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 Senate, March 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: Financial Institutions & Insurance: 1/21/15 [DP, w/oRec].

Passed Senate: 3/09/15, 49-0.


Majority Report: Do pass.

Signed by Senators Benton, Chair; Angel, Vice Chair; Mullet, Ranking Minority Member; Hobbs, Pedersen and Roach.

Minority Report: That it be referred without recommendation.

Signed by Senator Fain.

Staff: Susan Jones (786-7404)

Background: 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 Governance and Practices.

Enforcement. The Department may use various enforcement 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. Within ten days after the receiver takes possession of a credit union's assets, the credit union may serve notice upon the receiver to appear in court to show cause why the credit union should not be restored to the possession of its assets. The court must dismiss the complaint if it finds that the receiver was appointed for cause. If the court finds that no cause existed, the court must require that the receiver restore the credit union to possession of its assets.

Summary of Bill: Credit Union Governance and Practices.


Various other technical changes are made.

Appropriation: None.

Fiscal Note: Available.

Committee/Commission/Task Force Created: No.

Effective Date: Ninety days after adjournment of session in which bill is passed.

Staff Summary of Public Testimony: PRO: This bill modernizes the credit union charter to offer choice to credit unions of federal or state charter by creating a level playing field of powers and authority between the charters; updates the enforcement tools; provides parity with the state banking act; and clarifies certain requirements. The time period for barring certain creditors of a merging credit union is 30 days after merger notice is provided in the newspaper for three weeks, which is in parity with the banking act. The Department worked with stakeholders. Some of the credit union's legislative priorities are included in the bill. A progressive credit unions charter is not only those powers granted to the credit union but also those granted to our regulator.

Persons Testifying: Linda Jekel, Dept. of Financial Institutions; Mark Minickiello, NW Credit Union Assn.