Robe r ta Hollinshe ad Dire c tor of Ba nks Robe rta .Hollinshe a d@dfi.wa .g ov Pre se nta tion to the Infra struc ture a nd Public De pository T a sk F orc e Oc tobe r 20, 2017
Disc ussion T opic s I ntro duc tio n to DF I Ba nk Cha rte r Se le c tio n F e de ra l Re g ula to rs Prude ntia l Re g ula tio n CAME L S Ra ting Syste m, Are a s o f Re vie w Re g ula to ry E nfo rc e me nt Ac tio n F o rming a Ba nk (unde r c urre nt rule s) Ca nna b is Ba nking in Wa shing to n
DF I – Mission, F unc tion and F unding Mission. DF I re g ula te s fina nc ia l se rvic e s to pro te c t a nd e duc a te the pub lic a nd pro mo te e c o no mic vita lity. Re g ula tion of F ina nc ia l Se rvic e Provide rs. DF I pro vide s re g ula to ry o ve rsig ht fo r o ur sta te ’ s fina nc ia l se rvic e pro vide rs. unding . DF I is se lf-suppo rting . DF I ’ s Se lf- F o pe ra ting re ve nue s a re pa id b y the fina nc ia l se rvic e pro vide rs we re g ula te . Dire c tor- Glo ria Pa pie z
ROLES OF DFI DIVISIONS DIVISIONS: Banks Credit Consumer Services Securities Administration Unions Core mission: • Safety and • Safety and • Consumer Protection • Consumer • Administrative Support Soundness Soundness • Compliance Protection • Compliance • Compliance • Compliance Jurisdiction: State Chartered State Chartered Non-Depository Financial Securities Legal Affairs Broker/Dealers Banks and Trust Credit Unions Institutions: Consumer Loan Companies Companies Policy and Legislative • WA Securities Mortgage Brokers • Offerings Mortgage Loan Originators Public Records • Residential Mortgage Loan • Investment Advisers Servicers Information Technology and Reps Check Casher and Sellers • Payday Lenders • Budget & Accounting Small business Escrow Companies and • (technical assistance Officers Human Resources only) Money Transmitters and • Currency Exchangers Investment Fraud Communications & Providers of TAX Refund • Anticipation Loans (RALS) Outreach Franchises Facilities Business Opportunities Offerings Core Activities: Chartering Chartering Licensing Registration Agency Management • • • • • Examination Examination Examination Examination Administrative Services • • • • Enforcement Enforcement Enforcement Enforcement Education and Outreach • • • • • Education and Education and Education and Outreach Education and • • • • Outreach Outreach Outreach
Banking Conditions in Washington T he Numbe r s Ba nks a re sta b le a nd in g o o d c o nditio n Co nso lida tio n o f Sta te Cha rte re d Ba nks 57 in 2012; 51 in 2015; a nd 45 no w No ne w b a nking a c tivity Gro wth in Asse ts – Org a nic a nd me rg e r/ a c q uisitio n T o ta l a sse ts g re w fro m $48.7 b illio n to $55.4 b illio n in the pa st 2 ye a rs Ave ra g e b a nk size g re w fro m $974 millio n to $1.23 b illio n in a sse ts in the pa st 2 ye a rs Wa shing to n lo a n g ro wth ra te 10% o utpa c e s na tio na l a ve ra g e o f 7%
Pre and Post Crisis Snapshot Number of Institutions: 2008-2016 80 72 70 60 50 40 37 40 30 20 11 11 9 9 7 7 10 2 1 1 0 Commerical Savings Banks Alien Bank Trust Companies Banks Branches Dec-08 Dec-14 Sep-16 7
How is a Ba nk Cha rte re d? Co mmunity Ba nk Sta te Cha rte r Na tio na l Ba nk Cha rte r Cha rte r (DF I) F e d e ra l De po sit Offic e o f the Prima ry F e de ra l F e d e ra l Re se rve Insura nc e Co mptro lle r o f Me mb e r (F RB) Co rpo ra tio n the Curre nc y Re g ula to r (F DIC) (OCC)
F e de ra l Ba nking Re g ula tors
F e de ra l Ba nking Re g ula tors F e de ra l De po sit I nsura nc e Co rpo ra tio n (F DI C) – I nsure r o f de po sits, supe rvise s sta te -c ha rte re d no n-me mb e r b a nks, re c e ive r a nd re so lutio n o f fa ile d b a nks F e de ra l Re se rve (F RB) – Supe rvise s sta te - c ha rte re d me mb e r b a nks, b a nk ho lding c o mpa nie s, pro vide s a c c e ss to the pa yme nt syste m Co nsume r F ina nc ia l Pro te c tio n Bure a u (CF PB) – Supe rvise s c o nsume r c o mplia nc e o n b a nks o ve r $10 Billio n in a sse ts Offic e o f the Co mptro lle r o f the Curre nc y (OCC) – Supe rvise s na tio na l b a nks
Wha t is a Prude ntia l Re g ula tor? Supe rvise s de po sito ry institutio ns a nd e sta b lishe s re q uire me nts a nd limits o n risk ta king E nfo rc e s sta te a nd fe de ra l la ws Co nduc ts Sa fe ty a nd So undne ss E xa mina tio n a nd Co nsume r Co mplia nc e E xa mina tio ns – all b anks re g ulate d e sse ntially the same Go a l is to pro vide a c c e ss to c re dit a nd pro te c t de po sito rs funds
Safe ty and Soundne ss - CAME L S Ca pita l Asse t Qua lity Ma na g e me nt E a rning s L iq uidity Se nsitivity to Ma rke t Risk https:/ / www.yo utub e .c o m/ use r/ F DI Cc ha nne l
Othe r Are a s of Re vie w Re g ula to ry Re po rting - Ca ll Re po rt Ba nk Se c re c y Ac t/ Anti Mo ne y L a unde ring a nd Offic e o f F o re ig n Asse t Co ntro l I nfo rma tio n T e c hno lo g y a nd Se c urity Mo rtg a g e Ba nking Audit F unc tio n I nte rna l Ro utine s a nd Co ntro ls Co mplia nc e with Rule s a nd Re g ula tio ns
F e de r al and State Re gulations Snapshot Hundre ds o f rule s a nd re g ula tio ns. A fe w e xa mple s: Re a l E sta te L e nding Sta nda rds / L T V Re q uire me nts (Pa rt 365 F DI C R&R) Ca pita l Ma inte na nc e (Pa rt 325 F DI C R&R) Sta nda rds fo r Sa fe ty a nd So undne ss (Pa rt 364 F DI C R&R) Sta te L e g a l L e nding L imit – Wa shing to n RCW 30A.04.111 (20% o f Ba nk Ca pita l) F RB Re g ula tio n O – I nside r tra nsa c tio ns
Washington State Banks – Statute s and Rule s RCWs 30A Wa shing to n Co mme rc ia l Ba nk Ac t 32 Wa shing to n Sa ving s Ba nk Ac t WAC 208-512
Re gulator y Supe r visor y Powe r s Onc e c o nside re d le ss tha n sa tisfa c to ry – e xa mina tio n fre q ue nc y inc re a se s I nfo rma l E nfo rc e me nt Ac tio n F o rma l E nfo rc e me nt Ac tio n - Pub lic Co nse nt Orde rs (Ce a se a nd De sist) I ndividua ls a nd Org a niza tio ns Civil Mo ne y Pe na ltie s Clo sure
Industry Consolida tion & Sta ts 5,787 F DI C insure d b a nks a s o f Q2 2017 1985 this numb e r wa s > 18,000 Ba nks with le ss tha n $10B in a sse ts c o ntro l 18% o f the industry 78% o f a ll b a nks a re sta te c ha rte re d While 4 na tio na l b a nks ho ld 41% o f the industry a sse ts Ha ndful o f ne w b a nks fo rme d in 2016 a nd 2017 (no ne in Wa shing to n) Ve ry tra ditio na l b usine ss mo de l a nd lo ts o f c a pita l
How to form a Ba nk? F DI C Handb o o k fo r Org anize rs o f De No vo I nstitutio ns – April 2017, g o o d g uidanc e F o rm a Bo a rd o f Dire c to rs Se le c t Ba nk Ma na g e me nt Cre a te a Busine ss Pla n & F ina nc ia l Pro je c tio ns (de fine the ma rke t ne e d) De te rmine ho w muc h c a pita l is ne e de d ta king into c o nside ra tio n b usine ss pla n a nd risk pro file Applic a tio n a nd inve stig a tio n
Ba nking the Ma rijua na I ndustry Se ve ra l b a nks a nd c re dit unio ns a c tive ly b a nk the industry (prima rily a c c e pt de po sits) Writte n Guida nc e Co le Me mo ra ndum F inCE N Guida nc e (F I N-2014-G001) Suspic io us Ac tivity Re po rts L iq uo r a nd Ca nna b is Bo a rd Applic a tio n Pro c e ss Ong o ing Mo nito ring
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