Regulatory Alerts2013-02-28 | I-13-02Washington State Credit Union Investments in Employee Benefit Trusts
The Washington State Department of Financial Institutions issued Interpretive Letter I-13-02 to clarify that state-chartered credit unions may utilize the federal parity statute to fund employee benefit obligations through trusts holding otherwise impermissible investments. This authority allows credit unions to bypass standard state investment restrictions by adhering to National Credit Union Administration regulations, which require that investments be directly related to specific benefit obligations and held only for the duration of those obligations. To ensure compliance, credit unions must establish individual employee benefit funding trusts with strict segregation of assets, designated trustees, and annual funding worksheets that accurately calculate the necessary investment amounts.