WA House Bill 1209 – Public Depositories

The bill revises the definition of Financial Institution to include credit unions for public depositories in regards to RCW 39.58 Public Funds – Deposits and Investments – Public Depositories

There is currently not a companion bill in the Senate.

Sec. 3. RCW 39.58.108 and 2016 c 152 s 4 are each amended to read as follows:

(1) Except as provided in subsections (2) and (3) of this section, any financial institution may become, and thereafter operate  as, a public depositary upon approval by the commission and segregation of collateral in the manner as set forth in this chapter, and subject to compliance with all rules and policies adopted by the commission. A public depositary shall at all times pledge and segregate eligible collateral in an amount established by the commission by rule or noticed resolution.
(2) Solely for the purpose of receiving public deposits that may total no more than the maximum deposit insured by the national credit union share insurance fund, a state-chartered credit union chartered under chapter 31.12 RCW or a credit union chartered under federal law is a public depositary subject to RCW 39.58.040 and 39.58.100. The maximum deposit applies to all funds attributable to any one depositor of public funds in any one credit union.
(3) A state or federal credit union that has satisfied the requirements of subsection (1) of this section is not authorized to receive public deposits that total more than the maximum deposit insured by the national credit union share insurance fund unless at least four other state or federal credit unions have satisfied the requirements of subsection (1) of this section.
(4) At any time at which there are less than ten state or federal credit unions authorized under subsection (1) of this section to receive public deposits in excess of the maximum deposit insured by the national credit union share insurance fund, the maximum liability for each such credit union means:
(a) A sum equal to twenty percent of:
(i) All uninsured public deposits held by a public depositary that has not incurred a loss by the then most recent commission report date; or
(ii) The average of the balances of said uninsured public deposits on the last four immediately preceding reports required pursuant to RCW 39.58.100, whichever amount is greater; or
(b) Such other sum or measure as the commission may from time to time set by resolution according to criteria established by rule, consistent with the commission’s broad administrative discretion to achieve the objective of RCW 39.58.020.

Status updates on the bill can be found here.

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