H-1458.1 _______________________________________________
SUBSTITUTE HOUSE BILL 1085
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State of Washington 52nd Legislature 1991 Regular Session
By House Committee on Financial Institutions & Insurance (originally sponsored by Representatives Winsley, Dellwo, Broback, Dorn, Mielke, Inslee, Schmidt, Zellinsky, Anderson, Paris, R. Johnson, Edmondson, Wynne, Chandler, Wood, Tate and Orr).
Read first time February 5, 1991.
AN ACT Relating to directors, officers, employees, and other agents of credit unions; adding new sections to chapter 31.12 RCW; and prescribing penalties.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF WASHINGTON:
NEW SECTION. Sec. 1. A new section is added to chapter 31.12 RCW to read as follows:
Directors and officers of a credit union stand in a fiduciary relationship to the credit union and shall discharge the duties of their respective positions in good faith and with that diligence, care, and skill that ordinary, prudent persons would exercise under similar circumstances in like positions.
NEW SECTION. Sec. 2. A new section is added to chapter 31.12 RCW to read as follows:
(1) No director, officer, employee, or other agent of a credit union may purchase, or be interested in the purchase, directly or indirectly, of any of its assets without the previous consent of a majority of disinterested directors of the credit union. If the fair market value of the asset or assets exceeds ten thousand dollars, the credit union shall give not less than ten days' prior notice of the sale to the supervisor.
(2) No director, officer, employee, or other agent of any credit union may have an interest, direct or indirect, in the gains or profits of the credit union or credit union service organization, except to receive dividends, or interest upon share or deposit accounts nor may the directors, officers, employees, or other agents have an ownership interest in a credit union service organization or other partnership, firm, or corporation doing business with the credit union or a credit union service organization. However, nothing in this subsection prevents an officer, employee, or other agent of the credit union from receiving his or her authorized compensation; from participating in an employee benefit plan; or prevents a director, officer, employee, or other agent of the credit union from owning stock in a corporation doing business with the credit union or credit union service organization if after application to the supervisor, the supervisor determines that the ownership or other interest in such corporation is fair to the credit union. Nothing in this subsection prevents a director from receiving reasonable compensation for expenses as provided in RCW 31.12.365.
(3) No director, officer, employee, or other agent of any credit union may, directly or indirectly, receive a bonus, commission, compensation, remuneration, gift, speculative interest, or gratuity of any kind from any person, firm, or corporation other than the credit union (a) for granting, procuring, or endeavoring to procure, for any person, firm, or corporation, a loan by or out of the funds of the credit union; or (b) for the purchase or sale of a securities or property for or on account of the credit union.