Alternative Share Insurance & Draft Regulations
February 12, 2007
Washington credit unions are required to have share (deposit) insurance. More than 90% of the credit unions in America have federal deposit insurance, administered by the National Credit Unions Share Insurance Fund (NCUSIF). State legislatures in 26 jurisdictions, including Washington, have passed laws allowing state-chartered credit unions to contract for private share insurance. The Washington Credit Union Act allows the option of alternative share insurance under RCW 31.12.408. a 1996 law.
At the request of the Washington Credit Union League and five Washington credit unions, the Department of Financial Institutions (DFI) is now looking into regulatory standards for companies seeking to provide alternative share insurance in Washington. The official rulemaking process is underway, and the Division of Credit Unions website (www.dfi.wa.gov/cu) provides a timeline for the project, with links to relevant documents.
As part of the informal comment phase, the Division of Credit Unions is providing credit unions and interested persons with a copy of the discussion draft of the proposed regulations (PDF)*. This draft is being circulated for comment during the month of February 2007. You may comment by mail, e-mail or at the following informational meeting:
On February 21, 2007, from 10 a.m. until noon, there will be a meeting at the Department of Financial Institutions headquarters, 150 Israel Rd, Tumwater, Washington, to discuss alternative share insurance. A map and directions are available on the DFI website.
Comments will continue to be received throughout the rulemaking process. Written comments are public, and may be linked to the Division of Credit Unions website.
After completion of rulemaking, if a company applies to be an alternative share insurer and is approved by the Director of DFI to do business in Washington, alternative share insurance could be available for Washington state-chartered credit unions as early as 2008.
If you need additional information, please contact:
Project Manager/Specialist Consultant
Dept. of Financial Institutions
Div. of Credit Unions
P.O. Box 41200
Olympia WA 98504-1200
* This document is a PDF file, and you will need Adobe Acrobat Reader to view it. If you don't already have Acrobat Reader installed on your computer, you may download it for free from Adobe.