A Washington state private insurer that covers 77 credit unions has received an extended lease on life.
Gov. Mike Lowry told credit union officials that he does not endorse a plan by the state banking supervisor to shut down Washington Credit Union Share Guaranty Association this year. But he did not rule out tackling the issue in the future.
David Adams, president of the Washington Credit Union League, said the governor's office has made it clear that there is no room on the state's agenda for legislation closing the company.
"There will not be legislation this year, but it is an issue that will continue to be studied," he said. "Suffice it to say there are other issues that are more pressing."
Washington Share Guaranty insures 77 credit unions with about $1.5 billion in deposits. It requires insured credit unions to hold reserves equal to 1% of their deposits, and the insurer assesses those reserves when necessary.
John Bley, director of the Department of Financial Institutions, wants to close the insurer because, although it is now sound, he doubts it could withstand the loss of a large institution or several smaller institutions.
Mr. Bley said he will continue to press the issue and predicts his view ultimately will prevail.
"Do not confuse the initial firing on Fort Sumter with Appomattox Courthouse," he said. "This is the beginning, not the end."
Meanwhile, Mr. Bley said, his office will toughen supervision of privately insured credit unions.
Steven Toftoy, president of the insurer, said he's ready for future scrutiny.
"I think it's good to be evaluated," he said. "When and where and from what direction it will come, I don't know."
