Small State Charters In Washington Get Fee Break

The Washington State Department of Financial Institutions' Division of Credit Unions, has cut the asset assessment fee for CUs with fewer than $22 million in assets.

The reduction is temporary, and applies to the first two quarters of 2003. It will be reviewed in July. A spokesman for the Division of Credit Unions said it was the first change to asset assessment fees since 1995.

Under the former fee structure, CUs with assets from $10 million to $25 million paid $1,228 per quarter; those with assets between $2 million and $10 million paid $818, and those with assets between $500,000 and $2 million paid $545.

Instead of a flat quarterly fee, each CU with fewer than $22 million in assets will pay an amount equal to its asset size multiplied by 0.00005573. Credit Unions with more than $22 million in assets will pay a flat fee based on their asset size. Credit unions with assets of $500,000 or fewer will continue to pay no asset assessment fee.

According to figures released by the Division of Credit Unions, savings per quarter for each CU will range from $3 to $540, depending on asset size. For example, a credit union with $22 million in assets will pay $1,225, rather than the flat fee of $1,228. A $17 million CU-which previously paid $1,228-would be assessed $947, a savings of $281 per quarter.

The Division of Credit Unions said the total savings by CUs with fewer than $22 million in assets will be approximately $12,300 per quarter.

John Annaloro, president and CEO of the Washington Credit Union League, released a prepared statement complimenting the DCU for its "leadership."

"All credit unions, especially small credit unions, appreciate pricing considerations that let them better advance their mission of providing affordable financial services in today's progressive environment," Annaloro said.

Linda Jekel, the former program manager for the DCU who was appointed director Dec. 2, 2002, told The Credit Union Journal the fee waiver "was an opportunity for us to provide relief for smaller credit unions, which are under competition right now."

In addition, she said the Division of Credit Unions wanted to make asset assessments more standardized across asset size categories.

Jekel said the stock market's decline has prompted investors to put more deposits into credit unions, which in turn helped drive up asset sizes. As a result, the DCU has collected more fees than projected the last two years, which allowed it to grant this fee waiver.

"We will continue to look for opportunities to streamline our operations," she said.

The DCU, which examines all credit unions in the State of Washington and supervises those that need assistance, does not receive tax money from the state. It is self-sufficient based on asset assessments.