Olympia – The Washington State Department of Financial Institutions (DFI) is pleased to announce the passage of SB5107 - legislation updating the Washington Trust Institutions Act, Title 30B RCW. Governor Inslee signed the bill into law yesterday afternoon.
“I am pleased with the passing of this legislation,” DFI Director of Banks Roberta Hollinshead said. “It introduces important protections for consumers who rely on trust companies operating in Washington State. It gives DFI the ability to intervene if other companies doing business with a trust institution act in a manner that may pose a threat to its consumers, and provides a clear process for liquidating a trust should that become necessary. It also provides clear, concise and comprehensive laws for existing and future trust company businesses providing services to consumers in Washington State. It is another step in the process of ensuring the laws governing financial service providers are modern and up to date."
The following is a summary of changes the legislation puts in place:
- Modernizes the definition for “doing business in Washington state,” which recognizes the increasing prominence of online and global business;
- Clarifies who can obtain a trust company charter and the activities they can perform;
- Defines third-party service providers as they relate to trust businesses and provides authority to the DFI to examine them under certain conditions;
- Clearly defines prudential standards and corporate governance requirements for trust companies by which they will be examined for safety and soundness;
- Incorporates a comprehensive approach to corrective action measures including supervisory direction, corrective action orders, and conservatorship; and
- Amends and clarifies the procedures pertaining to life cycle events of a company including the chartering of a new business, voluntary and involuntary liquidation and changes in control of a trust company.
“It’s so important to provide trust beneficiaries with the protections they deserve. Senate bill sponsor Sen. Mona Das (D-Kent) of the 47th Legislative District said, “It’s also critical to have a modern regulatory environment if we are going to continue attracting new business to our state.”
"This policy change is good for both consumers and businesses - a true win-win," House bill sponsor Rep. Amy Walen (D-Olympia) of the 48th Legislative District added. "It is a recognition that doing business in Washington means something totally different today as so much business activity is done online without physical branches or locations."