Records and accounts—Segregation and disbursements of funds—Violation of section, penalties.
(1) Every licensed escrow agent shall keep adequate records, as determined by rule by the director, of all transactions handled by or through the agent including itemization of all receipts and disbursements of each transaction. These records shall be maintained in this state, unless otherwise approved by the director, for a period of six years from completion of the transaction. These records shall be open to inspection by the director or the director's authorized representatives.
(2) Every licensed escrow agent shall keep separate escrow fund accounts as determined by rule by the director in recognized Washington state depositaries authorized to receive funds, in which shall be kept separate and apart and segregated from the agent's own funds, all funds or moneys of clients which are being held by the agent pending the closing of a transaction and such funds shall be deposited not later than the first banking day following receipt thereof.
(3) An escrow agent, unless exempted by *RCW 18.44.021
(2), shall not make disbursements on any escrow account without first receiving deposits directly relating to the account in amounts at least equal to the disbursements. An escrow agent shall not make disbursements until the next business day after the business day on which the funds are deposited unless the deposit is made in cash, by interbank electronic transfer, or in a form that permits conversion of the deposit to cash on the same day the deposit is made. The deposits shall be in one of the following forms:
(b) Interbank electronic transfers such that the funds are unconditionally received by the escrow agent or the agent's depository;
(c) Checks, negotiable orders of withdrawal, money orders, cashier's checks, and certified checks that are payable in Washington state and drawn on financial institutions located in Washington state;
(d) Checks, negotiable orders of withdrawal, money orders, and any other item that has been finally paid as described in RCW 62A.4-213 before any disbursement; or
(e) Any depository check, including any cashier's check, certified check, or teller's check, which is governed by the provisions of the federal expedited funds availability act, 12 U.S.C. Sec. 4001 et seq.
(4) For purposes of this section, the word "item" means any instrument for the payment of money even though it is not negotiable, but does not include money.
(5) Violation of this section shall subject an escrow agent to penalties as prescribed in Title 9A
RCW and remedies as provided in chapter 19.86
RCW and shall constitute grounds for suspension or revocation of the license of any licensed escrow agent or licensed escrow officer. In addition, an escrow agent who is required to be licensed under this chapter and who violates this section or an individual who is required to be licensed as an escrow officer under this chapter and who violates this section, may be subject to penalties as prescribed in RCW 18.44.430
[1999 c 30 § 8; 1990 c 203 § 1; 1988 c 178 § 1; 1977 ex.s. c 156 § 6; 1965 c 153 § 7. Formerly RCW 18.44.070
was amended by 2015 c 229 § 1, changing subsection (2) to subsection (1)(b).
Severability—1988 c 178: "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." [1988 c 178 § 4.]
Powers of director.
(1) The director has the power and broad administrative discretion to administer and interpret this chapter to facilitate the delivery of services to citizens of this state by escrow agents and others subject to this chapter.
(2) The director may issue rules and regulations to govern the activities of licensed escrow agents and escrow officers. The director shall enforce all laws and rules relating to the licensing of escrow agents and escrow officers and fix the time and places for holding examinations of applicants for licenses and prescribe the method of conducting the examinations. The director may hold hearings and suspend or revoke the licenses of violators and may deny, suspend, or revoke the authority of an escrow officer to act as the designated escrow officer of a person who commits violations of this chapter or of the rules under this chapter.
Except as specifically provided in this chapter, the rules adopted and the hearings conducted shall be in accordance with the provisions of chapter 34.05
RCW, the administrative procedure act.
[1999 c 30 § 27; 1977 ex.s. c 156 § 25. Formerly RCW 18.44.320
Informal settlement of complaints or enforcement actions.
Except to the extent prohibited by another statute, the director may engage in informal settlement of complaints or enforcement actions including, but not limited to, payment to the department for purposes of financial literacy and education programs authorized under RCW 43.320.150
[2012 c 17 § 14.]
Investigation of violations—Procedure—Powers of director.
The director may:
(1) Make necessary public or private investigations within or outside of this state to determine whether any person has violated or is about to violate this chapter or any rule or order under this chapter, or to aid in the enforcement of this chapter or in the prescribing of rules and forms under this chapter; or
(2) Require or permit any person to file a statement in writing, under oath or otherwise as the director determines, as to all facts and circumstances concerning the matter to be investigated.
For the purpose of any investigation or proceeding under this chapter, the director or any officer designated by the director may administer oaths or affirmations, and upon his or her own motion or upon request of any party, may subpoena witnesses, compel their attendance, take evidence, and require the production of any matter which is relevant to the investigation, including the existence, description, nature, custody, condition, and location of any books, documents, or other tangible things and the identity and location of persons having knowledge or relevant facts, or any other matter reasonably calculated to lead to the discovery of material evidence.
Upon failure to obey a subpoena or to answer questions propounded by the investigating officer and upon reasonable notice to all persons affected thereby, the director may apply to the superior court for an order compelling compliance.
Except as otherwise provided in this chapter, all proceedings under this chapter shall be in accordance with the administrative procedure act, chapter 34.05
[1999 c 30 § 23; 1977 ex.s. c 156 § 21. Formerly RCW 18.44.280
(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
[2011 c 93 § 2.]
Finding—Intent—2011 c 93: "The legislature finds that in the case of State v. Miles, the state supreme court held that Article I, section 7 of the state Constitution requires judicial review of a subpoena under some circumstances. The legislature intends to provide a process for the department to apply for court approval of an agency investigative subpoena that is authorized under law in cases when the agency seeks approval, or when court approval is required by Article I, section 7 of the state Constitution. The legislature does not intend to require court approval except when otherwise required by law or Article I, section 7 of the state Constitution." [2011 c 93 § 1.]
Actions against license—Grounds.
(1) The director may, upon notice to the escrow agent and to the insurer providing coverage under RCW 18.44.201
, deny, suspend, decline to renew, or revoke the license of any escrow agent or escrow officer if the director finds that the applicant or any partner, officer, director, controlling person, or employee has committed any of the following acts or engaged in any of the following conduct:
(a) Obtaining a license by means of fraud, misrepresentation, concealment, or through the mistake or inadvertence of the director.
(b) Violating any of the provisions of this chapter or any lawful rules made by the director pursuant thereto.
(c) The commission of a crime against the laws of this or any other state or government, involving moral turpitude or dishonest dealings.
(d) Knowingly committing or being a party to, any material fraud, misrepresentation, concealment, conspiracy, collusion, trick, scheme, or device whereby any other person lawfully relying upon the word, representation, or conduct of the licensee or agent or any partner, officer, director, controlling person, or employee acts to his or her injury or damage.
(e) Conversion of any money, contract, deed, note, mortgage, or abstract or other evidence of title to his or her own use or to the use of his or her principal or of any other person, when delivered to him or her in trust or on condition, in violation of the trust or before the happening of the condition; and failure to return any money or contract, deed, note, mortgage, abstract, or other evidence of title within thirty days after the owner thereof is entitled thereto, and makes demand therefor, shall be prima facie evidence of such conversion.
(f) Failing, upon demand, to disclose any information within his or her knowledge to, or to produce any document, book, or record in his or her possession for inspection of, the director or his or her authorized representatives.
(g) Committing any act of fraudulent or dishonest dealing, and a certified copy of the final holding of any court of competent jurisdiction in such matter shall be conclusive evidence in any hearing under this chapter.
(h) Accepting, taking, or charging any undisclosed commission, rebate, or direct profit on expenditures made for the principal.
(i) Committing acts or engaging in conduct that demonstrates the applicant or licensee to be incompetent or untrustworthy, or a source of injury and loss to the public.
(2) Any conduct of an applicant or licensee that constitutes grounds for enforcement action under this chapter is sufficient regardless of whether the conduct took place within or outside of the state of Washington.
(3) In addition to or in lieu of a license suspension, revocation, or denial, the director may assess a fine of up to one hundred dollars per day for each violation of this chapter or rules adopted under this chapter and may remove and/or prohibit from participation in the conduct of the affairs of any licensed escrow agent, any officer, controlling person, director, employee, or licensed escrow officer. The statute of limitations on actions not subject to RCW 4.16.160
that are brought under this chapter by the director is five years.
(4) In addition to or in lieu of (a) a license suspension, revocation, or denial, or (b) fines payable to the department, the director may order an escrow agent, officer, controlling person, director, employee, or licensed escrow officer violating this chapter to make restitution to an injured consumer.
[2014 c 36 § 1; 2010 c 34 § 10; 1999 c 30 § 22; 1977 ex.s. c 156 § 16; 1971 ex.s. c 245 § 13. Formerly RCW 18.44.260
Violations—Cease and desist orders.
If the director determines after notice and hearing that a person has:
(1) Violated any provision of this chapter; or
(2) Directly, or through an agent or employee, engaged in any false, unfair and deceptive, or misleading:
(a) Advertising or promotional activity; or
(b) Business practices; or
(3) Violated any lawful order or rule of the director; the director may issue an order requiring the person to cease and desist from the unlawful practice and to take such affirmative action as in the judgment of the director will carry out the purposes of this chapter.
If the director makes a finding of fact in writing that the public interest will be irreparably harmed by delay in issuing an order, the director may issue a temporary cease and desist order. Every temporary cease and desist order shall include in its terms a provision that upon request a hearing will be held to determine whether or not the order becomes permanent.
[1999 c 30 § 19; 1977 ex.s. c 156 § 20. Formerly RCW 18.44.175
Referral fees prohibited—Consumer protection act—Application.
(1) "Real property lender" as used in this section means a bank, savings bank, savings and loan association, credit union, mortgage company, or other corporation, association, or partnership that makes loans secured by real property located in this state.
(2) No real property lender, escrow agent, or officer or employee of any escrow agent or real property lender may give or agree to pay or give any money, service, or object of value to any real estate agent or broker, to any real property lender, or to any officer or employee of any agent, broker, or lender in return for the referral of any real estate escrow services. Nothing in this subsection prohibits the payment of fees or other compensation permitted under the federal Real Estate Settlement Procedures Act as amended (12 U.S.C. sections 2601 through 2617).
(3) The legislature finds that the practices governed by this subsection are matters vitally affecting the public interest for the purpose of applying the consumer protection act, chapter 19.86
RCW. Any violation of this section is not reasonable in relation to the development and preservation of business and is an unfair and deceptive act or practice and an unfair method of competition in the conduct of trade or commerce in violation of RCW 19.86.020
. Remedies provided by chapter 19.86
RCW are cumulative and not exclusive.
[2000 c 171 § 17; 1999 c 30 § 33; 1988 c 178 § 3. Formerly RCW 18.44.145
Severability—1988 c 178:
See note following RCW 18.44.400
Possession of property and business—Grounds for director's authority.
(1) The director may immediately take possession of the property and business of a licensee whenever it appears to the director that, as a result of an examination, report, investigation, or complaint:
(a) The licensee is conducting its business in such an unsafe or unsound manner as to render its further operations hazardous to the public;
(b) The licensee has suspended payment of its trust obligations; or
(c) The licensee neglects or refuses to comply with any order of the director made pursuant to this chapter unless the enforcement of such an order is restrained in a proceeding brought by the licensee.
(2) The director may retain possession of the licensee's property and business until the licensee resumes business or its affairs are finally liquidated as provided in RCW 18.44.470
. The licensee may only resume business upon those terms as the director may prescribe.
[2010 c 34 § 11.]
Possession of property and business—Scope of director's authority.
(1) During the time that the director retains possession of the property and business of a licensee, the director has the power and authority to conduct the licensee's business and take any action on behalf of the licensee to protect consumers, including but not limited to discontinuing any violations and unsafe or injurious practices, making good any deficiencies, and making claims against the licensee's fidelity bond, errors and omissions bond, or surety bond on behalf of the company.
(2) The director, the department, and its employees are not subject to liability for actions under this section and RCW 18.44.455
and no moneys from the department's fund may be required to be expended on behalf of the licensee or the licensee's clients, creditors, employees, shareholders, members, investors, or any other party or entity.
[2013 c 64 § 3; 2010 c 34 § 12.]
License suspension—Nonpayment or default on educational loan or scholarship.
The director shall suspend the license of any person who has been certified by a lending agency and reported to the director for nonpayment or default on a federally or state-guaranteed educational loan or service-conditional scholarship. Prior to the suspension, the agency must provide the person an opportunity for a brief adjudicative proceeding under RCW 34.05.485
and issue a finding of nonpayment or default on a federally or state-guaranteed educational loan or service-conditional scholarship. The person's license shall not be reissued until the person provides the director a written release issued by the lending agency stating that the person is making payments on the loan in accordance with a repayment agreement approved by the lending agency. If the person has continued to meet all other requirements for licensing during the suspension, reinstatement shall be automatic upon receipt of the notice and payment of any reinstatement fee the director may impose.
[1999 c 30 § 15; 1996 c 293 § 11. Formerly RCW 18.44.125
Severability—1996 c 293:
See note following RCW 18.04.420
Termination of license—Effect upon preexisting escrows—Notice to principals.
The revocation, suspension, surrender, or expiration of an escrow agent's license shall not impair or affect preexisting escrows accepted by the agent prior to such revocation, suspension, surrender, or expiration: PROVIDED, That the escrow agent shall within five workdays provide written notice to all principals of such preexisting escrows of the agent's loss of license. The notice shall include as a minimum the reason for the loss of license, the estimated date for completing the escrow, and the condition of the agent's bond and whether it is in effect or whether notice of cancellation has been given. The notice shall afford the principals the right to withdraw the escrow without monetary loss.
[1999 c 30 § 16; 1977 ex.s. c 156 § 9; 1965 c 153 § 13. Formerly RCW 18.44.130
Upon application by the director or any other interested party and upon a showing that the interest of the creditors so requires, the superior court may appoint a receiver to take over, operate, or liquidate any escrow office in this state.
[1971 ex.s. c 245 § 6. Formerly RCW 18.44.190
Remedies—Affecting corporate franchise.
Upon petition by the attorney general, the court may, in its discretion, order the dissolution, or suspension or forfeiture of franchise, of any corporation for repeated or flagrant violation of this chapter or the terms of any order of injunction hereunder.
Authority to prosecute—Grants of injunctive relief, temporary restraining orders.
(1) The director, through the attorney general, may prosecute an action in any court of competent jurisdiction to enforce any order made by him or her pursuant to this chapter and shall not be required to post a bond in any such court proceedings.
(2) If the director has cause to believe that any person has violated any penal provision of this chapter he or she may refer the violation to the attorney general or the prosecuting attorney of the county in which the offense was committed.
(3) Whenever the director has cause to believe that any person, required to be licensed by this chapter, is conducting business as an escrow agent without a valid license, or that any licensed escrow agent, directly or through an agent or employee, is engaged in any false, unfair and deceptive, or misleading advertising or promotional, activity or business practices, or is conducting business in a manner deemed unsafe or injurious to the public, or has violated, is violating, or is about to violate any of the provisions of this chapter, or a rule or order under this chapter, the director, through the attorney general, may bring an action in any court of competent jurisdiction to enjoin the person from continuing the violation or doing any action in furtherance thereof. Upon proper showing, injunctive relief or temporary restraining orders shall be granted by the court and a receiver or conservator may be appointed.
(4) The attorney general and the several prosecuting attorneys throughout the state may prosecute proceedings brought pursuant to this chapter upon notification of the director.
[1999 c 30 § 18; 1977 ex.s. c 156 § 10; 1965 c 153 § 17. Formerly RCW 18.44.160
ESCROW ADVISORY COMMITTEE
Committee to advise director—Members—Compensation and travel expenses.
There is established a committee of the state of Washington, to consist of the director of financial institutions or his or her designee as chair, and five other members who shall act as advisors to the director as to the needs of the escrow profession, including but not limited to the design and conduct of tests to be administered to applicants for escrow licenses, the schedule of license fees to be applied to the escrow licensees, educational programs, audits and investigations of the escrow profession designed to protect the consumer, and such other matters determined appropriate. The director is hereby empowered to and shall appoint the other members, each of whom shall have been a resident of this state for at least five years and shall have at least five years experience in the practice of escrow as an escrow agent or as a person in responsible charge of escrow transactions.
Every member of the committee shall receive a certificate of appointment from the director and before beginning the member's term of office shall file with the secretary of state a written oath or affirmation for the faithful discharge of the member's official duties. On the expiration of the term of each member, the director shall appoint a successor to serve for a term of five years or until the member's successor has been appointed and qualified.
The director may remove any member of the committee for cause. Vacancies in the committee for any reason shall be filled by appointment for the unexpired term.
Members shall be compensated in accordance with RCW 43.03.240
, and shall be reimbursed for their travel expenses incurred in carrying out the provisions of this chapter in accordance with RCW 43.03.050
[2011 1st sp.s. c 21 § 50; 2011 c 336 § 484; 1995 c 238 § 3; 1985 c 340 § 3; 1984 c 287 § 36. Formerly RCW 18.44.208
This section was amended by 2011 c 336 § 484 and by 2011 1st sp.s. c 21 § 50, each without reference to the other. Both amendments are incorporated in the publication of this section under RCW 1.12.025
(2). For rule of construction, see RCW 1.12.025
Effective date—2011 1st sp.s. c 21:
See note following RCW 72.23.025
Effective date—1995 c 238:
See note following RCW 18.44.011
Legislative findings—Severability—Effective date—1984 c 287:
See notes following RCW 43.03.220
Compensation and travel expenses of committee members.
The committee members shall each be compensated in accordance with RCW 43.03.240
and shall be reimbursed for travel expenses as provided for state officials and employees in RCW 43.03.050
, when called into session by the director or when otherwise engaged in the business of the committee.
[2011 1st sp.s. c 21 § 49; 1984 c 287 § 37; 1977 ex.s. c 156 § 29. Formerly RCW 18.44.215
Effective date—2011 1st sp.s. c 21:
See note following RCW 72.23.025
Legislative findings—Severability—Effective date—1984 c 287:
See notes following RCW 43.03.220
Construction—1965 c 153.
Nothing in this chapter shall be so construed as to authorize any escrow agent, or his or her employees or agents, to engage in the practice of law, and nothing in this chapter shall be so construed as to impose any additional liability on any depositary authorized by this chapter and the receipt or acquittance of the persons so paid by such depositary shall be a valid and sufficient release and discharge of such depositary.
[2011 c 336 § 485; 1965 c 153 § 20. Formerly RCW 18.44.900
This chapter shall be known and cited as the "Escrow Agent Registration Act".
Severability—1971 ex.s. c 245.
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.
[1971 ex.s. c 245 § 15. Formerly RCW 18.44.920
Severability—1977 ex.s. c 156.
If any provision of this 1977 amendatory 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.
[1977 ex.s. c 156 § 33. Formerly RCW 18.44.921
Severability—1979 c 70.
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.