71st OREGON LEGISLATIVE ASSEMBLY--2001 Regular Session
NOTE: Matter within { + braces and plus signs + } in an
amended section is new. Matter within { - braces and minus
signs - } is existing law to be omitted. New sections are within
{ + braces and plus signs + } .
LC 1881
A-Engrossed
House Bill 2775
Ordered by the House March 26
Including House Amendments dated March 26
Sponsored by Representative KNOPP, Senator METSGER (at the
request of Credit Union Association of Oregon)
SUMMARY
The following summary is not prepared by the sponsors of the
measure and is not a part of the body thereof subject to
consideration by the Legislative Assembly. It is an editor's
brief statement of the essential features of the measure.
Changes provisions relating to authority of Director of
Department of Consumer and Business Services over credit unions.
Removes limit on amounts business and nonbusiness organizations
may borrow from credit union. Allows credit union board of
directors to determine dividend rate credited to accounts closed
between dividend periods. Deletes provisions relating to dormant
accounts.
A BILL FOR AN ACT
Relating to credit unions; amending ORS 723.122, 723.152, 723.176
and 723.406; and repealing ORS 723.457.
Be It Enacted by the People of the State of Oregon:
SECTION 1. ORS 723.122 is amended to read:
723.122. (1) Each credit union shall obtain and maintain a
fidelity bond or irrevocable letter of credit issued by an
insured institution, as defined in ORS 706.008, which includes
coverage in accordance with any rules of the Director of the
Department of Consumer and Business Services, to protect the
credit union against losses caused by occurrences covered therein
such as fraud, dishonesty, forgery, embezzlement,
misappropriation, misapplication of duty and all acts of its
agents, directors, officers, committee members, employees or
attorneys. The minimum amount of the bond or letter of credit
shall be determined based on the amount of the credit union's
total assets in accordance with the following table:
_________________________________________________________________
____NOTE_TO_GOPHER_CUSTOMERS:__________________________________
THE FOLLOWING TABULAR TEXT MAY BE IRREGULAR.
FOR COMPLETE INFORMATION PLEASE SEE THE PRINTED MEASURE.
_______________________________________________________________
Assets Minimum Amount
of Bond
or Letter of Credit
____NOTE_TO_GOPHER_CUSTOMERS:__________________________________
THE FOLLOWING TABULAR TEXT MAY BE IRREGULAR.
FOR COMPLETE INFORMATION PLEASE SEE THE PRINTED MEASURE.
_______________________________________________________________
$0 to $10,000 Coverage equal to
____NOTE_TO_GOPHER_CUSTOMERS:__________________________________
THE FOLLOWING TABULAR TEXT MAY BE IRREGULAR.
FOR COMPLETE INFORMATION PLEASE SEE THE PRINTED MEASURE.
_______________________________________________________________
the credit union's
assets.
____NOTE_TO_GOPHER_CUSTOMERS:__________________________________
THE FOLLOWING TABULAR TEXT MAY BE IRREGULAR.
FOR COMPLETE INFORMATION PLEASE SEE THE PRINTED MEASURE.
_______________________________________________________________
$10,001 to $1,000,$10,000 for each
____NOTE_TO_GOPHER_CUSTOMERS:__________________________________
THE FOLLOWING TABULAR TEXT MAY BE IRREGULAR.
FOR COMPLETE INFORMATION PLEASE SEE THE PRINTED MEASURE.
_______________________________________________________________
$100,000 or
fraction thereof.
____NOTE_TO_GOPHER_CUSTOMERS:__________________________________
THE FOLLOWING TABULAR TEXT MAY BE IRREGULAR.
FOR COMPLETE INFORMATION PLEASE SEE THE PRINTED MEASURE.
_______________________________________________________________
$1,000,001 to $50,$100,000 plus
____NOTE_TO_GOPHER_CUSTOMERS:__________________________________
THE FOLLOWING TABULAR TEXT MAY BE IRREGULAR.
FOR COMPLETE INFORMATION PLEASE SEE THE PRINTED MEASURE.
_______________________________________________________________
$50,000 for each $1
million or fraction
thereof over $1
million.
____NOTE_TO_GOPHER_CUSTOMERS:__________________________________
THE FOLLOWING TABULAR TEXT MAY BE IRREGULAR.
FOR COMPLETE INFORMATION PLEASE SEE THE PRINTED MEASURE.
_______________________________________________________________
$50,000,001 to $29$2.55,million plus
____NOTE_TO_GOPHER_CUSTOMERS:__________________________________
THE FOLLOWING TABULAR TEXT MAY BE IRREGULAR.
FOR COMPLETE INFORMATION PLEASE SEE THE PRINTED MEASURE.
_______________________________________________________________
$10,000 for each $1
million or fraction
thereof over $50
million.
____NOTE_TO_GOPHER_CUSTOMERS:__________________________________
THE FOLLOWING TABULAR TEXT MAY BE IRREGULAR.
FOR COMPLETE INFORMATION PLEASE SEE THE PRINTED MEASURE.
_______________________________________________________________
More than $295,000$50million.
_________________________________________________________________
____________________________________________________________
END OF POSSIBLE IRREGULAR TABULAR TEXT
____________________________________________________________
(2) Each bond or letter of credit shall include a faithful
performance clause to cover the chief financial officer. Each
bond or letter of credit shall be approved by the director who
may require such additional amounts as the director considers
necessary.
(3) All bond claims or claims upon a letter of credit that
exceed one percent of the credit union's reserves and undivided
earnings or that are related to the errors or omissions of an
officer, director or committee member shall be reported to the
director.
{ - (4) In addition to the requirements of subsections (1) to
(3) of this section, the director shall adopt rules prescribing
the minimum amount of insurance and surety bond or letter of
credit coverage required of credit unions in relation to their
assets, personal property or exposure to risk. - }
SECTION 2. ORS 723.152 is amended to read:
723.152. In addition to the powers conferred by the general
corporation law a credit union may, subject to the restrictions
and limitations contained in this chapter and its bylaws:
(1) Make contracts.
(2) Sue and be sued.
(3) Adopt and use a common seal and alter same.
(4) Acquire, lease, hold and dispose of property, either in
whole or in part, necessary or incidental to its operations.
(5) At the discretion of the board of directors, require the
payment of an entrance fee or annual membership fee, or both, of
any person admitted to membership.
(6) Receive savings from its members in the form of various
classes of shares, deposits or deposit certificates, deposit
accounts or special-purpose thrift accounts.
(7) Receive from its members or from another credit union
deposits or deposit certificates, deposit accounts or various
classes of shares payable on nonnegotiable request.
(8) Lend its funds to its members and credit unions as provided
in this chapter.
(9) Acquire and lease personal property at the request of a
member who wishes to lease the property on terms requiring
payment, during the term of the lease, of rents that exceed the
total expenditures made by the credit union for the acquisition,
ownership, financing and protection of the property. Rents may
include residual value payments that are the obligation of a
responsible third party.
(10) Borrow from any source in accordance with policy
established by the board of directors and issue debentures
pursuant to a plan approved by the Director of the Department of
Consumer and Business Services. The debentures shall be
subordinate to the shares and deposits of the credit union.
(11) Discount and sell any eligible obligations, subject to
rules adopted by the Director of the Department of Consumer and
Business Services.
(12) Sell all or substantially all of its assets or purchase
all or substantially all of the assets of another credit union,
subject to the approval of the director.
(13) Invest surplus funds as provided in this chapter.
(14) Make deposits in legally chartered banks, savings banks,
savings and loan associations, trust companies and credit unions.
(15) Assess charges to members in accordance with the bylaws
for failure to meet promptly their obligations to the credit
union.
(16) Hold membership in other credit unions organized under
this chapter or other state or federal laws, and in other
associations and organizations composed of credit unions.
(17) Declare dividends, pay interest on deposit and deposit
certificate accounts and pay interest refunds to borrowers as
provided in this chapter.
(18) { - Collect, receive and disburse moneys in connection
with the sale of travelers' checks, money orders, prepaid phone
cards and other money-type instruments and products, and for such
other purposes as may provide benefit or convenience to its
members, and charge a reasonable fee for such services. - }
{ + Offer products and services consistent with the purposes of
a credit union as set forth in ORS 723.006. + }
(19) Receive deposits from the federal government or this
state, or any agency or political subdivision thereof, when
payable for the accounts of members.
{ - (20) With the approval of the director, purchase
accounting services, participate in a service center or share
quarters and carry on business operations either individually or
jointly with one or more state or federal credit unions or with
an association of credit unions in this state. A credit union may
purchase stock of a corporation that provides the services
described in this subsection. The stock purchase shall be limited
to one percent of the credit union's assets. - }
{ - (21) - } { + (20) + } Make donations or contributions
to any civic, charitable, political or community organization as
authorized by the board of directors, subject to any rules
adopted by the director.
{ - (22) - } { + (21) + } Act as a custodian of qualified
pension funds of members if permitted by federal law.
{ - (23) - } { + (22) + } Purchase or make available
insurance for its directors, officers, agents, employees and
members.
{ - (24) - } { + (23) + } Allow its members to use share
accounts, deposit accounts or deposit certificate accounts as
share draft accounts as provided in ORS 723.434.
{ - (25) - } { + (24) + } Provide digital signature
verification or other electronic authentication services to its
members.
{ - (26) - } { + (25) + } Act as trustee or custodian for
members of individual retirement accounts or other arrangements
established pursuant to sections 408 and 530 of the Internal
Revenue Code, deferred compensation accounts established pursuant
to section 457 of the Internal Revenue Code, or any other
qualified individual retirement account established pursuant to
the provisions of the federal Employee Retirement Income Security
Act of 1974, provided that the trust or custodial agreement
establishing the arrangement requires all funds subject to the
arrangement to be invested exclusively in share accounts in the
credit union. The State of Oregon, or the applicable
instrumentality or municipality, shall be deemed to be a member
with respect to such deposits, except that the state or other
instrumentality or municipality shall not be entitled to vote,
hold office or otherwise participate in the management or
operation of the credit union.
{ - (27) - } { + (26) + } Indemnify its directors,
officers, employees and committee members or other volunteers in
accordance with the provisions of its articles, bylaws and the
indemnification provisions of ORS chapter 60.
{ - (28) - } { + (27) + } Exercise other powers that are
necessary to carry out the credit union's purpose.
SECTION 3. ORS 723.176 is amended to read:
723.176. Business and nonbusiness organizations composed of
individuals who are eligible for membership, or whose employees
are eligible for membership, may be admitted to membership in the
same manner and under the same conditions as individuals { - ,
but may not borrow in excess of $100,000 - } .
SECTION 4. ORS 723.406 is amended to read:
723.406. (1) At such intervals and for such periods as the
board of directors may authorize, and after provision for the
required reserves, the board of directors may declare dividends
to be paid on shares or share certificates. Dividends may be paid
at various rates, or not paid at all, with due regard to the
conditions that pertain to each class of share.
(2) Subject to the approval of the board of directors, accounts
closed between dividend periods may be credited with dividends at
the rate { - of the last dividend, computed from the last
dividend period to the date when closed - } { + set by the
board of directors + }.
SECTION 5. { + ORS 723.457 is repealed. + }
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