WSR 08-15-044

PROPOSED RULES

DEPARTMENT OF

FINANCIAL INSTITUTIONS
(Division of Credit Unions)

[ Filed July 11, 2008, 11:29 a.m. ]

Original Notice.

Preproposal statement of inquiry was filed as WSR 08-08-119.

Title of Rule and Other Identifying Information: Fees charged to credit unions and other persons, chapter 208-418 WAC, regarding fees and assessments of credit unions.

Hearing Location(s): John A. Cherberg Building, State Capitol Campus, Olympia, WA 98501, on August 27, 2008, at 10 a.m. to 12 noon.

Date of Intended Adoption: November 26, 2008.

Submit Written Comments to: Joanne Conrad, Regulatory Analyst, Department of Financial Institutions, P.O. Box 41200, Olympia, WA 98504-1200, e-mail jconrad@dfi.wa.gov, fax (360) 704-6490, by August 27, 2008.

Assistance for Persons with Disabilities: Contact Rhonda Mires by e-mail rmires@dfi.wa.gov or (360) 902-8718.

Purpose of the Proposal and Its Anticipated Effects, Including Any Changes in Existing Rules: The proposed rule increases credit union assessments and fee rates, in accordance with the "fiscal growth factor" under chapter 43.135 RCW, and makes related technical changes.

Reasons Supporting Proposal: The regulation for safety and soundness of state-chartered credit unions is supported by industry fees and assessments, not the general fund. The last fee increase was in 2002. This proposed increase is necessary to support the statutory mandate of the division of credit unions.

Statutory Authority for Adoption: Chapter 43.135 RCW; RCW 43.320.040, chapter 285, Laws of 2008.

Statute Being Implemented: RCW 31.12.516(6); chapter 285, Laws of 2008.

Rule is not necessitated by federal law, federal or state court decision.

Agency Comments or Recommendations, if any, as to Statutory Language, Implementation, Enforcement, and Fiscal Matters: This fee increase is needed in order to provide for an increase in assessment and fee rates, in accordance with the "fiscal growth" factor under chapter 43.135 RCW. See proposed amendments to chapter 208-418 WAC for text of fee increase and related changes.

Name of Proponent: Division of credit unions, department of financial institutions, governmental.

Name of Agency Personnel Responsible for Drafting: Joanne Conrad, DFI, 150 Israel Road S.W., Tumwater, WA 98501, (360) 902-8813; Implementation and Enforcement: Linda K. Jekel, DFI, 150 Israel Road S.W., Tumwater, WA 98501, (360) 902-8778.

No small business economic impact statement has been prepared under chapter 19.85 RCW. 1. Credit union fees are already asset-based on size of credit union.

2. Small credit unions may also be granted waivers to prevent hardship.

A cost-benefit analysis is not required under RCW 34.05.328. This rule is to provide for a routine fee increase, to an existing fee structure, in order to enable the division of credit unions to maintain its statutory mission. The department of financial institutions is not one of the agencies specified in RCW 34.05.328 (5)(i), and the rule is a "rule that sets or adjusts fees or rates pursuant to legislative standards," RCW 34.05.328 (5)(b)(vi).

July 2, 2008

Linda Jekel, Director

Division of Credit Unions

OTS-1741.1


AMENDATORY SECTION(Amending WSR 01-12-004, filed 5/23/01, effective 6/23/01)

WAC 208-418-010   Definitions.   Unless the context clearly requires otherwise, as used in this chapter:

(1) "Credit union" includes a Washington credit union, an out-of-state credit union and a foreign credit union.

(2) "Foreign credit union" means a credit union organized and operating under the laws of another country or other foreign jurisdiction, that is operating a branch in Washington in accordance with RCW 31.12.471.

(3) "Hourly fee" means a fee of $((57.42)) 64.35 per hour per examiner or other staff person of the division.

(4) "Out-of-state credit union" means a credit union organized and operating under the laws of another state or U.S. territory or possession, that is operating a branch in Washington in accordance with RCW 31.12.471.

(5)(a) "Total assets" of a Washington credit union includes all assets of the credit union as reported on the credit union's most recent form 5300 or similar financial report.

(b) "Total assets" of an out-of-state or foreign credit union is derived from the following fraction:

Total assets x in-state ((branch)) shares and deposits
Total shares and deposits

"Total assets" and "shares and deposits" include respectively all assets and shares and deposits as reported on the credit union's most recent form 5300 or similar financial report.

(6) "Washington credit union" means a credit union organized and operating under chapter 31.12 RCW.

[Statutory Authority: RCW 31.12.426(1), 31.12.516(2), 43.320.040. 01-12-004, 208-418-010, filed 5/23/01, effective 6/23/01.]


AMENDATORY SECTION(Amending WSR 01-12-004, filed 5/23/01, effective 6/23/01)

WAC 208-418-040   Quarterly asset assessments.   (1) The director will charge each credit union a quarterly asset assessment at the rate set forth in subsection (2) of this section. Asset assessments will be due on January 1, April 1, July 1, and October 1. Asset assessments must be paid no later than thirty days after their due date. The assessments will be computed on total assets as of the prior June 30 for the October 1 and January 1 assessments, and as of the prior December 31 for the April 1 and July 1 assessments.


(2) Credit Union's

Total Assets

Quarterly

Asset Assessment


over $500M

$((18,883 + 0.00001543)) 21,163 + .00001729 x total assets over $500M

over $100M up to $500M

$((5,250 + 0.00003408)) 5,883 + .00003819 x total assets over $100M

over $25M up to $100M

((0.00005250)) 0.00005883 x total assets

over $10M up to $25M

$((1,157)) 1,296

over $2M up to $10M

$((771)) 863

over $500K up to $2M

$((514)) 575

up to $500K

$0

M = Million K = Thousand


(3) Quarterly asset assessments are charged for the calendar quarter that begins on the due date of the assessment. No rebates will be made to credit unions that cease to be state-chartered during the quarter. A credit union converting to state charter will pay a prorated quarterly asset assessment for the quarter during which the conversion is completed.

(4) From time to time, the director may determine that asset assessments on an out-of-state credit union or foreign credit union are inappropriate relative to the level of examination and supervision of that credit union by the division. In that event, the director may charge the credit union hourly fees for examination and supervision of the credit union, including, but not limited to, off-site monitoring, in lieu of asset assessments. Such fees are due upon receipt of billing from the division.

[Statutory Authority: RCW 31.12.426(1), 31.12.516(2), 43.320.040. 01-12-004, 208-418-040, filed 5/23/01, effective 6/23/01. Statutory Authority: 1996 c 274. 96-12-058, 208-418-040, filed 5/31/96, effective 7/1/96. 96-06-011, recodified as 208-418-040, filed 2/23/96, effective 6/1/96. Statutory Authority: RCW 31.12.535 and 31.12.545. 95-06-066, 419-18-040, filed 2/28/95, effective 3/31/95; 91-06-062, 419-18-040, filed 3/1/91, effective 4/1/91. Statutory Authority: RCW 31.12.545(1). 85-07-008 (Order 85-2), 419-18-040, filed 3/8/85. Statutory Authority: RCW 31.12.320. 83-20-027 (Order 83-4), 419-18-040, filed 9/26/83; 82-13-016 (Order 82-5), 419-18-040, filed 6/7/82.]


AMENDATORY SECTION(Amending WSR 01-12-004, filed 5/23/01, effective 6/23/01)

WAC 208-418-050   Pass through of attorney general costs.   (1) The director ((will)) may charge each credit union the actual cost incurred by the division of credit unions for certain legal assistance rendered by an assistant attorney general or special counsel in regard to ((the)) that credit union. Legal assistance includes legal assistance rendered in connection with: Supervisory committee meetings and board meetings; receiverships, conservatorships, liquidations and declarations of insolvency; enforcement agreements or actions; collection actions; administrative hearings; declaratory orders; and opinions requested by a credit union or the division of credit unions. Charges are due upon receipt of billing from the division.

(2) The division will notify a credit union before the division incurs expense for legal assistance which may be charged to the credit union under this section.

[Statutory Authority: RCW 31.12.426(1), 31.12.516(2), 43.320.040. 01-12-004, 208-418-050, filed 5/23/01, effective 6/23/01. Statutory Authority: 1996 c 274. 96-12-058, 208-418-050, filed 5/31/96, effective 7/1/96. 96-06-011, recodified as 208-418-050, filed 2/23/96, effective 6/1/96. Statutory Authority: RCW 31.12.535 and 31.12.545. 95-06-066, 419-18-050, filed 2/28/95, effective 3/31/95; 91-06-062, 419-18-050, filed 3/1/91, effective 4/1/91. Statutory Authority: RCW 31.12.320. 83-20-027 (Order 83-4), 419-18-050, filed 9/26/83.]


AMENDATORY SECTION(Amending WSR 01-12-004, filed 5/23/01, effective 6/23/01)

WAC 208-418-070   Other fees.   (1) The director will charge hourly fees as follows:

(a) An hourly fee will be charged to a person other than a credit union or a subsidiary of one or more credit unions for each ((electronic data processing)) information systems and technology examination of the person by the division of credit unions.

(b) An hourly fee will be charged to a credit union for the ((processing)) examination of the credit union's application to add a community group to its field of membership.

(c) An hourly fee will be charged to a credit union for a fraud investigation or examination of the credit union and/or persons involved with the credit union by the division.

(d) An hourly fee will be charged to an out-of-state or foreign credit union for examination and supervision by the division under WAC 208-418-040(4).

(e) An hourly fee will be charged to an out-of-state or foreign credit union for the ((processing)) examination of the credit union's application to operate a branch in this state.

(f) An hourly fee will be charged to other divisions or agencies for examinations, investigations, or similar undertakings performed on their behalf by the division.

(g) An hourly fee will be charged for investigation or examination of conversion applications.

(h) An hourly fee will be charged for initial and annual examination of alternative share insurers that apply for authorization to do business with Washington state chartered credit unions.

(i) An hourly fee will be charged for examination of credit union service organizations and their subsidiaries.

(2) In addition, the director will charge a credit union or other person for the actual cost incurred by the division for an examination or investigation of the credit union or person performed under personal services contract by third parties.

(3) Charges under this section are due upon receipt of billing from the division.

[Statutory Authority: RCW 31.12.426(1), 31.12.516(2), 43.320.040. 01-12-004, 208-418-070, filed 5/23/01, effective 6/23/01. Statutory Authority: 1996 c 274. 96-12-058, 208-418-070, filed 5/31/96, effective 7/1/96. 96-06-011, recodified as 208-418-070, filed 2/23/96, effective 6/1/96. Statutory Authority: RCW 31.12.535 and 31.12.545. 95-06-066, 419-18-070, filed 2/28/95, effective 3/31/95; 91-06-062, 419-18-070, filed 3/1/91, effective 4/1/91. Statutory Authority: RCW 31.12.545(1). 85-07-008 (Order 85-2), 419-18-070, filed 3/8/85. Statutory Authority: RCW 31.12.320. 83-20-027 (Order 83-4), 419-18-070, filed 9/26/83.]


AMENDATORY SECTION(Amending WSR 01-12-004, filed 5/23/01, effective 6/23/01)

WAC 208-418-100   Waiver of fees.   The director may waive any or all of the fees and assessments imposed under WAC 208-418-040 and 208-418-070, in whole or in part, when ((he or she)) the director determines that ((both of the following factors are present:

(1) The credit union program fund exceeds the projected acceptable minimum fund balance level approved by the office of financial management; and

(2) That)) such course of action would be fiscally prudent.

[Statutory Authority: RCW 31.12.426(1), 31.12.516(2), 43.320.040. 01-12-004, 208-418-100, filed 5/23/01, effective 6/23/01.]


REPEALER

     The following section of the Washington Administrative Code is repealed:
WAC 208-418-090 Rate increase.

Washington State Code Reviser's Office