WA DFI Announces Important Procedural Change

The change will affect credit unions’ OSOS public web searches, or copies of OSOS filed documents.

Recently the Washington State Department of Financial Institutions Division of Credit Unions sent notification to the CEOs of Washington State chartered credit unions regarding a procedural change that the Washington State Secretary of State’s office is making.

The following is from the e-mail sent to the CEOs.

Dear CEOs,

New laws (RCW 23.95) will soon take effect with regard to the Office of Secretary of State (OSOS).  As of December 1, 2016, the corporate formation documents filed with the OSOS will change and will be less descriptive. Primarily, all positions will now be reflected as “Governor” as seen in the attachment to this email. 

Many credit unions rely on the OSOS public web search, or copies of OSOS filed documents, to confirm a Governor’s designation (President, VP, Treasurer, Member, Manager, Partner, etc.) when opening or servicing accounts. This information will no longer be available and will now only state that the person is a Governor. 

Credit Unions will need to develop alternative procedures to verify a Governor’s position of authority for all business entities including Corporations, LLCs, LPs, LLPs, LLLPs, and Nonprofit Corporations. Additionally, credit unions will likely need to obtain additional documentation to verify that such Governor has the appropriate authority to open and service an account.  Possible solutions may include, but are not limited to:

  • Requiring copies of corporate resolutions designating the Governor as having the ability to open and service an account,
  • Creating a credit union attestation form for the Governor to sign when opening an account, or
  • Requiring copies of corporate meeting minutes appointing the Governor to his or her position of authority.

Compliance Question of the Week

Are we required to list the BSA Officer by name in our BSA Policy?

According to the NCUA, the specific name (i.e., Jane Smith) is not required to be included in the policy itself, a title is enough.  However, the board minutes should reflect the current person, by name, that has been designated as the BSA compliance officer.
In addition to the designation in the policy and board minutes, examiners will also look to ensure that the BSA Officer has sufficient authority and expertise to administer an effective BSA program.

Related Links

12 CFR 748.2

Legal Briefs

National Credit Union Administration (NCUA)

The November issue of the NCUA Report is now available. This issue focuses on the new modernization of the Field-of-Membership rule approved by the NCUA Board in October.

The NCUA announced that it will hold a webinar on vendor due diligence on Wednesday, December 7th. The webinar will address managing third-party risk, due diligence, regulatory compliance, and vendor contracts. Credit unions that wish to attend the webinar can register here.

The NCUA released the results of its November board meeting. The board unanimously approved the 2017 and 2018 operating budget and technical changes to its Community Development Revolving Loan Fund.

NCUA Board Chairman Metsger released a statement on the NCUA’s 2017-2018 budget. Metsger stated that the budget will be down 1.6 percent from the previously approved 2017 budget.

Consumer Financial Protection Bureau (CFPB)

The CFPB announced that the ceiling on allowable charged under the FCRA will remain unchanged at $12.00.

The CFPB issued a Request for Information Regarding Consumer Access to Financial Records. The request is aimed at helping the CFPB understand the consumer benefits and risk associated with reliance on access to consumer financial account related financial information.

CFPB Director Cordray delivered prepared remarks at the Field Hearing on Consumer Access to Financial Records. In his remarks, Cordray discussed the opportunities and challenges created through the use of digital financial records.

The CFPB finalized its 2017 list of rural or underserved counties.

Federal Reserve Board (FRB)

The November issue of Fedflash is now available.

The Government Accountability Office issued a report to the FRB regarding the FRB’s stress test and capital analysists and review. The GAO provided the FRB with 15 recommendations aimed at improving the effectiveness of the stress test programs.

Federal Deposit Insurance Corporation (FDIC)

The FDIC approved a final rule that establishes recordkeeping requirements for FDIC-insured institutions with more than 2 million deposit accounts. The rule will help the FDIC ensure that it can provide access to customer funds in the case of an institution failure.

Federal Trade Commission (FTC)

The FTC, jointly with the CFPB and DoD, announced the new Military Consumer Toolkit. The toolkit was developed to help military servicemembers, as well as their dependents, easily access financial tools.

Federal Housing Finance Agency (FHFA)

The FHFA announced that its 2016 Performance and Accountability Report is now available. The report discusses the FHFA’s regulatory role of the Federal Home Loan Banking System as well as its role as regulator and conservator of Fannie Mae and Freddie Mac.

Office of Foreign Assets Control (OFAC)

OFAC has updated the SDN list as of November 18, 2016. The last update prior to this was November 14, 2016.

Questions? Contact the Compliance Hotline: 1.800.546.4465, [email protected].