Washington State Division of Credit Unions Issues Final Rule on Credit Union Parity

New rule creates procedures for credit unions requesting powers and authorities in other states.

11/19/2019

The Washington State Department of Financial Institutions’ Division of Credit Unions has published final rulemaking to create procedures for credit unions requesting powers and authorities authorized in other states. WAC 208-400-040 will be effective 31 days after filing.

A credit union must send notice to the director of the DCU expressing its intent to exercise a power or authority that it would have if it were an out-of-state credit union.

The written notice must include:

  • A description of the specific proposed powers or authorities and how the power or authority will serve the convenience and advantage of the credit union’s members;
  • The state law citations upon which the powers or authorities were;
  • A description of the policies, procedures, or other documents the credit union will use in implementing the powers or authorities;
  • A description of how the powers or authorities will impact the credit union’s safety and soundness, including net worth and earnings; and
  • Any actions planned to mitigate the safety and soundness risks created by the requested powers and authorities.

The director may grant the parity request if it is found in order, in the interests of the members, and it does not have any safety and soundness issues.

Unless a waiver extension is needed, the request is deemed granted within 30 days after delivery to the director, if the director has not taken any action.

Question of the Week

Q. What is a Single Member Limited Liability Company, and does it need an Employer Identification Number to open an account?

A. According to the IRS, an SMLLC can either be a corporation or a single member “disregarded entity.” The LLC structure provides greater protection than a sole proprietorship and allows for different options for IRS tax reporting.

For federal income tax purposes, an SMLLC classified as a disregarded entity generally must use the owner’s Social Security Number or Employer Identification Number for all information returns and reporting related to income tax. For example, if a disregarded entity LLC that is owned by an individual is required to provide a W-9, Request for Taxpayer Identification Number, and Certification, the W-9 should provide the owner’s SSN or EIN, not the LLC’s EIN.

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