CHAPTER 14 —FEDERAL CREDIT UNIONS
SUBCHAPTER I—GENERAL PROVISIONS
SUBCHAPTER II—SHARE INSURANCE
SUBCHAPTER III—CENTRAL LIQUIDITY FACILITY
§1751. Short title
This chapter may be cited as the "Federal Credit Union Act".
(June 26, 1934, ch. 750, §1,
Amendments
1959—
Transfer of Functions
Secretary and Department of Health, Education, and Welfare redesignated Secretary and Department of Health and Human Services by
Transfer of functions of Farm Credit Administration and Governor thereof to Bureau of Farm Credit Unions and Director thereof under jurisdiction of Federal Security Agency by act June 29, 1948, ch. 711, §§1, 2,
Functions of Farm Credit Administration and Governor thereof under this chapter, together with functions of Secretary of Agriculture with respect thereto, transferred to Federal Deposit Insurance Corporation by Reorg. Plan No. 1 of 1947, §401, eff. July 1, 1947, 12 F.R. 4534,
Farm Credit Administration transferred to Department of Agriculture by Reorg. Plan No. I of 1939, §401, eff. July 1, 1939, 4 F.R. 2730,
Short Title of 2014 Amendment
Short Title of 1998 Amendment
Short Title of 1987 Amendment
Short Title of 1978 Amendment
Congressional Findings
"(1) The American credit union movement began as a cooperative effort to serve the productive and provident credit needs of individuals of modest means.
"(2) Credit unions continue to fulfill this public purpose, and current members and membership groups should not face divestiture from the financial services institution of their choice as a result of recent court action.
"(3) To promote thrift and credit extension, a meaningful affinity and bond among members, manifested by a commonality of routine interaction, shared and related work experiences, interests, or activities, or the maintenance of an otherwise well-understood sense of cohesion or identity is essential to the fulfillment of the public mission of credit unions.
"(4) Credit unions, unlike many other participants in the financial services market, are exempt from Federal and most State taxes because they are member-owned, democratically operated, not-for-profit organizations generally managed by volunteer boards of directors and because they have the specified mission of meeting the credit and savings needs of consumers, especially persons of modest means.
"(5) Improved credit union safety and soundness provisions will enhance the public benefit that citizens receive from these cooperative financial services institutions."
§1751a. Omitted
Codification
Section, act June 29, 1948, ch. 711, §2,
SUBCHAPTER I—GENERAL PROVISIONS
§1752. Definitions
As used in this chapter—
(1) the term "Federal credit union" means a cooperative association organized in accordance with the provisions of this chapter for the purpose of promoting thrift among its members and creating a source of credit for provident or productive purposes;
(2) the term "Chairman" means the Chairman of the National Credit Union Administration Board;
(3) the term "Administration" means the National Credit Union Administration;
(4) the term "Board" means the National Credit Union Administration Board;
(5) The terms "member account" and "account" mean a share, share certificate, or share draft account of a member of a credit union of a type approved by the Board which evidences money or its equivalent received or held by a credit union in the usual course of business and for which it has given or is obligated to give credit to the account of the member, and, in the case of a credit union serving predominantly low-income members (as defined by the Board), such terms (when referring to the account of a nonmember served by such credit union) mean a share, share certificate, or share draft account of such nonmember which is of a type approved by the Board and evidences money or its equivalent received or held by such credit union in the usual course of business and for which it has given or is obligated to give credit to the account of such nonmember, and such terms mean share, share certificate, or share draft account of nonmember credit unions and nonmember units of Federal, State, or local governments and political subdivisions thereof enumerated in
(6) The terms "State credit union" and "State-chartered credit union" mean a credit union organized and operated according to the laws of any State, the District of Columbia, the several territories and possessions of the United States, the Panama Canal Zone, or the Commonwealth of Puerto Rico, which laws provide for the organization of credit unions similar in principle and objectives to Federal credit unions;
(7) The term "insured credit union" means any credit union the member accounts of which are insured in accordance with the provisions of subchapter II of this chapter, and the term "noninsured credit union" means any credit union the member accounts of which are not so insured;
(8) The term "Fund" means the National Credit Union Share Insurance Fund; and
(9) The term "branch" includes any branch credit union, branch office, branch agency, additional office, or any branch place of business located in any State of the United States, the District of Columbia, the several territories, including the trust territories, and possessions of the United States, the Panama Canal Zone, or the Commonwealth of Puerto Rico, at which member accounts are established or money lent. The term "branch" also includes a suboffice, operated by a Federal credit union or by a credit union authorized by the Department of Defense, located on an American military installation in a foreign country or in the trust territories of the United States.
(June 26, 1934, ch. 750, title I, §101, formerly §2,
References in Text
For definition of Canal Zone, referred to in text, see
Amendments
2006—Par. (3).
Par. (5).
1982—Par. (5).
1980—Par. (5).
Par. (10).
1979—Par. (5).
Par. (10).
1978—Par. (2).
Par. (4).
Par. (5).
Pars. (6) to (8).
Par. (9).
1977—Par. (4).
1970—Par. (2).
Par. (3).
Par. (4).
Pars. (4) to (8).
1959—
Effective Date of 1980 Amendment
Amendment by
Effective and Termination Dates of 1979 Amendment
Amendment by
Effective Date of 1978 Amendment
Repeals
Amendment by section 103 of
Ex. Ord. No. 13816. Revising the Seal for the National Credit Union Administration
Ex. Ord. No. 13816, Dec. 8, 2017, 82 F.R. 58701, provided:
By the authority vested in me as President by the Constitution and the laws of the United States of America, it is hereby ordered as follows:
(i) The eagle overlaid by the shield conveys the NCUA's role as an agency of the Federal Government. The text, "NCUA," in white on a blue background on the crest of the shield is the core of the sign that federally insured credit unions are required to display.
(ii) The three stars above the eagle represent the NCUA's three-member Board, appointed by the President of the United States by and with the advice and consent of the Senate.
(iii) The oak branch the eagle is holding in its left talon symbolizes the NCUA's strength, honor, and longevity in carrying out its mission of promoting confidence in the national system of cooperative credit.
(iv) The olive branch the eagle is holding in its right talon symbolizes the peace and prosperity facilitated by the economic growth and access to affordable financial services that the Nation's credit unions have long provided to millions of Americans.
(v) The upper portion of the circle that forms the border of the seal sets forth the agency's title, "National Credit Union Administration." The date "1934" in the lower portion of the circle reflects the creation of the Federal credit union system by the Congress in 1934 and the long unbroken line of Federal credit union regulation that evolved into the NCUA.
(b) This seal is of suitable design and appropriate for adoption as the official seal of the NCUA.
(c) I hereby approve this seal as the official seal of the NCUA.
(i) the authority granted by law to an executive department or agency, or the head thereof; or
(ii) the functions of the Director of the Office of Management and Budget relating to budgetary, administrative, or legislative proposals.
(b) This order shall be implemented consistent with applicable law and subject to the availability of appropriations.
(c) This order is not intended to, and does not, create any right or benefit, substantive or procedural, enforceable at law or in equity by any party against the United States, its departments, agencies, or entities, its officers, employees, or agents, or any other person.
Donald J. Trump.
§1752a. National Credit Union Administration
(a) Establishment; management under National Credit Union Administration Board
There is established in the executive branch of the Government an independent agency to be known as the National Credit Union Administration. The Administration shall be under the management of a National Credit Union Administration Board.
(b) Membership and appointment of Board
(1) In general
The Board shall consist of three members, who are broadly representative of the public interest, appointed by the President, by and with the advice and consent of the Senate. In appointing the members of the Board, the President shall designate the Chairman. Not more than two members of the Board shall be members of the same political party.
(2) Appointment criteria
(A) Experience in financial services
In considering appointments to the Board under paragraph (1), the President shall give consideration to individuals who, by virtue of their education, training, or experience relating to a broad range of financial services, financial services regulation, or financial policy, are especially qualified to serve on the Board.
(B) Limit on appointment of credit union officers
Not more than one member of the Board may be appointed to the Board from among individuals who, at the time of the appointment, are, or have recently been, involved with any insured credit union as a committee member, director, officer, employee, or other institution-affiliated party.
(c) Term of office
The term of office of each member of the Board shall be six years, except that the terms of the two members, other than the Chairman, initially appointed shall expire one upon the expiration of two years after the date of appointment, and the other upon the expiration of four years after the date of appointment. Board members shall not be appointed to succeed themselves except the initial members appointed for less than a six-year term may be reappointed for a full six-year term and future members appointed to fill unexpired terms may be reappointed for a full six-year term. Any Board member may continue to serve as such after the expiration of said member's term until a successor has qualified.
(d) Management of Administration vested in Board; adoption of rules; quorum; report to President and Congress
The management of the Administration shall be vested in the Board. The Board shall adopt such rules as it sees fit for the transaction of its business and shall keep permanent and complete records and minutes of its acts and proceedings. A majority of the Board shall constitute a quorum. Not later than April 1 of each calendar year, and at such other times as the Congress shall determine, the Board shall make a report to the President and to the Congress. Such a report shall summarize the operations of the Administration and set forth such information as is necessary for the Congress to review the financial program approved by the Board.
(e) Functions of Chairman
The Chairman of the Board shall be the spokesman for the Board and shall represent the Board and the National Credit Union Administration in its official relations with other branches of the Government. The Chairman shall determine each Board member's area of responsibility and shall review such assignments biennially. It shall be the Chairman's responsibility to direct the implementation of the adopted policies and regulations of the Board.
(f) Audit by Government Accountability Office
The financial transactions of the Administration shall be subject to audit by the Government Accountability Office in accordance with the principles and procedures applicable to commercial corporate transactions and under such rules and regulations as may be prescribed by the Comptroller General of the United States. The audit shall be conducted at the place or places where the accounts of the Administration are kept.
(June 26, 1934, ch. 750, title I, §102, formerly §3, as added
Prior Provisions
Section 2 of act June 29, 1948, ch. 711,
Section 1 of act June 29, 1948 transferred to the Federal Security Agency all functions, powers, and duties of the Farm Credit Administration and of the Governor thereof under the Federal Credit Union Act, as amended [this chapter], together with the functions of the Secretary of Agriculture with respect thereto, which were transferred to the Federal Deposit Insurance Corporation by Reorganization Plan Numbered 1 of 1947, part IV, section 401 [set out in the Appendix to Title 5, Government Organization and Employees].
Section 3 of act June 29, 1948 transferred to the Federal Security Agency, to be used in the administration of the functions, transferred, (a) all property, including office equipment, transferred to the Federal Deposit Insurance Corporation pursuant to Executive Order 9148 of April 27, 1942 [see note under
Section 4 of act June 29, 1948 transferred all funds allocated, specifically or otherwise, in the budget of the Federal Deposit Insurance Corporation for the administration of the Federal Credit Union Act, as amended [this chapter], during the fiscal year ending June 30, 1949, which were unexpended on the effective date of this Act [see section 5 of act June 29, 1948, set out as a note below], to the Federal Security Agency for use in the administration of the Federal Credit Union Act, as amended [this chapter]. The Corporation was to be reimbursed for the funds so transferred and for all other funds expended by it prior to the effective date of this Act in the administration of the Federal Credit Union Act, as amended [this chapter], in excess of fees from Federal Credit unions received by the Corporation, by deducting such amounts from the first moneys payable to the Secretary of the Treasury on account of the retirement of the stock of the Federal Deposit Insurance Corporation owned by the United States, and the Corporation was to have a charge on such stock for such amounts.
Section 5 of act June 29, 1948 provided that the Act was to become effective on the thirtieth day following the date of enactment.
Amendments
2004—Subsec. (f).
1998—Subsec. (b).
1982—Subsec. (f).
1978—
1970—
Effective Date of 1978 Amendment
Amendment by
Transfer of Functions
"(a) All functions, property, records, and personnel of the Bureau of Federal Credit Unions are transferred to the National Credit Union Administration created by this Act [which generally amended this chapter].
"(b) The Director of the Bureau of Federal Credit Unions in office on the date of enactment of this Act [Mar. 10, 1970] shall serve as acting Administrator of the National Credit Union Administration pending the appointment of an Administrator in accordance with section 3 of the Federal Credit Union Act as amended by this Act [this section]."
Study and Report on Differing Regulatory Treatment
Study of Corporate Credit Unions
Study of Credit Union System by GAO
Federally Chartered Central Credit Unions; Report to Congress
§1753. Federal credit union organization
Any seven or more natural persons who desire to form a Federal credit union shall each subscribe either individually or collectively before some officer competent to administer oaths an organization certificate in duplicate which shall specifically state:
(1) the name of the association;
(2) the location of the proposed Federal credit union and the territory in which it will operate;
(3) the names and addresses of the subscribers to the certificate and the number of shares subscribed by each;
(4) the initial par value of the shares;
(5) the proposed field of membership, specified in detail;
(6) the term of the existence of the corporation, which may be perpetual; and
(7) the fact that the certificate is made to enable such persons to avail themselves of the advantages of this chapter.
Such organization certificate may also contain any provisions approved by the Board for the management of the business of the association and for the conduct of its affairs and relative to the powers of its directors, officers, or stockholders.
(June 26, 1934, ch. 750, title I, §103, formerly §3,
Amendments
1982—
Par. (4).
1978—
1970—
1959—
Effective Date of 1978 Amendment
Amendment by
Transfer of Functions
Transfer of functions of Farm Credit Administration and Governor thereof, generally, see notes set out under
Functions of Governor of Farm Credit Administration under this section transferred to Federal Deposit Insurance Corporation by Reorg. Plan No. 1 of 1947.
§1754. Approval of organization certificate
The organization certificate shall be presented to the Board for approval. Before any organization certificate is approved, an appropriate investigation shall be made for the purpose of determining (1) whether the organization certificate conforms to the provisions of this chapter; (2) the general character and fitness of the subscribers thereto; and (3) the economic advisability of establishing the proposed Federal credit union. Upon approval of such organization certificate by the Board it shall be the charter of the corporation, and one of the originals thereof shall be delivered to the corporation after the payment of the fee required therefor. Upon such approval the Federal credit union shall be a body corporate and as such, subject to the limitations herein contained, shall be vested with all of the powers and charged with all of the liabilities conferred and imposed by this chapter upon corporations organized hereunder.
(June 26, 1934, ch. 750, title I, §104, formerly §4,
Amendments
1978—
1970—
1959—
Effective Date of 1978 Amendment
Amendment by
Transfer of Functions
Transfer of functions of Farm Credit Administration and Governor thereof, generally, see notes set out under
Functions of Governor of Farm Credit Administration under this section transferred to Federal Deposit Insurance Corporation by Reorg. Plan No. 1 of 1947.
§1755. Fees
(a) Payment by Federal credit union to Administration
In accordance with rules prescribed by the Board, each Federal credit union shall pay to the Administration an annual operating fee which may be composed of one or more charges identified as to the function or functions for which assessed.
(b) Determinations of amount, assessment periods, and payment dates
The fee assessed under this section shall be determined according to a schedule, or schedules, or other method determined by the Board to be appropriate, which gives due consideration to the expenses of the Administration in carrying out its responsibilities under this chapter and to the ability of Federal credit unions to pay the fee. The Board shall, among other things, determine the periods for which the fee shall be assessed and the date or dates for the payment of the fee or increments thereof.
(c) Supervision charge exception; waiver of payment
If the annual operating fee is composed of separate charges, no supervision charge shall be payable by a Federal credit union, and the Board may waive payment of any or all other charges comprising the fee, with respect to the year in which its charter is issued, or in which final distribution is made in its liquidation or the charter is canceled.
(d) Payment into Treasury of United States
All operating fees shall be deposited with the Treasurer of the United States for the account of the Administration and may be expended by the Board to defray the expenses incurred in carrying out the provisions of this chapter including the examination and supervision of Federal credit unions.
(e) Investment of annual operating fees not needed for current operations
(1) Upon request of the Board, the Secretary of the Treasury shall invest and reinvest such portions of the annual operating fees deposited under subsection (d) as the Board determines are not needed for current operations.
(2) Such investments may be made only in interest bearing securities of the United States with maturities requested by the Board bearing interest at rates determined by the Secretary of the Treasury, taking into consideration current market yields on outstanding marketable obligations of the United States of comparable maturities.
(3) All income derived from such investments and reinvestments shall be deposited to the account of the Administration described in subsection (d).
(June 26, 1934, ch. 750, title I, §105, formerly §5,
Amendments
1982—Subsec. (e).
1978—
1970—
1959—
1952—Act Apr. 17, 1952, amended section, substituting a graduated scale of supervisory fees for the $10 a year supervisory fee.
Effective Date of 1978 Amendment
Amendment by
Effective Date of 1952 Amendment
Act Apr. 17, 1952, ch. 214, §2,
Transfer of Functions
Transfer of functions of Farm Credit Administration and Governor thereof, generally, see notes set out under
Functions of Governor of Farm Credit Administration under this section transferred to Federal Deposit Insurance Corporation by Reorg. Plan No. 1 of 1947.
§1756. Reports and examinations
Federal credit unions shall be under the supervision of the Board, and shall make financial reports to it as and when it may require, but at least annually. Each Federal credit union shall be subject to examination by, and for this purpose shall make its books and records accessible to, any person designated by the Board.
(June 26, 1934, ch. 750, title I, §106, formerly §6,
Amendments
1978—
1970—
1959—
1937—Act Dec. 6, 1937, inserted "giving due consideration to the time and expense incident to such examinations, and to the ability of Federal credit unions to pay such fees" and struck out proviso relating to conditions relieving certain unions from payment of examination fee.
Effective Date of 1978 Amendment
Amendment by
Transfer of Functions
Transfer of functions of Farm Credit Administration and Governor thereof, generally, see notes set out under
Functions of Governor of Farm Credit Administration under this section transferred to Federal Deposit Insurance Corporation by Reorg. Plan No. 1 of 1947.
§1756a. Omitted
Section, act July 22, 1942, ch. 516,
§1757. Powers
A Federal credit union shall have succession in its corporate name during its existence and shall have power—
(1) to make contracts;
(2) to sue and be sued;
(3) to adopt and use a common seal and alter the same at pleasure;
(4) to purchase, hold, and dispose of property necessary or incidental to its operations;
(5) to make loans, the maturities of which shall not exceed 15 years, except as otherwise provided herein, and extend lines of credit to its members, to other credit unions, and to credit union organizations and to participate with other credit unions, credit union organizations, or financial organizations in making loans to credit union members in accordance with the following:
(A) Loans to members shall be made in conformity with criteria established by the board of directors: Provided, That—
(i) a residential real estate loan on a one-to-four-family dwelling, including an individual cooperative unit, that is or will be the principal residence of a credit union member, and which is secured by a first lien upon such dwelling, may have a maturity not exceeding thirty years or such other limits as shall be set by the National Credit Union Administration Board (except that a loan on an individual cooperative unit shall be adequately secured as defined by the Board), subject to the rules and regulations of the Board;
(ii) a loan to finance the purchase of a mobile home, which shall be secured by a first lien on such mobile home, to be used by the credit union member as his residence, a loan for the repair, alteration, or improvement of a residential dwelling which is the residence of a credit union member, or a second mortgage loan secured by a residential dwelling which is the residence of a credit union member, shall have a maturity not to exceed 15 years or any longer term which the Board may allow;
(iii) a loan secured by the insurance or guarantee of, or with advance commitment to purchase the loan by, the Federal Government, a State government, or any agency of either may be made for the maturity and under the terms and conditions specified in the law under which such insurance, guarantee, or commitment is provided;
(iv) a loan or aggregate of loans to a director or member of the supervisory or credit committee of the credit union making the loan which exceeds $20,000 plus pledged shares, be approved by the board of directors;
(v) loans to other members for which directors or members of the supervisory or credit committee act as guarantor or endorser be approved by the board of directors when such loans standing alone or when added to any outstanding loan or loans of the guarantor or endorser exceeds $20,000;
(vi) the rate of interest may not exceed 15 per centum per annum on the unpaid balance inclusive of all finance charges, except that the Board may establish—
(I) after consultation with the appropriate committees of the Congress, the Department of Treasury, and the Federal financial institution regulatory agencies, an interest rate ceiling exceeding such 15 per centum per annum rate, for periods not to exceed 18 months, if it determines that money market interest rates have risen over the preceding six-month period and that prevailing interest rate levels threaten the safety and soundness of individual credit unions as evidenced by adverse trends in liquidity, capital, earnings, and growth; and
(II) a higher interest rate ceiling for Agent members of the Central Liquidity Facility in carrying out the provisions of subchapter III for such periods as the Board may authorize;
(vii) the taking, receiving, reserving, or charging of a rate of interest greater than is allowed by this paragraph, when knowingly done, shall be deemed a forfeiture of the entire interest which the note, bill, or other evidence of debt carries with it, or which has been agreed to be paid thereon. If such greater rate of interest has been paid, the person by whom it has been paid, or his legal representatives, may recover back from the credit union taking or receiving the same, in an action in the nature of an action of debt, the entire amount of interest paid; but such action must be commenced within two years from the time the usurious collection was made;
(viii) a borrower may repay his loan, prior to maturity in whole or in part on any business day without penalty, except that on a first or second mortgage loan a Federal credit union may require that any partial prepayments (I) be made on the date monthly installments are due, and (II) be in the amount of that part of one or more monthly installments which would be applicable to principal;
(ix) loans shall be paid or amortized in accordance with rules and regulations prescribed by the Board after taking into account the needs or conditions of the borrowers, the amounts and duration of the loans, the interests of the members and the credit unions, and such other factors as the Board deems relevant; 1
(x) loans must be approved by the credit committee or a loan officer, but no loan may be made to any member if, upon the making of that loan, the member would be indebted to the Federal credit union upon loans made to him in an aggregate amount which would exceed 10 per centum of the credit union's unimpaired capital and surplus.
(B) A self-replenishing line of credit to a borrower may be established to a stated maximum amount on certain terms and conditions which may be different from the terms and conditions established for another borrower.
(C) Loans to other credit unions shall be approved by the board of directors.
(D) Loans to credit union organizations shall be approved by the board of directors and shall not exceed 1 per centum of the paid-in and unimpaired capital and surplus of the credit union. A credit union organization means any organization as determined by the Board, which is established primarily to serve the needs of its member credit unions, and whose business relates to the daily operations of the credit unions they serve.
(E) Participation loans with other credit unions, credit union organizations, or financial organizations shall be in accordance with written policies of the board of directors: Provided, That a credit union which originates a loan for which participation arrangements are made in accordance with this subsection shall retain an interest of at least 10 per centum of the face amount of the loan;
(6) to receive from its members, from other credit unions, from an officer, employee, or agent of those nonmember units of Federal, Indian tribal, State, or local governments and political subdivisions thereof enumerated in
(A) shares which may be issued at varying dividend rates;
(B) share certificates which may be issued at varying dividend rates and maturities; and
(C) share draft accounts authorized under
subject to such terms, rates, and conditions as may be established by the board of directors, within limitations prescribed by the Board;
(7) to invest its funds (A) in loans exclusively to members; (B) in obligations of the United States of America, or securities fully guaranteed as to principal and interest thereby; (C) in accordance with rules and regulations prescribed by the Board, in loans to other credit unions in the total amount not exceeding 25 per centum of its paid-in and unimpaired capital and surplus; (D) in shares or accounts of savings and loan associations or mutual savings banks, the accounts of which are insured by the Federal Deposit Insurance Corporation; (E) in obligations issued by banks for cooperatives, Federal land banks, Federal intermediate credit banks, Federal home loan banks, the Federal Housing Finance Board, or any corporation designated in
(8) to make deposits in national banks and in State banks, trust companies, and mutual savings banks operating in accordance with the laws of the State in which the Federal credit union does business, or in banks or institutions the accounts of which are insured by the Federal Deposit Insurance Corporation, and for Federal credit unions or credit unions authorized by the Department of Defense operating suboffices on American military installations in foreign countries or trust territories of the United States to maintain demand deposit accounts in banks located in those countries or trust territories, subject to such regulations as may be issued by the Board and provided such banks are correspondents of banks described in this paragraph;
(9) to borrow, in accordance with such rules and regulations as may be prescribed by the Board, from any source, in an aggregate amount not exceeding, except as authorized by the Board in carrying out the provisions of subchapter III, 50 per centum of its paid-in and unimpaired capital and surplus: Provided, That any Federal credit union may discount with or sell to any Federal intermediate credit bank any eligible obligations up to the amount of its paid-in and unimpaired capital;
(10) to levy late charges, in accordance with the bylaws, for failure of members to meet promptly their obligations to the Federal credit union;
(11) to impress and enforce a lien upon the shares and dividends of any member, to the extent of any loan made to him and any dues or charges payable by him;
(12) in accordance with regulations prescribed by the Board—
(A) to sell, to persons in the field of membership, negotiable checks (including travelers checks), money orders, and other similar money transfer instruments (including international and domestic electronic fund transfers and remittance transfers, as defined in
(B) to cash checks and money orders for persons in the field of membership for a fee;
(13) in accordance with rules and regulations prescribed by the Board, to purchase, sell, pledge, or discount or otherwise receive or dispose of, in whole or in part, any eligible obligations (as defined by the Board) of its members and to purchase from any liquidating credit union notes made by individual members of the liquidating credit union at such prices as may be agreed upon by the board of directors of the liquidating credit union and the board of directors of the purchasing credit union, but no purchase may be made under authority of this paragraph if, upon the making of that purchase, the aggregate of the unpaid balances of notes purchased under authority of this paragraph would exceed 5 per centum of the unimpaired capital and surplus of the credit union;
(14) to sell all or a part of its assets to another credit union, to purchase all or part of the assets of another credit union and to assume the liabilities of the selling credit union and those of its members subject to regulations of the Board;
(15) to invest in securities that—
(A) are offered and sold pursuant to
(B) are mortgage related securities (as that term is defined in
(C) are small business related securities (as defined in
(16) subject to such regulations as the Board may prescribe, to provide technical assistance to credit unions in Poland and Hungary; and
(17) to exercise such incidental powers as shall be necessary or requisite to enable it to carry on effectively the business for which it is incorporated.
(June 26, 1934, ch. 750, title I, §107, formerly §7,
References in Text
Codification
In par. (7), "
Amendments
2010—Par. (8).
Par. (12).
"(A) to sell, to persons in the field of membership, negotiable checks (including travelers checks), money orders, and other similar money transfer instruments (including international and domestic electronic fund transfers); and
"(B) to cash checks and money orders and receive international and domestic electronic fund transfers for persons in the field of membership for a fee;".
2006—Par. (5).
Par. (5)(E).
Par. (6).
Par. (7).
Par. (7)(D).
Par. (7)(E).
Par. (9).
Par. (12).
Par. (13).
1996—Par. (5)(A)(iv), (v).
1994—Par. (15)(C).
1989—Pars. (16), (17).
1987—Par. (5)(A)(ii).
Par. (6).
1984—Par. (5)(A)(ii).
Pars. (15), (16).
1983—Par. (5)(A)(i).
Par. (7)(K).
1982—Par. (5)(A)(i).
Par. (5)(A)(ii).
Par. (5)(A)(iii).
Par. (5)(A)(iv), (v).
Par. (5)(A)(viii).
Par. (5)(A)(x).
Par. (7)(E).
Par. (7)(L).
Par. (8).
Par. (12).
1980—Par. (5)(A)(i).
Par. (5)(A)(vi).
Par. (6).
1979—Par. (6).
1978—Par. (5).
Par. (6).
Par. (7).
Par. (8).
Par. (9).
Pars. (12) to (14).
1977—Par. (5).
Par. (6).
Par. (7).
Pars. (8) to (12).
Par. (13).
Par. (14).
1974—Par. (5).
Par. (6).
Par. (7).
Par. (8)(E).
Par. (9).
1972—Par. (8)(E).
1970—Pars. (5), (6), (8), (10), (13), (14),
Par. (7).
Par. (8).
1968—Par. (5).
Par. (8).
Pars. (14), (15).
1967—Par. (5).
Pars. (6), (7).
Pars. (8) to (14).
1966—Par. (7).
1964—Par. (7)(E).
1959—
1952—Par. (7)(d). Act May 13, 1952, authorized investment of funds in shares or accounts of any other institutions whose accounts are insured by the Federal Savings and Loan Insurance Corporation.
1949—Par. (5). Act Oct. 25, 1949, increased from 2 years to 3 years the limit for maturity of loans.
1946—Par. (5). Act July 31, 1946, inserted last two sentences to provide for the forfeiture of the entire amount of interest reserved and for the recovery of the entire amount of interest paid for the violation of the interest limitation.
1937—Par. (7)(c), (d). Act Dec. 6, 1937, added cls. (c) and (d).
Effective Date of 2010 Amendment
Amendment by section 362(1) of
Amendment by section 1073(d) of
Effective Date of 1980 Amendment
Amendment by section 305(b) of
Effective and Termination Dates of 1979 Amendments
Amendment by
Effective Date of 1978 Amendment
Amendment by section 502(b) of
Amendment by section 1803 of
Effective Date of 1974 Amendments
Amendment by
Amendment by
Effective Date of 1968 Amendment
For effective date of amendment by title VIII of
Repeals
Amendment by section 103 of
1 So in original. Probably should be followed by "and".
2 See References in Text note below.
§1757a. Limitation on member business loans
(a) In general
On and after August 7, 1998, no insured credit union may make any member business loan that would result in a total amount of such loans outstanding at that credit union at any one time equal to more than the lesser of—
(1) 1.75 times the actual net worth of the credit union; or
(2) 1.75 times the minimum net worth required under
(b) Exceptions
Subsection (a) does not apply in the case of—
(1) an insured credit union chartered for the purpose of making, or that has a history of primarily making, member business loans to its members, as determined by the Board; or
(2) an insured credit union that—
(A) serves predominantly low-income members, as defined by the Board; or
(B) is a community development financial institution, as defined in
(c) Definitions
As used in this section—
(1) the term "member business loan"—
(A) means any loan, line of credit, or letter of credit, the proceeds of which will be used for a commercial, corporate or other business investment property or venture, or agricultural purpose; and
(B) does not include an extension of credit—
(i) that is fully secured by a lien on a 1- to 4-family dwelling;
(ii) that is fully secured by shares in the credit union making the extension of credit or deposits in other financial institutions;
(iii) that is described in subparagraph (A), if it was made to a borrower or an associated member that has a total of all such extensions of credit in an amount equal to less than $50,000;
(iv) the repayment of which is fully insured or fully guaranteed by, or where there is an advance commitment to purchase in full by, any agency of the Federal Government or of a State, or any political subdivision thereof; or
(v) that is granted by a corporate credit union (as that term is defined by the Board) to another credit union.
(2) the term "net worth"—
(A) with respect to any insured credit union, means the credit union's retained earnings balance, as determined under generally accepted accounting principles; and
(B) with respect to a credit union that serves predominantly low-income members, as defined by the Board, includes secondary capital accounts that are—
(i) uninsured; and
(ii) subordinate to all other claims against the credit union, including the claims of creditors, shareholders, and the Fund; and
(3) the term "associated member" means any member having a shared ownership, investment, or other pecuniary interest in a business or commercial endeavor with the borrower.
(d) Effect on existing loans
An insured credit union that has, on August 7, 1998, a total amount of outstanding member business loans that exceeds the amount permitted under subsection (a) shall, not later than 3 years after August 7, 1998, reduce the total amount of outstanding member business loans to an amount that is not greater than the amount permitted under subsection (a).
(e) Consultation and cooperation with State credit union supervisors
In implementing this section, the Board shall consult and seek to work cooperatively with State officials having jurisdiction over State-chartered insured credit unions.
(June 26, 1934, ch. 750, title I, §107A, as added
Amendments
2018—Subsec. (c)(1)(B)(i).
Rule of Construction
Study and Report
§1758. Bylaws
In order to simplify the organization of Federal credit unions the Board shall from time to time cause to be prepared a form of organization certificate and a form of bylaws, consistent with this chapter, which shall be used by Federal credit union incorporators, and shall be supplied to them on request. At the time of presenting the organization certificate the incorporators shall also submit proposed bylaws to the Board for its approval.
(June 26, 1934, ch. 750, title I, §108, formerly §8,
Amendments
1978—
1970—
1959—
Effective Date of 1978 Amendment
Amendment by
Transfer of Functions
Transfer of functions of Farm Credit Administration and Governor thereof, generally, see notes set out under
Functions of Governor of Farm Credit Administration under this section transferred to Federal Deposit Insurance Corporation by Reorg. Plan No. 1 of 1947.
§1759. Membership
(a) In general
Subject to subsection (b), Federal credit union membership shall consist of the incorporators and such other persons and incorporated and unincorporated organizations, to the extent permitted by rules and regulations prescribed by the Board, as may be elected to membership and as such shall each, subscribe to at least one share of its stock and pay the initial installment thereon and a uniform entrance fee if required by the board of directors. Shares may be issued in joint tenancy with right of survivorship with any persons designated by the credit union member, but no joint tenant shall be permitted to vote, obtain loans, or hold office, unless he is within the field of membership and is a qualified member.
(b) Membership field
Subject to the other provisions of this section, the membership of any Federal credit union shall be limited to the membership described in one of the following categories:
(1) Single common-bond credit union
One group that has a common bond of occupation or association.
(2) Multiple common-bond credit union
More than one group—
(A) each of which has (within the group) a common bond of occupation or association; and
(B) the number of members, each of which (at the time the group is first included within the field of membership of a credit union described in this paragraph) does not exceed any numerical limitation applicable under subsection (d).
(3) Community credit union
Persons or organizations within a well-defined local community, neighborhood, or rural district.
(c) Exceptions
(1) Grandfathered members and groups
(A) In general
Notwithstanding subsection (b)—
(i) any person or organization that is a member of any Federal credit union as of August 7, 1998, may remain a member of the credit union after August 7, 1998; and
(ii) a member of any group whose members constituted a portion of the membership of any Federal credit union as of August 7, 1998, shall continue to be eligible to become a member of that credit union, by virtue of membership in that group, after August 7, 1998.
(B) Successors
If the common bond of any group referred to in subparagraph (A) is defined by any particular organization or business entity, subparagraph (A) shall continue to apply with respect to any successor to the organization or entity.
(2) Exception for underserved areas
Notwithstanding subsection (b), in the case of a Federal credit union, the field of membership category of which is described in subsection (b)(2), the Board may allow the membership of the credit union to include any person or organization within a local community, neighborhood, or rural district if—
(A) the Board determines that the local community, neighborhood, or rural district—
(i) is an "investment area", as defined in
(ii) is underserved, based on data of the Board and the Federal banking agencies (as defined in
(B) the credit union establishes and maintains an office or facility in the local community, neighborhood, or rural district at which credit union services are available.
(d) Multiple common-bond credit union group requirements
(1) Numerical limitation
Except as provided in paragraph (2), only a group with fewer than 3,000 members shall be eligible to be included in the field of membership category of a credit union described in subsection (b)(2).
(2) Exceptions
In the case of any Federal credit union, the field of membership category of which is described in subsection (b)(2), the numerical limitation in paragraph (1) of this subsection shall not apply with respect to—
(A) any group that the Board determines, in writing and in accordance with the guidelines and regulations issued under paragraph (3), could not feasibly or reasonably establish a new single common-bond credit union, the field of membership category of which is described in subsection (b)(1) because—
(i) the group lacks sufficient volunteer and other resources to support the efficient and effective operation of a credit union;
(ii) the group does not meet the criteria that the Board has determined to be important for the likelihood of success in establishing and managing a new credit union, including demographic characteristics such as geographical location of members, diversity of ages and income levels, and other factors that may affect the financial viability and stability of a credit union; or
(iii) the group would be unlikely to operate a safe and sound credit union;
(B) any group transferred from another credit union—
(i) in connection with a merger or consolidation recommended by the Board or any appropriate State credit union supervisor based on safety and soundness concerns with respect to that other credit union; or
(ii) by the Board in the Board's capacity as conservator or liquidating agent with respect to that other credit union; or
(C) any group transferred in connection with a voluntary merger, having received conditional approval by the Administration of the merger application prior to October 25, 1996, but not having consummated the merger prior to October 25, 1996, if the merger is consummated not later than 180 days after August 7, 1998.
(3) Regulations and guidelines
The Board shall issue guidelines or regulations, after notice and opportunity for comment, setting forth the criteria that the Board will apply in determining under this subsection whether or not an additional group may be included within the field of membership category of an existing credit union described in subsection (b)(2).
(e) Additional membership eligibility provisions
(1) Membership eligibility limited to immediate family or household members
No individual shall be eligible for membership in a credit union on the basis of the relationship of the individual to another person who is eligible for membership in the credit union, unless the individual is a member of the immediate family or household (as those terms are defined by the Board, by regulation) of the other person.
(2) Retention of membership
Except as provided in
(f) Criteria for approval of expansion of multiple common-bond credit unions
(1) In general
The Board shall—
(A) encourage the formation of separately chartered credit unions instead of approving an application to include an additional group within the field of membership of an existing credit union whenever practicable and consistent with reasonable standards for the safe and sound operation of the credit union; and
(B) if the formation of a separate credit union by the group is not practicable or consistent with the standards referred to in subparagraph (A), require the inclusion of the group in the field of membership of a credit union that is within reasonable proximity to the location of the group whenever practicable and consistent with reasonable standards for the safe and sound operation of the credit union.
(2) Approval criteria
The Board may not approve any application by a Federal credit union, the field of membership category of which is described in subsection (b)(2) to include any additional group within the field of membership of the credit union (or an application by a Federal credit union described in subsection (b)(1) to include an additional group and become a credit union described in subsection (b)(2)), unless the Board determines, in writing, that—
(A) the credit union has not engaged in any unsafe or unsound practice (as defined in
(B) the credit union is adequately capitalized;
(C) the credit union has the administrative capability to serve the proposed membership group and the financial resources to meet the need for additional staff and assets to serve the new membership group;
(D) any potential harm that the expansion of the field of membership of the credit union may have on any other insured credit union and its members is clearly outweighed in the public interest by the probable beneficial effect of the expansion in meeting the convenience and needs of the members of the group proposed to be included in the field of membership; and
(E) the credit union has met such additional requirements as the Board may prescribe, by regulation.
(g) Regulations required for community credit unions
(1) Definition of well-defined local community, neighborhood, or rural district
The Board shall prescribe, by regulation, a definition for the term "well-defined local community, neighborhood, or rural district" for purposes of—
(A) making any determination with regard to the field of membership of a credit union described in subsection (b)(3); and
(B) establishing the criteria applicable with respect to any such determination.
(2) Scope of application
The definition prescribed by the Board under paragraph (1) shall apply with respect to any application to form a new credit union, or to alter or expand the field of membership of an existing credit union, that is filed with the Board after August 7, 1998.
(June 26, 1934, ch. 750, title I, §109, formerly §9,
Amendments
2006—Subsec. (c)(2)(A)(i).
1998—Subsec. (a).
Subsecs. (b) to (e).
Subsec. (f).
Subsec. (g).
1978—
1974—
1970—
1959—
1946—Act July 31, 1946, inserted sentence at end permitting a Federal credit union to issue shares in joint tenancy with a right of survivorship.
Effective Date of 1978 Amendment
Amendment by
Report and Congressional Review Requirement for Certain Regulations
"(1) the term 'immediate family or household' for purposes of section 109(e)(1) of the Federal Credit Union Act [
"(2) the term 'well-defined local community, neighborhood, or rural district' for purposes of section 109(g) of the Federal Credit Union Act (as added by section 103 of this Act)."
§1760. Members' meetings
The fiscal year of all Federal credit unions shall end December 31. The annual meeting of each Federal credit union shall be held at such place as its bylaws shall prescribe. Special meetings may be held in the manner indicated in the bylaws. No member shall be entitled to vote by proxy, but a member other than a natural person may vote through an agent designated for the purpose. Irrespective of the number of shares held, no member shall have more than one vote.
(June 26, 1934, ch. 750, title I, §110, formerly §10,
Amendments
1982—
1963—
§1761. Management
(a) Board of directors, credit committee, and supervisory committee; election to board
The management of a Federal credit union shall be by a board of directors, a supervisory committee, and where the bylaws so provide, a credit committee. The board shall consist of an odd number of directors, at least five in number, to be elected annually by and from the members as the bylaws provide. Any vacancy occurring on the board shall be filled until the next annual election by appointment by the remainder of the directors.
(b) Membership on supervisory committee; names and addresses of officers and committee members
The supervisory committee shall be appointed by the board of directors and shall consist of not less than three members nor more than five members, one of whom may be a director other than the compensated officer of the board. A record of the names and addresses of the executive officers, members of the supervisory committee, credit committee, and loan officers, shall be filed with the Administration within ten days after their election or appointment.
(c) Compensation
No member of the board or of any other committee shall, as such, be compensated, except that reasonable health, accident, similar insurance protection, and the reimbursement of reasonable expenses incurred in the execution of the duties of the position shall not be considered compensation.
(June 26, 1934, ch. 750, title I, §111, formerly §11,
Amendments
1982—
1978—
1974—
1970—
1964—
1959—
1954—Subsecs. (b), (c). Act Aug. 24, 1954, provided express authority for the Director of the Bureau of Federal Credit Unions to regulate the minimum amount and character of surety bonds for officers and employees.
Subsec. (c). Act June 30, 1954, inserted provision with respect to interest refunds.
1949—Subsec. (d). Act Oct. 25, 1949, substituted "$400" for "$300" wherever appearing.
1946—Subsec. (c). Act July 31, 1946, struck out "fix the amount and character of the surety bond required of any officer having custody of funds" and inserted "require any officer or employee having custody of or handling funds to give bond with good and sufficient surety in an amount and character to be determined, from time to time, by the board and authorize the payment of the premium or premiums therefor from the funds of the Federal credit union".
Subsec. (d). Act July 31, 1946, struck out requirement that notice of meeting of the credit committee must be given by the treasurer and increased the maximum amount of an unsecured loan to a member from $100 to $300.
Subsec. (e). Act July 31, 1946, inserted last sentence defining "passbook".
1940—Subsec. (d). Act June 15, 1940, substituted "$100" for "$50" in fourth sentence.
Effective Date of 1978 Amendment
Amendment by
Transfer of Functions
Transfer of functions of Farm Credit Administration and Governor thereof, generally, see notes set out under
Functions of Governor of Farm Credit Administration under this section transferred to Federal Deposit Insurance Corporation by Reorg. Plan No. 1 of 1947.
§1761a. Officers of the board
At their first meeting after the annual meeting of the members, the directors shall elect from their number the board officers specified in the bylaws. Only one board officer may be compensated as an officer of the board and the bylaws shall specify such position as well as the specific duties of each of the board officers. The board shall elect from their number a financial officer who shall give adequate fidelity coverage in accordance with
(June 26, 1934, ch. 750, title I, §112, formerly §13, as added
Prior Provisions
Provisions similar to those comprising this section were contained in section 11(b) of act June 26, 1934, ch. 750,
Amendments
1987—
1982—
1978—
1970—
1963—
Effective Date of 1978 Amendment
Amendment by
§1761b. Board of directors; meetings; powers and duties; executive committee; membership officers; membership application
The board of directors shall meet at least once a month and shall have the general direction and control of the affairs of the Federal credit union. Minutes of all meetings shall be kept. Among other things, the board of directors shall—
(1) act upon applications for membership or appoint membership officers from among the members of the credit union, other than the board member paid as an officer, the financial board officer, any assistant to the paid officer of the board or to the financial officer, or any loan officer;
(2) provide adequate fidelity coverage for officers and employees having custody of or handling funds according to regulations issued by the Board;
(3) fill vacancies on the board of directors until successors elected at the next annual meeting have qualified;
(4) if the bylaws provide for an elected credit committee, fill vacancies on the credit committee until successors elected at the next annual meeting have qualified;
(5) appoint the members of the supervisory committee and, if the bylaws so provide, appoint the members of the credit committee;
(6) have charge of investments including the right to designate an investment committee of not less than two to act on its behalf;
(7) determine the maximum number of shares, share certificates, and share draft accounts, and the classes of shares, share certificates, and share draft accounts;
(8) subject to any limitations of this subchapter,1 determine the interest rates on loans, the security, and the maximum amount which may be loaned and provided in lines of credit;
(9) authorize interest refunds to members of record at the close of business on the last day of any dividend period from income earned and received in proportion to the interest paid by them during that dividend period;
(10) if the bylaws so provide, appoint one or more loan officers and delegate to these officers the power to approve or disapprove loans, lines of credit, or advances from lines of credit;
(11) establish the par value of the share;
(12) subject to the limitations of this subchapter and the bylaws of the credit union, provide for the hiring and compensation of officers and employees;
(13) if the bylaws so provide, appoint an executive committee of not less than three directors to act on its behalf and any other committees to which it can delegate specific functions;
(14) prescribe conditions and limitations for any committee which it appoints;
(15) review at each monthly meeting a list of approved or pending applications for membership received since the previous monthly meeting together with such other related information as it or the bylaws require;
(16) provide for the furnishing of the written reasons for any denial of a membership application to the applicant upon the written request of the applicant;
(17) in the absence of a credit committee, and upon the written request of a member, review a loan application denied by a loan officer;
(18) declare the dividend rate to be paid on shares, share certificates, and share draft accounts pursuant to the terms and conditions of
(19) establish and maintain a system of internal controls consistent with the regulations of the Board;
(20) establish lending policies; and
(21) do all other things that are necessary and proper to carry out all the purposes and powers of the Federal credit union, subject to regulations issued by the Board.
(June 26, 1934, ch. 750, title I, §113, formerly §14, as added
References in Text
This subchapter, referred to in par. (8), probably should have been a reference to this title in the original, meaning title I of act June 26, 1934, ch. 750, which is classified generally to this subchapter.
Prior Provisions
Provisions similar to those comprising this section were contained in section 11(c) of act June 26, 1934, ch. 750,
Amendments
1987—Par. (1).
Par. (2).
1983—
Par. (2).
Par. (9).
Par. (15).
1982—
1978—
1977—
1974—
1970—
1968—
1964—
Effective Date of 1978 Amendment
Amendment by
1 See References in Text note below.
§1761c. Credit committee
(a) Members; meetings; lines of credit and approval of loans; delegation to loan officers
If the bylaws provide for a credit committee, then pursuant to the provisions of the bylaws, the board of directors may appoint or the members may elect a credit committee which shall consist of an odd number of members of the credit union, but which shall not include more than one loan officer. The method used shall be set forth in the bylaws. The credit committee shall hold such meetings as the business of the Federal credit union may require, not less frequently than once a month, to consider applications for loans or lines of credit. Reasonable notice of such meetings shall be given to all members of the committee. Except for those loans or lines of credit required to be approved by the board of directors in
(b) Review and reversal of loan refusals; review by board in lieu of committee; limitation on disbursements by loan officers
If the bylaws provide for a credit committee, all applications not approved by the loan officer shall be reviewed by the credit committee, and the approval of a majority of the members who are present at the meeting when such review is undertaken shall be required to reverse the loan officer's decision provided a majority of the full committee is present. If there is not a credit committee, a member shall have the right upon written request of review by the board of directors of a loan application which has been denied. No individual shall have authority to disburse funds of the Federal credit union with respect to any loan or line of credit for which the application has been approved by him in his capacity as a loan officer.
(June 26, 1934, ch. 750, title I, §114, formerly §15, as added
Prior Provisions
Provisions similar to those comprising this section were contained in section 11(d) of act June 26, 1934, ch. 750,
Amendments
1982—
1978—
1977—
1970—
1968—
1967—
1964—
Effective Date of 1978 Amendment
Amendment by
§1761d. Supervisory committee; powers and duties; suspension of members; passbook
The supervisory committee shall make or cause to be made an annual audit and shall submit a report of that audit to the board of directors and a summary of the report to the members at the next annual meeting of the credit union; shall make or cause to be made such supplementary audits as it deems necessary or as may be ordered by the Board, and submit reports of the supplementary audits to the board of directors; may by a unanimous vote suspend any officer of the credit union or any member of the credit committee or of the board of directors, until the next members' meeting, which shall be held not less than seven or more than fourteen days after any such suspension, at which meeting any such suspension shall be acted upon by the members; and may call by a majority vote a special meeting of the members to consider any violations of this chapter, the charter, or the bylaws, or any practice of the credit union deemed by the supervisory committee to be unsafe or unauthorized. Any member of the supervisory committee may be suspended by a majority vote of the board of directors. The members shall decide, at a meeting held not less than seven nor more than fourteen days after any such suspension, whether the suspended committee member shall be removed from or restored to the supervisory committee. The supervisory committee shall cause the passbooks and accounts of the members to be verified with the records of the treasurer from time to time, and not less frequently than once every two years. As used in this section, the term "passbook" shall include any book, statement of account, or other record approved by the Board for use by Federal credit unions.
(June 26, 1934, ch. 750, title I, §115, formerly §16, as added
Prior Provisions
Provisions similar to those comprising this section were contained in section 11(e) of act June 26, 1934, ch. 750,
Amendments
1978—
1974—
1970—
1968—
Effective Date of 1978 Amendment
Amendment by
§1762. Repealed. Pub. L. 105–219, title III, §301(g)(3), Aug. 7, 1998, 112 Stat. 931
Section, acts June 26, 1934, ch. 750, title I, §116, formerly §12,
§1763. Dividends
At such intervals as the board of directors may authorize, and after provision for required reserves, the board of directors may declare a dividend to be paid at different rates on different types of shares, at different rates and maturity dates in the case of share certificates, and at different rates on different types of share draft accounts. Dividends credited may be accrued on various types of shares, share certificates, and share draft accounts as authorized by the board of directors. If the par value of a share exceeds $5, dividends shall be paid on all funds in the regular share account once a full share has been purchased.
(June 26, 1934, ch. 750, title I, §117, formerly §13,
Amendments
1982—
1980—
1978—
1977—
1974—
1967—
1959—
Effective Date of 1980 Amendment
Amendment by section 305(c) of
Effective Date of 1978 Amendment
Amendment by
§1764. Expulsion and withdrawal
(a) Expulsion by two-thirds vote
Except as provided in subsection (b) of this section, a member may be expelled by a two-thirds vote of the members of a Federal credit union present at a special meeting called for the purpose, but only after opportunity has been given him to be heard.
(b) Expulsion based on nonparticipation
The board of directors of a Federal credit union may, by majority vote of a quorum of directors, adopt and enforce a policy with respect to expulsion from membership based on nonparticipation by a member in the affairs of the credit union. In establishing its policy, the board should consider a member's failure to vote in annual credit union elections or failure to purchase shares from, obtain a loan from, or lend to the Federal credit union. If such a policy is adopted, written notice of the policy as adopted and the effective date of such policy shall be mailed to each member of the credit union at the member's current address appearing on the records of the credit union not less than thirty days prior to the effective date of such policy. In addition, each new member shall be provided written notice of any such policy prior to or upon applying for membership.
(c) Liability to credit union
Withdrawal or expulsion of a member pursuant to either subsection (a) or (b) of this section shall not operate to relieve him from liability to the Federal credit union. The amount to be paid a withdrawing or expelled member by a Federal credit union shall be determined and paid in a manner specified in the bylaws.
(June 26, 1934, ch. 750, title I, §118, formerly §14,
Amendments
1987—Subsec. (a).
Subsec. (b).
1982—
§1765. Minors
Shares may be issued in the name of a minor or in trust, subject to such conditions as may be prescribed by the bylaws. When shares are issued in trust, the name of the beneficiary shall be disclosed to the Federal credit union.
(June 26, 1934, ch. 750, title I, §119, formerly §15,
Amendments
1959—
§1766. Powers of Board
(a) The Board may prescribe rules and regulations for the administration of this chapter (including, but not by way of limitation, the merger, consolidation, and dissolution of corporations organized under this chapter). Any central credit union chartered by the Board shall be subject to such rules, regulations, and orders as the Board deems appropriate and, except as otherwise specifically provided in such rules, regulations, or orders, shall be vested with or subject to the same rights, privileges, duties, restrictions, penalties, liabilities, conditions, and limitations that would apply to all Federal credit unions under this chapter.
(b)(1) The Board may suspend or revoke the charter of any Federal credit union, or place the same in involuntary liquidation and appoint a liquidating agent therefor, upon its finding that the organization is bankrupt or insolvent, or has violated any of the provisions of its charter, its bylaws, this chapter, or any regulations issued thereunder.
(2) The Board, through such persons as it shall designate, may examine any Federal credit union in voluntary liquidation and, upon its finding that such voluntary liquidation is not being conducted in an orderly or efficient manner or in the best interests of its members, may terminate such voluntary liquidation and place such organization in involuntary liquidation and appoint a liquidating agent therefor.
(3) Such liquidating agent shall have power and authority, subject to the control and supervision of the Board and under such rules and regulations as the Board may prescribe, (A) to receive and take possession of the books, records, assets, and property of every description of the Federal credit union in liquidation, to sell, enforce collection of, and liquidate all such assets and property, to compound all bad or doubtful debts, and to sue in his own name or in the name of the Federal credit union in liquidation, and defend such actions as may be brought against him as liquidating agent or against the Federal credit union; (B) to receive, examine, and pass upon all claims against the Federal credit union in liquidation, including claims of members on member accounts; (C) to make distribution and payment to creditors and members as their interests may appear; and (D) to execute such documents and papers and to do such other acts and things which he may deem necessary or desirable to discharge his duties hereunder.
(4) Subject to the control and supervision of the Board and under such rules and regulations as the Board may prescribe, the liquidating agent of a Federal credit union in involuntary liquidation shall (A) cause notice to be given to creditors and members to present their claims and make legal proof thereof, which notice shall be published once a week in each of three successive weeks in a newspaper of general circulation in each county in which the Federal credit union in liquidation maintained an office or branch for the transaction of business on the date it ceased unrestricted operations; except that whenever the aggregate book value of the assets and property of a Federal credit union in involuntary liquidation is less than $1,000, unless the Board shall find that its books and records do not contain a true and accurate record of its liabilities he shall declare such Federal credit union in liquidation to be a "no publication" liquidation, and publication of notice to creditors and members shall not be required in such case; (B) from time to time make a ratable dividend on all such claims as may have been proved to his satisfaction or adjudicated in a court of competent jurisdiction and, after the assets of such organization have been liquidated, make further dividends on all claims previously proved or adjudicated, and he may accept in lieu of a formal proof of claim on behalf of any creditor or member the statement of any amount due to such creditor or member as shown on the books and records of the credit union; but all claims not filed before payment of the final dividend shall be barred and claims rejected or disallowed by the liquidating agent shall be likewise barred unless suit be instituted thereon within three months after notice of rejection or disallowance; and (C) in a "no publication" liquidation, determine from all sources available to him, and within the limits of available funds of the Federal credit union, the amounts due to creditors and members, and after sixty days shall have elapsed from the date of his appointment distribute the funds of the Federal credit union to creditors and members ratably and as their interests may appear.
(5) Upon certification by the liquidating agent in the case of an involuntary liquidation, and upon such proof as shall be satisfactory to the Board in the case of a voluntary liquidation, that distribution has been made and that liquidation has been completed, as provided herein, the Board shall cancel the charter of such Federal credit union; but the corporate existence of the Federal credit union shall continue for a period of three years from the date of such cancellation of its charter, during which period the liquidating agent, or his duly appointed successor, or such persons as the Board shall designate, may act on behalf of the Federal credit union for the purpose of paying, satisfying, and discharging any existing liabilities or obligations, collecting and distributing its assets, and doing all other acts required to adjust and wind up its business and affairs, and it may sue and be sued in its corporate name.
(c) After the expiration of five years from the date of cancellation of the charter of a Federal credit union the Board may, in its discretion, destroy any or all books and records of such Federal credit union in its possession or under its control.
(d) The Board is authorized and empowered to execute any and all functions and perform any and all duties vested in it hereby, through such persons as it shall designate or employ; and it may delegate to any person or persons, including any institution operating under the general supervision of the Administration, the performance and discharge of any authority, power, or function vested in it by this chapter.
(e) All books and records of Federal credit unions shall be kept and reports shall be made in accordance with forms approved by the Board.
(f)(1) The Board is authorized to make investigations and to conduct researches and studies of the problems of persons of small means in obtaining credit at reasonable rates of interest, and of the methods and benefits of cooperative saving and lending among such persons. It is further authorized to make reports of such investigations and to publish and disseminate the same.
(2)(A) The Board is authorized to conduct directly, or to make grants to or contracts with colleges or universities, State or local educational agencies, or other appropriate public or private nonprofit organizations to conduct, programs for the training of persons engaged, or preparing to engage, in the operation of credit unions, and in related consumer counseling programs, serving the poor. It is authorized to establish a program of experimental, developmental, demonstration, and pilot projects, either directly or by grants to public or private nonprofit organizations, including credit unions, or by contracts with such organizations or other private organizations, designed to promote more effective operation of credit unions, and related consumer counseling programs, serving the poor.
(B) In carrying out its authority under this paragraph, the Board shall consult with officials of the Office of Economic Opportunity and other appropriate Federal agencies responsible for the administration of projects or programs concerned with problems of the poor. The development and operation of programs and projects under this paragraph shall involve maximum feasible participation of residents of the areas and members of the groups served by such programs and projects, with community action agencies established under the provisions of the Economic Opportunity Act of 1964 [
(C) In order to carry out the purposes of this paragraph, there is authorized to be appropriated, as a supplement to any funds that may be expended by the Board pursuant to
(g) Any officer or employee of the Administration is authorized, when designated for the purpose by the Board, to administer oaths and affirmations and to take affidavits and depositions touching upon any matter within the jurisdiction of the Administration.
(h) The Board is authorized, empowered, and directed to require that every person appointed or elected by any Federal credit union to any position requiring the receipt, payment, or custody of money or other personal property owned by a Federal credit union, or in its custody or control as collateral or otherwise, give bond in a corporate surety company holding a certificate of authority from the Secretary of the Treasury under
(i) In addition to the authority conferred upon it by other sections of this chapter, the Board is authorized in carrying out its functions under this chapter—
(1) to appoint such personnel as may be necessary to enable the Administration to carry out its functions;
(2) to expend such funds, enter into such contracts with public and private organizations and persons, make such payments in advance or by way of reimbursement, acquire and dispose of, by lease or purchase, real or personal property, without regard to the provisions of any other law applicable to executive or independent agencies of the United States, and perform such other functions or acts as it may deem necessary or appropriate to carry out the provisions of this chapter, in accordance with the rules and regulations or policies established by the Board not inconsistent with this chapter; and
(3) to pay stipends, including allowances for travel to and from the place of residence, to any individual to study in a program assisted under this chapter upon a determination by the Board that assistance to such individual in such studies will be in furtherance of the purposes of this chapter.
(j)
(1)
(2)
(3)
(June 26, 1934, ch. 750, title I, §120, formerly §16,
References in Text
The Economic Opportunity Act of 1964, referred to in subsec. (f)(2)(B), is
Amendments
2006—Subsec. (h).
1994—Subsec. (k).
1989—Subsec. (j).
Subsec. (k).
1987—Subsec. (i)(2).
1982—Subsec. (a).
1978—
1977—Subsec. (b)(3)(B).
1970—Subsecs. (a) to (h).
Subsec. (i).
1968—Subsec. (f).
1959—
1954—Subsec. (f). Act June 30, 1954, added subsec. (f).
Subsec. (g). Act Aug. 24, 1954, added subsec. (g).
1946—Subsec. (b). Act July 31, 1946, provided a more adequate statutory procedure for the administration of this chapter by expressly authorizing the liquidation of a Federal credit union and setting up a procedure which will achieve more orderly and complete liquidation.
1937—Subsec. (e). Act Dec. 6, 1937, added subsec. (e).
Effective Date of 1978 Amendment
Amendment by
Effective Date of 1968 Amendment
§1767. Fiscal agents and depositories; authorization to secure deposits by governmental bodies
(a) Each Federal credit union organized under this chapter, when requested by the Secretary of the Treasury, shall act as fiscal agent of the United States and shall perform such services as the Secretary of the Treasury may require in connection with the collection of taxes and other obligations due the United States and the lending, borrowing, and repayment of money by the United States, including the issue, sale, redemption, or repurchase of bonds, notes, Treasury certificates of indebtedness, or other obligations of the United States; and to facilitate such purposes the Board shall furnish to the Secretary of the Treasury from time to time the names and addresses of all Federal credit unions with such other available information concerning them as may be requested by the Secretary of the Treasury. Any Federal credit union organized under this chapter, when designated for that purpose by the Secretary of the Treasury, shall be a depository of public money, except receipts from customs, under such regulations as may be prescribed by the Secretary of the Treasury.
(b) Any Federal credit union, upon the deposit with it of any funds by the Federal Government, an Indian tribe, or any State or local government or political subdivision thereof as otherwise authorized by this chapter, is authorized to pledge any of its assets securing the payment of the funds so deposited.
(June 26, 1934, ch. 750, title I, §121, formerly §17,
Amendments
1987—
1978—
1970—
Effective Date of 1978 Amendment
Amendment by
Transfer of Functions
Transfer of functions of Farm Credit Administration and Governor thereof, generally, see notes set out under
Functions of Governor of Farm Credit Administration under this section transferred to Federal Deposit Insurance Corporation by Reorg. Plan No. 1 of 1947.
§1768. Taxation
The Federal credit unions organized hereunder, their property, their franchises, capital, reserves, surpluses, and other funds, and their income shall be exempt from all taxation now or hereafter imposed by the United States or by any State, Territorial, or local taxing authority; except that any real property and any tangible personal property of such Federal credit unions shall be subject to Federal, State, Territorial, and local taxation to the same extent as other similar property is taxed. Nothing herein contained shall prevent holdings in any Federal credit union organized hereunder from being included in the valuation of the personal property of the owners or holders thereof in assessing taxes imposed by authority of the State or political subdivision thereof in which the Federal credit union is located; but the duty or burden of collecting or enforcing the payment of such a tax shall not be imposed upon any such Federal credit union and the tax shall not exceed the rate of taxes imposed upon holdings in domestic credit unions.
(June 26, 1934, ch. 750, title I, §122, formerly §18,
Amendments
1959—
1937—Act Dec. 6, 1937, inserted tax exemption provision, the real and tangible personal property proviso, provided that responsibility of tax collection would not be imposed upon Federal credit unions, and that tax rate would not exceed that of domestic credit unions.
§1769. Separability; right to alter, amend, or repeal chapter
(a) If any provision of this chapter, or the application thereof to any person or circumstance, is held invalid, the remainder of the chapter, and the application of such provision to other persons or circumstances, shall not be affected thereby.
(b) The right to alter, amend, or repeal this chapter or any part thereof, or any charter issued pursuant to the provisions of this chapter, is expressly reserved.
(June 26, 1934, ch. 750, title I, §123, formerly §24, as added
Prior Provisions
A prior section 1769, act June 26, 1934, ch. 750, §19,
Provisions similar to those comprising this section were contained in section 20 of act June 26, 1934, ch. 750,
§1770. Allotment of space in Federal buildings or Federal land
Notwithstanding any other provision of law, upon application by any credit union organized under State law or by any Federal credit union organized in accordance with the terms of this chapter, which application shall be addressed to the officer or agency of the United States charged with the allotment of space on lands reserved for the use of, and under the exclusive or concurrent jurisdiction of, the United States or in the Federal buildings in the community or district in which such credit union does business, such officer or agency may in his or its discretion lease land or allot space to such credit union without charge for rent or services if at least 95 percent of the membership of the credit union to be served by the allotment of space or the facility built on the lease land is composed of persons who either are presently Federal employees or were Federal employees at the time of admission into the credit union, and members of their families, and if space is available. For the purpose of this section, the term "services" includes, but is not limited to, the providing of lighting, heating, cooling, electricity, office furniture, office machines and equipment, telephone service (including installation of lines and equipment and other expenses associated with telephone service), and security systems (including installation and other expenses associated with security systems). Where there is an agreement for the payment of costs associated with the provision of space or services, nothing in title 31 or any other provision of law, shall be construed to prohibit or restrict payment by reimbursement to the miscellaneous receipts or other appropriate account of the Treasury.
(June 26, 1934, ch. 750, title I, §124, formerly §25, as added
Prior Provisions
A prior section 1770, act June 26, 1934, ch. 750, §20,
Provisions similar to those comprising this section were contained in section 21 of act June 26, 1934, ch. 750, as added July 9, 1937, ch. 471,
Amendments
2006—
1994—
1993—
1983—
1982—
Effective Date of 1994 Amendment
§1771. Conversion from Federal to State credit union and from State to Federal credit union
(a) A Federal credit union may be converted into a State credit union under the laws of any State, the District of Columbia, the several Territories and possessions of the United States, the Panama Canal Zone, or the Commonwealth of Puerto Rico, by complying with the following requirements:
(1) The proposition for such conversion shall first be approved, and a date set for a vote thereon by the members (either at a meeting to be held on such date or by written ballot to be filed on or before such date), by a majority of the directors of the Federal credit union. Written notice of the proposition and of the date set for the vote shall then be delivered in person to each member, or mailed to each member at the address for such member appearing on the records of the credit union, not more than thirty nor less than seven days prior to such date. Approval of the proposition for conversion shall be by the affirmative vote of a majority of the members of the credit union who vote on the proposal. The written notice of the proposition shall in boldface type state that the issue will be decided by a majority of the members who vote.
(2) A statement of the results of the vote, verified by the affidavits of the president or vice president and the secretary, shall be filed with the Administration within ten days after the vote is taken.
(3) Promptly after the vote is taken and in no event later than ninety days thereafter, if the proposition for conversion was approved by such vote, the credit union shall take such action as may be necessary under the applicable State law to make it a State credit union, and within ten days after receipt of the State credit union charter there shall be filed with the Administration a copy of the charter thus issued. Upon such filing the credit union shall cease to be a Federal credit union.
(4) Upon ceasing to be a Federal credit union, such credit union shall no longer be subject to any of the provisions of this chapter. The successor State credit union shall be vested with all of the assets and shall continue responsible for all of the obligations of the Federal credit union to the same extent as though the conversion had not taken place.
(b)(1) A State credit union, organized under the laws of any State, the District of Columbia, the several Territories and possessions of the United States, the Panama Canal Zone, or the Commonwealth of Puerto Rico, may be converted into a Federal credit union by (A) complying with all State requirements requisite to enabling it to convert to a Federal credit union or to cease being a State credit union, (B) filing with the Administration proof of such compliance, satisfactory to the Board, and (C) filing with the Administration an organization certificate as required by this chapter.
(2) When the Board has been satisfied that all of such requirements, and all other requirements of this chapter, have been complied with, the Board shall approve the organization certificate. Upon such approval, the State credit union shall become a Federal credit union as of the date it ceases to be a State credit union. The Federal credit union shall be vested with all of the assets and shall continue responsible for all of the obligations of the State credit union to the same extent as though the conversion had not taken place.
(June 26, 1934, ch. 750, title I, §125, formerly §26, as added
References in Text
For definition of Canal Zone, referred to in text, see
Prior Provisions
A prior section 1771, act June 26, 1934, ch. 750, §21, as added July 9, 1937, ch. 471,
Amendments
1982—Subsec. (a)(1).
1978—Subsec. (b).
1970—
Effective Date of 1978 Amendment
Amendment by
§1772. Territorial application of chapter
The provisions of this chapter shall apply to the several States, the District of Columbia, the several Territories, including the trust territories, and possessions of the United States, the Panama Canal Zone, and the Commonwealth of Puerto Rico.
(June 26, 1934, ch. 750, title I, §126, formerly §22, as added July 31, 1946, ch. 711, §7,
References in Text
For definition of Canal Zone, referred to in text, see
Amendments
1974—
1959—
1952—Act May 8, 1952, amended section to extend provisions of this chapter to the Virgin Islands.
§1772a. Gifts; acceptance of conditional gifts; deposit
The Board is authorized to accept gifts of money made unconditionally by will or otherwise for the carrying out of any of the functions under this chapter. A conditional gift of money made by will or otherwise for such purposes may be accepted and used in accordance with its conditions, but no such gift shall be accepted which is conditioned upon any expenditure not to be met therefrom or from income thereof unless the Board determines that supplementation of such gift from the fees it may expend pursuant to
(June 26, 1934, ch. 750, title I, §127, formerly §28, as added
Amendments
1978—
1970—
Effective Date of 1978 Amendment
Amendment by
§1772b. Apportionment
Notwithstanding any other provision of law, funds received by the Board pursuant to any method provided by this chapter, and interest, dividend, or other income thereon, shall not be subject to apportionment for the purpose of
(June 26, 1934, ch. 750, title I, §128, as added
§1772c. Trust fund
Notwithstanding any other provision of law, all moneys of the Board shall be treated as trust funds for the purpose of section 906(a)(2) 1 of title 2. This section is effective for fiscal year 1986 and every fiscal year thereafter.
(June 26, 1934, ch. 750, title I, §129, as added
References in Text
1 See References in Text note below.
§1772c–1. Community development revolving loan fund for credit unions
(a) In general
The Board may exercise the authority granted to it by the Community Development Credit Union Revolving Loan Fund Transfer Act, including any additional appropriation made or earnings accrued, subject only to this section and to regulations prescribed by the Board.
(b) Investment
The Board may invest any idle Fund moneys in United States Treasury securities. Any interest accrued on such securities shall become a part of the Fund.
(c) Loans
The Board may require that any loans made from the Fund be matched by increased shares in the borrower credit union.
(d) Interest
Interest earned by the Fund may be allocated by the Board for technical assistance to community development credit unions, subject to an appropriations Act.
(e) "Fund" defined
As used in this section, the term "Fund" means the Community Development Credit Union Revolving Loan Fund.
(June 26, 1934, ch. 750, title I, §130, as added
References in Text
The Community Development Credit Union Revolving Loan Fund Transfer Act, referred to in subsec. (a), is
§1772d. Forfeiture of organization certificate for money laundering or cash transaction reporting offenses
(a) Forfeiture of franchise for money laundering or cash transaction reporting offenses
(1) Conviction of title 18 offenses
(A) Duty to notify
If a credit union has been convicted of any criminal offense under
(B) Notice of termination; pretermination hearing
After receiving written notification from the Attorney General of such a conviction, the Board shall issue to such credit union a notice of its intention to terminate all rights, privileges, and franchises of the credit union and schedule a pretermination hearing.
(2) Conviction of title 31 offenses
If a credit union is convicted of any criminal offense under
(3) Judicial review
(b) Factors to be considered
In determining whether a franchise shall be forfeited under subsection (a), the Board shall take into account the following factors:
(1) The extent to which directors, committee members, or senior executive officers (as defined by the Board in regulations which the Board shall prescribe) of the credit union knew of, or were involved in, the commission of the money laundering offense of which the credit union was found guilty.
(2) The extent to which the offense occurred despite the existence of policies and procedures within the credit union which were designed to prevent the occurrence of any such offense.
(3) The extent to which the credit union has fully cooperated with law enforcement authorities with respect to the investigation of the money laundering offense of which the credit union was found guilty.
(4) The extent to which the credit union has implemented additional internal controls (since the commission of the offense of which the credit union was found guilty) to prevent the occurrence of any other money laundering offense.
(5) The extent to which the interest of the local community in having adequate deposit and credit services available would be threatened by the forfeiture of the franchise.
(c) Successor liability
This section shall not apply to a successor to the interests of, or a person who acquires, a credit union that violated a provision of law described in subsection (a), if the successor succeeds to the interests of the violator, or the acquisition is made, in good faith and not for purposes of evading this section or regulations prescribed under this section.
(June 26, 1934, ch. 750, title I, §131, as added
Amendments
1994—Subsec. (a)(2).
§1773. District of Columbia credit unions; conversion to Federal status
Any credit union organized under the District of Columbia Credit Unions Act, as amended, may apply for conversion into a Federal credit union by filing with the National Credit Union Administration Board (in
(
References in Text
The District of Columbia Credit Unions Act, referred to in text, was repealed by
Codification
Section was not enacted as part of the Federal Credit Union Act which comprises this chapter.
Transfer of Functions
"National Credit Union Administration Board" and "Board" substituted in text for "Director of the Bureau of Federal Credit Unions" and "Director", respectively, pursuant to section 3 of
Repeals; Revocation of Organization Certificates Issued Under District of Columbia Credit Unions Act
§1774. Approval of certificate; assets and obligations of applicant credit union
The Board shall approve any such organization certificate meeting such requirements. Upon such approval, the applicant credit union shall become a Federal credit union, and shall be vested with all of the assets and shall continue responsible for all of the obligations of such applicant credit union to the same extent as though the conversion had not taken place.
(
Codification
Section was not enacted as part of the Federal Credit Union Act which comprises this chapter.
Transfer of Functions
"Board", meaning the National Credit Union Administration Board, substituted in text for "Director", meaning Director of Bureau of Federal Credit Unions, pursuant to section 3 of
§1775. Conditions upon conversion to Federal status
Any District of Columbia credit union converting into a Federal credit union in accordance with
(1) no fee shall be imposed upon a credit union converting pursuant to
(2) any loan or investment made by a credit union converting pursuant to
(3) a credit union converting pursuant to
(
References in Text
The Federal Credit Union Act, referred to in text, is act June 26, 1934, ch. 750,
The District of Columbia Credit Unions Act, referred to in par. (2), was act June 23, 1932, ch. 272,
Codification
Section was not enacted as part of the Federal Credit Union Act which comprises this chapter.
Transfer of Functions
"Board" and "the Board's", meaning the National Credit Union Administration Board, substituted in par. (3) for "Director" and "his", respectively, meaning Director of Bureau of Federal Credit Unions, pursuant to section 3 of
SUBCHAPTER II—SHARE INSURANCE
§1781. Insurance of member accounts
(a) Eligibility
The Board, as hereinafter provided, shall insure the member accounts of all Federal credit unions and it may insure the member accounts of (1) credit unions organized and operated according to the laws of any State, the District of Columbia, the several territories, including the trust territories, and possessions of the United States, the Panama Canal Zone, or the Commonwealth of Puerto Rico, and (2) credit unions organized and operating under the jurisdiction of the Department of Defense if such credit unions are operating in compliance with the requirements of subchapter I of this chapter and regulations issued thereunder.
(b) Application; agreement
Application for insurance of member accounts shall be made immediately by each Federal credit union and may be made at any time by a State credit union or a credit union operating under the jurisdiction of the Department of Defense. Applications for such insurance shall be in such form as the Board shall provide and shall contain an agreement by the applicant—
(1) to pay the reasonable cost of such examinations as the Board may deem necessary in connection with determining the eligibility of the applicant for insurance: Provided, That examinations required under subchapter I of this chapter shall be so conducted that the information derived therefrom may be utilized for share insurance purposes, and examinations conducted by State regulatory agencies shall be utilized by the Board for such purposes to the maximum extent feasible;
(2) to permit and pay the reasonable cost of such examinations as in the judgment of the Board may from time to time be necessary for the protection of the fund and of other insured credit unions;
(3) to permit the Board to have access to any information or report with respect to any examination made by or for any public regulatory authority, including any commission, board, or authority having supervision of a State-chartered credit union, and furnish such additional information with respect thereto as the Board may require;
(4) to provide protection and indemnity against burglary, defalcation, and other similar insurable losses, of the type, in the form, and in an amount at least equal to that required by the laws under which the credit union is organized and operates;
(5) to maintain such regular reserves as may be required by the laws of the State, district, territory, or other jurisdiction pursuant to which it is organized and operated, in the case of a State-chartered credit union, or as may be required by this chapter, in the case of a Federal credit union;
(6) to maintain such special reserves as the Board, by regulation or in special cases, may require for protecting the interest of members or to assure that all insured credit unions maintain regular reserves which are not less than those required under subchapter I of this chapter;
(7) not to issue or have outstanding any account or security the form of which, by regulation or in special cases, has not been approved by the Board except for accounts authorized by State law for State credit unions;
(8) to pay and maintain its deposit and to pay the premium charges for insurance imposed by this subchapter; and
(9) to comply with the requirements of this subchapter and of regulations prescribed by the Board pursuant thereto.
(c) Approval of application
(1) Before approving the application of any credit union for insurance of its member accounts, the Board shall consider—
(A) the history, financial condition, and management policies of the applicant;
(B) the economic advisability of insuring the applicant without undue risk of the fund;
(C) the general character and fitness of the applicant's management;
(D) the convenience and needs of the members to be served by the applicant; and
(E) whether the applicant is a cooperative association organized for the purpose of promoting thrift among its members and creating a source of credit for provident or productive purposes.
(2) The Board shall disapprove the application of any credit union for insurance of its member accounts if it finds that its reserves are inadequate, that its financial condition and policies are unsafe or unsound, that its management is unfit, that insurance of its member accounts would otherwise involve undue risk to the fund, or that its powers and purposes are inconsistent with the promotion of thrift among its members and the creation of a source of credit for provident or productive purposes.
(3) Repealed.
(d) Certificate of insurance
Upon the approval of any application for insurance, the Board shall notify the applicant and shall issue to it a certificate evidencing the fact that it is, as of the date of issuance of the certificate, an insured credit union under the provisions of this subchapter.
(e) Prohibition on certain associations
(1) In general
No insured credit union may be sponsored by or accept financial support, directly or indirectly, from any Government-sponsored enterprise, if the credit union includes the customers of the Government-sponsored enterprise in the field of membership of the credit union.
(2) Routine business financing
Paragraph (1) shall not apply with respect to advances or other forms of financial assistance generally provided by a Government-sponsored enterprise in the ordinary course of business of the enterprise.
(3) "Government-sponsored enterprise" defined
For purposes of this subsection, the term "Government-sponsored enterprise" has the meaning given to such term in section 1404(e)(1)(A) of the Financial Institutions Reform, Recovery, and Enforcement Act of 1989.
(4) Employee credit union
No provision of this subsection shall be construed as prohibiting any employee of a Government-sponsored enterprise from becoming a member of a credit union whose field of membership is the employees of such enterprise.
(June 26, 1934, ch. 750, title II, §201, as added
References in Text
For definition of Canal Zone, referred to in text, see
Section 1404(e)(1)(A) of the Financial Institutions Reform, Recovery, and Enforcement Act of 1989, referred to in subsec. (e)(3), is section 1404(e)(1)(A) of
Amendments
2006—Subsec. (b)(5).
1996—Subsec. (e).
1984—Subsec. (b)(8).
1978—Subsec. (a).
Subsec. (b).
Subsec. (c).
Subsecs. (d), (e).
1977—Subsec. (c)(3)
1971—Subsec. (c)(2).
Subsec. (c)(3).
Subsec. (d).
Effective Date of 1996 Amendment
Effective Date of 1978 Amendment
Amendment by
§1782. Administration of insurance fund
(a) Reports of condition
(1) Each insured credit union shall make reports of condition to the Board upon dates which shall be selected by it. Such reports of condition shall be in such form and shall contain such information as the Board may require. The reporting dates selected for reports of condition shall be the same for all insured credit unions except that when any of said reporting dates is a nonbusiness day for any credit union the preceding business day shall be its reporting date. The total amount of the member accounts of each insured credit union as of each reporting date shall be reported in such reports of condition in accordance with regulations prescribed by the Board. Each report of condition shall contain a declaration by the president, by a vice president, by the treasurer, or by any other officer designated by the board of directors of the reporting credit union to make such declaration, that the report is true and correct to the best of such officer's knowledge and belief. Unless such requirement is waived by the Board, the correctness of each report of condition shall be attested by the signatures of three of the officers of the reporting credit union with the declaration that the report has been examined by them and to the best of their knowledge and belief is true and correct.
(2) The Board may call for such other reports as it may from time to time require.
(3) The Board may require reports of condition to be published in such manner, not inconsistent with any applicable law, as it may direct. Any insured credit union which maintains procedures reasonably adapted to avoid any inadvertent error and, unintentionally and as a result of such an error, fails to submit or publish any report required under this subsection or
(4) The Board may accept any report of condition made to any commission, board, or authority having supervision of a State-chartered credit union and may furnish to any such commission, board, or authority reports of condition made to the Board.
(5) Reports required under subchapter I of this chapter shall be so prepared that they can be used for share insurance purposes. To the maximum extent feasible, the Board shall use for insurance purposes reports submitted to State regulatory agencies by State-chartered credit unions.
(6)
(A)
(i) for which such credit union has not conducted an annual supervisory committee audit;
(ii) for which such credit union has not received a complete and satisfactory supervisory committee audit; or
(iii) during which such credit union has experienced persistent and serious recordkeeping deficiencies, as determined by the Board.
(B)
(C)
(i)
(ii)
(iii)
(D)
(i)
(ii)
(7)
(A)
(B)
(i) a copy of any supervisory memorandum of understanding with such credit union and any written agreement between the Board or a State regulatory agency and the credit union which is in effect during the period covered by the audit; and
(ii) a report of any action initiated or taken by the Board during such period under subsection (e), (f), (g), (i), (l), or (q) of
(I) the credit union; or
(II) any institution-affiliated party.
(8)
(A) any other Federal or State agency or authority with supervisory or regulatory authority over the credit union or other entity;
(B) any officer, director, or receiver of such credit union or entity; and
(C) any other person that the Board determines to be appropriate.
(b) Certified statement
(1) Statement required
(A) In general
For each calendar year, in the case of an insured credit union with total assets of not more than $50,000,000, and for each semi-annual period in the case of an insured credit union with total assets of $50,000,000 or more, an insured credit union shall file with the Board, at such time as the Board prescribes, a certified statement showing the total amount of insured shares in the credit union at the close of the relevant period and both the amount of its deposit or adjustment of deposit and the amount of the insurance charge due to the Fund for that period, both as computed under subsection (c).
(B) Exception for newly insured credit union
Subparagraph (A) shall not apply with respect to a credit union that became insured during the reporting period.
(2) Form
The certified statements required to be filed with the Board pursuant to this subsection shall be in such form and shall set forth such supporting information as the Board shall require.
(3) Certification
The president of the credit union or any officer designated by the board of directors shall certify, with respect to each statement required to be filed with the Board pursuant to this subsection, that to the best of his or her knowledge and belief the statement is true, correct, complete, and in accordance with this subchapter and the regulations issued under this subchapter.
(c) Deposit with National Credit Union Share Insurance Fund; amount, return, distribution, etc.
(1)(A)(i) Each insured credit union shall pay to and maintain with the National Credit Union Share Insurance Fund a deposit in an amount equaling 1 per centum of the credit union's insured shares.
(ii) The Board may, in its discretion, authorize insured credit unions to initially fund such deposit over a period of time in excess of one year if necessary to avoid adverse effects on the condition of insured credit unions.
(iii)
(I) annually, in the case of an insured credit union with total assets of not more than $50,000,000; and
(II) semi-annually, in the case of an insured credit union with total assets of $50,000,000 or more.
(B)(i) The deposit shall be returned to an insured credit union in the event that its insurance coverage is terminated, it converts to insurance coverage from another source, or in the event the operations of the fund are transferred from the National Credit Union Administration Board.
(ii) The deposit shall be returned in accordance with procedures and valuation methods determined by the Board, but in no event shall the deposit be returned any later than one year after the final date on which no shares of the credit union are insured by the Board.
(iii) The deposit shall not be returned in the event of liquidation on account of bankruptcy or insolvency.
(iv) The deposit funds may be used by the fund if necessary to meet its expenses, in which case the amount so used shall be expensed and shall be replenished by insured credit unions in accordance with procedures established by the Board.
(2)
(A)
(B)
(i) the Fund's equity ratio is less than 1.3 percent; and
(ii) the premium charge does not exceed the amount necessary to restore the equity ratio to 1.3 percent.
(C)
(D)
(i)
(I) the Board projects that the equity ratio of the Fund will, within 6 months of such determination, fall below the minimum amount specified in subparagraph (C); or
(II) the equity ratio of the Fund actually falls below the minimum amount specified in subparagraph (C) without any determination under sub-clause (I) having been made,
the Board shall establish and implement a restoration plan within 90 days that meets the requirements of clause (ii) and such other conditions as the Board determines to be appropriate.
(ii)
(iii)
(3)
(A)
(i) any loans to the Fund from the Federal Government, and any interest on those loans, have been repaid;
(ii) the Fund's equity ratio exceeds the normal operating level; and
(iii) the Fund's available assets ratio exceeds 1.0 percent.
(B)
(i) does not reduce the Fund's equity ratio below the normal operating level; and
(ii) does not reduce the Fund's available assets ratio below 1.0 percent.
(C)
(4)
(d) Remedy for failure to report; penalty for failure to file certified statement or pay premium; dispute as to deposit or premium charge; prohibition on distribution of assets or dividends while in default
(1) Any insured credit union which fails to make any report of condition under subsection (a) of this section or to file any certified statement required to be filed by it in connection with determining the amount of its deposit or any premium charge for insurance may be compelled to make such report or to file such statement by mandatory injunction or other appropriate remedy in a suit brought for such purpose by the Board against the credit union and any officer or officers thereof. Any such suit may be brought in any court of the United States of competent jurisdiction in the district or territory in which the principal office of the credit union is located.
(2)
(A)
(i) maintains procedures reasonably adapted to avoid any inadvertent error and, unintentionally and as a result of such an error, fails to submit any certified statement under subsection (b)(1) within the period of time required or submits a false or misleading certified statement under such subsection; or
(ii) submits the statement at a time which is minimally after the time required,
shall be subject to a penalty of not more than $2,000 for each day during which such failure continues or such false and misleading information is not corrected. The insured credit union shall have the burden of proving that an error was inadvertent or that a statement was inadvertently submitted late.
(B)
(i) fails to submit any certified statement under subsection (b)(1) within the period of time required or submits a false or misleading certified statement in a manner not described in subparagraph (A); or
(ii) fails or refuses to pay any deposit or premium for insurance required under this subchapter,
shall be subject to a penalty of not more than $20,000 for each day during which such failure continues, such false and misleading information is not corrected, or such deposit or premium is not paid.
(C)
(D)
(E)
(F)
(i) the failure is due to a dispute between the credit union and the Board over the amount of the deposit or premium which is due from the credit union; and
(ii) the credit union deposits security satisfactory to the Board for payment of the deposit or insurance premium upon final determination of the dispute.
(3) No insured credit union shall pay any dividends on its insured shares or distribute any of its assets while it remains in default in the payment of its deposit or any premium charge for insurance due to the fund. Any director or officer of any insured credit union who knowingly participates in the declaration or payment of any such dividend or in any such distribution shall, upon conviction, be fined not more than $1,000 or imprisoned not more than one year, or both. The provisions of this paragraph shall not be applicable in any case in which the default is due to a dispute between the credit union and the Board over the amount of its deposit or the premium charge due to the fund if the credit union deposits security satisfactory to the Board for payment of its deposit or the premium charge upon final determination of the issue.
(e) Recovery of unpaid deposit or premium; limitations
The Board, in a suit brought at law or in equity in any court of competent jurisdiction, shall be entitled to recover from any insured credit union the amount of any unpaid deposit or premium charge for insurance lawfully payable by the credit union to the fund, whether or not such credit union shall have made any report of condition under subsection (a) of this section or filed any certified statement required under subsection (b) of this section and whether or not suit shall have been brought to compel the credit union to make any such report or to file any such statement. No action or proceeding shall be brought for the recovery of any deposit or premium charge due to the fund, or for the recovery of any amount paid to the fund in excess of the amount due it, unless such action or proceeding shall have been brought within five years after the right accrued for which the claim is made. Where the insured credit union has made or filed with the Board a false or fraudulent certified statement with the intent to evade, in whole or in part, the payment of its deposit or any premium charge, the claim shall not be deemed to have accrued until the discovery by the Board of the fact that the certified statement is false or fraudulent.
(f) Penalty for failure to comply with section; court determination of failure; remedies not exclusive
Should any Federal credit union fail to make any report of condition under subsection (a) of this section or to file any certified statement required to be filed under subsection (b) of this section or to pay its deposit or any premium charge for insurance required to be paid under any provision of this subchapter, and should the credit union fail to correct such failure within thirty days after written notice has been given by the Board to an officer of the credit union, citing this subsection and stating that the credit union has failed to make any such report or file any such statement or pay any such deposit or premium charges as required by law, all the rights, privileges, and franchises of the credit union granted to it under subchapter I of this chapter shall be thereby forfeited. Whether or not the penalty provided in this subsection has been incurred shall be determined and adjudged by any court of the United States of competent jurisdiction in a suit brought for that purpose in the district or territory in which the principal office of such credit union is located, under direction of and by the Board in its own name, before the credit union shall be declared dissolved. The remedies provided in this subsection and in subsections (d) and (e) of this section shall not be construed as limiting any other remedies against any insured credit union but shall be in addition thereto.
(g) Records
Each insured credit union shall maintain such records as will readily permit verification of the correctness of its reports of condition, certified statements, and deposit and premium charges for insurance. However, no insured credit union shall be required to retain such records for such purpose for a period in excess of five years from the date of the making of any such report, the filing of any such statement, or the payment of any deposit or adjustment thereof or any premium charge, except that when there is a dispute between the insured credit union and the Board over the amount of any deposit or adjustment thereof or any premium charge for insurance the credit union shall retain such records until final determination of the issue.
(h) Definitions
For purposes of this section, the following definitions shall apply:
(1) Available assets ratio
The term "available assets ratio", when applied to the Fund, means the ratio of—
(A) the amount determined by subtracting—
(i) direct liabilities of the Fund and contingent liabilities for which no provision for losses has been made, from
(ii) the sum of cash and the market value of unencumbered investments authorized under
(B) the aggregate amount of the insured shares in all insured credit unions.
(2) Equity ratio
The term "equity ratio", which shall be calculated using the financial statements of the Fund alone, without any consolidation or combination with the financial statements of any other fund or entity, means the ratio of—
(A) the amount of Fund capitalization, including insured credit unions' 1 percent capitalization deposits and the retained earnings balance of the Fund (net of direct liabilities of the Fund and contingent liabilities for which no provision for losses has been made); to
(B) the aggregate amount of the insured shares in all insured credit unions.
(3) Insured shares
The term "insured shares", when applied to this section, includes share, share draft, share certificate, and other similar accounts as determined by the Board, but does not include amounts exceeding the insured account limit set forth in
(4) Normal operating level
The term "normal operating level", when applied to the Fund, means an equity ratio specified by the Board, which shall be not less than 1.2 percent and not more than 1.5 percent.
(June 26, 1934, ch. 750, title II, §202, as added
Amendments
2011—Subsec. (h)(2).
2009—Subsec. (c)(2)(D).
Subsec. (c)(3)(A).
2006—Subsec. (a)(8).
Subsec. (h)(3).
1998—Subsec. (a)(6).
Subsec. (b).
"(b)(1) For each insurance year, each insured credit union which became insured prior to the beginning of that year shall file with the Board, at such time as the Board prescribes, a certified statement showing the total amount of insured shares in the credit union at the close of the preceding insurance year and both the amount of its deposit or adjustment thereof and the amount of the premium charge for insurance due to the fund for that year, both as computed under subsection (c) of this section.
"(2) The certified statements required to be filed with the Board pursuant to this subsection shall be in such form and shall set forth such supporting information as the Board shall require.
"(3) Each such statement shall be certified by the president of the credit union, or by any officer of the credit union designated by its board of directors, that to the best of his knowledge and belief that statement is true, correct, and complete and in accordance with this subchapter and regulations issued thereunder."
Subsec. (c)(1)(A)(iii).
Subsec. (c)(2), (3).
"(2) Each insured credit union, at such time as the Board prescribes, shall pay to the fund a premium charge for insurance equal to one–twelfth of 1 per centum of the total amount of the insured shares in such credit union at the close of the preceding insurance year.
"(3) When, at the end of a given insurance year, any loans to the fund from the Federal Government and the interest thereon have been repaid and the equity of the fund exceeds the normal operating level, the Board shall effect for that insurance year a pro rata distribution to insured credit unions of an amount sufficient to reduce the equity in the fund to its normal operating level."
Subsec. (c)(4).
Subsec. (h).
"(1) the term 'insurance year' means the period beginning on January 1 and ending on the following December 31, both dates inclusive, unless otherwise prescribed by the Board;
"(2) the term 'normal operating level', when applied to the fund, means an amount equal to 1.3 per centum of the aggregate amount of the insured shares in all insured credit unions, or such lower level as the Board may determine; and
"(3) the term 'insured shares' when applied to this section includes share, share draft, share certificate and other similar accounts as determined by the Board, but does not include amounts in excess of the insured account limit set forth in
1992—Subsec. (d)(2).
1991—Subsec. (d)(2).
1989—Subsec. (a)(3).
Subsec. (a)(6).
Subsec. (a)(7).
1984—Subsec. (b).
Subsec. (c)(1).
Subsec. (c)(2).
Subsec. (c)(3).
Subsec. (c)(4).
Subsec. (d)(1), (2).
Subsec. (d)(3).
Subsec. (e).
Subsec. (f).
Subsec. (g).
Subsec. (h)(1).
Subsec. (h)(2).
Subsec. (h)(3).
1983—Subsec. (c)(1).
1982—Subsec. (c)(3).
Subsec. (c)(4), (5).
Subsec. (c)(6).
Subsec. (h)(3).
1978—Subsec. (a).
Subsecs. (b) to (g).
Subsec. (h)(3).
1974—Subsec. (h)(3).
Effective Date of 1998 Amendment
Effective Date of 1992 Amendment
Amendment by
Effective Date of 1989 Amendment
Amendment by section 911(f) of
Effective Date of 1978 Amendment
Amendment by
1 So in original. Probably should be "De minimis".
§1783. National Credit Union Share Insurance Fund
(a) Creation; use of fund
There is hereby created in the Treasury of the United States a National Credit Union Share Insurance Fund which shall be used by the Board as a revolving fund for carrying out the purposes of this subchapter. Money in the fund shall be available upon requisition by the Board, without fiscal year limitation, for making payments of insurance under
(b) Deposit of deposits and premium charges, fees and penalties
All deposits and premium charges for insurance paid pursuant to the provisions of
(c) Investment authorization
The Board may authorize the Secretary of the Treasury to invest and reinvest such portions of the fund as the Board may determine are not needed for current operations in any interest-bearing securities of the United States or in any securities guaranteed as to both principal and interest by the United States or in bonds or other obligations which are lawful investments for fiduciary, trust, and public funds of the United States, and the income therefrom shall constitute a part of the fund.
(d) Loans to fund, limitation and terms; interest accrual; determination of interest rate
(1) If, in the judgment of the Board, a loan to the insurance fund, or to the stabilization fund described in
(2) Interest shall accrue to the Treasury on the amount of any outstanding loans made to the fund pursuant to paragraph (1) of this subsection on the basis of the average daily amount of such outstanding loans determined at the close of each fiscal year with respect to such year, and the Board shall pay the interest so accruing into the Treasury as miscellaneous receipts annually from the fund. The Secretary of the Treasury shall determine the applicable interest rate in advance by calculating the average yield to maturity (on the basis of daily closing market bid quotations during the month of September of the preceding fiscal year) on outstanding marketable public debt obligations of the United States having a maturity date of five or less years from the first day of such month of September and by adjusting such yield to the nearest one-eighth of 1 per centum.
(3) For the purpose of making loans under paragraph (1) of this subsection, the Secretary of the Treasury is authorized to use as a public debt transaction the proceeds of the sale of any securities issued under
(4)
(A)
(B)
(e) Excess funds credited against loans
So long as any loans to the fund are outstanding, the Board shall from time to time, not less often than annually, determine whether the balance in the fund is in excess of the amount which, in its judgment, is needed to meet the requirements of the fund and shall pay such excess to the Secretary of the Treasury, to be credited against the loans to the fund.
(f) Authorization for fund to borrow from Central Liquidity Facility
In addition to the authority to borrow from the Secretary of the Treasury provided in subsection (d), if in the judgment of the Board, a loan to the fund is required at any time for carrying out the purposes of this subchapter, the fund is authorized to borrow from the National Credit Union Administration Central Liquidity Facility.
(June 26, 1934, ch. 750, title II, §203, as added
References in Text
This subchapter, referred to in subsec. (d)(1), probably should have been a reference to this title in the original, meaning title II of act June 26, 1934, ch. 750, which is classified generally to this subchapter.
Codification
In subsec. (d)(3), "
Amendments
2009—Subsec. (d)(1).
Subsec. (d)(4).
1984—Subsec. (b).
1982—Subsec. (f).
1978—
1976—Subsec. (d)(2).
Change of Name
Committee on Banking, Finance and Urban Affairs of House of Representatives treated as referring to Committee on Banking and Financial Services of House of Representatives by section 1(a) of
Effective Date of 1978 Amendment
Amendment by
1 See References in Text note below.
§1784. Examination of insured credit unions
(a) Examiners and claim agents; powers; report by examiner; jurisdiction of court
The Board shall appoint examiners who shall have power, on its behalf, to examine any insured credit union, any credit union making application for insurance of its member accounts, or any closed insured credit union whenever in the judgment of the Board an examination is necessary to determine the condition of any such credit union for insurance purposes. Each examiner shall have power to make a thorough examination of all of the affairs of the credit union and shall make a full and detailed report of the condition of the credit union to the Board. The Board in like manner shall appoint claim agents who shall have power to investigate and examine all claims for insured member accounts. Each claim agent shall have power to administer oaths and affirmations, to examine and to take and preserve testimony under oath as to any matter in respect to claims for insured accounts, and to issue subpenas and subpenas duces tecum and, for the enforcement thereof, to apply to the United States district court for the judicial district or the United States court in any territory in which the principal office of the credit union is located or in which the witness resides or carries on business. Such courts shall have jurisdiction and power to order and require compliance with any such subpena.
(b) Power of Board; jurisdiction of court
In connection with examinations of insured credit unions, or with other types of investigations to determine compliance with applicable law and regulations, the Board, or its designated representatives, shall have power to administer oaths and affirmations, to examine and to take and preserve testimony under oath as to any matter in respect of the affairs of any such credit union, and to issue subpenas and subpenas duces tecum and to exercise such other powers as are set forth in
(c) Court orders enforcing subpenas; immunity
In cases of refusal to obey a subpena issued to, or contumacy by, any person, the Board may invoke the aid of any court of the United States within the jurisdiction of which such hearing, examination, or investigation is carried on, or where such person resides or carries on business, in requiring the attendance and testimony of witnesses and the production of books, records, or other papers. Such court may issue an order requiring such person to appear before the Board, or before a person designated by it, there to produce records, if so ordered, or to give testimony touching the matter in question. Any failure to obey such order of the court may be punished by such court as a contempt thereof. All process in any such case may be served in the judicial district whereof such person is an inhabitant or carries on business or wherever he may be found. No person shall be excused from attending and testifying or from producing books, records, or other papers in obedience to a subpena issued under the authority of this subchapter on the ground that the testimony or evidence, documentary or otherwise, required of him may tend to incriminate him or subject him to penalty or forfeiture, but no individual shall be prosecuted or subject to any penalty or forfeiture for or on account of any transaction, matter, or thing concerning which he is compelled to testify or produce evidence, documentary or otherwise, after having claimed his privilege against self-incrimination, except that such individual so testifying shall not be exempt from prosecution and punishment for perjury committed in so testifying.
(d) Administration acceptance of State board reports; reports of Board furnished to State board
The Administration may accept any report of examination made by or to any commission, board, or authority having supervision of a State-chartered credit union and may furnish to any such commission, board, or authority reports of examination made on behalf of the Board.
(e) Flood insurance compliance by insured credit unions
(1) Examination
The Board shall, during each examination conducted under this section, determine whether the insured credit union is complying with the requirements of the national flood insurance program.
(2) Report
(A) Requirement
Not later than 1 year after September 23, 1994, and biennially thereafter for the next 4 years, the Board shall submit a report to the Congress on compliance by insured credit unions with the requirements of the national flood insurance program.
(B) Contents
The report shall include a description of the methods used to determine compliance, the number of insured credit unions examined during the reporting year, a listing and total number of insured credit unions found not to be in compliance, actions taken to correct incidents of noncompliance, and an analysis of compliance, including a discussion of any trends, patterns, and problems, and recommendations regarding reasonable actions to improve the efficiency of the examinations processes.
(f) Access to liquidity
The Board shall—
(1) periodically assess the potential liquidity needs of each insured credit union, and the options that the credit union has available for meeting those needs; and
(2) periodically assess the potential liquidity needs of insured credit unions as a group, and the options that insured credit unions have available for meeting those needs.
(g) Sharing information with Federal reserve banks
The Board shall, for the purpose of facilitating insured credit unions' access to liquidity, make available to the Federal reserve banks (subject to appropriate assurances of confidentiality) information relevant to making advances to such credit unions, including the Board's reports of examination.
(June 26, 1934, ch. 750, title II, §204, as added
Amendments
2006—Subsec. (b).
1998—Subsecs. (f), (g).
1994—Subsec. (e).
1989—Subsec. (b).
1978—
Effective Date of 1978 Amendment
Amendment by
§1785. Requirements governing insured credit unions
(a) Insurance logo
(1) Insured credit unions
(A) In general
Each insured credit union shall display at each place of business maintained by that credit union a sign or signs relating to the insurance of the share accounts of the institution, in accordance with regulations to be prescribed by the Board.
(B) Statement to be included
Each sign required under subparagraph (A) shall include a statement that insured share accounts are backed by the full faith and credit of the United States Government.
(2) Regulations
The Board shall prescribe regulations to carry out this subsection, including regulations governing the substance of signs required by paragraph (1) and the manner of display or use of such signs.
(3) Penalties
For each day that an insured credit union continues to violate this subsection or any regulation issued under this subsection, it shall be subject to a penalty of not more than $100, which the Board may recover for its use.
(b) Restrictions
(1) Except as provided in paragraph (2), no insured credit union shall, without the prior approval of the Board—
(A) merge or consolidate with any noninsured credit union or institution;
(B) assume liability to pay any member accounts in, or similar liabilities of, any noninsured credit union or institution;
(C) transfer assets to any noninsured credit union or institution in consideration of the assumption of liabilities for any portion of the member accounts in such insured credit union; or
(D) convert into a noninsured credit union or institution.
(2)
(A)
(B)
(C)
(i) 90 days before the date of the member vote on the conversion;
(ii) 60 days before the date of the member vote on the conversion; and
(iii) 30 days before the date of the member vote on the conversion.
(D)
(E)
(F)
(i)
(I) director fees; and
(II) compensation and other benefits paid to directors or senior management officials of the converted institution in the ordinary course of business.
(ii)
(G)
(i)
(ii)
(3) Except with the prior written approval of the Board, no insured credit union shall merge or consolidate with any other insured credit union or, either directly or indirectly, acquire the assets of, or assume liability to pay any member accounts in, any other insured credit union.
(c) Considerations for waiver or enforcement of restrictions
In granting or withholding approval or consent under subsection (b) of this section, the Board shall consider—
(1) the history, financial condition, and management policies of the credit union;
(2) the adequacy of the credit union's reserves;
(3) the economic advisability of the transaction;
(4) the general character and fitness of the credit union's management;
(5) the convenience and needs of the members to be served by the credit union; and
(6) whether the credit union is a cooperative association organized for the purpose of promoting thrift among its members and creating a source of credit for provident or productive purposes.
(d) Prohibition
(1) In general
Except with prior written consent of the Board—
(A) any person who has been convicted of any criminal offense involving dishonesty or a breach of trust, or has agreed to enter into a pretrial diversion or similar program in connection with a prosecution for such offense, may not—
(i) become, or continue as, an institution-affiliated party with respect to any insured credit union; or
(ii) otherwise participate, directly or indirectly, in the conduct of the affairs of any insured credit union; and
(B) any insured credit union may not permit any person referred to in subparagraph (A) to engage in any conduct or continue any relationship prohibited under such subparagraph.
(2) Minimum 10-year prohibition period for certain offenses
(A) In general
If the offense referred to in paragraph (1)(A) in connection with any person referred to in such paragraph is—
(i) an offense under—
(I) section 215, 656, 657, 1005, 1006, 1007, 1008,1 1014, 1032, 1344, 1517, 1956, or 1957 of title 18; or
(II) section 1341 or 1343 of such title which affects any financial institution (as defined in section 20 of such title); or
(ii) the offense of conspiring to commit any such offense,
the Board may not consent to any exception to the application of paragraph (1) to such person during the 10-year period beginning on the date the conviction or the agreement of the person becomes final.
(B) Exception by order of sentencing court
(i) In general
On motion of the Board, the court in which the conviction or the agreement of a person referred to in subparagraph (A) has been entered may grant an exception to the application of paragraph (1) to such person if granting the exception is in the interest of justice.
(ii) Period for filing
A motion may be filed under clause (i) at any time during the 10-year period described in subparagraph (A) with regard to the person on whose behalf such motion is made.
(3) Penalty
Whoever knowingly violates paragraph (1) or (2) shall be fined not more than $1,000,000 for each day such prohibition is violated or imprisoned for not more than 5 years, or both.
(e) Security standards; reports; penalty
(1) The Board shall promulgate rules establishing minimum standards with which each insured credit union must comply with respect to the installation, maintenance, and operation of security devices and procedures, reasonable in cost, to discourage robberies, burglaries, and larcenies and to assist in the identification and apprehension of persons who commit such acts.
(2) The rules shall establish the time limits within which insured credit unions shall comply with the standards and shall require the submission of periodic reports with respect to the installation, maintenance, and operation of security devices and procedures.
(3) An insured credit union which violates a rule promulgated pursuant to this subsection shall be subject to a civil penalty which shall not exceed $100 for each day of the violation.
(f) Share draft accounts; maintenance, loans, etc.
(1) Every insured credit union is authorized to maintain, and make loans with respect to, share draft accounts in accordance with rules and regulations prescribed by the Board. Except as provided in paragraph (2), an insured credit union may pay dividends on share draft accounts and may permit the owners of such share draft accounts to make withdrawals by negotiable or transferable instruments or other orders for the purpose of making transfers to third parties.
(2) Paragraph (1) shall apply only with respect to share draft accounts in which the entire beneficial interest is held by one or more individuals or members or by an organization which is operated primarily for religious, philanthropic, charitable, educational, or other similar purposes and which is not operated for profit, and with respect to deposits of public funds by an officer, employee, or agent of the United States, any State, county, municipality, or political subdivision thereof, the District of Columbia, the Commonwealth of Puerto Rico, American Samoa, Guam, any territory or possession of the United States, or any political subdivision thereof.
(g) Interest rates
(1) If the applicable rate prescribed in this subsection exceeds the rate an insured credit union would be permitted to charge in the absence of this subsection, such credit union may, notwithstanding any State constitution or statute which is hereby preempted for the purposes of this subsection, take, receive, reserve, and charge on any loan, interest at a rate of not more than 1 per centum in excess of the discount rate on ninety-day commercial paper in effect at the Federal Reserve bank in the Federal Reserve district where such insured credit union is located or at the rate allowed by the laws of the State, territory, or district where such credit union is located, whichever may be greater.
(2) If the rate prescribed in paragraph (1) exceeds the rate such credit union would be permitted to charge in the absence of this subsection, and such State fixed rate is thereby preempted by the rate described in paragraph (1), the taking, receiving, reserving, or charging a greater rate than is allowed by paragraph (1), when knowingly done, shall be deemed a forfeiture of the entire interest which the loan carries with it, or which has been agreed to be paid thereon. If such greater rate of interest has been paid, the person who paid it may recover, in a civil action commenced in a court of appropriate jurisdiction not later than two years after the date of such payment, an amount equal to twice the amount of interest paid from the credit union taking or receiving such interest.
(h) Emergency merger
Notwithstanding any other provision of law, the Board may authorize a merger or consolidation of an insured credit union which is insolvent or is in danger of insolvency with any other insured credit union or may authorize an insured credit union to purchase any of the assets of, or assume any of the liabilities of, any other insured credit union which is insolvent or in danger of insolvency if the Board is satisfied that—
(1) an emergency requiring expeditious action exists with respect to such other insured credit union;
(2) other alternatives are not reasonably available; and
(3) the public interest would best be served by approval of such merger, consolidation, purchase, or assumption.
(i) Emergency purchase of assets; conversion to insured deposits
(1) Notwithstanding any other provision of this chapter or of State law, the Board may authorize an institution whose deposits or accounts are insured by the Federal Deposit Insurance Corporation to purchase any of the assets of or assume any of the liabilities of an insured credit union which is insolvent or in danger of insolvency, except that prior to exercising this authority the Board must attempt to effect the merger or consolidation of an insured credit union which is insolvent or in danger of insolvency with another insured credit union, as provided in subsection (h).
(2) For purposes of the authority contained in paragraph (1), insured accounts of the credit union may upon consummation of the purchase and assumption be converted to insured deposits or other comparable accounts in the acquiring institution, and the Board and the National Credit Union Share Insurance Fund shall be absolved of any liability to the credit union's members with respect to those accounts.
(j) Privileges not affected by disclosure to banking agency or supervisor
(1) In general
The submission by any person of any information to the Administration, any State credit union supervisor, or foreign banking authority for any purpose in the course of any supervisory or regulatory process of such Board, supervisor, or authority shall not be construed as waiving, destroying, or otherwise affecting any privilege such person may claim with respect to such information under Federal or State law as to any person or entity other than such Board, supervisor, or authority.
(2) Rule of construction
No provision of paragraph (1) may be construed as implying or establishing that—
(A) any person waives any privilege applicable to information that is submitted or transferred under any circumstance to which paragraph (1) does not apply; or
(B) any person would waive any privilege applicable to any information by submitting the information to the Administration, any State credit union supervisor, or foreign banking authority, but for this subsection.
(June 26, 1934, ch. 750, title II, §205, as added
References in Text
Amendments
2010—Subsec. (b)(2)(G)(i).
Subsec. (i)(1).
2006—Subsec. (a).
Subsec. (j).
1998—Subsec. (b)(1).
Subsec. (b)(2), (3).
1994—Subsec. (d).
"(1)
"(A) any person who has been convicted of any criminal offense involving dishonesty or a breach of trust may not participate, directly or indirectly, in any manner in the conduct of the affairs of an insured credit union; and
"(B) an insured credit union may not permit such participation.
"(2)
1989—Subsec. (d).
1987—
1982—Subsec. (f)(2).
Subsecs. (h), (i).
1980—Subsec. (f).
Subsec. (g).
1978—
Effective Date of 2010 Amendment
Amendment by