Washington Legislative Update: Credit Union Bills Pass Washington Legislature
April 9, 2015
April 9, 2015
Both NWCUA-sponsored bills in Washington—Senate Bill 5757 and DFI agency request Senate Bill 5300—passed the House of Representatives this morning, completing their journey through the legislature. They will now be delivered to Governor Inslee to be signed into law.
“This accomplishment is due to our combined efforts!” said Mark Minickiello, the Associations vice president of legislative affairs. “The engagement for Northwest credit unions, from input and support of an aggressive legislative agenda, to attending our Credit Union Day at the Capitol and responding to calls to action with specific legislators, directly impacted the passage of these bills today at the Capitol. All of our NWCUA family shares in this remarkable accomplishment.”
NWCUA-sponsored Senate Bill 5757 addressing credit unions’ corporate governance and investments passed the House by a vote of 97-0 with 1 excused. The bill:
- Simplifies and clarifies the duties of the credit union Board of Directors.
- Eliminates the requirement to “declare” dividends to conform to common business practices.
- Increases CUSO investment/loan authority from the current 1%, to 5%.
- Clarifies that gifts of nominal value, insurance coverage, and expense reimbursements are not subject to the rules on compensation.
Senate Bill 5300 updating the DFI’ regulatory enforcement powers regarding credit unions and organizations providing services to credit unions passed the House by a vote of 77-19 with 2 excused.
There was a floor amendment offered to the bill by Rep. Matt Shea (R-Spokane Valley) to eliminate the authority of the DFI to temporarily suspend or restrict withdrawals of deposits in a credit union upon a written finding. House Business & Financial Services Committee Chairman Rep. Steve Kirby (D-Tacoma) as well as Ranking Minority Member Rep. Brandon Vick (R-Vancouver) spoke against the amendment which failed, but was the cause for the bill’s ‘no’ votes.
The bill includes four of our NWCUA legislative priorities:
- Updates parity provision
- Changes “Washington Credit Union League” to “Northwest Credit Union Association”
- Extends the timeframe for a membership meeting to vote on suspension of members of a committee or members of the Board.
- Lowers the member voting requirement from two-thirds to a simple majority for merger or conversion of a state CU into federal, out-of-state, or foreign credit union, or other type of financial institution, unless a greater percentage is required by a credit union’s bylaws.
The bills will now be sent to Governor Inslee to be signed into law. The Governor has five days if the Legislature is still in session, or 20 days after its adjournment to either sign the bill or veto all or any section of it. If the Governor fails to act on the bill, it becomes law automatically.
Other bills we are tracking
Substitute House Bill 1078 is attorney geneeral request legislation modifying notice requirements in cases of a data breach. The bill received a do-pass recommendation from the Senate Ways & Means Committee on April 7 and was referred to the Senate Rules Committee.
House Bill 1090 reauthorizes and expands the Financial Fraud and Identity Theft Crimes Investigation and Prosecution Program. The bill received a do-pass recommendation from the Senate Ways & Means Committee on April 7 and was referred to the Senate Rules Committee.
Debt Adjusting Services
Substitute House Bill 1283 concerning nonprofit organizations engaged in debt adjusting passed the Senate on April 8 by a vote of 49-0. The bills will now be sent to Governor Inslee to be signed into law.
Small Business Retirement Plan Marketplace
Engrossed Substitute Senate Bill 5826 creates the Washington Small Business Retirement Marketplace in the Department of Commerce, for self-employed individuals and employers with fewer than 100 employees. The bill passed the House on April 10 a vote of 57-40 with 1 excused. As the bill was amended on the House floor, it will now be sent back to the Senate for concurrence. Under the engrossed substitute bill:
- Commerce is required to contract with a private sector entity to establish the Marketplace, and to develop a website and marketing materials.
- The Marketplace is required to offer at least four products, including options that include and do not include employer contributions, and both target date-type funds and balanced funds. These options must include simple IRAtype programs and myRA.
- Qualified plans selected by Commerce to offer products on the Marketplace may not charge participating employers an administrative fee for approved Marketplace plans, and may not charge enrollees more than 100 basis points in total annual fees.
- DFI is required to annually, or upon request of Commerce, review retirement account products for eligibility for inclusion in the Marketplace, however review does not include confirmation that products comply with federal laws or regulations.
- The Director of Commerce is required to approve all firms and plans for participation in the Marketplace that meet a new definition of “approved plans.”
- Private sector financial firms that may participate in the Marketplace includes holders of certificates of authority.
- The development of a protocol for the qualifications of private sector financial services firms that seek to participate in the Marketplace is done through a contract between Commerce and a private entity, rather than by Commerce, with rules adopted by Commerce to ensure the protocol does not provide unfair advantage to the entity that establishes the protocol.
- The Director of Commerce shall adopt rules for the operation of the Marketplace, but rules must be proposed by January 1 of the year of implementation, and the rules shall not be adopted until after the end of the regular session of the Legislature of that year.
- Commerce shall not expose the state to any potential liability under the ERISA as an employer or through operation of the Marketplace. The Director of Commerce is required to report to the Legislature every two years on the effectiveness and efficiency of the program
Substitute Senate Bill 5202 changes the composition and duties of the Financial Education Public-Private Partnership (FEPPP). The bill passed the House on April 8 by a vote of 91-6 with 1 excused. The bill will now be sent to Governor Inslee to be signed into law.
Look for the Washington Legislative Week in Review each week in Anthem during legislative session which runs January 29 – April 26, 2015.
Questions about this story? Contact James Pearson: 206.340.4790, firstname.lastname@example.org.
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