Key Info for WA CUs Holding Public Deposits

Beginning July 1, 2011, Washington state and political subdivisions thereof will be allowed to deposit public funds in qualified Washington chartered credit unions. Those deposits must be $100,000 or less per political subdivision. Examples of political subdivisions include counties and cities. But they also include drainage, irrigation, navigation improvement, levee, sanitation, school or power districts. They may include bridge or port authorities and other special districts created by statute or compacts between the states.

Credit unions that desire to accept such deposits must apply to the Office of the State Treasurer to qualify. Approved credit unions will be required to complete a monthly online report that will include:

  • Public depositor;
  • Type (city, county, etc.);
  • Name;
  • Department;
  • Account type; and
  • Balance.

Additional information about both the application process and monthly reporting will be available on June 1, 2011, on the Office of State Treasurers website.

DFI has scheduled a webinar on Thursday, June 09, 2011, from 10:00 – 11:00 a.m. (Register here). Nancy Adams from the State Treasurer’s Office and Linda Jekel from the Division of Credit Unions will explain and answer questions about the application, approval, and on-line reporting process for Washington state-chartered credit unions choosing to become qualified public depositaries.

Several key points include:  

1. Must a state public fund meet the definition of a member in the credit union’s field of membership groups?
No, instead a Washington state-chartered credit union may accept state public funds for deposit under the Washington Credit Union Act’s enumerated powers in RCW 31.12.402 (11) that reads as follows: “Act as fiscal agent for and receive payments on shares and deposits from the federal government or this state, and any agency or political subdivision thereof.”

2. When may a Washington state-chartered credit union begin acceptance of a share or deposit from a state public fund?
A Washington state-chartered credit union may not accept a state public fund until July 1, 2011, the effective date of Chapter 36, Laws of 2010. For a copy of the law, see here.

3. What is the limit for each public entity for each credit union?
The maximum deposit amount is $100,000 for any one public entity funds, in compliance with RCW 39.58.240.

4. What is the aggregate limit on state public funds?
A federally insured credit union must comply with 12 C.F.R. 741.204 and 701.32. The maximum amount of all public funds (federal and state) plus any nonmember shares or deposits must not exceed $1.5 million or 20% of shares, whichever is greater.

5. What is the federal deposit insurance limit?
The deposit insurance limit is $250,000 per 12 C.F.R. 741.212 and 745.10. However, public entities do not have authority to place more than $100,000 on deposit, see RCW 39.58.240.

6. How will state public fund shares and deposits be categorized on the call reports?
A credit union must include all public entity deposits into the appropriate account types of the page 3 schedule of Shares and Deposits. In addition, the credit union must report the total amount held by non member government depositors on page 3, line 19, account 632. Finally, any member government deposits will be included on page 3, line 18, account code 631.

Questions about this program may be directed to Linda Jekel, Director of Credit Unions at 360 902-8778 or Nancy Adams, Administrator of the State Treasurer’s Office at nancy.adams@tre,gov

 

Questions? Contact the Compliance Hotline: 1.800.546.4465, or email us at compliance@nwcua.org.

Posted in Compliance.