Washington State Department of Financial Institutions

DIVISION OF CREDIT UNIONS

BULLETINS 1996

 

DCU Bulletin

Division of Credit Unions
Washington State Department of Financial Institutions
Phone: (360) 902-8718, Fax: (360) 902-8800

January 12, 1996
No. B-96-1

Rule-making Process Begun on New Fee Structure

On Wednesday, January 10, 1996, the Division filed the enclosed CR-101 to initiate the rule-making process on the Division’s new fee structure. The Division has been working with the Washington Credit Union League over the past year to develop a new fee structure. The adoption of the rules is conditioned on passage of state legislation approving the increase in revenue. If you have any comments on the CR-101, please contact Parker Cann or Linda Jekel at the Division.


DCU BULLETIN

Division of Credit Unions
Washington State Department of Financial Institutions
Phone: (360) 902-8718, Fax: (360) 902-8800

March 20, 1996
No. B-96-2

DCU Withdraws Rule-making on Capital/Liquidity and Messenger Service/Agency Issues

Effective March 14, 1996, the Division withdrew its pending rule-making on:

  1. Capital and liquidity requirements for credit unions guaranteed by the Washington Credit Union Share Guaranty Association. The preproposal statement of inquiry (form CR-101) on this matter was filed at WSR 95-18-080, and was discussed in DCU Bulletin No. 95-3.
  2. Messenger service and agency activities of credit unions (and other financial institutions). The preproposal statement of intent (form CR-101) on this matter was filed at WSR 95-14-127, and was discussed in DCU Bulletin No. 95-2. The withdrawal of rule-making does not affect existing authority of credit unions to conduct messenger service or agency activities.

DCU BULLETIN

Division of Credit Unions
Washington State Department of Financial Institutions
Phone: (360) 902-8718, Fax: (360) 902-8800

April 5, 1996
No. B-96-3

Division Files Draft Fee Rule and Schedules Hearing to Receive Comment

On April 3, 1996, the Division filed the enclosed form CR-102 which includes the draft of the new fee rule. A copy of the Small Business Economic Impact Statement in regard to the rule may be obtained upon request from the Division.

A hearing has been scheduled for May 21, 1996, from 9:00 to 10:00 am, to take oral or written comments on the rule. The hearing will be conducted through Washington Interactive Television studios in Lacey, Lynnwood, Yakima, and Spokane. The address of each site is listed on the enclosed CR-102. Credit unions and other interested parties may also send in their comments on the draft rule to the Division before the hearing.

For your information, the rule-making process is essentially divided into three stages:

  1. The publication of the form CR-101, the Preproposal Statement of Inquiry.
  2. The publication of the form CR-102, the Notice of Proposed Rule-making, which provides a draft of the proposed rule and notice of the public hearing to receive comment on the rule.
  3. The adoption of the final rule and publication of the form CR-103, the Rule-making Order.

In the case of the fee rule, the Division intends for the rule to take effect on July 1, 1996.


DCU BULLETIN

Division of Credit Unions
Washington State Department of Financial Institutions
Phone: (360) 902-8718, Fax: (360) 902-8800

April 12, 1996
No. B-96-4

Division Initiates Rule-Making to Delete Associational Group Provision for Retired Persons and Persons Over 50

On April 4, 1996, the Division filed the enclosed form CR-101 to begin the rule-making process to revise the definition of "common bond of association" in WAC 419-72-015(2). The second paragraph of -015(2) currently provides that retired persons and persons age 50 or older are deemed to have a common bond of association ("senior provision"). The Division is considering whether to delete the senior provision from WAC 419-72-015(2). The NCUA has deleted a comparable provision from its rulings.

For your information, the rule-making process is essentially divided into three stages:

  1. The publication of the form CR-101, the Preproposal Statement of Inquiry.
  2. the publication of the form CR-102, the Notice of Proposed Rule-making, which provides a draft of the proposed rule and notice of a public hearing to receive comment on the rule. In addition, the Division prepares a small business economic impact statement (SBEIS) prior to filing of the CR-102. The SBEIS is available to the public.
  3. The adoption of the final rule and publication of the form CR-103, the Rule-making Order.

Comments about the rule-making should be submitted to Parker Cann at the Division.


DCU BULLETIN

Division of Credit Unions
Washington State Department of Financial Institutions
Phone: (360) 902-8718, Fax: (360) 902-8800

May 6, 1996
No. B-96-5

Division Moves Rules

The Division has moved its rules from Title 419 of the Washington Administrative Code (WAC) to Title 208 of the WAC, effective June 1, 1996. The rules themselves have not changed at all, other than their numbering.

A copy of the DCU rules with their new numbers is enclosed. A conversion chart is also enclosed for your convenience. After June 1, the Division’s rules should be referred to by their Title 208 section numbers.

DCU has reserved the 400s in Title 208 for its rules. As a result, all new credit union rules will be placed in WAC Chapters 208-400 through 208-499.

The rules move is part of the consolidation of DFI’s rules into a single Title of the WAC. DFI’s agency-wide rules, on such matters as public records and adjudicative proceedings, will also be moved into Title 208 of the WAC.

You will notice that there are fewer DCU rules after the move. That is because the rules that deal strictly with savings and loan associations have not been moved over with DCU’s rules into Title 208.

Questions or comments on the rules move should be directed to Parker Cann, Assistant Director, at (360) 902-8778.

Conversion Chart for DCU Rules
As of June 1, 1996

I. DCU Rules Applicable to Credit Unions

Old WAC Title number

New WAC Title number

Title 419 WAC

Title 208 WAC

   

Old WAC Chapter numbers

New WAC Chapter numbers

Chapter 419-18 WAC

Chapter 208-418 WAC

Chapter 419-36 WAC

Chapter 208-436 WAC

Chapter 419-40 WAC

Chapter 208-440 WAC

Chapter 419-44 WAC

Chapter 208-444 WAC

Chapter 419-64 WAC

Chapter 208-464 WAC

Chapter 419-72 WAC

Chapter 208-472 WAC

Chapter 419-80 WAC

Chapter 208-480 WAC

WAC Section Numbers

The last three digits of each WAC section will not change. For example, WAC 419-18-020 becomes WAC 208-418-020.

II. Rules No Longer Administered by DCU

WAC Chapters that apply only to S&Ls (not moved to WAC 208)

Chapter 419-04 WAC
Chapter 419-14 WAC
Chapter 419-20 WAC
Chapter 419-28 WAC
Chapter 419-52 WAC
Chapter 419-56 WAC
Chapter 419-60 WAC


DCU BULLETIN

Division of Credit Unions
Washington State Department of Financial Institutions
Phone: (360) 902-8718, Fax: (360) 902-8800

June 6, 1996
No. B-96-6

DCU Adopts New Fee Rule

On May 31, 1996, the DCU filed its new fee rule in final form. Enclosed is a copy of the filing (CR-103) for the new rule. The new fee structure takes effect July 1, 1996.

The first quarterly asset assessment billings under the new structure will be mailed to credit unions by mid-June. Credit unions must pay the assessment by July 31, 1996.

The Division intended to repeal WAC 208-418-045 as part of the rule-making. (Section -045 authorizes the acceleration of asset assessments in certain circumstances.) However, for technical reasons, it was not possible to do so. As a result, we now intend to repeal -045 through an expedited repeal process permitted by recent amendments to the Administrative Procedures Act. The repeal of -045 should be completed by September of this year.

If you have any questions about the new fee rule, please contact Parker Cann, at (360) 902-8778.


DCU BULLETIN

Division of Credit Unions
Washington State Department of Financial Institutions
Phone: (360) 902-8718, Fax: (360) 902-8800

July 1, 1996
No.B- 96-7

List of Opinions Issued Year-to-Date

From time to time, the Division issues written opinions in response to questions about how a statute or rule should be applied to a particular factual situation. In order to make these opinions available generally to credit unions, we will publish a list of new opinions twice a year. The list will include the reference number, date, and subject matter of each opinion issued year-to-date. Enclosed is the first list for this purpose.

The Division is happy to provide "sanitized" copies of the actual opinions upon request. Please call or fax your request to Tina Philippsen (at the Division office at the numbers above) if you would like a copy of an opinion described on the enclosed list.

It should be noted that the opinions are limited to their facts; we may reach a different conclusion if presented with different facts or conditions.


DCU BULLETIN

Division of Credit Unions
Washington State Department of Financial Institutions
Phone: (360) 902-8718, Fax: (360) 902-8800

July 10, 1996
No. B-96-8

 

DCU Proposes Rule Amendments

The DCU recently filed two proposed rules:

  1. To delete the wording in WAC 208-472-015(2) that deems a group of retired persons or persons at least 50 years of age to be an associational group. See the enclosed CR-102 marked "1".
  2. To amend the WACs as follows:
  1. To correct out-of-date references like "supervisor" and "division of savings and loans".
  2. To correct or delete internal references to RCW and WAC sections that no longer exist.

See the enclosed CR-102 marked "2".

Comments and hearing. Written comments on the proposed rules should be received by DCU no later than August 13, 1996. A hearing on the rules has been scheduled through Washington Interactive Television (WIT) on August 14, 1996, from 11 AM to noon. You may participate in the hearing by attending any one of the following WIT sites:

  1. Spokane: 4022 East Broadway, Spokane, WA
  2. Yakima: SD #105 Bldg., 33 South 2nd Ave., Yakima, WA
  3. Vancouver: ESD #112, 2500 NE 65th Ave., Vancouver, WA
  4. Lynnwood: 2000-200th Pl SW, Lynnwood, WA
  5. Lacey: 710 Sleater-Kinney Rd SE, Ste Q, Lacey, WA

DCU BULLETIN

Division of Credit Unions
Washington State Department of Financial Institutions
Phone: (360) 902-8718, Fax: (360) 902-8800

July 15, 1996
No. B-96-9

DCU Proposes to Repeal Certain Rules

The DCU recently filed for the expedited repeal of :

  1. WAC section 208-440-030, restricting the offering of gifts, prizes, and premiums. This Section was originally adopted in the 1970’s; in consideration of changed legal and business circumstances since that time, DCU has proposed to repeal it.
  2. WAC section 208-418-045, authorizing DCU to accelerate the payment of asset assessments. This Section is no longer necessary in light of the recent change to quarterly asset assessments to fund the DCU.
  3. Chapter 419-28 WAC, requiring DCU approval for satellite facilities. Statutory changes in 1994 rendered this Chapter invalid.

Enclosed are the three CR-101X forms that were filed for this purpose, marked "A", "B, and "C".

Objections to repeal. The expedited repeal procedure is different from the typical rule-making procedure. DCU may finalize the repeal of the rules described above if no one objects to the repeal in writing by August 16, 1996. Objections should be mailed to:

Victoria W. Sheldon
Department of Financial Institutions
Box 41200
Olympia, WA 98504-1200


DCU BULLETIN

Division of Credit Unions
Washington State Department of Financial Institutions
Phone: (360) 902-8718, Fax: (360) 902-8800

September 5, 1996
No. B-96-10

Division Adopts Rules:

Deleting Streamlined Senior Provision,
Making Technical Corrections, and
Repealing Outdated Sections

On August 20, 1996, the Division filed the following rules in final form:

  1. The rule deleting the provision that groups of retired persons and persons at least age 50 were deemed to be an associational group ("streamlined senior provision").
  2. The rule making technical corrections throughout the Division’s WACs to update inaccurate references.
  3. The rule repealing:
  1. a. WAC 208-440-030 (restricting the offering of gifts, prizes, and premiums).
  2. b. WAC 208-418-045 (allowing acceleration of payment of asset assessments).
  3. c. WAC Chapters 419-28 (requiring prior approval of satellite facilities) and 419-20 (operations of the Division of Savings and Loans).

Enclosed are copies of the CR-103 forms that were filed for this purpose. These rules take effect on September 20, 1996. If you have any questions about these new rules, please call Parker Cann, Assistant Director, at (360) 902-8778.

Procedures for public records requests are now set forth at WAC 208-12.

Distribution of complete set of rules

We expect that the Code Reviser will reprint the Division’s WACs with these rule changes by the end of September. We will distribute a complete, updated set of the WACs to each credit union at that time.

Effect of deletion of senior provision

Only a handful of credit unions received approval to amend their FOM bylaws to include senior groups under the streamlined senior provision. As noted above, this provision will no longer be effective as of September 20, 1996. Credit union members who joined before September 20 under a streamlined senior group may continue their membership in these credit unions, if the FOM bylaws of the credit union provide that "once a member, always a member". However, after September 20, credit unions may not qualify individuals as new members based solely on their membership in a streamlined senior group.

It should be noted that the Division will continue to approve the addition of groups of seniors to a credit union’s FOM if the groups meet the standard associational group requirements in WAC Chapter 208-472.


DCU BULLETIN

Division of Credit Unions
Washington State Department of Financial Institutions
Phone: (360) 902-8718, Fax: (360) 902-8800

September 25, 1996
No. B-96-11

Credit Unions and the Year 2000

The next millennium is less than 3.5 years away. Are your computer systems and software programs ready to handle the year 2000?

Many computer systems and software programs do not have the capability for accurate calculations using the value "00" for the year 2000. Instead the computer program may read it as 1900 or even worse, the year input on all your transactions may trigger a system failure.

The Federal Financial Institutions Examination Council (FFIEC) has issued the attached statement regarding the substantial risks to financial institutions involving their computer systems and the new millennium. We strongly encourage you to read the FFIEC’s statement. The statement can be used as a guideline to help you decide the necessary actions needed to safeguard the accurate handling of future transactions using the year 2000 and beyond. If you use an outside electronic data processing vendor or servicer, you should verify that they are adequately addressing your system and software issues related to the next millennium.

If you have any questions, please give us a call at the Division.


DCU BULLETIN

Division of Credit Unions
Washington State Department of Financial Institutions
Phone: (360) 902-8718, Fax: (360) 902-8800

October 30, 1996
No. B-96-12

Copies of Current State Credit Union Statutes and Rules

Enclosed are copies of the state credit union statutes and Division’s rules, in their current form:

Statutes

  1. Chapter 31.12 RCW - Washington State Credit Union Act
  2. Chapter 31.12A RCW - Washington Credit Union Share Guaranty Association Act
  3. Chapter 31.13 RCW - Central Credit Union Act

For those credit unions with Internet access, Chapter 31.12 RCW can be found at: http://apps.leg.wa.gov/RCW/default.aspx?cite=31.12

Division’s Rules

  1. Chapter 208-418 - Fees charged to credit unions and related parties
  2. Chapter 208-436 - Rules governing supervisory approval of credit union investment practices
  3. Chapter 208-440 - Rules on credit union participation in commercial business activities
  4. Chapter 208-444 - Miscellaneous credit union rules
  5. Chapter 208-464 - Credit union member business loans
  6. Chapter 208-472 - Credit union field of membership expansion
  7. Chapter 208-480 - Real estate appraisals (Repealed)

FISCUs. Federally insured credit unions must comply with NCUA appraisal rules set forth at Part 722 of the NCUA rules. 12 C.F.R. Section 741.203(b). Consequently, the Division deems Chapter 208-480 WAC to be superseded by Part 722, to the extent the Chapter applies to FISCUs.

WCUSGAs. Credit unions whose shares and deposits are guaranteed by WCUSGA must comply with either Chapter 208-440 or, based on the state parity provision (RCW 31.12.136), the NCUA’s appraisal rules at Part 722.

We are not aware of any Internet site which has updated WAC rules.

If you have any questions about this Bulletin, please contact Parker Cann, Assistant Director, at (360) 902-8778.


DCU BULLETIN

Division of Credit Unions
Washington State Department of Financial Institutions
Phone: (360) 902-8718, Fax: (360) 902-8800

November 21, 1996
No. B-96-13

Important News from the Department of Licensing

Enclosed is a copy of a memo distributed by the Department of Licensing (DOL) regarding vehicle titles and registrations. This information may be pertinent to staff handling vehicle data. It appears that the DOL memo includes corrections of a prior DOL memo.

Should you or your staff have any questions regarding this information please contact the DOL. Your phone directory should have telephone listings in your area. If you are unable to reach anyone in your area you can contact:

Rabia Fournier, Vehicle Services
1125 Washington St SE
Olympia, WA 98504
Phone: (360)902-3751
Fax: (360)586-5748


DCU BULLETIN

Division of Credit Unions
Washington State Department of Financial Institutions
Phone: (360) 902-8718, Fax: (360) 902-8800

December 16, 1996
No. B-96-14

*************** URGENT ATTENTION REQUIRED ***************

Credit Union Action Required Before December 27, 1996

The Division of Credit Unions and National Credit Union Administration (NCUA) are in the process of developing the list of credit unions which are required to report activity under the Home Mortgage Disclosure Act (HMDA) for calendar year 1996. The fact that you are receiving this fax indicates that your credit union is on the list of those believed to be required to report. (Total assets over $10 million and holders of first lien home loans as of December 1995.)

You are required to report under HMDA unless you meet one or more of the following conditions.

  1. During calendar 1995, the credit union had no home or branch office in a metropolitan statistical area (MSA),
  2. During calendar 1995, the credit union did not originate a first lien dwelling purchase loan or refinance such a loan (see HMDA for definition of dwelling), or
  3. During calendar 1995, the credit union was not federally insured and the first lien dwelling loans it originated during 1995 were not insured, guaranteed, or supplemented by a federal agency, nor intended for sale to FNMA or FHLMC.

Credit unions subject to HMDA for calendar 1996 are required to submit a HMDA report by March 1, 1997. It is important that our list of credit unions subject to HMDA reporting be accurate. The NCUA will, if necessary, use the full range of its enforcement authority, which includes the assessment of civil money penalties, against credit unions which fail to submit a timely, accurate HMDA report for 1996.

Current required action: Please complete the following survey and return it to the Division of Credit Unions by fax no later than December 27, 1996. If you have any questions about the survey, contact Senior Analyst Mike Delimont at (360) 902-8790.

Division of Credit Unions
Fax Survey for
HMDA Reporting Exception

Credit Union Name:
Contact Person:
Contact Phone #:

  1. Did your credit union have an office (home or branch) in a metropolitan statistical area (MSA) at any time during 1995?
    YES __________ NO __________
  2. Did your credit union orginate a first lien dwelling purchase loan or refinance such a loan at any time during calendar 1995?
    YES __________ NO __________
  3. Was your credit union federally insured at any time during calendar 1995?
    YES __________ NO __________
  4. Were any of the first lien dwelling loans that you originated or refinanced in 1995 federally insured?
    YES __________ NO __________
  5. Were any of the first lien dwelling loans that you originated or refinanced in 1995 federally guaranteed?
    YES __________ NO __________
  6. Were any of the first lien dwelling loans that you originated or refinanced in 1995 supplemented by a federal agency?
    YES __________ NO __________
  7. Were any of the first lien dwelling loans that you originated or refinanced in 1995 intended for sale to FNMA or FHLMC?
    YES __________ NO __________

Please return by fax to: Mike Delimont, Senior Analyst, (360) 902-8800