Washington Regulator Begins Rule Work on Credit Union Act
May 30, 2013
May 30, 2013
In 2012, the Northwest Credit Union Association (NWCUA) formed a Washington State Model Act Subcommittee to build upon the work of the previous Washington Credit Union League Evolution Task Force and provide recommendations for state legislative changes to the Washington Credit Union Act. The recommendations were designed to advance the charter and operating environment for credit unions in the state.
After carefully comparing each section of the Washington Credit Union Act to other credit union charters, the subcommittee identified eight substantive changes. These issues were chosen for negotiation and introduction during the 2013 legislative session based both upon the seasoning of the issues and their perceived importance.
The legislation had broad support with nearly 120 credit union advocates attending credit union day at the capital in support of the legislation. In addition more than 200 advocates wrote or contacted their legislators to voice support. As a result the legislation (SB 5302) passed both the House and Senate unanimously and was signed into law by Governor Inslee on April 22, 2013. The Law goes into effect on July 28, 2013.
One of the provisions of the revised Act removes the prohibition on board and committee compensation and gives the state regulator the authority to conduct rulemaking concerning reasonable director compensation.
The Washington Department of Financial Institutions (DFI) will begin the rulemaking process in early August, and has scheduled a Stakeholder Meeting for June 20, to share information.
The meeting is scheduled to begin at 1:30 and will take place at the DFI, 150 Israel Road SW in Tumwater, Wash. but dial-in attendance is also available. More information is available online.
There are a number of compensation issues that credit unions are encouraged to consider including the qualification requirements for board member or supervisory committee members, disclosure to members of compensation, nomination process, election methods, process if election is contested and updating the bylaws.
The Credit Union National Association (CUNA), reports that currently, nine states can pay at least one member of the board while twelve states allow for more comprehensive board compensation. CUNA has provided more information online
“The Association intends to provide research and information on how other states and cooperatives handle board compensation,” said John Trull, director of regulatory affairs for the NWCUA. “To date we have aggregated data on state statutes and are examining rules that other states have in place. We are collaborating with the National Cooperative Business Association (NCBA) to gather information on how other cooperatives address board compensation, and we are working with credit unions to gather additional information.”
Trull noted the NWCUA supports a transparent process and is encouraging all state chartered credit unions in Washington to write in and voice their thoughts and opinions on board compensation.
“The Association will remain very close to the process throughout all phases of this rulemaking, carefully evaluating the comments of our members,” Trull said.
Questions? Contact Lynn Heider: 503.350.2225, firstname.lastname@example.org.