6-06 Credit Unions

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CHAPTER 6-06CREDIT UNIONS6-06-01. Savings and credit association may be organized. Any seven residents ofthis state may apply to the state credit union board for permission to organize a corporate cooperative association to be known as a credit union.6-06-02. Manner of organization of credit unions. A credit union must be organized inthe following manner:1.The applicants shall execute a certificate of organization, in triplicate, by the terms of which they agree to be bound, stating the name and the location of the proposed credit union, the names and addresses of the subscribers to the certificate and the number of shares subscribed by each, and the par value of the shares of the credit union, which may not exceed fifty dollars each. The commissioner shall prescribe the application form.2.The applicants shall prepare and execute proposed bylaws, in triplicate, for the general governance of the credit union consistent with the provisions of this chapter.3.The certificate and the proposed bylaws, both executed in triplicate, must be forwarded to the commissioner.4.The applicants shall apply for, secure, and maintain national credit union administration insurance of accounts.5.The board, within thirty days after the receipt of the certificate and bylaws, shall determine whether they comply and are consistent with this chapter.6.The board shall instruct the secretary of state to issue a charter, which must be attached to the certificate of organization and returned, together with the bylaws, to the applicants upon payment of a filing fee of thirty dollars to the secretary of state.7.Evidence of securing national credit union administration insurance must be furnished to the commissioner before the charter may be released to the applicant credit union.After the provisions of this section have been complied with, the association becomes a body corporate and is known as a credit union.6-06-03. Commissioner to furnish forms. The commissioner, on written application ofany seven residents of this state, shall furnish without charge to persons proposing to incorporate a credit union a form of certificate of organization and a set of suggested bylaws approved by the commissioner as consistent with this chapter.6-06-04.Amendment of certificate or bylaws - Approval by state credit unionboard. The certificate of organization or bylaws of a credit union may be amended by the board of directors or the membership of the credit union as specified in the bylaws. If the bylaws provide for amendments by the board of directors, such amendments require an affirmative vote of two-thirds of the authorized number of members of the board of directors of the credit union at any duly held meeting of the board, if the members of the board have been given prior written notice of said meeting and the notice contains a copy of the proposed amendment or amendments. If the bylaws provide for amendments by the membership of the credit union, such amendments require an affirmative vote of two-thirds of the members present and voting at a duly called regular or special meeting of the membership, providing the members have been given prior written notice of said meeting and the notice contains a copy or summary of the proposed amendment or amendments. No amendment of the bylaws or of the certificate of organization becomes effective, until approved in writing by the state credit union board.Page No. 1Amendments to the certificate of organization together with a filing fee of twenty dollars must be filed with the secretary of state within thirty days after the amendments have been approved by the state credit union board.6-06-05.Use of credit union and corporate central credit union restricted -Forfeiture. It is unlawful for any person, association, copartnership, or corporation, domestic or foreign, except corporations organized in accordance with the provisions of this chapter, to use the words "credit union", "corporate central credit union", or "central credit union" in their name or title, and any person, association, copartnership, or corporation violating this section shall forfeit to the state one hundred dollars for every day, or part thereof, during which such violation continues. The commissioner may recover such forfeited sums in a civil action and shall deposit any sums recovered or collected with the state treasurer. Only one "corporate central credit union" or "central credit union" may be organized under this chapter, and no other credit union may use the term "corporate central" or "central" as part of its name. The North Dakota credit union league, any chapter, affiliate, or subsidiary of this league, and any political action committee formed by credit unions organized under this chapter or federal law or a political action committee formed by the North Dakota credit union league are specifically exempt from this restriction.6-06-06. Powers of credit unions. A credit union has the following powers:1.To receive the savings of its members either as payment on shares or as deposits, including the right to conduct Christmas clubs, vacation clubs, and other such thrift organizations within its membership.2.To make loans to members.3.To make loans to a cooperative society or other organization having membership in the credit union.4.To deposit its moneys in state and national banks and trust companies and central credit unions authorized to receive deposits.5.To invest in the following:a.In bonds of the United States without limitation in securities issued as direct obligations by the United States government or any agency thereof and in any trust established for investing directly or collectively in such securities.b.In bonds or evidences of debt of this state or in bonds of states of the United States.c.In bonds or certificates of indebtedness of any county, city, or school district in this state, issued pursuant to authority of law, but not to exceed thirty percent of the assets of any credit union may be invested in such bonds or certificates of indebtedness.d.In notes or bonds secured by mortgage or deed of trust upon unencumbered, improved real estate in this state, if such investment does not exceed sixty-five percent of the actual cash value of the property mortgaged, and fire and tornado insurance policies are maintained and deposited as collateral to such mortgage, subject to such restriction and regulations as may be imposed by the state credit union board.e.In notes or bonds secured by a security interest or lien upon unencumbered personal property, if the investment does not exceed ninety percent of the actual cash value of the property secured.Page No. 2f.In first lien, public utility, industrial, corporation, or association bonds, notes, or other evidences of debt issued by corporations located in the United States of America to the extent authorized by the state credit union board.g.Subject to rules of the state credit union board, in shares of investment companies registered under the Investment Companies Act of 1940 and which invest only in investments otherwise permissible under this section.6.To borrow money as limited in this chapter.7.Subject to such regulations as the state credit union board may prescribe, insurance obtained under title 1 of the National Housing Act must be deemed adequate security.8.To sue and be sued.9.A credit union may invest in a credit union office building, including the lot, piece, or parcel of land on which the same is located, and in furniture and fixtures, to the extent authorized by regulations issued by the state credit union board.10.Every state credit union has the power to purchase, hold, and convey other real estate as herein provided, and not otherwise:a.Such as is mortgaged to it in good faith by way of security for loans, or for debts previously contracted.b.Such as is conveyed to it in good faith in satisfaction of debts previously contracted in the course of its dealings.c.Such as it purchases at sales under judgments, decrees, or mortgages held by the credit union, or purchases to secure debts due to it.Upon transfer to other real estate owned, a current appraisal performed by an independent qualified appraiser must be obtained for all property recorded at or below the lower of twenty-five thousand dollars or ten percent of the credit union's equity. Except as otherwise provided by chapter 10-06.1, a state credit union may hold possession of any real estate acquired after July 1, 1991, under mortgage, or title and possession of any real estate purchased to satisfy indebtedness, for a period not to exceed five years. Except as otherwise provided by chapter 10-06.1, real estate acquired before July 1, 1991, may be held for a period not exceeding five years from July 1, 1991.The commissioner may extend the real estate holdingperiod up to an additional five years upon formal request by a credit union if the credit union has made a good-faith attempt to dispose of the real estate within the five-year period, or disposal within the five-year period would be detrimental to the credit union. Within thirty days after receipt of an adverse decision, the credit union may appeal that decision to the state credit union board.11.Subject to authorization by the state credit union board, acting by order or rule, a state credit union has the same powers as a federal credit union and may engage in any activity in which a credit union could engage if the credit union were federally chartered.12.To exercise any incidental power necessary or requisite to enable the credit union to carry out effectively the business for which it is incorporated or as determined by the board by order or rule.6-06-06.1. Issuance of certificates of deposit - Penalty. Certificates of deposit, asdefined in section 41-03-04, may only be issued in this state by credit unions authorized to issue certificates of deposit, and which are organized to do business in this state under this chapter orPage No. 3under the Federal Credit Union Act, and whose accounts are insured by the national credit union administration, except that the requirement for insurance of accounts for any "corporate central credit union" or "central credit union" may be waived under section 6-06-40, or as authorized under section 6-03-02.2. Any person violating this section is subject to a civil penalty not to exceed five thousand dollars.6-06-07. Membership in credit union.1.The membership of a credit union consists of the incorporators and such other persons as may be elected to membership. Each member shall subscribe to and pay the initial installment on at least one share in the credit union and pay the entrance fee as provided by the bylaws of the credit union.Organizations,incorporated or otherwise, composed principally of the same general group as the credit union membership may be members of the credit union.2.Credit union membership is limited to groups having a common bond of occupation or association or to groups residing within a geographic area that does not extend beyond a seventy-five-mile [120.70-kilometer] radius of the home office of the credit union. Except as provided by this section, an office of a credit union that has a field of membership defined by geography may not be located more than seventy-five miles [120.70 kilometers] from the credit union main office.The restrictions onlocation and field of membership under this section do not apply to a credit union office location or field of membership approved by the board before January 1, 2005. In the event of a merger between credit unions with different geographic fields of membership, the surviving credit union may expand the field of membership to include the geographic field of membership of the merged credit union.AfterDecember 31, 2004, a credit union may not establish and operate a new branch office that is outside the credit union's field of membership. A branch office may not expand the geographic field of membership of a credit union.3.The board shall adopt a procedure through which all interested persons, including banking institutions and credit unions, are afforded reasonable opportunity to submit data, views, or arguments, orally or in writing; to obtain a hearing; and to intervene as a party to a proceeding concerning a proposed application for a credit union to expand the credit union's field of membership.6-06-08.State credit union board to supervise credit unions - Reports -Examinations - Fees.1.Credit unions and the permanent loan funds of credit unions, if any, are under the supervision of the commissioner. Credit unions shall report to the commissioner when called by the commissioner and at least four times each year.Thecommissioner shall prescribe the forms for the reports.At the discretion of thecommissioner, a call may be complied with by submission of a copy of the call report e-mailed directly to the department of financial institutions or by other electronic means of transmission. The call reports are due within thirty days of the call, or according to the deadlines published on the form NCUA 5300, whichever comes first. The commissioner may call for special reports from any credit union whenever in the commissioner's judgment it is necessary to obtain complete knowledge of the condition of the credit union. Every credit union that fails to make and transmit any report required in pursuance of this section shall forfeit and pay to the state a penalty of up to five hundred dollars for each day of delinquency, not to exceed two thousand five hundred dollars. At the discretion of the commissioner, all or part of this penalty may be waived if the reports are submitted within three days after the due date required by this section.2.Credit unions must be examined at least once each twenty-four months by the commissioner. In lieu of the examinations herein required, the commissioner mayPage No. 4accept any examination made or obtained by the national credit union administration and may conduct a joint examination with the national credit union administration.3.If it is determined through an examination or otherwise that the credit union is violating the provisions of this chapter, or is insolvent, the state credit union board may serve notice on the credit union of its intention to revoke the charter. If such violations continue for a period of fifteen days after such notice, the board may revoke the charter and take possession of the business and property of such credit union and shall maintain possession then until such time as it permits the reinstatement of the charter and the continuation of business by the credit union, or until its affairs finally are liquidated.The board may take similar action if anyrequired report remains in arrears for more than fifteen days.4.Every state credit union, including any "corporate central" or "corporate" credit union, placed under the jurisdiction and control of the state credit union board and the commissioner by the provisions of this title shall pay a yearly assessment. This assessment is to be determined by the state credit union board as necessary to fund that portion of the department's budget relating to the regulation of state-chartered credit unions. The assessment must be paid to the state treasurer within thirty days of each June thirtieth.Credit unions that have not been examined by thecommissioner or the state credit union board for three years prior to any assessment date are not required to pay the assessment. The state treasurer shall report the payments of fees to the commissioner, and if any credit union is delinquent more than twenty days in making payment, the board may make an order suspending the functions of the delinquent credit union until payment of the amount due.Thecommissioner may assess a penalty of five dollars for each day that the penalty is delinquent. The examination fee for any "corporate central" or "corporate" credit union shall be charged by the department at an hourly rate to be set by the commissioner, sufficient to cover all reasonable expenses of the department associated with the examination. All fees and penalties under this section must be paid to the state treasurer and deposited in the financial institutions regulatory fund.6-06-08.1. Additional assessments of credit unions. Repealed by S.L. 1989, ch. 96, </DIV></DIV></DIV> </DIV>  <DIV></DIV> <DIV></DIV> <DIV></DIV> <DIV></DIV>  <DIV id=footer> <DIV class=container> Copyright © 2012-2022 Laws9.Com All rights reserved.  <A href="/contactus.html">Contact Us</A> | <A href="/aboutus.html">About Us</A> | <A href="/terms.html">Terms</A> | <A href="/privacy.html">Privacy</A> </DIV> </DIV> </BODY></HTML>

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6-06 Credit Unions