PROPOSED RULES
FINANCIAL INSTITUTIONS
Original Notice.
Preproposal statement of inquiry was filed as WSR 01-03-145.
Title of Rule: Increasing fees and assessments paid by banks, thrifts, and other entities regulated by the Division of Banks.
Purpose: To provide additional revenue to the division.
Statutory Authority for Adoption: RCW 30.04.030, 33.04.025, 43.320.040.
Statute Being Implemented: RCW 30.04.070, 32.04.150, 33.28.020.
Summary: The proposed rule provides for an automatic annual rate increase in fees and assessments charged by the Division of Banks, on July 1, 2001, and every July 1 thereafter, up to the then current fiscal growth factor; and allows for the waiver of fees and assessments, if certain conditions are met.
Reasons Supporting Proposal: The division needs significant additional revenues to pay for the operation of the division and to maintain a reserve.
Name of Agency Personnel Responsible for Drafting: Patty Brombacher, 210 11th Street S.W., Room 300, Olympia, WA 98504, (360) 902-8748; Implementation and Enforcement: David Kroeger, 210 11th Street S.W., Room 300, Olympia, WA 98504, (360) 902-8747.
Name of Proponent: Division of Banks, governmental.
Rule is not necessitated by federal law, federal or state court decision.
Explanation of Rule, its Purpose, and Anticipated Effects: Explanation: The proposed rule provides for an automatic annual rate increase in fees and assessments charged by the Division of Banks, on July 1, 2001, and every July 1 thereafter, up to the then current fiscal growth factor; allows for the waiver of fees and assessments, if certain conditions are met; and eliminates the cap on assessments on assets over $10 billion.
Purpose: To increase revenue to cover the operation of the division and to maintain a reserve for the division.
Anticipated Effects: To provide additional revenues to the division and to increase fees and assessments paid by institutions regulated by the division.
Proposal Changes the Following Existing Rules: The proposed rule amends WAC 208-544-039 and 208-586-140 to provide for an automatic annual rate increase in fees and assessments charged by the Division of Banks, on July 1, 2001, and every July 1 thereafter, up to the then current fiscal growth factor; amends WAC 208-544-039 and 208-586-140 to allow for the waiver of fees and assessments, if certain conditions are met; amends WAC 208-544-039 (1)(d) to eliminate the cap on assessments on assets over $10 billion; and repeals WAC 208-544-037, 208-544-050, and 208-586-135.
A small business economic impact statement has been prepared under chapter 19.85 RCW.
By: Dave Kroeger, Director of Banks.
Date: March 21, 2001.
Introduction: The division has prepared this SBEIS in compliance with chapter 19.85 RCW, the Regulatory Fairness Act (RFA). The preproposal statement of inquiry (form CR-101) in connection with the proposed rule was filed at WSR 01-03-145. The proposed rule affects state commercial banks, savings banks, savings and loan associations, and other institutions subject to regulation by the division. Collectively these entities will be referred to in this SBEIS as "Institutions."
Background for Proposed Rule: Titles 30, 32, and 33 RCW authorize the director of DFI to collect from each institution the cost of their examination and supervision. (See RCW 30.04.070, 32.04.150, and 33.28.020.) Regulated financial institutions pay three types of charges assessed by the division:
1. A semiannual asset charge based on the total assets of the institution;
2. Hourly charges for examinations and other tasks performed by the division;
3. Miscellaneous charges and fees associated with the issuance of various certificates, application processing, licensing, legal assistance, and filing of documents.
The division needs significant additional revenues to pay the cost of its operation and to maintain its reserve. Under state law, the division cannot increase its fee and assessment rates in any one fiscal year by more than the "fiscal growth factor" for the year. The fiscal growth factor for the current fiscal year is 2.87%. In order to generate significant additional revenues, the proposed rule provides for an annual increase every July 1 up to the amount of the fiscal growth factor for that fiscal year. The rule also provides that fees and assessments may be waived if certain conditions are met.
Description of Proposed Rule: The proposed rule:
| Provides for the increase of fee and assessment rates on July 1, 2001, and every July 1 thereafter, up to the amount of the then current fiscal growth factor. | |
| Provides for a waiver of fees and assessments, if certain conditions are met. | |
| Eliminates the cap on assessments on assets over $10 billion. |
Element 1. A brief description of the reporting, record-keeping, and other compliance requirements of the proposed rule and the kinds of professional services that a small business is likely to need in order to comply with the requirements.
Response: The only substantive change in the proposed rule is the increase in fee and assessment rates paid by institutions. See "Description of Proposed Rule" above for a brief description of the requirements of the proposed rule. The proposed rule does not change the reporting, record-keeping or compliance requirements of the current rule, or the kinds of professional services that a small business is likely to need to comply with the proposed rule.
Element 2. An analysis of the costs of compliance for identified industries, including costs of equipment, supplies, labor and increased administrative costs.
Response: The proposed rule increases assessment and fee rates and provides for an automatic annual increase in such rates. The proposed rule should not increase any of the compliance costs associated with the payment of such fees or assessments, including costs for equipment, supplies, labor, or other administrative costs.
Element 3. Whether compliance with the proposed rule will cause business to lose sales or revenue.
Response: The annual increases will be fairly small. The reason is that the annual rate increases are limited to the amount of the fiscal growth factor (FGF), and the FGF is currently running less than 3%. Consequently, it is very doubtful that the increase in cost will prevent or delay institutions from bringing new products or services to market or cause them to lose market share.
Element 4. A comparison of the compliance costs for the small business segment and large business segment of the affected industry(ies), and whether the impact on the small business segment is disproportionate.
Response: Under the proposed rule, all fees and assessment rates are increased by the fiscal growth factor, so all institutions, regardless of size, will face the same percentage increase in their fee or assessment. Any existing disproportionality in fee or assessments rates will be maintained, but no additional disproportionality will be introduced.
Element 5. Steps taken by the agency under RCW 19.85.030(3) to reduce the costs of the proposed rule on small businesses, or reasonable justification for not doing so, addressing the specified mitigation steps.
Response: We have reviewed the six steps under RCW 19.85.030 (3)(a) through (f). Our analysis is as follows:
(a) Reducing, modifying, or eliminating substantive regulatory requirements: We believe that the proposed rule is necessary to ensure that the division has sufficient funds to operate and is, in the final analysis, necessary to ensure the safety and soundness of institutions, regardless of size. Consequently, we believe that the compliance requirements in this area should not be reduced for small institutions.
(b) Simplifying, reducing, or eliminating record-keeping and reporting requirements: The proposed rule does not increase record-keeping or reporting requirements.
(c) Reducing the frequency of inspections: The proposed rule does not provide for inspections.
(d) Delaying compliance timetables: The proposed rule does not change the timing of payment of assessments and fees.
(e) Reducing or modifying fine schedules for noncompliance: The proposed rule does not impose new fine schedules.
(f) Any other mitigation techniques: We are not aware of other mitigation techniques. However, we welcome comments from small institutions on how to make the proposed rule less onerous for them.
Consequently, as discussed above, we do not believe that it is legal or feasible to reduce the costs of the proposed rule on small businesses.
Element 6. A description of how the agency will involve small business in the development of the proposed rule.
Response: All institutions, including smaller ones, will be provided with a copy of the proposed rule and an opportunity to provide comment on the proposal. Institutions are welcome to contact the division to comment on the rule. Small institutions in particular are encouraged to provide comments on how the rule could be made less onerous for them.
Element 7. A list of the industry(ies) affected by the proposed rule.
Response: The industries affected by the proposed rule are as follows:
State commercial banks: Standard industrial classification 6022.
Savings institutions, not federally chartered: Standard industrial classification 6036.
Nondeposit trust facilities: Standard industrial classification 6091.
Branches and agencies of foreign banks: Standard industrial classification 6081.
A copy of the statement may be obtained by writing to Patty Brombacher, Division of Banks, 210 11th Street S.W., Room 300, Olympia, WA 98504, phone (360) 902-8748, fax (360) 704-6948.
Section 201, chapter 403, Laws of 1995, does not apply to this rule adoption. The Department of Financial Institutions is not a listed agency in section 201.
Hearing Location: General Administration Building, Auditorium, 1st Floor, 210 11th Street S.W., Olympia, WA 98504, on May 1, 2001, at 11:00 a.m.
Assistance for Persons with Disabilities: Contact Patty Brombacher by close of business April 13, 2001, TDD (360) 664-8126.
Submit Written Comments to: David Kroger, Assistant Director, Division of Banks, 210 11th Street S.W., Room 300, Olympia, WA 98504, fax (360) 704-6947, by close of business April 30, 2001.
Date of Intended Adoption: May 1, 2001.
March 20, 2001
John L. Bley
Director
OTS-4716.1
AMENDATORY SECTION(Amending WSR 01-06-024, filed 2/27/01,
effective 3/30/01)
WAC 208-544-039
Charges and fees effective July 1, ((1999))
2001.
(1) Effective July 1, ((1999)) 2001, the rate of charges
and fees under WAC 208-512-045, 208-544-020 and 208-544-030 shall
be as follows:
(a) WAC 208-512-045 (1)(c) and (d) - The fee shall be $100.00 for the issuance and filing of certificates.
(b) WAC 208-512-045 (1)(e) - The fee shall be 50 cents per page.
(c) WAC 208-512-045(2) - The fee shall be $((96.87)) 102.43
per employee hour expended.
(d) WAC 208-544-020(1) - The rates shall be the following:
| If total assets are: | The assessment is: | ||||
| Over | But not Over |
This Amount | Plus | Of Excess Over |
|
| Million | Million | Million | |||
| 0 | 500 | 0 | (( |
0 | |
| 500 | 1,000 | (( |
(( |
500 | |
| 1,000 | (( |
(( |
(( |
1,000 | |
| 10,000)) | |||||
(f) WAC 208-544-030(1) - The fee shall be $((69.95)) 73.95
per hour.
(g) WAC 208-544-030(2) - The fee shall be $((96.87)) 102.43
per hour.
(2) ((Thereafter, effective July 1, 2000, and again on July
1, 2001, the charges and fees set forth in subsection (1)(c),
(d), (e), (f), and (g) of this section shall be increased by the
fiscal growth factor as determined by the office of financial
management pursuant to RCW 43.135.025.)) (a) On July 1, 2002, and
each July 1 after that date, the rate of charges and fees under
subsection (1)(c), (d), (e), (f), and (g) of this section, as
increased in the prior fiscal year, will increase by a percentage
rate equal to the fiscal growth factor for the then current
fiscal year. As used in this section, "fiscal growth factor" has
the same meaning as the term is defined in RCW 43.135.025.
(b) The director may round off a rate increase under this subsection. However, no rate increase may exceed the applicable fiscal growth factor.
(c) By June 1 of each year the director will make available a chart of the new rates that will take effect on the immediately following July 1.
(3) The director may ((suspend the collection of)) waive any
or all of the charges and/or fees imposed under this section, in
whole or in part, when he or she determines that both of the
following factors are present:
(a) The banking examination fund established in RCW 43.320.110 (or its successor) exceeds the projected acceptable minimum fund balance level approved by the office of financial management (OFM); and
(b) That such course of action would be fiscally prudent.
(4)(a) If the charges and fees assessed under WAC 208-544-020(1) relating to a semiannual asset charge and WAC 208-544-030(1) relating to the hourly examination fee exceed ninety-five percent of the assessment charge applicable for a two-year period of the office of the comptroller of the currency (OCC) or its successor then the assessments paid in excess of such amount shall be rebated to the institution pursuant to (e) of this subsection unless abated by the director as provided in (f) of this subsection.
(b) For purposes of determining rebate entitlement, the total of semiannual assessments and examination fees will be determined by adding the monthly average semiannual assessment and the monthly average of the examination fees for any twenty-four month period beginning on or after July 1, 2000. The monthly average is determined by dividing the semiannual assessment fee by six and applying the monthly average to the previous six months. The monthly average examination fee is determined by dividing the examination fee for each examination during the averaging period by the number of months between each such examination and the previous examination as determined by the date of the examinations and applying the monthly average to those months. The OCC charge is determined in the same manner. Under no circumstances will an institution be permitted to calculate a rebate based on a period of time that was included, in whole or in part, in the calculation of another rebate under this section.
(c) The rebate is determined by the difference between the sum of the applicable monthly average state charges for the twenty-four month period minus ninety-five percent of the sum of the applicable monthly average OCC charge for the same period, as each are determined in (b) of this subsection.
(d) Entitlement of the rebate will occur only upon petition and satisfactory proof to the director.
(e) Rebate abatement. At the discretion of the director, all or part of the rebate determined under (d) of this subsection may be denied if the director determines that:
(i) The institution required a substantially greater than average amount of supervisory time for reasons other than as a result of economic, legal, regulatory, or other conditions beyond the control of competent management;
(ii) The institution required a substantially greater than average amount of examination time for an institution of its size for reasons other than as a result of economic, legal, regulatory, or other conditions beyond the control of competent management;
(iii) Examinations or investigations were performed by third parties under personal services contracts;
(iv) The banking examination fund established in RCW 43.320.110 (or its successor) does not exceed the projected acceptable minimum fund balance level approved by OFM or is insufficient to satisfy the rebates under this subsection and still maintain the operations of the department at a fiscally prudent level;
(v) The institution maintained a composite uniform financial institution rating (CAMELS) of 3, 4 or 5 during any time during the rebate period; or
(vi) Such other factors as the director may deem equitable or relevant.
(f) Institutions may become eligible to receive a rebate after June 30, 2002, for amounts paid on or after July 1, 2000.
[Statutory Authority: RCW 30.04.030 and 43.320.040. 01-06-024, 208-544-039, filed 2/27/01, effective 3/30/01; 00-17-141, recodified as 208-544-039, filed 8/22/00, effective 9/22/00. Statutory Authority: RCW 30.04.030, 30.04.070, 30.08.095, 33.04.025 and 43.320.040. 99-10-024, 50-44-039, filed 4/28/99, effective 6/25/99.]
[]
The following sections of the Washington Administrative Code are repealed:
| WAC 208-544-037 | Charges and fees effective June 25, 1999. |
| WAC 208-544-050 | Limitations on assessments. |
OTS-4717.1
AMENDATORY SECTION(Amending WSR 01-06-024, filed 2/27/01,
effective 3/30/01)
WAC 208-586-140
Charges and fees effective July 1, ((1999))
2001.
(1) Effective July 1, ((1999)) 2001, the rate of charges
and fees under chapters 208-586 and 208-594 WAC shall be as
follows:
(a) WAC 208-586-030(1) - The fee shall be $((43.05)) 45.51
per hour.
(b) WAC 208-586-030(2) - The fee shall be $((48.43)) 51.19
per hour.
(c) WAC 208-586-030(3) - The fee shall be $((53.81)) 56.89
per hour.
(d) WAC 208-586-040 - The asset charge shall be ((.0322916))
0.0348046 per thousand dollars of assets.
(e) WAC 208-586-075 - The fee shall be $2,500.00 for the first branch and $500.00 for each additional branch.
(f) WAC 208-586-080 - The fee shall be $50.00 for the home office and each branch.
(g) WAC 208-586-090 - The fee shall be $((64.57)) 68.27 per
hour.
(h) WAC 208-586-100 - The fee shall be $((53.81)) 56.89 per
hour.
(i) WAC 208-586-110 - The fee shall be $((53.81)) 56.89 per
hour.
(j) WAC 208-586-120 - The fee shall be $5,000.00.
(k) WAC 208-594-070 - The fee shall be $1,000.00.
(2) ((Thereafter, effective July 1, 2000, and again on July
1, 2001, the charges and fees set forth in subsection (1)(a),
(b), (c), (d), (g), (h), and (i) of this section shall be
increased by the fiscal growth factor as determined by the office
of financial management pursuant to RCW 43.135.025.)) (a) On July
1, 2002, and each July 1 after that date, the rate of charges and
fees under subsection (1)(a), (b), (c), (d), (g), (h), and (i) of
this section, as increased in the prior fiscal year, will
increase by a percentage rate equal to the fiscal growth factor
for the then current fiscal year. As used in this section,
"fiscal growth factor" has the same meaning as the term is
defined in RCW 43.135.025.
(b) The director may round off a rate increase under this subsection. However, no rate increase may exceed the applicable fiscal growth factor.
(c) By June 1 of each year, the director will make available a chart of the new rates that will take effect on the immediately following July 1.
(3) The director may ((suspend the collection of)) waive any
or all of the charges and/or fees imposed under this section, in
whole or in part, when he or she determines that both of the
following factors are present:
(a) The banking examination fund established in RCW 43.320.110 (or its successor) exceeds the projected acceptable minimum fund balance level approved by the office of financial management; and
(b) That such course of action would be fiscally prudent.
[Statutory Authority: RCW 30.04.030 and 43.320.040. 01-06-024, 208-586-140, filed 2/27/01, effective 3/30/01. Statutory Authority: RCW 33.04.025 and 43.320.040. 00-17-140, recodified as 208-586-140, filed 8/22/00, effective 9/22/00. Statutory Authority: RCW 30.04.030, 30.04.070, 30.08.095, 33.04.025 and 43.320.040. 99-10-024, 419-14-140, filed 4/28/99, effective 6/25/99.]
[]
The following section of the Washington Administrative Code is repealed:
| WAC 208-586-135 | Charges and fees effective June 25, 1999. |