As used in this chapter, unless the context
requires otherwise:
(1) “Assets” means property, a right or a claim with future
objectively measurable value that is owned or effectively controlled by a
credit union.
(2) “Capital” means a credit union’s reserves, undivided earnings
and allowances for loan loss.
(3) “Corporate central credit union” means a cooperative
organization whose members consist primarily of other credit unions and
whose purposes are:
(a) To accumulate and prudently manage the liquidity of its member
credit unions through interlending and investment services;
(b) To act as an intermediary for member credit unions to the
payment systems and facilitate funds transfers between its member credit
unions and other financial institutions or their agents;
(c) To obtain liquid funds from other credit union organizations,
financial intermediaries and other sources; and
(d) To perform such other financial services that benefit its
member credit unions and that are authorized in writing by the Director
of the Department of Consumer and Business Services.
(4) “Department” means the Department of Consumer and Business
Services.
(5) “Director” means the Director of the Department of Consumer and
Business Services.
(6) “Equity” means a credit union’s reserves and undivided earnings.
(7) “Home state” means the state in which the credit union is
chartered.
(8) “Host state” means the state in which a credit union conducts
business, but that is not the home state.
(9) “Interstate credit union” means a credit union chartered under
the provisions of this chapter or under the authority of the laws of
another state and operating in this state and in one or more other states.
(10) “Official” means any of the following:
(a) An individual who is or was a director or officer of the credit
union; or
(b) An individual who is or was a member of a credit union’s credit
committee or supervisory committee.
(11) “Regular reserve” means an irrevocable reserve set aside to
cover losses. [1985 c.762 §80; 1987 c.158 §151; 1987 c.373 §62; 1987
c.650 §1; 1993 c.744 §25; 1995 c.319 §7; 1999 c.185 §1] This chapter shall be known and may be cited
as the “Oregon Credit Union Act.” [1975 c.652 §2; 1985 c.762 §78; 1985
c.801 §1; 1987 c.158 §152; 1987 c.373 §63; 1987 c.650 §2] A credit union is a cooperative,
nonprofit association, incorporated under the laws of this state, for the
purposes of encouraging thrift among its members, creating a source of
credit at a fair and reasonable rate of interest and providing an
opportunity for its members to use and control their own money in order
to improve their economic and social condition. [1975 c.652 §3]As used in ORS 723.136 and 723.464 to 723.498, “credit union”
means a credit union organized under this chapter, an interstate credit
union doing business in this state or a federal credit union. [1999 c.185
§18; 2001 c.104 §286](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. 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. [1975 c.652 §4; 1985 c.762 §85; 1987 c.286 §1; 1999 c.185 §2] The Director of the
Department of Consumer and Business Services may not issue a certificate
of approval under ORS 723.012 if any person named in the articles of
incorporation submitted for approval:
(1) Is insolvent or bankrupt;
(2) Has engaged in dishonest, fraudulent or illegal practices or
conduct in any business or profession;
(3) Has willfully or repeatedly violated or failed to comply with
any provision of the Oregon Bank Act, the Savings Association Act, the
Oregon Credit Union Act, the Oregon Consumer Finance Act, the Oregon
Securities Law, the Oregon Mortgage Lender Law or the Pawnbrokers Act, or
any administrative rule or order adopted pursuant to any such Act;
(4) Has been convicted of a crime, an essential element of which is
fraud;
(5) Is not qualified to conduct a credit union business on the
basis of such factors as training, experience and knowledge of the
business;
(6) Is permanently or temporarily enjoined by a court of competent
jurisdiction from engaging in or continuing any conduct or practice
involving any aspect of the credit union business;
(7) Is the subject of an order of the director subjecting the
person to a fine or other civil penalty, or removing the person from an
office in any entity regulated by the director; or
(8) Is the subject of an order entered within the past five years
subjecting the person to a fine or other civil penalty or removing the
person from an office in a state banking institution, a national bank, a
state or federal credit union, a state or federal savings association or
a consumer finance company, or from a position as a securities broker or
dealer, a state or federal investment adviser or a mortgage lender, that
was issued by the regulatory authority of another state, or of the
federal government, with authority over such banking institutions, credit
unions, consumer finance companies, savings associations, securities
firms or mortgage lenders. [1977 c.135 §42; 1985 c.762 §86; 1987 c.373
§63a; 1987 c.650 §3; 1999 c.185 §3] In order to simplify the
organization of credit unions, the Director of the Department of Consumer
and Business Services shall cause to be prepared a form of articles of
incorporation and a form of bylaws, consistent with this chapter, which
may be used by credit union incorporators for their guidance. The
articles of incorporation and bylaws shall be available without charge to
persons desiring to organize a credit union. [1975 c.652 §5; 1985 c.762
§87] (1) The
articles of incorporation or the bylaws may be amended as provided in the
bylaws. Amendments to the articles of incorporation or bylaws shall be
submitted, together with a fee established by rule of the Director of the
Department of Consumer and Business Services, to the director, who shall
approve or disapprove the amendments within 30 days.
(2) Amendments shall become effective upon approval in writing by
the director. [1975 c.652 §6; 1991 c.635 §1; 1999 c.185 §4] With the exception
of a credit union organized under this chapter or of any other credit
union act, or an association of credit unions or a recognized chapter
thereof, any person using a name or title containing the words “credit
union” or any derivation thereof or representing themselves in their
advertising or otherwise as conducting business as a credit union shall
be fined not more than $500 or imprisoned not more than one year, or
both, and may be permanently enjoined from using such words in its name.
[1975 c.652 §7; 1985 c.762 §88] (1) A credit
union may establish a place of business or change its 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. 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. [1975 c.652 §8; 1977 c.135 §44; 1991 c.635 §3; 1997 c.832
§1; 1999 c.185 §55; 2005 c.95 §1] The fiscal year of each credit union shall end
on the last day of December. [1975 c.652 §9] (1) A credit union chartered
under this chapter may operate in another state unless prohibited by the
laws of the other state. Oregon is the home state for any credit union
chartered under this chapter.
(2) A credit union organized under the laws of another state may
conduct business as a credit union in this state with the approval of the
Director of the Department of Consumer and Business Services under the
conditions described in subsection (3) of this section. Oregon is the
host state for any credit union chartered under the laws of any other
state and conducting business as a credit union in this state. The state
that charters the credit union is the home state of the credit union.
(3) The director may issue a branch certificate to a credit union
chartered in another state for the purposes of operating in this state if
all of the following conditions are met:
(a) The credit union is organized under a credit union law
substantially similar to this chapter;
(b) The credit union files an application that includes an
agreement to comply with all rules prescribed by the director;
(c) The credit union agrees to submit an annual or other regular
report of examination from the supervising agency of the state in which
it is chartered;
(d) The credit union agrees to authorize the examination of its
parent credit union by the director and to pay the fee determined under
ORS 723.114;
(e) The field of membership of the credit union meets the
definition of membership as defined in ORS 723.172;
(f) The credit union acknowledges that laws of this state relating
to consumer protection apply to transactions with residents of this state;
(g) The credit union has account insurance comparable to that
required for credit unions incorporated under this chapter;
(h) The credit union designates and maintains an agent for the
service of process in this state; and
(i) The credit union submits quarterly financial reports as
required by the director.
(4) The director may suspend or revoke the certificate of any
credit union for which Oregon is the host state for any violation of the
provisions of this chapter or rules or orders issued by the director.
[1975 c.652 §10; 1981 c.412 §6; 1985 c.762 §89; 1987 c.373 §63b; 1999
c.185 §5]REGULATORY AUTHORITY In accordance with ORS chapter 183,
the Director of the Department of Consumer and Business Services may
adopt rules for the purpose of carrying out this chapter. [1975 c.652
§11; 1985 c.762 §90; 1991 c.331 §123; 1991 c.635 §4; 1999 c.185 §6] (1) Credit unions
shall report to the Director of the Department of Consumer and Business
Services annually by a date established by the director on forms supplied
and in the manner specified by the director for that purpose. Additional
reports may be required.
(2) A fine in an amount to be established by rule of the director,
but not to exceed $1,000 for each day a report is in arrears shall be
levied against the offending credit union unless it is excused for cause
by the director. [1975 c.652 §12; 1991 c.635 §2; 1999 c.185 §7] (1) The Director of the Department of
Consumer and Business Services shall examine each credit union to
determine its condition and whether the credit union is complying with
the laws of this state and such other matters as the director may
prescribe. For the purpose of conducting an examination or any part
thereof, the director may employ an independent consultant determined by
the director as qualified to conduct examinations. Except as provided in
subsection (3) of this section, examinations under this subsection must
be conducted not less frequently than 24 months apart.
(2) For purposes of an examination under subsection (1) of this
section:
(a) Each credit union and all of its officers and agents shall be
required to give to representatives of the director full access to all of
the credit union’s books, papers, securities, records and other sources
of information under their control.
(b) The director may subpoena witnesses, administer oaths, compel
the giving of testimony and require the submission of documents.
(3) Instead of an examination under subsection (1) of this section,
the director may accept an examination or report made by an agency of the
United States Government under statutes of the United States.
(4) A report of an examination under subsection (1) of this section
shall be forwarded to the executive officer of each credit union within
60 days after completion. The report shall contain comments relative to
the management of the affairs of the credit union and also as to the
general condition of its assets. Within 45 days after the receipt of the
report, the directors and supervisory committee members shall meet to
consider matters contained in the report and shall report in writing to
the director on the manner in which the credit union is complying or will
comply with the director’s recommendations. [1975 c.652 §13; 1977 c.135
§45; 1985 c.762 §91; 1987 c.373 §63c; 1999 c.185 §8] (1) Each credit union
shall pay to the Director of the Department of Consumer and Business
Services each year the fee determined by reference to the schedule
adopted by the director under ORS 705.620. The fee shall be paid by the
date set by the director in the rule establishing the schedule.
(2) In addition to any fee collected under subsection (1) of this
section, whenever the director devotes any extra attention to the affairs
of a credit union, either upon determination by the director or upon
request of the credit union, the fee for the extra service shall be the
actual cost thereof. [1985 c.762 §92; 1987 c.171 §6; 1987 c.373 §64] A credit union shall maintain all books,
records, accounting systems and procedures in accordance with such rules
as the Director of the Department of Consumer and Business Services from
time to time prescribes. In prescribing such rules, the director shall
consider the relative size of a credit union and its reasonable
capability of compliance. [1975 c.652 §14; 1991 c.635 §5; 1999 c.185 §9] (1) The
Director of the Department of Consumer and Business Services shall
receive and file in the Department of Consumer and Business Services all
reports required under this chapter.
(2) Except as provided in subsection (3) of this section, the
records of the department pertaining to the administration of this
chapter are available for public inspection unless the director
determines in the particular instance that the public interest in
disclosing the records is outweighed by the interests of the credit union
or its directors, members, officers or employees in keeping the records
confidential, or that the records are exempt from disclosure under ORS
192.501 to 192.505. A determination by the director under this subsection
is subject to review under ORS 192.410 to 192.505.
(3) Except as provided in subsections (4) and (5) of this section,
the following records of the department are exempt from disclosure or
production and shall be treated as confidential as provided in ORS
705.137:
(a) Examination reports and work papers, directives, orders and
correspondence that relate to examination reports.
(b) Investigatory information concerning persons subject to
investigation by the director under ORS 723.014 or 723.132 and financial
statements of those persons.
(c) Proprietary information.
(d) Reviews of financial statements submitted to the director.
(e) The name of a member or borrower and the amount of shares,
deposits or debts of a member or borrower.
(4) Notwithstanding subsection (3) of this section and except as
otherwise provided in this subsection, the director may disclose any
record of the department specified in this subsection pertaining to a
credit union that has been liquidated under ORS 723.676 if the director
determines in the particular instance that the public interest in
disclosing the record outweighs the interests of the credit union or its
directors, members, officers or employees in keeping the record
confidential. The director may not disclose any record or portion of a
record that contains any proprietary information or any information
relating to the individual financial activities or affairs of persons
unless the director concludes that those activities or affairs were a
direct and substantial contributing factor in the failure of the credit
union. This subsection applies to the following records of the department:
(a) Examination reports and work papers, directives, orders and
correspondence that relate to examination reports.
(b) Investigatory information concerning persons subject to
investigation by the director under ORS 723.014 or 723.132.
(c) Reviews of financial statements.
(d) Reports filed under ORS 723.106.
(5) Notwithstanding ORS 40.270, an officer of the department may be
examined concerning records that are exempt from disclosure under
subsection (2) or (3) of this section and the records are subject to
production if the court before which a civil or criminal action is
pending finds that the examination and production is essential for
establishing a claim or defense. In making a finding under this
subsection, if the court views the records, the court shall do so in
camera.
(6) All records of the department pertaining to the condition of
credit unions may be furnished to:
(a) The National Credit Union Administration.
(b) The Federal Home Loan Bank of which the credit union is a
member or to which the credit union has applied for membership.
(c) The State Treasurer if the credit union is a depository of
public fund deposits.
(d) The respective credit union.
(7) If the director is requested to disclose any record subject to
this section and the record contains both material that is exempt from
disclosure under this section or any other provision of law and material
that is not exempt from disclosure, the director shall separate the
exempt and nonexempt material and may disclose only the nonexempt
material. [2005 c.95 §3] (1) Each credit union
shall obtain and maintain a fidelity bond or irrevocable letter of credit
issued by an insured institution, as defined in ORS 706.008, which
includes coverage in accordance with any rules of the Director of the
Department of Consumer and Business Services, to protect the credit union
against losses caused by occurrences covered therein such as fraud,
dishonesty, forgery, embezzlement, misappropriation, misapplication of
duty and all acts of its agents, directors, officers, committee members,
employees or attorneys. The minimum amount of the bond or letter of
credit shall be determined based on the amount of the credit union’s
total assets in accordance with the following table:
___________________________________________________________________________
___Assets Minimum Amount
of Bond
or Letter of Credit
$0 to $10,000 Coverage equal to
the credit union’s
assets.
$10,001 to $1,000,000 $10,000 for each
$100,000 or
fraction thereof.
$1,000,001 to $50,000,000 $100,000 plus
$50,000 for each $1
million or fraction
thereof over $1
million.
$50,000,001 to $295,000,000$2.55 million plus
$10,000 for each $1
million or fraction
thereof over $50
million.
More than $295,000,000 $5 million.
___________________________________________________________________________
___ (2) Each bond or letter of credit shall include a faithful
performance clause to cover the chief financial officer. Each bond or
letter of credit shall be approved by the director who may require such
additional amounts as the director considers necessary.
(3) All bond claims or claims upon a letter of credit that exceed
one percent of the credit union’s reserves and undivided earnings or that
are related to the errors or omissions of an officer, director or
committee member shall be reported to the director. [1975 c.652 §15; 1987
c.286 §2; 1991 c.331 §124; 1995 c.319 §1; 1997 c.249 §216; 1997 c.631
§542; 1997 c.832 §2; 1999 c.185 §10; 2001 c.308 §1] The Director of the Department of
Consumer and Business Services may institute any action or other
proceeding that the director considers necessary for enforcing any
provision of this chapter or any rule, order or action adopted, issued or
taken by the director under this chapter. [1987 c.215 §10] The
Director of the Department of Consumer and Business Services by order may
direct a credit union to remove any officer, director or committee member
of the credit union for any reason stated in ORS 723.014. [1987 c.650 §6](1) The Director of the Department of Consumer and
Business Services may enter into cooperative, coordinating and
information sharing agreements with any other credit union supervisory
agency or any organization affiliated with or representing one or more
credit union supervisory agencies with respect to the periodic
examination or other supervision of any branch or other office or place
of business in this state of any non-Oregon institution, or any branch of
a credit union that is chartered in Oregon and is located in any other
state. The director may accept the supervisory agency’s reports of
examination and reports of investigation in lieu of conducting the
director’s own examinations or investigations. The agreement may resolve
conflicts of laws and specify the manner in which examination,
supervision and application processes shall be coordinated between this
state and the home state of the non-Oregon institution. The director may
also share information with the Federal Home Loan Bank and its directors.
(2) The director may enter into contracts with any credit union
supervisory agency that has concurrent jurisdiction over a credit union
operating a branch or other office or place of business in this state, to
engage the services of such agency’s examiners at a reasonable rate of
compensation, or to provide the services of the director’s examiners to
such agency at a reasonable rate of compensation. Any such contract shall
be deemed exempt from competitive bidding requirements under the
provisions of ORS 279.835 to 279.855 and ORS chapters 279A and 279B. The
contract may resolve conflicts of laws and specify the manner in which
examination, supervision and application processes shall be coordinated
between this state and the home state of the non-Oregon institution.
(3) The director may enter into joint examinations or joint
enforcement actions with other credit union supervisory agencies that
have concurrent jurisdiction over any branch or other office or place of
business in this state of a non-Oregon institution, or any branch of a
credit union that is chartered in Oregon and is located in any other
state, provided that the director may at any time take the actions
independently if the director deems the actions to be necessary or
appropriate to carry out the director’s responsibilities or to ensure
compliance with the laws of this state. In the case of a non-Oregon
institution, the director may recognize:
(a) The exclusive authority of the credit union supervisory agency
of the home state of the non-Oregon institution over corporate governance
matters; and
(b) The primary responsibility of the credit union supervisory
agency of the home state of the non-Oregon institution over safety and
soundness matters.
(4) Any fees collected by the director from non-Oregon institutions
under the provisions of this chapter may be shared with other credit
union supervisory agencies or any organization affiliated with or
representing one or more credit union supervisory agencies in accordance
with agreements between such parties and the director. [1999 c.185 §39;
2003 c.794 §324]POWERS OF CREDIT UNIONS 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 bylaws:
(1) Make contracts.
(2) Sue and be sued.
(3) Adopt and use 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 operations.
(5) At the discretion of the board of directors, require the
payment of an entrance fee or annual membership fee, or both, of any
person admitted to membership.
(6) Receive savings from its members in the form of various classes
of shares, deposits or deposit certificates, deposit accounts or
special-purpose thrift accounts.
(7) Receive from its members or from another credit union deposits
or deposit certificates, deposit accounts or various classes of shares
payable on nonnegotiable request.
(8) Lend its funds to its members and credit unions as provided in
this chapter.
(9) Acquire and lease personal property at the request of a member
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 assets or purchase all or
substantially all of the assets of another credit union, subject to the
approval of the director.
(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.
(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 if
permitted by federal law.
(22) Purchase or make available insurance for its directors,
officers, agents, employees and members.
(23) Allow its members 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.
(25) Act as trustee or custodian for members 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 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 directors, officers, employees and committee
members or other volunteers in accordance with the provisions of its
articles, bylaws and the indemnification provisions of ORS chapter 60.
(27) Exercise other powers that are necessary to carry out the
credit union’s purpose. [1975 c.652 §16; 1981 c.290 §3; 1983 c.37 §36b;
1985 c.762 §93; 1985 c.801 §2; 1987 c.650 §4; 1999 c.185 §11; 2001 c.104
§287; 2001 c.308 §2; 2003 c.405 §10; 2005 c.95 §4] Notwithstanding
any other provision of law, a credit union may, upon prior approval by
the Director of the Department of Consumer and Business Services and
subject to any limitations prescribed by the director, exercise any of
the powers conferred upon a federally chartered credit union doing
business in this state that is subject to the regulations of the
administrator of the National Credit Union Administration or the
successor or successors of the administrator, if the director finds that
the exercise of the power:
(1) Serves the public and members’ convenience and advantage; and
(2) Equalizes and maintains the quality of competition between
state chartered credit unions and federally chartered credit unions.
[1975 c.652 §17; 1991 c.635 §6; 1997 c.832 §3]MEMBERSHIP (1) The membership of a
credit union shall be limited to and consist of the incorporators to the
articles of incorporation and such other persons within the common bond
set forth in the bylaws as have been duly admitted members, have paid the
required entrance fee or membership fee, or both, have subscribed for one
or more shares and have paid the initial installment thereon, and have
complied with such other requirements as the articles of incorporation or
bylaws specify.
(2) Credit union membership may include:
(a) One or more groups, each having a common bond of occupation or
association; or
(b) Persons who live or work in, or organizations located within, a
well-defined local community, neighborhood or rural district.
(3) Credit union membership may also include any of the immediate
family of a person who is eligible for membership in the credit union
under subsection (2) of this section.
(4) For purposes of this section, a “well-defined local community,
neighborhood or rural district” shall consist of one or more adjacent
precincts, districts, cities, counties or other boundaries defined by the
state or a unit of local government or by any state or local government
agency.
(5) In determining whether adjacent precincts, districts, cities,
counties or other boundaries defined by the state or a unit of local
government or by any state or local government agency form a well-defined
local community, neighborhood or rural district, the Director of the
Department of Consumer and Business Services shall consider:
(a) Any interaction or shared interests that tie the precincts,
districts, cities, counties or other boundaries together;
(b) The size of the population of the proposed well-defined local
community, neighborhood or rural district;
(c) The size of the geographic area of the proposed well-defined
local community, neighborhood or rural district; and
(d) Any other criteria that the director considers relevant in
accordance with the purposes of this chapter.
(6)(a) A credit union may not add a group with a separate bond of
occupation or association to its membership unless, at the time the group
is added to the membership of the credit union, the group does not
contain more than 3,000 members.
(b) The limitation in paragraph (a) of this subsection does not
apply to:
(A) Any group the director determines could not feasibly or
reasonably establish a new credit union due to a lack of volunteer
resources, financial resources or other factors the director considers
important to the likelihood of the successful formation of a new credit
union; or
(B) Any group transferred to the credit union in connection with a
merger, consolidation or transfer approved by the director, or in
connection with the liquidation of another credit union.
(7) Notwithstanding subsection (2) of this section, a credit union
whose membership includes one or more groups, each having a common bond
of occupation or association, may add to its membership persons who live
or work in, or organizations located within, a well-defined local
community, neighborhood or rural district if:
(a) The director determines that the well-defined local community,
neighborhood or rural district is underserved by other depository
institutions, as defined in section 19(b)(1)(A) of the Federal Reserve
Act (12 U.S.C. 461(b)(1)(A)), based on data of the National Credit Union
Administration and the federal banking agencies, as defined in section 3
of the Federal Deposit Insurance Act (12 U.S.C. 1813); and
(b) The credit union establishes and maintains an office or
facility in the well-defined local community, neighborhood or rural
district at which credit union services are available.
(8) In reviewing a proposed amendment to a credit union’s bylaws
that would include an additional group within the credit union’s
membership, the director shall consider:
(a) Whether, within the preceding year, the credit union has
engaged in any unsafe or unsound practice that is material;
(b) Whether the credit union has the capitalization, administrative
capability and financial resources to serve the additional group; and
(c) Other factors the director may prescribe by rule. [1975 c.652
§18; 1999 c.730 §1] Business
and nonbusiness organizations composed of individuals who are eligible
for membership, or whose employees are eligible for membership, may be
admitted to membership in the same manner and under the same conditions
as individuals. [1975 c.652 §19; 1987 c.286 §3; 1999 c.185 §56; 2001
c.308 §3] Any credit union organized
under the laws of this state may permit membership of any other credit
union organized under the laws of this state, of any other state or of
the United States. [1975 c.652 §20]Notwithstanding any other provision
of this chapter, a credit union may receive deposits from the State of
Oregon of moneys belonging to the Deferred Compensation Fund established
under ORS 243.411. With respect to such deposits, the State of Oregon
shall be deemed to be a member of the credit union, except that the state
shall not be entitled to vote, hold office or otherwise participate in
the management or operation of the credit union. [1977 c.721 §17; 1997
c.179 §31] Members who leave the field of
membership may be permitted to retain their membership in the credit
union as a matter of general policy of the board of directors. [1975
c.652 §21] (1) Notwithstanding any other
provision of this chapter, a credit union that provides in its articles
of incorporation or bylaws for membership of employees of the State of
Oregon shall also permit membership of any person:
(a) Serving as a foster parent in a foster home certified by the
Department of Human Services under ORS 418.625 to 418.645; and
(b) Maintaining a developmental disability child foster home
certified by the Department of Human Services under ORS 443.830 and
443.835.
(2) A person eligible for membership in a credit union under
subsection (1) of this section shall comply with all other membership
requirements applicable to any other person eligible for membership in
the credit union. [1989 c.550 §2; 1999 c.59 §226; 1999 c.316 §9] The members of the credit union shall
not be personally or individually liable for the payment of the debts of
the credit union. [1975 c.652 §22; 1981 c.903 §10] (1) The
annual meeting and any special meetings of the members of the credit
union shall be held at the time and place and in the manner indicated by
the bylaws.
(2) At meetings described in subsection (1) of this section, a
member has one vote, irrespective of the amount of that member’s
shareholdings. A member may not vote by proxy, but a member may vote by
mail or electronic ballot if allowed by the bylaws of the credit union.
The board of directors shall establish procedures to safeguard the
confidentiality and integrity of the voting process. As used in this
subsection, “electronic” has the meaning given that term in ORS 84.004.
(3) The board may establish a minimum age as a qualification of
eligibility to vote at meetings of the members. [1975 c.652 §23; 1999
c.185 §12; 2005 c.95 §5] (1) A member desiring
to withdraw from a credit union shall file a written notice of intention
to withdraw.
(2) Subject to subsection (3) of this section, the board of
directors may expel any member 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) A member shall not be expelled until the member has been
informed in writing of the reasons for the expulsion and has had
reasonable opportunity to be heard. 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 from such
members. [1975 c.652 §24; 1985 c.762 §94; 1999 c.185 §13]DIRECTION OF AFFAIRS (1) The credit union
shall be directed by a board consisting of an odd number of directors, at
least five in number, to be elected by and from the members in the manner
provided in the credit union’s bylaws. All members of the board shall
hold office for such terms as the bylaws provide.
(2) The board of directors shall appoint a supervisory committee of
not less than three members at the organizational meeting and within 30
days following each annual meeting of the members for such terms as the
bylaws provide.
(3) The board of directors shall appoint a credit committee
consisting of an odd number, not less than three in number, for such
terms as the bylaws provide, or said credit committee may be elected at
the annual members’ meeting by and from the members, or in lieu of a
credit committee, a credit manager may be appointed.
(4) The board of directors may appoint alternate directors, credit
committee or supervisory committee members to serve in place of absent
officials. [1975 c.652 §25; 1997 c.832 §4] Within such time as
the Director of the Department of Consumer and Business Services may
establish, a record of the names and addresses of the members of the
board, committees and all officers of the credit union shall be filed
with the director on forms provided and in the manner prescribed by the
director. [1975 c.652 §26; 1991 c.635 §7; 1999 c.185 §14] (1) Subject to subsection (2) of this section,
the board of directors may fill any vacancies occurring in the board
until successors elected at the next annual meeting have qualified.
(2) If a vacancy occurring in the board reduces the number of
directors to five or fewer, the board shall fill the vacancy until a
successor elected at the next annual meeting has qualified.
(3) The board shall also fill vacancies in the credit and
supervisory committees or in the office of credit manager. [1975 c.652
§27; 2005 c.95 §6] No officer, director, or
committee member, other than the treasurer, a credit manager, a general
manager, or a loan officer may be compensated for service as such, but
providing reasonable life, health, accident and similar insurance
protection for a director or committee member, or indemnification and
related insurance, shall not be considered compensation. Directors and
committee members, while on official business of the credit union, may be
reimbursed for necessary expenses incidental to the performance of such
business. [1975 c.652 §28; 1991 c.635 §8] No director, committee member,
officer, agent or employee of the credit union shall in any manner,
directly or indirectly, participate in the deliberation upon or the
determination of any question affecting pecuniary interest or the
pecuniary interest of any corporation, partnership or association (other
than the credit union) in which the director, committee member, officer,
agent or employee is directly or indirectly interested. [1975 c.652 §29] (1) At their organizational meeting and
within 30 days following each annual meeting of the members, the
directors shall elect an executive officer, who may be designated as
chairperson of the board or president; a vice chairperson of the board or
one or more vice presidents; a treasurer; and a secretary. The treasurer
and the secretary may be the same individual. The persons so elected
shall be the executive officers of the corporation.
(2) The terms of the officers shall be one year, or until their
successors are chosen and have duly qualified.
(3) The duties of the officers shall be prescribed in the bylaws.
(4) The board of directors may employ an officer in charge of
operations whose title shall be president, general manager, or such other
title as may be designated in the bylaws of the credit union; or, in lieu
thereof, the board of directors may designate the treasurer or an
assistant treasurer to be in active charge of the affairs of the credit
union.
(5) The board of directors may appoint a security officer. [1975
c.652 §30; 1987 c.286 §4; 1991 c.635 §9] The board of directors shall have
the general direction of the business affairs, funds and records of the
credit union. [1975 c.652 §31] From the persons elected to the board,
the board may appoint an executive committee of not less than three
directors who may be authorized to act for the board in all respects,
subject to such conditions and limitations as are prescribed by the
board. [1975 c.652 §32] The board of directors shall meet at
least monthly. [1975 c.652 §33; 1999 c.185 §15] (1) The board of
directors shall manage the business and affairs of the credit union. The
duties of the board include, but are not limited to, the duties listed in
this section. The board may not delegate duties listed in subsection (2)
of this section. The board may delegate the duties listed in subsection
(3) of this section to a committee, officer or employee of the credit
union, who shall provide appropriate information to the board regarding
the exercise of the duties.
(2) The board shall:
(a) Establish the requirements for membership in the credit union,
including the par value, if any, of a share;
(b) Declare dividends on shares and share certificates as provided
by the bylaws;
(c) Authorize interest refunds, if any, to members from income
earned and received in proportion to the interest paid by them on classes
of loans and under conditions that the board prescribes;
(d) Authorize the employment of persons necessary to carry on the
business of the credit union and fix the compensation of the manager or
chief executive officer;
(e) Authorize the conveyance of property;
(f) Suspend members of the credit or supervisory committee for
failure to perform their duties;
(g) Appoint any special committees the board considers necessary;
(h) Perform other duties as the members of the credit union from
time to time direct, and perform or authorize any action not inconsistent
with this chapter and not specifically reserved by the bylaws for the
members;
(i) Limit the number of shares and the amount of deposits that may
be owned by a member and ensure that limitations adopted under this
subsection apply alike to all members; and
(j) Establish policies and controls regarding the investment of
surplus funds.
(3) In addition to the duties listed in subsection (2) of this
section, and subject to subsection (1) of this section, the board shall:
(a) Act upon applications for membership. If this duty is
delegated, a record of an approval or denial of membership must be made
available to the board. A person denied membership by a committee,
officer or employee of the credit union may appeal the denial to the
board.
(b) Purchase a blanket fidelity bond, in accordance with ORS
723.122.
(c) Determine from time to time the interest rate or rates that
shall be charged on loans.
(d) Determine the prospective dividend rate to be paid on shares
and share certificates and the interest rate or rates that will be paid
on deposits and deposit certificates.
(e) Designate a depository or depositories for the funds of the
credit union.
(f) Borrow or lend money to carry out the functions of the credit
union. [1975 c.652 §34; 1981 c.412 §7; 1985 c.762 §95; 1985 c.801 §3;
1987 c.286 §5; 1997 c.832 §5; 2005 c.95 §7] The credit committee shall have
the general supervision of all loans to members. [1975 c.652 §35] The credit committee shall
meet as often as the business of the credit union requires and not less
frequently than once a month to consider applications for loans. No loan
shall be made unless it is approved by a majority of the committee who
are present at the meeting at which the application is considered. [1975
c.652 §36] (1) The credit committee may appoint one or
more loan officers and delegate the power to approve or disapprove loans,
subject to such limitations or conditions as the credit committee
prescribes.
(2) Loan applications not approved by a loan officer may be
reviewed by the credit committee. [1975 c.652 §37; 1987 c.286 §6] 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. [1975 c.652 §38](1) The supervisory committee shall make or cause to be
made a comprehensive annual audit of the books and affairs of the credit
union and shall submit a report of the audit to the board of directors
and the Director of the Department of Consumer and Business Services and
a summary of that report to the members at the next annual meeting of the
credit union. It shall make or cause to be made such supplementary audits
or examinations as it deems necessary or as are required by the director
or by the board of directors, and submit reports of these supplementary
audits to the board of directors.
(2) The supervisory committee shall cause the accounts of the
members to be verified with the records of the credit union from time to
time in accordance with subsection (3) of this section. This verification
shall be done not less frequently than every two years.
(3) Verification of members’ accounts shall be made using either of
the following methods:
(a) A controlled verification of 100 percent of members’ share and
loan accounts; or
(b) A controlled random statistical sampling method in accordance
with rules that the director may prescribe.
(4) Records of accounts verified shall be maintained and retained
until the next verification of members’ accounts is completed. [1975
c.652 §39; 1991 c.635 §10](1) The supervisory committee by a unanimous vote
may suspend any member of the credit committee and shall report such
action to the board of directors for appropriate action.
(2) The supervisory committee by a unanimous vote may suspend any
officer or member of the board until the next members’ meeting. The next
members’ meeting must be held not less than 14 nor more than 45 days
after the suspension. At the meeting the members shall decide whether to
remove the suspended officer or board member.
(3) Any member of the supervisory committee may be removed by the
board for failure to perform duties prescribed in this chapter or in the
credit union’s articles of incorporation, bylaws or policies.
(4) A person may not serve as a director if the person has
defaulted on payment of a voluntary obligation to the credit union or has
otherwise caused the credit union to incur a financial loss. [1975 c.652
§40; 1985 c.762 §96; 1999 c.185 §16; 2005 c.95 §8] The supervisory committee by a majority
vote may call a special meeting of the members to consider any violation
of this chapter, the articles of incorporation or bylaws, or any practice
of the credit union deemed by the supervisory committee to be unsafe or
unauthorized. [1975 c.652 §41; 1985 c.762 §97](1) If a director,
officer or committee member of a credit union has reason to believe that
a person has violated any provision of the Oregon Credit Union Act for
which criminal prosecution is provided, such official shall give the
information relative to the violation to the appropriate federal, state
or local law enforcement officer having jurisdiction of the violation,
and to the Director of the Department of Consumer and Business Services.
(2) If the matter is referred to the Attorney General or to a
district attorney, such official promptly shall investigate the violation
and institute such action against the person as the information and
investigation requires or justifies. The cost of the investigation and
action shall be paid by the county or state in the manner in which other
criminal actions are paid. [1979 c.88 §33]ACCOUNTS (1) Shares may be subscribed to, paid for and
transferred in such manner as the bylaws prescribe.
(2) A certificate need not be issued to denote ownership of a share
in a credit union. [1975 c.652 §42; 1985 c.801 §4; 1987 c.158 §153; 1987
c.650 §7] (1) At such intervals and for such periods as
the board of directors may authorize, and after provision for the
required reserves, the board of directors may declare dividends to be
paid on shares or share certificates. Dividends may be paid at various
rates, or not paid at all, with due regard to the conditions that pertain
to each class of share.
(2) Subject to the approval of the board of directors, accounts
closed between dividend periods may be credited with dividends at the
rate set by the board of directors. [1975 c.652 §43; 1985 c.206 §1; 1985
c.801 §5; 1995 c.319 §2; 2001 c.308 §4](1) A credit union may receive savings in deposit and deposit
certificate accounts from its members and other credit unions, subject to
such conditions as the board of directors establishes.
(2) Deposit and deposit certificate accounts differ from shares and
share certificates in that a predeclared rate of return, as determined
from time to time at such rates and upon such classes of deposit and
deposit certificate accounts as are established by the board of
directors, shall be established on deposit accounts.
(3) Interest may be paid on deposits and deposit certificates at
various rates with due regard to the conditions that pertain to each type
of account such as minimum balance, notice and time requirements.
(4) In the event of liquidation of a credit union, shares and share
certificates shall be subordinate to the claims of depositors and other
creditors. [1975 c.652 §44; 1985 c.801 §8] A member may designate any person or
persons to hold shares, deposits and thrift club accounts with the member
in joint tenancy, with or without the right of survivorship, but no joint
tenant, unless a member in the member’s own right, shall be permitted to
vote, obtain loans, or hold office or be required to pay an entrance or
membership fee. [1975 c.652 §47; 1977 c.555 §16; 1991 c.635 §11] Shares may be issued and deposits may be
held in the name of a member in trust for a beneficiary, including a
minor, but no beneficiary, unless a member in the beneficiary’s own
right, shall be permitted to vote, obtain loans, hold office or be
required to pay an entrance or membership fee. [1975 c.652 §48; 1977
c.555 §17] (1) A credit union may allow a member
holding a regular share or deposit account to use that account as a share
draft account as provided in this section, subject to conditions
established by the board of directors.
(2) As used in this section:
(a) “Share draft” means a negotiable or nonnegotiable draft used to
withdraw shares or deposits from a share draft account.
(b) “Share draft account” means any regular share account or
deposit account from which the credit union allows shares or deposits to
be withdrawn by means of a share draft or other order.
(3) The terms “share draft” and “share draft account” may encompass
accounts whether the underlying account is a share account or a deposit
account, without changing the type of account. [1981 c.290 §2; 1983 c.37
§36c; 1999 c.185 §40] A credit union may certify a share
draft issued by the credit union. A credit union that certifies a share
draft may immediately charge the amount of the share draft to the
drawer’s share draft account. [1985 c.206 §5; 1987 c.286 §7; 1999 c.185
§41]Shares, share certificates, deposits and deposit certificates may
be withdrawn for payment to the account holder or to third parties in
accordance with the manner and procedures established by the board of
directors. The board of directors may restrict one class of shares so
that a share in the class may not be redeemed, withdrawn or transferred
except upon termination of membership in the credit union. [1985 c.801 §7] The credit union shall have a lien on all funds of a
member or joint owner on deposit with the credit union in any individual
or joint account held in any capacity, for any obligation of the member
or joint owner to the credit union. [Formerly 723.436; 1991 c.635 §12;
1999 c.185 §57] (1) Whenever the losses of any credit
union, resulting from a depreciation in value of its loans or investments
or otherwise, exceed its undivided earnings and reserve fund so that the
estimated value of its assets is less than the total amount due the
shareholders, the credit union may by a majority vote of the entire
membership order a reduction in the shares of each of its shareholders to
divide the loss proportionately among the members.
(2) If the credit union thereafter realizes from such assets a
greater amount than was fixed by the order of reduction, such excess
shall be divided proportionately among the shareholders whose assets were
reduced, but only to the extent of such reduction. [Formerly 723.446] Any deposit to a credit
union made to an account in the name of a minor shall be held for the
exclusive right and benefit of the minor and free from the control or
lien of all other persons, except other parties to the account and
creditors, and shall be paid, in accordance with the terms of the
account, together with any interest thereon, to or upon the order of the
minor. [1999 c.185 §20] (1) On the
death of a member of a credit union, if the deposit to the credit of the
deceased member is $25,000 or less, the credit union may, upon receipt of
an affidavit from the person claiming the deposit as provided in
subsection (2) of this section, pay the moneys on deposit:
(a) To the surviving spouse;
(b) If there is no surviving spouse, to the Department of Human
Services, on demand of the Department of Human Services within 60 days
from the death of the member when there is a preferred claim arising
under ORS 411.708, 411.795 or 414.105, or if there is no claim by the
Department of Human Services, to the surviving children 18 years of age
or older;
(c) If there is no surviving spouse, Department of Human Services
claim or surviving children, to the member’s surviving parents; or
(d) If there is no surviving spouse, Department of Human Services
claim, surviving children or surviving parents, to the member’s surviving
brothers and sisters 18 years of age or older.
(2) The affidavit shall:
(a) State where and when the member died;
(b) State that the total deposits of the deceased member in all
financial institutions in this state do not exceed $25,000;
(c) Show the relationship of the affiant or affiants to the
deceased member; and
(d) Embody a promise to pay the expenses of last sickness, funeral
expenses and just debts of the deceased out of the deposit, to the full
extent of the deposit if necessary, in the order of priority prescribed
by ORS 115.125, and to distribute any remaining moneys to the persons who
are entitled to those moneys by law.
(3) In the event the decedent died intestate without known heirs,
an estate administrator of the Department of State Lands appointed under
ORS 113.235 shall be the affiant and shall receive the moneys as escheat
property.
(4) The credit union shall determine the relationship of the
affiant to the deceased member. However, payment of such moneys in good
faith to the affiant or affiants shall discharge and release the
transferor from any liability or responsibility for the transfer in the
same manner and with the same effect as if the property had been
transferred, delivered or paid to a personal representative of the estate
of the decedent.
(5) A probate proceeding is not necessary to establish the right of
the surviving spouse, Department of Human Services claim, surviving
children, surviving parents, surviving brothers and sisters or an estate
administrator of the Department of State Lands to withdraw the deposits
upon the filing of the affidavit. If a personal representative is
appointed in an estate where a withdrawal of deposits was made under this
section, the person withdrawing the deposits shall account for them to
the personal representative.
(6) When a credit union transfers moneys under subsection (1) of
this section, the transferor may require the transferee to furnish the
transferor with a written indemnity agreement, indemnifying the
transferor against loss for moneys paid to the extent of the amount of
the deposit.
(7) This section is subject to the rights of other parties to the
account under ORS 723.474 to 723.498. [1999 c.185 §21; 2003 c.395 §24;
2005 c.381 §28](1) A credit union
shall be obligated to recognize an adverse claim to a deposit it holds
only if the adverse claimant gives notice to the credit union of its
claim and:
(a) Procures a restraining order, injunction or other appropriate
process against the credit union in an action wherein the person to whose
credit the deposit stands is made a party and served with summons; or
(b) Delivers to the credit union in a form, and with sureties
acceptable to the credit union, a bond or an irrevocable letter of credit
issued by a financial institution, as defined in ORS 706.008,
indemnifying the credit union from any liability, damage or expenses on
account of the payment of the adverse claim or the dishonor of the check
or other order of the person to whose credit the deposit stands.
(2) This section does not apply when the person in whose name the
account is carried is a fiduciary for the adverse claimant, and the
affidavit of the adverse claimant states the facts constituting the
fiduciary relationship and the facts showing reasonable cause of belief
on the part of the claimant that the fiduciary is about to misappropriate
the deposit.
(3) A credit union may, at its option, interplead a deposit that is
subject to any adverse claim. [1999 c.185 §22]
If a person who owns a share or deposit account subject to check
authorizes another person as agent to draw checks against the account,
the credit union, in the absence of written notice to the contrary, may
presume that any check drawn by the agent in the manner authorized by the
terms and conditions of the account, including checks drawn to the
personal order of the agent, is drawn for a purpose authorized by the
principal and within the scope of the authority conferred upon the agent.
[1999 c.185 §23] A credit union
may refuse to pay any check, draft or order drawn upon it when the
officers or employees of the credit union have reason to believe that the
person signing or indorsing the instrument was so under the influence of
alcohol, drugs or controlled substances or that the person was otherwise
so incapacitated as to make it reasonably doubtful whether the person was
capable of transacting business at the time of signing or indorsing the
check, draft or order. [1999 c.185 §24] As used in ORS
723.474 to 723.498, unless the context requires otherwise:
(1) “Account” means a contract of deposit of funds between a member
and a credit union and includes a checking account, savings account,
certificate of deposit and share account.
(2) “Beneficiary” means a person named in a trust account as one
for whom a party to the account is named as trustee.
(3) “Joint account” means an account payable on request to one or
more of two or more parties whether or not mention is made of any right
of survivorship.
(4) “Multiple-party account” means a joint account, a P.O.D.
account or a trust account. “Multiple-party account” does not include:
(a) Accounts established for the deposit of funds of a partnership,
joint venture or other association for business purposes; or
(b) Accounts controlled by one or more persons as the duly
authorized agent or trustee for a corporation, unincorporated
association, charitable or civic organization, or a regular fiduciary or
trust account where the relationship is established other than by deposit
agreement.
(5) “Net contribution” of a party to a joint account means the sum
of all deposits made to the account by or for the party, less all
withdrawals made by or for the party that have not been paid to or
applied to the use of any other party, plus a pro rata share of any
interest or dividends included in the current balance. “Net contribution”
includes any proceeds of deposit life insurance added to the account by
reason of the death of the party whose net contribution is in question.
(6) “Party” means a person who, by the terms of the multiple-party
account, has a present right, subject to request, to payment from a
multiple-party account. A P.O.D. payee or beneficiary of a trust account
is a party only after the account becomes payable to the payee or
beneficiary by reason of the payee or beneficiary surviving the original
party or trustee. “Party” includes a guardian, conservator, personal
representative or assignee, including an attaching creditor, of a party.
“Party” also includes a person identified as a trustee of an account,
whether or not a beneficiary is named, but does not include any named
beneficiary unless the named beneficiary has a present right of
withdrawal.
(7) “Payment” of sums on deposit includes withdrawal, payment on
check or other directive of a party, any pledge of sums on deposit by a
party and any setoff, deduction or other disposition of all or part of an
account pursuant to a pledge.
(8) “P.O.D. account” means an account payable on request:
(a) To one person during the lifetime of the person and upon the
death of the person to one or more P.O.D. payees; or
(b) To one or more persons during their lifetimes and upon the
death of all of them to one or more P.O.D. payees.
(9) “P.O.D. payee” means a person designated on a P.O.D. account as
the person to whom the account is payable on request after the death of
one or more persons.
(10) “Request” means a proper request for withdrawal, or a check or
order for payment, that complies with all conditions of the account,
including special requirements concerning necessary signatures and
regulations of the credit union. If the credit union conditions
withdrawal or payment on advance notice, for purposes of ORS 723.474 to
723.498, the request for withdrawal or payment is treated as immediately
effective and a notice of intent to withdraw is treated as a request for
withdrawal.
(11) “Sums on deposit” means the balance payable on a
multiple-party account including interest, dividends and any deposit life
insurance proceeds added to the account by reason of the death of a party.
(12) “Trust account” means an account in the name of one or more
parties as trustee for one or more beneficiaries where the relationship
is established by the form of the account and the deposit agreement with
the credit union, and there is no subject of the trust other than the
sums on deposit in the account. It is not essential that payment to the
beneficiary be mentioned in the deposit agreement. A trust account does
not include a regular trust account under a testamentary trust, a trust
agreement that has significance apart from the account, or a fiduciary
account arising from a fiduciary relationship such as attorney-client.
(13) “Withdrawal” includes payment to a third person pursuant to
check or other directive of a party. [1999 c.185 §25]The provisions of ORS 723.478,
723.480 and 723.482 concerning beneficial ownership between parties or
between parties and P.O.D. payees or beneficiaries of multiple-party
accounts are relevant only to controversies between those persons and
their creditors and other successors, and have no bearing on the power of
withdrawal of those persons as determined by the terms of account
contracts. The provisions of ORS 723.486 to 723.496 govern the liability
of credit unions that make payments pursuant thereto, and their setoff
rights. [1999 c.185 §26] (1) A joint account
belongs, during the lifetime of all parties, to the parties in proportion
to the net contributions by each party to the sums on deposit, unless
there is clear and convincing evidence of a different intent.
(2) A P.O.D. account belongs to the original party during the
lifetime of the party and not to the P.O.D. payee or payees. If two or
more persons are named as original parties, during their lifetimes,
rights between them are governed by subsection (1) of this section.
(3) Unless a contrary intent is manifested by the terms of the
account or the deposit agreement, or there is other clear and convincing
evidence of an irrevocable trust, a trust account belongs beneficially to
the trustee during the lifetime of the trustee. If two or more parties
are named as trustees of the account, during their lifetimes, beneficial
rights between them are governed by subsection (1) of this section. If
there is an irrevocable trust, the account belongs beneficially to the
beneficiary. [1999 c.185 §27](1) Sums remaining on deposit at a
credit union at the death of a party to a joint account are rebuttably
presumed to belong to the surviving party or parties against the estate
of the decedent. If there are two or more surviving parties, their
respective ownerships during their lifetimes shall be in proportion to
their previous ownership interests under ORS 723.478, augmented by an
equal share for each survivor of any interest the decedent may have owned
in the account immediately before death. The right of survivorship
continues between the surviving parties.
(2) If the account is a P.O.D. account:
(a) Upon the death of one of two or more original parties, the
rights to any sums remaining on deposit are governed by subsection (1) of
this section.
(b) Upon the death of the sole original party or the survivor of
two or more original parties, any sums remaining on deposit belong to the
P.O.D. payee or payees, if surviving, or to the survivor of them if one
or more die before the original party. If two or more P.O.D. payees
survive, there is no right of survivorship in the event of death of a
P.O.D. payee thereafter unless the terms of the account or deposit
agreement expressly provide for survivorship between them.
(3) If the account is a trust account:
(a) Upon the death of one of two or more trustees, the rights to
any sums remaining on deposit are governed by subsection (1) of this
section.
(b) Upon the death of the sole trustee or the survivor of two or
more trustees, any sums remaining on deposit belong to the person or
persons named as beneficiaries, if surviving, or to the survivor of them
if one or more die before the trustee, unless there is clear and
convincing evidence of a contrary intent. If two or more beneficiaries
survive, there is no right of survivorship in the event of death of any
beneficiary thereafter unless the terms of the account or deposit
agreement expressly provide for survivorship between them.
(4) In other cases, the death of any party to a multiple-party
account has no effect on beneficial ownership of the account, other than
to transfer the rights of the decedent as part of the estate of the
decedent.
(5) A right of survivorship arising under this section or from the
express terms of the account, a beneficiary designation in a trust
account or a P.O.D. payee designation cannot be changed by will.
(6) The rebuttable presumption under subsection (1) of this section
may be overcome by evidence establishing that:
(a) The deceased party intended a different result; or
(b) The deceased party lacked capacity when the joint account was
established.
(7) A credit union is not liable for distributing sums remaining on
deposit at the death of a party to a joint account to a surviving party
or parties in accordance with the account agreement unless, prior to
distributing sums to a surviving party or parties:
(a) The credit union has received notice of an adverse claim under
ORS 723.468; and
(b) The adverse claimant proceeds as required under ORS 723.468.
[1999 c.185 §28; 2003 c.256 §2]The provisions of ORS 723.480 that apply to rights of
survivorship are determined by the form of the account at the time of
death of a party. Subject to satisfaction of the requirements of the
credit union, the form of an account may be altered by a written order
given by a party to the credit union. The order must be signed by the
party, be received by the credit union during the party’s lifetime, and
not be countermanded by other written order of the same party during the
lifetime of the party. [1999 c.185 §29]Any transfers resulting from the
application of ORS 723.480 are effective by reason of the account
contracts involved and application of ORS 723.480. The transfers are not
to be considered as testamentary or subject to administration in the
estate of a deceased party. [1999 c.185 §30]Credit unions may enter into multiple-party accounts to the same
extent that they may enter into single-party accounts. Any multiple-party
account may be paid, on request, to any one or more of the parties. For
purposes of establishing net contributions a credit union shall not be
required to inquire about the source of funds received for deposit to a
multiple-party account, or to inquire about the proposed application of
any sum withdrawn from an account. [1999 c.185 §31]Any sums in a joint account may be paid, on request, to any party
without regard to whether any other party is incapacitated or deceased at
the time the payment is requested. Payment may not be made to the
personal representative or heirs of a deceased party unless:
(1) Proof of death is presented to the credit union, showing that
the decedent was the last surviving party; or
(2) There is no right of survivorship under ORS 723.480. [1999
c.185 §32] account; payment to any original party; payment to
others. Any P.O.D. account may be paid, on request, to any original party
to the account. Payment may be made, on request, to the P.O.D. payee or
to the personal representative or heirs of a deceased P.O.D. payee upon
presentation to the credit union of proof of death showing that the
P.O.D. payee survived all persons named as original parties. Payment may
be made to the personal representative or heirs of a deceased original
party if proof of death is presented to the credit union showing that the
decedent was the survivor of all other persons named on the account
either as an original party or as a P.O.D. payee. [1999 c.185 §33] Any
trust account may be paid, on request, to any trustee. Unless the credit
union has received written notice that the beneficiary has a vested
interest not dependent upon the beneficiary surviving the trustee,
payment may be made to the personal representative or heirs of a deceased
trustee if proof of death is presented to the credit union showing that
the decedent survived all other persons named on the account as either
trustee or beneficiary. Payment may be made, on request, to the
beneficiary upon presentation to the credit union of proof of death
showing that the beneficiary or beneficiaries survived all persons named
as trustees. [1999 c.185 §34]
Payment made pursuant to ORS 723.486, 723.488, 723.490 or 723.492
discharges the credit union from all claims for amounts paid, whether or
not the payment is consistent with the beneficial ownership of the
account between parties, P.O.D. payees or beneficiaries, or their
successors. The protection given by this section does not extend to
payments made after a credit union has received written notice from any
party able to request present payment that states that withdrawals in
accordance with the terms of the account should not be permitted. Unless
the notice is withdrawn by the person giving it, the successor of any
deceased party must concur in any demand for withdrawal if the credit
union is to be protected under this section. No other notice or any other
information shown to have been available to a credit union shall affect
its right to the protection provided by this section. The protection
provided by this section shall have no bearing on the rights of parties
in disputes between themselves or their successors concerning the
beneficial ownership of funds in or withdrawn from multiple-party
accounts. [1999 c.185 §35] Without qualifying
any other statutory or common law right to setoff or lien, and subject to
any contractual provision, if a party to a multiple-party account is
indebted to a credit union, the credit union has a right to setoff
against the account in which the party has or had immediately before the
death of the party a present right of withdrawal. The amount of the
account subject to setoff is that proportion to which the debtor is, or
was immediately before the death of the debtor, beneficially entitled
and, in the absence of proof of net contributions, to an equal share with
all parties having present rights of withdrawal. [1999 c.185 §36] Nothing
in ORS 723.426, 723.432, 723.474, 723.476 or 723.478 shall preclude a
party to an account from adding the name of another person to the account
with the designation of “agent.” The agent shall have no present or
future interest in the sums on deposit in the account, but the credit
union may honor requests for payment from the accounts by the agent,
unless the principal is deceased at the time the payment is requested and
the credit union has actual knowledge of the death. Payments from the
account by the credit union at the request of the agent shall discharge
the credit union from all claims for amounts so paid. [1999 c.185 §37]LOANS A credit union may loan to members for
such purpose and upon such security and terms as the credit committee,
credit manager or loan officer approves. [1975 c.652 §52; 1981 c.412 §8] Every application for a loan shall be made in
the form prescribed by the credit committee, credit manager or loan
officer. The application shall state the security, if any offered. Each
loan shall be evidenced by a written document. [1975 c.652 §53; 1991
c.635 §14] (1) No loan shall be made to any
member in an aggregate amount in excess of $15,000, or 15 percent of the
credit union’s equity, whichever is greater. In determining the amount of
loans to be made to a member, loans for which that member is a guarantor
or surety shall be included, as well as loans to persons who are not
individuals if the individual member is a principal or owner of the
person who is not an individual or the loan is for that member’s benefit.
(2) The restrictions in subsection (1) of this section do not apply
to any loan fully guaranteed by shares or deposits. [1975 c.652 §54; 1977
c.628 §3; 1979 c.88 §34; 1987 c.650 §8; 1995 c.319 §8; 1999 c.185 §42] A member may receive a loan in installments,
or in one sum, and may pay the whole or any part of the member’s loan on
any day on which the office of the credit union is open for business.
[1975 c.652 §55] The credit committee, credit manager, or
loan officer may approve in advance upon their own motion or upon
application by a member, a line of credit, and advances may be granted to
such member within the limit of such extension of credit. Where a line of
credit has been approved, no additional loan applications are required as
long as the aggregate obligation does not exceed the limit of such
extension of credit. [1975 c.652 §56; 1987 c.286 §8] (1) Loans to credit union members may
be shared with other credit unions, corporations or financial
organizations.
(2) A credit union may participate in guaranteed loan programs of
the federal government, the State of Oregon or any other state.
(3) A credit union may purchase the conditional sales contracts,
notes and similar instruments of its members.
(4) A credit union may purchase the leases of its members if the
leases satisfy the requirements of ORS 723.152 (9). [1975 c.652 §57; 1999
c.185 §43] (1) For the
purposes of this section, “management team” means any individual who
holds a position of vice president or higher or who has policymaking
authority.
(2) A credit union may make loans to its individual directors,
members of its management team, credit managers and members of its
supervisory and credit committees, provided that:
(a) The loan complies with all lawful requirements under this
chapter with respect to loans to other borrowers and is not on terms more
favorable than those extended to other borrowers;
(b) The combined aggregate amount of loans to any one such
individual that exceeds five percent of the credit union’s equity or
$25,000, whichever is less, has been approved by the credit union’s board
of directors; and
(c) The combined aggregate amount of such loans to all such
individuals may not exceed 10 percent of the credit union’s assets.
(3) Except when approved by the board of directors of the credit
union, no director, officer or committee member shall be permitted to
become surety or guarantor for any loan or advance made by the credit
union except for the spouse or children of the director, officer or
committee member.
(4) The Director of the Department of Consumer and Business
Services may waive the requirements of this section by rule or order upon
request of a credit union. The director may establish by rule a higher
amount than set in subsection (2)(b) of this section and the type of
loans to directors, officers or committee members that must be approved
by the board of directors of the credit union. [1975 c.652 §58; 1985
c.206 §2; 1985 c.762 §98; 1987 c.286 §9; 1997 c.832 §7; 1999 c.185 §44] Any officer,
director or member of a committee of a credit union who knowingly permits
a loan to be made or participates in a loan to a nonmember of the credit
union shall be primarily liable to the credit union for the amount thus
illegally loaned. The illegality of such loan shall be no defense in any
action by the credit union to recover the amount loaned. [1975 c.652 §59]INSURANCE AND GROUP PURCHASING (1) A credit union may purchase or
make available life savings, loan protection and other forms of insurance
for its members in amounts related to their respective ages, shares,
deposits or loan balances or to any combination of them.
(2) A credit union may enter into cooperative marketing
arrangements to facilitate its members’ voluntary purchases of insurance.
[1975 c.652 §60; 1999 c.185 §45]A credit union may purchase and maintain insurance on behalf of
any person who is or was a director, officer, employee or agent of the
credit union, or who is or was serving at the request of the credit union
as a director, officer, employee or agent of another corporation,
partnership, joint venture, trust or other enterprise against any
liability asserted against such person and incurred by such person in any
such capacity or arising out of such person’s status as such, whether or
not the credit union would have the power to indemnify such person
against such liability. [1975 c.652 §61] (1) Each credit union shall
secure insurance on shares and deposits from the National Credit Union
Administration under the Federal Credit Union Act or its successor, or
from any other insuring organization that provides comparable coverages
and is approved by the Director of the Department of Consumer and
Business Services. Any one share of a member, as designated in the bylaws
of the credit union, may be excluded from the requirement for insurance.
(2) The director may make available condition and examination
reports to the appropriate insuring organization and may accept any
report of examination made by such organization. The director may appoint
the appropriate insuring organization as liquidating agent of an insured
credit union. [1975 c.652 §62; 1977 c.549 §1; 1985 c.801 §9; 1987 c.286
§10; 1999 c.185 §46] A credit union may enter into cooperative
marketing arrangements to facilitate its members’ voluntary purchases of
such goods and services as are in the interest of improving economic and
social conditions of the members. Said investment shall not exceed one
percent of the credit union’s assets. Notwithstanding any other provision
of law, the taxable income from such activities which are conducted by
the credit union shall be subject to tax pursuant to ORS 317.920. [1975
c.652 §63; 1983 c.162 §56; 1999 c.185 §47]INVESTMENTS Funds not used in loans to
members may be invested:
(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 agency thereof or in any trust or trusts established directly or
collectively in the same.
(2) In obligations of any 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 political subdivision thereof.
(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 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.
(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) 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 total
amount not exceeding one percent of the shares, deposits, and surplus of
the credit union.
(8) In loans to any credit union association or corporation,
national or state, of which the credit union is a member, except that
such investments shall be limited to two percent of the assets of the
credit union.
(9) In such other investments as approved by the Director of the
Department of Consumer and Business Services by rule or order. [1975
c.652 §64; 1987 c.286 §11; 1999 c.185 §48; 2005 c.95 §9]RESERVE ALLOCATIONS (1) A
credit union shall establish and maintain a regular reserve for
contingencies. The Director of the Department of Consumer and Business
Services may adopt rules prescribing:
(a) Minimum net worth requirements for credit unions; and
(b) Actions to be taken by a credit union when the net worth of the
credit union falls below the applicable minimum net worth requirement.
(2) In addition to the regular reserve required in subsection (1)
of this section, a credit union shall establish a reserve for loan
losses. The credit union shall allocate sufficient funds each month to
the reserve for loan losses to maintain the reserve for loan losses in an
amount at least equal to the credit union’s best estimate of the losses
the credit union expects to sustain in the liquidation of currently
outstanding loans. [1981 c.192 §38 (enacted in lieu of 723.632); 1995
c.319 §3; 2005 c.95 §10] (1) Subject to subsection (2)
of this section, the board of directors of a credit union may authorize
losses to be charged to the regular reserve after first depleting the
balance of the undivided earnings account and other appropriations of
undivided earnings designated by the management of the credit union or by
the regulatory authorities.
(2) An authorization may be made under subsection (1) of this
section only if the charge will not cause the net worth of the credit
union to fall below any minimum net worth requirement prescribed by the
Director of the Department of Consumer and Business Services under ORS
723.631. The authorization must state the amount charged to the regular
reserve and include an explanation of the need for the charge.
(3) Upon application of a credit union, the director may approve a
charge to the regular reserve that will cause the net worth of the credit
union to fall below any minimum net worth requirement prescribed by the
director under ORS 723.631. [1975 c.652 §66; 1981 c.192 §39; 1999 c.185
§49; 2005 c.95 §11] (1) In addition to the regular
reserve established under ORS 723.631, special reserves to protect the
interest of members shall be established, as provided in this section:
(a) When required by rule; or
(b) When found by the board of directors of the credit union or by
the Director of the Department of Consumer and Business Services, or if
the members’ accounts are insured by the National Credit Union
Administration, the Administrator of the National Credit Union
Administration, in any special case, to be necessary for that purpose.
(2) Special reserves belong to the credit union and shall be used
to provide liquidity for the credit union. A credit union may not pay
regular or special dividends from the special reserve. [1975 c.652 §68;
1981 c.192 §40; 1995 c.319 §4]CHANGE IN CORPORATE STATUS (1) If it appears that
any credit union is bankrupt or insolvent, or that it has willfully
violated any provision of this chapter, or is operating in an unsafe or
unsound manner, the Director of the Department of Consumer and Business
Services shall issue an order temporarily suspending the credit union’s
operations for not less than 30 nor more than 60 days. The board of
directors shall be given notice by registered mail or by certified mail
with return receipt of such suspension, and a list of the specific
violations of this chapter.
(2) Upon receipt of the suspension notice, the credit union shall
cease all operations, except those authorized by the director. The board
of directors shall then file with the director a reply to the suspension
notice, and may request a hearing to present a plan of corrective actions
proposed if it desires to continue operations. The board may request that
the credit union be declared insolvent and a liquidating agent be
appointed.
(3) Upon receipt from the suspended credit union of evidence that
the conditions causing the order of suspension have been corrected, the
director may revoke the suspension notice and permit the credit union to
resume normal operations.
(4) If the director, after issuing notice of suspension and
providing an opportunity for a hearing, rejects the credit union’s plan
to continue operations, the director may then revoke the credit union’s
charter, appoint a liquidating agent and liquidate the credit union. The
credit union may request the appropriate court to stay execution of such
action. Involuntary liquidation may not be ordered prior to the
conclusion of suspension procedures outlined in this section.
(5) If, within the suspension period, the credit union fails to
answer the suspension notice or request a hearing, the director may then
revoke the credit union’s charter, appoint a liquidating agent and
liquidate the credit union. [1975 c.652 §69; 1985 c.762 §99; 1991 c.249
§68] (1) A credit union may elect to dissolve
voluntarily and liquidate its affairs in the manner prescribed in this
section.
(2) The board of directors shall adopt a resolution recommending
the credit union be dissolved voluntarily and directing that the question
of liquidation be submitted to the members.
(3) Within 10 days after the board of directors decides to submit
the question of liquidation to the members, the president or chairperson
of the board shall notify the Director of the Department of Consumer and
Business Services thereof in writing setting forth the reasons for the
proposed action. Within 10 days after the members act on the question of
liquidation, the president or chairperson of the board shall notify the
director in writing as to whether or not the members approved the
proposed liquidation.
(4) As soon as the board of directors decides to submit the
question of liquidation to the members, payment on shares, withdrawal of
shares, making any transfer of shares to loans and interest, making
investments of any kind and granting loans shall be suspended pending
action by members on the proposal to liquidate. On approval by the
members of such proposal, all such business transactions shall be
permanently discontinued. Necessary expenses of operation shall, however,
continue to be paid on authorization of the board of directors or
liquidating agent during the period of liquidation.
(5) For a credit union to enter voluntary liquidation, approval by
a majority of the members in writing or by a two-thirds majority of the
members present at a regular or special meeting of the members is
required. Where authorization for liquidation is to be obtained at a
meeting of the members, notice in writing shall be given to each member
by first class mail to the member’s last-known address at least 10 days
prior to such meeting.
(6) A liquidating credit union shall continue in existence for the
purpose of discharging its debts, collecting and distributing its assets
and doing all acts required in order to wind up its business and may sue
and be sued for the purpose of enforcing such debts and obligations until
its affairs are fully adjusted.
(7) The board of directors or the liquidating agent shall use the
assets of the credit union to pay: First, expenses incidental to
liquidating including any surety bond that may be required; and, second,
any liability due nonmembers. Assets then remaining shall be distributed
to the members proportionately to the shares and deposits held by each
member as of the date dissolution was voted.
(8) As soon as the board of directors or the liquidating agent
determines that all assets from which there is a reasonable expectancy of
realization have been liquidated and distributed as set forth in this
section, they shall execute a certificate of dissolution on a form
prescribed by the director and file the same, together with all pertinent
books and records of the liquidating credit union, with the director,
whereupon such credit union shall be dissolved. [1975 c.652 §70; 1999
c.185 §50] (1) Any 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 plan agreed upon by the
majority of each board of directors of each credit union joining in the
merger and 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.
(2) After agreement by the directors and approval by the members of
the merging credit union, 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 plan was agreed upon.
(b) The vote in favor of the adoption of the plan.
(c) A copy of the resolution or other action by which the plan was
agreed upon.
(d) The time and place of the meeting of the members at which the
plan agreed upon was approved.
(e) The vote by which the plan was approved by the members.
(3) The certificate and a copy of the plan of merger agreed upon
shall 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 the director, 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 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.
[1975 c.652 §71; 1999 c.185 §51] (1) A credit union chartered under
the laws of this state may be converted to a credit union chartered under
the laws of the United States, subject to the approval of the National
Credit Union Administration.
(2) A credit union chartered under the laws of the United States
may convert to a credit union chartered under the laws of this state
subject to approval of the Director of the Department of Consumer and
Business Services. [1975 c.652 §72; 1987 c.286 §12]CENTRAL CREDIT UNIONS Any central credit union may be
organized and operated under this chapter with all the rights and powers
of any credit union organized under this chapter, except those granted to
a corporate central credit union under ORS 723.730, and shall be subject
to all provisions of this chapter not inconsistent with ORS 723.702 to
723.730. Such a credit union shall use the term “central” in its official
name. [1975 c.652 §73; 1985 c.762 §100; 1999 c.185 §52] Membership in a central credit union is limited
to:
(1) Credit unions organized and operating under this chapter or
under any other credit union act.
(2) Officers, directors, committee members and employees of such
credit unions; officials and employees of any association of credit
unions; and employees of federal or state governmental agencies
responsible for the supervision of credit unions in this state.
(3) Organizations and associations of those persons or
organizations enumerated in subsection (1) or (2) of this section.
(4) Employees of an employer with insufficient numbers to form or
conduct the affairs of a credit union that would provide substantially
similar services and facilities.
(5) Persons in the field of membership of liquidated credit unions
or of credit unions that have entered into or are about to enter into
voluntary or involuntary liquidation proceedings.
(6) Members of the immediate families of all members qualified
above. [1975 c.652 §74; 1985 c.762 §101; 1999 c.185 §53] Each credit union becoming a member
of such central credit union may designate one person to be its voting
representative in the central credit union, which person shall be
designated by the board of directors of the member credit union. Such
voting representative shall be eligible to hold office in the central
credit union as if such person were a member of the central credit union.
[1975 c.652 §75] (1) A central credit union
shall have all of the rights and powers of any other credit union
organized under this chapter and the additional rights and powers
specified in this section, notwithstanding any limitations or
restrictions found elsewhere in this chapter.
(2) A central credit union may make loans to other credit unions,
purchase shares of and make deposits in other credit unions and, with the
approval of the director, obtain or acquire the assets and liabilities of
any credit union operating in this state that enters into liquidation.
(3) A central credit union may invest in and grant loans to
associations of credit unions, central funds of credit unions or
organizations chartered to provide service to credit unions.
(4) A central credit union may borrow money from any source. It may
also issue debentures pursuant to a plan approved by the director. The
debentures must be subordinate to the deposits and shares of the credit
union. [1975 c.652 §76; 1985 c.762 §102]CORPORATE CENTRAL CREDIT UNIONMembership in a corporate central credit union shall be
limited to credit unions organized under federal law or under the laws of
states listed in the bylaws of the corporate central credit union, and to
subsidiaries of any such credit unions, associations of any such credit
unions and affiliates of such associations. A corporate central credit
union shall have all the powers, rights and obligations imposed upon or
granted central credit unions under this chapter, except:
(1) It shall be exempt from the regular reserve requirements of ORS
723.631, but shall be required to establish and maintain a minimum
capital to assets ratio as set by the Director of the Department of
Consumer and Business Services by rule.
(2) It shall be exempt from the bond or letter of credit
requirements of ORS 723.122, but shall be required to obtain and maintain
a fidelity bond in accordance with any rules adopted by the director.
(3) It may buy and sell any form of marketable debt obligations of
domestic corporations or of federal, state or local government units in
accordance with an investment plan approved by the director prior to the
purchase or sale of the obligation.
(4) A corporate central credit union may make loans or establish
lines of credit to a member without regard to the limit set in ORS
723.512. Notwithstanding ORS 723.502 or any other provision of law
limiting allowable interest on a loan, a corporate central credit union
and a member may agree in writing on the rate of interest that shall be
charged on such loans.
(5) A corporate central credit union may issue membership capital
share accounts as provided by rule. [1977 c.628 §2; 1981 c.192 §41; 1981
c.256 §1; 1985 c.206 §3; 1995 c.319 §6; 1997 c.832 §8; 1999 c.185 §54]TAXATION Any credit
union subject to this chapter shall be deemed an institution for savings
within the meaning of the law that exempts such institutions from
taxation. No law, except as stated in this section, that taxes
corporations in any form, or the shares thereof or the accumulations
therein, shall apply to credit unions doing business in accordance with
this chapter unless the credit unions are specifically named in the law.
However, credit unions subject to this chapter shall be subject to the
same tax as mutual savings and loan associations. [1975 c.652 §77; 1985
c.762 §103] The shares of any credit union shall
not be subject to stock transfer taxes, either when issued or when
transferred from one member to another. [1975 c.652 §78] The participation by
a credit union in any government program providing unemployment, Social
Security, old age pension or other benefits shall not be deemed a waiver
of the taxation exemption hereby granted. [1975 c.652 §79]MISCELLANEOUSIf the Director of the Department of
Consumer and Business Services has reason to believe that a person has
violated any provision of the Oregon Credit Union Act for which criminal
prosecution is provided, the director shall give the information relative
to the violation to the federal, state or local law enforcement agency
having jurisdiction of the violation. This section does not apply,
however, if an official of the credit union has reported the information
to the proper law enforcement officer under ORS 723.338. [1975 c.652 §81;
1979 c.88 §36] The Attorney General shall conduct all
actions begun by the Director of the Department of Consumer and Business
Services under authority of the Oregon Credit Union Act, and may require
the assistance of the district attorney of the district in which the
action is conducted. [1975 c.652 §82] (1) No credit union officer, director,
employee or agent, shall willfully:
(a) With intent to deceive, falsify any book of account, report,
statement, record or other document of a credit union whether by
alteration, false entry, omission or otherwise.
(b) Sign, issue, publish or transmit to a governmental office any
book of account, report, statement, record or other document which the
person knows to be false.
(c) By means of deceit, obtain a signature to a writing which is a
subject of forgery.
(d) With intent to deceive, destroy any credit union book of
account, report, statement, record or other document.
(2) No person shall maliciously and knowingly spread false reports
about the management or finances of any credit union. [1975 c.652 §83] A
person may not knowingly give or cause to be given to the Director of the
Department of Consumer and Business Services any document or any oral or
written statement or report that is false in any material respect, in the
course of any investigation or examination by the director under this
chapter. [1987 c.215 §7](1) The Director of the Department of Consumer and
Business Services may issue and serve upon a credit union or a director,
officer, committee member, employee or agent of a credit union an order
to cease and desist from a practice or a violation as follows:
(a) The director may issue an order to cease and desist from an
unsafe or unsound practice when the director has reasonable cause to
believe that the person to whom the order is directed is engaging, has
engaged or is about to engage in an unsafe or unsound practice in
conducting the business of the credit union.
(b) The director may issue an order to cease and desist from a
violation when the director has reasonable cause to believe that the
person to whom the order is directed is violating, has violated or is
about to violate a law or rule, an order of the director or any provision
of the articles of incorporation or bylaws of the credit union.
(2) An order under subsection (1) of this section shall include the
following:
(a) A statement of the facts constituting the practice or violation.
(b) A provision requiring the person named in the order to cease
and desist from the practice or violation. The provision may be mandatory
or otherwise.
(c) The effective date of the order.
(d) A notice to the person named in the order of the right to a
contested case hearing under ORS chapter 183.
(3) When the practice or violation specified in the order or the
continuation of the practice or violation is likely to prejudice the
interest of the members of a credit union, the director may issue an
order effective immediately or at a later date. In all other cases, the
order shall be effective 30 days after the date of the order unless the
person named in the order requests a hearing thereon.
(4) An order under this section remains in effect until it is
withdrawn by the director or by a court order.
(5) If an individual named in an order under this section fails to
comply with the order, the director may issue an order removing or
suspending the individual from the office or position held by the
individual. The removal or suspension is in addition to any penalty
provided by ORS 723.995 for failure to comply with an order issued under
this section. [1975 c.544 §56; 1977 c.135 §46; 1987 c.215 §8; 1987 c.286
§13] A credit
union may not contract for any of the services described in this section
to be performed for the credit union unless both the credit union and the
person performing the services agree to be subject to regulation and
examination by the Director of the Department of Consumer and Business
Services to the same extent as if the services were performed by the
credit union. This section applies to the following services:
(1) Check and deposit sorting and posting.
(2) Computation and posting of interest and other credits and
charges.
(3) Any other bookkeeping, accounting or similar functions
performed for a credit union. [1987 c.650 §9; 1997 c.832 §9]The provisions of the Oregon Credit Union Act shall apply to the
fullest extent permitted by the laws and Constitutions of the United
States and of the State of Oregon, to all existing credit unions
organized under any general Act of this state. [1975 c.652 §85]
(1) The Oregon Credit Union Act may be amended, repealed or modified, but
such amendment, repeal or modification shall not take away or impair any
remedy for any liability which shall have been previously incurred.
(2) The repeal of a previous law by section 88, chapter 652, Oregon
Laws 1975, shall not affect any right accrued or established, or any
liability or penalty incurred, under the provisions of such previous law,
A person may not be held personally liable for an act or
omission by the person in good faith and in compliance with a statute,
rule or order of the Director of the Department of Consumer and Business
Services under this chapter regardless of whether the statute, rule or
order is later amended, rescinded or determined to be invalid by judicial
or other authority. [1999 c.185 §38](1) This
section applies to the safe deposit box of any person who is the sole
lessee or last surviving lessee of the box and who has died.
(2) Upon being furnished with a certified copy of the decedent’s
death certificate or other evidence of death satisfactory to the credit
union, the credit union within which the box is located shall cause or
permit the box to be opened and the contents of the box examined at the
request of an individual who furnishes an affidavit stating:
(a) That the individual believes the box may contain the will of
the decedent, a trust instrument creating a trust of which the decedent
was a trustor or a trustee at the time of the decedent’s death, documents
pertaining to the disposition of the remains of the decedent, documents
pertaining to property of the estate of the decedent or property of the
estate of the decedent; and
(b) That the individual is an interested person as defined in this
section and wishes to open the box to conduct a will search or trust
instrument search, obtain documents relating to the disposition of the
decedent’s remains or inventory the contents of the box.
(3) For the purpose of this section, “interested person” means any
of the following:
(a) A person named as personal representative of the decedent in a
purported will of the decedent;
(b) The surviving spouse or any heir of the decedent;
(c) A person who was serving as the court-appointed guardian or
conservator of the decedent or as trustee for the decedent immediately
prior to the decedent’s death;
(d) A person named as successor trustee in a purported trust
instrument creating a trust of which the decedent was a trustor or a
trustee at the time of the decedent’s death;
(e) A person designated by the decedent in a writing that is
acceptable to the credit union and is filed with it prior to the
decedent’s death;
(f) A person who immediately prior to the death of the decedent had
the right of access to the box as an agent of the decedent under a
durable power of attorney; or
(g) If there are no heirs of the decedent, an estate administrator
of the Department of State Lands appointed under ORS 113.235.
(4) If the box is opened for the purpose of conducting a will
search, the credit union shall remove any document that appears to be a
will, make a true and correct copy of it and deliver the original will to
a person designated in the will to serve as the decedent’s personal
representative, or if no such person is designated or the credit union
cannot, despite reasonable efforts, determine the whereabouts of such
person, the credit union shall retain the will or deliver it to a court
having jurisdiction of the estate of the decedent. A copy of the will
shall be retained in the box. At the request of the interested person, a
copy of the will, together with copies of any documents pertaining to the
disposition of the remains of the decedent, may be given to the
interested person.
(5) If the box is opened for the purpose of conducting a trust
instrument search, the credit union shall remove any document that
appears to be a trust instrument creating a trust of which the decedent
was a trustor or trustee at the time of the decedent’s death, make a true
and correct copy of it and deliver the original trust instrument to a
person designated in the trust instrument to serve as the successor
trustee on the death of the decedent. If no such person is designated or
the credit union cannot, despite reasonable efforts, determine the
whereabouts of such person, the credit union shall retain the trust
instrument. A copy of the trust instrument shall be retained in the box.
At the request of any interested person, a copy of the trust instrument
may be given to the interested person.
(6) If the box is opened for the purpose of obtaining documents
pertaining to the disposition of the decedent’s remains, the credit union
shall comply with subsection (4) of this section with respect to any will
of the decedent found in the box, and may in its discretion either:
(a) Make and retain in the box a copy of any documents pertaining
to the disposition of the remains of the decedent and tender the original
documents to the interested person; or
(b) Provide a copy of any documents pertaining to the disposition
of the remains of the decedent to the interested person and retain the
original documents in the box.
(7) If the box is opened for the purpose of making an inventory of
its contents, the credit union shall comply with subsection (4) or (5) of
this section with respect to any will or trust instrument of the decedent
that is found in the box, and shall cause the inventory to be made. The
inventory shall be attested to by a representative of the credit union
and may be attested to by the interested person, if the interested person
is present when the inventory is made. The credit union shall retain the
original inventory in the box, and shall furnish a copy of the inventory
to the interested person upon request.
(8) The credit union may presume the truth of any statement
contained in the affidavit required to be furnished under this section,
and when acting in reliance upon such an affidavit, the credit union is
discharged as if it had dealt with the personal representative of the
decedent. The credit union is not responsible for the adequacy of the
description of any property included in an inventory of the contents of a
box, or for the conversion of the property in connection with actions
performed under this section, except for conversion by intentional acts
of the credit union or its employees, directors, officers or agents. If
the credit union is not satisfied that the requirements of this section
have been satisfied, the credit union may decline to open the box.
(9) If the interested person does not furnish the key needed to
open the box, and the credit union must incur expense in gaining entry to
the box, the credit union may require that the interested person pay the
expense of opening the box.
(10) Any examination of the contents of a box under this section
shall be conducted in the presence of at least one employee of the credit
union. [1999 c.506 §11; 2003 c.395 §25]PENALTIES(1) Violation of ORS 723.816 (1) is a
Class C felony.
(2) Violation of ORS 723.816 (2) is a Class A misdemeanor. [1975
c.652 §84] (1) The Director of the Department of
Consumer and Business Services may assess any person who violates any
provision of this chapter or any rule or final order issued under this
chapter a civil penalty of not more than $2,000 for each violation or
$10,000 in the aggregate for all violations within any three-month
period. In the case of an individual agent or employee of a credit union,
the civil penalty shall be not more than $1,000 for each violation or
$5,000 in the aggregate for all violations within any three-month period.
The director shall count each day that a violation continues as a
separate violation.
(2) In addition to the civil penalty provided by subsection (1) of
this section, a credit union or a director, officer, committee member,
agent or employee of a credit union who violates any provision of this
chapter, or any rule or final order issued under this chapter, may be
assessed a civil penalty in an amount determined by the director but not
to exceed the amount by which the person profited as a result of the
violation.
(3) Civil penalties under this section shall be imposed as provided
in ORS 183.745.
(4) If a civil penalty is assessed against a director, officer,
committee member, agent or employee of a credit union, unless the
director provides otherwise, the director, officer, committee member,
agent or employee shall forfeit the penalty and the penalty shall not be
paid either directly or indirectly by the credit union.
(5) All moneys collected under this section shall be paid to the
State Treasurer and credited as provided in ORS 705.145. [Formerly
723.826]
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