Thank you for sharing!

Your article was successfully shared with the contacts you provided.

OLYMPIA, Wash. – Monumental. Revolutionary. These are the words one Washington League official is using to describe the changes the state regulator is planning to put in front of credit unions that will radically alter the way state-chartered credit unions expand their field-of-membership. What Parker Cann, director of the Division of Credit Unions for the Department of Financial Institutions intends to reveal to credit unions at three town hall-type meetings is a preliminary draft of revisions to the DCU’s FOM rules that would allow any credit union with a composite CAMEL 1 or 2 to add any occupational, associational or community group with a population of 6,300 or less with the approval of its board of directors. The FOM groups would be allowed to be located inside or outside Washington State. In addition, before a CU’s board approved the amendment to its bylaws, the CU would have to mail or in some other way notify each SCCU and federal credit union headquartered in the county in which the FOM group is primarily located. A credit union that wanted to add a larger group or any SCCU with a CAMEL 3, 4 or 5, would have to go through the regular regulatory process. That includes receiving the approval of its board of directors and the prior written approval of the director of the Division of Credit Unions. “It’s a way for a well-run credit union to keep the authority in the board room,” said Stacy Augustine vice president of government affairs for WCUL. The proposed FOM rule changes are the result of discussions Cann had over the past few months with the League’s field-of-membership task force and government affairs committee. Augustine said originally the town hall meetings weren’t on the agenda, but the task force recommended to Cann that he hold the meetings so credit unions would have direct contact with their regulator and have the opportunity to ask him questions, as well as give Cann the opportunity to explain the proposed changes to CUs. “I think credit unions in Washington State are ready for these changes,” said Cann. “We want to make sure they’re comfortable with them.” Cann said one of the factors that prompted him to make the changes was budget and staff related. “Most of the field-of-membership expansion applications we receive are approved handily and don’t present safety and soundness issues,” he said. “As budgets get tighter and it became apparent that our staff person spent a lot of time on each of these applications, it forced us to ask whether we needed to go through the process for each application that comes into our office.” As for how he came up with the 6,300-figure, Cann said he evaluated NCUA and Washington State data, looked at the penetration rate of new credit unions and asked himself what kind of capital and how many members were necessary to start a new credit union. He even looked at bank regulations Cann is aware that the proposed FOM rule changes open the door for more field-of-membership overlaps, and he expects some credit unions to be wary of this. “There are already a tremendous amount of overlaps and not just between credit unions but also with other financials,” said Cann. He said Director John Bley of the Department of Financial Institutions is “strongly in favor” of eliminating overlap protection completely. There are 95 state-chartered credit unions in Washington State, and Cann said most of them have hybrid charters – a mix of association, community and occupational. Only a few like Boeing Employees’ CU-an occupational CU-have pure charters. Still, Cann said he intends to take into consideration the concerns credit unions express during the town hall meetings on Nov. 27 and 28, and Dec. 4, as well as when the proposed rule goes out for comment. “Providing competition is our statutory mission,” said Cann The division plans to file a CR-102 form to publish proposed FOM rules and to schedule a formal hearing on the proposal. Cann is quick to offer that the changes his office has in mind making to the Department of Credit Unions’ FOM rules may not be suitable for other states and are not intended to be used as a model for them. “There are varying statutes among the states. Each state regulator has to examine its state’s needs and have a set of regulations that is suitable to that state and its credit unions,” said Cann. -

Complete your profile to continue reading and get FREE access to CUTimes.com, part of your ALM digital membership.

Your access to unlimited CUTimes.com content isn’t changing.
Once you are an ALM digital member, you’ll receive:

  • Critical CUTimes.com information including comprehensive product and service provider listings via the Marketplace Directory, CU Careers, resources from industry leaders, webcasts, and breaking news, analysis and more with our informative Newsletters.
  • Exclusive discounts on ALM and CU Times events.
  • Access to other award-winning ALM websites including Law.com and GlobeSt.com.

Already have an account?


Credit Union Times

Join Credit Union Times

Don’t miss crucial strategic and tactical information necessary to run your institution and better serve your members. Join Credit Union Times now!

  • Free unlimited access to Credit Union Times' trusted and independent team of experts for extensive industry news, conference coverage, people features, statistical analysis, and regulation and technology updates.
  • Exclusive discounts on ALM and Credit Union Times events.
  • Access to other award-winning ALM websites including TreasuryandRisk.com and Law.com.

Already have an account? Sign In Now
Join Credit Union Times
Live Chat

Copyright © 2022 ALM Media Properties, LLC. All Rights Reserved.