14400-14410

FINANCIAL CODE
SECTION 14400-14410




14400.  (a) The savings capital of a credit union shall consist of
the payments made by members on shares as set forth in the credit
union's written savings capital structure policy pursuant to Section
14862.
   (b) The equity capital of the credit union shall consist of the
credit union's regular reserve account, the undivided earnings
account, any appropriated undivided earnings accounts, and other
forms of capital approved by the commissioner.



14401.  A credit union may borrow money from any source in an
aggregate amount not to exceed 50 percent of the paid-in and
unimpaired capital and surplus of the credit union. Loans from the
National Credit Union Central Liquidity Facility (12 U.S.C. Sec. 1795
et seq.) shall not be included in computing the aggregate borrowings
of a credit union. For the purposes of this division, "certificate
for funds" means borrowed money.



14402.  Every credit union may purchase and hold, either
individually or jointly with other credit unions or affiliated
organizations, a lot and building to be employed principally for the
transaction of business, and to provide for future expansion of the
facilities of those organizations. Any excess space that is not
occupied by the organizations purchasing and holding the building may
be leased to the public. The lot and building may be sold if all the
holders of the property join in its sale.



14403.  Every credit union may purchase and hold, either
individually or jointly with other credit unions or affiliated
organizations, furniture, fixtures, vaults, and other personal
property necessary or proper to carry on its business, and to equip
or furnish any space in any building purchased or held individually
or jointly with other credit unions or affiliated organizations under
authorization of Section 14402, whether occupied by the credit union
or leased to the public. The personal property may be sold, if all
the holders of the property join in its sale.



14404.  A credit union shall not invest more than the amounts
permitted pursuant to regulations which shall be promulgated by the
commissioner for the investments set forth in Sections 14402, 14403,
14650 and 14651.


14405.  Every credit union may:
   (a) (1) Become a member of any organization or organizations
composed of credit unions, credit associations, chambers of commerce,
financial institutions, community economic development entities, or
business or trade organizations.
   (2) Become a member of any nonprofit organization approved by the
board of directors.
   (b) Pay dues and assessments as may be levied upon it by any
organization of which it is a member.



14406.  The savings capital, undivided profits, and reserve funds of
a credit union shall be deposited only in the following:
   (a) Commercial banks or trust companies, incorporated under the
laws of this state.
   (b) National banks doing business in this state.
   (c) Shares or periodic certificates for funds received by or any
form of evidence of interest or indebtedness issued by any credit
union organized under this division or by any other credit union if
its member accounts are insured as provided for by Subchapter II of
the Federal Credit Union Act (12 U.S.C. Sec. 1781 et seq.), or,
alternatively, are insured by other means determined acceptable by
the commissioner.
   (d) Accounts with, investment certificates or withdrawable shares
of, any savings and loan association doing business in this state
that is an insured institution pursuant to the Federal Deposit
Insurance Corporation Act (12 U.S.C. Sec. 1811 et seq.).



14407.  (a) Whenever the losses of any credit union resulting from a
depreciation in the value of its securities or otherwise exceed its
undivided earnings and reserve fund so that the estimated value of
its assets is less than the total amount due its shareholders, the
credit union may, if approved by a majority of all members at a
meeting called to consider the matter, order a reduction of the
liability to each of its shareholders, so as to divide the loss
equitably among the shareholders. If thereafter the credit union
realizes from its assets a greater amount than was fixed in the order
of reduction, the excess shall be divided among the shareholders
whose assets were reduced, but to the extent of the reduction only.
   (b) The commissioner may approve a reduction in the liability on
shares approved by less than a majority of all members as provided in
subdivision (a) if the commissioner finds, upon the written and
verified application filed by the board of directors, that (1) notice
of the meeting called to consider the question was mailed to each
member entitled to vote upon the question, (2) the notice disclosed
the purpose of the meeting and properly informed the membership that
approval of the reduction in liability might be sought pursuant to
this subdivision, and (3) that a majority of the votes cast upon the
question were in favor of the reduction in liability.



14408.  No credit union shall make any gift or donation having a
value in excess of twenty-five thousand dollars ($25,000) unless the
gift or donation is in the best interest of the credit union, is
approved by a resolution of the board of directors and is in
conformance with any regulation or order that the commissioner may
issue. The resolution of the board of directors approving the gift or
donation shall identify the recipient of the gift or donation, state
the value of the gift or donation, and specify the basis for the
board's determination that the gift or donation is in the best
interests of the credit union. The board may establish a budget for
gifts and donations and authorize appropriate officials of the credit
union to select recipients and disburse budgeted funds among those
recipients.



14409.  (a) Every credit union shall obtain adequate bond or
insurance coverage, for each director, officer, supervisory committee
member, and credit committee member, for the credit manager, and for
each employee.
   (b) The commissioner may adopt regulations setting forth
guidelines with respect to the minimum amount of the bond or
insurance coverage deemed adequate. The regulations may be based upon
the gross assets of the credit union and may contain a formula or
schedule for the calculation of minimum bond or insurance coverage.



14409.2.  (a) Notwithstanding the provisions of Sections 1051, 1052,
and 1054 of the Labor Code and Section 2947 of the Penal Code, any
credit union or officer or employee thereof may deliver fingerprints
taken of an applicant for employment by the credit union to local,
state, or federal law enforcement agencies for the purpose of
obtaining information as to the existence and nature of a criminal
record, if any, of the applicant relating to convictions, and to any
arrest for which the applicant is released on bail or on his or her
own recognizance pending trial, for the commission or attempted
commission of a crime involving robbery, burglary, theft,
embezzlement, fraud, forgery, bookmaking, receiving stolen property,
counterfeiting, or involving checks or credit cards or using
computers.
   (b) The Department of Justice shall, pursuant to Section 11105 of
the Penal Code, and a local agency may, pursuant to Section 13300 of
the Penal Code, furnish to the officer of the credit union
responsible for the final decision regarding employment of the
applicant, or to his or her designees having responsibilities for
personnel or security decisions in the usual scope and course of
their employment with the credit union, summary criminal history
information when requested pursuant to this section. If, upon
evaluation of the criminal history information received pursuant to
this section, the credit union determines that employment of the
applicant would constitute an unreasonable risk to the credit union
or its customers, the applicant may be denied employment.
   (c) A request for records pursuant to this section made of the
Department of Justice shall be on a form approved by the department.
The department may charge a fee to be paid by the requesting credit
union pursuant to subdivision (e) of Section 11105 of the Penal Code.
No request shall be submitted without the written consent of the
applicant.
   (d) Any criminal history information obtained pursuant to this
section is confidential and no recipient shall disclose its contents
other than for the purpose for which it was acquired.



14410.  (a) No member of the board of directors, supervisory
committee, or credit committee shall receive any compensation for his
or her services as a member of the board of directors, supervisory
committee, or credit committee, but he or she may be provided with
reasonable health, accident, and similar insurance. Nothing in this
subdivision shall prohibit a member of the board of directors,
supervisory committee, or credit committee from receiving nonmonetary
compensation that is incidental to the person's service as a member
of the board of directors, supervisory committee, or credit
committee, if and as approved by regulation or order of the
commissioner.
   (b) Notwithstanding subdivision (a), a director or committee
member may be reimbursed for actual expenses incurred in the
performance of his or her duties if reimbursement is made pursuant to
the requirements of the commissioner's regulations controlling
expense reimbursement by the credit union. Reimbursement for actual
expenses may include, among other things, travel expenses incurred on
or relating to credit union business, and any other matters,
categories, or items of expense that the commissioner may establish
by regulation.
   (c) Nothing in this section shall prevent any person from
receiving compensation for actual services as a general manager,
credit manager, loan officer, or other position as an employee of the
credit union.