Washington Administrative Code

(1) If a bank holds at any time Type II or III securities that are not considered investment grade and represent an aggregate par value exceeding five percent of the bank's capital and surplus, the investment securities must be charged down to market value, or a specific reserve …

A bank may invest in shares of an investment company provided that all of the following conditions are met:(1) The investment company must be registered with Securities and Exchange Commission under the Investment Company Act of 1940 and the Securities Act of 1933 or be a private…

Nothing in WAC 208-512-110, 208-512-115, or 208-512-116 shall limit the authority of a bank to invest in corporations or entities pursuant to chapters 32.20 and 33.24 RCW, or with the prior authorization of the director pursuant to RCW 30A.04.127.[Statutory Authority: RCW 43.320.…

WAC 208-512-180 and 208-512-190, inclusive, are intended to further refine the requirements under chapter 30A.60 RCW and RCW 30A.04.212 to encourage banks to help meet the credit needs of their local communities in satisfying their continuing and affirmative obligations to help m…

The total investment by a commercial bank in a single parcel of real property, and improvements thereon, shall not exceed twenty-five percent of the aggregate amount of such bank's real estate investments allowed by RCW 30A.04.212.[Statutory Authority: RCW 43.320.040, 43.320.050,…

(1) An amount equal to ten percent of the aggregate amount invested in real estate by a commercial bank pursuant to RCW 30A.04.212 shall be placed in qualifying community investments.(2) A qualifying community investment made by an entity that wholly owns a bank, is wholly owned …

Subject to RCW 30A.60.020, the division shall consider, among other factors, the record of performance of the applicant in helping to meet the credit needs of the applicant's entire community, including low-income and moderate-income neighborhoods in determining the approval or d…

WAC 208-512-320 through 208-512-370, inclusive, govern the authority of a bank to engage in insurance-related activities.[Statutory Authority: RCW 43.320.040, 43.320.050, 30A.04.030, 30A.12.060, 30A.04.140, 30A.04.210, 30A.04.212, 30A.60.010 – [30A.60.]901, 30A.08.140, 30A.08.150…

Except as provided in these rules, or as otherwise provided by law, a bank may not act as a principal in any insurance-related activity that is not permissible for a national bank, unless consistent with 12 U.S.C. Sec. 1831a.(1) The Federal Deposit Insurance Corporation has deter…

Notwithstanding WAC 208-512-340, a bank may not engage in insurance underwriting except to the extent that activity is permissible for a national bank.[Statutory Authority: RCW 43.320.040, 43.320.050, 30A.04.030, 30A.12.060, 30A.04.140, 30A.04.210, 30A.04.212, 30A.60.010 – [30A.6…

(1) A bank may conduct insurance-related activities through a subsidiary of the bank as authorized by RCW 30A.04.125(8) subject to subsection 2 of this section.(2) A subsidiary of a bank may not engage as a principal in any insurance-related activity that is not permissible for a…

It shall be considered an unsafe and unsound practice in conducting the affairs of the bank if in the opinion of the director, the insurance-related activities of a bank or bank subsidiary are:(1) A violation of WAC 208-512-340, 208-512-350, or 208-512-360; or(2) A violation of a…

These rules are designed to help Washington state-chartered banks (Title 30A RCW), savings banks (Title 32 RCW) and savings associations (Title 33 RCW) establish, reiterate, integrate and maintain their own policies and procedures regarding subprime and nontraditional mortgage le…

Because of concerns about problems with subprime mortgage lending, the federal government issued the Interagency Guidance on Nontraditional Mortgage Product Risks and a Statement on Subprime Mortgage Lending (collectively, "the guidance"). In 2007, the governor convened the Washi…

The stated intent of the guidance is to help borrowers to better understand adjustable rate mortgage (ARM) risks. The guidance requires financial institutions to have policies and procedures that focus on the various risks of subprime/nontraditional mortgage lending. The guidance…

Yes, the guidance requires all financial institutions, including banks, savings banks and savings associations, to focus on the following subjects and apply the relevant ones to their existing policies and procedures: (1) Help borrowers understand ARM risks, including:(a) Low ini…

You can find the two federal guidance documents on the internet: http://www.fdic.gov/news/news/press/2006/pr06086b.pdf; and http://www.fdic.gov/news/news/press/2007/pr07055a.html.You can also click on the links on the DFI website at www.dfi.wa.gov.If you do not have internet acce…

The federal guidance consists of two lengthy documents that are very detailed. Because they are required by state statutory law, they apply in their entirety. Division of banks cannot merely summarize them or give you a checklist. You must read the documents in order to apply the…

Every state-chartered bank, savings banks and savings association is different. There is no "one-size-fits-all" guidance available. Division of banks will not issue model guidance, because the process of self-analysis that your institution needs to do, in order to develop its own…

The division of banks of the department of financial institutions (hereinafter, the "division"), after due and proper notice, and pursuant to the provisions of RCW 30A.04.030, 30A.04.111, 30A.04.215, 30A.08.140, 32.08.157, 43.320.040, and 43.320.050, hereby adopts and promulgates…

(1) The director of the division (hereinafter, the "director of banks"), by and through the director of bank's delegated authority from the director of the department of financial institutions under RCW 43.320.040 and 43.320.050, finds and determines, that pursuant to RCW 30A.04.…

(1) "Loan or extension of credit" generally includes:(a) Any direct or indirect advance of funds to a person made on a basis of any obligation of that person to repay the funds, or repayable from specific property pledged by or on behalf of a person;(b) Any credit exposure of a b…

As used in this chapter and to the extent used in RCW 30A.04.111, the following additional terms, unless otherwise indicated, mean:(1) "ALLL" means a bank's allowance for loan and lease losses.(2) "Bank" includes a commercial bank chartered and regulated under Title 30A RCW and, …

This chapter is applicable, notwithstanding any other provision thereof, only to:(1) A commercial bank under Title 30A RCW;(2) A mutual or stock savings bank under Title 32 RCW, which, on January 21, 2013, or thereafter, invests in derivative transactions;(3) A mutual or stock sa…

The total amount of loans and extensions of credit by a bank to a person outstanding at one time and not fully secured by collateral in a manner set forth in WAC 208-512A-011, shall not exceed twenty percent of the capital and surplus of such bank; provided, that a bank shall not…

(1) A loan or extension of credit by a bank to a person outstanding at one time and fully secured by readily marketable collateral having a market value, as determined by reliable and continuously available price quotations, shall not be subject to any limitations based on capita…

(1) A loan or extension of credit that was within the limit on loans and extensions of credit when made, will not be deemed a violation of the legal lending limit and will be treated as "nonconforming" if the loan or extension of credit is no longer in conformity with the bank's …

Notwithstanding any provision of this chapter 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, th…

(1) Notwithstanding any provision of this chapter to the contrary, the director of banks, in his or her discretion, may grant an exception to the limit on loans and extensions of credit based on extenuating facts and circumstances.(2) In deciding whether to grant an exception und…

(1) A bank may renew a contractual commitment to advance funds and complete funding under that commitment if all of the following criteria are met:(a) The completion of funding is consistent with safe and sound banking practices and is made to protect the position of the bank;(b)…

A loan or extension of credit arising from the discount of commercial or business paper evidencing an obligation to the person negotiating it with recourse is excluded from the calculation of the general lending limit, subject to the following terms and conditions:(1) This exclus…

The purchase of bankers' acceptances of the kind described in section 13 of the Federal Reserve Act and which are issued by other depositary institutions, is excluded from the calculation of the general lending limit, subject to the following terms and conditions:(1) Acceptances …

(1) Loans and extensions of credit secured by bills of lading, warehouse receipts, or similar documents transferring or securing title to readily marketable staples shall be subject to a limitation of thirty-five percent of capital and surplus, in addition to the general limit se…

Loans or extensions of credit secured by bonds, notes, certificates of indebtedness, or treasury bills of the United States or by other such obligations wholly guaranteed as to principal and interest by the United States are excluded from the calculation of the general lending li…

Loans or extensions of credit to or secured by unconditional takeout commitments or guarantees of any department, agency, bureau, board, commission, or establishment of the United States or any corporation wholly owned directly or indirectly by the United States shall be excluded…

Loans or extensions of credit secured by a segregated deposit account in the lending bank are excluded from the calculation of the general lending limit set forth in WAC 208-512A-010, subject to the following terms and conditions:(1) Deposit accounts which may qualify for this ex…

The unpaid portion of the purchase price of a sale of a bank's asset or assets, if secured by such asset or assets, shall be excluded from the calculation of the general lending limit set forth in WAC 208-512A-010, subject to the following terms and conditions:(1) Any sale of a b…

(1) Loans and extensions of credit arising from the discount of negotiable or nonnegotiable installment consumer paper which carries a full recourse endorsement or unconditional guarantee by the person transferring the paper shall be subject to a maximum limitation equal to twent…

(1) Loans or extensions of credit to one person will be attributed to another person or persons when:(a) The proceeds of the loans or extensions of credit are intended for or are used for the direct benefit of the other person or persons; or(b) A "common enterprise" exists betwee…

(1) Loans or extensions of credit to a partnership, joint venture, or association shall, for purposes of this chapter, be considered loans or extensions of credit to each member of such partnership, joint venture, or association.(2) Loans or extensions of credit to members of a p…

Loans or extensions of credit to a limited liability company shall, for purposes of this chapter, be considered loans or extensions of credit to a corporation, and shall not be subject to the provisions of WAC 208-512A-110.[Statutory Authority: RCW 30.04.030, 30.04.111, 30.04.215…

(1) Loans or extensions of credit to a person and its subsidiaries or to subsidiaries of one person will not be combined where the person and its subsidiaries are not engaged in a "common enterprise" as defined in WAC 208-512A-100(2).(2) If members of a corporate group (a person …

(1) For purposes of determining compliance with RCW 30A.04.111 and this chapter, a bank shall determine its lending limit as of the most recent of the following dates:(a) The last day of the preceding calendar quarter; or(b) The date on which there is a change in the bank's capit…

(1) This section sets forth the rules for calculating the credit exposure arising from a derivative transaction entered into by a bank for purposes of determining the bank's lending limit pursuant to RCW 30A.04.111 and this chapter.(2) Subject to the direction of the division, a …

(1) Only to the extent required by the FDIC, a bank that is a state insured bank shall comply with all rules governing limits on extensions of credit related to a state insured bank's credit exposure to securities financing transactions.(2) Only to the extent required by the Fede…

To fulfill the requirements of section 611 of the Dodd-Frank Wall Street Reform and Consumer Protection Act, codified as section 18(y) of the Federal Deposit Insurance Act, 12 U.S.C. Sec. 1828(y), and the requirements (if any) of the FDIC and the Federal Reserve Board in relation…

Where RCW 30A.04.111 and this chapter do not specifically address certain transactions involving loans and extensions of credit, the division may, as necessary, in its interpretations and supervision and enforcement of banks, be guided by applicable rules, interpretations, and op…

No provision of Titles 30A and 32 RCW, chapter 208-512 WAC, or this chapter, shall limit the duty of a bank or a bank's affiliate, independent of any requirements of this chapter, to also comply with the provisions of Federal Reserve Board Regulation O, 12 C.F.R. Part 215, which …

(1) Loans or extensions of credit that were in violation of RCW 30A.04.111 and the former lending limits rules prior to January 21, 2013, will be considered to remain in violation of law until they are paid in full, regardless of whether the loans or extensions of credit conform …

For purposes of this section the following words shall have the following meanings:(1) "Foreclosed property" means real estate or interest therein, or other property used in connection therewith acquired through foreclosure or similar action, deed of trust sales, or by deed in li…