FINANCIAL INSTITUTIONS

(Credit Unions Division)

[Filed August 20, 2019, 4:13 p.m.]

Preproposal statement of inquiry was filed as WSR 19-10-047.

Title of Rule and Other Identifying Information: Parity requests. Procedures for requesting powers and authorities authorized in other states.

Hearing Location(s): On October 2, 2019, at 10:00 a.m., at 150 Israel Road S.W., Room 319, Tumwater, WA 98501.

Date of Intended Adoption: October 2, 2019.

Submit Written Comments to: Cristina Diaz, P.O. Box 41200, Olympia, WA 98501, email Cristina.Diaz@dfi.wa.gov, fax 877-330-6870, by September 25, 2019.

Assistance for Persons with Disabilities: Contact Cristina Diaz, phone 360-902-8718, fax 877-330-6870, TTY 800-833-6384, email Cristina.Diaz@dfi.wa.gov.

Purpose of the Proposal and Its Anticipated Effects, Including Any Changes in Existing Rules: This is a new rule, which will provide procedures for requesting powers and authorities allowed in other states. These powers and authorities are permitted under a new law, HB 1247.

Reasons Supporting Proposal: To make the notice process and requirements clear for credit unions that are requesting approval to use powers allowed in other states.

Statutory Authority for Adoption: RCW 31.12.516.

Statute Being Implemented: RCW 31.12.402.

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

Name of Proponent: Department of financial institutions, credit unions division, governmental.

Name of Agency Personnel Responsible for Drafting and Enforcement: Amy Hunter, 150 Israel Road S.W., Tumwater, WA 98501, 360-902-8778; and Implementation: Doug Lacy-Roberts, 150 Israel Road S.W., Tumwater, WA 98501, 360-902-8753.

A school district fiscal impact statement is not required under RCW 28A.305.135.

A cost-benefit analysis is not required under RCW 34.05.328. The department of financial institutions is not an agency identified in RCW 34.05.328.

This rule proposal, or portions of the proposal, is exempt from requirements of the Regulatory Fairness Act because the proposal:

Is exempt under RCW 19.85.025(3) as the rules only correct typographical errors, make address or name changes, or clarify language of a rule without changing its effect.

Director of Credit Unions

WAC 208-400-040Parity requests.

Procedures for requesting powers and authorities authorized in other states.

(1) A credit union must send written notice to the director, by United States mail or by electronic delivery, of its intent to exercise a power or authority that it would have if it were an out-of-state credit union.

(2) The written request must provide the following information in order to be considered complete:

(a) 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;

(b) The state law citations upon which the powers or authorities are based;

(c) A description of the policies, procedures, or other documents the credit union will use in implementing the powers or authorities;

(d) A description of how the powers or authorities will impact the credit union's safety and soundness, including net worth and earnings; and

(e) Any actions planned to mitigate the safety and soundness risks created by the requested powers and authorities.

(3) The director shall grant a parity request if the director finds:

(a) The request is in accordance with the requirements of RCW 31.12.404;

(b) The power or authority is in the interests of the members of the credit union and maintains the fairness of competition and parity between state-chartered credit unions and out-of-state credit unions; and

(4) The director may ask the credit union to waive or extend the thirty day response time set forth in RCW 31.12.404(4).

(5) Absent a waiver or extension, if the director takes no action on the request within thirty days of delivery of the notice, the right to exercise the power is deemed granted.

(6) The director may attach restrictions or limitations on a credit union's new powers or authorities.