WSR 02-11-010

PROPOSED RULES

DEPARTMENT OF

FINANCIAL INSTITUTIONS

[ Filed May 3, 2002, 10:32 a.m. ]

     Original Notice.

     Preproposal statement of inquiry was filed as WSR 02-05-045.

     Title of Rule: Regulatory relief for small credit unions.

     Purpose: To provide appropriate regulatory relief for small credit unions (those with up to $10 million in total assets).

     Statutory Authority for Adoption: RCW 31.12.516 (2), (3), (4), 43.17.060, 43.320.040.

     Statute Being Implemented: RCW 31.12.516(3).

     Summary: The rule provides more regulatory flexibility for small credit unions in regard to scheduling of special meetings of members, and the number of regular board meetings.

     Reasons Supporting Proposal: To eliminate unnecessary regulatory burden on small credit unions.

     Name of Agency Personnel Responsible for Drafting, Implementation and Enforcement: Linda Jekel, 210 11th Street S.W., Room 300, Olympia, WA 98501, (360) 902-8753.

     Name of Proponent: Division of Credit Unions, governmental.

     Rule is not necessitated by federal law, federal or state court decision.

     Explanation of Rule, its Purpose, and Anticipated Effects: The proposed rule allows small credit unions:

     1. To schedule special meetings of members from ten to one hundred twenty days after a request for a special meeting is received by the credit union's secretary, as provided in the credit union's bylaws. The current rule requires special meetings to be scheduled from twenty to thirty days after the request is received; and

     2. To hold as few as nine regular board meetings each calendar year, no more than eight weeks apart, as provided in the credit union's bylaws. The current rule requires regular board meetings to be held monthly.

     On another aspect of small credit unions' supervision, the division is aware that the scheduling of on-site examinations of small credit unions can create staffing problems for them. For example, an exam can prove challenging at the beginning of a calendar quarter, when small credit unions must devote staff to the preparation of financial statements and/or call reports. The division intends to work with small credit unions to avoid scheduling their exams during these problematic time periods.

     Partly in response to recommendation from the Washington Credit Union League's Small Credit Union Task Force, the division recently adopted new field of membership (FOM) rules which streamlined the process for credit unions to add FOM groups to their FOM bylaws. These new FOM rules will significantly reduce the regulatory burden on small credit unions in adding FOM groups. The new rules took effect on March 8, 2002.

     Proposal does not change existing rules.

     No small business economic impact statement has been prepared under chapter 19.85 RCW. The rule reduces the cost of regulatory compliance and makes existing rules more flexible. It does not add any costs of compliance.

     RCW 34.05.328 does not apply to this rule adoption. RCW 34.05.328 does not include the Department of Financial Institutions as a covered agency.

     Hearing Location: Department of Financial Institutions, 210 11th Street S.W., Room 300, Olympia, WA 98501, on June 25, 2002, at 1:00 p.m.

     Assistance for Persons with Disabilities: Contact Tina Philippsen by 4:30 p.m., June 19, 2002, TDD (360) 664-8126.

     Submit Written Comments to: Linda Jekel, 210 11th Street S.W., Room 300, Olympia, WA 98501, e-mail ljekel@dfi.wa.gov, fax (360) 704-6901, by June 25, 2002.

     Date of Intended Adoption: June 25, 2002.

May 3, 2002

Mark Thomson

Acting Director

OTS-5666.1

Chapter 208-424 WAC

REGULATORY RELIEF FOR SMALL CREDIT UNIONS


NEW SECTION
WAC 208-424-010   Definition of small credit union.   For purposes of this chapter, a "small credit union" means a credit union with up to ten million dollars in total assets as of its most recently filed call report.

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NEW SECTION
WAC 208-424-020   Timing of special membership meetings of small credit unions.   In regard to timing of special membership meetings, the last sentence of RCW 31.12.195(3) states:

     "The designated time of the membership meeting must be no sooner than twenty, and no later than thirty days after the request is received by the secretary."

     A small credit union may vary from the last sentence of RCW 31.12.195(3) as provided in its bylaws, as long as it is a small credit union at the time the request for a special membership meeting is received by the secretary. However, the designated time of the special membership meeting must be no sooner than ten, and no later than one hundred twenty days, after the request is received by the secretary. In all other respects, a small credit union must comply with RCW 31.12.195.

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NEW SECTION
WAC 208-424-030   Frequency of regular meetings of board of directors of small credit unions.   In regard to timing of regular board meetings, RCW 31.12.225(5) states:

     "The board will have regular meetings not less frequently than once each month."

     A small credit union may vary from RCW 31.12.225(5) as provided in its bylaws. However, a small credit union must have at least nine regular board meetings each calendar year, and consecutive regular board meetings must be no more than ten weeks apart. In all other respects, a small credit union must comply with RCW 31.12.225.

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