-
REGULATIONS
Vol. 30 Iss. 4 - October 21, 2013TITLE 10. FINANCE AND FINANCIAL INSTITUTIONSSTATE CORPORATION COMMISSIONChapter 40Proposed RegulationREGISTRAR'S NOTICE: The State Corporation Commission is claiming an exemption from the Administrative Process Act in accordance with § 2.2-4002 A 2 of the Code of Virginia, which exempts courts, any agency of the Supreme Court, and any agency that by the Constitution is expressly granted any of the powers of a court of record.
Title of Regulation: 10VAC5-40. Credit Unions (adding 10VAC5-40-80, 10VAC5-40-90).
Statutory Authority: §§ 6.2-1303 and 12.1-13 of the Code of Virginia.
Public Hearing Information: A public hearing will be held upon request.
Public Comment Deadline: November 8, 2013.
Agency Contact: Werner Paul, Deputy Commissioner, Bureau of Financial Institutions, State Corporation Commission, P.O. Box 640, Richmond, VA 23218, telephone (804) 371-9698, FAX (804) 371-9416, or email werner.paul@scc.virginia.gov.
Summary:
The State Corporation Commission is proposing regulations that would give state-chartered credit unions the authority to (i) purchase loan participation interests to the same extent, and subject to the same terms and conditions, as is authorized for federal credit unions under 12 CFR 701.22 and (ii) offer employee benefit plans and defined benefit plans on terms and conditions comparable to federal credit unions under 12 CFR 701.19. The proposed regulation also provides state-chartered credit unions the authority to purchase an investment to fund an obligation under an employee benefit plan or defined benefit plan provided that the investment is directly related to the credit union's obligation or potential obligation and the credit union holds the investment only for as long as it has an actual or potential obligation under such plan.
AT RICHMOND, SEPTEMBER 27, 2013
COMMONWEALTH OF VIRGINIA, ex rel.
STATE CORPORATION COMMISSION
CASE NO. BFI-2013-00097
Ex Parte: In re: parity regulations
for state-chartered credit unionsORDER TO TAKE NOTICE
Section 6.2-1303 of the Code of Virginia authorizes the State Corporation Commission ("Commission") to adopt such regulations as may be necessary to permit state-chartered credit unions to have powers at least comparable with those of federal credit unions, regardless of any existing statute, regulation, or court decision limiting or denying such powers to state-chartered credit unions. The Commission's regulations governing state-chartered credit unions are set forth in Chapter 40 of Title 10 of the Virginia Administrative Code.
Based on requests that the Bureau of Financial Institutions ("Bureau") has received from various state-chartered credit unions, the Bureau has submitted to the Commission proposed parity regulations that would give state-chartered credit unions the authority to (i) purchase loan participation interests on terms and conditions comparable to federal credit unions under 12 C.F.R. § 701.22; and (ii) offer employee benefit plans as well as defined benefit plans and purchase investments to fund such plans on terms and conditions comparable to federal credit unions under 12 C.F.R. § 701.19.
NOW THE COMMISSION, based on the information supplied by the Bureau, is of the opinion and finds that the proposed regulations should be considered for adoption with a proposed effective date of December 1, 2013.
Accordingly, IT IS ORDERED THAT:
(1) The proposed regulations are appended hereto and made a part of the record herein.
(2) Comments or requests for a hearing on the proposed regulations must be submitted in writing to Joel H. Peck, Clerk, State Corporation Commission, c/o Document Control Center, P.O. Box 2118, Richmond, Virginia 23218, on or before November 8, 2013. Requests for a hearing shall state why a hearing is necessary and why the issues cannot be adequately addressed in written comments. All correspondence shall contain a reference to Case No. BFI-2013-00097. Interested persons desiring to submit comments or request a hearing electronically may do so by following the instructions available at the Commission's website: http://www.scc.virginia.gov/case.
(3) This Order and the attached proposed regulations shall be posted on the Commission's website at http://www.scc.virginia.gov/case.
(4) The Commission's Division of Information Resources shall provide a copy of this Order, including a copy of the attached proposed regulations, to the Virginia Registrar of Regulations for publication in the Virginia Register of Regulations.
AN ATTESTED COPY hereof, together with a copy of the proposed regulations, shall be sent by the Clerk of the Commission to the Commission's Office of General Counsel and the Commissioner of Financial Institutions, who shall forthwith send a copy of this Order, together with a copy of the proposed regulations, to all state-chartered credit unions and such other interested parties as he may designate.
10VAC5-40-80. Loan participations.
Notwithstanding any provision of Chapter 13 (§ 6.2-1300 et seq.) of Title 6.2 of the Code of Virginia relating to loan participations or cooperative loans, a state-chartered credit union may purchase a participation interest in a loan to the same extent, and subject to the same terms and conditions, as is authorized for federal credit unions under 12 CFR 701.22.
10VAC5-40-90. Benefits for employees of state-chartered credit unions.
A. A state-chartered credit union may provide employee benefits, including retirement benefits, to its employees and officers. The kind and amount of these benefits shall be reasonable given the credit union's size, financial condition, and the duties of the employees.
B. When a state-chartered credit union is the benefit plan trustee or custodian, the plan shall be authorized and maintained to the same extent, and subject to the same terms and conditions, as is authorized for federal credit unions under 12 CFR Part 724. When the benefit plan trustee or custodian is a party other than a state-chartered credit union, the benefit plan shall be maintained in accordance with applicable laws, including any applicable regulations adopted by the U.S. Department of Labor, the U.S. Department of the Treasury, or any other federal or state authority exercising jurisdiction over the plan.
C. Notwithstanding the investment limitations set forth in § 6.2-1376 of the Code of Virginia, a state-chartered credit union investing to fund an obligation under an employee benefit plan, as defined in 29 USC § 1002(3), may purchase an investment if (i) the investment is directly related to the credit union's obligation or potential obligation under the employee benefit plan and (ii) the credit union holds the investment only for as long as it has an actual or potential obligation under the employee benefit plan.
D. A state-chartered credit union may invest to fund a defined benefit plan, as defined in 29 USC § 1002(35), provided that the investment complies with subsection C of this section. If a credit union invests to fund a defined benefit plan that is not subject to the fiduciary responsibility provisions of Part 4 of the Employee Retirement Income Security Act of 1974 (ERISA), 29 USC § 1001 et seq., it shall diversify its investment portfolio to minimize the risk of large losses unless it is clearly prudent not to do so under the circumstances.
E. A state-chartered credit union shall not occupy the position of a fiduciary, as defined in ERISA and the regulations adopted by the U.S. Department of Labor.
VA.R. Doc. No. R14-3872; Filed September 30, 2013, 11:34 a.m.
