Bill Text: MI HB5018 | 2015-2016 | 98th Legislature | Engrossed
Bill Title: Financial institutions; credit unions; administration and operation of credit unions; make certain revisions to credit union act. Amends secs. 201, 210, 221, 303, 306 & 341 of 2003 PA 215 (MCL 490.201 et seq.). TIE BAR WITH: HB 5017'15, HB 5019'15, HB 5020'15, HB 5021'15, HB 5022'15
Spectrum: Moderate Partisan Bill (Republican 9-2)
Status: (Passed) 2016-06-09 - Assigned Pa 153'16 With Immediate Effect [HB5018 Detail]
Download: Michigan-2015-HB5018-Engrossed.html
HB-5018, As Passed House, December 9, 2015
SUBSTITUTE FOR
HOUSE BILL NO. 5018
A bill to amend 2003 PA 215, entitled
"Credit union act,"
by amending sections 201, 210, 221, 303, 306, and 341 (MCL 490.201,
490.210, 490.221, 490.303, 490.306, and 490.341), sections 201 and
341 as amended by 2004 PA 471.
THE PEOPLE OF THE STATE OF MICHIGAN ENACT:
Sec.
201. (1) The commissioner director
shall administer the
laws of this state relating to credit unions that are transacting
business
in this state and shall supervise domestic credit unions ,
and foreign credit unions other than federal credit unions that are
transacting business in this state. Each domestic credit union
shall report its financial condition as required by the
commissioner.director.
(2)
The commissioner director shall charge an annual operating
fee to each domestic credit union. All of the following apply to
the annual operating fee:
(a)
Subject to subdivision (d), the commissioner director
shall establish a fee amount that is sufficient to defray the
estimated
expenses of the credit union division of the office of
financial
and insurance services department
in performing all
credit union examinations and the supervision of domestic credit
unions.
(b)
The commissioner director shall invoice each domestic
credit union for the fee before July 1 of each year and each
domestic credit union shall pay the operating fee before July 16 of
that year.
(c)
The commissioner director shall compute the fee based on
the total assets of the domestic credit union on December 31 of the
previous year as shown on the report of the domestic credit union
filed
with the commissioner director
under subsection (1).
(d) The amount of the fee is the greater of $500.00 or the sum
of all of the following:
(i) A base fee established by the commissioner director of
not
less than $1.00 or more than $3.50 per $1,000.00 of assets up to
$500,000.00.
(ii) A fee of 40% of the base fee per $1,000.00 of assets
greater than $500,000.00 up to $1,000,000.00.
(iii) A fee of 30% of the base fee per $1,000.00 of assets
greater than $1,000,000.00 up to $5,000,000.00.
(iv) A fee of 20% of the base fee per $1,000.00 of assets
greater than $5,000,000.00 up to $10,000,000.00.
(v) A fee of 10% of the base fee per $1,000.00 for all assets
greater than $10,000,000.00.
(e)
The commissioner director shall not require a domestic
credit union to pay an operating fee more often than annually.
(3) A corporate credit union organized under this act shall
pay an operating fee in the same manner as other domestic credit
unions, but the fee shall not exceed $50,000.00 annually.
(4) Each domestic credit union shall report its financial
condition
as required by the commissioner. director. A domestic
credit
union that fails to file a report with the commissioner
director when it is due shall pay a fee of $100.00 for each day the
report
is delinquent. The commissioner director
may waive the fee
for
cause. If a delinquency continues for 15 days, the commissioner
director may revoke the domestic credit union's certificate of
approval and take possession of the business and property of the
domestic credit union and maintain possession until the
commissioner
director permits it to continue business or
involuntarily dissolves the credit union under section 331(3).
(5) A domestic credit union that amends its bylaws or
certificate
of organization shall must
file the amendment with the
commissioner.
director. The commissioner director shall
not charge
a fee for reviewing and approving or disapproving of an amendment
under
for purposes of section 303.
(6) A domestic credit union shall make all of its accounts,
books, and records, in whatever form maintained, available for
examination
by the commissioner director
or the commissioner's
director's appointed agent during the normal business hours of the
commissioner.
director. A domestic credit union shall do all of the
following:
(a)
Provide the commissioner director
with a current schedule
of the hours during which the domestic credit union is open.
(b) Designate an individual to provide access to the credit
union records and a substitute for that individual.
(c)
Provide the commissioner director
with the current name,
address, and telephone number of the individual designated in
subdivision
(b) , and of
his or her substitute if the individual is
absent.
(d) If the credit union processes any of its records at any
location other than its principal place of business, provide the
commissioner
director with the current name and address of the
person that processes the records.
(7) As used in subsection (6), "records" includes audit
reports and audit working papers described in section 344 unless
privileged by law.
Sec.
210. (1) If in the opinion of the commissioner director a
domestic credit union is engaging, has engaged, or is about to
engage in an unsafe or unsound practice in conducting the business
of the domestic credit union or is violating, has violated, or is
about
to violate a law or rule, the commissioner director may
issue
and serve upon the domestic credit union a notice of charges. The
notice shall contain a statement of the facts constituting the
alleged unsafe or unsound practice or violation and shall fix a
time
and place for a hearing to determine whether the commissioner
director should issue an order to cease and desist. The hearing
shall
be not earlier than 30 days nor later than held at least 30
and not more than 60 days after service of the notice unless an
earlier
or later date is set by the commissioner director at the
request of the domestic credit union. If the domestic credit union
does not appear at the hearing by a duly authorized representative,
it has consented to the issuance of a cease and desist order.
(2) If a domestic credit union consents to a cease and desist
order
under subsection (1), or if upon on the record made at the
hearing
under subsection (1) the commissioner director finds that
an unsafe or unsound practice or violation specified in the notice
of
charges has occurred, the commissioner director may issue and
serve
upon on the domestic credit union an order to cease and
desist from the practice or violation. The order may require the
domestic credit union and its directors, officers, employees, and
agents to cease and desist from the practice or violation and to
take affirmative action to correct the conditions resulting from
the practice or violation.
(3) A cease and desist order issued after a hearing under
subsection (2) is effective 30 days after the service of the order
upon
on the domestic credit union. A cease and desist order
issued
with the consent of the domestic credit union under subsection (2)
is effective at the time specified in the order. A cease and desist
order is effective and enforceable as provided in the order, except
to the extent it is stayed, modified, terminated, or set aside by
action
of the commissioner director
or a reviewing court.
(4)
If the commissioner director
determines that a foreign
credit
union branch located that
is conducting business in this
state is acting in violation of the laws of this state or that the
activities
of the branch foreign
credit union are being conducted
in
an unsafe and unsound manner, the commissioner director may
take
any enforcement action that would be permitted under this act if
the
branch foreign credit
union were a domestic credit union.
(5)
If the commissioner director
determines that a federal
credit union is acting in violation of the laws of this state, the
commissioner
director shall notify the national credit union
administration
National Credit Union
Administration and the
attorney general.
Sec.
221. (1) The commissioner director
may by order require a
domestic credit union to close its principal place of business or 1
or
more branches if it appears to the commissioner director that
the action is required because an emergency exists. The facilities
closed
shall remain closed until the commissioner director by
order
finds
that the emergency is ended. The commissioner director shall
promptly notify the governor of the issuance of an order under this
section.
(2)
The commissioner director may authorize a domestic credit
union to close on a day designated by the president of the United
States or the governor of this state as a day of national mourning,
rejoicing, or other special observance.
(3)
If the commissioner director
has not issued and does not
issue an order of emergency under subsection (1) and the general
manager or other designated officer of a domestic credit union
determines that an emergency exists, the officer may close the
principal place of business or 1 or more branches of the domestic
credit union until he or she finds that the emergency is ended.
(4) A domestic credit union closing its principal place of
business or 1 or more branches under this section shall give notice
to
the commissioner, director,
and to any other appropriate
governmental entity if required by law.
(5) The period during which the principal place of business of
a domestic credit union is closed under this section is considered
an emergency condition or a legal holiday, and not a banking day,
if the status of the closing as a legal holiday, banking day, or a
response to an emergency is relevant to any legal obligation of the
domestic credit union.
(6) This section does not alter any obligations of a domestic
credit union to its employees or to the employees of another
employer under state or federal law.
Sec. 303. (1) If approved by a majority of the members present
at a duly constituted annual or special meeting of the members, the
membership may amend the certificate of organization or bylaws of a
domestic credit union or delegate authority to the credit union
board, or rescind the authority of the credit union board, to amend
the certificate of organization or bylaws.
(2) Any proposed action to amend the certificate of
organization or the bylaws or to delegate authority to amend the
certificate of organization or bylaws to the credit union board
under subsection (1) shall be stated in a notice of the meeting.
(3) An amendment to the certificate of organization or bylaws
of a domestic credit union is not effective unless it is submitted
to
the commissioner director for review and approved by the
commissioner.director.
Sec.
306. With the prior approval of the commissioner, With
prior written notice to the director, a domestic credit union may
conduct its business solely by mail or through electronic
communication without having a physical location where members may
transact business with the credit union. A domestic credit union
conducting business under this section shall maintain a principal
place of business in this state.
Sec. 341. (1) The organizers shall hold an organizational
meeting of a domestic credit union organized under this act. The
organizational meeting of the domestic credit union is the first
annual meeting of the members required under section 351.
(2)
Each member of the credit union board member of a domestic
credit union shall be a member of the domestic credit union. The
bylaws
shall establish the number of directors, board members, but
a credit union board must consist of 5 or more individuals. A
director
board member shall hold office for the term established in
the bylaws and until a successor takes office.
(3) If the bylaws of a domestic credit union provide for a
credit committee or a supervisory committee, that committee shall
consist of 3 or more individuals and may have alternate committee
members, as established in the bylaws, each of whom is a member of
the domestic credit union. The bylaws shall provide whether the
credit union board may appoint or the members may elect committee
members and their terms of office and the duties of the committee.
Except
as provided in section 345, a current director, board
member, officer, loan officer, credit committee member, or other
employee of the domestic credit union shall not serve on the
supervisory committee.
(4) If the bylaws of a domestic credit union do not provide
for a credit committee or a supervisory committee, the credit union
board shall perform the duties of the credit committee or the
supervisory committee or delegate those duties as it considers
advisable.
(5) A corporate credit union organized under this act shall
have at least 1 member of the credit union board, the supervisory
committee, if any, and the credit committee, if any, who is a
resident of this state.
(6)
A domestic credit union shall provide the commissioner
director with a record of the names and addresses of the members of
the credit union board and the members of the credit and
supervisory committees, if any, within 30 days after their
election.
(7)
If the commissioner director
considers it appropriate, the
commissioner
director may call a meeting of the credit union board,
for any purpose, by giving a notice of the time, place, and purpose
of
the meeting at least 3 days prior to before the meeting to the
directors.
board members. The commissioner director shall
deliver
the
notice to their the board
members' last known addresses as
shown by the books of the domestic credit union.
(8) Each individual elected or appointed to serve as a
director,
board member, supervisory committee member, or credit
committee member of a domestic credit union, or as a member of any
other committee that performs significant ongoing functions
relating to the ongoing operations of the domestic credit union,
shall meet all of the following criteria:
(a) He or she is a member of the domestic credit union, in
good standing according to reasonable criteria established by the
credit union board.
(b) He or she is acceptable as a bonding risk by a bonding
company licensed to do business in this state.
(c)
He or she has not been removed as a director, board
member, officer, committee member, or employee of a financial
institution by a federal regulator, a state regulator other than
the
commissioner, director, or a court of competent jurisdiction.
(d)
The commissioner director has not removed him or her as a
director,
board member, officer, committee member, or employee of a
credit union, financial institution, or other legal entity pursuant
to
the commissioner's director's
enforcement powers under any law
of this state.
(e) He or she has not been convicted within the preceding 20
years of a crime involving dishonesty or breach of trust.
(f) He or she is not habitually negligent in paying his or her
financial obligations as determined by criteria reasonably
established by the credit union board.
(g) He or she has not been convicted by a court of competent
jurisdiction of a violation, or found in violation by a court of
competent
jurisdiction or the commissioner, director, of any law of
this
state enforced or administered by the commissioner.director.
(9) If an individual no longer meets 1 or more of the
requirements
of subsection (8) while serving as a director, board
member, supervisory committee member, or credit committee member of
a domestic credit union, or as a member of any other committee that
performs significant ongoing functions relating to the ongoing
operations of the domestic credit union, he or she is immediately
removed from that office without further action of the members or
credit union board and the domestic credit union shall appoint or
elect a replacement to fill the vacancy in the manner described in
the bylaws.
Enacting section 1. This amendatory act takes effect 90 days
after the date it is enacted into law.
Enacting section 2. This amendatory act does not take effect
unless all of the following bills of the 98th Legislature are
enacted into law:
(a) Senate Bill No.____ (request no. 02768'15) or House Bill
No. 5017.
(b) Senate Bill No.____ (request no. 02771'15) or House Bill
No. 5020.
(c) Senate Bill No.____ (request no. 02772'15) or House Bill
No. 5021.
(d) Senate Bill No.____ (request no. 02773'15) or House Bill
No. 5022.
