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State regulator sets teleconference about proposed fee hike
FEDERAL WAY, Wash. (2/15/08)--In response to concerns raised by the Washington Credit Union League, the state Division of Credit Unions (DCU) will host a teleconference Feb. 29 about its proposed 5.38% credit union fee increase for fiscal year 2009. The teleconference, which will start at 10 a.m. PST, will provide data and the rationale behind the increase. The league had written a comment letter Jan. 11 asking for a full business case analysis to explain the proposed increase. The league's comment letter, written by Stacy Augustine, senior vice president and general counsel, said it supported earlier fee increases in 1995 and 2001, but it raised three concerns about the new increase proposal:
* It asked DCU to make a business case to all state-chartered credit unions, answering these questions: Why haven't organic increases associated with asset-based assessment kept pace, since more state-chartered credit unions exist today than when the formula was created? What has the division done to reduce expenses? What types of increased costs are out of DCU's control? How does its efficiency metrics compare with other credit union regulators? How will DCU improve its efficiency? * Past fees-increase support centered the desire to increase examiner quality and retention. The league asked for more detail on what DCU has done to increase examiner quality since the last increase and whether it succeeded in improving quality or reducing industry concerns. It also asked how DCU would address examiner quality in the future. * The league said it continues to be concerned about having dedicated, nonappropriated funds swept into the state's general fund during times of economic stress. Although the league supported the merging of separate divisions of credit unions, banks, securities and consumer services funds into one Department of Financial Institution Fund, it is concerned about sweeps in the future.
"Providing this information to Washington's credit union community may give credit unions more confidence that the division's fee increase is necessary and will be put to good use," said Augustine. The league's letter can be found by going to Department of Financial Institutions' website, clicking on Rulemaking Activity, then Updated Fee Regulations Rulemaking, then Comments. Due to the state's initiative 960, now in effect, the state legislature must vote on all tax and fee increases for state agencies, says DCU in a bulletin issued Feb. 7. The new process means DCU and the Washington State Department of Financial Institutions (DFI) must seek legislative approval in a bill or budget item, for even routine or minor fee increases, DCU said. A Power Point for the teleconference will be available on DCU's website before the teleconference.
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