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CU System
Washington DFI Issues Interpretation On Two Rules
OLYMPIA, Wash. (3/14/13)--The Washington Department of Financial Institutions (DFI) has issued what Northwest Credit Union Association Director of Regulatory Advocacy John Trull described as "favorable" guidance on two regulations impacting state-chartered credit unions.

"It's encouraging to see the positive working relationship we have developed with regulators continuing to develop, and we expect that relationship to continue to translate into better outcomes for credit unions," Trull said (Anthem Recap March 11) .

One of the clarification released last week related to credit unions' use of the terms "audit committee" and "supervisory committee." The other outlined credit unions' investment options and restrictions for funding employee-benefit obligations.

The terms "audit committee" and "supervisory committee" are seen as interchangeable for regulatory purposes as long as the committee is compliant with supervisory committee regulations, DFI Division of Credit Unions (DCU) Director Linda Jekel explained in a letter addressed to Trull (Anthem Recap March 11).

"The Division of Credit Unions is of the view that a state credit union may use the term 'audit committee' synonymously and in place of 'supervisory committee' in its bylaws as long as it complies with the same requirements for a supervisory committee contained in the Act and all applicable rules for a supervisory committee of a federally insured credit union," Jekel wrote.

The second letter was in response to an inquiry from Parker Cann, BECU's general counsel. State-chartered credit unions in Washington may fund employee benefit trusts with investments typically unavailable to credit unions, as long as those investments are not made by the credit union for its own financial gain. This gives state-chartered credit unions permissions already available to credit unions with federal charters, wrote Joseph Vincent, DFI's general counsel,

Vincent clarified that National Credit Union Administration (NCUA) regulations still apply, saying that "in making such investments, a state credit union is subject to all of the limitations set forth in the aforementioned NCUA regulations and other NCUA authority interpreting or applying those regulations."
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