RECIPROCITY. (1) Except as authorized by federal law or by another law of this state, an out-of-state trust institution shall not be permitted to engage in a trust business in this state on more favorable terms and conditions than the terms and conditions on which state trust companies incorporated under this title and savings banks engaged in trust business under RCW 32.08.140, 32.08.142, 32.08.210, and 32.08.215 are permitted to engage in trust business in such other state.
     (2) The out-of-state trust institution may exercise additional powers and authorities that are authorized under the laws of its home state if the director determines in writing that the exercise of the additional powers and authorities in this state will not threaten the safety and soundness of trust institutions in this state and serves the convenience and needs of Washington consumers.

NEW SECTION.  Sec. 369   REQUIREMENT OF NOTICE. An out-of-state trust institution desiring to engage in trust business in this state shall provide, or cause its home state regulator to provide, written notice to the director of its intent to engage in trust business in this state, accompanied by:
     (1) Satisfactory written evidence of a certificate of authority to engage in trust business in its home state, or equivalent, from its home state regulator;
     (2) A copy of the resolution adopted by the board of directors of such out-of-state trust institution authorizing the out-of-state trust institution to engage in trust business in this state;
     (3) Written evidence of compliance with the requirements of the director set forth in subsection (1) of this section; and
     (4) A filing fee, if any, as prescribed by the director under authority of RCW 30.04.070 (as recodified by this act).

NEW SECTION.  Sec. 370   CONDITIONS FOR APPROVAL. (1) Except as authorized by section 402 of this act, an out-of-state trust institution may not engage in trust business in this state unless:
     (a) The out-of-state trust institution has confirmed in writing to the director that for as long as it maintains a trust office in this state, it will comply with all applicable laws of this state.
     (b) The out-of-state trust institution has provided satisfactory evidence to the director of compliance with (i) any applicable requirements of chapter 23B.15 or 25.15 RCW and (ii) the applicable requirements of its home state regulator for engaging in trust business in both its home state and this state.
     (c) The director, acting within sixty days after receiving notice under section 369 of this act, has certified to the home state regulator that the requirements of this chapter have been met and the notice has been approved or, if applicable, that any conditions imposed by the director pursuant to subsection (2) of this section have been satisfied.
     (2) The out-of-state trust institution may commence engaging in trust business in this state on the sixty-first day after the date the director receives the notice unless the director specifies an earlier or later date.
     (3) The period of review in subsection (2) of this section may be extended by the director on a determination that the written notice raises issues that require additional information or additional time for analysis. If the period of review is extended, the out-of-state trust institution may engage in trust business in this state only on prior written approval by the director.

NEW SECTION.  Sec. 371   ADDITIONAL TRUST OFFICES. An out-of-state trust institution that maintains a trust office in this state under this chapter may establish or acquire additional trust offices in this state to the same extent that a state trust company may establish or acquire additional offices in this state.

NEW SECTION.  Sec. 372   EXAMINATIONS OF OUT-OF-STATE TRUST INSTITUTIONS--PERIODIC REPORTS--COOPERATIVE AGREEMENTS--ASSESSMENT OF FEES. (1) To the extent consistent with subsections (3), (4), and (5) of this section, the director may make such examinations and investigations of an out-of-state trust institution engaged in trust business in this state as the director may deem necessary to determine whether the out-of-state trust institution is being operated and maintained in a safe and sound manner in a manner affecting this state. Unless otherwise prescribed by rule, the provisions of Title 30 RCW (as recodified by this act) applicable to examination or investigation of banks shall apply to such examinations or investigations of out-of-state trust institutions.
     (2) The director may require periodic reports regarding any out-of-state trust institution engaged in trust business in this state. The required reports shall be provided by such out-of-state trust institution or by the home state regulator. Any reporting requirements prescribed by the director under this subsection shall be (a) consistent with the reporting requirements applicable to state trust companies and (b) appropriate for the purpose of enabling the director to carry out his or her responsibilities under this chapter.
     (3) The director may enter into cooperative, coordinating, and information-sharing agreements with any other trust institution supervisory agency with respect to the periodic examination or other supervision of an out-of-state trust institution engaging in trust business in this state, and the director may accept the report of examination and report of investigation of such agency in lieu of conducting his or her own examination or investigation.
     (4) The director may enter into contracts with any trust institution supervisory agency that has concurrent jurisdiction over an out-of-state trust institution engaged in trust business in this state to engage the services of such agency's examiners at a reasonable rate of compensation, or to provide the services of the director's examiners to such agency at a reasonable rate of compensation. Any such contract shall be deemed a sole source contract to the extent permitted under Washington state law.
     (5) The director may enter into joint examinations or joint enforcement actions with other trust institutions supervisory agencies having concurrent jurisdiction over any out-of-state trust institution engaged in trust business in this state or by a state trust company doing business in any host state.
     (6) Notwithstanding any other provision of this section, the director may at any time take enforcement action independently if the director deems such actions to be necessary or appropriate to carry out his or her responsibilities under this title or to ensure compliance with the laws of this state. However, in the case of an out-of-state trust institution, the director shall recognize the exclusive authority of the home state regulator over corporate governance matters and the primary responsibility of the home state regulator with respect to safety and soundness matters.
     (7) An out-of-state trust institution that engages in trust business in this state and which is subject to examination by the director under any cooperative agreement between the director and the home state of the out-of-state trust institution, may be subject to supervisory, examination, and other fees, under authority of such cooperative agreement, RCW 30.04.070 (as recodified by this act), and as may be specified by rule.

NEW SECTION.  Sec. 373   ENFORCEMENT. (1) Consistent with the Washington administrative procedure act, chapter 34.05 RCW, and in the manner provided for enforcement action against a state trust company under this title, after notice and opportunity for hearing, the director may determine an out-of-state trust institution engaging in trust business in this state is in violation of any provision of the laws of this state or is operating in an unsafe and unsound manner.
     (2) The director shall have the authority to take all such enforcement actions as he or she would be empowered to take if the out-of-state trust institution were a state trust company, including but not limited to issuing an order temporarily or permanently prohibiting the out-of-state trust institution from engaging in trust business in this state.
     (3) The director may make a written finding that an out-of-state trust institution engaging in or proposing to engage in a trust business in this state does not meet the requirements for engaging in trust business in this state pursuant to this chapter or section 402 of this act, which finding shall be effective on the date of issuance or such other date as the director shall determine.
     (4) In cases involving extraordinary circumstances requiring immediate action, the director may issue a temporary order without advance notice or opportunity for hearing, subject to the out-of-state trust institution's right to petition for judicial review in the same manner as a state trust company under this title.
     (5) The director will give notice to the home state regulator of each enforcement action taken against an out-of-state trust institution and, to the extent practicable, will consult and cooperate with the home state regulator in pursuing and resolving such enforcement action.

NEW SECTION.  Sec. 374   NOTICE OF SUBSEQUENT MERGER, CLOSING, ETC. Each out-of-state trust institution that maintains an office in this state pursuant to this chapter, or the home state regulator of such trust institution, shall give at least thirty days' prior written notice, or in the case of an emergency transaction, such shorter notice as is consistent with applicable state or federal law, to the director of:
     (1) Any merger, consolidation, or other transaction that would cause a change of control with respect to such out-of-state trust institution or any bank holding company that controls such trust institution, with the result that an application would be required to be filed pursuant to the federal change in bank control act of 1978, 12 U.S.C. Sec. 1817(j), or the federal bank holding company act of 1956, 12 U.S.C. Sec. 1841 et seq., or any successor statutes thereto;
     (2) Any transfer of all or substantially all of the trust accounts or trust assets of the out-of-state trust institution to another person; or
     (3) The closing or disposition of any office in this state.

NEW SECTION.  Sec. 375   FUNCTIONALLY UNREGULATED OUT-OF-STATE TRUST INSTITUTIONS. Notwithstanding any other provision of this chapter, an out-of-state trust institution engaging in trust business in this state, which is not an exempt person under section 306 of this act and which by reason of the laws of its home state is not subject to any supervision, examination, or other safety and soundness oversight by a home state regulator, shall be subject to all the requirements of a state trust company under this title.

STATE TRUST COMPANIES--VOLUNTARY DISSOLUTION AND LIQUIDATION

NEW SECTION.  Sec. 376   REQUIRED VOTE OF SHAREHOLDERS. A state trust company may go into voluntary liquidation and be closed, and may surrender its charter and franchise as a corporation of this state by the affirmative votes of its shareholders owning two-thirds of its stock or participation shares.

NEW SECTION.  Sec. 377   CORPORATE PROCEDURE. Shareholder action to liquidate a state trust company shall be taken at a meeting of the shareholders or participants duly called by resolution of the board of directors or members, written notice of which, stating the purpose of the meeting, shall be mailed to each shareholder or participant, or in case of a shareholder's or participant's death, to such shareholder's or participant's legal representative or heirs at law, addressed to the shareholder's or participant's last known residence ten days previous to the date of such meeting. If stockholders or participants shall, by the required vote, elect to liquidate a trust company, a certified copy of all proceedings of the meeting at which such action shall have been taken, verified by the oath of the president and secretary, shall be transmitted to the director for approval.

NEW SECTION.  Sec. 378   AUTHORITY TO LIQUIDATE--PUBLICATION. If the director approves the liquidation, the director shall issue to the state trust company a permit for such purpose. A permit shall not be issued by the director until the director is satisfied that provision has been made by the state trust company to satisfy and pay off all creditors. If not so satisfied, the director shall refuse to issue a permit, and is authorized to take possession of the state trust company and its assets and business, and hold the same and liquidate the state trust company in the manner provided in this title. When the director approves the voluntary liquidation of a state trust company, the directors of that state trust company shall cause to be published in a newspaper in the county in which the same is located, or if no newspaper is published in such county, then in a newspaper having a general circulation in such county, a notice that the state trust company is closing down its affairs and going into liquidation, and notify its creditors to present their claims for payment. Such notice shall be published once a week for four consecutive weeks.

NEW SECTION.  Sec. 379   EXAMINATION AND REPORTS. When any state trust company is in process of voluntary liquidation, it is subject to examination by the director, and shall furnish such reports from time to time as may be called for by the director.

NEW SECTION.  Sec. 380   UNCLAIMED PROPERTY. All unclaimed property remaining in the hands of a liquidated state trust company is subject to the provisions of chapter 11.08 RCW.

NEW SECTION.  Sec. 381   SELL OR TRANSFER OF PROPERTY. Any state trust company may sell and transfer to any other trust institution, whether state or federally chartered, all of its assets of every kind upon such terms as may be agreed upon and approved by the director and by two-thirds vote of its board of directors or members. A certified copy of the minutes of any meeting at which such action is taken, under the oath of the president and secretary, together with a copy of the contract of sale and transfer, shall be filed with the director. Whenever voluntary liquidation shall be approved by the director or the sale and transfer of the assets of any state trust company shall be approved by the director, a certified copy of such approval, filed in the office of the secretary of state, shall authorize the cancellation of the charter of such state trust company, subject, however, to its continued existence, as provided by this title and the general law relative to corporations.

STATE TRUST COMPANIES--INVOLUNTARY
DISSOLUTION AND LIQUIDATION

NEW SECTION.  Sec. 382   WHEN DIRECTOR MAY TAKE POSSESSION. (1) After the expiration of thirty days from the director's written notice to correct an unsafe condition of the state trust company, the director may take possession of the business and property of a state trust company to which this title is applicable whenever it appears that the state trust company:
     (a) Has violated the terms of its certificate of authority or any laws applicable thereto;
     (b) Is conducting its business in an unauthorized or unsafe manner;
     (c) Is in an unsafe or unsound condition to transact its business;
     (d) Has an impairment of its capital;
     (e) Has become otherwise insolvent;
     (f) Has neglected or refused to comply with the terms of a duly issued lawful order of the director;
     (g) Has refused, upon proper demand, to submit its records, affairs, and concerns for inspection and examination of a duly appointed or authorized examiner of the director;
     (h) Through its officers, has refused to be examined upon oath regarding its affairs; or
     (i) Has made a voluntary assignment of its assets to trustees.
     (2) Notwithstanding the notice requirement in subsection (1) of this section, the director may without notice seize and take immediate possession of a state trust company if it appears to the director that the conditions of the state trust company are so hazardous that they pose an imminent threat to the general public or the interests of the state trust company's clients.

NEW SECTION.  Sec. 383   MUTUAL CONSENT TO DISSOLUTION AND LIQUIDATION. If the director consents, any state trust company may voluntarily place its assets and business under the control of the director for liquidation by a resolution of a majority of its directors or members upon notice to the director. Upon taking possession of the state trust company, the director, or duly appointed agent, shall retain possession thereof until the state trust company is authorized by the director to resume business or until the affairs of the state trust company are fully liquidated as provided in this chapter. A state trust company shall not make any general assignment for the benefit of its creditors except by surrendering possession of its assets to the director, as provided in this section. Whenever any state trust company for any reason suspends operations for any length of time, the state trust company shall, immediately upon such suspension of operations, be deemed in the possession of the director and subject to liquidation under this chapter.

NEW SECTION.  Sec. 384   OTHER REQUIREMENTS FOR INVOLUNTARY DISSOLUTION AND LIQUIDATION. (1) To the greatest extent consistent with this title, the standards, terms and conditions, and procedures for involuntary dissolution and liquidation of a state trust company shall conform to the provisions of chapter 30.44 RCW (as recodified by this act), excluding RCW 30.44.010, 30.44.020, and 30.44.270 (as recodified by this act) related to involuntary dissolution and liquidation of a bank, including the right to judicially contest the director's action as provided in RCW 30.44.030 (as recodified by this act).
     (2) The director may by rule establish a uniform set of procedures consistent with this chapter.

STATE TRUST COMPANIES--SUPERVISORY
DIRECTION AND CONSERVATORSHIP

NEW SECTION.  Sec. 385   SUPERVISORY DIRECTION. (1) If upon examination or at any other time it appears to the director that a state trust company is in an unsafe condition and its condition is such as to render the continuance of its business hazardous to the public or to its clients, or if the state trust company appears to have exceeded its powers or has failed to comply with the law, or if the state trust company gives its consent, then the director shall upon his or her determination (a) notify the state trust company of his or her determination, (b) furnish to the state trust company a written list of the director's requirements to abate his or her determination, and (c) if the director makes further determination to directly supervise, he or she shall notify the state trust company 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 state trust company 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 state trust company fails to comply within such time the director may appoint a conservator.
     (2) To the greatest extent consistent with this title, the standards, terms and conditions, and procedures of supervisory direction, and abatement therefrom, shall be consistent with chapter 30.46 RCW (as recodified by this act) related to supervisory direction of banks.
     (3) The director may establish rules related to supervisory direction consistent with this section.

NEW SECTION.  Sec. 386   CONSERVATORSHIP. (1) After the period of supervisory direction specified by the director for compliance, if he or she determines that the state trust company has failed to comply with the lawful requirements imposed, the director may appoint a conservator, who shall immediately take charge of such state trust company and all of its property, books, records, and effects.
     (2) The conservator shall conduct the business of the state trust company and take such steps toward the removal of the causes and conditions which have necessitated such order, as the director may direct.
     (3) 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 the state trust company, including claims or causes of actions belonging to or which may be asserted by the state trust company, 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 the state trust company which are deemed by the conservator to be necessary to protect all of the interested parties for a property affected thereby.
     (4) The director, or any newly appointed assistant, may be appointed to serve as conservator.
     (5) If the director, however, is satisfied that the state trust company is not in condition to continue business in the interest of its clients under the conservator, the director may proceed with appropriate remedies provided by other provisions of this title.
     (6) The powers, duties, privileges, and immunities of a conservator appointed under this chapter shall be subject to all other applicable provisions of this title related to appointment of conservators and to all other provisions of chapter 30.46 RCW (as recodified by this act) related to the appointment of and service by conservators in relation to banks.
     (7) The director may establish rules related to conservatorship of state trust companies consistent with this section.

STATE TRUST COMPANIES--MERGER, CONSOLIDATION, AND CONVERSION

NEW SECTION.  Sec. 387   APPLICABILITY OF CHAPTER. This chapter applies to any merger or consolidation in which a state trust company is a party.

NEW SECTION.  Sec. 388   DEFINITIONS. Unless the context clearly requires otherwise, the definitions in this section apply throughout this chapter.
     (1) "Merger" includes consolidation.
     (2) "Merging trust company" means a party to a merger.
     (3) "Resulting trust company" means the trust company resulting from a merger.
     (4) "Vote of stockholders" or "vote of classes of stockholders" means only a vote of those entitled to vote under the terms of such shares.

NEW SECTION.  Sec. 389   APPROVAL BY DIRECTOR--REQUIRED. Upon approval by the director, trust companies may be merged to result in a trust company.

NEW SECTION.  Sec. 390   CONTENTS OF MERGER AGREEMENT--APPROVAL BY EACH BOARD OF DIRECTORS--REQUIREMENTS FOR DIRECTOR'S APPROVAL. (1) The board of directors of each merging trust company shall, by a majority of the entire board, approve a merger agreement that must contain:
     (a) The name of each merging trust company and location of each office;
     (b) With respect to the resulting trust company, (i) the name and location of the principal and other offices; (ii) the name and mailing address of each director to serve until the next annual meeting of the stockholders; (iii) the name and mailing address of each officer; (iv) the amount of capital, the number of shares, and the par value, if any, of each share; and (v) the amendments to its charters and bylaws;
     (c) Provisions governing the exchange of shares of the merging trust companies for such consideration as has been agreed to in the merger agreement;
     (d) A statement that the agreement is subject to approval by the director and the stockholders of each merging trust company;
     (e) Provisions governing the manner of disposing of the shares of the resulting trust company if the shares are to be issued in the transaction and are not taken by dissenting shareholders of merging trust companies; and
     (f) Any other provisions the director requires to discharge his or her duties with respect to the merger.
     (2) After approval by the board of directors of each merging trust company, the merger agreement shall be submitted to the director for approval, together with certified copies of the authorizing resolutions of each board of directors showing approval by a majority of the entire board. Within sixty days after receipt by the director of the merger agreement and resolutions, the director shall approve or disapprove of the merger agreement, and if no action is taken, the agreement is deemed approved. The director shall approve the agreement if it appears that the:
     (a) Resulting trust company meets the requirements of state law as to the formation of a new trust company;
     (b) Agreement provides an adequate capital in relation to the deposit liabilities, if any, of the resulting trust company and its other activities which are to continue or are to be undertaken;
     (c) Agreement is fair; and
     (d) Merger is not contrary to the public interest.
     If the director disapproves an agreement, he or she shall state his or her objections and give an opportunity to the merging trust company to amend the merger agreement to obviate such objections.

NEW SECTION.  Sec. 391   APPROVAL BY STOCKHOLDERS--VOTING--NOTICE. (1) To be effective, a merger that is to result in a trust company must be approved by the stockholders of each merging trust company by a vote of two-thirds of the outstanding voting stock of each class at a meeting called to consider such action. This vote shall constitute the adoption of the charter and bylaws of the resulting trust company, including the amendments in the merger agreement.
     (2) Unless waived in writing, notice of the meeting of stockholders shall be given by publication in a newspaper of general circulation in the place where the principal office of each merging trust company is located, at least once each week for four successive weeks, and by mail, at least fifteen days before the date of the meeting, to each stockholder of record of each merging trust company at the address on the books of the stockholder's trust company. No notice of publication need be given if written waivers are received from the holders of two-thirds of the outstanding shares of each class of stock. The notice shall state that dissenting stockholders will be entitled to payment of the value of only those shares which are voted against approval of the plan.

NEW SECTION.  Sec. 392   EFFECTIVE DATE OF MERGER--CERTIFICATE OF MERGER. (1) A merger that is to result in a trust company shall, unless a later date is specified in the agreement, become effective after the filing with and upon the approval of the director of the executed agreement together with copies of the resolutions of the stockholders of each merging trust company approving it, certified by the trust company's president or a vice president and a secretary. The charters of the merging trust companies, other than the resulting trust company, shall immediately after that automatically terminate.
     (2) The director shall immediately after that issue to the resulting trust company a certificate of merger specifying the name of each merging trust company and the name of the resulting trust company. The certificate shall be conclusive evidence of the merger and of the correctness of all proceedings regarding the merger in all courts and places, and may be recorded in any office for the recording of deeds to evidence the new name in which the property of the merging trust companies is held.

NEW SECTION.  Sec. 393   RESULTING TRUST COMPANY--PROPERTY, RIGHTS, POWERS, AND DUTIES. (1) A resulting trust company is the same business and corporate entity as each merging trust company with all property, rights, powers, and duties of each merging trust company, except as affected by state law and by the charter and bylaws of the resulting trust company. A resulting trust company has the right to use the name of any merging trust company whenever it can do any act under such name more conveniently.
     (2) Any reference to a merging trust company in any writing, whether executed or taking effect before or after the merger, is a reference to the resulting trust company if not inconsistent with the other provisions of that writing.

NEW SECTION.  Sec. 394   DISSENTING SHAREHOLDERS--MAY RECEIVE VALUE IN CASH--APPRAISAL. (1) The owner of shares of a trust company that were voted against a merger to result in a trust company shall be entitled to receive their value in cash, if and when the merger becomes effective, upon written demand made to the resulting trust company at any time within thirty days after the effective date of the merger, accompanied by the surrender of the stock certificates. The value of the shares shall be determined, as of the date of the stockholders' meeting approving the merger, by three appraisers, one to be selected by the owners of two-thirds of the dissenting shares, one by the board of directors of the resulting trust company, and the third by the two so chosen. The valuation agreed upon by any two appraisers shall govern. If the appraisal is not completed within ninety days after the merger becomes effective, the director shall cause an appraisal to be made.
     (2) The dissenting shareholders shall bear, on a pro rata basis based on number of dissenting shares owned, the cost of their appraisal and one-half of the cost of a third appraisal, and the resulting trust company shall bear the cost of its appraisal and one-half of the cost of the third appraisal. If the director causes an appraisal to be made, the cost of that appraisal shall be borne equally by the dissenting shareholders and the resulting trust company, with the dissenting shareholders sharing their half of the cost on a pro rata basis based on number of dissenting shares owned.
     (3) The resulting trust company may fix an amount which it considers to be not more than the fair market value of the shares of a merging trust company at the time of the stockholders' meeting approving the merger, that it will pay dissenting shareholders of the trust company entitled to payment in cash. The amount due under an accepted offer or under the appraisal shall constitute a debt of the resulting trust company.

NEW SECTION.  Sec. 395   VALUATION OF ASSETS--BOOKS OF MERGING TRUST COMPANY. Without approval by the director, no asset shall be carried on the books of the resulting trust company at a valuation higher than that on the books of the merging trust company at the time of its last examination by a state trust examiner before the effective date of the merger or conversion.

NEW SECTION.  Sec. 396   SALE OF ASSETS. (1) The board of a state trust company, with the director's approval, may cause a state trust company to sell all or substantially all of its assets, including the right to control accounts established with the trust company, without shareholder or participant approval if the director finds:
     (a) The interests of the state trust company's clients, depositors, and creditors are jeopardized because of insolvency or imminent insolvency of the state trust company; and
     (b) The sale is in the best interest of the state trust company's clients and creditors.
     (2) A sale under this section must include an assumption and promise by the buyer to pay or otherwise discharge:
     (a) All of the state trust company's liabilities to clients and depositors;
     (b) All of the state trust company's liabilities for salaries of the state trust company's employees incurred before the date of the sale;
     (c) Obligations incurred by the director arising out of the supervision or sale of the state trust company; and
     (d) Fees and assessments due the department.
     (3) This section does not limit the incidental power of a state trust company to buy and sell assets in the ordinary course of business.
     (4) This section does not affect the director's authority to take action under another law.
     (5) The sale by a trust company of all or substantially all of its assets with shareholder or participant approval is considered a voluntary dissolution and liquidation and is governed by the voluntary dissolution and liquidation provisions of chapter 30.44 RCW (as recodified by this act).

PRIVATE TRUSTS AND PRIVATE TRUST COMPANIES

NEW SECTION.  Sec. 397   DEFINITIONS. Unless the context clearly requires otherwise, the definitions in this section apply to the provisions of this chapter.
     (1) "Change of control" means to transfer or sell control of a private trust or private trust company to a person or persons other than family members.
     (2) "Common ancestor" has the same meaning as an individual referred to as a common ancestor in the internal revenue code, 26 U.S.C. Sec. 1361(c)(1)(B)(ii), and excludes an individual who, on an applicable date, is more than six generations removed from the youngest generation of shareholders or holders of beneficial interests in a private trust company.
     (3) "Family member" means an individual who is a common ancestor, a lineal descendant of such common ancestor, or a spouse or former spouse of such common ancestor or such lineal descendant.
     (4) "Private trust" means a trust created and maintained pursuant to the Washington trust act, chapter 11.98 RCW, or the laws of another state or foreign jurisdiction, in which:
     (a) The trustee is a person who does not hold itself out to the general public as being engaged in trust business; and
     (b) Neither the trust nor the trustee, in the capacity of trustee for the private trust, transacts business with the general public.
     (5) "Private trust company" means a company acting as a private trust.
     (6) "Transact business with the general public" means any sales, solicitations, arrangements, agreements, or transactions to provide trust or other business services, whether or not for a fee, commission, or any other type of remuneration, with any client that is not a family member or a sole proprietorship, partnership, joint venture, association, trust, estate, business trust, or other company that is not one hundred percent owned or controlled by one or more family members.

NEW SECTION.  Sec. 398   PRIVATE TRUSTS AND PRIVATE TRUST COMPANIES EXEMPT--EXCEPTION FOR CHANGE OF CONTROL. (1) A private trust or private trust company is exempt from the requirement of a certificate of authority or regulation under this title.
     (2) Notwithstanding subsection (1) of this section, a transfer or change of control of a private trust or private trust company to a person or persons other than family members constitutes unauthorized trust activity unless the resulting private trust company is a trust institution authorized to do business in this state.

NEW SECTION.  Sec. 399   CONVERSION TO PUBLIC TRUST COMPANY. A private trust or private trust company which seeks to convert to one transacting business with the general public in this state must apply for and obtain a certificate of authority as a state trust company under chapter 30B.-- RCW (sections 321 through 332 of this act) or a federal charter or charter from another state which would permit it to conduct trust business and fiduciary activities in this state without engaging in unauthorized trust activity.

NEW SECTION.  Sec. 400   OTHER EXEMPTIONS NOT AFFECTED BY CHAPTER. The provisions of this chapter do not affect the exemptions for persons acting pursuant to section 306 of this act.

EFFECT ON PREEXISTING TRUST COMPANIES AND TRUST BUSINESSES

NEW SECTION.  Sec. 401   TRUST COMPANIES UNDER FORMER TITLE 30 RCW. Trust companies under Title 30 RCW, as it existed on the effective date of this section, shall automatically succeed to and be subject to all powers and authorities, rights and obligations, privileges and immunities, and discretions of a state trust company under this title.

NEW SECTION.  Sec. 402   PREEXISTING APPROVED OUT-OF-STATE TRUST INSTITUTIONS. (1) An out-of-state trust institution that has, prior to the effective date of this section, obtained approval from the director under authority of Title 30 RCW, as it existed on the effective date of this section, to engage in trust business in this state and has continuously since the date of such approval held itself out to the public as engaging in trust business in this state, shall be exempt from the requirement of notice to or obtaining approval from the director pursuant to chapter 30B.-- RCW (sections 366 through 375 of this act).
     (2) For purposes of this section, the term "director" includes the former office of the supervisor of banks that merged into the department under authority of chapter 43.320 RCW.
     (3) For purposes of this section, satisfactory evidence of approval from the director may be established only by written evidence that the director gave his or her approval prior to the effective date of this section in the form of a certificate of authority, declaration of reciprocity between this state and the home state of the out-of-state trust institution, or the equivalent. Authorization from the secretary of state to transact business in this state as a foreign corporation or foreign limited liability company is not by itself satisfactory evidence of such approval from the director.
     (4) For purposes of this section, an out-of-state trust institution with satisfactory evidence of the director's approval to engage in trust business prior to the effective date of this section is presumed to have:
     (a) Complied with section 370(1) of this act; and
     (b) Continuously held itself out to the public as engaging in trust business in this state since the date of the director's approval by demonstrating that it has maintained uninterrupted and without lapse registration with the secretary of state as a foreign corporation under chapter 23B.15 RCW or foreign limited liability company under chapter 25.15 RCW.

CONSTRUCTION

NEW SECTION.  Sec. 403   CONTINUATION OF EXISTING LAW. The provisions of this title, insofar as they are substantially the same as statutory provisions repealed by this act and relating to the same subject matter, shall be construed as restatements and continuations, and not as new enactments.

NEW SECTION.  Sec. 404   TITLE, CHAPTER, SECTION HEADINGS NOT PART OF LAW. Title headings, chapter or subchapter headings, and section or subsection headings as used in this title do not constitute any part of the law.

NEW SECTION.  Sec. 405   SEVERABILITY. 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. 406   PRIOR INVESTMENTS OR TRANSACTIONS NOT AFFECTED. This title does not affect the legality of investments, made prior to January 5, 2015, or of transactions had before January 5, 2015, pursuant to any provisions of law in force when such investments were made or transactions had.

SAVINGS BANK ACT

NEW SECTION.  Sec. 501   A new section is added to chapter 32.04 RCW to read as follows:
     This title may be known and cited as the Washington savings bank act.

Sec. 502   RCW 32.08.210 and 1994 c 92 s 320 are each amended to read as follows:
     (1) A savings bank has the powers and authorities to engage in trust business that a state commercial bank authorized under RCW 30.08.150 (as recodified by this act) and subject also to the requirements and conditions for engaging in trust business set forth in this section.
     (2)
A mutual savings bank shall have the power to act as trustee under:
     (((1))) (a) A trust established by an inter vivos trust agreement or under the will of a deceased person.
     (((2))) (b) A trust established in connection with any collective bargaining agreement or labor negotiation wherein the beneficiaries of the trust include the employees concerned under the agreement or negotiation, or a trust established in connection with any pension, profit sharing, or retirement benefit plan of any corporation, partnership, association, or individual, including but not limited to retirement plans established pursuant to the provisions of the act of congress entitled "Self-Employed Individuals Tax Retirement Act of 1962", as now constituted or hereafter amended, or plans established pursuant to the provisions of the act of congress entitled "Employee Retirement Income Security Act of 1974", as now constituted or hereafter amended.
     (3) A mutual savings bank may be appointed to and accept the appointment of personal representative of the last will and testament, or administrator with will annexed, of the estate of any deceased person and to be appointed and to act as guardian of the estate of minors ((and)), incompetent persons, and ((disabled)) persons with a disability.
     (4) The restrictions, limitations and requirements in Title 30 RCW (as recodified by this act) shall apply to a mutual savings bank exercising the powers granted under this section insofar as the restrictions, limitations, and requirements relate to exercising the powers granted under this section. The incidental trust powers to act as agent in the management of trust property and the transaction of trust business in Title 30 RCW (as recodified by this act) shall apply to a mutual savings bank exercising the powers granted under this section insofar as the incidental powers relate to exercising the powers granted under this section.
     (5) Before engaging in trust business, a mutual savings bank shall apply to the director on such form as he or she shall determine and pay the same fee as required for a state bank to engage in trust business. In considering such application the director shall ascertain from the best source of information at his or her command and by such investigation as he or she may deem necessary whether the management and personnel of the mutual savings bank are such as to command confidence and warrant belief that the trust business will be adequately and efficiently conducted in accordance with law, whether the resources in the neighborhood of such place and in the surrounding country afford a reasonable promise of adequate support for the proposed trust business and whether the resources of the mutual savings bank are sufficient to support the conduct of such trust business, and that the mutual savings bank has and maintains, in addition to its guaranty fund, undivided profits against which the depositors have no prior claim in an amount not less than would be required of a state bank or trust company, which undivided profits shall be eligible for investment in the same manner as the guaranty fund of a mutual savings bank. Within sixty days after receipt of such application, the director shall either approve or refuse the same and forthwith return to the mutual savings bank a copy of the application upon which his or her decision has been endorsed. The director shall not be required to approve or refuse an application until thirty days after any appropriate approval has been obtained from a federal regulatory agency. 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, as now or hereafter amended. A mutual savings bank shall not use the word "trust" in its name, but may use the word "trust" in its business or advertising.

SAVINGS ASSOCIATION ACT

NEW SECTION.  Sec. 601   A new section is added to chapter 33.04 RCW to read as follows:
     This title may be known and cited as the Washington savings association act.

Sec. 602   RCW 33.12.010 and 1994 c 92 s 435 are each amended to read as follows:
     An association shall have the same capacity to act as possessed by natural persons. An association has authority to perform such acts as are necessary or proper to accomplish its purposes.
     In addition to any other power an association may have, an association has authority:
     (1) To have and alter a corporate seal;
     (2) To continue as an association for the time limited in its articles of incorporation or, if no such time limit is specified, then perpetually;
     (3) To sue or be sued in its corporate name;
     (4) To acquire, hold, sell, dispose of, pledge, mortgage, or encumber property, as its interests and purposes may require;
     (5) To conduct business in this state and elsewhere as may be permitted by law and, to this end, to comply with any law, regulation, or other requirements incident thereto;
     (6) To acquire capital in the form of deposits, shares, or other accounts for fixed, minimum or indefinite periods of time as are authorized by its bylaws, and may issue such passbooks, statements, time certificates of deposit, or other evidence of accounts;
     (7) To pay interest;
     (8) To charge reasonable service fees for services provided as part of its business;
     (9) To borrow money and to pledge, mortgage, or hypothecate its properties and securities in connection therewith;
     (10) To collect or protest promissory notes or bills of exchange owned or held as collateral by the association;
     (11) To let vaults, safes, boxes, or other receptacles for the safekeeping or storage of personal property, subject to the laws and regulations applicable to and with the powers possessed by safe deposit companies; and to act as escrow holder;
     (12) To act as fiscal agent for the United States of America; to purchase, own, vote, or sell stock in, or act as fiscal agent for any federal home loan bank, the federal housing administration, home owners' loan corporation, or other state or federal agency, organized under the authority of the United States or of the state of Washington and authorized to loan to or act as fiscal agent for associations or to insure savings accounts or mortgages; and in the exercise of these powers, to comply with any requirements of law or rules or orders promulgated by such federal or state agency and to execute any contracts and pay any charges in connection therewith;
     (13) To procure insurance of its mortgages and of its accounts from any state or federal corporation or agency authorized to write such insurance and, in the exercise of these powers, to comply with any requirements of law or rules or orders promulgated and to execute any contracts and pay any premiums required in connection therewith;
     (14) To loan money and to sell any of its notes or other evidences of indebtedness, together with the collateral securing the same;
     (15) To make, adopt, and amend bylaws for the management of its property and the conduct of its business;
     (16) To deposit moneys and securities in any other association or any bank or savings bank or other like depository;
     (17) To dissolve and wind up its business;
     (18) To collect or compromise debts due to it and, in so doing, to apply to the indebtedness the accounts of the debtors, and to receive, as collateral or otherwise, other securities, property or property rights of any kind or nature;
     (19) To become a member of, deal with, or make reasonable payments or contribution to any organization to the extent that such organization assists in furthering or facilitating the association's purposes, powers or community responsibilities, and to comply with any reasonable conditions of eligibility;
     (20) To sell money orders, travelers checks and similar instruments as agent for any organization empowered to sell such instruments through agents within this state and to receive money for transmission through a federal home loan bank;
     (21) To service loans and investments for others;
     (22) To sell and to purchase mortgages or other loans, including participating interests therein;
     (23) To use abbreviations, words or symbols in connection with any document of any nature and on checks, proxies, notices and other instruments which abbreviations, words, or symbols shall have the same force and legal effect as though the respective words and phrases for which they stand were set forth in full for the purposes of all statutes of the state and all other purposes;
     (24) To conduct a trust business under rules adopted by the director pursuant to chapter 34.05 RCW; ((and))
     (25) To exercise the powers and authorities of a state commercial bank to engage in trust business under RCW 30.08.150 (as recodified by this act) upon application to and approval by the director and subject to requirements and conditions that the director may establish by rule; and
     (26)
To exercise, by and through its board of directors and duly authorized officers and agents, all such incidental powers as may be necessary to carry on the business of the association.
     The powers granted in this section shall not be construed as limiting or enlarging any grant of authority made elsewhere by this title.

TITLE 30B CODIFICATION

NEW SECTION.  Sec. 701   The following is applicable to Title 30B RCW as authorized by this act:
     (1) Sections 301 through 320 of this act constitute a new chapter in Title 30B RCW to be codified as chapter 30B.04 RCW;
     (2) Sections 321 through 332 of this act constitute a new chapter in Title 30B RCW to be codified as chapter 30B.08 RCW;
     (3) Sections 333 through 345 of this act constitute a new chapter in Title 30B RCW to be codified as chapter 30B.10 RCW;
     (4) Sections 346 through 359 of this act constitute a new chapter in Title 30B RCW to be codified as chapter 30B.12 RCW;
     (5) Sections 360 through 362 of this act constitute a new chapter in Title 30B RCW to be codified as chapter 30B.20 RCW;
     (6) Sections 363 through 365 of this act constitute a new chapter in Title 30B RCW to be codified as chapter 30B.24 RCW;
     (7) Sections 366 through 375 of this act constitute a new chapter in Title 30B RCW to be codified as chapter 30B.38 RCW;
     (8) Sections 376 through 381 of this act constitute a new chapter in Title 30B RCW to be codified as chapter 30B.44A RCW;
     (9) Sections 382 through 384 of this act constitute a new chapter in Title 30B RCW to be codified as chapter 30B.44B RCW;
     (10) Sections 385 and 386 of this act constitute a new chapter in Title 30B RCW to be codified as chapter 30B.46 RCW;
     (11) Sections 387 through 396 of this act constitute a new chapter in Title 30B RCW to be codified as chapter 30B.53 RCW;
     (12) Sections 397 through 400 of this act constitute a new chapter in Title 30B RCW to be codified as chapter 30B.64 RCW;
     (13) Sections 401 and 402 of this act constitute a new chapter in Title 30B RCW to be codified as chapter 30B.72 RCW; and
     (14) Sections 403 through 406 of this act constitute a new chapter in Title 30B RCW to be codified as chapter 30B.98 RCW.

--- END ---