Chapter 30B.08 RCW

ORGANIZATION AND POWERS

Sections

30B.08.005Who may organize a state trust company.
30B.08.010FormationIssuance of certificate of authorityAmendment of articles, etc.
30B.08.020Limited liability companyOrganization or conversionApproval of directorConditionsApplication of chapter 25.15 RCWDefinitions.
30B.08.030Application for state trust company certificate of authority.
30B.08.040Notice and investigation of application.
30B.08.050Required capital.
30B.08.060Capital notes or debentures.
30B.08.070Application of general business corporation laws.
30B.08.080Powers of a state trust company.
30B.08.090Additional powers of a state trust companyFederal and interstate parity.
30B.08.100Scope of regulated activities of a state trust company.
30B.08.110Internet trust business.


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.



FormationIssuance of certificate of authorityAmendment of articles, etc.

Except as set forth in this chapter or as may be prescribed by rule of the director, RCW 30A.08.020, 30A.08.040, 30A.08.050, 30A.08.055, 30A.08.060, 30A.08.070, 30A.08.081, 30A.08.082, 30A.08.083, 30A.08.084, 30A.08.086, 30A.08.087, 30A.08.088, 30A.08.090, 30A.08.092, and 30A.08.170 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 30A RCW.



Limited liability companyOrganization or conversionApproval of directorConditionsApplication of chapter 25.15 RCWDefinitions.

*** CHANGE IN 2019 *** (SEE 5107.SL) ***
(1) The provisions of RCW 30A.08.025 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.



Application for state trust company certificate of authority.

*** CHANGE IN 2019 *** (SEE 5107.SL) ***
(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.



Notice and investigation of application.

*** CHANGE IN 2019 *** (SEE 5107.SL) ***
(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.



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 RCW 30B.08.030(3)(b)(ii) 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.



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 30A.36 RCW governing capital notes and debentures of state banks.



Application of general business corporation laws.

*** CHANGE IN 2019 *** (SEE 5107.SL) ***
(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.



Powers of a state trust company.

*** CHANGE IN 2019 *** (SEE 5107.SL) ***
(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 RCW 30B.08.070, 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 30A 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.



Additional powers of a state trust companyFederal and interstate parity.

*** CHANGE IN 2019 *** (SEE 5107.SL) ***
(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 January 5, 2015, 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.38 RCW.
(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 January 5, 2015.
(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.



Scope of regulated activities of a state trust company.

Notwithstanding the definition of "trust business" as set forth in RCW 30B.04.005, the director has the authority to regulate the exercise of all powers and authorities of a state trust company which are enumerated in RCW 30B.08.080 and which may be conferred by way of parity under RCW 30B.38.060.



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.38 RCW or acting under authority of RCW 30B.72.010; or
(b) An exempt person under RCW 30B.04.040.
(2) The director may adopt rules specific to the regulation of internet trust businesses in the interest of protecting Washington state citizens.