Washington Governor Signs Credit Union Bill to Enhance Regulatory Authority

March 29, 2010-The Washington Department of Financial Institutions (DFI) recently announced that Gov. Christine Gregoire signed two bills regarding the regulation of state-chartered credit unions and banks in the state of Washington.

The DFI stated that these bills provide Washington's financial regulators with additional tools necessary to support the health and stability of the state's financial institutions.

The credit union bill, EHB 2830, provides the following:

  • The bill adds tools to permit stronger regulatory oversight and earlier enforcement of troubled credit unions.
  • It also updates and streamlines early regulatory action for troubled credit unions by providing for early regulatory intervention when a credit union becomes undercapitalized.
  • The fiduciary duties of board members are strengthened.
  • DFI is given the authority to suspend credit union directors for harmful activities.
  • DFI is authorized to fine credit unions for material violations of credit union act or rules.
  • DFI's conservatorship and receivership provisions for credit unions are modernized.

"While DFI has not had to close a credit union yet during the existing financial crisis, the credit union bill addresses some potential shortcomings in Washington's Credit Union Act," Linda Jekel, Director of DFI's Credit Union Division said in a March 17 agency press release. "The credit union bill provides DFI with an improved regulatory toolbox in order protect consumers' financial interests."

The bank bill, EHB 2831, gives DFI enforcement powers over bank holding companies, among other provisions. To read more about both bills, follow this link.