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Banks
Administration and Enforcement of
Banking Laws Generally
This permanent rulemaking activity aligns Oregon rules concerning unimproved credit union property held for future expansion with federal regulations applicable to federally-chartered credit unions, In January 2013, the Department of Consumer and Business Services adopted a temporary rule allowing a state-chartered credit union up to six years to partially utilize unimproved property held for future expansion (see Admin. Order No. FCS 1-20 13 (Temp )). The temporary rule maintained regulatory parity with federally-chartered credit unions, which due to recent changes by National Credit Union Administration (NCUA) regulations, could hold unimproved real property longer than a state-chartered credit union. This proposed amendment would simply adopt this temporary rule on a permanent basis.
Recent rules - permanent rules not yet posted to Secretary of State Web site:
Like the temporary rule, the permanent rule gives Oregon chartered commercial banks authority to engage in interest rate swap transactions with and on behalf of the banks' loan customers and to pledge the banks' assets in connection with such transactions. While national banks and other financial institutions currently possess this authority, Oregon chartered banks may not engage in these types of transactions unless the Director of the Department of Consumer and Business Services permits them to do so under ORS 706.795. Without this rule, Oregon chartered commercial banks will be unable to compete on equal terms with national banks and other institutions.
This rule implements Section 10 of the 2012 Oregon Laws ch. 7 (Enrolled House Bill 4117). HB 4117 requires the Director of the Department of Consumer and Business Services to create a process, by rule, to allow a master trustee to calculate the balance of trust fund deposits at least two times each year. The permanent rules establish the two dates when a master trustee must calculate the value of the trust fund in order to recover expenses from earnings, in line with statutory requirements. The proposed rules also require some form of written notice to the Director that the master trustee chooses to recover expenses from the trust fund earning for the calendar year.
This temporary rulemaking activity aligns Oregon rules concerning unimproved credit union property held for future expansion with federal regulations applicable to federally-chartered credit unions. In Oregon, a credit union holding unimproved property for future expansion (e.g., the construction of a new branch office) must partially use the unimproved property within three years of acquisition, unless waived by the Director of the Department of Consumer and Business Services (DCBS). In contrast, recent changes to National Credit Union Administration (NCUA) regulations (12 C.F.R. § 701.36) give federally-chartered credit unions six years to partially utilize unimproved property held for the same purpose. The practical effect of this difference between state and federal regulations is that state-chartered credit unions will be at a competitive disadvantage when acquiring unimproved property for new branches or support offices, especially in a commercial real estate market favoring purchasers. To avoid this result, this temporary rulemaking activity would simply align the span of time a state-chartered credit union can hold unimproved property for future expansion so that credit unions maintain regulatory parity in Oregon.
Resources:
Statutes: This links to the general Oregon Revised Statues Web site. It provides search and index functions as well as an overview to the Oregon Revised Statutes.
Rules: This is a general link to the Div. of Finance and Corporate Securities Rules as posted on the Secretary of State's Oregon State Archives Web site. Search and index functions available.
