Chapter 343
AN ACT
SB 592
Relating to credit unions; creating new
provisions; and amending ORS 723.012, 723.032, 723.152, 723.202 and 723.502.
Be It Enacted by the People of
the State of
SECTION 1. ORS 723.012 is amended to read:
723.012. (1) Any seven or more residents of this state or another
appropriate jurisdiction, of legal age, who have a common bond referred to in
ORS 723.172 may organize a credit union and become charter members thereof by
complying with this section.
(2) The incorporators
shall execute the documents, including the articles of incorporation, required
by the Director of the Department of Consumer and Business Services to apply
for a credit union charter. The articles shall state:
(a) The name, which shall
include the words “credit union” and which shall not be the same as that of any
other existing credit union in this state.
(b) The location where
the proposed credit union is to have its principal place of business.
(c) The par value, if
any, of the shares of the credit union shall be defined in the bylaws.
(d) The full name,
residence and post-office address of each of the incorporators.
(e) The number of its
directors, which shall not be less than five, and the names of the
incorporators who shall be its directors until the first annual meeting of
shareholders.
(f) The number of
members of the supervisory committee, which shall not be less than three, and
the name, residence and post-office address of the persons who are to serve as
members until the first meeting of directors.
(3) The incorporators
shall prepare and adopt bylaws for the general government of the credit union,
which shall be consistent with this chapter.
(4) The incorporators
shall forward the articles of incorporation and the bylaws to the Director of
the Department of Consumer and Business Services, together with a filing fee [of $150] in an amount that the
director sets by rule. The director shall issue a certificate of approval
if the articles and the bylaws are in conformity with this chapter and the
director is satisfied that the ability of the proposed credit union to operate
successfully is favorable. The director shall return a copy of the bylaws and
the articles to the applicants or their representatives, which shall be preserved
in the permanent files of the credit union. The application shall be acted upon
by the director within 60 days.
(5) The subscribers for
a credit union charter shall not transact any business until formal approval of
the articles and bylaws has been received.
SECTION 2. ORS 723.032 is amended to read:
723.032. (1) A credit
union may establish a place of business or change [its] the credit union’s place of business within this state
upon written notice to the Director of the Department of Consumer and Business
Services.
(2) A credit union may
establish additional places of business upon written application to the
director. The application shall be accompanied by a [$500] fee in an amount that the director sets by rule. The
fee shall be paid only with applications for the establishment of new places of
business. Except as provided in subsection (3) of this section, mobile
facilities described in subsection (3) of this section are considered new
places of business. The fee is not required to be paid with applications
relating to the acquisition or relocation of existing places of business. The
director may approve or disapprove the application. If the director does not
disapprove an application within 30 days after a completed application is received,
the application shall be considered approved.
(3) A credit union may
establish one or more mobile facilities to engage in credit union operations.
Mobile facilities of a credit union having the membership described in ORS
723.172 (2)(a) may operate in this state or in other
states. Mobile facilities of a credit union having the membership described in
ORS 723.172 (2)(b) may operate only within the
well-defined local community, neighborhood or rural district served by the
credit union. An application and fee are not required under this section for
mobile facilities that exercise permissible credit union powers or engage in
permissible credit union activities but that do not accept deposits.
(4) The director may
limit or restrict the ability of a credit union to establish additional places
of business upon written notice to the credit union if the director determines
that the safety and soundness of the credit union would be adversely affected
by any addition.
(5) A credit union may
share office space with one or more credit unions and contract with any person
or corporation to provide facilities or personnel.
SECTION 3. 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] the credit union’s bylaws:
(1) Make contracts.
(2) Sue and be sued.
(3) Adopt, [and] use and alter 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] the credit union’s
operations.
(5) At the discretion of
the board of directors, require any person admitted to membership to pay [the payment of] an entrance fee or
annual membership fee, or both[, of any person admitted to membership].
(6) Receive savings from
[its] members of the credit union
in the form of various classes of shares, deposits or deposit certificates,
deposit accounts or special-purpose thrift accounts.
(7) Receive from [its] members of the credit union
or from another credit union deposits or deposit certificates, deposit accounts
or various classes of shares payable on nonnegotiable request.
(8) Lend [its] the credit union’s funds to
[its] members of the credit union
and to other credit unions as provided in this chapter.
(9) Acquire and lease
personal property at the request of a member of the credit union 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] the
credit union’s assets or purchase all or substantially all of the assets of
another credit union, subject to the approval of the Director of the
Department of Consumer and Business Services.
(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.]
(15) Assess charges
to a member of the credit union in accordance with the credit union’s bylaws
for the member’s failure to meet the member’s obligations to the credit union
promptly.
(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) Offer products and
services reasonably related to 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.
(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].
(21) Act as a custodian
of qualified pension funds of members of the credit union if permitted
by federal law.
(22) Purchase or make
available insurance for [its] the
credit union’s directors, officers, agents, employees and members.
(23) Allow [its] members of the credit union
to use share accounts, deposit accounts or deposit certificate accounts as
share draft accounts as provided in ORS 723.434.
(24) Provide digital
signature verification or other electronic authentication services to [its] members of the credit union.
(25) Act as trustee or
custodian for members of the credit union under any written trust
instrument or custodial agreement in connection with a tax-advantaged savings
plan authorized under the Internal Revenue Code, including but not limited to
individual retirement, deferred compensation, education savings and health
savings accounts, provided that the trust instrument or custodial agreement requires
all funds subject to the instrument or agreement to be invested exclusively in
share or deposit accounts in the credit union. The State of
(26) Indemnify [its] the directors, officers, employees
and committee members or other volunteers of the credit union in
accordance with the provisions of [its]
the credit union’s articles, bylaws and the indemnification provisions of
ORS chapter 60.
(27) Sell negotiable
checks, including traveler’s checks, money orders and other money transfer
instruments, including domestic and international electronic funds transfers,
to persons eligible for credit union membership under ORS 723.172, whether or
not such persons are members of the credit union.
(28) For a fee, cash
checks and money orders and send or receive domestic and international
electronic funds transfers for persons eligible for credit union membership
under ORS 723.172, whether or not such persons are members of the credit union.
The fee a credit union may charge for cashing checks or money orders in
accordance with this subsection may not exceed the following amounts, as
appropriate:
(a) For a check or money
order issued by the federal government or an agency of the federal government,
by this state or an agency of this state, by any other state or political
subdivision thereof or by the government of the municipality in which a person
is cashing the check or money order, or for a check that is a payroll check
drawn against an account held in a financial institution in this state:
(A) $5 or two percent of
the face value of the check or money order, whichever is greater, if the person
cashing the check or money order provides valid and current government-issued
photo identification; or
(B) $5
or 2-1/2 percent of the face value of the check or money order, whichever is
greater, if the person cashing the check or money order does not provide valid
and current government-issued photo identification.
(b) For a check or money
order not described in paragraph (a) of this subsection:
(A) $5 or three percent
of the face value of the check or money order, whichever is greater, if the
person cashing the check or money order provides valid and current
government-issued photo identification; or
(B) $5
or 3-1/2 percent of the face value of the check or money order, whichever is
greater, if the person cashing the check or money order does not provide valid
and current government-issued photo identification.
[(27)] (29) Exercise other powers that are necessary to carry
out the credit union’s purpose.
SECTION 4. Section 5 of this 2007 Act is added to and
made a part of ORS chapter 723.
SECTION 5. (1) The Director of the Department of
Consumer and Business Services by rule may establish guidelines for determining
whether a credit union predominantly serves low-income members. If the
director, using the guidelines established in accordance with this subsection,
determines that a credit union predominantly serves low-income members, the
credit union may:
(a) Receive deposits
from a person that is not a member of the credit union and allow the person to
hold shares in the credit union; and
(b) Issue secondary
capital accounts that are subject to any terms and conditions that the Director
of the Department of Consumer and Business Services may prescribe by rule.
(2) For purposes of this
section, “secondary capital account” means a deposit or share account that is
not insured by the National Credit Union Share Insurance Fund, or another
primary share insurer approved by the Director of the Department of Consumer
and Business Services, and that is subordinate to all other claims against the
credit union, including claims of creditors, owners of share accounts and the
National Credit Union Share Insurance Fund or another insurer approved by the
Director of the Department of Consumer and Business Services. Secondary capital
accounts that the credit union issues in accordance with this section are
equity as defined in ORS 723.001 for the purposes of ORS 723.631 and for any
other purpose.
(3) The powers set forth
in this section are in addition to the powers the credit union has under ORS
723.152.
SECTION 6. ORS 723.202 is amended to read:
723.202. [(1) A member desiring to withdraw from a
credit union shall file a written notice of intention to withdraw.]
[(2)] (1) Subject to subsection [(3)] (2) of this section, [the board of directors] a credit union may expel any member
of the credit union who:
(a) Has not carried out
the member’s engagements with the credit union;
(b) Has been convicted
of a criminal offense;
(c)
Fails to comply with the provisions of this chapter or of the credit union’s
articles, bylaws or policies;
(d) Threatens, harasses
or abuses any member, employee, board or committee member or agent of the
credit union; or
(e) Habitually neglects
to pay the member’s debts or becomes insolvent or bankrupt.
[(3)] (2) A credit union that expels a member [shall not be expelled until the member has
been informed] shall inform the member in writing of the reasons for
the expulsion and [has had] give
the expelled member reasonable opportunity to [be heard] request the credit union’s board of directors to
reinstate the member. Members of a credit union who withdraw or are
expelled shall not be relieved of any liability to the credit union. The
amounts paid in on shares or deposited by such members, together with any
dividends credited to their shares and any interest which has accrued on their
deposits, shall be repaid to them in the order of their withdrawal or
expulsion, as funds become available therefor, but the credit union may deduct
from such payments any sums due [it]
to the credit union from such members.
SECTION 7. ORS 723.502 is amended to read:
723.502. A credit union
may [loan] make loans to members
of the credit union for such purpose and upon such security and terms as
the credit committee, credit manager or loan officer approves. A person who
is not a member of the credit union may be a guarantor or coobligor on a credit
union’s loan to a member of the credit union.
SECTION 8. Section 5 of this 2007 Act and the
amendments to ORS 723.032, 723.152, 723.202 and 723.502 by sections 2, 3, 6 and
7 of this 2007 Act apply to credit unions authorized to do business in this
state on or after the effective date of this 2007 Act.
Approved by the Governor June 11, 2007
Filed in the office of Secretary of State June 13, 2007
Effective date January 1, 2008
__________