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<p>FEDERAL WAY, Wash. – State-chartered credit unions throughout Washington will be able to expand their fields of membership without first obtaining regulatory approval under a new rule to be adopted by the Washington State Division of Credit Unions. The new rule, scheduled to go into effect March 8, will apply to well-run credit unions, those with a CAMEL 1 or CAMEL 2 rating. Other credit unions with CAMEL 3, 4 or 5 ratings will still require state approval to expand their fields of membership (FOM). “This isn’t a change that is just for big credit unions,” noted Stacy Augustine, senior vice president with the Washington Credit Union League. “This is a change that eliminates unnecessary regulatory procedures that aren’t related to safety and soundness and that helps everyone. It means you can get field of membership changes made as soon as your next board meeting instead of waiting three or four months for the state to do it.” Augustine said the rule could also serve as an incentive for credit unions to have a high CAMEL rating. “It is kind of parallel to Reg-Flex in a lot of ways,” she said, referring a plan that would provide regulatory relief to qualified credit unions. “It is something a well-run credit union can use no matter what size it is. I like to call it FOM-Flex because that’s really what it is. It’s a regulatory blanket approval for allowing a well-run credit union to add groups to its field of membership.” Under the plan, eligible credit unions can add “qualified” groups – consisting of occupational, associational or community groups of more than 500 members but fewer than 6,300 members – without the state regulator’s approval. The addition of non-qualified groups will still require approval under the rule. The measure also includes a “direct marketing restriction” to prevent credit unions, particularly large ones, from soliciting groups belonging to other credit unions. Augustine said the issue was one of the most “sensitive” raised by the financial institutions. “Under the rule, a credit union can’t directly market a group unless it is already within its field of membership or has been asked to do so in a written letter requesting service,” she said. However, she said the rule does not prevent a credit union from conducting a “blanket marketing” of the entire community. “But it does keep a credit union from targeting another credit union’s occupational group,” she said. She said the direct marketing prohibition was designed to address fears of some smaller credit unions concerned about competition from larger institutions. “I think those fears were ungrounded, but if it makes them feel better no one really minded having it [the direct marketing restriction] in there,” Augustine said. “Washington has been easing out of overlap analysis over a number of years,” she added. “This pretty much eliminates all last vestiges of overlap analysis.” Augustine said the league had worked closely with state officials to develop the new rule and that it was satisfied with the result. A task force of credit unions was formed last fall to provide input on the proposed rule as well as other financial issues, she said. Parker Cann, director of the Washington Division of Credit Unions with the Department of Financial Institutions, also held three meetings with credit unions throughout the state to gather input on the proposed rule, she said. -</p> <p>[email protected]</p>

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