Washington DFI Accepting Comments on Rule Regulating the Frequency of Board Meetings

As it nears the end of the rulemaking process for director compensation, Washington’s Department of Financial Institutions (DFI) has begun accepting comments on the next order of business: regulating the frequency of board meetings.

An amendment to the Washington Credit Union Act allows credit unions to hold a minimum of six regular board meetings per year, including at least one meeting in each calendar quarter. The legislation also gave the director of credit unions the authority to require additional board meetings for reasons related to safety and soundness.

In an effort to clarify the law’s requirements, the DFI’s draft rule outlines six scenarios where additional meetings could be required:

  1. The credit union receives a rating of 3, 4 or 5 in the management component rating of CAMEL;
  2. The credit union receives a composite CAMEL rating of 3, 4 or 5;
  3. The credit union has less than a 7-percent net-worth ratio;
  4. The credit union has been designated as a troubled institution;
  5. The credit union is conducting or about to conduct an unsafe or unsound practice; or
  6. The credit union was notified by the Director of Credit Unions of a significant supervisory or financial concern.

At an initial stakeholder meeting Nov. 26, participating credit unions sought some clarifications but did not express many fundamental concerns. One commenter did ask that the DFI not require credit unions with a CAMEL 3 rating (composite or management) to hold more than monthly board meetings.

Stakeholders will have another opportunity to weigh in on the draft rule on Thursday, Jan. 23, from 2-4 p.m. The meeting 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#).

The DFI held four stakeholder meetings on the issue of director compensation before issuing a formal draft rule on Nov. 20. Written comments on the rule will be accepted through January 7, when the DFI will hold a formal hearing to listen to additional thoughts and comments. The final rule is expected to be issued on Jan. 22.

“The thoughts and concerns of credit unions drive our advocacy efforts, and I encourage everyone to participate in the rulemaking process” says John Trull, director of regulatory advocacy for the Northwest Credit Union Association. All comments submitted to the DFI are public record and posted on the department’s website; credit unions that would prefer to share their concerns anonymously can contact Trull at 503.350.2209 or jtrull@nwcua.org.

Coming soon: DFI Director Scott Jarvis has been meeting with key regulatory officials to see if there is a feasible path forward for handling the banking deposits of state-licensed marijuana growers and retailers as part of the I-502 implementation. The NWCUA will provide updates as they become available, Trull says.

 

Questions? Contact Gary Stein: 503.350.2216, gstein@nwcua.org.

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