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ENGROSSED 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 which ordinary, prudent persons would exercise under similar circumstances in like position.
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 any 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 exceed ten thousand dollars, not less than ten days' prior notice of the sale shall be given to the supervisor.
(2) 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 for granting, procuring, or endeavoring to procure, for any person, firm, or corporation, any loan by or out of the funds of such credit union; or for the purchase or sale of any securities or property for or on account of such credit union.
(3) No credit union may enter into a written or oral contract with any person to provide goods, products, or services to or for the benefit of such credit union if the performance of such contract would adversely affect the safety or soundness of the institution.
(4) No credit union may contract for, or purchase from, any of its directors, officers, or employees or from any firm of which any of its directors, officers, or employees is an employee or has an ownership interest, any service or property unless such contract or purchase is made in the regular course of business upon terms not less favorable to the credit union than those offered to others.