Source: http://register.dls.virginia.gov/details.aspx?id=4274
Timestamp: 2019-04-19 12:42:13+00:00

Document:
REGISTRAR'S NOTICE: The State Corporation Commission is claiming an exemption from the Administrative Process Act in accordance with § 2.2-4002 A 2 of the Code of Virginia, which exempts courts, any agency of the Supreme Court, and any agency that by the Constitution is expressly granted any of the powers of a court of record.
Title of Regulation: 10VAC5-40. Credit Unions (adding 10VAC5-40-80, 10VAC5-40-90).
Statutory Authority: §§ 6.2-1303 and 12.1-13 of the Code of Virginia.
Agency Contact: Werner Paul, Deputy Commissioner, Bureau of Financial Institutions, State Corporation Commission, P.O. Box 640, Richmond, VA 23218, telephone (804) 371-9698, FAX (804) 371-9416, or email werner.paul@scc.virginia.gov.
The State Corporation Commission is adopting regulations to give state-chartered credit unions the authority to (i) purchase loan participation interests to the same extent, and subject to the same terms and conditions, as is authorized for federal credit unions under 12 CFR 701.22 and (ii) offer employee benefit plans and defined benefit plans on terms and conditions comparable to federal credit unions under 12 CFR 701.19. The regulations also provide state-chartered credit unions the authority to purchase an investment to fund an obligation under an employee benefit plan or defined benefit plan provided that the investment is directly related to the credit union's obligation or potential obligation and the credit union holds the investment only for as long as it has an actual or potential obligation under such plan.
On September 27, 2013, the State Corporation Commission ("Commission") entered an Order to Take Notice ("September 27 Order") of a proposal by the Bureau of Financial Institutions to amend Chapter 40 of Title 10 of the Virginia Administrative Code, which governs state-chartered credit unions. The proposed regulations would give state-chartered credit unions the authority to (i) purchase loan participation interests on terms and conditions comparable to federal credit unions under 12 C.F.R. § 701.22; and (ii) offer employee benefit plans as well as defined benefit plans and purchase investments to fund such plans on terms and conditions comparable to federal credit unions under 12 C.F.R. § 701.19. The September 27 Order and proposed regulations were published in the Virginia Register of Regulations on October 21, 2013, posted on the Commission's website, and sent to all state-chartered credit unions and other interested parties. Credit unions and other interested parties were afforded the opportunity to file written comments or request a hearing on or before November 8, 2013. The Commission received comment letters from the Virginia Credit Union League and Northern Star Credit Union, Incorporated. Both comment letters supported the proposed regulations. The Commission did not receive any requests for a hearing.
NOW THE COMMISSION, having considered the proposed regulations, the comments filed, the record herein, and applicable law, concludes that the proposed regulations should be adopted with an effective date of January 1, 2014.
(1) The proposed regulations, as attached hereto, are adopted effective January 1, 2014.
(2) This Order and the attached regulations shall be posted on the Commission's website: http://www.scc.virginia.gov/case.
(3) The Commission's Division of Information Resources shall provide a copy of this Order, including a copy of the attached regulations, to the Virginia Registrar of Regulations for publication in the Virginia Register of Regulations.
(4) This case is dismissed from the Commission's docket of active cases.
AN ATTESTED COPY hereof, together with a copy of the attached regulations, shall be sent by the Clerk of the Commission to the Commission's Office of General Counsel and the Commissioner of Financial Institutions, who shall forthwith send a copy of this Order, together with a copy of the attached regulations, to all state-chartered credit unions and such other interested parties as he may designate.
Notwithstanding any provision of Chapter 13 (§ 6.2-1300 et seq.) of Title 6.2 of the Code of Virginia relating to loan participations or cooperative loans, a state-chartered credit union may purchase a participation interest in a loan to the same extent, and subject to the same terms and conditions, as is authorized for federal credit unions under 12 CFR 701.22.
10VAC5-40-90. Benefits for employees of state-chartered credit unions.
A. A state-chartered credit union may provide employee benefits, including retirement benefits, to its employees and officers. The kind and amount of these benefits shall be reasonable given the credit union's size, financial condition, and the duties of the employees.
B. When a state-chartered credit union is the benefit plan trustee or custodian, the plan shall be authorized and maintained to the same extent, and subject to the same terms and conditions, as is authorized for federal credit unions under 12 CFR Part 724. When the benefit plan trustee or custodian is a party other than a state-chartered credit union, the benefit plan shall be maintained in accordance with applicable laws, including any applicable regulations adopted by the U.S. Department of Labor, the U.S. Department of the Treasury, or any other federal or state authority exercising jurisdiction over the plan.
C. Notwithstanding the investment limitations set forth in § 6.2-1376 of the Code of Virginia, a state-chartered credit union investing to fund an obligation under an employee benefit plan, as defined in 29 USC § 1002(3), may purchase an investment if (i) the investment is directly related to the credit union's obligation or potential obligation under the employee benefit plan and (ii) the credit union holds the investment only for as long as it has an actual or potential obligation under the employee benefit plan.
D. A state-chartered credit union may invest to fund a defined benefit plan, as defined in 29 USC § 1002(35), provided that the investment complies with subsection C of this section. If a credit union invests to fund a defined benefit plan that is not subject to the fiduciary responsibility provisions of Part 4 of the Employee Retirement Income Security Act of 1974 (ERISA), 29 USC § 1001 et seq., it shall diversify its investment portfolio to minimize the risk of large losses unless it is clearly prudent not to do so under the circumstances.
E. A state-chartered credit union shall not occupy the position of a fiduciary, as defined in ERISA and the regulations adopted by the U.S. Department of Labor.
VA.R. Doc. No. R14-3872; Filed December 17, 2013, 12:13 p.m.

References: § 2
 § 701
 § 701
 § 6
 § 1002
 § 1002
 § 1001