74th OREGON LEGISLATIVE ASSEMBLY--2007 Regular Session
Enrolled
Senate Bill 592
Sponsored by COMMITTEE ON BUSINESS, TRANSPORTATION AND WORKFORCE
DEVELOPMENT (at the request of Credit Union Association of
Oregon)
CHAPTER ................
AN ACT
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 Oregon:
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
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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 - } .
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(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.
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(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
Oregon, or the applicable instrumentality or municipality, is
considered to be a member { + of the credit union + } with
respect to such deposits, except that the state or other
instrumentality or municipality is not entitled to vote, hold
office or otherwise participate in the management or operation of
the credit union.
(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
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(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
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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. + }
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Passed by Senate April 23, 2007
...........................................................
Secretary of Senate
...........................................................
President of Senate
Passed by House May 25, 2007
...........................................................
Speaker of House
Enrolled Senate Bill 592 (SB 592-A) Page 6
Received by Governor:
......M.,............., 2007
Approved:
......M.,............., 2007
...........................................................
Governor
Filed in Office of Secretary of State:
......M.,............., 2007
...........................................................
Secretary of State
Enrolled Senate Bill 592 (SB 592-A) Page 7