reglab/statecodes huggingface dataset:
Washington Administrative Code › Title 208 - Financial Institutions, Department of (See also Titles 50, 419, and 460) › Chapter 208-436 - Rules governing supervisory approval of credit union investment practices › Section 208-436-080 - Modification or revocation of investment practices previously authorized

Current through Register Vol. 24-14, July 15, 2024
The director may find that an investment or deposit practice
						previously authorized is no longer a safe and prudent practice for credit
						unions generally to engage in, or has become inconsistent with applicable state
						or federal law, or has ceased to be a safe and prudent practice in one or more
						particular credit unions in light of their financial condition or management.
						Upon such a finding, the director may in writing inform the board of directors
						of any or all of the credit unions engaging in such a practice that the
						authority to engage in the practice has been revoked or modified. When the
						director so notifies any credit union, its directors and officers shall
						forthwith take steps to liquidate the investments in question (if authority to
						engage in the practice has been revoked) or to make such modifications as the
						director requires. The director may for cause shown grant a credit union some
						definite period of time in which to arrange its affairs to comply with the
						director's orders. Credit unions which continue to engage in investment
						practices where their authority to do so has been revoked or modified will be
						treated as if the authority to engage in the practice had never been granted,
						and their actions may be deemed an unsound credit union practice and a wilful
						violation of an order of the director and may be grounds for appropriate
						supervisory action against the credit union, its directors or
						officers.
Statutory Authority: RCW 42.320.040 [43.320.040] and
							31.12.535. 96-17-071, §
										208-436-080, filed 8/20/96,
							effective 9/20/96. 96-06-011, recodified as §
										208-436-080, filed 2/23/96,
							effective 6/1/96. Statutory Authority: RCW 31.12.260(g). 79-07-002 (Order
							79-1), § 419-36-080, filed
							6/7/79.
Washington Administrative Code › Title 208 - Financial Institutions, Department of (See also Titles 50, 419, and 460) › Chapter 208-440 - Credit union participation in commercial arrangements with third parties › Section 208-440-010 - Commercial arrangements with third parties

Current through Register Vol. 24-14, July 15, 2024
(1) Credit unions may enter into arrangements
					with third parties in order for the third party or credit union to offer the
					third party's products and services to the credit union's members. These
					arrangements are referred to in this rule as commercial arrangements.
In connection with commercial arrangements, credit unions
						may:
(a) Allow third parties to offer
					products and services to members through the credit union;
(b) Endorse, directly or indirectly, products
					and services of a third party;
(c)
					Enter into group purchasing arrangements with third parties;
(d) Receive payment from third parties for
					participation in commercial arrangements; and
(e) Rent, lease or sublease portions of their
					land and buildings to third parties to offer products and services to members.
This list is not intended to be exhaustive.
As used in this rule, the term "third party" includes, but is
						not limited to, credit union service organizations.
Washington Administrative Code › Title 208 - Financial Institutions, Department of (See also Titles 50, 419, and 460) › Chapter 208-444 - Miscellaneous credit union rules › Section 208-444-010 - State chartered credit unions - Acceptance of audit instead of examination

Current through Register Vol. 24-14, July 15, 2024
(1)RCW
					   31.12.545 authorizes the acceptance, in the
					director's discretion, of independent audit reports in lieu of the examination
					required thereunder. In order to be considered for acceptance in lieu of an
					examination, an audit must meet the following conditions:
(a) The audit was performed by accountants
					who have demonstrated to the director extensive knowledge of the examination
					procedures and techniques utilized by the division of credit unions;
(b) The scope of the audit follow, but is not
					limited to, the scope of examinations conducted by the division, including a
					compliance review;
(c) The audit
					includes a verification of loan and share accounts;
(d) The audit includes a cash reconciliation,
					including an adequately documented physical cash count, and also includes an
					affirmative verification of investments and deposits made by the audited credit
					union;
(e) Verification of the
					status of funds borrowed by the audited credit union, including promissory
					notes and certificates;
(f) The
					audit sets forth such comments as are appropriate in a positive format
					specifying corrective action recommended and schedule for completing such
					corrective action;
(g) The audit
					was performed not less than nine months after and not more than fifteen months
					after the last examination by the division or an audit which was accepted in
					lieu thereof.
(h) All working
					papers as well as the accountant's report, internal control report, and any
					other documents associated with the audit are made available to the
					director.
Washington Administrative Code › Title 208 - Financial Institutions, Department of (See also Titles 50, 419, and 460) › Chapter 208-444 - Miscellaneous credit union rules › Section 208-444-020 - Prohibited fees

Current through Register Vol. 24-14, July 15, 2024
(1) Except as
					otherwise provided herein, no official or employee of a credit union, or
					immediate family member of an official or employee of a credit union, may
					receive, directly or indirectly, any commission, fee, or other compensation in
					connection with any loan made by the credit union.
(2) This section does not prohibit:
(a) Payment, by a credit union, of salary to
					employees;
(b) Payment, by a credit
					union, of an incentive or bonus to an employee based on the credit union's
					overall financial performance;
(c)
					Payment, by a credit union, of an incentive or bonus to an employee, other than
					a senior management employee, in connection with a loan or loans made by the
					credit union, provided that the board of directors of the credit union
					establishes written policies and internal controls in connection with such
					incentive or bonus and monitors compliance with such policies and controls at
					least annually.
(d) Receipt of
					compensation from a person outside a credit union by a volunteer official or
					nonsenior management employee of the credit union, or an immediate family
					member of a volunteer official or employee of the credit union, for a service
					or activity performed outside the credit union, provided that no referral has
					been made by the credit union or the official, employee, or family
					member.
Washington Administrative Code › Title 208 - Financial Institutions, Department of (See also Titles 50, 419, and 460) › Chapter 208-444 - Miscellaneous credit union rules › Section 208-444-030 - Nonpreferential loans

Current through Register Vol. 24-14, July 15, 2024
(1) The rates,
					terms and conditions on any loan either made to, or endorsed or guaranteed by
(a) An official
(b) An immediate family member of an
					official, or
(c) Any individual
					having a common ownership, investment or other pecuniary interest in a business
					enterprise with an official or with an immediate family member of an official
					shall not be more favorable than the rates, terms and conditions for comparable
					loans to other credit union members.
Washington Administrative Code › Title 208 - Financial Institutions, Department of (See also Titles 50, 419, and 460) › Chapter 208-444 - Miscellaneous credit union rules › Section 208-444-040 - Definitions

Current through Register Vol. 24-14, July 15, 2024
Unless the context clearly requires otherwise, as used in this
						chapter:
(1) "Compensation" includes
					nonmonetary items, except those of nominal value.
(2) "Immediate family member" means a spouse
					or other family member living in the same household.
(3) "Loan" includes line of credit.
(4) "Person" means a natural person or an
					organization.
(5) "Senior
					management employee" means the credit union's chief executive officer
					(typically, this individual holds the title of president or treasurer/manager),
					any assistant chief executive officers (e.g., assistant president, vice
					president, or assistant treasurer/manager), and the chief financial officer
					(comptroller).
(6) "Volunteer
					official" means an official of a credit union who does not receive compensation
					from the credit union solely for his or her service as an official.
Statutory Authority: RCW 31.12.535 and
							43.320.040. 97-23-071, §
										208-444-040, filed 11/19/97,
							effective 3/19/98 by letter filed as WSR
							98-10-072.
Washington Administrative Code › Title 208 - Financial Institutions, Department of (See also Titles 50, 419, and 460) › Chapter 208-444 - Miscellaneous credit union rules › Section 208-444-050 - Effective date

Current through Register Vol. 24-14, July 15, 2024
WAC
						208-444-020,
						208-444-030, and
						208-444-040 will take effect on
						the date that these rules are determined by the Board of the National Credit
						Union Administration (NCUA) to be substantially equivalent to NCUA
						rules.
Statutory Authority: RCW 31.12.535 and
							43.320.040. 97-23-071, §
										208-444-050, filed 11/19/97,
							effective 3/19/98 by letter filed as WSR
							98-10-072.
Washington Administrative Code › Title 208 - Financial Institutions, Department of (See also Titles 50, 419, and 460) › Chapter 208-460 - Member business loans › Section 208-460-010 - What is a member business loan?

Current through Register Vol. 24-14, July 15, 2024
(1)
Definition of MBL.
"Member
					business loan" or "MBL" includes any loan, line of credit, letter of credit, or
					any unfunded commitment to make a loan, where the borrower intends to use the
					proceeds for any of the following purposes:
(a) Commercial;
(b) Corporate;
(c) Investment property;
(d) Business venture; or
(e) Agricultural.
Washington Administrative Code › Title 208 - Financial Institutions, Department of (See also Titles 50, 419, and 460) › Chapter 208-460 - Member business loans › Section 208-460-020 - What member business loans are prohibited?

Current through Register Vol. 24-14, July 15, 2024
(1)
Who is ineligible to receive a
					member business loan?
You may not grant a member business loan to the
					following:
(a) Your chief executive officer
					(typically this individual holds the title of president or
					treasurer/manager);
(b) Any
					assistant chief executive officers (e.g., assistant president, vice-president,
					or assistant treasurer/manager);
(c) Your chief financial officer
					(comptroller); or
(d) Any
					associated member or immediate family member of anyone listed in (a) through
					(c) of this subsection.
Washington Administrative Code › Title 208 - Financial Institutions, Department of (See also Titles 50, 419, and 460) › Chapter 208-460 - Member business loans › Section 208-460-030 - What are the requirements for MBL development and construction lending?

Current through Register Vol. 24-14, July 15, 2024
Unless the director grants a waiver, a credit union that makes
						MBL development or construction loans is subject to the following
						requirements:
(1) The aggregate of all
					such loans may not exceed fifteen percent of net worth. To determine the
					aggregate, you may exclude any portion of a loan that is:
(a) Secured by shares or deposits in the
					credit union making the extension of credit or in other credit unions, and by
					deposits in other financial institutions; or
(b) Insured or guaranteed, or subject to an
					advance commitment to purchase, by any federal or state agency (or any
					political subdivision of a state);
Washington Administrative Code › Title 208 - Financial Institutions, Department of (See also Titles 50, 419, and 460) › Chapter 208-460 - Member business loans › Section 208-460-040 - How do you implement a member business loan program?

Current through Register Vol. 24-14, July 15, 2024
The board of directors must adopt specific member business loan
						policies and review them at least annually. The credit union must utilize the
						services of an individual with at least two years direct experience with the
						type of lending the credit union will be engaging in, except as required by WAC
						208-460-030(4).
Credit unions do not have to hire staff to meet the
						requirements of this section; however, credit unions must ensure that the
						expertise is available. A credit union can meet the experience requirement
						through various approaches. For example, a credit union can use the services of
						a credit union service organization, an employee of another credit union, an
						independent contractor, or other third parties. However, the actual decision to
						grant a loan must reside with the credit union.
Statutory Authority:
							RCW
							31.12.426(1),
							31.12.516(2), 43.320.040. 01-10-084, §
										208-460-040, filed 5/1/01,
							effective 6/1/01.
Washington Administrative Code › Title 208 - Financial Institutions, Department of (See also Titles 50, 419, and 460) › Chapter 208-460 - Member business loans › Section 208-460-050 - What must your member business loan policy address?

Current through Register Vol. 24-14, July 15, 2024
At a minimum, your member business loan policy must address the
						following:
(1) The types of MBL you
					will make;
(2) Your trade
					area;
(3) The maximum amount of
					your assets, in relation to net worth, that you will invest in MBL;
(4) The maximum amount of your assets, in
					relation to net worth, that you will invest in a given type of MBL;
(5) The maximum amount of your assets, in
					relation to net worth, that you will loan to a member or associated members,
					subject to WAC
					208-460-070;
(6) The qualifications and experience of
					personnel (minimum of two years) involved in making and administering the
					loans;
(7) A requirement for
					analysis and documentation of the ability of the borrower to repay the
					loan;
(8) Receipt and periodic
					updating of financial statements and other documentation, including tax
					returns;
(9) Documentation
					sufficient to support each request to extend credit, or increase an existing
					loan or line of credit, except where the board of directors finds that the
					required documentation is not generally available for a particular type of loan
					and states the reasons for those findings in the credit union's written policy.
					At a minimum, the documentation must include the following:
(a) Balance sheet;
(b) Cash flow analysis;
(c) Income statement;
(d) Tax data;
(e) Analysis of leveraging; and
(f) Comparison with industry average or
					similar analysis;
Washington Administrative Code › Title 208 - Financial Institutions, Department of (See also Titles 50, 419, and 460) › Chapter 208-460 - Member business loans › Section 208-460-060 - What are the collateral and security requirements?

Current through Register Vol. 24-14, July 15, 2024
Unless the director grants a waiver:
(1) All member business loans must be secured
					by collateral in accordance with this section, except the following:
(a) A credit card line of credit granted to
					nonnatural persons that is limited to routine purposes normally made available
					under such lines of credit; and
(b)
					A loan made by a credit union where the loan and the credit union meet each of
					the following criteria:
(i) The amount of the
					loan does not exceed one hundred thousand dollars;
(ii) The aggregate of unsecured MBL under (b)
					of this subsection does not exceed ten percent of the credit union's net
					worth;
(iii) The credit union has a
					net worth of at least seven percent; and
(iv) The credit union submits reports to the
					division of credit unions with its NCUA 5300 reports, providing figures and
					other detail as may be requested by the director to demonstrate compliance with
					(b) of this subsection;
Washington Administrative Code › Title 208 - Financial Institutions, Department of (See also Titles 50, 419, and 460) › Chapter 208-460 - Member business loans › Section 208-460-070 - How much may a member or associated members borrow?

Current through Register Vol. 24-14, July 15, 2024
Unless the director grants a waiver for a higher amount, the
						aggregate amount of member business loans to a member or associated members may
						not exceed the greater of:
(1) Fifteen
					percent of the credit union's net worth; or
(2) One hundred thousand dollars.
Statutory Authority:
							RCW
							31.12.426(1),
							31.12.516(2), 43.320.040. 01-10-084, §
										208-460-070, filed 5/1/01,
							effective 6/1/01.
Washington Administrative Code › Title 208 - Financial Institutions, Department of (See also Titles 50, 419, and 460) › Chapter 208-460 - Member business loans › Section 208-460-080 - How do you calculate the aggregate fifteen percent limit?

Current through Register Vol. 24-14, July 15, 2024
(1) Step 1. Calculate the numerator by adding
					together the amount of the member business loans to the member and associated
					members (if any). From this amount, subtract any portion:
(a) Secured by shares or deposits in the
					credit union making the extension of credit or in other credit unions, or by
					deposits in other financial institutions; or
(b) Insured or guaranteed, or subject to an
					advance commitment to purchase, by any federal or state agency (or any
					political subdivision of a state).
Washington Administrative Code › Title 208 - Financial Institutions, Department of (See also Titles 50, 419, and 460) › Chapter 208-460 - Member business loans › Section 208-460-090 - What waivers are available?

Current through Register Vol. 24-14, July 15, 2024
You may seek a waiver for a type of member business loan in the
						following areas:
(1) Development and
					construction loan requirements under WAC
					208-460-030;
(2) Loan-to-value ratios under WAC
					208-460-060;
(3) Maximum loan amount to a member or
					associated members under WAC
					208-460-070; and
(4) Appraisal requirements under Section
					722.3 of NCUA rules.
Statutory Authority:
							RCW
							31.12.426(1),
							31.12.516(2), 43.320.040. 01-10-084, §
										208-460-090, filed 5/1/01,
							effective 6/1/01.
Washington Administrative Code › Title 208 - Financial Institutions, Department of (See also Titles 50, 419, and 460) › Chapter 208-460 - Member business loans › Section 208-460-100 - How do you obtain a waiver?

Current through Register Vol. 24-14, July 15, 2024
(1) To
					obtain a waiver under WAC
					208-460-090, a credit union must
					submit its request to the director. The waiver request must contain the
					following:
(a) A copy of your member business
					loan policy;
(b) The higher limit
					sought (if applicable);
(c) An
					explanation of the need to raise the limit (if applicable);
(d) Documentation supporting your ability to
					manage this activity; and
(e) An
					analysis of the credit union's prior experience making member business loans,
					including, as a minimum:
(i) The history of
					loan losses and loan delinquency;
(ii) Volume and cyclical or seasonal
					patterns;
(iii)
					Diversification;
(iv)
					Concentrations of credit to a member and associated members in excess of
					fifteen percent of net worth;
(v)
					Underwriting standards and practices;
(vi) Types of loans grouped by purpose and
					collateral; and
(vii) The
					qualifications of personnel responsible for underwriting and administering
					member business loans.
Washington Administrative Code › Title 208 - Financial Institutions, Department of (See also Titles 50, 419, and 460) › Chapter 208-460 - Member business loans › Section 208-460-110 - How do I classify member business loans so as to reserve for potential losses?

Current through Register Vol. 24-14, July 15, 2024
Nondelinquent member business loans may be classified based on
						factors such as the adequacy of analysis and supporting documentation. You must
						classify potential loss loans as either substandard, doubtful, or loss. The
						criteria for determining the classification of loans are:
(1)
Substandard.
A substandard
					loan is inadequately protected by the current sound worth and paying capacity
					of the obligor or of the collateral pledged, if any. The loan must have a
					well-defined weakness or weaknesses that jeopardize the liquidation of the
					debt. It is characterized by the distinct possibility that the credit union
					will sustain some loss if the deficiency is not corrected. Loss potential,
					while existing in the aggregate amount of substandard loans, does not have to
					exist in individual loans classified substandard;
(2)
Doubtful.
A loan classified
					doubtful has all the weaknesses inherent in one classified substandard, with
					the added characteristic that the weaknesses make collection or liquidation in
					full, on the basis of currently existing facts, conditions, and values, highly
					questionable and improbable. The possibility of loss is extremely high, but
					because of certain important and reasonably specific pending factors which may
					work to the advantage and strengthening of the loan, its classification as an
					estimated loss is deferred until its more exact status may be determined.
					Pending factors include: Proposed merger, acquisition, or liquidation actions;
					capital injection; perfecting liens on collateral; and refinancing plans;
					and
(3)
Loss.
A loan
					classified loss is considered uncollectible and of such little value that its
					continuance as a loan is not warranted. This classification does not
					necessarily mean that the loan has absolutely no recovery or salvage value, but
					rather, it is not practical or desirable to defer writing off this basically
					worthless asset even though partial recovery may occur in the future.
Statutory Authority:
							RCW
							31.12.426(1),
							31.12.516(2), 43.320.040. 01-10-084, §
										208-460-110, filed 5/1/01,
							effective 6/1/01.
Washington Administrative Code › Title 208 - Financial Institutions, Department of (See also Titles 50, 419, and 460) › Chapter 208-460 - Member business loans › Section 208-460-120 - How much must I reserve for potential losses?

Current through Register Vol. 24-14, July 15, 2024
The following schedule sets the minimum amount you must reserve
						for classified member business loans:
Classification
Amount Required
Substandard
10% of outstanding balance unless other factors (for
											example, history of such loans at the credit union) indicate a greater or
											lesser amount is appropriate.
Doubtful
50% of the outstanding balance.
Loss
100% of the outstanding balance.
Statutory Authority:
							RCW
							31.12.426(1),
							31.12.516(2), 43.320.040. 01-10-084, §
										208-460-120, filed 5/1/01,
							effective 6/1/01.
Washington Administrative Code › Title 208 - Financial Institutions, Department of (See also Titles 50, 419, and 460) › Chapter 208-460 - Member business loans › Section 208-460-130 - What is the aggregate member business loan limit?

Current through Register Vol. 24-14, July 15, 2024
The aggregate limit on the amount of a credit union's member
						business loans is the lesser of:
(1)
					One and three quarters times the credit union's net worth; or
(2) Twelve and one quarter percent of the
					credit union's total assets.
Statutory Authority:
							RCW
							31.12.426(1),
							31.12.516(2), 43.320.040. 01-10-084, §
										208-460-130, filed 5/1/01,
							effective 6/1/01.
Washington Administrative Code › Title 208 - Financial Institutions, Department of (See also Titles 50, 419, and 460) › Chapter 208-460 - Member business loans › Section 208-460-140 - Are there any exceptions to the aggregate MBL limit?

Current through Register Vol. 24-14, July 15, 2024
(1) Credit unions that meet any one of the
					following four criteria qualify for an exception from the aggregate member
					business loan limit in WAC
					208-460-130:
(a) Credit unions that have a low-income
					designation;
(b) Credit unions that
					participate in the Community Development Financial Institutions
					program;
(c) Credit unions that are
					chartered for the purpose of making member business loans, as supported by
					documentary evidence, such as the credit union's charter, bylaws, business
					plan, field of membership, board minutes and loan portfolio; and
(d) Credit unions that have a recent history
					of primarily making member business loans, established by the fact that the
					outstanding balance of member business loans comprises:
(i) At least twenty-five percent of the
					outstanding balance of the credit union's loans; or
(ii) The largest portion of the outstanding
					balance of the credit union's loans.
Such facts must be evidenced in an NCUA call report or any
						equivalent documentation, such as financial statements, for a period within two
						years before the date of application. For example, a credit union qualifies for
						the exception under (d)(ii) of this subsection if, based on the outstanding
						balance of a credit union's loans, the credit union's loan portfolio is
						comprised of twenty-three percent member business loans, twenty-two percent
						first mortgage loans, twenty-two percent new automobile loans, twenty percent
						credit card loans, and thirteen percent total other real estate loans.
Washington Administrative Code › Title 208 - Financial Institutions, Department of (See also Titles 50, 419, and 460) › Chapter 208-460 - Member business loans › Section 208-460-150 - How do I obtain an exception?

Current through Register Vol. 24-14, July 15, 2024
(1) The exception under WAC
					208-460-140(1)(a) and
					(b)    is effective upon written notice to the
					director of such designation or participation.
(2) To obtain an exception under WAC
					208-460-140(1)(c) or
					(d), a credit union must submit its request
					to the director. An exception is not effective until it is approved by the
					director. The exception request must include documentation demonstrating that
					the credit union meets the criteria for one of the exceptions. The exception
					does not expire unless revoked for safety and soundness reasons by the
					director.
(3) The director will
					promptly notify Region VI of the NCUA of his or her decision on the
					request.
Statutory Authority:
							RCW
							31.12.426(1),
							31.12.516(2), 43.320.040. 01-10-084, §
										208-460-150, filed 5/1/01,
							effective 6/1/01.
Washington Administrative Code › Title 208 - Financial Institutions, Department of (See also Titles 50, 419, and 460) › Chapter 208-460 - Member business loans › Section 208-460-160 - What are the recordkeeping requirements?

Current through Register Vol. 24-14, July 15, 2024
You must separately identify member business loans in your
						records and in the aggregate on your financial reports.
Statutory Authority:
							RCW
							31.12.426(1),
							31.12.516(2), 43.320.040. 01-10-084, §
										208-460-160, filed 5/1/01,
							effective 6/1/01.
Washington Administrative Code › Title 208 - Financial Institutions, Department of (See also Titles 50, 419, and 460) › Chapter 208-460 - Member business loans › Section 208-460-170 - Definitions

Current through Register Vol. 24-14, July 15, 2024
For purposes of this chapter, the following definitions
						apply:
(1) The "amount" of a MBL
					includes:
(a) Any unfunded commitment to make
					the loan;
(b) The outstanding
					balance of the loan; and
(c) Any
					undisbursed proceeds of the loan.
Washington Administrative Code › Title 208 - Financial Institutions, Department of (See also Titles 50, 419, and 460) › Chapter 208-472 - Credit union field of membership › Section 208-472-010 - Authority

Current through Register Vol. 24-14, July 15, 2024
A credit union may admit to membership those persons qualified
						for membership who are within its field of membership as stated in its bylaws.
						A credit union may amend its field of membership bylaws to add one or more
						occupational groups, associational groups and communities to its field of
						membership, as approved by the director pursuant to this chapter. The FOM
						groups may be located inside or outside the state.
The director may waive any provision of this chapter as the
						director deems appropriate to facilitate credit union service to low and
						moderate income persons.
In addition to the field of membership powers or authorities
						reflected in this chapter, a credit union has the field of membership powers
						and authorities granted pursuant to
						RCW
						   31.12.404.
Statutory Authority:
							RCW
							31.12.382,
							31.12.516(2),
							(4), 43.320.040. 02-04-094, §
										208-472-010, filed 2/5/02,
							effective 3/8/02; 96-06-011, recodified as §
										208-472-010, filed 2/23/96,
							effective 6/1/96. Statutory Authority: RCW 31.12.045,[31.12].115 and
							[31.12].535. 95-09-049, § 419-72-010, filed 4/17/95, effective 5/18/95.
							Statutory Authority: RCW 31.12.045(2),
							
											31.12.115,
							31.12.516 and 31.12.535. 89-24-085
							(Order 89-3), § 419-72-010, filed 12/6/89, effective
							1/6/90.
Washington Administrative Code › Title 208 - Financial Institutions, Department of (See also Titles 50, 419, and 460) › Chapter 208-472 - Credit union field of membership › Section 208-472-015 - Definitions

Current through Register Vol. 24-14, July 15, 2024
Unless the context clearly requires otherwise, as used in this
						chapter:
(1) "Affiliate" of an
					enterprise or organization means a person that controls, is controlled by, or
					is under common control with, the enterprise or organization. "Control" means
					twenty-five percent or greater stock ownership.
(2) "Associational group" is a group with a
					common bond of association related to membership in an organization, or a
					portion of such a group. The organization must satisfy each of the following
					criteria:
(a) The organization's primary
					purpose must be other than providing eligibility for credit union
					services;
(b) The organization's
					membership must be primarily composed of natural persons; and
(c) The organization's organizational
					documents must define membership eligibility.
In regard to an associational group within a credit union's FOM
						bylaws, the credit union may admit to membership:
(i) Members of the organization;
(ii) Directors, employees, volunteers and
					retirees of the organization or its subsidiaries or affiliates;
(iii) Natural persons under contract to work
					for the organization or its subsidiaries or affiliates;
(iv) Family members (as determined by the
					credit union) of any of the above-described natural persons;
(v) The spouse of any of the above-described
					natural persons if the person qualified for membership at the time of his or
					her death;
(vi) The organization
					and its subsidiaries and affiliates;
(vii) Organizations and enterprises more than
					half of whose owners, members or employees are eligible to be members of the
					credit union; and
(viii) Other
					persons approved by the director.
Students of a school, college or university are deemed to be
						members of an organization that constitutes an associational group. In regard
						to such an associational group within a credit union's FOM bylaws, the credit
						union may admit to membership the students of the school, college or university
						as well as the family members (as determined by the credit union) of the
						students.
Washington Administrative Code › Title 208 - Financial Institutions, Department of (See also Titles 50, 419, and 460) › Chapter 208-472 - Credit union field of membership › Section 208-472-020 - FOM bylaws; addition of FOM groups

Current through Register Vol. 24-14, July 15, 2024
(1) General. Each credit union must keep its
					FOM bylaws substantially in the form of the model FOM bylaws prescribed by the
					division. Credit unions that have not converted to the model FOM bylaws prior
					to . . . . . . . . (the effective date of the 2002 revisions to this chapter)
					must do so by December 31, 2002. Each credit union must maintain accurate,
					complete and up-to-date FOM bylaws.
(2) CAMEL 1s and 2s.
A credit union rated a composite CAMEL 1 or 2 by the
						division:
(a) May add qualified
					occupational groups, qualified associational groups and qualified communities
					to its field of membership bylaws if the credit union satisfies each of the
					following:
(i) If the FOM group has more than
					500 employees, members or residents, as applicable, in Washington, the credit
					union has, before its board of directors approves the amendment, mailed or
					otherwise provided notice of the addition to each credit union and federal
					credit union headquartered in the county(ies) in Washington in which the FOM
					group is primarily located; and
(ii) The credit union's board has approved
					the amendment, which names the underlying enterprise, organization or
					community, as applicable, and indicates the date that the board approved the
					amendment.
Additions made in accordance with this subsection (2)(a) are
						deemed approved by the director; and
Washington Administrative Code › Title 208 - Financial Institutions, Department of (See also Titles 50, 419, and 460) › Chapter 208-472 - Credit union field of membership › Section 208-472-025 - Application for addition of FOM groups - Approval of director

Current through Register Vol. 24-14, July 15, 2024
(1) In order to
					request the approval of the director to add an FOM group to its bylaws under
					WAC 208-472-020(2)(b) or
					(3), a credit union must submit a written
					application in duplicate to the director. The application must include the
					following items, and any other information and materials requested by the
					director:
(a) The name of the FOM group that
					the applicant desires to add to its bylaws;
(b) A copy of the resolution of its board of
					directors approving the bylaws amendment, certified by the board chairperson or
					secretary;
(c) A detailed
					description of the FOM group, including, but not limited to, location and
					number of employees, members or residents, as applicable, with supporting
					documentation;
(d) An explanation
					how the FOM group satisfies the definition of such a group in WAC
					208-472-015;
(e) If the applicant is applying to add an
					associational group, an explanation of the qualifications for membership in the
					organization, and a copy of the organization's organizational
					documents;
(f) An explanation how
					the addition of the FOM group will affect the financial condition of the
					applicant. In addition, if the applicant is applying for a community, three
					year pro forma income statements and balance sheets and key ratios (including,
					but not limited to, return on average assets, net worth, asset growth and share
					growth);
(g) If the applicant is
					applying to add a nonqualified occupational or associational group in excess of
					6,299 employees or members, as applicable, a reasoned justification why the
					group does not have sufficient size or resources, including individual and
					sponsor support, and financial, physical and human resources, to support a
					viable credit union of its own; and
(h) If the group has more then 500 employees,
					members, or residents, as applicable, a statement that the applicant has mailed
					or otherwise provided notice of the application to each credit union and
					federal credit union headquartered in the county(ies) in Washington in which
					the FOM group is primarily located.
The director may waive any of the items in this subsection as
						the director deems appropriate, such as in the case of the addition of FOM
						groups located wholly out-of-state.
Washington Administrative Code › Title 208 - Financial Institutions, Department of (See also Titles 50, 419, and 460) › Chapter 208-472 - Credit union field of membership › Section 208-472-030 - Direct marketing restriction

Current through Register Vol. 24-14, July 15, 2024
A credit union may not conduct direct marketing targeted
						primarily at the persons in an occupational or associational group
						unless:
(1) The group was included in
					the FOM bylaws of the credit union prior to . . . . . . . . (the effective date
					of the 2002 revisions to this chapter). An occupational or associational group
					is "included" in the FOM bylaws of a credit union if the underlying enterprise
					or organization, as applicable, is named or within an industry described in the
					credit union's FOM bylaws. A group that does not satisfy the prior sentence,
					but that is within a community in a credit union's FOM bylaws, is not
					considered "included" in the FOM bylaws of the credit union; or
(2) A management official of the underlying
					enterprise or organization has provided the credit union with a written
					statement, signed by the official, that the group desires service by the credit
					union.
Statutory Authority:
							RCW
							31.12.382,
							31.12.516(2),
							(4), 43.320.040. 02-04-094, §
										208-472-030, filed 2/5/02,
							effective 3/8/02.
Washington Administrative Code › Title 208 - Financial Institutions, Department of (See also Titles 50, 419, and 460) › Chapter 208-472 - Credit union field of membership › Section 208-472-035 - Application

Current through Register Vol. 24-14, July 15, 2024
(1) This chapter
					also applies to the conversion of an out-of-state, foreign or federal credit
					union to a credit union chartered and operating under
					chapter
					31.12 RCW.
(2) This chapter does not apply to mergers
					where the continuing credit union is organized (or chartered) and operating
					under chapter 31.12
					RCW. The continuing credit union may amend its FOM bylaws to add the FOM groups
					of the merging credit union.
(3)
					This chapter does not restrict FOM groups added to a credit union's bylaws
					prior to . . . . . . . . (the effective date of the 2002 revisions to this
					chapter).
Statutory Authority:
							RCW
							31.12.382,
							31.12.516(2),
							(4), 43.320.040. 02-04-094, §
										208-472-035, filed 2/5/02,
							effective 3/8/02.
Washington Administrative Code › Title 208 - Financial Institutions, Department of (See also Titles 50, 419, and 460) › Chapter 208-476 - Credit union - Other real estate owned › Section 208-476-010 - Reason for rule

Current through Register Vol. 24-14, July 15, 2024
Why do credit unions need a rule on the handling of "other real
						estate owned" (OREO), property legally owned by the credit union as the result
						of foreclosure, or acquired as the result of default on a loan collateralized
						by real property? Although most financial institutions that do real estate
						lending have experienced an occasional foreclosure, the volume and asset value
						of foreclosed property has significantly increased recently. Due to the
						economic downturn that began in the fourth quarter of 2007, credit unions are
						now experiencing a greater number of foreclosures and acquiring portfolios of
						OREO. Because this type of economic effect is cyclic, it is useful for credit
						unions to be prepared to handle OREO property in a safe and sound manner. Some
						credit unions may find their number of OREO properties is becoming more
						difficult to manage. Some credit unions may be dealing with OREO properties for
						the first time.
The department of financial institutions (DFI), division of
						credit unions, is responsible for regulating to protect the integrity of credit
						unions as cooperative institutions, and to ensure that they remain viable and
						competitive.
						RCW
						   31.12.015. It is important to provide
						regulatory standards for safe and sound management of OREO.
						RCW
						   31.12.005(24).
Statutory Authority:
							RCW
							31.12.404,
							31.12.426,
							31.12.428,
							31.12.436, and
							31.12.516. 09-24-050, §
										208-476-010, filed 11/24/09,
							effective 12/31/09.
Washington Administrative Code › Title 208 - Financial Institutions, Department of (See also Titles 50, 419, and 460) › Chapter 208-476 - Credit union - Other real estate owned › Section 208-476-020 - Rule-making authority

Current through Register Vol. 24-14, July 15, 2024
What is DFI's rule-making authority for these OREO rules? The
						division of credit unions is delegated rule-making authority by the director of
						DFI. The director's rule-making authority is based upon the Washington Credit
						Union Act (WCUA),
						RCW
						   31.12.516(2), which allows
						the director to adopt rules that are reasonable and necessary to carry out the
						purposes of the WCUA. The director has the power and broad administrative
						discretion to administer and interpret the provisions of the WCUA.
						RCW
						   31.12.516(4). In addition,
						the director has specific rule-making authority regarding secured or unsecured
						loans to members.
						RCW
						   31.12.426(1).
Statutory Authority:
							RCW
							31.12.404,
							31.12.426,
							31.12.428,
							31.12.436, and
							31.12.516. 09-24-050, §
										208-476-020, filed 11/24/09,
							effective 12/31/09.
Washington Administrative Code › Title 208 - Financial Institutions, Department of (See also Titles 50, 419, and 460) › Chapter 208-476 - Credit union - Other real estate owned › Section 208-476-030 - Authority of director to require reports

Current through Register Vol. 24-14, July 15, 2024
What legal authority does DFI have to require special reports
						from credit unions, accounting for OREO? The director has the statutory
						authority to require a credit union to file any financial or statistical report
						the director may require. The director, therefore, has the authority to require
						special reports on OREO properties held by Washington state chartered credit
						unions. RCW    31.12.567.
Statutory Authority:
							RCW
							31.12.404,
							31.12.426,
							31.12.428,
							31.12.436, and
							31.12.516. 09-24-050, §
										208-476-030, filed 11/24/09,
							effective 12/31/09.
Washington Administrative Code › Title 208 - Financial Institutions, Department of (See also Titles 50, 419, and 460) › Chapter 208-476 - Credit union - Other real estate owned › Section 208-476-040 - Authority for credit unions to hold real estate

Current through Register Vol. 24-14, July 15, 2024
What is the legal authority for a credit union to acquire, hold
						and dispose of OREO? A Washington state chartered credit union is permitted to
						own foreclosed and other OREO property, based on its statutory power to make
						secured and unsecured loans to its members.
						RCW
						   31.12.426(1). If the
						borrower defaults on a loan secured by real property, the credit union has the
						authority to obtain title to the property as a power incidental to its normal
						course of business.
Statutory Authority:
							RCW
							31.12.404,
							31.12.426,
							31.12.428,
							31.12.436, and
							31.12.516. 09-24-050, §
										208-476-040, filed 11/24/09,
							effective 12/31/09.
Washington Administrative Code › Title 208 - Financial Institutions, Department of (See also Titles 50, 419, and 460) › Chapter 208-476 - Credit union - Other real estate owned › Section 208-476-100 - Limitations on holding of OREO

Current through Register Vol. 24-14, July 15, 2024
How long is a credit union allowed to hold OREO?
OREO must be disposed of as soon as prudent business judgment dictates, and in
						no case longer than five years, absent special circumstances and discretionary
						approval by the director. The longer real estate is held, the more speculative
						an investment it becomes.
When does the holding period begin?
The holding
						period begins on the date that the credit union takes title to the OREO
						property.
What if the OREO is not sold within the initial holding
						period?
An application to hold other real estate owned beyond the five
						year initial holding period must be filed no less than six months prior to the
						end of the initial five years, on a form provided by DFI. In addition to the
						form, the director may require justifying information, data and reports. The
						granting of an additional holding period of up to five years is at the
						regulatory discretion of the director.
Statutory Authority:
							RCW
							31.12.404,
							31.12.426,
							31.12.428,
							31.12.436, and
							31.12.516. 09-24-050, §
										208-476-100, filed 11/24/09,
							effective 12/31/09.
Washington Administrative Code › Title 208 - Financial Institutions, Department of (See also Titles 50, 419, and 460) › Chapter 208-476 - Credit union - Other real estate owned › Section 208-476-200 - Accounting for OREO

Current through Register Vol. 24-14, July 15, 2024
What accounting and reporting procedures are credit
						unions required to follow when accounting for OREO?
Accounting and
						reporting for OREO must comply with GAAP. GAAP applies to accounting and
						reporting for OREO, regardless of materiality.
Where can GAAP be accessed and researched?
The
						definitive text of U.S. GAAP, as codified, may be found at
http://asc.fasb.org
or as a link from
						fasb.org.
Can the DCU require charge offs or special reserves for
						OREO property?
Yes, the DCU has authority to require a credit union to
						charge off or set a special reserve for OREO property.
						RCW
						   31.12.545(2)(c).
Statutory Authority:
							RCW
							31.12.404,
							31.12.426,
							31.12.428,
							31.12.436, and
							31.12.516. 09-24-050, §
										208-476-200, filed 11/24/09,
							effective 12/31/09.
Washington Administrative Code › Title 208 - Financial Institutions, Department of (See also Titles 50, 419, and 460) › Chapter 208-476 - Credit union - Other real estate owned › Section 208-476-300 - Minimal standards for safe and sound OREO management

Current through Register Vol. 24-14, July 15, 2024
(1)
What basic standards are used to
					determine the initial and ongoing regulatory acceptability of holding
					OREO?
Holding requirements include, at a minimum, compliance with the
					following:
(a) Accurate accounting for OREO.
					Refer to the accounting section of this rule at WAC
					208-476-200;
(b) Obtaining independent written appraisals,
					or determinations of fair value, depending upon the nature of the loan, and
					updated periodically, to reflect changed market conditions;
(c) Diligent marketing efforts, including a
					written marketing plan, updated periodically to reflect changed market
					conditions;
(d) Compliance with any
					determination, order or directive issued by the director regarding the
					acquisition, holding, management or disposition of OREO.
Washington Administrative Code › Title 208 - Financial Institutions, Department of (See also Titles 50, 419, and 460) › Chapter 208-490 - "Guidance" for credit unions › Section 208-490-010 - Purpose of these rules

Current through Register Vol. 24-14, July 15, 2024
These rules are designed to help Washington state-chartered
						credit unions establish, reiterate, integrate and maintain their own policies
						and procedures regarding subprime and nontraditional mortgage lending guidance.
						These policies and procedures are required by chapter 108, Laws of 2008
						(chapter 19.144 RCW).
Statutory Authority:
							RCW
							43.320.040,
							19.144.040 (2008 c 108).
							08-22-072, §
										208-490-010, filed 11/4/08,
							effective 12/5/08.