title: RCW 30B.08.060

text:
(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.
[ 2014 c 37 s 327.]

catchline: Capital notes or debentures.


doc_type: statute

jurisdiction: wa

title: RCW 30B.08.070

text:
(1) A state trust company shall be deemed a distinct type of corporation or limited liability trust company whose certificate of authority may be granted, conditioned, canceled, or revoked only by the department.
(2) Title 23B RCW applies to a state trust company in corporation form and chapter 25.15 RCW in limited liability company form 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 incorporation or limited liability company agreement.
(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.
[ 2019 c 389 s 9; 2014 c 37 s 328.]

license: public-domain-government-work

rule_set: Revised Code of Washington

catchline: Application of general business corporation laws.

code: rcw

unit: section

court: Washington State Legislature


title: RCW 30B.08.080

text:
(1) Upon the issuance of a certificate of authority to a state trust company as prescribed in this chapter and its commencement of business pursuant to such certificate of authority, it shall be a corporation or limited liability company for the purpose of engaging in trust business under this title, including:
(a) 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;
(b) Acting as an attorney-in-fact in any agreed upon capacity;
(c) Acting pursuant to court order as executor, administrator, guardian, or conservator of an estate; or
(d) Regularly engaging in any other activity that the director determines by rule to be an essential function of a trust business in Washington state upon his or her finding that (i) the proposed activity of the applicant is closely akin to acting as a fiduciary, (ii) the proposed activity cannot be more effectively regulated under a statute of Washington state other than this title, and (iii) the exercise of such powers by the applicant in Washington state (A) would serve the convenience and advantage of trustors and beneficiaries, or the general public, and (B) would maintain the fairness of competition and parity between state trust companies and, as applicable, federal trust institutions or out-of-state trust institutions.
(2) The state trust company also shall be a corporation or limited liability company for the purposes of engaging in trust business under this title if the director otherwise issues a written finding, pursuant to a specific application for a certificate of authority to do business as a state trust institution in Washington state pursuant to this chapter or chapter 30B.38 RCW, that all of the criteria set forth in subsection (1)(d) of this section exist in relation to the applicant.
(3) Pursuant to such certificate of authority, a state trust company may also perform incidental activities, other than trust business, which include:
(a) Acting as a bailee or receiving for safekeeping personal property;
(b) Acting as a custodian for money or its equivalent, or for other personal property, which conduct has not otherwise been determined by rule to be trust business pursuant to subsection (1)(d) of this section;
(c) Acting as a recordkeeper for a retirement plan;
(d) Acting as the registrar of or transfer agent for stocks and bonds;
(e) Acting as a sponsoring or other member of any clearing corporation with respect to securities or other property;
(f) Acting as an escrow agent, escrow holder, or managing agent;
(g) Acting as a receiver;
(h) Acting as a manager of a limited liability company, limited liability partnership, or similar entity; or
(i) Conducting such other incidental activities permissible for a state trust company as the director shall prescribe by rule.
(4) The director may prescribe rules for the safe and sound exercise of the powers enumerated in subsections (1) and (3) of this section.
(5) A trust department of a state commercial bank, to the extent authorized under RCW 30A.08.150, or a trust department of a state savings bank, to the extent authorized under RCW 32.08.210, may exercise all of the powers and authorities of a state trust company under this title.
(6) A state trust company, when acting in a fiduciary capacity, either alone or jointly with an individual or individuals, may, with the consent of such individual or individuals, who are hereby authorized to give such consent, cause any stocks, securities, or other property held or acquired to be registered and held in the name of a nominee or nominees of the state trust company without mention of the fiduciary relationship. Any such fiduciary shall be liable for any loss occasioned by the acts of any of its nominees with respect to such stocks, securities, or other property so registered.
[ 2019 c 389 s 10; 2014 c 37 s 329.]

catchline: Powers of a state trust company.


title: RCW 30B.08.090

text:
(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 Washington state, a state trust company has the powers and authorities conferred as of July 28, 2019, upon a federal trust institution. A state trust company may exercise the powers and authorities conferred on a federal trust institution 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 that is not a functionally unregulated out-of-state institution under RCW 30B.38.090.
(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 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 July 28, 2019.
(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 consider but is not bound by the rulings of the board of governors of the federal reserve system and the comptroller of the currency.
(7) Notwithstanding any of the powers and authorities granted to a state trust company under this section, the director may, upon written notice to a state trust company, disallow any such power or authority if the director finds that such power and authority cannot be exercised by the state trust company in a safe or sound manner.
[ 2019 c 389 s 11; 2014 c 37 s 330.]

catchline: Additional powers of a state trust company—Federal and interstate parity—Disallowance by director.


title: RCW 30B.08.100

text:
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.
[ 2014 c 37 s 331.]

catchline: Scope of regulated activities of a state trust company.


title: RCW 30B.08.110

text:
(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.
[ 2014 c 37 s 332.]

catchline: Internet trust business.


title: RCW 30B.10.003

text:
As used in this chapter, unless the context clearly appears otherwise, the terms in this section mean:
(1) "Affiliate" means the same as defined in RCW 30B.04.005.
(2) "Agent" means the same as defined in RCW 30B.04.005.
(3) "Cause of action" means any of the acts or omissions giving rise to a violation under this chapter for which the department can pursue administrative remedies.
(4) "Presiding officer" means a person who qualifies as a presiding officer under RCW 34.05.425 and has been authorized to act as presiding officer in an administrative proceeding under this chapter.
(5) "Respondent" means a person against whom the director has issued a notice and statement of charges pursuant to this chapter.
(6) "Third-party service provider" means the same as in RCW 30B.04.005.
[ 2019 c 389 s 13.]

catchline: Definitions.


title: RCW 30B.10.005

text:
(1) The director shall exercise supervision authority over state trust companies and also over out-of-state trust institutions as set forth in this chapter or to the extent provided for in cooperative agreements made by the director with the home states of out-of-state trust institutions pursuant to RCW 30B.38.060.
(2) The director shall execute and enforce through the department and such other agents as exist on or after January 5, 2015, all laws which exist on or after January 5, 2015, relating to state trust companies and out-of-state trust institutions engaged in trust business in Washington 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.
[ 2019 c 389 s 14; 2014 c 37 s 333.]

catchline: Director supervision over authorized trust institutions.


title: RCW 30B.10.010

text:
Examination and investigation fees, together with semiannual assessments of state trust companies and all other miscellaneous fees for trust institutions, are governed by RCW 30A.04.070 of the Washington commercial bank act and by rules adopted by the director.
[ 2014 c 37 s 334.]

catchline: Fee for examination.


title: RCW 30B.10.020

text:
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 January 5, 2015, 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."
[ 2014 c 37 s 335.]

catchline: Director to act under authority of the department's division of banks.


title: RCW 30B.10.030

text:
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.
[ 2014 c 37 s 336.]

catchline: Generally accepted accounting principles.


title: RCW 30B.10.040

text:
(1) The director is authorized to adopt rules governing the examination standards for a state trust company, trust department, third-party service provider, 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 from cooperative agreements made by the director under RCW 30B.38.060.
(2) Subject to subsection (3) of this section, such rules shall not be inconsistent with the uniform interagency trust rating system, or its equivalent, of the federal financial institutions examination council or its successor agency; and subject to subsection (3) of this section, the director shall apply the standards of the uniform interagency trust rating system, or its equivalent, in its examination and rating of state trust companies and other persons subject to investigation and examination under this title to the extent that the department has not adopted applicable rules.
(3) Notwithstanding subsection (2) of this section, the director may, in lieu of or in addition to applicable rules, prescribe special conditions for a new state trust company or an out-of-state trust company doing business in Washington state, to the extent that such special conditions contain standards of examination and rating for the state trust company or out-of-state trust company that the director deems necessary to address circumstances including, without limitation, an emerging business model, which do not appear to the director to be contemplated or adequately addressed by the uniform interagency trust rating system, or its equivalent, of the federal financial institutions examination council or its successor agency.
[ 2019 c 389 s 16; 2014 c 37 s 337.]

catchline: Examination standards for state trust companies—Rule making—Special conditions.


title: RCW 30B.10.045

text:
(1) The director shall visit each state trust company at least once every twenty-four months, and more often as determined by the director, for the purpose of making a full investigation into the condition of such state trust company.
(2) The director may make such other full or partial examinations as deemed necessary and may visit and examine any affiliate of a state trust company, obtain reports of condition for any such affiliate, and shall have full access to all the books, records, papers, securities, correspondence, bank accounts, and other papers of such business for such purposes.
(3) Before the director may issue notice of its intent to visit and directly examine a third-party service provider without a subpoena pursuant to RCW 30B.10.120, the director must find:
(a) That the third-party service provider either:
(i) Performs services for the state trust company that appear to be necessary for the state trust company to meet its fiduciary duty, operate in a safe and sound manner, or otherwise comply with this title and other applicable law; or
(ii) Appears that the state trust company cannot extricate itself from its client-vendor relationship without adverse material consequences or prolonged delay, including inability to timely find a replacement vendor as third-party service provider;
(b) That either:
(i) The information sought by the director cannot be otherwise accessed or verified by the records of the state trust company without direct examination of the records of the third-party service provider that relate to the state trust company; or
(ii) The third-party service provider manages an application, process, or system for the benefit of the state trust company, the integrity of which cannot be evaluated without direct examination; and
(c) That it appears prior to direct examination of the third-party service provider that an act or omission of the third-party service provider sought to be examined has resulted in a significant heightened risk of the state trust company not meeting its fiduciary duty, committing an unsafe practice or operating in an unsafe or unsound manner, or otherwise violating a provision of this title or other applicable law.
(4) Subject to notice to a state trust company and its third-party service provider accompanied by a written finding by the director that the conditions of subsection (3) of this section have been met, the director may visit and directly examine a third-party service provider of a state trust company in order to determine whether the state trust company, on account of an act or omission of the third-party service provider, is in compliance with this title and other applicable law including, without limitation, the provisions of chapter 30B.24 RCW. If prerequisites for direct examination of such third-party service provider conform to this subsection, then a subpoena pursuant to RCW 30B.10.120 shall not be required prior to a visitation and examination of such third-party service provider.
(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 trust institution regulatory authorities of the United States and other states and United States territories, for the periodic examination of state trust institutions and their affiliates. 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 Washington state.
(7) Copies from the records, books, and accounts of a state trust institution or its affiliate shall be competent evidence in all cases, equal with originals thereof, if there is attached to such copies a declaration under penalty of perjury stating that the declarant is the officer of the state trust institution or its affiliate 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.
[ 2019 c 389 s 15.]

catchline: Examinations—Requirements—Reciprocal agreements permitted—Records, books, and accounts.


title: RCW 30B.10.050

text:
(1) Each person subject to the requirement of a certificate of authority or approval from the director pursuant to RCW 30B.04.050, and any director, officer, manager, employee, or agent of such person, shall not engage in any unauthorized trust activity and shall comply with:
(a) This title and Title 11 RCW;
(b) The rules adopted by the director pertaining to this title and compliance with Title 11 RCW;
(c) Any condition in the department's certificate of authority of a state trust company or in the department's approval of an out-of- state trust company doing business in Washington state including, without limitation, any condition of certificate of authority or approval made pursuant to RCW 30B.10.040(3);
(d) Any lawful order of the director;
(e) Any lawful supervisory agreement with the director or supervisory directive of the director; and
(f) All applicable federal laws and regulations affecting trust institutions subject to the authority of the director.
(2) Each affiliate of a person subject to the authority of the director under this title, and any director, officer, manager, employee, or agent of such affiliate, shall not engage in any unauthorized trust activity and shall comply with:
(a) The provisions of this title and Title 11 RCW, to the extent that any act or omission of the affiliate, or a director, officer, manager, employee, or agent of such affiliate, affects the safety and soundness and compliance with the law of a person subject to the authority of this title;
(b) The rules adopted by the director with respect to such affiliate;
(c) Any lawful 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 a trust institution or its affiliate subject to the authority of the director.
(3) The violation of any supervisory agreement, supervisory 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.
[ 2019 c 389 s 17; 2014 c 37 s 338.]

catchline: Duties of persons subject to authority of director—Violations.


title: RCW 30B.10.060

text:
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 this chapter.
[ 2019 c 389 s 18; 2014 c 37 s 339.]

catchline: Governing administrative law and procedure.


title: RCW 30B.10.070

text:
In addition to any other powers conferred by this title, the director shall have the power, consistent with the requirements of this chapter, to order:
(1) Any person, its affiliate, or any director, officer, manager, employee, or agent of such person or its affiliate, subject to the authority of RCW 30B.10.050, to cease and desist engaging in any unauthorized trust activity or violating any provision of this title or any lawful rule;
(2) Any state trust institution, its affiliate, or any director, officer, manager, employee, or agent of the state trust institution or its affiliate to cease and desist from a course of conduct that is unsafe or unsound or 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 state trust institution;
(3) Any person, its affiliate, or any director, officer, manager, employee, or agent of such person or its affiliate, subject to the authority of RCW 30B.10.050, to take affirmative action to avoid or refrain from unauthorized trust activity, an unsafe or unsound practice, or other violation of this title;
(4) The imposition of fines;
(5) Restitution to beneficiaries, trustors, or other aggrieved persons;
(6) Costs and expenses related to investigation and enforcement, including attorney fees; and
(7) Other remedies authorized by law.
[ 2019 c 389 s 19; 2014 c 37 s 340.]

catchline: Administrative orders—Penalties for violation.


title: RCW 30B.10.080

text:
(1) In addition to the remedies set forth in RCW 30B.10.070, the director may, as applicable, issue and serve a current or former director, officer, manager, or employee of a state trust company or its affiliate with written notice of intent to remove such person from office or employment, or to prohibit such person from participating in the conduct of the affairs of the state trust company, its affiliate, or any depository institution, trust company, or affiliate of such depository institution or trust company, doing business in Washington state, whenever:
(a) Such person has committed an unsafe or unsound practice or a violation or practice involving a breach of fiduciary duty, personal dishonesty, recklessness, or incompetence; and
(b)(i) The state trust company has suffered or is likely to suffer substantial financial loss or other damage as a result of the person's acts or omissions as set forth in (a) of this subsection; or
(ii) The interests of beneficiaries, trustors, shareholders, or the general public could be seriously prejudiced by reason of the person's acts or omissions as set forth in (a) of this subsection.
(2) The director may also serve upon the same respondent a written notice and order suspending the respondent from further participation in any manner in the conduct of the affairs of the state trust company, its affiliate, or any depository institution, trust company, or affiliate of such depository institution or trust company, doing business in Washington state, pending resolution of the charges made pursuant to subsection (1) of this section, if the director determines that such an action is necessary for the protection of: The state trust company or its affiliate; the interests of beneficiaries, trustors, or shareholders of the state trust company or its affiliate; the interests of any depository institution or its depositors, trust beneficiaries, borrowers, or shareholders; or the general public.
(3) A suspension order issued by the director is effective upon service and, unless the superior court issues a stay of such order, such order shall remain in effect and enforceable until:
(a) The director dismisses the charges contained in the notice served on the person; or
(b) The effective date of a final order for removal of such person.
[ 2019 c 389 s 24; 2014 c 37 s 341.]

catchline: Suspension and removal of directors, officers, and employees.


title: RCW 30B.10.090

text:
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.
[ 2014 c 37 s 342.]

catchline: Subpoena power and examination under oath.


title: RCW 30B.10.100

text:
A present or former director, officer, manager, employee, or agent of a state trust institution or affiliate, or any other person against whom there is outstanding an effective final order under authority of this chapter which has been duly served is guilty of a gross misdemeanor punishable under chapter 9A.20 RCW, if such person thereafter:
(1) Participates in any manner in the conduct of the affairs of a state trust institution or affiliate;
(2) 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 state trust institution or affiliate;
(3) Without the prior approval of the department, votes for a director;
(4) Serves or acts as a director, officer, manager, employee, or agent of any depository institution, trust company, or affiliate of a depository institution or trust company doing business in Washington state.
[ 2019 c 389 s 30; 2014 c 37 s 343.]

catchline: Effect of final orders against officers, directors, employees, and agents.


title: RCW 30B.10.110

text:
(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 Washington state contrary to the requirements of this title if the conduct of the trust business in Washington 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 an emergency cease and desist order against such person in the manner provided for in RCW 30B.10.180 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.08 RCW as a condition of continuing to engage in a trust business in Washington 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 RCW 30B.04.040, except for a person identifiable solely by reason of RCW 30B.04.040(1).
[ 2019 c 389 s 31; 2014 c 37 s 344.]

catchline: Director's authority to protect the public and state trust institutions.


title: RCW 30B.10.120

text:
(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.
[ 2014 c 37 s 345.]

catchline: Director's subpoenas.


title: RCW 30B.10.130

text:
(1) This chapter sets forth the authority of the department to supervise and examine state trust institutions and to seek adjudicative enforcement remedies against persons, and their affiliates, officers, directors, managers, employees, and agents, engaged in authorized or nonauthorized and nonexempt trust business in Washington state.
(2) None of the provisions in this chapter shall be deemed to be an exclusive remedy of the department, and the department may, as applicable, exercise other remedies set forth elsewhere in this title and in other Washington law including, without limitation:
(a) The issuance of a supervisory directive, nonadjudicative corrective action order, or nonadjudicative order of conservatorship pursuant to chapter 30B.46 RCW; and
(b) The issuance of nonadjudicative orders for involuntary dissolution and liquidation of a state trust company pursuant to chapter 30B.44B RCW.
[ 2019 c 389 s 12.]

catchline: Scope of chapter—Remedies.


title: RCW 30B.10.140

text:
(1) A hearing pursuant to a notice of charges under this chapter must be conducted in accordance with chapter 34.05 RCW, except to the extent otherwise provided in this chapter.
(2) Such hearing may be held at a place designated by the director and, at the option of the director, may be conducted by a delegated presiding officer whom the director appoints without referral to the office of administrative hearings.
(3) The hearing shall be conducted in accordance with this chapter, chapter 34.05 RCW, and chapters 10-08 and 208-08 WAC.
(4) If the department elects to conduct a hearing as permitted by subsection (2) of this section, the director must appoint a presiding officer from outside the division of banks, who may be either an employee from another division, an independent contractor, or an administrative law judge of the office of administrative hearings.
(5) Such hearing shall be private unless the director determines that a public hearing is necessary to protect the public interest upon good cause shown in a motion by the respondent, if any, to make the hearing public.
(6) The director may elect to either retain authority to issue a final order or may delegate such authority to the presiding officer appointed pursuant to subsection (2) of this section.
[ 2019 c 389 s 20.]

catchline: Hearing—Who may conduct—Authority.


title: RCW 30B.10.150

text:
(1) The director may issue and serve a notice of charges upon:
(a) A state trust institution;
(b) An affiliate of a state trust institution;
(c) A director, officer, manager, employee, or agent of a state trust institution or its affiliate; or
(d) Any other person subject to the jurisdiction of the department under this title including, without limitation, a person engaged in unauthorized trust activity.
(2) Such notice of charges may be issued to and served upon any person or entity described in subsection (1) of this section whenever such person or entity:
(a) Has engaged in an unsafe or unsound practice;
(b) Has violated any provision of RCW 30B.10.050; or
(c) 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 acts or omissions specified in subsection (2) of this section.
(4) The notice shall set a time and place at which a hearing will be held to determine whether the following remedies should be granted:
(a) An order to cease and desist any of the acts or omissions specified in subsection (2) of this section;
(b) An order compelling affirmative action to redress any of the acts or omissions specified in subsection (2) of this section;
(c) An order imposing fines as authorized by RCW 30B.10.070;
(d) Restitution to beneficiaries, trustors, or other aggrieved persons;
(e) Costs and expenses related to investigation and enforcement, including attorney fees; and
(f) Other remedies authorized by law.
[ 2019 c 389 s 21.]

catchline: Notice of charges.


title: RCW 30B.10.160

text:
(1) The hearing shall be held not earlier than ten days or later than thirty days after service of the notice set forth in RCW 30B.10.150, unless a later date is set by the director for good cause as requested by the respondent.
(2) Unless the respondent appears at the hearing set forth in subsection (1) of this section, a default order granting any of the remedies or sanctions set forth in the notice and statement of charges may be issued by the presiding officer, consistent with RCW 34.05.440(2).
(3) A respondent may file with the presiding officer, within seven days of service of the default order, a motion to set aside a default order consistent with RCW 34.05.440(3). If the presiding officer does not issue a ruling within five business days of the motion being filed, then the motion to set aside is denied.
[ 2019 c 389 s 22.]

catchline: Hearing—Schedule—Default.


title: RCW 30B.10.170

text:
(1) The presiding officer shall have sixty days after the hearing to issue an order, including findings of fact and conclusions of law, consistent with RCW 34.05.461(3).
(2) If the director has not delegated his or her authority to a presiding officer to issue a final order, a party may bring a petition for review of the presiding officer's initial order before the director, consistent with RCW 34.05.464.
(3) If the director has previously delegated his or her authority for the presiding officer to issue a final order, then the order of such presiding officer shall be final and may be appealable to the superior court of Washington, consistent with RCW 34.05.514.
(4) The commencement of proceedings for judicial review shall not operate as a stay of any order issued by the director unless specifically ordered by the court.
[ 2019 c 389 s 23.]

catchline: Hearing—Order—Review or appeal.


title: RCW 30B.10.180

text:
(1) When the director finds it necessary for one or more of the purposes set forth in subsection (2) of this section, the director may issue and serve an emergency order upon:
(a) A state trust institution, its affiliate, a director, officer, manager, employee, or agent of such state trust institution or its affiliate, or any person subject to the authority of this title, requiring the respondent to take immediate affirmative action or immediately cease and desist from any act, practice, or omission or failure to act; or
(b) A director, officer, manager, or employee of a state trust company or its affiliate to suspend or remove such person from his or her office or employment with the state trust company or its affiliate pursuant to RCW 30B.10.080.
(2) Such emergency order may be issued to:
(a) Ensure the safety or soundness of the authorized trust institution;
(b) Prevent the state trust institution's insolvency or inability to pay its obligations in the ordinary course of business;
(c) Prevent significant or critical undercapitalization or substantial dissipation of assets;
(d) Compel timely compliance with a supervisory agreement, supervisory directive, or order of the director;
(e) Compel production of or access to its books, papers, records, or affairs as directed by the department or other applicable financial services regulator;
(f) Prevent immediate and irreparable harm to the public interest, interests of the trustors or beneficiaries, or condition of the state trust institution; or
(g) Prevent fraudulent activity.
(3) The emergency order must:
(a) Be served upon each entity or person subject to the order by personal delivery or registered or certified mail, return receipt requested, to the entity or person's last known address;
(b) State the specific acts or omissions at issue and require the entity or person to immediately comply with the order; and
(c) Contain a notice that a request for hearing may be filed by the respondent within ten days of service with the superior court, as set forth in subsection (5) of this section.
(4) Unless a respondent against whom the order is directed files a petition for judicial review with the court within ten days after the order is served under this section, the order is nonappealable and any right to a hearing is deemed conclusively waived as to that respondent.
(5) A petition for judicial review must:
(a) Be filed with the superior court of the county of the principal place of business of the respondent or, in the case of the respondent not being domiciled in Washington state, the Thurston county superior court;
(b) State the specific respondents seeking review of the order;
and
(c) State the specific grounds and authority to set aside or
modify the order.
(6) Upon receipt of a timely filed petition for review, the court shall set the time and place of a hearing, no later than ten business days after the petition for review is filed, unless otherwise agreed by the parties.
(7) The department shall bear the burden of proof by a preponderance of evidence.
(8) Pending judicial review, the emergency order shall continue in full force and effect unless the order is stayed by the department.
[ 2019 c 389 s 25.]

catchline: Emergency order—Judicial review.


title: RCW 30B.10.190

text:
(1) The director may issue and serve a state trust institution, or its affiliate, with written notice of intent to prohibit it from permitting a third-party service provider of such state trust institution or affiliate from participating in the conduct of the affairs of the state trust institution, whenever:
(a) The third-party service provider commits an unsafe or unsound practice, or a violation or practice involving a breach of fiduciary duty, personal dishonesty, recklessness, or incompetence; and
(b)(i) The state trust institution or its affiliate has suffered or is likely to suffer substantial financial loss or other damage; or
(ii) The interests of the state trust institution, or its affiliate, or their beneficiaries, trustors, shareholders, or the general public in Washington state could be seriously prejudiced by reason of the violation or practice of the third-party service provider.
(2) The director shall also serve any affected third-party service provider with the notice described in subsection (1) of this section, and such third-party service provider shall be deemed a real party in interest with the same right to notice and right to intervene in the administrative action and defend against it as if the third-party service provider were the respondent.
[ 2019 c 389 s 26.]

catchline: Order of prohibition against third-party service providers—Grounds—Notice.


title: RCW 30B.10.200

text:
(1) A notice pursuant to RCW 30B.10.080 or 30B.10.190 shall:
(a) Contain a statement of the facts that constitute grounds for removal or prohibition; and
(b) Set a time and place at which a hearing will be held.
(2) 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 board trustee or director, officer, or employee for good cause shown or at the request of the attorney general of the state.
(3) Unless the respondent appears at the hearing personally or by a representative authorized under WAC 208-08-030, the respondent 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 order of removal or prohibition from participation in the conduct of the affairs of the state trust company, out-of-state trust company doing business in Washington state, or affiliate, as the director may consider appropriate.
(4) Any order under this section shall become effective at the expiration of ten days after service upon the respondent, except that an order issued upon consent shall become effective at the time specified in the order.
(5) An order shall remain effective except to the extent it is stayed, modified, terminated, or set aside by the director or a reviewing court.
[ 2019 c 389 s 27.]

catchline: Notice of intention to remove or prohibit participation in conduct of affairs—Hearing—Order.


title: RCW 30B.10.210

text:
(1) In addition to any other remedy set forth in this chapter, the director may notify, in writing, the board of directors of any state trust company that the director has information that any member of the board of directors, officer, manager, employee, or agent of the state trust company or affiliate of the state trust company is dishonest, reckless, or incompetent, or is failing to perform any duty required of the state trust company or such affiliate.
(2) The board shall then meet to consider such matter as soon as reasonably feasible, but no later than thirty calendar days of the director's notice.
(3) The director shall have notice of the time and place of such meeting and an opportunity to appear at such meeting and address the board of directors concerning the director's information.
(4) If the board finds the director's information to be well-founded, and the affected member of the board of directors, officer, employee, or agent of the state trust company or such affiliate is working under an employment contract or independent contractor agreement that prohibits termination without cause, the board shall notify such member of the board of directors, officer, employee, or agent of the board's intent to remove him or her from the position, or to otherwise instruct such affiliate to do so, as applicable. Such notice shall be in writing and include:
(a) Notice of the allegations;
(b) Specific facts supporting the allegations; and
(c) A time and place at which such member of the board of directors, officer, employee, or agent will have an opportunity to be heard before a final action is taken by the board.
(5) Pursuant to subsection (4) of this section, the board shall set the time and place of the meeting no sooner than ten business days after such member of the board of directors, officer, employee, or agent receives notice of the board's intent to remove or terminate the contract.
(6) If the board finds the director's information to be well-founded, and the affected member of the board of directors, officer, manager, employee, or agent may be terminated without cause, such director, officer, manager, employee, or agent may be removed by the state trust company or such affiliate, or their contract may be terminated, at the option of the board.
(7) If the board does not remove such director, officer, employee, or agent, or if the board fails to meet, consider, or act upon the director's information within twenty days after receiving the same, then the director may within twenty days after, or earlier in the case of the necessity of an emergency order under RCW 30B.10.070, seek removal of such person by complying with the applicable provisions of this chapter.
(8) This section shall not be deemed to be an exclusive remedy of the department. The department may exercise any other remedies available to it under this chapter.
[ 2019 c 389 s 28.]

catchline: Authority of director to seek removal by the board of a state trust company.


title: RCW 30B.10.220

text:
(1) The director may apply to a superior court of Washington for the enforcement of any effective and outstanding final order issued pursuant to this chapter, and the superior court shall have jurisdiction to order compliance with such final order.
(2) No court shall have jurisdiction to affect by injunction or otherwise the department's issuance or enforcement of any order pursuant to this chapter, or to review, modify, suspend, terminate, or set aside such order, except as provided in this chapter.
(3) The venue for enforcement of a final order by the department under this chapter shall be the superior court in the county of the principal place of business of the person upon whom the order is imposed or, in the case of such person not being domiciled in Washington state, the venue shall be Thurston county superior court.
[ 2019 c 389 s 29.]

catchline: Jurisdiction of courts as to the department's enforcement orders—Venue.


title: RCW 30B.10.230

text:
(1) A person who shall knowingly violate or knowingly aid or abet the violation of any provision of RCW 30B.10.050 shall be guilty of a misdemeanor.
(2) A director, officer, manager, employee, or agent of a state trust institution or affiliate who has had imposed upon him or her a criminal conviction for the violation of this title or any other financial services law 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, manager, employee, or agent of any state trust company or its affiliate doing business in Washington state.
[ 2019 c 389 s 32.]

catchline: General penalty—Effect of conviction.


title: RCW 30B.10.240

text:
(1) An action seeking any remedy under RCW 30B.10.070, 30B.10.080, or 30B.10.190 shall commence no later than five years after the cause of action accrued.
(2) A cause of action under this section is deemed to have accrued at the later of the following events:
(a) The occurrence of the act or omission;
(b) When the department discovers or should have discovered that the act or omission has occurred;
(c) When the department discovers or should have discovered that the act or omission has negatively impacted the capital status or other element of safety or soundness of a state trust company or out-of-state trust company doing business in Washington state; or
(d) Where an act or omission is part of a pattern or practice, upon the occurrence of the most recent act or omission comprising the pattern or practice. A cause of action under this subsection may include all acts or omissions comprising the pattern or practice if the cause of action is timely as to the most recent act or omission.
[ 2019 c 389 s 33.]

catchline: Statute of limitations.


title: RCW 30B.12.005

text:
(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.
[ 2014 c 37 s 346.]

catchline: Voting securities held by state trust company.


title: RCW 30B.12.010

text:
(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.
[ 2014 c 37 s 347.]

catchline: Bylaws.


title: RCW 30B.12.020

text:
(1) The board of a state trust company must consist of not fewer than five directors, managers, or managing participants, at least two of whom shall not be officers, managers, employees, or agents of the state trust company, or otherwise in control of the state trust company, either as a principal or in a representative capacity, as "control" is defined in RCW 30B.53.005. 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 as determined by the definition of "control" set forth in RCW 30B.53.005;
(b) The person has been convicted of a felony or a crime involving personal dishonesty; 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 filled 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 a declaration under penalty of perjury 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.
(7) Notwithstanding any other provision of this section to the contrary, a state trust company shall have directors, managers, or managing participants, and committees or subcommittees composed of such directors, managers, or managing participants, consistent with the requirements of RCW 30B.24.030 and in conformity with the contents of the state trust company's written statement of principles of trust management, pursuant to RCW 30B.24.040, as adopted by the board and subject to approval of the department.
[ 2019 c 389 s 34; 2014 c 37 s 348.]

catchline: Board of directors, managers, or managing participants.


title: RCW 30B.12.030

text:
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.
[ 2014 c 37 s 349.]

catchline: Required board meetings.


title: RCW 30B.12.040

text:
(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, manager, 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, or an officer of the state trust company with an equivalent function, must be a Washington state resident.
(4) Notwithstanding any other provision of this section to the contrary, the board of a state trust company shall designate officers and committees or subcommittees composed of such officers, consistent with the requirements of RCW 30B.24.030 and in conformity with the contents of the state trust company's written statement of principles of trust management, pursuant to RCW 30B.24.040, as adopted by the board and subject to approval of the department.
[ 2019 c 389 s 35; 2014 c 37 s 350.]

catchline: Officers.


title: RCW 30B.12.050

text:
(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.
[ 2014 c 37 s 351.]

catchline: Certain criminal offenses.


title: RCW 30B.12.060

text:
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;
(3) The direction and review of the actions of each officer, manager, employee, committee, and agent used by the state trust company in the exercise of its fiduciary powers; and
(4) Every other requirement of the board as set forth in RCW 30B.24.030 and in conformity with the contents of the state trust company's written statement of principles of trust management, pursuant to RCW 30B.24.040, as adopted by the board and subject to approval of the department.
[ 2019 c 389 s 36; 2014 c 37 s 352.]

catchline: Board's responsibility.


title: RCW 30B.12.070

text:
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 30A.12.030 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.
[ 2014 c 37 s 353.]

catchline: Bonding requirements.


title: RCW 30B.12.080

text:
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.
[ 2014 c 37 s 354.]

catchline: Reports of apparent crime.


title: RCW 30B.12.090

text:
(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 Washington 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 RCW 30B.04.130. 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.
(7) Notwithstanding any other provision of this section to the contrary, a state trust company and its directors, officers, managers, employees, and committees shall exercise administration of fiduciary powers consistent with the requirements of RCW 30B.24.030 and in conformity with the contents of the state trust company's written statement of principles of trust management, pursuant to RCW 30B.24.040, as adopted by the board and subject to approval of the department.
[ 2019 c 389 s 37; 2014 c 37 s 355.]

catchline: Administration of fiduciary powers.


title: RCW 30B.12.100

text:
(1) A state trust company shall have a fiduciary audit committee, which shall exercise fiduciary responsibilities, administer fiduciary powers, and report to the board of directors consistent with the requirements of this section, RCW 30B.24.030, and in conformity with the contents of the state trust company's written statement of principles of trust management, pursuant to RCW 30B.24.040.
(2) At least once during each calendar year, a state trust company shall arrange for a suitable audit by internal or external auditors of all significant fiduciary activities, under the direction of its fiduciary audit committee, unless the state trust company adopts a continuous audit system in accordance with subsection (3) of this section. The state trust company shall note the results of the audit, including significant actions taken as a result of the audit, in the minutes of the board of directors.
(3) In lieu of performing annual audits under subsection (2) of this section, a state trust company may adopt a continuous audit system under which the state trust company arranges for a discrete audit by internal or external auditors of each significant fiduciary activity on an activity-by-activity basis, under the direction of its fiduciary audit committee, at an interval commensurate with the nature and risk of that activity. Under such a system, certain fiduciary activities may receive audits at intervals greater or less than one year, as appropriate. A state trust company that adopts a continuous audit system pursuant to this subsection shall note the results of all discrete audits performed since the last audit report, including significant actions taken as a result of the audits, in the minutes of the board of directors at least once during each calendar year.
(4) A state trust company's fiduciary audit committee may consist of the entire board of directors, or it may comprise either a committee of the bank's directors or an audit committee of an affiliate of the state trust company. However, in either case, the committee:
(a) Must not include any officers of the state trust company or an affiliate who participate significantly in the administration of the state trust company's fiduciary activities; and
(b) Must consist of a majority of members who are not also members of any committee to which the board of directors has delegated power to manage and control the fiduciary activities of the state trust company.
(5) The requirements of subsections (1) through (4) of this section shall be separate from and in addition to any audits of the nonfiduciary operations of the state trust company, if any.
[ 2019 c 389 s 38; 2014 c 37 s 356.]

catchline: Audit—Fiduciary audit committee.


title: RCW 30B.12.110

text:
(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.
[ 2014 c 37 s 357.]

catchline: Shareholders—Actions authorized without meetings—Written consent.


title: RCW 30B.12.120

text:
(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.
[ 2014 c 37 s 358.]

catchline: Directors, committees—Actions authorized without meetings—Written consent.


title: RCW 30B.12.130

text:
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.
[ 2014 c 37 s 359.]

catchline: Directors, committees—Meetings authorized by conference telephone or similar communications equipment.


title: RCW 30B.12.140

text:
(1) Except as otherwise permitted by the director under specified terms and conditions, the board of directors of a state trust company shall direct and require good and sufficient fidelity bonds and liability insurance, issued by a company authorized to engage in the insurance business in the state of Washington, covering the state trust company and all of its active directors, officers, managers, and employees. Bonds or coverage shall provide for indemnity to the state 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 directors, officers, managers, and employees, acting independently or in collusion or combination with any person. Such bonds or coverage may be individual, schedule, or blanket form, and premiums shall be paid by the state trust company.
(2) Except as otherwise permitted by the director under specified terms and conditions, the board of directors of a state trust company shall direct and require good and sufficient liability insurance, including errors and omissions coverage, for the negligent or reckless acts and omissions of directors, officers, fiduciary managers, and employees. Such coverage shall be paid by the state trust company.
(3) Except as otherwise permitted by the director under specified terms and conditions, the directors shall also direct and require suitable insurance protection to the state trust company, as necessary, against burglary, robbery, theft, and other similar insurance hazards to which the state trust company may be exposed in the operations of its business on the premises or elsewhere.
(4) The directors shall be responsible for prescribing at least once in each year the amount of such bonds or policies and the sureties or underwriters to be engaged, after giving due consideration to all known elements and factors constituting known risks or hazards. Such action of the directors shall be recorded in the board minutes.
(5) The director may by rule prescribe requirements for bond and insurance coverage that are more specific and derogation of the provision of subsections (1) through (4) of this section if the director determines that such a rule is necessary to conform to the market availability of certain bond and insurance coverages.
[ 2019 c 389 s 39.]

catchline: Fidelity bonds—Liability insurance—Additional insurance—Authority of director.


title: RCW 30B.20.005

text:
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.
[ 2014 c 37 s 360.]

catchline: General prohibition on deposit taking.


title: RCW 30B.20.010

text:
(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.
[ 2014 c 37 s 361.]

catchline: Trust deposits as a client investment—Security fund.


title: RCW 30B.20.020

text:
(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.
(3) A state trust company that invests in a collective investment fund shall make investments as required by RCW 30B.24.030 and in conformity with the contents of the state trust company's written statement of principles of trust management, pursuant to RCW 30B.24.040, as adopted by the board and subject to approval of the department. A state trust company shall also comply with RCW 30B.24.020 in avoiding conflicts of interest and self-dealing in relation to a collective investment fund.
(4) Unless otherwise prescribed by the director by rule, a state trust company shall be required to establish and maintain collective investment funds the same as required for a federally insured state bank with authorized trust powers, taking into account federal rules applicable to a federally insured state bank in relation to a collective trust fund that require a written plan and specific requirements for fund management including, without limitation, provision for proportionate interests, methods and frequency of valuation of all or portions of the fund, admission and withdrawal of accounts, methods of distribution, segregation of investments, audit and financial reports related to the collective investment fund, advertising restrictions, management fees, expenses, and prohibition against certificates.
(5) Notwithstanding the general use of the term "affiliate" in this title as defined in RCW 30B.04.005, nothing in this chapter shall be construed as exempting or modifying a requirement of a state trust institution with respect to RCW 11.102.010.
[ 2019 c 389 s 40; 2014 c 37 s 362.]

catchline: Common trust funds—Collective investment funds.


title: RCW 30B.24.005

text:
(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 shall comply with all applicable provisions of this title and with applicable provisions of Title 11 RCW including, without limitation, chapters 11.97, 11.98, *11.98A, 11.100, 11.102, 11.104B, 11.106, 11.107, 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.
(3) A state bank, in relation to its trust department and its exercise of trust powers, shall comply with:
(a) Title 30A RCW, if a state commercial bank, and Title 32 RCW, if a state savings bank;
(b) The applicable provisions of Title 11 RCW including, without limitation, chapters 11.97, 11.98, *11.98A, 11.100, 11.102, 11.104B, 11.106, 11.107, and 11.108 RCW, and with chapter 11.110 RCW, in the case of a charitable trust;
(c) If the state bank is federally insured, any applicable rules and guidance of the federal deposit insurance corporation or other applicable federal law or regulation related to such state bank's exercise of trust powers; and
(d) If the state bank is a member of the federal reserve system, any rules and guidance of the board of governors of the federal reserve system related to such state bank's exercise of trust powers.
[ 2021 c 140 s 2804; 2019 c 389 s 41; 2014 c 37 s 363.]
Notes:
*Reviser's note: Chapter 11.98A RCW was repealed in its entirety by 2020 c 303 s 19.
Effective date—2021 c 140 ss 2101-2806: See RCW 11.104B.905.

catchline: Prudential fiduciary standards.


title: RCW 30B.24.010

text:
(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.
[ 2014 c 37 s 364.]

catchline: Fee determination.


title: RCW 30B.24.020

text:
(1) 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.
(2) Unless authorized by other law, a state trust company may not invest funds of a fiduciary account over which it has investment discretion in the shares or obligations of, or in assets acquired from: The state trust company or any of its directors, officers, managers, or employees; affiliates of the state trust company or any of their directors, officers, managers, or employees; or individuals or organizations with whom there exists an interest that might affect the exercise of the best judgment of the state trust company.
(3) If retention of shares or obligations of the state trust company or its affiliates in a fiduciary account is consistent with applicable law, the state trust company may:
(a) Exercise rights to purchase additional shares, or securities convertible into additional shares, when offered pro rata to shareholders; and
(b) Purchase fractional shares to complement fractional shares acquired through the exercise of rights or the receipt of a share dividend resulting in fractional share holdings.
(4) A state trust company may not lend, sell, or otherwise transfer assets of a fiduciary account for which a state trust company has investment discretion to itself or any of its directors, officers, managers, or employees, or to affiliates of the state trust company or any of their directors, officers, managers, or employees, or to individuals or organizations with whom there exists an interest that might affect the exercise of the best judgment of the state trust company, unless:
(a) The transaction is authorized by other applicable law;
(b) Legal counsel advises the state trust company in writing that the state trust company has incurred, in its fiduciary capacity, a contingent or potential liability, in which case the state trust company, upon the sale or transfer of assets, shall reimburse the fiduciary account in cash at the greater of book or market value of the assets;
(c) In the case of a collective investment fund, the state trust company purchases for its own account any defaulted investment held by the fund if, in the judgment of the state trust company, the cost of segregating the investment is excessive in light of the market value of the investment: PROVIDED, That the state trust company purchases the defaulted investment at the greater of market value or the sum of cost and accrued unpaid interest; or
(d) Required in writing by the director.
(5) Notwithstanding any other provision of this section, a state trust company may not lend to any of its directors, officers, managers, or employees any funds held in trust, except with respect to employee benefit plans in accordance with the exemptions found in section 408 of the employee retirement income security act of 1974, 29 U.S.C. Sec. 1108.
(6) A state trust company may make a loan to a fiduciary account and may hold a security interest in assets of the account if the transaction is fair to the account and is not prohibited by applicable law.
(7) A state trust company may sell assets between any of its fiduciary accounts if the transaction is fair to both accounts and is not prohibited by applicable law.
(8) A state trust company may make a loan between any of its fiduciary accounts if the transaction is fair to both accounts and is not prohibited by applicable law.
[ 2019 c 389 s 44; 2014 c 37 s 365.]

catchline: Conflicts of interest.


title: RCW 30B.24.030

text:
(1) Unless the director shall otherwise set forth by rule, a state trust company and, to the extent applicable, its affiliates, and their respective directors, officers, managers, employees, and agents, shall comply with such federal regulations applicable to the fiduciary activities of a federally insured state bank.
(2) The requirements of subsection (1) of this section, as applicable to a state trust company, shall be at least partially contained in the state trust company's written statement of principles of trust management, the contents of which shall be subject to examination and approval by the department, and upon which the department may further examine a state trust company as to whether it is in compliance with such statement.
(3) A state trust company and, to the extent applicable, its affiliate, shall comply with standards for prudent management of third-party risk under applicable law or as the director may otherwise adopt by rule or by a written interpretive statement including, without limitation, management of third-party risk pursuant to RCW 30B.24.060.
[ 2019 c 389 s 42.]

catchline: Compliance with fiduciary activities standards equivalent to that of national banks—Statement of principles of trust management—Management of third-party risk.


title: RCW 30B.24.040

text:
(1) The board of directors of a state trust company shall adopt a written statement of principles of trust management at its first organizational meeting or at a meeting of the board called for that purpose, which it must annually reaffirm by written vote, whether or not such statement is sought to be amended.
(2) The statement of principles of trust management shall set forth the minimum requirements for sound fiduciary management in the operation of a state trust company. Such minimum requirements shall provide for sound fiduciary practices in the operation of a state trust company and provide safeguards for the protection of fiduciary beneficiaries, principals of agency relationships, creditors, stockholders, and the public, and shall provide for:
(a) Involvement by the board of directors in providing for the establishment and continuing fiduciary operations;
(b) Operation of fiduciary activities separate and apart from every other activity of the state trust company, with trust assets separated from other assets owned by the state trust company, and the assets of each trust account separated from the assets of every other trust account; and
(c) Maintenance of separate books and records for the fiduciary business in sufficient detail to properly reflect all fiduciary activities.
(3) The statement of principles of trust management shall provide that the board of directors, by resolution included in its minutes:
(a) Designate a competent and qualified officer or manager to be responsible for and administer the fiduciary activities of the state trust company;
(b) Define such officer's or manager's duties;
(c) Name a trust committee consisting of at least three directors to be responsible for and supervise the fiduciary activities of the state trust company or state banking institution, which shall include, if feasible, one or more directors who are not officers of the state trust company or state banking institution;
(d) Receive reports from such trust committee and record actions taken in its minutes;
(e) Review the examination reports of the state trust company by the department or other applicable financial services regulatory authority having jurisdiction over the state trust company; and
(f) Record all actions taken in its minutes.
(4) Nothing in this section is intended to prohibit the board of directors from authorizing itself to act as the trust committee, or from authorizing itself to appoint additional committees and officers to oversee account administration and the operation of the state trust company and its fiduciary activities.
(5) When such statement provides for delegating duties to a subcommittee or officers, the statement shall indicate that the board and the trust committee remain responsible for the oversight of all trust company and fiduciary activities. Such statement shall also reflect that sufficient reporting and monitoring procedures are required to fulfill this responsibility.
(6) The statement of principles of trust management shall provide that the trust committee:
(a) Meet at least quarterly, and more frequently if considered necessary and prudent to fulfill its supervisory responsibilities;
(b) Approve and document:
(i) The opening of all new fiduciary accounts;
(ii) Purchases and sales of, and changes in, trust assets; and
(iii) The closing of trust and agency relationship accounts;
(c) Provide for a comprehensive review of all new accounts, for which the state trust company or trust department has investment responsibility, promptly following acceptance;
(d) Provide for a review of each fiduciary and agency account, including collective investment funds, at least once during each calendar year, the scope, frequency, and level of review of which should be addressed in appropriate written policies that give consideration to the state trust company's fiduciary responsibilities, type and size of account, and other relevant factors, including coverage of both administration of the account and suitability of the account's investments, distinguishing as between the scope and components of discretionary and nondiscretionary reviews;
(e) Keep comprehensive minutes of meetings held and actions taken; and
(f) Make periodic reports to the board of directors of its actions.
(7) The statement of principles of trust management shall also require:
(a) Comprehensive written policies which address all important areas of the state trust company's fiduciary activities;
(b) Competent legal counsel to advise trust officers and the trust committee on legal matters pertaining to fiduciary activities;
(c) Adequate internal controls, including appropriate controls over fiduciary assets; and
(d) An adequate annual audit of all fiduciary activities by an internal or external auditor, as required by the department, the findings of which, including actions taken as a result of the audit, must be recorded in its minutes.
(8) Notwithstanding subsection (7)(d) of this section, the statement of principles of trust management may provide that, if a state trust company adopts a continuous audit process instead of performing annual audits, such audits may be performed, on an activity-by-activity basis, at intervals commensurate with the level of risk associated with that activity. In such case, the statement must reflect that audit intervals are to be supported and reassessed regularly to ensure appropriateness, given the current risk and volume of the activity.
[ 2019 c 389 s 43.]

catchline: Written statement of principles of trust management required—Contents.


title: RCW 30B.24.050

text:
(1) A state trust company shall file no later than forty-five days after the end of each calendar quarter a statement of its financial condition and a summary of the condition of its fiduciary accounts, known as a call report, in a form and content as prescribed by the director by rule or written policy from which at least ninety days' advance written notice has been given.
(2) Unless otherwise established by rule, such call report shall be deemed confidential examination information and shall be subject to RCW 30A.04.075.
[ 2019 c 389 s 45.]

catchline: Call report.


title: RCW 30B.24.060

text:
(1) A state trust institution and its affiliate or third-party service provider, if applicable, shall comply with the federal financial recordkeeping and reporting of currency and foreign transactions act, 31 U.S.C. Sec. 5311 et seq., also known as the bank secrecy act, and with associated federal regulations including, without limitation, any requirements under 31 C.F.R. Part 103.
(2) A state trust institution and its affiliate or third-party service provider, if applicable, shall maintain the federal standards for safeguarding customer information, required pursuant to Title V of the federal Gramm-Leach-Bliley act, P.L. 106-10, 113 Stat. 1338, as amended, and shall comply with applicable federal and state laws and rules related to cybersecurity, or written interpretive statement of the department to which the state trust institution, affiliate, or third-party service provider has been furnished notice.
(3) A state trust company shall be subject to examination by the department for compliance with subsections (1) and (2) of this section. An affiliate of a state trust company may be subject to examination for compliance with subsections (1) and (2) of this section upon notice to the state trust company and to the applicable affiliate. A third-party service provider may be subject to direct examination in relation to compliance with subsections (1) and (2) of this section as may be required pursuant to RCW 30B.10.045 (3) and (4).
[ 2019 c 389 s 46.]

catchline: Compliance with the bank secrecy act—Management of third-party risk—Cybersecurity—Examination.


title: RCW 30B.38.005

text:
(1) An out-of-state trust institution that meets the requirements of this chapter is not required to maintain a physical trust office in Washington state.
(2) An out-of-state trust institution that does not operate a trust office in Washington state and that meets the requirements of this chapter may establish and maintain a new trust office in Washington state.
(3) As used in this chapter, "doing business in Washington state," with reference to an out-of-state trust institution, means purposely availing oneself of regularly transacting trust business with the public in Washington state, or otherwise seeking to regularly transact trust business with the public in Washington state by means of solicitation, which the director may so determine if all or part of the administration of any trust or other agreement to conduct trust business is administered or sought to be administered in Washington state, or if a trust or other trust business agreement, with the assent of the out-of-state trust institution, specifies Washington state as the situs of the trust or situs of the tangible or intangible property covered by the trust business agreement.
[ 2019 c 389 s 47; 2014 c 37 s 366.]

catchline: Trust business at a trust office.


title: RCW 30B.38.010

text:
Notwithstanding any other provision of this title, an out-of-state trust institution that complies with RCW 30B.38.020(1) and 30B.72.010 is exempt from the requirements of RCW 30B.38.030 and 30B.38.040.
[ 2014 c 37 s 367.]

catchline: Preexisting approved out-of-state trust institutions.