RCW 31.12.005 Definitions, 31.12.235 Board of directors, 31.12.335 Supervisory committee duties, 31.12.365 Compensation of directors and committee members, 31.12.428 Loans to one borrower limits, 31.12.438 Investment in real property, 31.12.471 Out-of-state credit unions, 31.12.565 Exam reports, and 31.12.567 Regular reports.

Rules Review. The agency also intends to review its credit union rules through this rule making, in accordance with Governor Locke's Executive Order 97-02 (EO 97-02) and the agency's regulatory improvement plan. The agency's credit union rules fall into seven chapters:

Chapter 208-418 WAC, Fees; chapter 208-436 WAC, Investment practices; chapter 208-440 WAC, Commercial business activities; chapter 208-444 WAC, Miscellaneous; chapter 208-464 WAC, Member business loans; chapter 208-472 WAC, Field of membership expansion; and chapter 208-480 WAC, Real estate appraisals.

The agency will review all of its credit union rules in this rule making, except for its rules on field of membership expansion, chapter 208-472 WAC. The agency intends to review chapter 208-472 WAC in a separate rule making, at a later time.

EO 97-02 requires agencies to review their rules using the following criteria:

1. Need. Is the rule necessary to comply with the statutes that authorize it? Is the rule obsolete, duplicative, or ambiguous to a degree that warrants repeal or revision? Have laws or other circumstances changed so that the rule should be amended or repealed? Is the rule necessary to protect or safeguard the health, welfare, or safety of Washington's citizens?

2. Effectiveness and Efficiency. Is the rule providing the results that it was originally designed to achieve in a reasonable manner? Are there regulatory alternatives or new technologies that could more effectively or efficiently achieve the same objectives?

3. Clarity. Is the rule written and organized in a clear and concise manner so that it can be readily understood by those to whom it applies?

4. Intent and Statutory Authority. Is the rule consistent with the legislative intent of the statutes that authorize it? Is the rule based upon sufficient statutory authority? Is there a need to develop a more specific legislative authorization in order to protect the health, safety, and welfare of Washington's citizens?

5. Coordination. Could additional consultation and coordination with other governmental jurisdictions and state agencies with similar regulatory authority eliminate or reduce duplication and inconsistency? Agencies should consult with and coordinate with other jurisdictions that have similar regulatory requirements when it is likely that coordination can reduce duplication and inconsistency.

6. Cost. Have qualitative and quantitative benefits of the rule been considered in relation to its cost?

7. Fairness. Does the rule result in equitable treatment of those required to comply with it? Should it be modified to eliminate or minimize any disproportionate impacts on the regulated community? Should it be strengthened to provide additional protection?

The agency is interested in your comments on its credit union rules in light of these criteria.

Statutes Authorizing the Agency to Adopt Rules on this Subject: RCW 31.12.516.

Reasons Why Rules on this Subject may be Needed and What They Might Accomplish: (1) To implement chapter 397, Laws of 1997; and (2) to make any necessary rule revisions based on a review of the agency's credit union rules in compliance with Executive Order 97-02.

Other Federal and State Agencies that Regulate this Subject and the Process Coordinating the Rule with These Agencies: The rules of the National Credit Union Administration (NCUA) may, at least in part, overlap the agency's credit union rules. However, the NCUA and agency have different roles: The NCUA is the federal insuring authority, while the agency is the state chartering authority. In our experience, the NCUA is not willing to defer to state agencies in the event both parties have rules on the same subject matter, except in very limited circumstances with certain identified rules. In the case of the agency's rules, the only rule so identified by the NCUA is the agency's rule on member business loans (MBL). Consequently, the agency does not intend to attempt to coordinate with the NCUA on the adoption of its rules, other than its MBL rules. Nonetheless, the agency will attempt in this rule making to eliminate any inappropriate or unnecessary overlaps with NCUA rules, while preserving its rights as the state credit union chartering authority.

Process for Developing New Rule: Consultation with interested parties.

Interested parties can participate in the decision to adopt the new rule and formulation of the proposed rule before publication by contacting Parker Cann, Assistant Director, Division of Credit Unions, P.O. Box 1200, Olympia, WA 98502-1200, phone (360) 902-8778, FAX (360) 902-8800, e-mail pcann@dfi.wa.gov.

Interested parties may provide comments to Parker Cann, including comments on existing credit union rules based on the criteria in EO 97-02, as well as comments on any rules or rule revisions that the agency may ultimately propose in connection with this rule making.

June 16, 1998

John L. Bley

Director