Washington State Legislature Adjourns Sine Die after Passing Supplemental Budget and Overriding Governor’s Vetoes

DFI Sweep

Against NWCUA opposition, the final supplemental budget included an appropriation of $5 million in reserves from the Department of Financial Institutions Financial Services Regulation Account to the Department of Revenue. Per the DFI opinion, the appropriation will not require an increase in fees by their regulated industries; the association strongly opposes these ongoing “sweeps.”

Of particular concern this year was the use of an appropriation out of a dedicated funds account, which is not only bad public policy but amounts to a tax on DFI’s regulated industries. DFI was one of several agencies to have funds swept through this appropriation manner. NWCUA will continue to work with other DFI stakeholders in urging the legislature to discontinue this practice, while continuing to work closely with the Division of Credit Unions on assessment waivers in order to maintain a fund just above operating costs. (The association is advocating for a 30% asset assessment waiver in the second half of the year which will ensure the credit union program operating budget maintains only a thin cushion of reserves.)

DFI’s Financial Services Regulation Account is funded by the agency’s regulated industries across all Divisions including credit unions, banks, consumer services, and securities. Each Division contributes to the Account in different ways. Some through assessments (as is the case with credit unions and banks), hourly exam rates, licensing and income received from fines.

Tax Exemptions

The supplemental budget did not include the repeal or scaling back of any tax exemptions. The association had concerns over the possible removal of the REET exemption on foreclosure sales, which would have in effect required REET to be paid twice; once at the foreclosure sale and then again upon resale of the property.

In addition to passing a supplemental budget, both the House and Senate overrode Governor Inslee’s vetoes of the 27 bills he vetoed at the end of the regular session for not passing a spending plan before adjournment.

Of the bills we have been tracking and reporting on, the following received action during the special session. We will produce a comprehensive final legislative report which will cover all of the bills impacting credit unions and the broader financial services industry.

Public Funds

Senate Bill 5265, allowing banks which are public depositaries to arrange for reciprocal deposits of public funds, was vetoed by Governor Inslee on March 10. During their special session, the legislature overrode the Governor’s veto by a vote of 43-0 in the Senate and 87-7 in the House. The bill takes effect on June 30, 2016.

DFI Agency Request Legislation

Senate Bill 6282, extending the expiration date of the Mortgage Lending Fraud Prosecution Account and its related surcharge ($1 at the recording of a deed of trust) until June 30, 2021, was signed into law by Governor Inslee on March 10. The bill takes effect on June 9, 2016.

Senate Bill 6283, which makes technical changes to the Securities Act of Washington, was signed into law by Governor Inslee on March 29. The bill takes effect on June 30, 2016.

Next Steps

The next regular legislative session will commence on January 9, 2017. As we begin to develop our legislative agenda for 2017, we need your input and involvement.

We want to be fully aware of all existing challenges and limitations, from your perspective, to our state charter so that our governmental affairs team can effectively advocate for policy advancement. Your input and involvement is critical.

Please work with your operations team to determine challenges and limitations to your credit union as well as the needs you believe your credit union will have in the future and send your input to governmentaffairs@nwcua.org.

Credit unions are seeing unprecedented success in the Northwest. In order to ensure that success continues, we must engage and continue to advocate, not only for the needs we have today, but the needs of tomorrow, as well.

Editor’s note: This is the last regular edition of the Washington Legislative Week in Review for 2016. We will provide periodic updates as appropriate throughout the interim, and start weekly updates again in January 2017.

Questions about this story? Contact Eric Horvath: 503.350.2222, ehorvath@nwcua.org.

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Posted in Advocacy News, NWCUA.