October 27, 2015, Introduced by Reps. Forlini, Iden, McCready, Love, Muxlow, Lucido, Barrett, Theis, Clemente and Victory and referred to the Committee on Financial Services.
A bill to amend 2003 PA 215, entitled
"Credit union act,"
by amending the title and sections 102, 103, 202, 214, 304, 305,
342, 345, 353, 355, 357, 401, 408, 409, 423, 431, and 432 (MCL
490.102, 490.103, 490.202, 490.214, 490.304, 490.305, 490.342,
490.345, 490.353, 490.355, 490.357, 490.401, 490.408, 490.409,
490.423, 490.431, and 490.432), sections 102, 214, 304, 342, 345,
357, 401, and 423 as amended by 2004 PA 471.
THE PEOPLE OF THE STATE OF MICHIGAN ENACT:
TITLE
An act to provide for the organization, operation, regulation,
and supervision of credit unions; to prescribe the powers and
duties of credit unions; to prescribe the powers and duties of
certain state agencies and officials; to create the credit union
regulatory fund; to prescribe penalties, civil sanctions, and
remedies; and to repeal acts and parts of acts.
Sec. 102. As used in this act:
(a) "Affiliate" means a person, other than an individual or
governmental entity, to which any of the following apply:
(i) A credit union directly or indirectly owns or controls a
majority of the person's voting shares or other voting ownership
interests.
(ii) A credit union directly or indirectly owns or controls
more than 50% of the number of shares or other ownership interests
voted at the most recent election for the election of its
directors, trustees, or other individuals who exercise similar
functions.
(iii) A credit union has the power to directly or indirectly
elect a majority of the person's directors, trustees, or other
individuals who exercise similar functions.
(iv) A majority of a credit union board constitutes a majority
of the directors, trustees, or other persons exercising similar
functions of the person.
(b) "Alien credit union" means a credit union that is
organized under the laws of a country other than the United States.
(c) "Associate board member" means an individual appointed by
a credit union board to the position described in section 342(10).
(d) (c)
"Bank" means a bank that
is organized under the laws
of this state, any other state, the District of Columbia, or a
territory or protectorate of the United States, or a national
banking association chartered by the federal government under the
national
bank act, chapter 106, 13 Stat. 99, 12 USC 21 to 216d, and
whose deposits are insured by an agency of the federal government.
(e) "Board member" means a member of a board of directors,
board of trustees, or similar governing body of an organization. In
connection with a credit union board, the term does not include an
associate board member.
(f) (d)
"Borrower" means a member
who obtains a loan from a
domestic
credit union.
(g) (e)
"Branch" means, a
place of business, other than the
principal
place of business, that is owned or leased by a credit
union
and where the credit union transacts business authorized by
the
credit union board. except
as otherwise provided in this
subdivision, an office or other place of business at which a credit
union receives deposits, pays checks, or lends money. Branch does
not include any of the following:
(i) An elementary, middle, or high school at which an employee
or agent of a credit union only accepts deposits.
(ii) An electronic funds transfer facility that is made
available to 2 or more depository institutions under 1978 PA 322,
MCL 488.1 to 488.31.
(iii) A loan production office of a credit union.
(iv) A mobile office. As used in this subparagraph, "mobile
office" means a credit union office or facility that does not have
a permanent location and is designed to be moveable from place to
place.
(h) (f)
"Commissioner" means the commissioner
of the office of
financial
and insurance services in the department of labor and
economic
growth.director.
(i) (g)
"Corporate credit union"
means a credit union whose
field of membership consists primarily of other credit unions.
(j) (h)
"Credit union" means a
domestic or foreign credit
union.
(k) (i)
"Credit union board"
means a board of directors, board
of trustees, or other governing body of a credit union. A credit
union board does not include associate board members.
(l) (j)
"Credit union service
organization" means a
corporation
or other organization legal
entity that is engaged
primarily in providing 1 or more of the products or services
described
in section 407 to credit unions or their members, and
that a domestic credit union may organize, invest in, or lend to
under section 401(2)(gg), and that may or may not be controlled by
1 or more credit unions.
(m) (k)
"Debt management" means
that term as defined in
section 2 of the debt management act, 1975 PA 148, MCL 451.412.
(n) "Department" means the department of insurance and
financial services.
(o) "Director" means the director of the department.
(p) (l) "Domestic
credit union" means a cooperative, nonprofit
entity organized under this act for the purposes of encouraging
thrift among its members, providing a variety of financial services
to its members, 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.
(q) (m)
"Eligibility record date"
means a record date that is
1 year or more before the adoption of a plan of conversion by a
credit union board and is set forth in a plan of conversion for
determining eligible members of a converting credit union.
(r) (n)
"Emergency" means a
condition, event, or occurrence
that meets both of the following:
(i) It has or may interfere with the conduct of normal
business operations, or poses an imminent or existing threat to the
safety and security of a person or property, at the principal place
of business or 1 or more branches of a credit union.
(ii) It is the result of a fire, flood, earthquake, hurricane,
tornado, wind, rain, snowstorm, labor dispute or strike, power
failure, transportation failure, fuel shortage, interruption of a
communication facility, shortage of housing, epidemic or other
natural or manmade catastrophe, riot, civil commotion, or any other
act of lawlessness or violence.
(s) (o)
"Federal credit union"
means a credit union that is
organized under the laws of the United States.
(t) (p)
"Field of membership"
means that term as established
under section 352.
(u) (q)
"Financial institution"
means a credit union, bank,
savings bank, or savings and loan association.
(v) (r)
"Foreign credit union"
means a credit union organized
under the laws of another state or territory of the United States
or a federal credit union.
(w) (s)
"Insolvent" means a
credit union that meets either of
the following:
(i) It is not able to pay its debts and other obligations,
including those related to member shares, as they become due.
(ii) Its liabilities exceed its assets.
Sec. 103. As used in this act:
(a) "Membership share" means a share of a domestic credit
union equal in amount to the par value of the credit union's shares
that is credited to an account of a member by the credit union, is
required as a condition of membership in the credit union, and is
subject to any withdrawal restriction or other standards
established by the domestic credit union for membership shares.
(b) "Mutual savings and loan association" means a savings and
loan association that is not authorized by its articles of
incorporation to issue capital stock.
(c) "Mutual savings bank" means a savings bank that is not
authorized by its articles of incorporation to issue capital stock.
(d) "Net worth" means the sum of a credit union's undivided
earnings and reserves. The term does not include allowances for
loan and lease losses accounts.
(e) "Office of financial and insurance services" means the
department.
(f) (e)
"Officer" means the
chairperson of the board, the
vice-chairperson of the board, the secretary, the treasurer, the
general
manager, an individual whose title is "president", or
"vice
president",
an assistant treasurer, or an
assistant secretary of a
credit
union, or any other person individual
who is specifically
designated as an officer of a credit union by the credit union
board.
(g) (f)
"Official" means a member
of a credit union board or
an officer, member of a credit committee or supervisory committee,
or member of any other committee performing functions similar to a
credit committee or supervisory committee, of a credit union.
(h) (g)
"Person" means an
individual, corporation,
partnership, limited liability company, association, governmental
entity, or any other legal entity.
(i) (h)
"Principal place of
business" means the place where a
domestic credit union keeps its principal records.
(j) (i)
"Savings and loan
association" means a savings
association that is organized under the laws of this state, a
savings and loan association, building and loan association, or
homestead association that is organized under the laws of any other
state, the District of Columbia, or a territory or protectorate of
the United States, or a federal savings association organized under
section
5 of the home owners' loan act, chapter
64, 48 Stat. 132,
12
U.S.C. 1464, 12 USC 1461 to
1470, and whose deposits are insured
by an agency of the federal government.
(k) (j)
"Savings bank" means a
savings bank that is organized
under the laws of this state, any other state, the District of
Columbia, a territory or protectorate of the United States, or of
the United States, and whose deposits are insured by an agency of
the federal government.
(l) (k)
"Senior management
employee" means a credit union's
general
manager or an assistant general manager or the chief
financial
officer of the credit union.any
individual who is
designated as a senior policy-making employee of a credit union by
the board of the credit union.
(m) (l) "Service
center" means a place of business of a credit
union, other than the principal place of business or a branch,
where the credit union may transact business authorized by the
credit union board.
(n) (m)
"Stock savings and loan
association" means a savings
and loan association that is authorized by its articles of
incorporation to issue capital stock.
(o) (n)
"Stock savings bank"
means a savings bank that is
authorized by its articles of incorporation to issue capital stock.
Sec.
202. (1) Any fees, fines, A fee, a civil or
administrative fine, or any other money received or collected by
the
commissioner director or the office of financial and insurance
services
department under this act, except a fine imposed for a
violation of section 217, is not refundable and shall be deposited
into
the state treasury to the credit of the office of financial
and
insurance services and used only for the operation of the
office
of financial and insurance services.credit union regulatory
fund created in subsection (2).
(2) The credit union regulatory fund is established in the
department of treasury. All of the following apply to the credit
union regulatory fund:
(a) The fund shall consist of the following:
(i) Fees, civil or administrative fines, and any other money
received or collected under this act, except fines imposed for
violations of section 217.
(ii) Money appropriated to the fund.
(iii) Donations of money made to the fund from any source.
(iv) Interest and earnings from fund investments.
(b) Money in the fund at the close of a fiscal year shall
remain in the fund and shall not revert to the general fund.
(c) Upon appropriation, the department shall use the money in
the fund only for credit union regulatory purposes, as determined
by the director.
(d) The state treasurer shall direct the investment of the
fund.
(e) The department is the administrator of the fund for
auditing purposes.
Sec.
214. (1) If a person participating an individual who
participates in the conduct of the affairs of a domestic credit
union is charged in any information, indictment, warrant, or
complaint by a county, state, or federal authority with the
commission
of, or participation in, a felony involving crime that
involves
dishonesty or breach of trust, the commissioner
director
may, by
written notice served on the person individual, suspend the
person
individual from office or prohibit the person individual
from further participation in any manner in the conduct of the
affairs
of the domestic credit union. The commissioner director
shall also serve a copy of the suspension or prohibition on the
domestic credit union. A suspension or prohibition is in effect
until the information, indictment, warrant, or complaint is finally
disposed
of or until terminated by the commissioner.director.
(2) If a judgment of conviction with respect to an offense
described
in subsection (1) is entered against a person, an
individual, after the judgment is not subject to further appellate
review,
the commissioner director may issue an order removing the
person
individual from office or prohibiting the person individual
from further participation in the conduct of the affairs of any
domestic credit union. If an order described in this subsection is
issued,
the person individual must obtain the prior consent of the
commissioner
director before participating in any manner in the
conduct of the affairs of any domestic credit union.
(3)
A person An individual who
is removed from office under
subsection
(2) is removed when a copy of the order is served upon
on the domestic credit union.
(4) A finding of not guilty or other disposition of the charge
does
not preclude the commissioner director
from instituting
proceedings
to suspend or remove a person an
individual from office
or to prohibit further participation in the affairs of a domestic
credit union under section 212(1), (2), or (3).
Sec.
304. (1) A If a domestic credit union may change changes
the
location of its principal place of business within in this
state, if
it provides the domestic
credit union must provide the
commissioner
director with written notice at least 30 days before
the change of location.
(2) A domestic credit union shall file the address of the
principal place of business and the names and titles of the
officials and senior management employees of the domestic credit
union
with the commissioner director
on a form prescribed by the
commissioner.
director. If the name or title of an official or
senior management employee of a domestic credit union changes, the
credit
union shall provide the commissioner director with written
notice
of the change within 3 business 30
days after the change.
(3) A domestic credit union may establish and maintain
branches. The credit union shall provide written notice to the
commissioner
director of the location of a branch before
establishing the branch.
(4) A domestic credit union and 1 or more domestic or foreign
credit unions or other financial organizations may establish and
maintain service centers. One or more of the financial
organizations that establish a service center may operate the
service center, or the financial organizations organizing the
service center may contract with another person to operate the
service center. A domestic credit union may refer to a service
center as a branch.
(5) Subject to all of the following, a domestic credit union
may adopt or change 1 or more assumed names:
(a) The domestic credit union shall give written notice of a
proposed
assumed name to the commissioner director at least 30 days
before using the assumed name.
(b)
The commissioner director may deny a domestic credit union
the right to use an assumed name or terminate a credit union's
right
to use an assumed name if the commissioner director
determines that the assumed name is confusing or misleading or for
any other reason.
(c) A domestic credit union using an assumed name shall
clearly and conspicuously disclose the name of the credit union and
the assumed name in all signs, advertising, mailings, and similar
materials and shall clearly and conspicuously disclose the assumed
name and the name of the credit union in all legal documents,
certificates of deposit, signature cards, loan agreements, account
statements, checks, drafts, and other similar documents.
(d)
An assumed name may not contain the phrase "credit union".
Sec. 305. (1) A domestic credit union shall maintain its books
and records at its principal place of business filed with the
commissioner
director under section 304 and make the books and
records
available for examination by the commissioner director or
his or her authorized agent, except as follows:
(a) A credit union may maintain specified books and records at
a location in this state other than its principal place of business
if
it gives notice to the commissioner director of the location of
the specified books and records and can produce those books and
records at its principal place of business within 3 business days
after a request from the commissioner to examine them.
(b) Except as required by other applicable law, a credit union
may
store records that are more than 3 years old at an off-site
facility or on alternative storage media if the records are
available
for examination by the commissioner director or his or
her appointed agent.
(c) A domestic credit union may maintain records specific to a
branch located outside of this state at that branch if the credit
union can make the originals of those records available to the
commissioner
director within this state within 3 business days
after
a request from the commissioner director
to examine them. If
a law applicable in the state where the branch is located prohibits
the removal of the original records from that state, the credit
union
shall notify the commissioner director
of that law and
provide
copies of the records to the commissioner.director.
(2) If a domestic credit union does not make its books and
records
available to the commissioner director
or his or her
authorized agent in the manner described in subsection (1), the
commissioner
director may obtain an order from the circuit court of
the
county in which the credit union is located requiring that
requires the credit union to produce the books and records for
examination.
Sec. 342. (1) At its first meeting, the credit union board
shall elect from the credit union board members a chairperson,
vice-chairperson, treasurer, and secretary. An individual may serve
as both treasurer and secretary. A credit union may refer to these
officers by different titles. The credit union shall establish the
duties of all of the officers of the credit union in its bylaws.
(2) A credit union board has general management of the affairs
of the domestic credit union. The credit union board has the
authority and responsibility for the general direction of the
business affairs, funds, and records of the domestic credit union
and is responsible for maintaining its safety and soundness. The
duties of the credit union board include, but are not limited to,
the duties described in subsection (3) or (4).
(3) The credit union board shall perform all of the following
duties, which the credit union board may not delegate to another
person or committee:
(a) Except as provided in section 345(3), filling a vacancy on
the board until a successor is elected by the members.
(b)
Establishing the maximum individual shareholdings of
members.
(b) (c)
Establishing the maximum amount of
secured and
unsecured loans made by the domestic credit union, subject to
section
423(12) 423(11) and any limitations under the bylaws of the
domestic
credit union. adopted and approved by the commissioner.
(c) (d)
Employing a general manager or chief executive officer
and fixing his or her compensation.
(d) (e)
Approving an annual operating
budget.
(f)
Acquiring, selling, or encumbering real property.
(e) (g)
Appointing special committees as
that the board deems
considers necessary.
(h)
Borrowing money under section 401(2)(j).
(i)
Fixing the amount of the surety bonds for all officers and
employees
handling money.
(f) (j)
Determining the par value of shares
under section 301.
(g) (k)
Recommending changes in the bylaws
to the members.
(l) Specifying forms and procedures for applications
for
membership
and set criteria for use in determining whether to
accept
an applicant into membership.
(h) (m)
Adopting investment policies.
(i) (n)
Adopting other policies the board considers necessary
for the operation of the domestic credit union.
(j) (o)
Establishing the titles of the board officers
holding
who
hold the positions described in this
section. subsection (1).
The credit union board shall not establish any misleading titles
for those officers.
(p)
Meeting at least once every 62 days and at least 9 times
each
calendar year, in person or by means of electronic
communication
devices that enable all participants in a meeting to
communicate
simultaneously with each other.
(k) (q)
Performing any other duties
required by the members.
(4) A credit union board shall perform, or, subject to
subsection (5), delegate to the general manager or chief executive
officer of the domestic credit union according to guidelines
established by the credit union board that may include the
authority to further delegate 1 or more duties, all of the
following duties:
(a) Approving, disapproving, or otherwise acting on
applications for membership.
(b) Determining the interest rates on loans and on deposits.
(c) Hiring employees other than the general manager or chief
executive officer and fixing their compensation.
(d) Making and selling investments according to investment
policies adopted by the board.
(e) Designating 1 or more depositories for funds.
(f) Establishing procedures to implement policies of the
credit union board.
(g) Establishing internal controls as necessary.
(h) Determining the amount of a dividend after providing for
any required reserves and declaring the dividend.
(i) Establishing the maximum individual shareholdings of
members.
(j) Acquiring, selling, or encumbering real property.
(k) Borrowing money under section 401(2)(j).
(l) Fixing the amount of the surety bonds for all officers and
employees who handle money.
(m) Specifying forms and procedures for applications for
membership and set criteria for use in determining whether to
accept an applicant into membership.
(5) If a credit union board delegates a duty described in
subsection (4)(i) to (m) to the general manager or chief executive
officer, and the general manager or chief executive officer acts
pursuant to that delegation, the general manager or chief executive
officer shall provide a summary of the actions he or she took to
the credit union board at the next regularly scheduled meeting of
the credit union board.
(6) (5)
A credit union board may do any of
the following:
(a) By resolution, designate a general manager or chief
executive officer and define his or her duties.
(b)
Appoint an executive committee that consists of not fewer
than
3 directors. at least 3 board
members. An executive committee
may act on any matter specifically authorized by the board.
(c)
Remove a director board
member by a 2/3 vote of the credit
union board, for cause or for any reason set forth in the bylaws.
In addition to removal under section 341(9), the domestic credit
union's
bylaws may also provide for immediate removal of a director
board member from that office without further action of the members
or credit union board if 1 or more events specified in the bylaws
occur.
(d) If the domestic credit union does not have a supervisory
committee, remove a credit committee member by a 2/3 vote of the
credit union board.
(e) If there is no supervisory committee, suspend a member of
the credit union board by a 2/3 vote of the credit union board. If
a member of the credit union board is suspended under this
subdivision
or section 345(2), the remaining directors board
members shall report the suspension and the cause for the
suspension
to the commissioner director
within 3 days and shall
call
a special members' meeting that shall take place not less
fewer than 7 or more than 45 days after the suspension. At the
special
members' meeting, the remaining directors board members
shall
report the cause for the suspension, the suspended director
board member has the right to be heard, and the members shall
decide whether to sustain or reverse the action of the supervisory
committee or the credit union board. If the members sustain the
action, they shall replace the suspended board member at the
special members' meeting. If a supervisory committee suspends a
majority of the credit union board under section 345(2), the
remaining board members have general management of the affairs of
the domestic credit union until the suspended board members are
reinstated or replaced at the special members' meeting.
(f) Suspend or remove a member of the supervisory committee
for failure to perform his or her duties in accordance with this
act, the certificate of organization, or the bylaws by a 2/3 vote
of the credit union board.
(g) By a majority vote, suspend or remove any officer from his
or her duties as an officer.
(7) (6)
An individual who is elected
or appointed to serve as
a
director, board member,
associate board member, supervisory
committee member, or credit committee member of a domestic credit
union, or as a member of any other committee that performs
significant ongoing functions relating to the ongoing operations of
the domestic credit union, shall not receive compensation for his
or her service as a board member, associate board member, or
committee
member, .subject
to the following:
(a) A domestic credit union may provide reasonable life,
health, accident, disability, or similar insurance protection, and
reimbursement for reasonable expenses that are incidental to the
performance of official business of the credit union, to board
members, associate board members, supervisory committee members, or
credit committee members of the credit union or to the members of
any other committee that performs significant ongoing functions
relating to the ongoing operations of the domestic credit union.
(b) This section does not prevent an employee of a domestic
credit union who serves on a credit union committee from receiving
compensation for his or her duties as a credit union employee.
(8) (7)
If a loan made to or cosigned,
endorsed, or guaranteed
by
a director board member or a member of the supervisory, credit,
or other committee is more than 2 months delinquent, the individual
is
automatically removed from his or her position as director board
member or committee member and he or she is ineligible to serve as
a
director board member or committee member for 2 years. The
commissioner
director may waive the application of this provision
in
a given situation if the commissioner director determines that
it is in the best interests of the domestic credit union to do so.
(9) The board of a domestic credit union shall meet at least 6
times in each calendar year and at least every other month. The
board shall meet in person or by means of electronic communication
devices that enable all participants in a meeting to communicate
with each other.
(10) In addition to the board members required under section
341, the board of a domestic credit union may appoint 1 or more
associate board members. All of the following apply concerning
associate board members:
(a) A credit union board in its discretion shall determine
whether to appoint associate board members, the number of associate
board members, if any, and their duties. The credit union board has
authority concerning the appointment and removal of individuals as
associate board members.
(b) A credit union board shall not appoint an individual as an
associate board member if he or she does not meet the eligibility
requirements described in section 341(8) for board members.
(c) An individual appointed as an associate board member
serves in an ex officio capacity. An associate board member may
participate in meetings of a credit union board, but only in an
advisory capacity; has no authority to vote or otherwise act as a
board member; and is not considered a board member for purposes of
this act.
(d) An associate board member must sign a confidentiality
agreement, to ensure that any information concerning the credit
union remains confidential and that he or she shall not disclose
that information to any other person. Disclosure of confidential
information by an associate board member without approval of the
director is a violation of this act.
(11) (8)
A majority of the credit union
board constitutes a
quorum for the transaction of business.
(12) (9)
Unless specifically prohibited by
the bylaws, if this
act requires or allows a credit union board to take an action at a
meeting, the board may take that action without a meeting if a
consent
in writing setting forth the action taken is signed by all
a
majority of the directors board members who are entitled to vote
on that matter. A written consent under this subsection shall
contain 1 or more written approvals, each of which sets forth the
action
taken and bears the signature of 1 or more directors. board
members.
The directors board members shall deliver their signed
approvals to the secretary, and he or she shall file them in the
corporate records of the domestic credit union. An action taken by
written
consent under this subsection is effective when all a
majority
of the directors board members have approved the consent
unless the consent specifies a different effective date. A consent
signed
by all a majority of the directors board members has the
same
effect as a unanimous majority
vote of the credit union board,
and the domestic credit union may represent that the action was
approved
by a unanimous majority vote in any document filed with
the
commissioner director under this act.
(13) (10)
A director when When he or
she is first elected or
appointed to the credit union board, a board member shall take and
subscribe an oath that he or she will diligently and honestly
perform the duties of the office and will not knowingly violate, or
permit to be violated, any provisions of this act. The secretary
shall file the oaths in the corporate records of the domestic
credit union. An oath made by a board member under this subsection
remains in effect as long as he or she remains in office.
Sec. 345. (1) A domestic credit union may have a supervisory
committee.
If authorized by the bylaws, 1 director board member who
is not an officer of the domestic credit union may serve as a
member
of the supervisory committee. Otherwise, a director board
member may not serve as a member of the supervisory committee.
(2) If a domestic credit union has a supervisory committee,
the supervisory committee may do any of the following:
(a) By majority vote, call a special meeting of the members to
consider any matter submitted to the special meeting of the members
by the committee.
(b) By a unanimous vote, suspend any member of the credit
committee and report the suspension and the reason for the
suspension to the credit union board. At its next meeting, the
credit union board shall vote on whether to remove or reinstate the
suspended credit committee member. A 2/3 vote of the credit union
board is required to remove the suspended credit committee member.
(c) By a unanimous vote, suspend a member of the credit union
board for cause.
(d) Access any credit union records.
(3) If a domestic credit union has a supervisory committee and
the members elect the supervisory committee, the committee shall
fill
vacancies on the supervisory committee. until the next annual
meeting
of the members. If a domestic
credit union has a
supervisory committee and the credit union board appoints the
supervisory committee, the credit union board shall fill vacancies
on the supervisory committee. An individual appointed to fill a
vacancy on the supervisory committee under this subsection shall
serve for the remainder of the term of the vacant position.
Sec. 353. (1) Except as provided in this part, ownership of a
share is a condition of membership in a domestic credit union. A
domestic credit union may require ownership of a membership share
rather than a share as a condition of membership. Except as
provided in this section, a member may own only 1 membership share.
(2) A domestic credit union may accept and maintain deposits
under section 401(2)(x) without the depositor subscribing to or
paying for a share in the domestic credit union.
(3)
If it is comprised composed
for the most part of the same
general group as the membership of the domestic credit union, or
does business within the geographic area of the credit union's
field of membership, a domestic credit union may accept a legal
entity as a member of a domestic credit union.
(4) If the domestic credit union elects, a single account
jointly owned by 2 or more individuals may serve as the basis for
membership of any of those individual owners who are otherwise
eligible for membership if the account contains at least 1 share
for each of them.
(5) If an individual was a member of, or eligible for
membership in, the domestic credit union at the time of his or her
death, a domestic credit union may accept the estate of the
individual as a member.
Sec. 355. A domestic credit union may allow a member to
designate
an account upon on which his or her membership is based
as inactive. If the account is the basis for the membership of more
than 1 individual, each individual must agree to the designation.
While an account is inactive, the member involved shall retain his
or her membership but is not entitled to any of the privileges of
membership. While an account is inactive, the domestic credit union
shall not charge any fees to the account. The member who designated
an account as inactive may remove the designation of inactive at
any
time. If the inactive designation is not removed within 5 3
years, the domestic credit union shall deliver all money or other
property in the account to the department of treasury under the
uniform unclaimed property act, 1995 PA 29, MCL 567.221 to 567.265,
and terminate any membership based on the account.
Sec.
357. (1) A credit union board may terminate the
membership
of, or terminate some or all services to, a member who
does
any of the following:The
general manager or chief executive
officer of a domestic credit union, or his or her designee, may
suspend some or all services to a member, or terminate the
membership of any person, that does any of the following:
(a) Causes a loss to the domestic credit union.
(b) Commits fraud or another misdeed against the domestic
credit union or against a person on the premises of the domestic
credit union.
(2)
Pending action by the credit union board at its next
regularly
scheduled meeting, a domestic credit union may
immediately
suspend any credit union services to a member who does
any
of the following:
(a)
Causes a loss to the domestic credit union.
(b)
Commits fraud or another misdeed against the domestic
credit
union or against a person on the premises of the domestic
credit
union.
(c) Engages in inappropriate behavior involving another
individual, such as physical or verbal abuse of another member or
an employee of the credit union.
(2) A member that has its services suspended or a person that
has its membership terminated under subsection (1) may appeal the
suspension or termination to the credit union board within 90 days
after the date of the suspension or termination. The credit union
board has final authority to resolve an appeal under this
subsection.
(3) A member may withdraw from a domestic credit union at any
time, but the domestic credit union may require a notice of
withdrawal from the withdrawing member as a condition of
withdrawal.
(4) When money becomes available, and after deducting all
amounts owed to the domestic credit union by the member, a domestic
credit union shall pay a person whose membership is terminated or
who
that is a withdrawing member any amounts paid on shares
or as
deposits of the member and any dividends or interest accrued on the
shares or deposits before the date of payment.
(5) Unless the withdrawal of a member occurs on a maturity
date or within 7 days after a maturity date, a domestic credit
union may require that a withdrawing member give a 60-day notice of
intention to withdraw shares or a 30-day notice of intention to
withdraw deposits. A domestic credit union that requires a notice
of intention to withdraw may wait until the expiration of the
applicable notice period before complying with subsection (4). A
domestic credit union may waive an applicable notice period for a
specific member or account in writing.
(6)
After a termination or withdrawal under this section, the
a
former member has no rights in the a domestic
credit union, but
the termination or withdrawal does not release the former member
from any remaining liability to the domestic credit union.
Sec. 401. (1) A domestic credit union has the powers described
in this section, specified or implied by this act, and specified in
any other law of this state.
(2) A domestic credit union has all of the following powers:
(a) To enter into contracts.
(b) To sue and be sued.
(c) To adopt and alter a seal.
(d) To individually or jointly with other credit unions,
purchase, lease, or otherwise acquire and hold tangible personal
property necessary or incidental to its operations. A domestic
credit union shall depreciate or appreciate personal property in
the
manner and at the rates the commissioner director prescribes by
rule, order, or declaratory ruling.
(e) To sell, convey, lease, or otherwise dispose of, or
assign, pledge, or create a security interest in, all or part of
its tangible personal property, including property obtained as a
result of a default of an obligation owed to the domestic credit
union. A domestic credit union may finance the sale of its personal
property to a person at a rate of interest that does not exceed the
rate
of interest permitted by under
the credit reform act, 1995 PA
162, MCL 445.1851 to 445.1864, for loans to its members for the
purchase of equivalent property.
(f) To incur and pay necessary and incidental operating
expenses.
(g) To receive the funds of its members either as payment on
shares or as deposits. Subject to the limitation on payment of
dividends in section 362, a domestic credit union may have 1 or
more classes of share or deposit accounts in the classifications
and form, under the terms and conditions and with liquidation
priorities authorized by the credit union board, unless otherwise
prescribed by law. A domestic credit union shall provide for the
transfer and withdrawal of funds from accounts by the means and
through the payment systems that the credit union board determines
best serve the convenience and needs of its members.
(h) To charge fees in connection with shares, savings,
extensions of credit, and other services by contract or agreement.
(i) To make secured or unsecured loans to any member, at fixed
or variable interest rates, and take and hold any real or personal
property as security. In establishing an interest rate, the
domestic credit union shall consider the collateral provided, the
creditworthiness of the borrower, the duration of the loan, and any
other factor reasonably determined by the domestic credit union to
affect the risks related to the loan.
(j) To borrow funds from any source. Funds borrowed under this
subdivision are not deposits. The domestic credit union may secure
a loan described in this subdivision with a pledge of some or all
of the domestic credit union's assets.
(k) To make loans to a trade association of which it is a
member.
(l) To provide debt counseling and other financial counseling
services to its members. If the counseling includes debt management
for a member and the member is delinquent in any indebtedness owed
to the domestic credit union, the domestic credit union shall not
charge that member, directly or indirectly, a fee for providing the
counseling services.
(m) To disburse loan proceeds as the borrower directs.
(n) To act as trustee or custodian of and administer, for
individuals or as part of an employer group plan, retirement
accounts, or other accounts that permit tax deferrals or provide
other tax benefits under federal or state law.
(o) To act as agent for its members and depositors in the
purchase, sale, or other disposition of securities, interests in
mutual funds, and interests or participations in any other type of
investment, if the purchase, sale, or other disposition is done
solely for the accounts of its members and depositors and is done
on a nonrecourse basis.
(p) To discount, sell, convey, or otherwise dispose of, or
assign, pledge, or create a security interest in, all or part of
its intangible personal property.
(q)
To purchase any of the assets of another domestic credit
union,
depository institution, or with the approval of the
commissioner
director assume any of the liabilities of another
domestic
credit union.depository
institution.
(r) To make deposits in or loans to banks, savings banks,
savings and loan associations, trust companies, and other credit
unions, or purchase shares of mutual savings banks, mutual savings
and loan associations, and other credit unions. A domestic credit
union may also make deposits in, loans to, or purchase shares of a
corporate credit union and invest funds as provided in section 431.
(s) To join, make deposits in or loans to, or purchase shares
of any federal reserve bank, federal home loan bank, or central
liquidity facility established under federal or state law.
(t) To hold membership in associations and organizations
controlled by or fostering the interests of credit unions or in a
central liquidity facility organized under federal or state law.
(u) To, if approved by the credit union board and not
inconsistent with this act, engage in activities and programs of
the federal government, a state, a territory of the United States,
or an agency or political subdivision of the federal government or
a state or territory of the United States.
(v) To receive funds as shares or deposits from a credit
union, bank, savings bank, savings and loan association, or any
other type of depository institution.
(w) To receive funds as shares or deposits from a retirement
plan that serves all or any of the domestic credit union's members
or potential members.
(x) To receive funds as shares or deposits from a public
employee retirement system or plan.
(y) To lease tangible personal property to its members.
(z) To purchase, sell, pledge, discount, or otherwise acquire,
or dispose of all or part of the obligations of its members in
accordance with section 432. This subdivision does not apply to
participation
loans originated pursuant to section 423(7).423(6).
(aa) At the domestic credit union's expense, to purchase
insurance for its members in connection with share, deposit, loan,
or other accounts.
(bb) To establish, operate, participate in, or hold membership
in systems that allow the transfer of credit union funds and funds
of its members or other account holders by electronic or other
means, including clearinghouse associations, data processing and
other electronic networks, the federal reserve system, or any other
payment or liquidity program and contract with outside vendors to
process member payments, send or receive funds for member
investments, or initiate and execute electronic funds transfers on
behalf of its members.
(cc) To service loans sold by the domestic credit union, in
whole or in part, to a third party.
(dd) To receive payments on shares or deposits from or make
loans to the United States or an agency or instrumentality of the
United States.
(ee) To act as a fiscal agent and maintain treasury tax and
loan accounts of the United States.
(ff) To receive payments on shares or deposits from a state, a
territory of the United States, or from an agency, political
subdivision, or instrumentality of a state or territory of the
United States. A domestic credit union may act as fiscal agent for,
maintain tax and loan accounts of, and make loans to, an entity
that the domestic credit union has authority to receive payments
from under this subdivision.
(gg) To organize, invest in, and make loans to credit union
service organizations. In addition to the activities described in
section 407(1) or (2) for credit union service organizations, the
commissioner
director shall determine the activities and services
that fall within the meaning of this subdivision. Investments and
loans described in this subdivision shall not in the aggregate
exceed 12% of the assets of the domestic credit union, and without
the
prior approval of the commissioner director shall not in the
aggregate exceed 6% of the assets of the domestic credit union. A
domestic
credit union may not invest in or make loans to a credit
union
service organization under this subdivision unless if the
credit
union service organization agrees in writing to allow allows
the
commissioner director to conduct an examination of the credit
union
service organization to the same extent that the commissioner
director
is authorized to examine credit unions
and agrees in
writing
to make any reports to the commissioner
director that he or
she requires.
(hh) To individually or jointly with other credit unions or
other financial organizations, purchase, lease, construct, or
otherwise acquire and hold land and buildings for the purpose of
providing adequate facilities for the transaction of present and
potential business. A domestic credit union may use land and
buildings for its principal place of business functions, a branch,
a service center, or another facility used to conduct an activity
in which it engages. A domestic credit union may rent excess space
as a source of income. A domestic credit union shall depreciate or
appreciate buildings owned by it in the manner and at the rates the
commissioner may prescribe by rule, order, or declaratory ruling. A
domestic credit union's investment or contractual obligations,
direct, indirect, or contingent, in land and buildings under this
subdivision
may not exceed 5% 10% of its assets without the prior
approval
of the commissioner. director.
An agreement to acquire and
hold buildings or land jointly with other credit unions or other
financial organizations requires the prior approval of the
commissioner.
director. The commissioner director shall
act on a
completed application within 30 days after the application is
filed.
(ii) To own stock in a corporation that owns land or buildings
used to provide a facility described in subdivision (hh), but
ownership of the stock is an investment in the land and buildings
for all purposes under subdivision (hh). If a domestic credit union
owns less than 100% of the stock in a corporation described in this
subdivision, the investment is a joint agreement that requires the
commissioner's
director's approval under subdivision (hh).
(jj) To sell, convey, lease, or otherwise dispose of, or
assign, mortgage, pledge, or create a lien in, all or part of its
land and buildings, including land and buildings obtained as a
result of a default of an obligation owed to it, or stock in a
corporation described in subdivision (ii). A domestic credit union
may finance the sale of its land and buildings to any person at a
rate of interest that does not exceed the rate of interest
permitted by the credit reform act, 1995 PA 162, MCL 445.1851 to
445.1864, for loans to its members for the purchase of land and
buildings.
(kk) Pursuant to a written agreement, to perform services for
members of other domestic or foreign credit unions. A domestic
credit union may allow other credit unions to perform services for
its members pursuant to a written agreement. A domestic credit
union shall perform services described in this subdivision in
accordance with the laws of this state.
(ll) To engage in any aspect of the insurance and surety
business as an agent, broker, solicitor, or insurance counselor as
provided under the insurance code of 1956, 1956 PA 218, MCL 500.100
to 500.8302.
(mm) To own an insurance agency in whole or in part as
provided under the insurance code of 1956, 1956 PA 218, MCL 500.100
to 500.8302.
(nn) To make charitable contributions, if the individual
contributions and the aggregate amount of the contributions are
reasonable in amount, or to establish charitable donation accounts
if those accounts meet the requirements of 12 CFR part 721.3.
(oo) To offer tax return preparation and filing services.
(pp)
To contract with entities offering that offer funds
transfer services and provide those services to any person.
(qq) To receive payments on shares or deposits or make loans
to corporations that are wholly owned by 1 or more of the types of
entities from which the domestic credit union may receive payments
on shares under subdivision (dd) or (ff).
(rr) To enter into marketing and other support arrangements to
facilitate members' purchases of goods and services from third
parties that may include compensation to the domestic credit union.
(ss) To purchase insurance policies and other investment
products to fund deferred compensation arrangements for its
employees. If the deferred compensation arrangement does not
present a risk to the safety and soundness of the domestic credit
union, the purchase of those investment products is not subject to
the limitations of this act.
(tt) Subject to section 352, to establish and revise its field
of membership.
(uu)
Guarantee To guarantee the signature of a member in
connection
with a transaction involving that
involves tangible or
intangible property in which a member has or seeks to acquire an
interest.
(vv)
Perform To perform any of the following services for a
person
who that is not a member of the credit union if the service
is performed under a contractual arrangement in which another
financial organization performs the same service for the credit
union's members:
(i) Cash advances.
(ii) Funds transfers.
(iii) Cashing travelers checks.
(iv) Any other service specified by the commissioner
director
by rule, order, or declaratory ruling.
(ww) To perform any of the following services for any person
in
an underserved area or who that
does not have an established
relationship with a financial institution:
(i) Cashing and selling checks, drafts, or money orders.
(ii) Purchasing and selling foreign currencies in exchange for
United States currency.
(iii) Wire transfers.
(iv) Financial counseling services.
(xx) To provide educational scholarships.
(yy) To invest in interest rate derivatives for the purpose of
mitigating portfolio risk. A domestic credit union must notify the
director at least 60 days before it begins a program to invest in
interest rate derivatives under this subdivision. A domestic credit
union must conduct an investment program described in this
subdivision in a safe and sound manner, and any investments in
interest rate derivatives must meet the standards for an obligation
described in section 431(1)(d).
Sec.
408. (1) A domestic credit union wishing to utilize that
utilizes automated information processing services of a vendor
shall
must enter into a written contract, lease, or licensing
agreement with the vendor for those services. The credit union
board shall review the contract, lease, or licensing agreement to
ensure the interests of the domestic credit union are protected.
Approval of the contract, lease, or licensing agreement by the
credit union board is required before any automated information
processing services are performed or provided to the domestic
credit union.
(2)
The written contract, lease, or licensing agreement
described
in subsection (1) shall provide at least all of the
following:
(a)
That the vendor will furnish the written assurance
described
in subsection (4) to the commissioner.
(2) (b)
That the A domestic credit union will retain that
utilizes the services of a vendor under subsection (1) retains
permanent and exclusive ownership of all internal information and
member
information in the possession of the vendor. , that the The
vendor
may shall not disclose any of that information to third
parties except as explicitly authorized in writing by the domestic
credit
union; , and that the
vendor may shall not use any of that
information for the vendor's own purposes except as explicitly
authorized in writing by the domestic credit union; and if the
vendor or any subcontractor of the vendor has access to
confidential member information, the vendor or that subcontractor
are subject to regulation and examination by the director.
(c)
That the vendor will provide contingency planning and
disaster
recovery provisions to reconstruct the transactions of the
domestic
credit union and to resume automated information
processing
within a reasonable time after a failure of the
automated
information processing services.
(d)
That upon termination of the contract, lease, or licensing
agreement,
the vendor shall return copies of all internal
information
and member information in an electronic form usable to
the
domestic credit union, and disclose any fees related to the
return
of the information in electronic form.
(e)
The extent to which the vendor is liable for
nonperformance,
breach, or fraud or other dishonesty.
(f)
That each employee of the vendor with access to internal
information
or member information is sufficiently bonded against
fraud
or other dishonesty.
(g)
A statement of each service the vendor will perform, the
frequency
of each service, and the fees charged in connection with
performance
of each service.
(h)
A description of the ownership of the hardware, software,
or
systems utilized in the performance of the automated information
processing
services.
(i)
An allocation of responsibility for delivering internal
information
or member information to the vendor, and liability for
loss
of internal information or member information before it is
delivered.
(3)
If automated information processing services are donated
to
a domestic credit union by a sponsor, the domestic credit union
shall
make available sufficient off-premises storage and
duplication
of internal information and member information to
enable
the sponsor or the sponsor's vendor to reconstruct the
transactions
of the domestic credit union and resume automated
information
processing within a reasonable time after a failure of
the
automated information processing services.
(4)
A domestic credit union shall not purchase automated
information
processing services from a vendor unless the domestic
credit
union and the vendor, and any subcontractors of the vendor,
furnish
the commissioner with an assurance in writing that the
performance
of the services is subject to examination and
regulation
to the same extent as if the services were performed by
the
domestic credit union on its own premises.
(3) (5)
As used in this section:
(a) "Automated information processing" means automated
processing, updating, and storage of internal information or member
information.
(b) "Internal information" means the accounts, books, and
records of a domestic credit union maintained in any form.
(c) "Member information" means the share, deposit, loan
account balances, or other information related to any member of a
domestic credit union maintained in any form.
(d)
"Sponsor" means an entity around which all or part of a
domestic
credit union's field of membership is formed.
(d) (e)
"Vendor" means a person
who supplies hardware,
software, or systems used for automated information processing
services to a domestic credit union or performs automated
information processing services for a domestic credit union. The
term includes a subcontractor of a vendor.
Sec. 409. (1) A credit union board may offer insurance
programs to members of the domestic credit union, individually or
as a group, including insurance programs at the individual member's
own expense. An insurance program offered under this section shall
meet 1 of the following conditions:
(a) Except for insurance described in subdivision (b), the
purchase of the insurance coverage by a member is voluntary and a
copy of the written election to purchase the insurance is on file
at the domestic credit union.
(b) If the insurance is a condition of a loan, the member who
is borrowing may purchase or provide the insurance from a carrier
of the member's choice or may assign any existing insurance
coverage.
(2) A domestic credit union may receive payment for making an
insurance program available to its members.
(3) Other than a refund of premium if he or she is a purchaser
of
the insurance services, a credit union officer, director, board
member, committee member, or employee shall not directly or
indirectly be paid or receive, and a person shall not directly or
indirectly offer, a fee, compensation, commission, gift, or other
consideration for insurance sold to the domestic credit union or
its membership from any person other than the domestic credit
union. This subsection does not prevent a credit union officer,
director,
board member, committee member, or employee from
receiving customary salary or commission as an employee or agent of
an insurance company if the salary or commission is not related to
making insurance programs available to credit union members or to
placing insurance with a domestic credit union served by the credit
union
officer, director, board
member, committee member, or
employee.
(4) A domestic credit union shall not directly or indirectly
enter
into any act or transaction involving that involves an
insurance program unless all of the parties to the insurance
program expressly agree in writing to meet all of the requirements
of this section.
(5)
If Before a domestic credit union makes an insurance
program available to its members, the domestic credit union shall
maintain
documentary evidence that it has investigated various
plans
of insurance and has determined that the provisions relating
to
costs and benefits and other provisions of the plan selected
protect
and serve the interest of its members. The commissioner may
inspect
the documentary evidence on request.conduct a reasonable
due diligence review of that product. The domestic credit union
shall provide the director with access to any files that are
relevant to that review on request.
(6) A domestic credit union may advise its members of the
availability of an insurance program and of its action taken under
subsection (5) and may use marketing materials supplied by the
insurance carrier.
(7) If authorized by the credit union board, a domestic credit
union may furnish to an insurance carrier or an agent membership
lists of addresses without compensation from the insurance carrier
or agent. For an appropriate fee, if authorized by the credit union
board, a domestic credit union may mail marketing materials about
an insurance program to its membership.
(8) A domestic credit union may assist a member in filing a
claim and with other matters dealing with an insurance carrier if
that assistance does not violate any applicable insurance law and
regulation.
Sec. 423. (1) A loan by a domestic credit union to a member
shall conform to any conditions contained in the bylaws.
(2)
A borrower may repay his or her a
loan from a domestic
credit union in whole or in part at any time the domestic credit
union is open for business or otherwise capable of receiving
payment on the loan.
(3)
A domestic credit union may contract with a borrower for
the
borrower to reimburse the domestic credit union for any
specifically
identified third party costs related to a loan
originally
paid by the domestic credit union, and for any amount
specifically
identified in the loan agreement as an incentive if
the
borrower prepays the loan in full within 3 years of the date
that
the loan is made and the originally scheduled amortization
period
of the loan is more than 5 years.
(3) (4)
Except as provided in subsection (9),
(8), a domestic
credit union shall not agree to rates, terms, or conditions on any
loan or line of credit that is made to or endorsed or guaranteed by
an official or an immediate family member of an official that are
more favorable than the rates, terms, and conditions for comparable
loans or lines of credit to other credit union members. A domestic
credit union shall not agree to rates, terms, and conditions on any
loan or line of credit to any person that has a common ownership,
investment, or other pecuniary interest in a business with an
official or immediate family member of an official that are more
favorable than the rates, terms, and conditions for comparable
loans or lines of credit to other credit union members.
(4) (5)
A domestic credit union shall
process a loan to an
official or employee in the same manner as a loan to other members,
except that the applicant shall not participate in the approval
process for his or her loan. The director shall not impose any
additional limitations on the authority of a domestic credit union
to review a loan application of, and approve or deny a loan to, an
official of the credit union that do not apply to member loans
generally.
(5) (6)
A domestic credit union may provide
open-end or
closed-end credit arrangements for its members if the credit union
board has established a policy for those credit arrangements.
Unless prohibited by the agreement for the open-end credit
arrangement, a domestic credit union may under an open-end credit
arrangement unilaterally increase the approved limit or may
increase the approved limit on the request of the member.
(6) (7)
A domestic credit union may
participate in loans to
credit union members jointly with other credit unions, credit union
service organizations, or other financial institutions.
(7) (8)
A domestic credit union may
participate in a
guaranteed loan program of the federal or state government under
the terms and conditions specified in the law establishing that
program.
(8) (9)
A domestic credit union may offer
reduced rate loans
and other extensions of credit to its employees, other than
employees
who are directors, board
members, supervisory committee
members, credit committee members, or members of any other
committee that performs significant ongoing functions relating to
the ongoing operations of the domestic credit union, under a policy
adopted by its credit union board.
(9) (10)
The credit union board, or the
credit committee if
the domestic credit union has a credit committee that does not
include any credit union employees, must approve of any loan or
other extension of credit to or purchase of an obligation of the
general manager or chief executive officer.
(10) (11)
A domestic credit union shall not
make a loan or
extend a line of credit if an official or senior management
employee will receive a commission, fee, or compensation other than
salary if the loan or line of credit is approved. However, this
subsection does not limit or prohibit arrangements that compensate
employees who are not senior management employees based on the
volume of loans generated by those employees.
(11) (12)
A domestic credit union shall not
loan more than
$20,000.00
or 25% of its net worth, whichever is greater, an amount
that exceeds 25% of the credit union's unimpaired capital to a
borrower
and any affiliates affiliate
of the borrower. This
subsection does not apply to a corporate credit union.
(12) As additional security for a loan transaction with a
borrower, a domestic credit union may permit a person that is not a
member of the domestic credit union to act as an additional
borrower, a cosigner, or a guarantor of the loan.
Sec. 431. (1) A domestic credit union may invest funds that
are not used in loans to members in any of the following:
(a) Securities, obligations, or other instruments of or issued
by or fully guaranteed as to principal and interest by the United
States or an agency or instrumentality of the United States, or in
any trust or trusts established for investing directly or
collectively in those securities, obligations, or instruments.
(b) Securities, obligations, or other instruments of or issued
by any state of the United States, the District of Columbia, the
Commonwealth of Puerto Rico, or a territory organized by Congress,
or any of their political subdivisions.
(c) Securities, obligations, or other instruments of any
central liquidity facility or corporate credit union established
under the laws of this state, the laws of another state or
territory of the United States, or the laws of the United States,
or any federal reserve bank.
(d) An obligation that meets all of the following:
(i) In the domestic credit union's prudent judgment, which may
be
based in part upon on estimates which that it
believes are
reliable, there is adequate evidence that the obligor of the
obligation will be able to perform all it undertakes to perform in
connection with the obligation, including all debt service
requirements, and that the obligation may be sold with reasonable
promptness at a price that corresponds to its fair value.
(ii) The investment characteristics of the obligation are not
considered distinctly or predominantly speculative.
(iii) The obligation is not in default in the payment of
principal or interest.
(iv) The obligation is a marketable obligation in the form of
a bond, note, or debenture, commonly regarded as an investment
security, and salable under ordinary circumstances with reasonable
promptness at a fair value.
(e) Shares or certificates of an open-end management
investment company registered with the securities and exchange
commission
under the investment company act of 1940, title I of
chapter
686, 54 Stat. 789, 15 U.S.C. 80a-1 to 80a-3 and 80a-4 15
USC 80a-1 to 80a-64, if all of the following conditions are met:
(i) Not less than At least 90%
of the fund's assets consist of
and are limited to securities in which a domestic credit union may
invest directly.
(ii) The domestic credit union has an equitable and undivided
interest in the underlying assets of the fund.
(iii) The domestic credit union is not liable for acts or
obligations of the fund.
(iv) The domestic credit union's investment in any 1 fund does
not exceed the amount of its net worth.
(f) Investments in mortgage-backed securities either issued by
or guaranteed by a private organization if the securities involved
meet the investment standards for an obligation described in
subdivision (d).
(2) A domestic credit union other than a corporate credit
union
shall not invest more than an
amount that exceeds 25% of its
net worth in an obligor or affiliate of the obligor. This
subsection does not apply to the extent that the investment is
insured or guaranteed by the United States government or an agency
of the United States government or a state or local government, or
the investment is in a corporate credit union.
(3) A domestic credit union may not invest in or hold common
stock or another equity investment except as provided in section
401(2), or in bank and bank holding company stock legally acquired
before December 19, 1986. If a domestic credit union possesses
capital stock or another equity investment as the result of a loan
default, it shall dispose of that investment within a reasonable
period of time that does not exceed 1 year, or a longer period of
time
approved by the commissioner director
for that domestic credit
union.
(4) In addition to investments authorized by this act, a
domestic credit union may make any other type of investment
approved
by the commissioner director
by rule, order, or
declaratory ruling.
(5) A domestic credit union shall maintain files containing
credit and other information adequate to demonstrate evidence of
prudent business judgment in exercising the investment powers
granted under this act or by rule, order, or declaratory ruling of
the
commissioner.director.
(6) If a domestic credit union invests funds in a security,
obligation, or other instrument that at the time is permitted under
this section, the investment subsequently becomes impermissible
because of a change in circumstances or law, and the director finds
that continuing to hold the investment will have an adverse effect
on the safety and soundness of the credit union, the director may
require that the credit union develop a reasonable plan for the
divestiture of the investment.
Sec. 432. (1) If the purchase meets the conditions of a
written policy of the credit union board, a domestic credit union
may purchase 1 or more of the following obligations:
(a) An obligation of a member that satisfies this act, the
bylaws, and the lending policies established by the credit union
board, other than any annual percentage interest rate requirement.
(b) An obligation of a member if before the domestic credit
union agrees to purchase the obligation the member agrees in
writing to refinance the obligation within 60 days after the
purchase in a manner that will result in the obligation meeting
subdivision (a).
(2) A domestic credit union may purchase an obligation of a
member under this section if the credit union board approves the
purchase of the obligation or a class of obligations that includes
the obligation, there is a written agreement for the purchase, and
the domestic credit union retains the written agreement and a
schedule of the obligations covered by the agreement at its
principal place of business.
(3) If a domestic credit union agrees to purchase a partial
interest in an obligation of a member, the agreement shall disclose
the responsibilities of each party if the obligation is subject to
collection, loss, or foreclosure and shall provide that in the
event of a loss each owner shares in the loss in proportion to the
owner's interest in the obligation.
(4) A domestic credit union may purchase an obligation of a
member at a discount or premium if the discount or premium is
amortized monthly over the remaining term of the obligation.
(5) A domestic credit union may sell all or part of an
obligation
of a member if the all of
the following are met:
(a) The sale meets the conditions of the sale policy adopted
by
the credit union board. , the
(b)
The credit union board approves the
sale , there or
the
sale is approved by senior management employees to whom the credit
union board has, in a written board policy, delegated the authority
to approve sales described in this subsection.
(c) There is a written agreement for the sale, and the
domestic credit union retains the written agreement and a schedule
of the obligations covered by the agreement at its principal place
of business.
(6) An agreement to sell a partial interest in an obligation
of a member shall not include a recourse or repurchase provision
other than 1 or more of the following:
(a) A provision that requires the seller to repurchase the
obligation because of a breach of warranty or misrepresentation.
(b) A provision that allows the domestic credit union to
repurchase the obligation at its discretion.
(c) A provision that allows substitution of 1 loan for another
loan.
(7) A domestic credit union may pledge all or any part of an
obligation
of a member if the either
of the following is met:
(a) The pledge meets the conditions of the pledge policy
adopted
by the credit union board , and
the credit union board
approves the pledge.
(b) The pledge meets the conditions of the pledge policy
adopted by the credit union board and the pledge is approved by
senior management employees to whom the credit union board has, in
a written board policy, delegated the authority to approve pledges
described in this subdivision. If 1 or more pledges are approved by
a senior management employee under this subdivision, he or she
shall provide a summary of the pledges to the credit union board at
the next regularly scheduled meeting of the credit union board.
(8) An agreement to pledge an obligation of a member shall
identify the obligations covered by the agreement and set forth the
responsibilities of each party if an obligation covered by the
agreement is subject to collection, loss, foreclosure, or default.
(9) This section does not permit a domestic credit union to
pledge an obligation of a member unless authorized in section
401(2).
(10) For a fee, a domestic credit union may agree to service
all or part of an obligation it purchases or sells.
(11) A member shall not directly or indirectly give and a
senior management employee shall not directly or indirectly receive
a fee, compensation, commission, gift, or other consideration as an
inducement to purchase, sell, or pledge an obligation of a member.
Enacting section 1. This amendatory act takes effect 90 days
after the date it is enacted into law.
Enacting section 2. This amendatory act does not take effect
unless all of the following bills of the 98th Legislature are
enacted into law:
(a) Senate Bill No.____ or House Bill No. 5018 (request no.
02769'15).
(b) Senate Bill No.____ or House Bill No. 5020 (request no.
02771'15).
(c) Senate Bill No.____ or House Bill No. 5021 (request no.
02772'15).
(d) Senate Bill No.____ or House Bill No. 5022 (request no.
02773'15).