S-0935.1                   _______________________________________________

                                                     SENATE BILL 5457

                              _______________________________________________

State of Washington                              53rd Legislature                             1993 Regular Session

By Senators Prentice, Moore, Pelz and Amondson

Read first time 01/29/93.  Referred to Committee on Labor & Commerce.

Granting confidentiality exceptions of credit union examination reports.

          AN ACT Relating to confidentiality exceptions of credit union examination reports; and amending RCW 31.12.565.

BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF WASHINGTON:

        Sec. 1.  RCW 31.12.565 and 1984 c 31 s 58 are each amended to read as follows:

          (1) Examination reports and information obtained by the supervisor's staff in conducting examinations of credit unions and credit union service organizations are confidential and privileged information and not subject to public disclosure under chapter 42.17 RCW.

          (2) Notwithstanding subsection (1) of this section, the supervisor may furnish examination reports prepared by the supervisor's office to:

          (a) Federal agencies empowered to examine state-chartered credit unions;

          (b) Officials empowered to investigate criminal charges.  The supervisor may furnish only that part of the report which is necessary and pertinent to the investigation, and only after notifying the affected credit union and members of the credit union who are named in that part of the examination report that the report is being furnished to the officials, unless the officials requesting the report obtain a waiver of the notice requirement for good cause from a court of competent jurisdiction;

          (c) The examined credit union and its designated agent or agents, solely for ((its)) their confidential use;

          (d) The attorney general in his role as legal advisor to the supervisor;

          (e) Prospective merger partners or liquidating agents of a distressed credit union;

          (f) Credit union administrators in other states regarding an out-of-state chartered credit union doing business in this state under this chapter, or regarding a credit union chartered under this chapter doing business in another state;

          (g) Accounting firms under contract with the credit union;

          (h) Companies that have bonded the credit union to the extent that information is relevant to the renewal of the bond coverage or to a claim under the bond coverage; ((or))

          (i) Companies, associations, or agencies insuring or guaranteeing the shares of or deposits in the credit union; or

(j) With the credit union's approval, the Washington credit union league or successor organization, solely for its confidential use in conjunction with the credit union examined.

          (3) Examination reports furnished under subsection (2) of this section remain the property of the supervisor's office and no person, agency, or authority to whom reports are furnished or any officer, director, or employee thereof may disclose or make public the reports or information contained in the reports except in published statistical information that does not disclose the affairs of an individual or corporation, except that nothing prevents the use in a criminal prosecution of reports furnished under subsection (2)(b) of this section.

          (4) In a civil action in which the reports are sought to be discovered or used as evidence, a party upon notice to the supervisor, may petition the court for an in-camera review of the reports.  The court may permit discovery and introduction of only those portions of the report which are relevant and otherwise unobtainable by the requesting party.  This subsection does not apply to an action brought or defended by the supervisor.

          (5) This section does not apply to investigation reports prepared by the supervisor and the supervisor's staff concerning an application for a new credit union or a notice of intent to establish a branch of a credit union, except that the supervisor may adopt rules making confidential portions of the reports if in the supervisor's opinion the public disclosure of that portion of the report would impair the ability to obtain information the supervisor considers necessary to fully evaluate the application.

          (6) Any person who knowingly violates a provision of this section is guilty of a gross misdemeanor.

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