Chapter 327
Oregon Laws 2011
AN ACT
SB 177
Relating to
regulating credit union operations; amending ORS 723.292, 723.316, 723.532,
723.602 and 723.682.
Be It Enacted by the People of the State of Oregon:
SECTION 1. ORS 723.292 is amended to
read:
723.292. The board of directors of
a credit union shall meet at least [monthly.
If a quorum of directors is present at the annual meeting of the credit union’s
membership, the board of directors need not hold a board meeting for the month
in which the annual meeting occurs.] 10 times, in 10 separate months,
during each calendar year.
SECTION 2. ORS 723.316 is amended to
read:
723.316. [The credit committee may be dispensed with, and a credit manager
empowered to approve or disapprove loans under conditions prescribed by the
board of directors. In the event the credit committee is dispensed with, the
procedures prescribed in ORS 723.302 to 723.312 do not apply, and no loans
shall be made unless approved by the credit manager, except the credit manager
may appoint one or more loan officers with the power to approve loans, subject
to such limitations or conditions as the credit manager prescribes.] The
board of directors of a credit union may appoint a chief credit officer in lieu
of a credit committee to approve or disapprove loans under conditions that the
board prescribes. If the board appoints a chief credit officer in lieu of a
credit committee, the provisions of ORS 723.302 to 723.312 do not apply and the
credit union may not make a loan unless the chief credit officer approves the
loan, except that the chief credit officer may appoint one or more loan
officers with the power to approve loans subject to limitations or conditions
that the chief credit officer prescribes.
SECTION 3. ORS 723.532 is amended to
read:
723.532. (1) For the purposes of this
section, “management team” means the president or chief executive officer of
a credit union or an individual who holds a position in a credit union of
vice president or higher [or] who has
policymaking authority or authority to approve loans.
(2) A credit union may make [loans] a loan to [individual directors, members] a
director, a member of the credit union’s management team, [credit managers and members] the
chief credit officer or a member of the credit union’s supervisory and
credit committees[, provided that]
if the credit union makes the loan under the following conditions:
(a) The loan complies with [all lawful requirements under] the
provisions of this chapter [with
respect] that apply to loans to other borrowers and is not on terms
more favorable than terms extended to other borrowers[;].
(b)(A) Except as provided in
subparagraph (B) of this paragraph, if [the
credit union’s board of directors has approved] the combined aggregate
amount of loans to an individual described in this subsection [that] exceeds five percent of the credit
union’s equity or $100,000, whichever is less[; and], the board of directors must approve making the loans in
excess of the specified aggregate amount.
(B) The aggregate amount of loans
specified in subparagraph (A) of this paragraph does not include a loan that
is:
(i) For an amount that is equal to or
less than the conforming loan limit that the Federal Housing Finance Agency
specifies, or $400,000, whichever is greater; and
(ii) Secured by a first lien on the
borrower’s principal residence.
(c) The combined aggregate amount of
loans to all individuals described in this subsection may not exceed 10 percent
of the credit union’s assets.
(d) If a loan to a director, a member
of the credit union’s management team, the chief credit officer or a member of
the credit union’s supervisory or credit committee is not subject to approval
by the board of directors under paragraph (b) of this subsection, after the
loan is approved, the loan must be reported to the board of directors at the
next meeting of the board of directors.
(3)(a) Except as provided in [this subsection or when approved by the
board of directors of the credit union,] paragraph (b) of this
subsection, a director, officer or committee member may not become a surety
or guarantor for a loan or advance made by the credit union unless the board
of directors approves.
(b) A director, officer or
committee member may [without the
approval of the board of directors] become a surety or guarantor for the
spouse or children of the director, officer or committee member without the
approval of the board of directors.
(4) The Director of the Department of
Consumer and Business Services may waive the requirements of this section by
rule or order at a credit union’s request. The Director of the Department of
Consumer and Business Services may establish by rule a higher amount than the
amount set in subsection (2)(b) of this section and may specify by rule the
type of loans to directors, officers or committee members that the board of
directors of the credit union must approve.
(5) A director, a member of the
credit union’s management team, the chief credit officer or a member of the
credit union’s supervisory or credit committee may not participate in approving
or disbursing a loan in which the director, member of the credit union’s
management team, chief credit officer or member of the credit union’s
supervisory or credit committee has a direct or indirect financial interest.
SECTION 4. ORS 723.602 is amended to
read:
723.602. A credit union may invest funds
not used in loans to members [may be
invested] in:
(1) [In] Securities, obligations or other instruments of or issued by or
fully guaranteed as to principal and interest by the United States or [any] an agency [thereof] of the United States or
in [any] a trust or trusts
established directly or collectively in the [same] securities, obligations or instruments described in this
subsection.
(2) [In] Obligations of [any]
a state of the United States, the agencies or instrumentalities of the
federal government, the District of Columbia, the Commonwealth of Puerto Rico
and the several territories organized by Congress, or [any] a political subdivision [thereof] of a state, district, commonwealth or territory
identified in this subsection.
(3) [In] Certificates of deposit or passbook type accounts issued by a
state or national bank, mutual savings bank or savings and loan association.
(4) [In] Loans to or in shares or deposits of other credit unions.
(5) [In] Stocks, membership units or other ownership interests in, or
loans to, a corporation, limited liability company or mutual association in
an amount not to exceed [one] five
percent of assets if:
(a) The ownership, [or] membership or loan, as
applicable, is primarily confined to credit unions or organizations of credit
unions; and
(b) The purposes for which the [agency] corporation, limited
liability company or mutual association is organized are [designed] primarily to service or
otherwise assist credit union operations.
[(6)
In addition to the limit specified in subsection (5) of this section, in loans
to a corporation, limited liability company or mutual association, in an amount
not to exceed one percent of assets, if:]
[(a)
The ownership or membership, as applicable, is primarily confined to credit
unions or organizations of credit unions; and]
[(b)
The purposes for which the agency or association is organized are designed
primarily to service or otherwise assist credit union operations.]
[(7)]
(6) [In] Shares of a credit union
cooperative society organized under the laws of this state or of the laws of
the United States in [the] a
total amount not exceeding one percent of the shares, deposits[,] and surplus of the credit union.
[(8)]
(7) [In] Loans to [any] a national or state credit
union association or corporation[,
national or state,] of which the credit union is a member, except that [such investments shall] the loans
must be limited to not more than five [two] percent of the assets of the credit union.
[(9)]
(8) [In such] Other investments [as approved by] the Director of the
Department of Consumer and Business Services approves by rule or order.
SECTION 5. ORS 723.682 is amended to
read:
723.682. (1) [Any] A credit union chartered in this state may, with the
approval of the Director of the Department of Consumer and Business Services,
merge with another credit union under the existing charter of the other credit
union pursuant to [any] a plan
[agreed upon by] that the
majority of each board of directors of each credit union joining in the merger
[and approved] agrees to and that
is approved by the affirmative vote of a majority of the members of the
merging credit union [voting at a meeting
of its members duly called for such purpose] that vote on the merger.
(2) After [agreement by] the directors agree to a plan and [approval by] the members of the merging
credit union approve the plan, the president and secretary of the credit
union shall execute a certificate of merger, which shall set forth all of the
following:
(a) The time and place of the meeting
of the board of directors at which the board agreed to the plan [was agreed upon].
(b) The vote in favor of [the adoption of] adopting the
plan.
(c) A copy of the resolution or other
action by which the board agreed to the plan [was agreed upon].
(d) The time and place of the meeting
of the members at which the members approved the plan [agreed upon was approved].
(e) The vote by which the members
approved the plan [was approved by
the members].
(3) The certificate and a copy of the
plan of merger [agreed upon shall]
must be forwarded to the director, certified by the director and
returned to the continuing credit union within 30 days.
(4) [Upon return of the certificate from] After the director
returns the certificate, all property, property rights and members’
interest of the merged credit union shall vest in the continuing credit union
without deed, indorsement or other instrument of transfer, and the continuing
credit union under whose charter the merger was effected assumes all debts,
obligations and liabilities of the merged credit union [shall be deemed to have been assumed by the continuing credit union
under whose charter the merger was affected]. The rights and privileges of
the members of the merged credit union [shall]
remain intact.
[(5)
This section shall be construed, whenever possible, to permit a credit union
chartered under the laws of any other state or of the United States to merge
with one chartered under the laws of this state, or to permit one chartered
under the laws of this state to merge with one chartered under the laws of any
other state or of the United States.]
(5) This section permits a credit
union chartered under the laws of another state or of the United States to
merge with a credit union chartered under the laws of this state, and a credit
union chartered under the laws of this state to merge with a credit union
chartered under the laws of another state or of the United States, to the same
extent that the laws of this state permit two or more credit unions chartered
under the laws of this state to merge.
(6)(a) After the board of directors of
a credit union that is chartered in this state has approved a plan to merge
with another credit union, if a member of the credit union opposes the plan to
merge and wishes to inform other members of the credit union of the member’s
opposition, the member may submit a proposed statement of opposition to the
credit union and may ask the credit union to disseminate the statement of
opposition to the other members.
(b) If the credit union maintains on
the Internet and publicizes to the credit union’s members a public forum for
communications concerning the plan to merge or other issues related to the
credit union, the credit union, within 14 calendar days after receiving the
proposed statement of opposition from the member and subject to paragraph (e)
of this subsection, shall publish the statement of opposition on the public
forum.
(c) If the credit union does not make
a public forum available on the Internet and if the credit union received the
member’s proposed statement of opposition at least 28 days before the date on
which the members of the credit union are to vote on the plan to merge, subject
to paragraph (e) of this subsection, the credit union shall:
(A) Notify the member, within seven
days after receiving the statement of opposition, of:
(i) Any limit, which may not be less
than 500 words, that the credit union may impose on the length of the statement
of opposition; and
(ii) The estimated reasonable cost to
reproduce and mail the statement of opposition as a stand-alone document or the
estimated cost to include the statement of opposition in any informational or
persuasive material concerning the plan to merge that the credit union
disseminates to credit union members. The credit union’s estimate of the cost
of including the statement of opposition in the credit union’s material may not
exceed two cents multiplied by the number of the credit union’s members.
(B) Reproduce and mail the statement
of opposition to the credit union’s members or include the statement of
opposition in the credit union’s informational or persuasive materials
concerning the plan to merge, within 10 days after receiving payment of the
cost estimated in subparagraph (A)(ii) of this paragraph, if the member agrees
to the limit the credit union imposes on the length of the statement of
opposition and pays the cost at least 14 days before the date on which the members
of the credit union are to vote on the plan to merge.
(d) For purposes of paragraph (c) of
this subsection, informational and persuasive material concerning the plan to
merge does not include a notice of the meeting at which the credit union’s
members are to consider the plan to merge, a summary of the merger plan or
other items that state or federal law requires the credit union to send to
credit union members.
(e)(A) The credit union shall notify
the credit union member within seven days after receiving the proposed
statement of opposition if the credit union declines to disseminate the
statement of opposition because the statement of opposition:
(i) Is false or misleading with
respect to a material fact at the time and in light of the circumstances in
which the statement is made;
(ii) Omits a material fact that is
necessary for the statement of fact not to be false or misleading;
(iii) Relates to a personal claim or
grievance or solicits personal gain by or business advantage for any party;
(iv) Is not sufficiently related to
the credit union’s business or affairs;
(v) Impugns, directly or indirectly, a
person’s character, integrity or personal reputation or without an expressed
factual basis charges a person with illegal, improper or immoral conduct; or
(vi) Impugns the stability or
soundness of the credit union.
(B) The credit union may decline to
disseminate the proposed statement of opposition if the credit union member
does not agree to the limits the credit union imposes on the length of the
statement of opposition or fails within the time limits set in paragraph (c) of
this subsection to pay the cost of mailing the statement or including the
statement with the credit union’s informational or persuasive material
concerning the plan to merge.
(C) The credit union may not decline
to disseminate the statement of opposition for reasons other than the reasons
identified in subparagraph (A) or (B) of this paragraph.
(f)(A) A credit union member may
appeal to the director the credit union’s decision under paragraph (e)(A) of
this subsection not to disseminate the credit union member’s statement of
opposition. An appeal under this paragraph is not a contested case, as defined
in ORS 183.310, and a party to the appeal is not entitled to notice and an
opportunity for a hearing under ORS 183.413 to 183.470. As part of the appeal,
the credit union member shall provide the director with:
(i) The proposed statement of
opposition;
(ii) A statement of reasons for
disagreeing with the credit union’s decision under paragraph (e)(A) of this
subsection not to disseminate the statement of opposition; and
(iii) The credit union member’s name,
address and telephone number or other contact information.
(B) Before issuing an order under this
paragraph, the director shall request from the credit union a statement of
reasons for declining to disseminate the proposed statement of opposition. The
director shall consider the credit union member’s proposed statement of
opposition and statement of reasons and the credit union’s statement of reasons
and shall arrive at an independent determination as to whether the credit union
correctly declined to disseminate the credit union member’s proposed statement
for the reasons identified in paragraph (e)(A) of this subsection.
(C) The director by order shall uphold
the credit union’s decision under paragraph (e)(A) of this subsection or shall
require the credit union to disseminate the credit union member’s proposed
statement of opposition in accordance with the provisions of this subsection.
The director’s order is subject to appeal only as provided in ORS 183.484.
Approved by
the Governor June 14, 2011
Filed in the
office of Secretary of State June 14, 2011
Effective date
January 1, 2012
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