H.. B.
(By Delegates Farris, Seacrist, Cann, Douglas, Fantasia, Faircloth and
Greear)
(Originating in the House Committee on Banking and Insurance)
[February 7, l996]
A BILL to amend chapter thirty-one of the code of West Virginia, one thousand nine
hundred thirty one, as amended, by deleting article ten of said chapter and
substituting therefor a new chapter, entitled chapter thirty-one b, to said code,
all relating generally to providing for the organization, operation, and
supervision of cooperative, nonprofit thrift and credit associations to be known
as credit unions and to define their powers.
Be it enacted by the Legislature of West Virginia:
That article ten of chapter thirty-one of the code of West Virginia, one
thousand nine hundred thirty-one, as amended, be deleted and that a new chapter
thirty-one b be added to said code and enacted, all to read as follows:
chapter 31B. CREDIT UNIONS
ARTICLE 1. SUPERVISION AND REGULATION
§31B-1-1. Definitions.
In construing this chapter, the following definitions shall apply unless such
application would produce a result clearly inconsistent with the context of the
statutory provision.
(a) "Board of banking and financial institutions" means the board created
pursuant to section one, article three, chapter thirty-one-a of this code and is
referred to herein as "board."
(b) "Commissioner" means the West Virginia commissioner of Banking.
(c) "Corporate credit union" means a credit union whose field of
membership consists primarily of other credit unions.
(d) "Credit union" means a cooperative, nonprofit corporation,incorporated under this chapter, for the purposes of encouraging thrift among its
members, creating a source of credit at fair and reasonable rates of interest, and
providing an opportunity for its members to use and control their own money on a
democratic basis in order to improve their economic and social condition.
(e) "Deposit account" means a balance held by a credit union and established
by a member, another credit union or a governmental unit in accordance with
standards specified by the credit union including balances designated as deposits,
deposit certificates, checking accounts or other names. Ownership of a deposit
account does not confer membership or voting rights and does not represent an
interest in the equity capital of the credit union upon dissolution or conversion to
another type of institution. A deposit account is a debt owed by the credit union to
the account holder.
(f) "Equity Capital" means reserves, loan loss and investment loss
allowance accounts, and undivided earnings.
(g) "Fixed asset" means a structure, land, computer hardware and
software, furniture, office equipment, and heating and cooling equipment that is
affixed to premises.
(h) "Governmental unit" means any board, agency, department, authority,
instrumentality or other unit or organizations of the federal, state, county,
municipal or other level of government.
(i) "Immediate family" means one's wife or husband, and children,
brothers, sisters or parents of the member or their spouse. The term "children"
also includes stepchildren, foster children, and adopted children.
(j) "Insolvent" means the condition that results when the institution is
unable to pay its debts to its depositors, members and other creditors in the
ordinary and usual course of business or when it is in a state of balance sheet
insolvency such that its assets are less than its liabilities, exclusive of equity
capital. The term "about to be insolvent" means the institution would be unable
to meet the demands of its depositors or members, or to make adequate provision
for their timely payment if it were immediately closed for the purpose of
liquidation.
(k) "Insuring organization" means an organization that provides aid and
financial assistance to credit unions that are in the process of liquidation or are
incurring financial difficulty in order that the share and deposit accounts in the
credit unions shall be protected or guaranteed against loss either without limit or
up to a specified level for each account.
(l) "Membership share" means a balance held by a corporate credit union
and established by a member in accordance with standards specified by thecorporate credit union. Ownership of a membership share represents an interest
in the capital of the corporate credit union upon dissolution or conversion to
another type of institution.
(m) "Organization" means any corporation, association, partnership,
society, firm, syndicate, trust or other legal entity.
(n) "Person" means any natural person, organization or governmental unit.
(o) "Reserves" means allocations of retained income and includes regular
and special reserves, except for any allowances for loan losses and investment
losses.
(p) "Risk Assets" means all assets other than cash on hand, deposits and/or
shares in federally or state- insured banks, savings and loan associations, and
credit unions that have a remaining maturity of 5 years or less, or which otherwise
qualify as a risk assets as set forth in 12 CFR 700.1(i) and shall include
membership shares in corporate credit unions.
(q) "Share account" or "Shares" means a balance held by a credit union
and established by a member in accordance with standards specified by the credit
union including balances designated as shares, share certificates, share draft
accounts or other names. However, it does not include membership shares issued
by a corporate credit union. Ownership of a share account confers membership
and voting rights and represents an interest in the equity capital of the credit union
upon dissolution or conversion to another type of institution.
§31B-1-2. Authority of Commissioner and Board of Banking and Financial Institutions.
The commissioner of the department of banking shall be responsible for the
supervision and regulation of credit unions incorporated under this chapter or
previously incorporated under this code. The commissioner is specifically charged
with administering the supervisory and regulatory responsibilities set forth in this
chapter, in conjunction with the board of banking and financial institutions as set
forth in section two, article three, chapter thirty-one-a of this code.
§31B-1-3. Powers of commissioner.
(a) The commissioner may prescribe rules to implement any provision of
this chapter and to define any term not defined in the chapter. Such rules shall
serve to foster and maintain an effective level of credit union services and the
security of member accounts.
(b) The commissioner may restrict the withdrawal of share or deposit
accounts or both from any credit union having determined circumstances makesuch restriction necessary for the proper protection of shareholders or depositors.
(c) The commissioner may issue cease and desist orders pursuant to
section four, article two, chapter thirty-one-a of this code if a credit union is
engaged or has engaged, or when the commissioner has reasonable cause to
believe the credit union is about to engage, in an unsafe or unsound practice, or is
violating or has violated or the commissioner has reasonable cause to believe is
about to violate a material provision of any law, rule or any condition imposed in
writing by the commissioner or any written agreement made with the
commissioner.
(d) The commissioner may suspend from office and prohibit from further
participation in any manner in the conduct of the affairs of a credit union any
director, officer or committee member who has committed any violation of a law,
rule or of a cease and desist order or who has engaged or participated in any
unsafe or unsound practice in connection with the credit union or who has
committed or engaged in any act, omission, or practice which constitutes a breach
of that person's fiduciary duty as such director, officer or committee member,
when the commissioner has determined that such action or actions have resulted or
will result in substantial financial loss or other damage that seriously prejudices
the interests of the members.
(e) The commissioner shall have the power to subpoena witnesses, compel
their attendance, require the production of evidence, administer oaths, and
examine any person under oath in connection with any subject relating to a duty
imposed upon or a power vested in the commissioner.
(f) The commissioner may enter into cooperative, coordinating or
information-sharing agreements with any other state or federal credit union
supervisory agency or any organization affiliated with or representing one or more
credit union supervisory agencies.
(g) The commissioner shall also in connection with the supervision of
credit unions have all powers set forth in article two, chapter thirty-one-a of this
code relating to the regulation of credit unions as financial institutions and to any
subsidiary or affiliate organization of such credit union.
§31B-1-4. Suspension; Involuntary Liquidation.
(a) If it appears that any credit union is bankrupt, insolvent, about to be
insolvent, or that it has willfully violated this chapter, or is operating in an unsafe
or unsound manner, the commissioner may, without prior hearing, issue an order
temporarily suspending the credit union's operations. The credit union's board of
directors shall be given notice by registered mail of such suspension, which notice
shall include a list of the reasons for such suspension, and a list of the specific
violations of this chapter, if any. The commissioner shall also notify the insuring
organization and the board of banking and financial institutions of any suspension.
(b) Upon receipt of such suspension notice, the credit union shall cease all
operations, except those authorized by the commissioner. The credit union's
board of directors shall then file with the commissioner a reply to the suspension
notice within five (5) business days of its receipt, and must therein request a
hearing to be held within sixty (60) days to present a plan of corrective actions
proposed if they desire to continue operations. Alternatively, the credit union's
board of directors may request that the credit union be declared insolvent and a
liquidating agent be appointed.
(c) Upon receipt from the suspended credit union of evidence that the
conditions causing the order of suspension have been corrected, the commissioner
may revoke the suspension notice, permit the credit union to resume normal
operations, and notify the insuring organization and the board of banking and
financial institutions of such action.
(d) If the commissioner, after issuing notice of suspension and providing
an opportunity for a hearing, rejects the credit union's plan to continue operations,
or if the commissioner after accepting or directing a plan for continued operations
finds that the credit union has failed to comply with the plan's substantive
corrective provisions; then the commissioner may issue a notice of involuntary
liquidation and appoint a liquidating agent. The credit union shall be given at
least sixty (60) days in which to take corrective action upon acceptance or
issuance of any corrective plan by the commissioner. The credit union may
request the appropriate court to stay execution of an involuntary liquidation sought
under this subsection. However nothing in this section prevents the commissioner
from appointing a conservator pursuant to section three, article seven, chapter
thirty-one-a of this code, including a temporary appointment of a conservator
pending the correction of the conditions causing the suspension, nor appointing a
receiver and seeking to liquidate the credit union pursuant to section four, article
seven, chapter thirty-one-a of this code when necessary in order to protect the
interest of the credit union's members and depositors.
(e) If, within the suspension period, the credit union fails to answer the
suspension notice or request a hearing, the commissioner may then revoke the
credit union's charter, appoint a liquidating agent and liquidate the credit union.
(f) In the event of liquidation, the assets of the credit union or the
proceeds from any disposition of the assets shall be applied and distributed in the
following sequence:
(1)secured creditors up to the value of their collateral;
(2)costs and expenses of liquidation;
(3)wages due the employees of the credit union;
(4)costs and expenses incurred by creditors in successfully opposing
the release of the credit union from certain debts as allowed by the commissioner;
(5)taxes owed to the United States or any other governmental unit;
(6)debts owed to the United States;
(7)general creditors, secured creditors to the extent their claims exceed
the value of their collateral and owners of deposit accounts to the extent such
accounts are uninsured;
(8)members, to the extent of uninsured share accounts and the
organization that insured the accounts of the credit union; and
(9)members of a corporate credit union, to the extent of membership
shares.
As soon as the appointed liquidating agent determines that all assets from
which there is a reasonable expectancy of realization have been liquidated and
distributed as set forth in this section, a certificate of dissolution shall be executed
on a form prescribed by the commissioner and filed with the secretary of state,
which shall after filing and indexing same, be forwarded to the commissioner,
whereupon the credit union shall be dissolved. The liquidating agent shall return
all pertinent books and records of the liquidating credit union to the commissioner.
§31B-1-5. Examinations.
(a) The commissioner shall annually examine or cause to be examined
each credit union. A credit union and any of its officers and agents shall be
required to give the commissioner or the commissioner's representatives full
access to all books, papers, securities, records and other sources of information
under their control.
(b) A report of such examination shall be forwarded to the credit union's
board of directors within thirty (30) days after completion. Said report shall
contain comments relative to the management of the affairs of the credit union and
the general condition of its assets. Within thirty (30) days after the receipt of
such report, the directors and committee members shall meet to consider matters
contained in the report. Every official communication from the commissioner to
any such institution, or to any officer thereof, relating to an examination or an
investigation of the affairs of such institution conducted by the commissioner or
containing suggestions or recommendations as to the manner of conducting the
business of the institution, shall be read to the board of directors at the next
meeting after the receipt thereof, and the president, or other executive officer, of
the institution shall within fourteen (14) days of such meeting notify the
commissioner in writing of the presentation and reading of the communication and
of any action taken thereon by the institution.
(c) In lieu of making an examination of a credit union, the commissioner
may accept an examination or audit report of the condition of the credit union
made by the National Credit Union Administration.
§31B-1-6. Records.
(a) A credit union shall maintain all books, records, accounting systems,and procedures in accordance with such rules as the commissioner from time to
time prescribes. In prescribing such rules, the commissioner shall consider the
relative size of a credit union and its reasonable capability of compliance. Unless
otherwise required or permitted by a specific rule, credit unions shall follow the
record retention requirements set forth in section thirty-five, article four, chapter
thirty-one-a of this code.
(b) A credit union is not liable for destroying records after the expiration
of the record retention time prescribed by subsection (a) of this section, except for
any records involved in an official investigation or examination about which the
credit union has received notice.
(c) Reproduction of any credit union records shall be admissible as
evidence of transactions with the credit union as provided in section seven-b,
article one, chapter fifty-seven; and section thirty-five, article four, chapter thirty-
one-a of this code.
§31B-1-7. Reports.
(a) Credit unions shall report to the commissioner semi-annually during
January and July of each calendar year on a date set by the commissioner for the
business periods ending June 30th and December 31st respectively on forms
supplied by the commissioner for that purpose. Additional reports may also be
required.
(b) A charge of $100 shall be levied for each day a credit union fails to
provide a required report, unless it is excused for cause by the commissioner or
courts.
(c) The fiscal year of each credit union incorporated under this chapter
shall end on the last day of December.
(d) In addition to other reports that may be required under this chapter,
every credit union with a main office or branch located in this state shall file with
the commissioner an annual report specifying for its main office and each branch
(excluding automated teller machines) in this state:
(i) the location of each such office, including county and, where
applicable, municipality;
(ii) the amount of deposits and shares held by each such office as of the
end of the preceding calendar year; and
(iii) the amount of loans outstanding by each such office at the end of the
preceding calendar year.
The foregoing report shall be based upon the credit union's allocation of its
deposit and share base and loan portfolio among its offices. The report shall be
filed with the commissioner on or before the fifteenth of February of each year on
forms prescribed by the commissioner.
§31A-1-8. Assessments.
The commissioner of banking shall charge and collect from each credit
union and pay into a special revenue account in the state treasury for the
department of banking an annual assessment payable on the first day of July
computed upon the total assets of the credit union shown on the report of
condition of the credit union as of the last business day in December of the
previous year as is set out in section eight, article two, chapter thirty-one-a of this
code.
ARTICLE 2. FORMATION OF CREDIT UNION
§31B-2-1. Organization Procedure.
(a) Any eight (8) or more residents of this state, of legal age, who share
the common bond referred to in section one, article four of this chapter, may
organize a credit union and become charter members thereof by complying with
this section.
(b) The incorporators shall prepare, adopt and execute in duplicate articles
of incorporation and agree to the terms thereof. The articles shall state:
(1)The credit union's name, and the address of the proposed credit
union's principal place of business;
(2)that the existence of the credit union shall be perpetual;
(3)the names and addresses of the incorporators to the articles of
incorporation, and the number of shares subscribed to by each, which for each
incorporator shall be not less than one (1) share; and
(4)the par value of each share to be issued.
(c) The incorporators shall prepare, adopt and execute in duplicate bylaws
consistent with this chapter for the general government of the credit union. The
bylaws shall state:
(1)the conditions and qualifications of membership;
(2)the conditions upon which shares may be issued, transferred and
withdrawn;
(3)the number of directors, their powers and duties; and the
compensation and duties of all officers;
(4)the date of the annual meeting and requirements as to notice and
manner of conducting such meeting;
(5)the term of service for directors, which terms shall be staggered so
that an approximately equal number expire each year;
(6)the number and term of service for supervisory committee
members, together with their powers and duties;
(7)the number and the term of service for credit committee members,
unless the bylaws provide for the board of directors to act as the credit committee,
and their respective powers and duties;
(8)the purposes and conditions upon which loans may be made;
(9)the manner of a member's appeal for a loan application disapproved
by a loan officer, if the bylaws provide for the appointment of loan officers; and
(10)the par value of shares, and where applicable in corporate credit
unions, any membership shares.
(d) The incorporators shall select at least five (5) persons who are eligible
for membership and who agree to become members and serve on the board of
directors, and at least three (3) other persons who are eligible for membership and
who agree to become members and serve on the supervisory committee. The
persons selected to serve on the board of directors and supervisory committee
shall execute an agreement to serve in these capacities until the first annual
meeting or until the election of their respective successors, whichever is later.
(e) The incorporators shall provide to the commissioner an affidavit of the
expenses incurred or anticipated in the organization of the credit union.
(f) In their application to obtain a certificate of charter the incorporators
shall forward to the commissioner the duplicate articles of incorporation and
bylaws and the agreements to serve. The submission of these documents shall be
accompanied by an investigation fee of one hundred dollars ($100) payable to the
commissioner.
§31B-2-2. Certification of Charter; and Certificate of Authority.
(a) The commissioner shall review the incorporation agreement and
bylaws together with other information submitted as the commissioner may
prescribe and complete the examination and investigation on an application to
charter a credit union within ninety (90) days, unless a written request for
additional information or disclosures are made by the commissioner, in which
event, the period of ninety days shall be extended an additional thirty (30) days.
Upon public hearing and obtaining written approval by order of the commissioner,
the agreement and bylaws, both executed in duplicate, together with a certified
copy of the order and applicable corporation chartering fees shall be forwarded to
the secretary of state for processing as in the case of any other corporate charter
application. A certificate of charter shall be approved by the commissioner if
the articles and bylaws are in conformity with this chapter and the commissioner
is satisfied that:
(1)the characteristics of the common bond set forth in the proposed
bylaws are favorable to the economic viability of the proposed credit union;
(2)the proposed capital structure is adequate;
(3)provision has been made for suitable quarters from which to
conduct the business of a credit union; and
(4)the reputation, character, and abilities of the initial board of
directors and supervisory committee provide assurance that the credit union's
affairs will be properly administered.
(b) The secretary of state shall upon receipt of any applicable fees, file
and record the incorporation charter, and return a copy of the bylaws and one of
the duplicate originals of the articles of incorporation to the incorporators or their
representatives. The original articles and bylaws shall be preserved in the
permanent files of the credit union.
(c) Any order to grant or deny a certificate of charter shall be
accompanied by findings of fact and conclusions of law upon which the decision
was based. If a certificate of charter is denied by the commissioner, he/she shall
notify the incorporators and provide a copy of the order, which shall set forth
reasons for the denial. The commissioner's decision may be appealed to the board
of Banking and Financial Institutions within thirty (30) days, and if no appeal is
made of an order to deny the application, the agreement of incorporation, the
corporation chartering fees, and any other papers filed therewith shall be promptly
returned to the attorney, agent, or other responsible person representing the
incorporators in the application.
(d) Upon receipt of a certificate of charter, the incorporators of the credit
union shall promptly apply to the commissioner for a certificate of authority to
engage in business and comply with the provisions of section five, article two,
chapter thirty-one-a of this code, in advance to the issuance of the credit union's
certificate of authority. The incorporators shall likewise comply with other
provisions of this chapter relating to completion of its corporate organization, and
the corporation's readiness to commence business as a credit union.
(f) Upon the credit union's application, and the examination, approval,
and receipt of a certificate of authority from the commissioner, a credit union may
commence to engage in business. The procedure and criteria for the certificate of
authority licensure shall be those set forth in section five, article two, chapter
thirty-one-a of this code for non-bank financial institutions.
(g) The certificate of authority shall be preserved and displayed in the
place of business of the credit union.
(h) If a certificate of authority is denied by the commissioner, he/she
shall notify the applicant and set forth reasons for the denial. The credit union
may appeal the commissioner's decision to the board of banking and financial
institutions within thirty (30) days.
§31B-2-3. Articles and Bylaws.
(a) In order to simplify the organization of credit unions, the
commissioner may cause to be prepared model articles of incorporation and
bylaws, consistent with this chapter, which may be used by credit union
incorporators for their guidance. Such articles of incorporation and bylaws shall
be available to persons desiring to organize a credit union.
(b) The articles of incorporation and the bylaws may be amended as
provided in the articles and bylaws, respectively. Amendments to the articles of
incorporation or bylaws shall be submitted to the commissioner who shall approve
or disapprove the proposed amendments within sixty (60) days.
(c) Amendments shall become effective upon approval in writing by the
commissioner. If the commissioner disapproves any proposed amendment, the
credit union may appeal the decision to the board within thirty (30) days.
§31B-2-4. Use of Name Exclusive.
(a) The name of every credit union organized under this chapter shall
include the phrase "credit union". No credit union may adopt a name either
identical to the name of any other credit union doing business in this state or so
similar to the name of any other credit union doing business in this state as to be
misleading or to cause confusion.
(b) No person, other than a credit union incorporated under this chapter,
the Federal Credit Union Act or a credit union authorized to do business in this
state under section six, article two of this chapter, and association of credit
unions, or an organization, corporation, or association whose membership or
ownership is primarily limited to credit unions or credit union organizations, may
use a name or title containing the phrase "credit union" or any derivation thereof,
represent itself as a credit union, or conduct business as a credit union.
(c) Violation of this section constitutes a misdemeanor punishable by a
fine of not more than $100 for each day of illegal use of such name, by
imprisonment for not more than one (1) year, or both.
(d) The commissioner may petition a court of competent jurisdiction to
enjoin a violation of this section.
§31B-2-5. Branches and Other Service Facilities.
(a) A credit union may change its principal place of business within this
state upon notice to, and approval in writing of, the commissioner.
(b) A credit union may maintain other service facilities and branches,
including automated teller machines (ATMs), at locations other than its principaloffice upon notice to and approval in writing of the commissioner. The
maintenance of such facilities must be reasonably necessary to furnish service to
its members. The creation of such facilities must be approved by a majority vote
of the credit union's board of directors.
(c) A credit union may, upon notice and approval in writing of the
commissioner, join with one or more other credit unions or other financial
organizations in the operation of automated teller machines (ATMs) or other
service facilities. The joint operation of such facilities must be approved by a
majority of the credit union's board of directors.
(d) To the extent that a credit union provides its members access to their
accounts through a remote service unit, e.g., ATM or Point-of-Sale (POS) device,
the credit union shall be governed by the same rules of the commissioner
pertaining to banks operating through customer bank communication terminals
(CBCTs).
§31B-2-6. Out-of-State Credit Unions.
(a) A credit union organized under the laws of another state or territory of
the United States may conduct business as a credit union through a branch or
service facility in this state with the approval by written order of the
commissioner, provided credit unions incorporated under this chapter are allowed
to do business in the other state under conditions similar to these provisions.
Unless the context clearly requires otherwise, the term "territory of the United
States" shall, as used in this chapter, include the District of Columbia. Before
granting the approval, the commissioner must, upon public hearing, find that the
applicant out-of-state credit union:
(1)is a credit union organized and operating under standards
recognized as appropriate pursuant to the provisions of this chapter;
(2)is financially solvent and has an adequate capital structure;
(3)has account insurance as required for credit unions incorporated
under this chapter;
(4)has a board of directors and supervisory committee with the
reputation, character, and abilities to provide assurance that the credit union's
affairs will be properly administered;
(5)has in connection with any office of operations in this state made
provision for suitable quarters from which to conduct the business of a credit
union;
(6)is examined and supervised by a regulatory agency of the state or
territory in which it is organized; and
(7)needs to conduct business in this state to adequately serve its
members in this state.
(b) No out-of-state credit union may conduct business in this state unless
it:
(1)complies with the limits on finance charges applicable to credit
unions set forth in section two, article seven of this chapter when making loans in
this state;
(2)complies with the consumer protection statutes and rules applicable
to credit unions incorporated under this chapter;
(3)agrees to furnish the commissioner a copy of the report of
examination of its regulatory agency, and if deemed necessary by the
commissioner, to submit to an examination by the commissioner, the cost of
which shall be paid for by the credit union; and
(4)designates and maintains an agent for the service of process in this
state.
(c) The commissioner may revoke the approval of a credit union to
conduct business in this state if the commissioner finds that:
(1)the credit union no longer meets the requirements of subsection (a)
of this section;
(2)the credit union has violated the laws of this state or lawful rules or
orders issued by the commissioner;
(3)the credit union has engaged in a pattern of unsafe or unsound
credit union practices; or
(4)continued operation by the credit union is likely to have a
substantially adverse impact on the financial, economic or other interests of
residents of this state.
§31B-2-7. Conducting Business Outside This State.
A credit union incorporated under this chapter may conduct business
outside of this state in other states or territories where it is permitted to conduct
business as a credit union. The activities and records of such credit union
business conducted outside this state remain fully under the jurisdiction and
supervision of the commissioner. Prior to the establishment of any branch or
service facility outside this state, a credit union shall provide notice to, and obtain
written approval of, the commissioner. The creation of such facilities must be
approved by a majority vote of the credit union's board of directors.
§31B-2-8. Tax Exemption.
(a) Any credit union organized under this or any other credit union act and
all shares and deposits therein shall be exempt from all taxation now or hereafter
imposed by this state or any taxing authority within this state. No law which taxes
corporations in any form, or the shares or deposits thereof, or the accumulation
thereon, shall apply to any such credit union; except that any real property and any
tangible personal property owned by any such credit union shall be subject to taxation
to the same extent as other similar property is taxed, provided that this exception
shall not permit the imposition of any sales or use taxes on the credit union.
(b)The shares of any such credit union shall not be subject to stock,transfer taxes, either when issued or when transferred from one member to another.
(c)The participation by a credit union in any government program
providing unemployment, social security, old age pension or other benefits shall not
be deemed a waiver of the taxation exemption hereby granted.
§31B-2-9. Credit Unions Heretofore Organized Need Not Obtain New
Charter; Actions Validated.
All credit unions which have been heretofore legally organized under
chapter thirty-six of the acts of the Legislature of one thousand nine hundred
twenty-five and which are in existence on the effective date of this section; and all
credit unions which have been heretofore legally organized under article ten of
chapter thirty-one of the code of West Virginia, one thousand nine hundred thirty-
one, as amended, and which are in existence on the effective date of this section,
shall upon the effective date of this section be considered to have been organized
under the provisions of this article, and shall not be required to obtain a new
charter or to reorganize hereunder. All acts and things done by any such credit
unions, insofar as such acts and things shall not have constituted any violation of
law as it shall heretofore have existed, shall be deemed valid and effective.
ARTICLE 3. POWERS OF CREDIT UNION
§31B-3-1. General Powers.
In addition to the powers mentioned elsewhere in this chapter, a credit
union may:
(a) Enter into contracts necessary for the conduct of its business as
authorized under this statute.
(b) Sue and be sued.
(c) Adopt, use and display a corporate seal.
(d) Acquire, lease, hold, assign, sell, discount or otherwise dispose of
property or assets, either in whole or in part, necessary or incidental to its
operation.
(e) Borrow from any source, provided that a credit union must obtain
approval of the commissioner in writing of its intention to borrow in excess of an
aggregate of twenty percent (20%) of its equity capital and shares, and in no
event shall its borrowing be in excess of an aggregate of fifty percent (50%) of
its equity capital and shares .
(f) Purchase the assets of another credit union.
(g) Offer related financial services, including, but not limited to,
electronic fund transfers, safe deposit boxes, leasing and correspondent
arrangements with other financial institutions.
(h) Hold membership in other credit unions organized under this or other
acts, and in associations and organizations controlled by or fostering the interests
of credit unions, including a central liquidity facility organized under state orfederal law.
(i) Engage in activities and programs as requested by any governmental
unit.
(j) Act as fiscal agent for and receive payments on share and deposit
accounts from a governmental unit.
(k) Make contributions to any nonprofit civic, charitable or service
organizations.
(l) Receive the savings of its members either as payment on shares, or as
deposits (including the right to conduct Christmas clubs, vacation clubs and other
thrift organizations within the membership).
(m) Make loans for provident, productive, non-speculative purposes to
members, including a cooperative society or other organization having
membership in the credit union.
§31B-3-2. Incidental Powers.
A credit union may exercise all incidental powers that are convenient,
suitable or necessary to enable it to carry out its purposes.
§31B-3-3. Advantageous Federal Powers.
Unless exercise of a power is specifically denied, the commissioner may
prescribe rules authorizing credit unions to exercise any of the powers conferred
upon federal credit unions if the commissioner deems it appropriate for the
purposes of credit unions in this state and a benefit to their members.
ARTICLE 4. MEMBERSHIP
§31B-4-1. Membership Defined.
(a) The membership of a credit union shall consist of those persons who
share a common bond set forth in the bylaws, have been duly admitted members,
have paid any required one-time or periodic membership fee, or both, have
subscribed to one or more shares and have complied with such other requirements
as the articles of incorporation and bylaws specify.
(b) Credit union membership shall be limited to, persons within one or
more groups having a common bond or bonds of similar occupation, employer,
association or interest, and members of the immediate family of such persons.
§31B-4-2. Organizations.
(a) Organizations comprised primarily of individuals who are eligible for
membership in the credit union, and corporations whose total number of
stockholders or whose majority stockholders are comprised primarily of such
individuals, may be admitted to membership in the same manner and under the
same conditions as individuals. Likewise, organizations one of whose principal
functions is to provide services to persons who are eligible for membership in the
credit union may be admitted to membership. Other organizations having a
commonality of interest with the credit union may be admitted to membership withthe approval of the commissioner.
(b)Any corporate credit union organized under this chapter may accept as a
member any other credit union organized under this or any other act.
§31B-4-3. Membership Applications.
The board of directors of the credit union shall act upon applications for
membership or appoint one or more membership officers to approve applications
for membership under such conditions as the board prescribes. A record of the
actions taken by a membership officer shall be made available in writing to the
board of directors for inspection. A person denied membership by a membership
officer may appeal the denial to the credit union's board of directors.
§31B-4-4. Members Who Cease to be Eligible.
Members who cease to be eligible for membership may be permitted to
retain their membership in the credit union, under reasonable standards established
by the credit union's board of directors.
§31B-4-5. Liability and Expulsion of Members.
(a) The members of the credit union shall not be personally or individually
liable for the payment of its debts solely by virtue of holding membership.
(b) Any member may be expelled by a two-thirds (2/3) vote of its
members present at any regular meeting or a special meeting called to consider the
matter, but only after an opportunity has been given the member to be heard.
(c) The credit union's board of directors may expel a member pursuant to
a written policy adopted by it. All members shall be given written notice of the
terms of any such policy upon becoming a member. Any person expelled by the
credit union's board of directors shall have the right to request a hearing before it
to reconsider the expulsion.
§31B-4-6. Meetings of Members.
(a) The annual meeting and any special meetings of the members of the
credit union shall be held in accordance with the bylaws.
(b) At all such meetings a member shall have but one vote, irrespective of
the member's shareholdings. No member may vote by proxy, but a member may
vote by absentee ballot, mail or other method if the bylaws of the credit union so
provide.
(c) The credit union's board of directors may establish a minimum age,
not greater than eighteen (18) years of age, as a qualification of eligibility to vote
at meetings of the members or to hold office, or both.
(d) An organization having membership in the credit union, may berepresented and have its vote cast by one of its members or shareholders, provided
such person has been so authorized by the organization's governing body.
§31B-4-7. Calling of Special Meeting.
(a) The supervisory committee by a majority vote may call a special
meeting of the members to consider any violation of this chapter, the credit
union's articles of incorporation or bylaws, or any practice of the credit union
deemed by the supervisory committee to be unsafe or unauthorized; and may call
a special meeting to consider the suspension or removal of any officer or director
of the credit union as provided for in this chapter.
(b) The bylaws may also prescribe the manner in which a special meeting
of the members may be called by the members or by the credit union's board of
directors or both.
(c) The commissioner may also require the directors of a credit union to
call a special meeting of the members pursuant to his or her authority under
section nine, article two, chapter thirty-one-a of this code.
ARTICLE 5. DIRECTION OF CREDIT UNION AFFAIRS
§31B-5-1. Authority and Responsibility of Directors.
The credit union's board of directors shall have the authority and
responsibility for directing the business affairs, funds, and records of the credit
union. In addition to the duties found elsewhere in this Article, it shall be the
special duty of the credit union's board of directors to:
(a) Purchase adequate fidelity coverage for the chief executive officer and
for other active officers and employees handling or having custody of funds or
property.
(b) Authorize the employment and compensation of the chief executive
officer who shall hire such other persons necessary to carry on the business of the
credit union.
(c) Approve an annual operating budget for the credit union.
(d) Authorize the conveyance of property.
(e) Borrow or lend money to carry on the functions of the credit union.
(f) Appoint any special committees deemed necessary.
(g) Perform such other duties as the members from time to time direct,
and perform or authorize any action not inconsistent with this chapter and not
specifically reserved by the bylaws for the members.
The credit union's board of directors shall meet each month. The board
may meet at other times as is necessary. board meetings may be conducted by
means of telephone as provided in the bylaws in a manner consistent with state
law.
§31B-5-2. Election of Directors and Selection of Supervisory and Credit
Committee
Members.
(a) The credit union's board shall consist of an odd number of directors,
at least five (5) in number, to be elected by and from the members. Elections
shall be held at the annual meeting or in such other manner as the bylaws provide.
All members of the credit union's board shall hold office for such terms as the
bylaws provide, except that terms shall be staggered so that an approximately
equal number expire each year.
(b) A supervisory committee of not less than three (3) persons shall either
be elected by the membership at the annual meeting or appointed by the credit
union's board of directors at the organization meeting held within thirty (30) days
following each annual election for such terms as the bylaws provide.
(c) At the same organization meeting, the credit union's board of directors
shall appoint a credit committee, unless the bylaws provide for the board of
directors to act as the credit committee. The committee shall consist of an odd
number, not less than three (3), whose terms shall be as the bylaws provide.
§31B-5-3. Record of Officials; and Filing Vacancies.
(a) Within twenty (20) days after each organization meeting, a record of
the names and addresses of the members of the board and such other committees
and officials, as required by the commissioner, shall be filed with the
commissioner.
(b) The credit union's board of directors shall fill any vacancies occurring
in the board until successors elected at the next annual election have qualified.
The credit union's board shall also fill vacancies in the credit committee and , if
appointed by them, the supervisory committee. If the supervisory committee is
elected by the members, then any vacancies thereon shall be filled by selection by
the remaining supervisory committee members.
§31B-5-4. Compensation of Officials; and Conflicts of Interest.
(a) No officer, director or committee member, other than an employee,
may be compensated for services, except as provided in section one, article five of
this chapter. However, providing reasonable life, health, accident and similar
insurance protection shall not be considered compensation. Directors, officers and
committee members may be reimbursed for necessary expenses incidental to the
performance of official business of the credit union.
(b) No director, committee member, officer, agent or employee of the
credit union shall in any manner, directly or indirectly, participate in the
deliberation upon or the determination of any question affecting that person'specuniary interest or the pecuniary interest of any corporation, partnership, or
association (other than the credit union) in which that person is directly or
indirectly interested.
§31B-5-5. officers.
(a) At their organization meeting held within thirty (30) days following
each annual election, the credit union's board of directors shall elect from their
own number a chairman of the board, one or more vice chairmen, a treasurer and
a secretary. The office of secretary and treasurer may, if the bylaws so provide,
be held by one person. They shall also elect any other officials that are specified
in the bylaws.
(b) The terms of the officers shall be one year, or until their successors
are chosen and have been duly qualified.
(c) The duties of the officers shall be prescribed in the bylaws.
(d) The credit union's board of directors shall appoint a president to act as
the chief executive officer of the credit union and be in active charge of its
operations.
(e) Notwithstanding any other provision of this chapter, a credit union
may use any titles it chooses for the officials holding the positions described in
this chapter, as long as such titles are not misleading.
§31B-5-6. Executive Committee.
The credit union's board of directors may appoint from its own number an
executive committee, consisting of not less than three (3) directors, which may be
authorized to act for the board in all respects. These actions are subject to
subsequent review by the full credit union's board of directors and any other
conditions or limitations prescribed by the board of directors.
§31B-5-7. Credit Committee and Loan officers
(a) The credit committee shall have the general supervision of all loans to
members. It may approve or disapprove loans, subject to written policies
established by the board of directors.
(b) The credit committee shall meet as often as the business of the credit
union requires to consider applications for loans and/or review the work of the
loan officers. No loan shall be made by the credit committee unless it is approved
by a disinterested majority of the committee who are present at the meeting at
which the application is considered.
(c) If the bylaws so provide, the board of directors may act as the credit
committee.
(d) The credit union's board of directors or credit committee may appoint
one or more loan officers and delegate the power to approve or disapprove loans,
subject to such limitations or conditions as the credit committee or credit union's
board of directors prescribes.
(e) A member whose application was disapproved by a loan officer may
appeal such action to the credit committee or credit union's board of directors, as
appropriate under the bylaws.
§31B-5-8. Audits.
(a) The supervisory committee shall make or cause to be made a
comprehensive annual audit of the books and affairs of the credit union. It shall
submit a report of each annual audit to the credit union's board of directors and a
summary of that report to the members at the next annual meeting of the credit
union. Such reports shall be filed and preserved with the records of the
corporation.
(b) The supervisory committee of not less than three (3) elected or
appointed members shall make or cause to be made such supplementary audits,
examinations, and verifications of members' accounts as it deems necessary or as
are required by the commissioner or by the credit union's board of directors, and
submit reports of these supplementary audits to the credit union's board of
directors.
(c) The workpapers of any audit, including any materials associated with
an audit of the credit union's electronic data procedures, shall be made available
to the commissioner or to the examiners of the department of banking upon
request, and will be accorded confidentiality in conformity with section four,
article two, chapter thirty-one-a of this code.
§31B-5-9. Fidelity Bonds, Required Oaths and Hazard Insurance.
(a) As a condition precedent to qualification or entry upon the discharge of
their duties, all active officers, as well as every person appointed or elected to any
position requiring the receipt, payment or custody of money or other personal
property owned by a credit union or in its custody or control as collateral or
otherwise, shall give a bond in some responsible corporate surety company,
licensed to do business in this state, in such sufficient amount as the credit union
directors shall require and approve. The bonds shall provide for indemnity to the
credit union on account of any losses sustained by it as the result of any dishonest,
fraudulent or criminal act or omission by such persons acting independently or in
collusion or combination with others. The bonds may be in individual, schedule
or blanket form, and the premiums therefor shall be paid by the credit union.
(b) No officer or employee who is required to give bond shall be deemedqualified nor shall be permitted to enter upon the discharge of their duties until
their bond shall have been approved by a majority of the credit union's board of
directors.
(c) The credit union's board of directors shall also direct and require
suitable insurance protection to the credit union against burglary, robbery, theft,
and other insurable hazards to which the credit union may be exposed in the
operations of its business on the premises or elsewhere.
(d) The credit union's board of directors shall be responsible for
prescribing at least once each year the amount or penal sum of the bonds or
policies and the sureties or underwriters thereon, after giving due and careful
consideration to all known elements and factors constituting such risk or hazard.
This action shall be recorded in the minutes of the board of directors. At any
time the commissioner may require additional bond or security, when, in his or
her opinion, the bonds then executed and approved are insufficient.
(e) Upon their election or appointment each director, officer and member
of a committee shall individually make an oath that they will, as far as the duty
devolves upon them, diligently and honestly administer the affairs of the credit
union, and will not knowingly violate, or willingly permit to be violated, any of
the provisions of law applicable to the credit union, and that they are each the
owner in good faith in their own right on the books of the credit union of at least
one share therein. This oath shall be subscribed by the individual making it, and
be certified by the officer before whom it was taken, and shall immediately be
transmitted to the commissioner and filed and preserved in his/her office.
§31B-5-10. Suspension and Removal of Officials.
(a) The supervisory committee by a two-thirds (2/3) vote of the entire
committee may suspend any member of the credit committee and shall report such
action to the credit union's board of directors. The credit union's board of
directors shall meet not less than seven (7) nor more than twenty-one (21) days
after such suspension to take appropriate action.
(b) The supervisory committee by a two-thirds (2/3) vote of the entire
committee may recommend suspension of any officer or member of the credit
union's board of directors. A meeting of a quorum of the remaining board
members shall convene in person and take action on the recommendation, which
meeting shall be held not less than seven (7) nor more than twenty-one (21) days
after such proposed suspension. The suspension matter shall be acted upon at the
board meeting and the person shall either be removed for cause, or restored to
office. If the supervisory committee is not satisfied with the board's action, it
may call a special meeting of the members or elect to bring the matter before the
next member's regular meeting, and the issue will be acted upon at the meeting by
the members and the person shall either be removed for cause, or reaffirmed tooffice. At any such member's meeting the person at issue shall have the right to
appear and be heard.
(c) Any member of the supervisory committee or of the credit committee
may be suspended or removed for cause by the board of directors by a two-thirds
(2/3) vote of those present at a meeting for failure to perform duties in accordance
with this chapter, the articles of incorporation, or the bylaws. The committee
member shall have the right to appear and be heard at such meeting.
ARTICLE 6. ACCOUNTS
§31B-6-1. Share Accounts and Membership Shares.
(a) Share accounts and membership shares (if any) shall be subscribed to
and paid for in such a manner as the bylaws prescribe.
(b) A corporate credit union may require its members to subscribe to and
make payments on membership shares.
(c) The par value of shares and any membership shares shall be as
prescribed in the bylaws. Par value of shares shall not be less than $1.00 nor
more than $10.00 per share.
(d) Membership shares may not be pledged as security on any loan.
(e) A credit union may limit the number of shares which may be owned
by a member, but any such limit shall apply alike to all members.
§31B-6-2. Dividends.
(a) The credit union's board of directors shall establish the dividend period.
Rates of dividends and the terms of payment may be established in advance by action
of the board of directors. Dividends may be paid at various rates with due regard
to the conditions that pertain to each type of account such as minimum balance,
notice and time requirements.
(b) The commissioner may, if circumstances warrant, establish the maximum
dividend that a credit union or corporate credit union may pay in each classification
of its savings.
§31B-6-3. Deposit Accounts.
(a) A credit union may accept deposit accounts from its members, other
credit unions and governmental units subject to the terms, rates and conditions
established by the board of directors.
(b) Interest may be paid on deposit accounts at various rates with due
regard to the conditions that pertain to each type of account such as minimum
balance, notice and time requirements.
(c) Funds in share and deposit accounts may be withdrawn for payment to
the account holder or to third parties, in such manner and in accordance with such
procedures as are established by the board of directors, subject to any rules the
commissioner prescribes.
(d) Share and deposit accounts shall be subject to any withdrawal notice
requirement which is imposed pursuant to the bylaws.
(e) A membership share may not be redeemed or withdrawn except
subject to the terms set forth by the corporate credit union.
31B-6-4. Minor Accounts.
Payments on share and deposit accounts may be received from a minor
who may withdraw funds from such accounts including the dividends and interest
thereon. Payments on share and deposit accounts by a minor and withdrawals
thereof by the minor shall be valid in all respects. For such purposes a minor is
deemed of full majority age.
31B-6-5. Joint Accounts.
(a) A member may designate any person or persons to own a share or
deposit account with the member in joint tenancy with the right of survivorship, as
a tenant in common or under any other form of joint ownership permitted by law,
but no co-owner, unless a member in own right, shall be permitted to vote, obtain
loans, or hold office or be required to pay a membership fee.
(b) Payment of part or all of such accounts to any of the co-owners shall,
to the extent of such payment discharge the liability to all unless: (1) the account
agreement contains a prohibition or limitation on such payment; or unless (2) the
credit union had received notice in writing signed by any one of such joint tenants
not to pay such deposit in accordance with the terms thereof, prior to its
payment. The commissioner may promulgate rules regarding notice to joint
account holders of their rights and liabilities under this section.
31B-6-6. Trust Accounts.
(a) Share and deposit accounts may be owned by a member in trust for a
beneficiary, or owned by a non-member in trust for a beneficiary who is a
member.
(b) Beneficiaries may be minors, but no beneficiary unless a member in
that person's own right, shall be permitted to vote, obtain loans, hold office or berequired to pay a membership fee.
(c) Payment of part or all of such a trust account to the party in whose
name the account is held shall, to the extent of such payment, discharge the
liability of the credit union to that party and to the beneficiary, and the credit
union shall be under no obligation to see to the application of such payment.
(d) In the event of the death of the party who owns a trust account, if the
credit union has been given no other written notice of the existence or terms of
any trust and has not received a court order as to disposition of the account,
account funds and any dividends or interest thereon shall be paid to the
beneficiary.
(e) The operation of trust accounts as permitted in this section does not
constitute engaging in a trust business as set forth in chapter thirty-one-a of this
code.
§31B-6-7. Payable-on-Death Accounts.
Notwithstanding any other provision of law a credit union may establish
share and deposit accounts payable to one or more persons during their lifetimes
and on the death of all of them to one or more payable-on-death payees. An
account established under this section must be identified as a "payable-on-death"
account or abbreviated as a "p.o.d." account. Any transfer to a payable-on-death
payee is effective by reason of the account contract and shall not be considered to
be a testamentary transfer.
§31B-6-8. Liens.
The credit union shall have a general lien on the share accounts, any
membership shares, and accumulated dividends of a member for any sum owned
the credit union by said member and for any loan endorsed by that member. The
credit union shall also have a right of immediate set-off with respect to every
deposit account. The credit union may also refuse to allow withdrawals from any
share or deposit account. The credit union may waive its rights to a lien, to
immediate set-off, to restrict withdrawals, or to any combination of such rights
with respect to any share or deposit account or groups of such accounts.
§31B-6-9. Share and Deposit Insurance.
(a) Before the incorporators of a credit union forward the corporate
documents to the commissioner under subsection (d), section two, article two of
this chapter they shall apply for insurance on share and deposit accounts from the
National Credit Union Administration under Title II of the Federal Credit Union
Act (12 U.S.C. §1781 et. seq).
(b) A credit union which has lost its commitment for such insurance shallwithin thirty (30) days commence steps to either liquidate, or merge with an
insured credit union, or apply in writing to the commissioner for additional time
to obtain another insurance commitment. The commissioner may grant one or
more extensions of time to obtain the insurance commitment upon satisfactory
evidence that the credit union has made or is making a substantial effort to achieve
the conditions precedent to issuance of the commitment.
(c) No persons shall be granted a certificate of authority to engage in
business by the commissioner to operate a credit union unless they have obtained a
commitment for insurance of its share and deposit accounts.
(d) The commissioner may make available reports of condition and
examination findings to the appropriate insuring organization and may accept any
report of examination made on behalf of such organization.
(e) A state-chartered corporate credit union must only apply for and
maintain share and deposit insurance in the amounts and of the same kind as
would be required for a similarly situated federally chartered corporate credit
union.
§31B-6-10. Reduction in Shares.
(a) Whenever the losses of any credit union, resulting from a depreciation
in value of its loans or investments or otherwise, exceed the aggregate of its
undivided earnings, reserves, and membership shares if any, so that the estimated
value of its assets is less than the total amount of share accounts, and the board of
directors determines that the credit union may be subject to involuntary
liquidation, the credit union board may propose a reduction in shares. The credit
union may by a three-fourths (3/4) majority vote of those voting on the
proposition order a reduction in the share accounts of each of its shareholders to
divide the loss in proportion to the shareholdings held by shareholders in their
respective share accounts.
(b) If the credit union thereafter realizes from such assets a greater amount
than was fixed by the order of reduction, such excess shall be proportionately
restored to the shareholders whose assets were reduced, but only to the extent of
such reduction.
ARTICLE 7. LOANS
§31B-7-1. Purpose and Conditions of Loans.
A credit union may loan to members for such purposes and upon such
conditions as the bylaws may provide. The board of directors shall establish
written policies with respect to the granting of loans and the extending of lines of
credit, including the terms, conditions and acceptable forms of security.
§31B-7-2. Finance Charge.
The finance charges imposed by the credit union on loans shall be
determined by the credit union's board of directors, subject to the limitations
established by this state. Unless otherwise permitted or prescribed by this code,
the finance charge rate shall not exceed 1.5% per month, computed on unpaid
balances.
§31B-7-3. Additional Charges.
(a) In addition to interest on loans, a credit union may charge members
reasonable expenses in connection with the making, closing, disbursing,
extending, or renewing of loans.
(b) A credit union may assess charges to members, in accordance with the
bylaws, for failure to meet their obligations to the credit union in a timely
manner. A credit union may also assess charges for other benefits, including
insurance, as allowed for lenders under law.
(c) Any charges in connection with a consumer loan, including late
charges and deferral charges, permitted under this section shall conform and be
limited to those allowed under article three, chapter forty-six-a of this code.
§31B-7-4. Applications.
Except as provided for in section six, article seven of this chapter, every
application for a loan shall be made in writing upon a form prescribed by the
credit union and shall state the purpose of the loan as well as the security or
collateral offered, if any. Each loan shall be evidenced by a written document.
§31B-7-5. Loan Limit; Collateral Requirements; and Repayment.
(a) The aggregate of loans to any one member shall be limited to ten
percent (10%) of the credit union's assets. This limit shall not apply to loans
which are fully secured by assignments of shares or deposits in the credit union.
(b) Loans to members which in the aggregate exceed the amount shown in
the schedule below shall be secured by such collateral having a value which is at
least equal to any amount exceeding the limits in the following schedule, except
that all loans exceeding $5,000 not subject to collateral shall be supported by a
sworn financial statement:
(1) $500, in credit unions with assets of less than $5,000;
(2) $1,000 in credit unions with assets of $5,000 and less than $25,000;
(3) $2,000 in credit unions with assets of $25,000 and less than
$100,000;
(4) $5,000 in credit unions with assets of $100,000 and less than
$500,000;
(5) $7,000 in credit unions with assets of $500,000 and less than
$1,000,000; and
(6) $10,000 in credit unions with assets of $1,000,000 or more, Provided
that the commissioner may, upon request and at his or her discretion, approve in
writing a higher unsecured loan limit amount for credit unions having assets of
$1,000,000 or more.
(c) A borrower may pay the whole or part of the borrower's loan on any
day the credit union is open for business.
§31B-7-6. Line of Credit.
(a) Upon written application by a member, the credit committee or loan
officer may approve a line of credit, and loan advances may be granted to the
member within the limit of such line of credit. Access to the line of credit may
be by use of a lender credit card. Where a line has been approved, no additional
credit application is required as long as the aggregate indebtedness does not
exceed the approved limit.
(b) Lines of credit shall be subject to periodic review by the credit union,
in accordance with the written policies of the credit union's board of directors,
and approved or disapproved as to the granting of further loan advances.
§31B-7-7. Participation Loans.
A credit union may participate in loans to credit union members jointly
with other credit unions, credit union organizations or other organizations pursuant
to written policies established by the credit union's board of directors. A credit
union which originates such a loan shall retain an interest of at least 10% of the
face amount of the loan.
§31B-7-8. Other Loan Programs.
(a) A credit union may participate in any guaranteed loan program of the
federal or state government under the terms and conditions specified in the law
under which such a program is provided.
(b) A credit union may purchase the conditional sales contracts, notes and
similar instruments of its members.
(c) A credit union may finance for any person the sale of its personal
property, including property obtained as a result of defaults in obligations owed to
it, under the terms, conditions and rates provided by this chapter.
§31B-7-9. Loans to Officials.
(a) A credit union may permit officers, directors, and members of its
supervisory and credit committees to act as comakers, guarantors, or endorsers of
loans to other members, subject to the requirements of subsection (b) of this
section.
(b) A credit union may make loans to its officers, directors, and members
of its supervisory and credit committees, provided that:
(1)the loan complies with all requirements of this chapter and is not on
terms more favorable than those extended to other borrowers; and
(2)the aggregate of loans to or guaranteed by all such officials
combined, excepting those secured by shares or deposits, may not exceed twenty
percent (20%) of the credit union's assets, and shall be shown in aggregate as a
separate item in the reports rendered by the credit union and filed with the
commissioner pursuant to section seven, article one of this chapter.
(c) No credit union officer, director, or member of its supervisory or credit
committee may participate in making a credit approval of a loan in which they have
a self-interest. If any member of the credit committee makes an application to
borrow money from the credit union or becomes surety for any other member whose
application for a loan is under consideration, the supervisory committee shall appoint
a substitute to act on the credit committee in place of that member, during the
consideration of the application.
ARTICLE 8. OTHER MEMBER SERVICES
§31B-8-1. Insurance for Members.
A credit union may purchase or make available credit life or other credit
insurance for its members either on an individual or group basis.
§31B-8-2. Indemnification of officers.
A credit union may indemnify its officers, directors or employees by purchase
of insurance or otherwise, to the extent that such indemnification is permitted to that
institution under federal law. Indemnification articles or bylaws must conform to,
or be more restrictive than, that set forth in section nine, article one, chapter thirty-
one of this code. The commissioner reserves the right to prohibit or limit, by
regulation or order, any indemnification payment for reasons of safety and soundness
or nonconformity to the credit union's articles of incorporation or bylaws or to the
restrictions placed on indemnification contained in this section or other applicable
state law.
§31B-8-3. Group Purchasing.
A credit union may enter into marketing arrangements and joint ventureswith other credit unions, organization or financial institutions to facilitate its
members' voluntary purchase of goods, insurance and other services from third
parties, consistent with the purposes of the credit union. A credit union may be
compensated for services so provided.
§31B-8-4. Money-Type Instruments.
A credit union may collect, receive and disburse monies in connection with
the providing of negotiable checks, money orders, travelers' checks, and other
money-type instruments, and the providing of these services through automated
teller machines (ATMs) and for such other purposes as may provide benefit or
convenience to its members. A credit union may charge fees for such services.
§31B-8-5. Retirement Accounts and Trust Authority.
A credit union may provide pension savings programs and deferred income
accounts, including individual retirement accounts. In order to carry out its
authority under this section, a credit union may:
(i) Contract for the provision of trust services to its members with a trust
company or other organization with trust powers authorized to do business in this
state. For this purpose, the trust company or other organization with trust powers
may serve credit union members at credit union facilities on a full-time or part-
time basis; and may
(ii) Act as trustees of member funds permitted by federal law to be
deposited in a credit union in the form of share deposits either as a deferred
compensation or tax-deferral device, provided the credit union obtains the prior
approval to conduct such activity from the board of Banking and Financial
Institutions upon hearing and written order.
ARTICLE 9. INVESTMENTS AND RESERVE ALLOCATIONS
§31B-9-1. Investment and Deposit of Funds.
(a) The credit union's board of directors shall have charge of the
investment of funds, except that they may designate an investment committee or
investment officer to make investments in its behalf, under written investment
policies established by the credit union's board.
(b) The credit union's board of directors shall designate a depository or
depositories for the funds of the credit union.
§31B-9-2. Authorized Investments.
Funds not used in loans to members may be invested:
(a) In securities, obligations, or other instruments of or issued by or fully
guaranteed as to principal and interest by the United States of America or any
agency or instrumentality thereof or in any trust or trusts established for investing
directly or collectively in the same.
(b) In securities, obligations, or other instruments of any state of the
United States, the District of Columbia, the Commonwealth of Puerto Rico, and
the several territories organized by Congress, or any political subdivision thereof.
(c) In deposits, obligations or other accounts of banking institutions
organized under state or federal law.
(d) In loans to or in shares or deposits of other credit unions or corporate
credit unions.
(e) In deposits in, loans to, or shares of any Federal Reserve Bank or of
any central liquidity facility established under state or federal law.
(f) In shares, stocks, deposits in, loans to or other obligations of any
organization, corporation, or association providing services associated with the
general purposes of the credit union or engaging in activities incidental to the
operations of a credit union. Such investments in the aggregate may not exceed
two percent (2%) of the credit union's equity capital and shares without written
permission of the commissioner.
(g) In any investment legal for banking institutions or trust funds chartered
in this state.
(h) In participation loans with other credit unions, credit union
organizations or other organizations.
(i) In fixed assets, not to exceed five percent (5%) of the credit union's
equity capital and shares, unless with the prior written approval of the
commissioner.
§31B-9-3. Reserve Funds.
(a) At the end of each accounting period the credit union shall determine
its gross income and from this amount shall set aside and transfer funds to a
regular reserve. The credit union shall transfer to the reserve amounts as required
under a schedule set by the National Credit Union Administration ("NCUA") or
its successor. If no such schedule is set, then the reserve shall be at a rate of
10% of gross income until such time as the reserve fund reaches 5% of risk
assets; then the formula is decreased to 7% of gross income until such time as the
reserve fund reaches 6% of risk assets; and then the formula is decreased to 5%of gross income until the reserve fund attains a maximum of 7% of risk assets,
with subsequent transfers required only to maintain the 7% maximum. The
reserves established under this section shall belong to the credit union and shall be
held to meet contingencies or losses in its business.
(b) Special reserves to protect the interest of members may be required by
the commissioner by rule, or when found by the credit union's board of directors
or by the commissioner, in any special case, to be necessary for that purpose.
These may include allowances for loan losses and investment losses.
ARTICLE 10. CHANGE IN CORPORATE STATUS
§31B-10-1. Voluntary Liquidation.
(a) A credit union may elect to dissolve voluntarily and liquidate its affairs
in the manner prescribed in this section.
(b) If it decides to begin the procedure, the board of directors shall adopt
a resolution recommending the credit union be dissolved voluntarily, and directing
that the question of liquidation be submitted to the members.
(c) Within ten (10) days after the board of directors decides to submit the
question of liquidation to the members, the president shall notify the commissioner
and the insuring organization in writing, setting forth the reasons for the proposed
liquidation. Within ten (10) days after the members act on the question of
liquidation, the president shall notify the commissioner and the insuring
organization in writing as to the action of the members on the proposal.
(d) As soon as the board of directors decides to submit the question of
liquidation to the members, payments on, withdrawal of, and making any transfer
of share and deposit accounts to loans and interest, making investments of any
kind, and granting loans may be restricted or suspended pending action by
members on the proposal to liquidate. On approval by the members of such
proposal, all such business transactions shall be permanently discontinued.
Necessary expenses of operation shall, however, continue to be paid on
authorization of the board of directors or liquidating agent during the period of
liquidation.
(e) For a credit union to enter voluntary liquidation, approval by a
majority of the members in writing or by a two-thirds (2/3) majority of the
members present at a regular or special meeting of the members is required.
When authorization for liquidation is to be obtained at a meeting of the members,
notice in writing shall be given to each member, by first class mail, at least ten
(10) days prior to such meeting.
(f) A liquidating credit union shall continue in existence for the purpose of
discharging its debts, collecting on loans and distributing its assets, and doing all
acts required in order to wind up its business and may sue and be sued for the
purpose of enforcing such debts and obligations until its affairs are fully
concluded.
(g) The board of directors or the liquidating agent shall distribute the
assets of the credit union or the proceeds of any disposition of the assets in the
sequence described in subsection (f), section four, article one of this chapter.
(h) As soon as the board of directors or the liquidating agent determines
that all assets from which there is a reasonable expectancy of realization have been
liquidated and distributed as set forth in this section, a certificate of dissolution
shall be executed on a form prescribed by the commissioner and filed with the
secretary of state, which shall after filing and indexing same, be forwarded to the
commissioner, whereupon such credit union shall be dissolved. The liquidating
agent shall return all pertinent books and records of the liquidating credit union to
the commissioner.
§31B-10-2. Merger of Credit Unions.
(a) A credit union organized under this chapter may, with the approval of
the commissioner and regardless of common bond, merge with one or more other
credit unions organized under this chapter, the laws of another state or territory of
the United States, or the laws of the United States.
(b) When two or more credit unions merge, they shall either designate one
of them as the continuing credit union, or they shall structure a totally new credit
union and designate it as the new credit union. If the latter procedure is followed,
the new credit union shall be organized under article two of this chapter. All
participating credit unions other than the continuing or new credit union shall be
designated as merging credit unions.
(c) Any merger of credit unions shall be done according to a plan of
merger. After approval by the boards of directors of all participating credit
unions, the plan shall be submitted to the commissioner for review and hearing to
grant preliminary approval. If the plan includes the creation of a new credit
union, all documents required by section one, article two of this chapter shall be
submitted as part of the plan. In addition to any other documents or information
required by the commissioner, each participating credit union shall submit the
following:
(1)the time and place of the meeting of the board of directors at which
the plan was agreed upon;
(2)the vote of the directors in favor of the adoption of the plan; and
(3)a copy of the resolution or other action by which the plan wasagreed upon.
(d) The commissioner shall after review and hearing, grant preliminary
approval by written order, if: (i) the plan has been approved properly by each
board of directors; (ii) the documentation required to form a new credit union, if
any, complies with section one, article two of this chapter; (iii) the action would
not result or tend to create a monopoly, or substantially lessen competition, or
otherwise further a restraint of trade, unless the anticompetitive effects of the
proposed action are clearly outweighed in the public interest by the probable effect
of the action in meeting the convenience and needs of the members to be served;
and (iv) taking into consideration the financial and managerial resources and
further prospects of the credit unions concerned, the action would not be contrary
to the best interests of the community whose shares are affected by such action,
nor detrimental to the safety and soundness of the credit union to be acquired.
(e) After the commissioner grants preliminary approval, each merging
credit union shall, unless waived by the commissioner, conduct a membership vote
on its participation in the plan. The vote shall be conducted either at a special
membership meeting called for that purpose or by mail ballot. If a majority of the
members voting approve the plan, the credit union shall submit a record of that
fact to the commissioner indicating the vote by which the members approved the
plan and either the time and place of the membership meeting or the mailing date
and closing date of the mail ballot.
(f) The commissioner may waive the membership vote described in
subsection (e) of this section for any credit union upon determining that the credit
union is insolvent or about to be insolvent.
(g) The commissioner shall grant final approval of the plan of merger
after determining that the requirements of subsection (e) of this section in the case
of each merging credit union have been met. If the plan of merger includes the
creation of a new credit union, the commissioner must approve the organization of
the new credit union under section two, article two of this chapter as part of the
approval of the plan of consolidation. The commissioner shall notify all
participating credit unions of the approval of the plan.
(h) Upon final approval of the plan by the commissioner and the filing of
the proper documents with the office of the secretary of state, all property,
property rights, and members' interests in each merging credit union shall vest in
the continuing or new credit union as applicable without deed, endorsement, or
other instrument of transfer, and all debts, obligations, and liabilities of each
merging credit union shall be deemed to have been assumed by the continuing or
new credit union. The rights and privileges of the members of each participating
credit union shall remain intact; however, if a person is a member of more than
one of the participating credit unions, that person shall be entitled to only a single
set of membership rights in the continuing or new credit union.
(i) If the surviving or new credit union created by the transaction is
chartered by another state or territory of the United States, it shall, in addition to
the criteria set forth in subsection (c) of this section, be subject to the
requirements of section six, article two of this chapter. No merger resulting in an
out-of-state credit union acquiring a West Virginia credit union shall be permitted
unless that other state or territory permits a West Virginia credit union to merge
or acquire credit unions in their state or territory on terms that are, on the whole,
substantially no more restrictive than those established under the terms of this
section. Provided, further that no such merger shall be approved where the West
Virginia credit union to be acquired has been in operation for less than two years.
(j) Notwithstanding any other provision of law, the commissioner may,
without prior hearing, authorize a merger or consolidation of a credit union which
is insolvent or is about to be insolvent with any other credit union or may
authorize a credit union to purchase any of the assets of, or assume any of the
liabilities of, any other credit union which is insolvent or about to be insolvent if
the commissioner is satisfied that:
(1)an emergency requiring expeditious action exists with respect to
such other 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.
(k) Notwithstanding any other provision of law, the commissioner 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, a credit union which is insolvent or about to be insolvent, except
that prior to exercising this authority the commissioner should consider attempting
to effect a merger or consolidation with, or purchase and assumption by, another
credit union as provided in subsection (j) of this section; and
(l) For purposes of the authority contained in subsection (k) of this
section, insured share and deposit 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 commissioner and
the insuring organization shall be absolved of any liability to the credit union's
members with respect to those accounts.
§31B-10-3. Conversion.
(a) A credit union incorporated under the laws of this state may be converted
to a credit union organized under the laws of any other state or under the laws of the
United States, by complying with the following requirements:
(1) the proposition for such conversion shall first be approved, and a date setfor 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 said West Virginia state 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 (30) or less than seven (7) days prior to such
date. Approval of the proposition for conversion shall be by the affirmative vote of
two thirds of the members, in person or in writing;
(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 commissioner of
banking within ten (10) days after the vote is taken. However, no West Virginia
state chartered credit union may convert its charter to that of another state, unless (i)
the conversion is approved by the commissioner of banking in writing after notice
and hearing on the matter, (ii) the other state allows conversions of its credit unions
to a West Virginia state charter on a reciprocal basis; and (iii) the majority, or in the
event the credit union operates offices in more than two states, the plurality, of the
credit union's members are residents of that other state. To the extent that an out-of-
state credit union created by conversion seeks to conduct business through a branch
or service facility in West Virginia, the provisions of section six, article two of this
chapter shall apply;
(3) promptly after the vote approving the conversion is taken, or after
approval of the commissioner of banking, where such approval is required, and in
no event later than ninety days thereafter, the credit union shall take such action as
may be necessary under the applicable federal or state law to make it a federal credit
union or credit union of another state, and within ten days after receipt of the federal
credit union charter or out-of-state credit union charter there shall be filed with the
commissioner of banking a copy of the charter thus issued. Upon such filing, the
credit union shall cease to be a West Virginia state chartered credit union;
(4) the successor federal credit union or out-of-state chartered credit
union shall be vested with all the assets and shall continue to be responsible for all
of the obligations of the West Virginia state credit union to the same extent as though
the conversion had not taken place.
(b)A credit union organized under the laws of the United States or of
any other state may convert to a credit union incorporated under the laws of this
state. To effect such a conversion, a credit union must comply with all the
requirements of the jurisdiction under which it was originally organized and the
requirements of the laws and rules of this State, and file proof of such compliance
with the commissioner. The commissioner shall generally treat the conversion to
a West Virginia state chartered credit union as a formation of a new credit union
pursuant to article two of this chapter, and the procedures and requirements
therein shall be followed to the extent applicable.
ARTICLE 11. CORPORATE CREDIT UNION
§31B-11-1. Incorporation.
A corporate credit union may be incorporated under this Article. All parts
of this chapter not inconsistent with this Article shall apply to it.
§31B-11-2. Purposes.
The purposes of the corporate credit union are to:
(a) accumulate and prudently manage the liquidity of its member credit
unions through interlending and investment services;
(b) act as an intermediary for credit union funds between members and
other corporate credit unions;
(c) obtain liquid funds from other credit union organizations, financial
intermediaries, and other sources;
(d) foster and promote in cooperation with other state, regional, and national corporate credit unions and credit union organizations or associations the
economic security, growth and development of member credit unions;
(e) provide payment systems and correspondent services to its members;
and
(f) perform such other services of benefit to its members which are
authorized by the commissioner.
§31B-11-3. Membership.
(a) Membership in the corporate credit union shall consist of and be
limited to the credit union subscribers to the articles of incorporation, credit
unions incorporated under this chapter, the Federal Credit Union Act or any other
credit union act, organizations or associations of credit unions, and such other
organizations provided for in the articles of incorporation or bylaws.
(b) A member of the corporate credit union shall designate one person to
be its authorized representative to attend meetings of the corporate credit union
and to vote on behalf of the member. A credit union member of the corporate
credit union may only designate as its authorized representative a member of its
own credit union.
§31B-11-4. Organization.
(a) Application to form a corporate credit union shall be made in writing
to the commissioner. The application shall contain the names of at least ten
(10%) percent of the credit unions in the proposed field of membership, but in no
case less than fifty (50) credit unions that have agreed to subscribe to shares in the
corporate credit union at the time the application is made.
(b) The application shall be accompanied by articles of incorporation and
bylaws.
(c) The bylaws shall provide for the selection of a board of directors of atleast five (5) persons, all of whom shall be authorized representatives of members.
The bylaws shall require those applying for membership to subscribe to
membership shares or other shares, or both, in a minimum amount as specified in
the bylaws.
§31B-11-5. Powers and Privileges.
(a) The corporate credit union shall enjoy the powers and privileges of any
other credit union incorporated under this chapter in addition to those powers
enumerated in this Article, notwithstanding any limitations or restrictions found
elsewhere in this chapter.
(b) The corporate credit union may;
(1)accept funds, either as shares or deposits, from a member and from
any credit union incorporated by this state, by another state or territory of the
United States, or by the United States, whether or not such credit union is a
member of the corporate credit union, or from a similar institution incorporated
under the laws of another country;
(2)make loans to or invest in a member or in any credit union
incorporated by this state, by another state or territory of the Unites States, or by
the United States, whether or not such credit union is a member of the corporate
credit union;
(3)make loans to or place deposits in a bank, savings bank, trust
company, or savings and loan association incorporated by this state, by another
state or territory of the United States, or by the United States;
(4)provide payment systems and correspondent services for the benefit
of its members;
(5)participate with any credit union incorporated by this state, another
state or territory of the United States, or the United States in making loans to its
members or to members of any other participating credit union, under the terms
and conditions to which the participating credit unions agree;
(6)purchase, sell, and hold investment securities which are marketable
obligations in the form of bonds, notes, or debentures which are salable under
ordinary circumstances with reasonable promptness at a fair value. All
investments and related contracts and agreements shall be made in accordance with
written investment policies established by the board of directors, and shall
conform to those investments permitted under section two, article nine of this
chapter;
(7)borrow from any source, at the discretion of its board of directors;
(8)authorize its board of directors to delegate the authority to set
interest rates on loans and deposits and to determine dividends on shares;
(9)contract for penalties for payment of loans prior to their scheduled
maturity;
(10)sell all or a part of its assets to another depository financial
institution, purchase all or part of the assets of another depository financial
institution and assume the liabilities of the selling depository financial institution
and those of its members or depositors. To the extent that the action results in amerger, the commissioner shall direct that the appropriate provisions of section
two, article ten of this chapter be followed;
(11)act as intermediary for the funds of members, credit unions and
other corporate credit unions;
(12)act as agent for members, other credit unions and credit union
organizations in paying, receiving, transferring the assets and liabilities received
and invested as permitted in this Article;
(13)receive and hold in safekeeping the securities and other assets of its
members and, in connection therewith, make such disposition of such assets as
may be agreed to or directed by the member; and
(14)exercise all incidental powers that are convenient, suitable or
necessary to enable it to carry out its purposes.
(c) The corporate credit union may exercise the powers or privileges
granted a federal corporate credit union, subject to the approval of the
commissioner.
§31B-11-6. Participation in Central System.
The corporate credit union may enter into agreements and subscribe to any
required shares for the purpose of participation in the National Credit Union
Administration Central Liquidity Facility created by Public Law 95-630 or any
other state or federal central liquidity facility or central financial system available
to credit unions. It may also enter into agreements with any third parties to aid
credit unions to obtain additional sources of liquidity.
§31B-11-7. Security Interest.
The corporate credit union may require and accept security for loans to a
member in the form of a pledge, assignment, hypothecation or mortgage of any
assets of the member or a guarantor.
§31B-11-8. Meetings.
The board of directors of the corporate credit union shall meet each month.
The board may meet at other times as is necessary. board meetings may be
conducted by means of telephone as provided in the bylaws in a manner consistent
with state law.
§31B-11-9. Fees.
Corporate credit unions shall pay the assessment and fees set for credit
unions under this code to defray the costs to the commissioner and board for their
supervision, examination, and administration. The assessments and operating
fees established by the commissioner or Legislature may make allowances for the
special purposes and operations of the corporate credit union.
§31B-11-10. Reserves.
(a) The corporate credit union shall be exempt from the regular reserverequirements of subsection (a), section three, article nine, of this chapter but at the
end of each accounting period and prior to paying a dividend or interest refund
(or, at the option of the credit union, on a monthly basis if dividends or interest
refunds are paid more frequently than monthly) sums shall be set aside in a
regular reserve in accordance with the following schedule:
(1)When the credit union's regular reserve and undivided earnings are
less than two percent (2%) of assets at the end of the transfer period, the credit
union shall set aside an amount equal to .0015 times the credit union's average
daily assets for the transfer period, times the number of days in the transfer
period, divided by 365.
(2)When the regular reserve and undivided earnings are equal to or
greater than two percent (2%) of assets, but the regular reserve is less than four
percent (4%) of assets, the credit union shall set aside an amount equal to .0010
times the credit union's average daily assets for the transfer period, times the
number of days in the transfer period, divided by 365.
(b) Charges may be made to the regular reserve for loan losses and for
investment losses caused by factors other than trading losses or market
fluctuations. Other charges to the regular reserve may only be made with the
prior approval of the commissioner.
(c) Additional reserves for corporate credit unions may be required by the
commissioner when in his or her discretion, circumstances make such additional
reserves necessary and prudent for the protection of shareholders and depositors.
§31B-11-11. Annual Audit.
(a) The supervisory committee of the corporate credit union shall cause an
annual audit to be made by an independent certified public accountant and shall
submit the annual audit report to the board of directors. A summary of the audit
report shall be submitted to the membership at the next annual meeting.
(b) A copy of the audit report shall be submitted to the commissioner
within thirty (30) days after receipt by the board of directors.
§31B-11-12. Securities Exemption.
The corporate credit union shall be exempt from the securities laws of this
state.
ARTICLE 12. PENALTIES
§31B-12-1. Criminal Liability.
Any credit union officer, director, employee, or agent, who willfully doesany of the following shall be deemed guilty of a felony and may upon conviction
thereof, be fined not more than ten thousand dollars ($10,000) or imprisoned not
less than one year nor more than five years, or both:
(a) With intent to deceive, falsifies any books of account, report,
statement, record, or other document of a credit union whether by alteration, false
entry, omission or otherwise.
(b) Signs, issues, publishes or transmits to a government agency any book
of account, report, statement, record or other document which that person knows
to be false.
(c) By means of deceit, obtains a signature to a writing which is the
subject of forgery.
(d) With intent to deceive, destroys any credit union book of account,
report, statement, record or other document.
§31B-12-2. Penalty for False Reports.
Whoever maliciously and knowingly spreads false reports about the
management or finances of any credit union shall be fined not less than twenty-
five dollars ($25.00), nor more than two hundred dollars ($200.00) or be
imprisoned for not less than thirty days nor more than one year, or both.
§31B-12-3. Civil Penalties.
Any person who violates this chapter, the rules issued pursuant thereto, or
any orders lawfully entered by the commissioner or board of banking and financial
institutions may be subject to civil penalties in an action brought by the
commissioner or board in an amount not less than fifty dollars ($50) nor more
than five thousand dollars ($5,000) for each violation.
***
[chapter 31, article 10, section 1 et seq. is repealed]
NOTE: The purpose of this bill is to better provide for the organization, operation,
and supervision of cooperative, nonprofit thrift and credit associations
to be known as credit unions and to define their powers. The bill will
clarify the ability and the procedure for credit unions to establish
branches and corporate credit unions. The bill specifies the ability of
credit unions to offer payable-on-death accounts and certain trust
accounts including individual retirement accounts. The bill also
provides for applicability and conformity with the consumer protection
provisions of chapter 46A of this code to credit unions. The bill allows
for civil penalties to be sought by the commissioner of Banking for
violations, and establishes greater loan limits based upon credit union
assets. The bill sets forth the ability of credit unions to indemnify
officers, directors, and employees in a manner allowed for banking
institutions. The bill also provides for interstate business and branching
by West Virginia state credit unions on a reciprocal basis; and generally
amends the credit union code to meet the changing needs of such
financial institutions so as to provide their customers with better
services.
Strike-throughs indicate deletions and underscoring indicates new
language; chapter 31B is new and therefore strike-throughs and underscoring
have been deleted.
Effective Date. This Act shall take effect July 1, 1996. All laws or parts of laws
in conflict with this Act are hereby repealed to the extent of such conflict.