Private Insurance Bid Shelved

OLYMPIA, Wash. – In another shot to the private insurance option, the Department of Financial Institutions last week abruptly cancelled public hearings scheduled for this week and December on the return of private deposit insurance to the state after the Washington CU League and five credit unions which had requested the private insurance option urged suspension of the rulemaking process. The move comes soon after Patelco CU, the largest privately insured credit union, reversed course and agreed to return to federal insurance provided by NCUA after opting for private insurance in 2002. In separate letters to the DFI, the Washington League and the credit unions asked that the process be suspended while they seek changes in the state statute allowing private insurance. The five credit unions are: SHARE CU, Prevail CU, School Employees’ CU, Seattle CU Center and Harborstone CU. The DFI has been working with the credit unions and ASI, the only remaining private insurer for credit unions, for more than a year to restore the private deposit insurance option for credit unions, which was eliminated following the 1991 crisis in Rhode Island that prompted the closure of a dozen private credit union insurers. The initiation of the process in Washington followed the enactment of new rules in Texas to restore the private insurance option through ASI.