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JANUARY/FEBRUARY 2012
OFFICIAL PUBLICATION OF THE WASHINGTON BANKERS ASSOCIATION

JANUARY/FEBRUARY 2012
OFFICIAL PUBLICATION OF THE WASHINGTON BANKERS ASSOCIATION

Serving The Needs Of Washington Bankers Since 1889
INSIDE THIS ISSUE
5 2012 Promises to Be an Eventful Year
Jim Pishue, President & CEO, Washington Bankers Association
6 Fighting for Examination Relief
Frank Keating, President & CEO, American Bankers Association
9 Special Session Recap
By Denny Eliason, WBA Lobbyist, Alliances Northwest
10 Congratulations to the 2011 Executive Development
Program Graduates!
On the Cover: Deception Pass
taken by Bob Rollins.
Cover Photo Submissions: WBA
members are invited to submit photos
for consideration. Direct submissions to
monique@wabankers.com.
ISSUES & ANSWERS is the official trade publication of the Washington
Bankers Association.
The views and opinions expressed herein are those of the individual
authors and do not necessarily represent official statements of
WBA policy, or its publisher Media Communications Group, Inc. Any
legal advice should be regarded as general information. It is strongly
recommended that one contact an attorney for counsel regarding
specific circumstances. Likewise, the appearance of advertisers does
not constitute an endorsement of the products or services featured
by the Washington Bankers Association or Media Communications
Group, Inc.
11 WBA Scholarship Program
13 Washington Bankers Association Partners with Leading
Financial Education Technology Company
15 One Size Fits One
16 Conference Spotlight
17 CEO/Bank Directors Conference
18 Mark Your Calendars for the Annual Bankers Convention
19 Upcoming WBA Seminars
20 Foreclosure Fairness Act — A Look at the First Six Months
By Kathleen A. Nelson, Lane Powell PC
21 Industry News
WBA STAFF
Jim Pishue, President & CEO
(206) 344-3485
james@wabankers.com
Liz Wilson, Executive Vice President
(206) 344-3495
liz@wabankers.com
DessaMonica de Castro, Accounting Assistant
(206) 344-3476
dessa@wabankers.com
Danielle Molle, Programs Administrator
(206) 344-3475
danielle@wabankers.com
Chelsey Mullins, Administrative Coordinator
(206) 344-3484
chelsey@wabankers.com
Monique Osbjornsen, Convention Planner
(206) 344-3494
monique@wabankers.com
Gretchen Kirkpatrick, Database & Website Specialist
(206) 344-3492
gretchen@wabankers.com
Peter Tang, Senior Accountant
(206) 344-3472
peter@wabankers.com
WBA BOARD OF DIRECTORS
Eric Pearson, Chairman
President & CEO, Community 1st Bank, Kennewick
Laurie Stewart, Chairman-Elect
President & CEO, Sound Community Bank, Seattle
Kerry Biddle, Secretary/Treasurer
Senior Vice President, Bank of America, Tacoma
Dave Straus, Immediate Past Chair
President & CEO, Fortune Bank, Seattle
Jim Mitchell, ABA Govt Relations Committee Rep.
President & CEO, Puget Sound Bank, Bellevue
Kurt E. Graff, WBA PROS Chairman
President & CEO, Northwest Commercial Bank, Lakewood
Jim Carmichael, Director (term to 2014)
President & CEO, Kitsap Bank, Port Orchard
Melanie Dressel, Director (term to 2013)
President & CEO, Columbia Bank, Tacoma
Brian Hawley, Director (term to 2014)
SVP & Regional President, Union Bank, Seattle
John E. (Jack) Heath, Director (term to 2012)
President & COO, Washington Trust Bank, Spokane
Dennis Long, Director (term to 2013)
CEO, Bank of the Pacific, Aberdeen
Jim Mitchell, Director (term to 2013
President & CEO, Puget Sound Bank, Bellevue
Carol K. Nelson, Director (term to 2014)
President & CEO, Opus Bank, Everett
Byron L. Richards, Director (term to 2014)
Senior Vice President, U.S. Bank, Seattle
Greg Seibly (term to 2014)
President & CEO, Sterling Financial Corporation, Spokane
Patrick Yalung, Director (term to 2013)
Regional President, Wells Fargo Bank, Seattle
www.wabankers.com 4

Serving The Needs Of Washington Bankers Since 1889
PRESIDENT’SMESSAGE
Jim Pishue, President & CEO, Washington Bankers Association
2012 Promises to Be an
Eventful Year
Out with the old, and in with the new.
Few bankers I know will be sorry
to see 2011 growing smaller in
the rear-view mirror. Continuing
a journey that began in 2008, our
industry over the past twelve months faced
the economic impacts of a deep and persistent
recession, a new and increasingly intrusive
regulatory environment, intense media
scrutiny, random protests, and any number
of other challenges.
But looking through the windshield at 2012
spreading out before us, the road ahead appears
a bit smoother. The hard work that has gone
into improving credit quality is beginning to
pay off in the form of stronger bank earnings.
Yes, the road ahead in 2012 already looks a bit
smoother than the one we drove over in 2011.
But we can’t afford to be asleep at the wheel.
Many customers remain justifiably wary of
another dip in economic activity, but some are
beginning to once again look at investing in
their businesses. Given these trends, I sense a
cautious optimism on the part of many bankers
in Washington.
For that optimism to materialize over the
coming months, however, our entire industry
must take a broader view of what is “our business.”
Yes, bankers must continue to execute
the fundamentals: building strong customer
relationships, attracting deposits, making
prudent loans, maintaining asset quality and
managing our balance sheets.
But we must also make it “our business” to be
actively engaged in the political and regulatory
processes that impact our ability to serve our
customers and our communities.
As you read this, lawmakers in Olympia are
struggling to find ways to close the remaining
2011-13 budget gap, now estimated at $1.5
billion. The legislature took some steps in
the right direction during December’s special
session, but the choices they’ll face in closing
the remaining gap will be even more difficult.
Legislators will be under
intense pressure to
increase taxes to close
at least part of this gap.
Our industry will once
again be in the crosshairs,
with tax proposals
ranging from the elimination of the first
mortgage interest income exemption to the
imposition of a “windfall” profits tax on financial
service providers. WBA will continue
to lead the industry’s response through the
United Financial Lobby in Olympia.
To maximize our effectiveness, we continue to
need our members to be directly and actively
engaged in our advocacy efforts. That means
having each WBA member bank designate
at least one primary contact to receive issue
updates and to ensure that calls to action are
5
completed in a timely manner. It means increasing
participation in Bankers Day so that
our elected leaders hear directly from bankers
in their communities. And it means increasing
financial support of WBA’s WashBankPAC.
That final item is especially important, as the
2012 election season presents an opportunity
to alter the political landscape in the state for
the next few years.
The gubernatorial race seems to be shaping up
into a heads-up battle between Republican Attorney
General Rob McKenna and Democratic
Congressman Jay Insley. The 2010 census
resulted in a new legislative map that changes
the character of a number of districts. Announced
and anticipated departures of some
incumbent legislators are expected to create
more competitive races.
Taken collectively, these changes will provide
banks and others in the business community
more opportunities to help elect candidates
who understand and support the role of the
private sector in providing jobs and creating
economic opportunities for Washington
citizens. The opportunity is there if we are
strategic and aggressive in our actions to take
advantage of it.
Yes, the road ahead in 2012 already looks a
bit smoother than the one we drove over in
2011. But we can’t afford to be asleep at the
wheel.
January/February 2012

Serving The Needs Of Washington Bankers Since 1889
WASHINGTONUPDATE
Frank Keating, President & CEO, American Bankers Association
Fighting for
Examination Relief
We’re urging bankers to write their representatives and ask
them to co-sponsor the bipartisan examination relief
bill introduced by House Financial Services Financial
Institutions Subcommittee Chairman Shelley Moore
Capito (R-W.Va.) and Ranking Member Carolyn Maloney (D-N.Y.)
The Financial Institutions Examination Fairness and Reform Act (H.R.
3461) would take a major step toward a more balanced and transparent
approach regarding how, and on what basis, decisions are made by the
regulatory agencies in the examination process.
The bill would also address some examiner decisions that have effectively
and unnecessarily reduced the amount of capital available for increased
lending — particularly to small businesses
ABA worked closely with bankers and the Washington Bankers Association
in raising issues that the Capito-Maloney bill would resolve as well as
offering recommendations.
You’ve told us that the reasons for certain decisions regulators make during
the examination process have not been clear. You’ve also reported that some
examiner decisions have effectively and unnecessarily reduced the amount
of capital available for increased lending — particularly to small businesses.
This hurts your banks’ abilities to help local businesses grow and create jobs.
The Capito-Maloney bill would address these concerns by requiring, among
other things, more timely examination reports; more information about the
facts the agency relied upon to make its exam decisions; and more precise,
consistent and understandable classification standards for commercial loans.
The legislation also would create a new, independent inter-agency ombudsman
within the Federal Financial Institutions Examination Council to ensure
the consistency and quality of all exams, and it would institute an expedited
process for banks to appeal examination decisions without fear of reprisal.
Working together, bankers, state associations and ABA have identified the
problems and recommended a workable, practical solution. This is how
we do things. We focus on legislation that is passable, is backed by solid,
credible arguments, and will make a real difference for the industry. The
Capito-Maloney bill certainly meets those tests. Now, we have to fight for
it. (Feels good to be fighting for something, doesn’t it)
Write to your representatives (click on the “Action Alert” icon on ABA’s
home page at www.aba.com) and urge them to co-sponsor the bill. And
don’t forget to join us in Washington for ABA’s GR Summit March 19-
21, where we will continue to advance our industry’s advocacy goals and
priorities.
E-mail Frank Keating at fkeating@aba.com
Annual Bankers Convention
Save the date to join us in June in Coeur d’ Alene
Mark your calendars to attend the 2012 Annual Bankers Convention presented by the Washington Bankers Association and Washington Financial League.
Taking place June 28-30 at the Coeur d’Alene Resort, this signature industry event is an opportunity for you to:
• connect with colleagues
• get timely information about state and federal issues that affect you and your bank
• hear from national and regional industry experts
Management teams, boards of directors, and promising up-and-coming bankers are encouraged to attend. Spouses and families are also welcome. Look
for special pre-and post-event room rates for travel extensions.
Book your room by March 31 and be entered into a drawing for a free night stay. Call the Resort at (800) 688-5253 and ask for the WBA/WFL Room Block.
For more information, and to suggest topic ideas and speaker suggestions visit www.wabankers.com.
www.wabankers.com 6

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Serving The Needs Of Washington Bankers Since 1889
Special Session Recap
By Denny Eliason, WBA Lobbyist, Alliances Northwest
It has been said that democracy is the worst form of government except all the others that
have been tried. — Winston Churchill
As business people and bankers it can often be frustrating
watching our State government in action. This is particularly
true as it relates to the way lawmakers and the Governor
have managed the State General Fund Budget over the past
six years. Alas, we enter the 2012 Legislative Session with yet another
structural budget deficit – this time $1.5 billion in an approximate $31
billion context. That’s the bad news; the good news is that the Governor
and many within the Legislature are now sending signals that they are
serious about right sizing Washington State government spending so that
the General Fund Budget moving forward is sustainable.
The outlook for the sixty-day Session is a bit unclear at this time. Democrats
control the House, Senate, and Governor’s Office; but there are no
clear majorities that have yet coalesced around a set of solutions. Republicans
and a number of moderate Democrats are holding firm on the
notion that any Supplemental Budget must contain significant reforms to
state government spending. More liberal Democrats and some moderates
are calling for a substantial revenue package to help deal with the deficit.
All of these efforts have been, and will be, vital as we move into the 2012
Session if we are to counteract the call for increased taxes on our industry.
Bankers Day on the Hill will be held on February 23rd, and it will be
critical that our members send representatives to Olympia at what will
likely be a very important time in the Session. Having “real” bankers talk
to their lawmakers directly as the Legislature debates our issues is very
powerful. If you are interested in participating in Bankers Day, please
contact the WBA in the very near future.
Winston Churchill’s frustration and admiration of democracy was well
founded. In a democracy our industry does rightfully have a voice. In
2012 we will have to take advantage of that right — and responsibility — if
we are to continue to protect the banking climate in Washington State.
I respectfully urge you to get involved.
That’s where our WBA members are exposed. Liberal lawmakers
continue to join with the labor unions and “occupy” crowd in calling
for an elimination of the first mortgage deduction and the establishment
of a windfall profits tax on the largest of national banks. Another
group of moderate lawmakers are calling for a modest increase in the
sales tax of .5% that would raise approximately $500 million dollars
during the balance of the biennium. (This is the most politically
feasible tax proposal, and it will likely be forwarded to the voters
in the Spring for approval.) All that said, there will be significant
pressure to tax our industry in 2012, and our membership will have
to thoughtfully engage if we are to have any chance of avoiding new
bank-specific taxes.
The WBA has been working diligently during the summer and fall of
2011 to educate lawmakers regarding the downside of eliminating the first
mortgage deduction and the negative effects on our State’s economy that
would result from a windfall profits tax on financial institutions. WBA
members turned out in impressive numbers at our Regional Meetings that
were held around the State, bringing lawmakers together with bankers
in their local districts. In addition, our Board has approved a significant
focus on new social media activities aimed at getting our message to the
public and motivating them to contact their lawmakers.
9
January/February 2012

Serving The Needs Of Washington Bankers Since 1889
Congratulations to the 2011 Executive
Development Program Graduates!
The WBA would like to extend congratulations to the graduating class of the 2011 Executive Development Group. These bankers are to
be commended for the time and effort they contributed toward successful completion of the program. Graduates were recognized during
the 2011 December CEO Bank Directors Conference. Says Jim Pishue, WBA President, “these bankers worked hard throughout the
year completing monthly assignments, meeting with their mentors and giving 100% during each class.” The WBA would like to thank
and congratulate all 2011 graduates for a job well done.
Congratulations graduates!
Chera Anderson AmericanWest Bank
DeeDee Anderson Cashmere Valley Bank
Nils Bajczuk
Whidbey Island Bank
Sandy Bartel
Chris Blotsky
AmericanWest Bank
Alina Coonc
Whidbey Island Bank
Mark Dresback
Inland Northwest Bank
Erin Eiseman
Federal Home Loan Bank of Seattle
Tami Ferguson
Washington Trust Bank
Chris Freeman
Tony Fyrqvist
Elaine Gentilo
Lynn Linderman
Brigid O’Callaghan
Sara Stien
Connie Waks
Cathie Winegar
Regina Wood
Sound Community Bank
Islanders Bank
First Federal
Bank of the Pacific
U.S. Bank
Sound Community Bank
Federal Home Loan Bank of Seattle
Washington Trust Bank
First Federal
Levon Matthews and Elaine Gentilo, First Federal
Sara Stien and Laurie Stewart,
Sound Community Bank
Bruce MacNaughton and Lynn Linderman,
Bank of the Pacific
Bryan McDonald and Alina Coonc,
Whidbey Island Bank
Chris Blotsky, AmericanWest Bank and Jim Pishue,
Washington Bankers Association
Connie Fritz and DeeDee Anderson,
Cashmere Valley Bank
www.wabankers.com 10

Serving The Needs Of Washington Bankers Since 1889
WBA
Scholarship
Program
WBA announces the availability of ten $1,000 scholarships for the 2012–
2013 academic year. Washington Bankers Association (WBA) created
the WBA Scholarship Program to assist children of employees of WBA’s
member institutions in pursuing their college education.
Visit our website at www.wabankers.com for an application packet.
Eligibility Requirements
Applicant must be a dependent child of a parent or guardian employed
by a WBA member in good standing. The parent must have been
employed on a continual full-time basis for a minimum of two years,
or on a part- time (20 hours or more) basis for four years, as of the
scholarship application deadline. Eligibility will extend to children of
parents who were deceased no more than two years prior to the cutoff
date of application.
Incoming College Freshman
The recipient must have received, or is expected to receive, a high school
diploma or GED and be accepted for full-time enrollment (as defined by
the accredited educational institution) as a freshman in an undergraduate
course of study which offers courses beyond the high school level.
Enrollment at any accredited college or university, including community
college and technical college, will be considered.
Selection Criteria and Process
It is WBA’s desire to not only assist students and their families financially,
but also to take an active role in developing tomorrow’s leaders.
Therefore, selection will be based on a student’s academic achievement,
extracurricular activities, and community service.
WBA will select scholarship recipients on an objective and nondiscriminatory
basis. WBA will not discriminate on the basis of race, gender, sexual
orientation, ethnicity, or religion. WBA may, however, take into account
criteria reasonably related to the purposes of the WBA scholarship program.
Scholarship recipients will be notified in June 2012 and announced at the
WBA annual convention.
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Serving The Needs Of Washington Bankers Since 1889
Washington Bankers Association
Partners with Leading Financial
Education Technology Company
Partnership presents marketing, public relations and community
reinvestment opportunities for WBA members
will work directly with banks to launch the program
and create a media campaign involving
local leaders and policymakers. Banks can take
part in meaningful recognition events, such as
Certification Ceremonies.
The Washington Bankers Association is pleased to announce its new
partnership with EverFi, Inc., a Washington, DC-based education
technology company, to bring an interactive, web-based personal
finance program to students in schools throughout Washington.
EverFi’s entirely web-based Financial
Literacy Platform uses the latest in
new media technologies — adaptivepathing,
3-D gaming, social networking,
online animations, video, and messaging
tools to present complex learning modules.
After successfully completing each module, students
are certified in hundreds of core financial
topics, including: banking, taxes, mortgages, financing
higher education, stocks, 401(k) plans,
budgeting and saving, credit scores, insurance,
and credit cards.
of the course, students are provided with Certification
in Financial Literacy. Certification can
be a valuable mark of distinction on resumes
and college applications. This has proven to create
lasting effects as a community development
tool by graduating entire classes of students who
are financially capable and literate. EverFi fully
manages every aspect of the program within
schools and will team with your bank to private
label the program for maximum community exposure.
EverFi manages all technology, teacher
support and integration into schools.
EverFi allows banks to create powerful programs
that quickly scale to thousands of young
adults in their footprint, and equips schools
with a tool that covers hundreds of personal
finance concepts that map to national and state
financial literacy standards. The program also
assists certified students in establishing the
right financial infrastructure for their lives postgraduation
and allows banks a direct channel
to new potential customers through incentive
opportunities.
The platform has been received with enthusiasm
from schools, students and families
throughout the country and is a channel connecting
banks to their local communities. In
addition to fostering and maintaining these
valuable relationships, the program serves to increase
bank visibility, demonstrate community
reinvestment and link with potential customers
in an exclusive way.
To learn more about getting involved in this
program, contact Mike Fee, EverFi executive
vice president at mike@everfi.com.
Schools will be sponsored quickly, so don’t
delay to be sure to take advantage of this great
opportunity!
The system tracks student progress and reports
the unique score of each user. Upon completion
WBA members can sponsor local schools and
private-label the program in their bank . EverFi
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January/February 2012

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Serving The Needs Of Washington Bankers Since 1889
One Size Fits One
Training Multiple Generations
Karl J. Ahlrichs, SPHR, Gregory & Appel | www.uncommonzone.com
“We can’t make everyone happy at the same time. If we change to
attract younger workers, our older workers feel taken advantage of.
If we stay the same the way older workers want, younger people will
not stick around. It’s a serious dilemma.”
Does this sound familiar
• You have just spent time recruiting
recent college graduates to your bank,
only to find that six months later, they
have left you for greener pastures.
• You are horrified by the casual writing
style of your younger staff and wonder
what happened to spell check and
punctuation.
• You are frustrated by what you call a
“sense of entitlement” in today’s youth
and marvel at their lack of patience to
master a skill or job thoroughly.
If any of these statements hits home, you have
already come in contact with the Millennial
generation, born after 1981. If you haven’t been
exposed to this dynamic cohort, just wait.
Over 75 million Millennials will enter the US
labor market in the coming years.
Understanding who they are and how they
best respond to training will no longer be
a choice. A foundation issue with banking
and the next generation centers around
you, the leaders. Overall, training must
adapt to a more employee-focused style of
communication and training. This is a real
challenge for banks, struggling with attracting
and retaining multiple generations in
their workforce.
—a Bank HR Manager
Conflicts between the generations are proof
that our culture is in transition. Generations
X and Y have taken the lead in driving these
cultural changes, while Baby Boomers continue
to embrace the culture they helped to
shape. At the same time, the new workers that
are just arriving – the Mlllennials – are every
bit as different and have their own challenges.
Welcome to the “new normal.”
Here are some simple tips to get you started on
training and communicating a multigenerational
workforce:
They are more tech than you probably are.
Born into the world of the internet, cell phones
and video games, they are tech savvy with short
attention spans. Raised by “Helicopter” Baby
Boomer parents who pushed them to excel,
Millennials are natural multi-taskers brimming
with confidence.
Simultaneously, this generation’s writing and
communication skills have not kept pace with
previous generations. Remedial training will
be helpful in this area. What’s more, Millennial
values around the sharing of media and
intellectual property differ significantly from
their older cohorts. Consider online social
networking sites like Facebook and you will get
a hint of how freely Millennials disseminate information
over the web. This is a Harry Potter
15
generation of action-oriented team enthusiasts
who want to make the world a better place.
So where does this leave Millennials as up and
coming employees Here are some secrets for
working with Millennials to effectively train and
manage this generation:
• Challenge them to learn new skills
• Encourage teamwork
• Stay connected
• Make it meaningful
• Create goals together
• Provide flexibility
• Recognize success
• Transitions that count
• Offer flexible ways to learn
• Use assessments and training as leadership
tools
• Just get out there and communicate
and lead
Today’s managers must realize that they will
not be effective as tomorrow’s leaders unless
they master employee-centered leadership
techniques. Just do it.
Using his 25+ years of human resources
and marketing experience,
Karl assists organizations with their
business, risk management and
people issues. He is often quoted in
the media on HR and training issues,
including USA Today and the Chicago
Tribune. He is a member of the Society for Human
Resources Management (SHRM), the American Society
of Training and Development, and the Association
for Psychological Type. Karl served as Keynote
speaker for the 2011 HR/Training Conference. Contact
liz@wabankers.com for more information.
January/February 2012

Serving The Needs Of Washington Bankers Since 1889
Conference
Spotlight
2012 Senior Credit Conference
March 2, 2012
Washington Athletic Club, Seattle, WA
Designed specifically for chief credit officers, senior lenders, and
others who oversee the lending process at their banks, attendees
will benefit from comprehensive panel discussions and in-depth
issue coverage, as well as outstanding networking opportunities with
fellow bankers from across the state. The Senior Credit Conference
was unanimously recommended as ‘“a must-attend” by those who
attended last year.
2012 WBA/OBA Marketing Conference
March 28, 2012
Washington Athletic Club, Seattle, WA
To give you the tools that you need in order to gather and keep customers
in today’s tough economy, you can’t miss the 2012 WBA/OBA
Marketing Conference. This year’s conference will include hot topics
at the top of every marketing professional’s mind.
2012 WBA/OBA HR/Training
April 12-13, 2012 Enzian Inn, Leavenworth, WA
Specifically designed to meet the needs of bank trainers, HR managers
and bank staff members responsible for providing training and
encouragement to employees of all levels, the WBA HR/Training
Conference has something of value for everyone. Careful attention
has been paid to ensuring a solid agenda with the best speakers in
the country.
2012 WBA/OBA Agriculture Conference
May 1-2, 2012
Northern Quest Resort, Spokane, WA
Targeted to Ag lenders, credit managers and analysts, this conference
presents information against the backdrop of general macroeconomic
forces. Highlighting numerous outstanding national and
local speakers, attendees will gain insight on a local, regional, and
national scope.
www.wabankers.com 16

Serving The Needs Of Washington Bankers Since 1889
CEO/Bank Directors Conference
The Washington Bankers Association and the Washington
Financial League co-sponsored the 2011 CEO/Bank Directors
Conference held in Seattle at the Cedarbrook Lodge in
December. With more than 95 CEOs and bank directors in
attendance, the conference offered ample networking opportunities.
this worthy cause. The WashBankPac contributes to financial industry
supportive candidates who are seeking election or re-election to the
U.S. Senate and House of Representatives.
Keynote speaker Chris Nichols of Pacific Coast Bankers Bank, spoke
about the top ten future trends that will change banking in the next ten
years. Ken Johnson of Ken Johnson Consulting, addressed bank directors
on the topics of the changing bank environment and enterprise risk
management. Other speakers covered topics including strategies for
dealing with the media, compensation trends, demographics in America
and bank public policy issues. The annual “Ask the Regulators” session
closed out the conference.
WashBankPac Annual Auction and Wine Raffle
This year’s WashBankPac auction featured items such as fine wines,
XBox Kinect, golf outings, jewelry and Mariners tickets and raised
over $5,500 for the PAC. The conference also hosted the second annual
WashBankPac Wine Raffle where four lucky ticket holders took home a
half-case of fine wine. This year’s conference raised a total of $7,500 for
WashBankPac Wine Raffle
Dick Kneipp, Islanders Bank and
Wayne Mannie, Columbia Bank
Levon Matthews, First Federal, Louise
Hanson, Moss Adams and Larry Hueth,
First Federal
Lee Adams, Community First Bank, Eric Pearson,
Community First Bank, and Darrick Dietrich,
Community First Bank
Curriculum Designed
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Session Dates:
August 19 – 31, 2012
Location:
University of Washington | Seattle, WA
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17
January/February 2012

Serving The Needs Of Washington Bankers Since 1889
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www.wabankers.com 18

Serving The Needs Of Washington Bankers Since 1889
Upcoming WBA Seminars
2/13 Calculating and Maintaining the Allowance for Loan
and Lease Losses
2/28 Notary Public
3/1 Improving Your Collections Department
3/13 IRA Basics, Ascensus
3/14 Advanced IRAs, Ascensus
3/20 Notary Public, Tacoma
4/10 Notary Public, Everett
4/17 Compliance Update, Professional Bank Services,
PBS, Spokane
4/18 Compliance Update, PBS, Seattle
4/30 – 5/2 Commercial Lending Institute
5/3- 5/4 Training the Credit Analyst
5/8 Introduction to Lending Compliance, PBS, Seattle
5/9 Mortgage Update B to Z, PBS, Seattle
5/10 Mastering HMDA, PBS, Seattle
5/15 Introduction to Lending Compliance, PBS, Spokane
5/16 Notary Public, Bellevue
5/16 Mortgage Update B to Z, PBS, Spokane
5/17 Mastering HMDA, PBS, Spokane
6/14 Commercial Loan Documentation
6/15 Consumer Loan Documentation
6/19 – 6/20 Advanced Commercial Lending Academy
**All courses held in Seattle at the WBA office unless
otherwise noted
Please visit our Professional Development Calendar
at www.wabankers.com
for more training opportunities, including webinars
and online training.
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Fax: 503-288-1539
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19
January/February 2012

Serving The Needs Of Washington Bankers Since 1889
Foreclosure Fairness Act
A Look at the First Six Months
By Kathleen A. Nelson, Lane Powell PC
The Foreclosure Fairness Act (“FFA”), which took effect in
Washington state on July 22, 2011, provides an opportunity for
Washington homeowners to seek relief from the foreclosure
tidal wave of the past four years.
The housing crisis continues to escalate
nationwide. In Washington
alone, foreclosures jumped from
approximately 7,000 in 2007 to
more than 45,000 in 2010, ranking Washington
around tenth in the nation in the number of
foreclosures. Homeowners are feeling particularly
frustrated by the securitizing of home
loans, perceived lack of accountability of loan
servicers, and perceived lack of compliance
with laws concerning pre-foreclosure rights.
One of their biggest complaints, however, is the
inability to speak with someone who has the actual
authority to modify their loan. Additional
complaints at the top of their list include loss of
paperwork by the servicer, inappropriate denial
of temporary loan modifications, and what they
feel is a lack of response to the question of who
has the proper authority to foreclose.
The FFA provides that, once a homeowner
becomes delinquent on his or her loan, the
COUNSELOR’S CORNER
beneficiary or authorized agent must send the
borrower an initial contact letter at least 30 days
before issuing a notice of default. This letter
must inform the borrower to contact a housing
counselor or attorney as soon as possible.
The borrower must respond within 30 days of
receipt of this letter, or the beneficiary can issue
a notice of default.
Full Disclosure at Mediation
If the borrower’s housing counselor or attorney
determines that mediation is appropriate, he
or she may refer the borrower to the mediation
program through the Washington state
Department of Commerce (“DOC”). Prior
to mediation, the beneficiary must provide
specific documents as identified by the DOC.
The documents must include the loan balance
and itemized list of fees and charges, payment
history and most importantly, information
indicating the net present value (“NPV”). The
borrower must also provide specific enumer-
www.wabankers.com 20
ated documents. The goal of the mediation
session is to allow the parties to meet faceto-face
and examine the borrower’s financial
ability to stay in his or her house by reaching
a mutually satisfactory agreement to avoid
foreclosure. This agreement can include reinstatement,
a loan modification, an agreement
to conduct a short sale, and a deed in lieu of
foreclosure or some other work-out plan. The
mediator must consider the borrower’s current
and future income, debts and financial
obligations, as well as the net present value of
receiving modified payments compared to the
anticipated net recovery following foreclosure.
Within seven business days of the mediation,
the mediator must certify that mediation occurred,
that the parties participated in good
faith, and a description of the net present value
used (expressed in a dollar amount). If the
parties are unable to reach an agreement during
or following the mediation session, and if
the mediator certifies that the parties acted in
good faith, the beneficiary may proceed with
foreclosure.
Waiver Requirement Eliminated
It has been six months since the FFA took effect,
and it has proven to be a very slow process
without many results. One of the reasons for
this is that the FFA required the parties to sign
a waiver stating that neither party can call the
mediator as a witness in any lawsuit related to
the foreclosure process. Dispute Resolution
Centers (“DRC”), which handle 75 percent
of foreclosure mediations, expressed concern
over the waiver requirement, slowing the mediation
process to a crawl. On December 14,
2011, Senate Bill 5988 was passed, removing
the requirement that the parties sign a waiver
and instead include the language in the statute
providing DRC foreclosure mediators’ immunity,
except in cases of willful misconduct.
The hope is that this legislation, effective immediately,
will get the process rolling again.
How Is It Working
Six months into the FFA, there are several
kinks to work out in the mediation program.
The program has had very limited results. As
of December 2011, 771 loans were referred to
— continued on page 22

Serving The Needs Of Washington Bankers Since 1889
INDUSTRY NEWS
Issues & Answers Photo Contest
We are pleased to recognize two members that submitted outstanding
photos and we look forward to featuring their photos on the covers of
this year’s Issues & Answers.
Congratulations to Kim Youngers, North Cascades National Bank and
Heidi Sexton, Sound Community Bank!
Five WBA member banks named by Forbes magazine
Banks across the country continue working to improve and stabilize
their financial health, and late last year, Forbes magazine evaluated the
progress of the industry by assessing the financial soundness of 100 of
the largest publicly traded banks in the country.
Based on data from regulatory findings of banks and thrifts as of Dec. 1,
2011, provided by Virginia-headquartered SNL Financial, Forbes ranked
the institutions on eight key financial criteria: return on average equity; net
interest margin; non-performing loans; nonperforming assets; reserves;
two capital ratios; and a leverage ratio.
Forbes’ list, published this past December, includes the following Washington
Bankers Association members that were rated among the top 50 best:
• Boston Private Bank & Trust
• Columbia Bank
• KeyBank
• Umpqua Bank
• U.S. Bank
Visit www.wabankers.com to access links to more information on the
rankings, including the full list .
Mountain Pacific Bank Raises $4.1 Million in
Additional Capital New Local Funds to Fuel Next Stage
of Growth
Mountain Pacific Bank announced today that it successfully raised $4.1
million in additional new local capital during the final quarter of 2011.
Over the past two years, the Bank has successfully raised a total of over
$10.5 million in new local capital.
With the new capital, Mountain Pacific Bank remains among the best
capitalized banks in the State of Washington. The new funds are slated to
be used for increased lending to businesses and individuals in Snohomish
— continued on page 22
The Federal Home Loan Bank of Seattle
provides liquidity, funding, and services that
can help your institution make more housing
and business loans at more competitive rates.
We offer:
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21
January/February 2012

Serving The Needs Of Washington Bankers Since 1889
COUNSELOR’S CORNER — continued from page 20 INDUSTRY NEWS — continued from page 21
mediation, with only 55 mediations being completed, resulting in only 11
loan modifications. It remains to be seen just how effective the program
will be in the long term, and if the modified loan agreements or other
relief efforts offered to borrowers are satisfactory to both parties involved.
Nevertheless, borrowers, beneficiaries, servicers and the attorneys who
represent them will have to adapt to this requirement, which will no doubt
reduce the number of non-judicial foreclosures and related litigation in
Washington. For those with the goal of saving their home, the program
is off to a very slow start. However, sometimes success is achieved when a
borrower is offered “cash for keys,” providing them with some cash to use
for moving expenses, as well as a little more time in the home to explore
other options, ultimately resulting in a fresh start. Whatever the goal of
the parties, the FFA provides a vehicle to meet face-to-face to consider
all pertinent information and to arrive at a solution if at all possible. The
hope is that the FFA mediation process speeds ahead in 2012.
Kathleen A. Nelson is a Shareholder at Lane Powell PC, where
she is a member of the Firm’s Mortgage and Consumer Finance
and Class Action practices. She has extensive experience in
representing national and regional financial institutions, as well
as mortgage brokers and lenders in a variety of disputes, including
claims under the Real Estate Settlement Procedures Act, Truth
in Lending Act and state consumer protection statutes. She can
be reached at 206.223.7268 or nelsonk@lanepowell
County and will support up to $50 million in new loans.
Mountain Pacific Bank President & CEO Mark Duffy stated, “We’re
excited to be in position to grow and support the economic recovery in
our local community. Mountain Pacific Bank was founded and funded
entirely by local people to provide a unique experience in local banking.
With this new capital, we look forward to growing and serving the needs
of more customers as we help our local economy prosper.”
Rick Pedack, Chairman of the Board added, “We are proud that Mountain
Pacific Bank has been able to create such a strong local capital base
without taking any government money from the taxpayers and without
leaving our local community to attract new capital. We’re totally focused
on building a local, community-oriented Bank for the people and businesses
of Snohomish County – one that doesn’t require its customers to
deal with the issues that out of state ownership or control bring.”
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www.wabankers.com 22

B
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Working together, Northrim Funding Services may provide the
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Bankers helping bankers.
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dan@northrimfs.com
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170 120th Avenue NE, Suite 202
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Telephone: (425) 453-1105
Fax: (425) 453-1205
northrim.com

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