WA Leg. Proposes Sweep of DFI Funds, Budget Negotiations Continue in Salem
April 7, 2011
April 7, 2011
With elected officials scrambling to close billion dollar deficits in Olympia and Salem, two very different approaches are being pursued.
This week, Democratic leaders in the Washington State House of Representatives presented their budget proposal, which includes a provision to sweep a further $7 million from the Department of Financial Institution (DFI).
Already, $2 million has been transferred from the Financial Service Regulation Account to the general fund for the 2010 fiscal year. Under the new $62 billion proposal, another $7 million would be transferred for the 2011 fiscal year. The proposed agency’s budget is $47 million for the 2011-2013 biennium.
This sweep would comes despite the same budget predicting a 60 percent increase in the number of investment advisers regulated by the agency due to the newly enacted Dodd-Frank Wall Street Reform and Consumer Protection Act.
However, there is reason to believe the Division of Credit Union will not lose any funds. Most of the swept funds are expected to come from fines levied by the DFI’s securities division.
“The Association continues to watch all budget proposals very closely,” said NWCUA Senior Vice President & General Counsel Stacy Augustine. “Sweeping dedicated, non-appropriated funds from the Division of Credit Unions could essentially constitute a hidden tax on our members.”
In Salem, on the other hand, Governor John Kitzhaber and the co-chairs of the Joint Ways & Means Committee have released proposals without any mention of funds sweeps.
Under the governor’s $14.5 billion proposal, the Division of Finance & Corporate Securities (DFCS) would receive $394 million, while the committee proposed balanced budget does not go into detail about the department’s funding level.
While recognizing that negotiations continue, the credit union regulator in Oregon does not expect to be swept for any funds, according to its head.
“I am optimistic that there won’t be a funds sweep,” said DFCS Administrator David Tatman. “We all understand sharing the pain, but everyone also understands that fund sweeps are not the favored practices to balance the budget.”
As the budget negotiations continue in both state capitals, the Association’s staff will work to ensure agencies have the funding they need to regulator credit unions in a responsible and collaborative manner.
Questions about budget developments in the capitals? Contact SVP & General Counsel Stacy Augustine: 206.340.4816, email@example.com.
Posted in Advocacy News.