SB 5300

This analysis was prepared by non-partisan legislative staff for the use of legislative members in their deliberations. This analysis is not a part of the legislation nor does it constitute a statement of legislative intent.

As Passed House:

April 9, 2015

Title: An act relating to updating the department of financial institutions' regulatory enforcement powers regarding credit unions and organizations providing services to credit unions.

Brief Description: Updating the department of financial institutions' regulatory enforcement powers regarding credit unions and organizations providing services to credit unions.

Sponsors: Senators Benton, Mullet, Fain, Darneille, Hobbs and Angel; by request of Department of Financial Institutions.

Brief History:

Committee Activity:

Business & Financial Services: 3/17/15, 3/18/15 [DP].

Floor Activity:

Passed House: 4/9/15, 77-19.

Brief Summary of Bill

  • Amends provisions regarding the corporate governance of credit unions.

  • Clarifies and broadens the Department of Financial Institutions' enforcement authority with respect to credit unions.

  • Amends what practices credit unions may engage in.


Majority Report: Do pass. Signed by 9 members: Representatives Kirby, Chair; Ryu, Vice Chair; Vick, Ranking Minority Member; Blake, Hurst, Kochmar, McCabe, Santos and Stanford.

Minority Report: Do not pass. Signed by 1 member: Representative G. Hunt.

Staff: David Rubenstein (786-7153).


Credit unions doing business in Washington may be chartered by the state or federal government. The National Credit Union Administration (NCUA) regulates federally chartered credit unions. The Department of Financial Institutions (Department) regulates state chartered credit unions.

Credit Union Corporate Governance.

State credit unions are governed by a board of directors (board). A supervisory committee monitors both the financial condition of the credit union and the decisions of the board. The credit union's bylaws must prescribe the manner in which the business of the credit union will be conducted, including the frequency of regular meetings and the manner in which members may call a special membership meeting. State law also provides the following with respect to credit union corporate governance:Ÿ

Credit Union Practices.

Various provisions of law govern how a credit union may operate, including:Ÿ


The Department enforces laws governing credit unions through various tools and actions, including: removing or suspending officers, directors, or supervisory committee members; issuing temporary cease and desist orders; assessing fines; inspecting records and business practices; and liquidating a credit union or taking it into receivership.

Summary of Bill:

Credit Union Governance.

Credit union corporate governance provisions are modified as follows:Ÿ

Credit Union Practices.

Regulations regarding credit union practices are modified as follows:Ÿ


The Department's regulatory and enforcement powers are modified as follows:

Appropriation: None.

Fiscal Note: Available.

Effective Date: The bill takes effect 90 days after adjournment of the session in which the bill is passed.

Staff Summary of Public Testimony:

(In support) Credit unions have a choice of charters, state or federal, and it is important to continue to update the state credit union charter to maintain competitiveness.  A healthy credit union charter depends on both the powers granted to credit unions but also to regulators.  The bill was crafted in collaboration with credit unions and updates the federal parity date, which is 14 years old, updates the low-income designation to more precisely define which credit unions have access to other sources of capital, and facilitates mergers between failing and healthy credit unions to preserve deposits.  The provision allowing the Department to restrict withdrawals allows the Department to act quickly to find a healthy credit union to take over the deposits of a failing credit union.

(Opposed) None.

Persons Testifying: Linda Jekel, Department of Financial Institutions; and Mark Minickiello, Northwest Credit Union Association.

Persons Signed In To Testify But Not Testifying: None.