Washington DFI to Issue Draft Rule on Director Compensation
November 14, 2013
Nov. 14, 2013
Credit unions have until Nov. 15 to submit informal comments on the Washington Department of Financial Institutions’ draft rule for director compensation as the agency moves closer to issuing its final regulation.
After four stakeholder meetings over the past five months, the agency is expected to issue its draft rule (CR-102) on Nov. 20. Earlier this month, DFI canceled stakeholder meetings scheduled for November and December and issued a timeline for adoption of the rule. Hearings will be scheduled in early January 2014, the agency says, with the final rule expected to take effect on Feb. 24.
“Participation initially was high,” says John Trull, director of regulatory affairs for the Northwest Credit Union Association, “but it tapered off as credit unions became comfortable with the direction that the DFI was taking. Linda Jekel and her team listened to the feedback they received from credit unions and made changes to address those concerns.”
Amendments to the Washington Credit Union Act authorized state-chartered credit unions to offer “reasonable” compensation to their Officials effective July 28, 2013. DFI’s final rule addresses the implementation of that law, and will include requirements for:
- Continuity – The rule will allow credit unions to continue their current practices of paying for training, insurance coverage or gifts of minimal value without having to meet reporting requirements;
- Accountability – The rule will include safeguards to ensure that member interests are protected;
- Transparency – The rule will require disclosure to members of the amount of director compensation, the expectations for director service and the process for seeking a position as a director; and
- Flexibility – The rule will allow each credit union to set its own compensation structure.
BECU, the nation’s fourth-largest credit union, has already announced plans to compensate its directors and Audit Committee members beginning in 2014. BECU members were informed of the plans Nov. 5 in an article posted to the credit union’s News Center website.
BECU’s board has approved annual stipends ranging from $14,000 to $25,000, depending on the official’s position and committee service. The board’s chair will be the only official to receive the full $25,000 stipend. BECU’s stipend policy takes effect in January 2014, with the first set of stipend payments to be made in April 2014.
The Credit Union National Association (CUNA) reports that credit unions in nine states can currently pay at least one member of the board, while 12 states allow for more-comprehensive board compensation.
DFI Also Considering Frequency of Board Meetings
Next on the DFI’s docket: rulemaking related to the frequency of board meetings.
Another July 2013 amendment to the Washington Credit Union Act allows credit unions to hold six annual board meetings with at least one per quarter. The rulemaking will specify the conditions required for credit unions to hold meetings less than once a month.
Two stakeholder meetings have been scheduled to address the topic: the first will be held on Tuesday, Nov. 26, from 9:30-11:30 a.m.; the second meeting will be held on Thursday, Jan. 23, from 2-4 p.m. Both meetings will be held at the DFI office in Tumwater (150 Israel Road SW, Tumwater 98501) and via teleconference at 1.877.298.8255 (use conference ID 7009517#).
Questions? Contact Gary Stein: 503.350.2216, email@example.com.
Posted in Advocacy News.