Chapter 1301:9-2 General Provisions

1301:9-2-01 Service facilities.

(A) A credit union may, subject to the approval of the superintendent, provide one or more service facilities for the transaction of any credit union business. A set of all accounting records of the service facilities shall be maintained at the home office of the credit union. A service facility may also include a shared service facility.

(B) The credit union shall file with the superintendent a request for approval to establish a new service facility or to relocate an existing facility in writing prior to establishing a new service facility or relocating an existing facility. The superintendent shall notify the credit union not more than thirtydays after the filing of the request for approval to establish a new service facility or relocate an existing facility whether it is denied, approved, or modified. If the superintendent does not respond within thirty days after the filing of the request for approval to establish a new service facility or relocate an existing service facility it shall be deemed approved; unless, the superintendent notifies the credit union in writing within thirty days of the credit union's request being filed that additional documentation is required. If additional documentation is required, the credit union shall have thirty days to file the additional documentation with the superintendent. If the superintendent does not respond within fifteen days of receipt of the additional documentation, the request will be deemed approved. If the service facility includes the purchase of real estate, the notice and approval required for the service facility shall be subject to the provisions of rule 1301:9-2-25 of the Administrative Code.

Effective: 03/22/2012
R.C. 119.032 review dates: 12/29/2011 and 03/22/2017
Promulgated Under: 119.03
Statutory Authority: 1733.41
Rule Amplifies: 1733.04
Prior Effective Dates: 12/31/76, 9/1/79, 2/11/88, 11/1/88, 8/3/93, 7/1/06

1301:9-2-02 Voting by the membership.

(A) Voting by proxy or by mail ballot by members is permitted if a provision for the use thereof and minimum standards are contained in the credit union's code of regulations.

(B) The form of any proxy or mail ballot shall have the prior written approval of the superintendent. If a credit union is using a division approved form of proxy or ballot for an annual meeting regarding the election of directors, then pre-approval is not required. The credit union must send a copy of the proxy or ballot to the superintendent.

(C) Irrespective of whether a vote is accomplished by actual vote, mail ballot, electronic ballot, by proxy, or other means approved by the superintendent, only qualified members may vote. Each qualified member is entitled to one vote on each matter properly submitted to the membership. The credit union may use any identifiable method or code unique to the member that verifies the member's identification to vote. If a member does not have access to an electronic ballot, the member must be provided a paper ballot on request.

(D) At a minimum, the form of the proxy shall provide for the date of execution, name of member, and any identifiable method or code unique to the member that verifies the member's identification to vote; shall, in bold type, indicate whether the proxy is solicited on behalf of management; and shall clearly and impartially identify each matter or group of related matters intended to be acted upon, whether proposed by the management or by shareholders. No appointment of a proxy shall be valid after the expiration of eleven months from the time it is issued.

(E) A proxy may confer discretionary authority to vote with respect to any of the following matters:

(1) Matters of which the persons soliciting the proxy are unaware, provided that a specific statement to that effect is made in the proxy statement or form of proxy.

(2) Approval of the minutes of the prior meeting if such approval does not amount to ratification of the action taken at that meeting.

(3) Matters incidental to the conduct of the meeting.

(F) At a minimum, the form of the mail ballot shall provide for the final date of submission, name of member and any identifiable method or code unique to the member that verifies the member's identification to vote and shall clearly and impartially identify each matter or group of related matters intended to be acted upon, whether proposed by the management or by members.

Effective: 03/22/2012
R.C. 119.032 review dates: 12/29/2011 and 03/22/2017
Promulgated Under: 119.03
Statutory Authority: 1733.41
Rule Amplifies: 1733.13
Prior Effective Dates: 12/31/75, 9/1/79, 2/11/88, 7/1/06

1301:9-2-03 Required bond.

(A) Each credit union shall obtain and maintain a fidelity bond subject to approval of the superintendent. As a minimum, the fidelity bond must provide coverage for the fraud and dishonesty of all employees, directors, officers, and committee members. If a bonding company has submitted a template bond to be approved by the superintendent and such template is approved, a credit union may use this bond without the superintendent's approval provided the bond's provisions have not been altered since the time of the superintendent's review and approval. It shall be the responsibility of the board of directors to determine what coverage in excess of the minimum requirement is needed for its particular credit union.

(B) The superintendent may require additional coverage for any or all credit unions when, in his or her opinion, current coverage is insufficient.

(C) All bond claims or potential bond claims shall be reported to the superintendent within three days of the filing of the claim or notice of potential claim with the bonding company. The notice to the superintendent shall include a copy of the claim or notice of potential claim.

(D) All bonds shall include a provision, in a form approved by the superintendent, requiring written notification by the surety to the superintendent:

(1) When the bond of a credit union is terminated in its entirety and when bond coverage is terminated, by issuance of a written notice, on an employee, director, officer or committee member. The notification shall be sent to the superintendent and shall include a brief statement of cause for termination.

(2) When the bond coverage is changed by the credit union or surety. The notification shall include a copy of the change in coverage.

(E) The minimum amount of bond coverage required shall be computed based on the credit union's total assets and shall be:

Assets Minimum bond
$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 million or fraction over $1,000,000
$50,000,001 to $295,000,000 $2,550,000 plus $10,000 for each million or fraction thereof over $50,000,000
Over $295,000,000 $5,000,000

(F) The superintendent must approve in writing any proposal made to reduce coverage at least twenty days in advance of the proposed effective date of the reduction.

(G) The maximum amount of deductibles allowed are based on the credit union's total assets. The following table sets out the maximum deductibles:

Assets Maximum deductible
$0 to $100,000 No deductible allowed
$100,001 to $250,000 $1,000
$250,001 to $1,000,000 $2,000
Over $1,000,001 $2,000 plus 1/1000 of total assets up to a maximum deductible of $200,000

No deductible shall exceed ten percent of the credit union's regular reserve unless the credit union creates a segregated contingency reserve for the amount of the excess. Valuation allowance accounts, such as allowance for loan losses, may not be considered part of the regular reserve when determining the maximum deductible. The superintendent must approve in writing any proposal made by the credit union to implement deductibles at least twenty days in advance of the proposed effective date of the deductibles.

Effective: 03/22/2012
R.C. 119.032 review dates: 12/29/2011 and 03/22/2017
Promulgated Under: 119.03
Statutory Authority: 1733.41
Rule Amplifies: 1733.23
Prior Effective Dates: 3/3/88, 8/3/93

1301:9-2-04 Charge-off of uncollectible loans and other losses and reserves.

(A) The purpose of the allowance for loan losses is to represent the management's estimate of loan losses in a credit union's loan portfolio. The allowance for loan losses will be charged with the amount of uncollectible loans and loan-derived assets which have been authorized for charge-off by the board of directors: likewise, recoveries on loans previously charged-off will be credited to this account.

(B) A record shall be maintained of all loans charged-off. Said record shall contain the following information: account number, name, original date, amount of original loan, security, balance at the time of charge-off; and what, if any, recovery has been made on the security. This record shall be kept current and made available to the examiners at each examination.

(C) Loans should be charged-off when they are deemed uncollectible. That practice should be applied consistently in all interim financial reporting periods in accordance with GAAP. A credit union's loan policy shall address when a loan is deemed uncollectible.

(D) Interest should not be accrued on loans which are doubtful of collection. For this purpose, loans on which payments have not been received for six months or more, should be considered as doubtful of collection.

(E) Each credit union shall establish and maintain reserves and allowances as required by section 1733.31 of the Revised Code, this rule, and administrative guidelines issued by the superintendent.

(F) Pursuant to section 1733.31 of the Revised Code, the superintendent has established the following as additional nonrisk assets:

(1) Prepaid share insurance; other prepaid insurance;

(2) Other prepaid and deferred expenses;

(3) Accrued income on nonrisk assets; and

(4) Deposits in corporate credit unions with maturities of two years or less.

(G) Reserves for corporate credit unions.

(1) At the end of each dividend cycle and prior to paying a dividend (or, at the option of the corporate credit union, on a monthly basis if dividends are paid more frequently than monthly), sums shall be set aside in a corporate reserve in accordance with the following schedule:

(a) When the credit union's corporate reserve and undivided earnings are less than two per cent of the assets at the end of the transfer period, the credit union shall set aside an amount equal to .0015 times the number of days in the transfer period divided by three hundred sixty-five.

(b) When the corporate reserve and undivided earnings are equal to or greater than two per cent of the assets but the corporate reserve is less than four per cent of the assets, the credit union shall set aside an amount equal to .0010 times the credit union's average daily assets for the transfer period times the number of days in the transfer period divided by three hundred sixty-five.

(2) Charges may be made to the corporate reserve for loan losses and for investment losses accrued by factors other than trading losses or market fluctuations. No other charges shall be made except as may be authorized in writing by the superintendent. Charges shall be made in accordance with GAAP.

(H) Refinance or extension agreements.

(1) In the determination of the amount of delinquency of a loan and the proper amount to be added to the allowance for loan losses account, the terms "refinance" and "extension" shall be treated as if they are one and the same.

(a) Credit unions are authorized to grant to members in certain cases an extension of the time in which a loan must be paid off; this is accomplished by an agreement between the credit union and the member borrower.

(b) In making such renegotiated arrangements, the credit union must comply with all provisions of the credit union's applicable policy.

(i) In either case, the loan so negotiated shall be deemed to be of current status only if six consecutive payments are made thereon, pursuant to the new loan terms.

(ii) Should the borrower make six consecutive payments and then default for any reason, the resultant delinquency and allowance for loan losses shall be determined based upon the original terms of the loan and not upon the renegotiated loans.

(2) The new note or extension agreement and related documents shall be attached to a copy of the original note in either example given above.

(3) Only one refinance or extension agreement shall be permitted for the purpose of determining delinquency and allowance for loan losses.

(I) Repossessions/foreclosures.

After the sale of a repossessed security, the allowance for loan losses is to be funded in an amount equal to the deficiency balance until the loan is charged-off. A permanent record shall be maintained of all security that is repossessed and/or foreclosed.

Replaces: Part of 1301:9-2-08

Effective: 03/22/2012
R.C. 119.032 review dates: 12/29/2011 and 03/22/2017
Promulgated Under: 119.03
Statutory Authority: 1733.41
Rule Amplifies: 1733.31
Prior Effective Dates: 12/31/75, 3/29/76, 5/6/77, 9/1/79, 2/11/88

1301:9-2-05 Financial statements.

(A)

Each credit union member shall be furnished, at least semiannually, a statement of accounts. Such statement shall clearly reflect all transactions involving themember's account during the previous accounting period. Any member, pursuant to request, shall receive within a reasonable time a statement reflecting the member's current outstanding balances in the member's account.

(B)

Each credit union shall display at all operating locations, copies of its current and previous month's financial statements. Such statements shall be posted in both a conspicuous and available manner, so as to be accessible for inspection by all members.

Effective: 03/22/2012
R.C. 119.032 review dates: 12/29/2011 and 03/22/2017
Promulgated Under: 119.03
Statutory Authority: 1733.41
Rule Amplifies: 1733.32
Prior Effective Dates: 12/31/75, 9/1/79, 10/14/91

1301:9-2-06 Preservation/retention of records.

Each credit union shall preserve its corporate records either as originals or by some other method in accordance with sections 1733.29 and 1733.291 of the Revised Code, GAAP and with the following schedule.

(A) Records to be permanently maintained:

(1) Monthly financial statements;

(2) Litigation record; and

(3) Repossession record.

(B) Records to be maintained for six years:

(1) Minutes of the meetings of all committees of the board of directors;

(2) Minutes of the meetings of the credit committee and supervisory audit committee; and

(3) Subsidiary loan and share ledgers.

(C) Records to be maintained for two years:

(1) Disclosure records as required by federal truth-in-lending laws and regulations; and

(2) Proxies, cancelled checks, or other records as the superintendent may require.

Effective: 03/22/2012
R.C. 119.032 review dates: 12/29/2011 and 03/22/2017
Promulgated Under: 119.03
Statutory Authority: 1733.41
Rule Amplifies: 1733.29
Prior Effective Dates: 9/1/79, 7/1/06

1301:9-2-06.1 [Rescinded] Authorized processes for recording or storing documents or instruments.

Effective: 03/22/2012
R.C. 119.032 review dates: 12/29/2011
Promulgated Under: 119.03
Statutory Authority: 1733.41
Rule Amplifies: 1733.29
Prior Effective Dates: 7/1/06

1301:9-2-07 Investments.

(A) For the purchase of notes of liquidating other credit unions, notes made by individual members of a credit union may be purchased by another credit union at a price agreed upon by the credit unions and subject to the prior written approval of the superintendent.

(B) Authorized investments and investment restrictions

(1) No credit union shall invest any of its funds in any securities or other property not specifically authorized in section 1733.30 of the Revised Code unless the superintendent has approved of the investment policy in writing. The credit union shall file with the superintendent such investment policy with a copy of a resolution of the board of directors of such credit union approving the investment policy. The superintendent shall notify the credit union not more than fifteen business days after the filing of the policy whether it is denied, approved, or needs modification. If the superintendent does not respond within fifteen business days after the filing of the policy, it shall be deemed approved; unless, the superintendent notifies the credit union in writing within fifteen business days of the credit union's request being filed that additional documentation is required. If additional documentation is required, the credit union shall have thirty days to file the additional documentation with the superintendent. If the superintendent does not respond within fifteen business days of receipt of the additional documentation, the policy shall be deemed approved.

(2) In addition to investments authorized by section 1733.30 of the Revised Code, credit unions may invest in the following, subject to paragraph (B)(1) of this rule:

(a) Government security mutual funds and government security money market funds not to exceed in the aggregate ten per cent of its shares and undivided earnings;

(b) Shares, stocks, deposits in, or other obligations of any organization, corporation, or association providing services associated with the general purposes of the credit union or engaging in activities incidental to the operations of a credit union, provided that such investments in the aggregate do not exceed five per cent of the credit union's shares and undivided earnings;

(c) Shares, share certificates, share deposits, or other investments of insured credit unions, including corporate credit unions;

(d) Investments for the purpose of funding an employee benefit plan, including credit union owned life insurance policies, not to exceed in the aggregate ten per cent of its shares and undivided earnings;

(e) Any securities or other properties not specifically described in section 1733.30 of the Revised Code and paragraph (B)(2) of this rule, to an extent not exceeding in the aggregate five per cent of shares and undivided earnings as of the thirty-first day of December of the previous year.

(3) Participation loans with the prior approval of the superintendent.

The credit union shall file with the superintendent a copy of the credit union participation policy prior to engaging in participation loans with other credit unions or credit union organizations or financial institutions as defined by 15 U.S.C. 78c(a)(46) , as amended. The superintendent shall notify the credit union not more than fifteen business days after the filing of the policy whether it is denied, approved, or needs modification. If the superintendent does not respond within fifteen business days after the filing of the policy, it shall be deemed approved; unless the superintendent notifies the credit union in writing within fifteen business days of the credit union's request being filed that additional information is required. If additional information is required, the credit union shall have thirty days to file the additional information with the superintendent. If the superintendent does not respond within fifteen business days of receipt of the additional information, the request or policy shall be deemed approved.

(a) No credit union shall obtain an interest in a participation loan if the sum of that interest and any other indebtedness owing to the credit union by the borrower exceeds ten per cent of the credit union's unimpaired capital and surplus.

(b) A written master participation agreement shall be properly executed and acted upon by the credit union's board of directors or, if the board has so delegated in its policy, the investment committee or senior management official(s), and retained in the credit union's office. The master agreement shall include provisions for identifying, either through a document which is incorporated by reference into the master agreement, or directly in the master agreement, the participation loan or loans prior to their sale.

(c) A credit union may sell to or purchase from any participation the servicing of any loan in which it owns a participation interest.

(d) An originating lender which is a credit union shall:

(i) Originate loans only to its members;

(ii) Retain an interest of the face amount of each loan unless otherwise approved by the superintendent;

(iii) Retain the original or copies of the loan documents; and

(iv) Require the credit committee or loan officer to use the same underwriting standards for participation loans used for loans that are not being sold in a participation agreement unless there is a participation agreement in place prior to the disbursement of the loan. Where a participation agreement is in place prior to disbursement, either the credit union's loan policies or the participation agreement shall address any variance from non-participation loan underwriting standards.

(e) A participant credit union that is not an originating lender shall:

(i) Participate only in loans it is empowered to grant, having a participation policy in place which sets forth the loan underwriting standards prior to entering into a participation agreement;

(ii) Participate in participation loans only if made to its own members, eligible members, or members of another participating credit union;

(iii) Retain the original or a copy of the written participation loan agreement and a schedule of the loans covered by the agreement; and

(iv) Obtain the approval of the board of directors or investment committee of the disbursement of proceeds to the originating lender.

(4) No investment in any securities of the United States, any state or territory of the United States, or the District of Columbia, or any municipal corporation may be made if the issuer has not been in existence for at least ten years. Nor may any such aforementioned investment be made if the issuing government has, within the preceding ten-year period from which the investment is to be made, defaulted for more than ninety days in the payment of any part of either principal or interest of any debt contracted by it.

(5) In addition to investments authorized by section 1733.30 of the Revised Code, a corporate credit union may invest in the following, subject to paragraph (B)(1) of this rule:

(a) Deposits in, the sale of federal funds to, and debt obligations of foreign banks subject to the following requirements:

(i) The bank must have assets of at least United States twenty billion dollars and the investment must not be rated lower than A-1 (or equivalent for short-term (initial maturity of one year or less) by a rating agency recognized by the securities and exchange commission (SEC), and not lower than AA- (or equivalent) for long-term (initial maturity over one year) investments. The corporate credit union must divest itself of short-term investments, if material in amount, downgraded below A-2 (or equivalent) and long-term investments downgraded below A- (or equivalent) by the same rating agency used when the investment was purchased.

(ii) The investment shall be dominated in United Statesdollars;

(iii) The country in which the issuing bank is located shall be rated AAA (or equivalent) for political and economic stability by a SEC-recognized rating agency;

(iv) The aggregate investments in any single foreign bank shall not exceed five per cent of the corporate credit union's net assets.

(b) Debt obligations of U.S. bank holding companies and other U.S. chartered corporations subject to the following requirements:

(i) The investments must not be rated lower than A-1 (or equivalent for short-term (initial maturity of one year or less) investment by a SEC-recognized rating agency and not lower than AA- (or equivalent) for long-term (initial maturity of over one year) investments. The corporate credit union must divest itself of short-term investments, if material in amount, downgraded below A-2 (or equivalent) and long-term investments downgraded below A- (or equivalent) by the same rating agency used when the investment was purchased.

(ii) The aggregate investments in the obligations of any single issuer shall not exceed five per cent of the corporate credit union's net assets.

(iii) This authority does not apply to debt obligations that are convertible into the stock of the corporation or the holding company.

(c) Asset-backed securities subject to the following requirements:

(i) The security must not be rated lower than AAA (or equivalent) by a SEC-recognized rating agency. The corporate credit union must divest itself of asset-backed securities, if material in amount, downgraded below AA- (or equivalent) by the same rating agency used when the investment was purchased;

(ii) The investment in any single security or trust shall not exceed five per cent of the corporate credit union's net assets; and

(iii) The security must have an average life at time of purchase of no more than five years.

(d) Federally issued collateralized mortgage obligations (CMOs) and real estate mortgage investment conduits (REMICs) and privately issued CMOs and REMICs as defined in section 3(a)(41) of the Securities and Exchange Act of 1934 subject to the following requirements:

(i) An investment in a fixed rate obligation must have an average life at time of purchase and on subsequent review dates not to exceed five years given an immediate increase of three hundred basis points in mortgage loan commitment rates assuming market interest rates and prepayment speeds at the time the tests are applied. Industry consensus prepayment models will be used when computing the average life. This limitation does not apply if principal payments of the investment are specifically matched to principal payments of the corresponding liability.

(ii) For an investment in a variable rate obligation with a cap, the lesser of the highest interest rate cap or the final interest rate cap during the average life at the time of purchase must be at least two hundred basis points above the rate of the corresponding liability that the investment is matched against. This limitation does not apply if principal payments of the investment are specifically matched to principal payments of the corresponding liability.

(iii) The corporate credit union must divest itself of any CMO or REMIC security, if material in amount, downgraded below AA-(or equivalent) by the same SEC-recognized rating agency used when the investment was purchased;

(iv) The investment in any single issuer shall not exceed five per cent of the corporate credit union's net assets;

(e) Additional investments provided the corporate credit union has obtained prior written approval from the superintendent.

(f) The requirements of this rule to divest investments downgraded below the minimum acceptable ratings do not apply if the expected maturity of the downgraded investment is three months or less. The corporate credit union has ten business days to divest itself of any investment downgraded below the minimum credit ratings specified in this rule or to request in writing permission from the superintendent to retain the investment.

(g) The following definitions apply for purposes of this rule for corporate credit union investments:

(i) "Capital" means the total of regular or statutory reserves, undivided earnings, net income, and membership capital share deposit accounts.

(ii) "Material" means an amount that exceeds five per cent or more of the corporate credit union's capital.

(iii) "Net assets" mean total assets minus central liquidity facility (CLF) stock subscriptions, CLF loans guaranteed by the national credit union share insurance fund, U.S. central credit union CLF certificates, and member reverse repurchase transactions.

(6) For any investments not expressly authorized in division (A) of section 1733.30 of the Revised Code, or paragraph (B)(2) of this rule, the superintendent may require a reserve to be established and maintained to be used as a reserve against losses resulting from such investments. The superintendent may, in his discretion, require an allowance for investment losses to be maintained based on the degree of risk and exposure of the investment.

(7) The provisions of this rule shall not affect the propriety of legality of an investment made by any credit union which was in accordance with the laws of this state at the time such investment was made, nor shall this rule affect the propriety or legality of any investment or investment policy authorized by the division of financial institutions prior to December 31, 1975; except where a program exists which provides for the automatic reinvestment of income or capital gains in additional securities from which such income is derived and the reinvestment of which income would exceed the limits of this rule.

(8) In applying the provision of this rule, membership fees and annual assessments required by sections 1761.01 to 1761.18 of the Revised Code shall not be considered an investment for the purpose of this rule.

Effective: 03/22/2012
R.C. 119.032 review dates: 12/29/2011 and 03/22/2017
Promulgated Under: 119.03
Statutory Authority: 1733.41
Rule Amplifies: 1733.30
Prior Effective Dates: 2/11/88, 8/3/93, 7/1/06

1301:9-2-08 Liquidity.

(A) Pursuant to division (C) of section 1733.31 of the Revised Code, the superintendent has permitted insured certificates of deposit with a remaining maturity of one year or less to be included in the calculation of liquidity as additional assets.

(B) Liquidity fund

.

Pursuant to division (C) of section 1733.31 of the Revised Code, all credit unions must maintain, as a minimum, a liquidity fund equal to five per cent of its shares. Nothing herein shall prevent the superintendent from requiring a particular credit union or all credit unions to establish a liquidity fund greater than or less than five per cent of total shares unless the superintendent establishes a greater or less amount for particular credit unions or all credit unions. A credit union may request in writing that the superintendent waive this requirement.

Effective: 03/22/2012
R.C. 119.032 review dates: 12/29/2011 and 03/22/2017
Promulgated Under: 119.03
Statutory Authority: 1733.41
Rule Amplifies: 1733.31
Prior Effective Dates: 3/25/76, 5/6/77, 9/1/79, 2/11/88, 7/1/06

1301:9-2-09 Dividends.

(A) The board of directors may approve payment of dividends on shares from current earnings only. No dividend may be declared or paid unless the credit union has satisfied the reserve requirements of section 1733.31 of the Revised Code. However, the superintendent may permit the payment of dividends from undivided earnings upon written request submitted to the superintendent, subject to a plan of corrective action.

(B) Requests for approval of payment of dividends from undivided earnings by the superintendent shall be made at least ten business days before the end of the quarter, unless the credit union is under a supervisory agreement. When the credit union is under a supervisory agreement, the terms of the supervisory agreement shall take precedence. All requests for approval for payment of dividends shall be made on a form prescribed by the superintendent. The superintendent will approve or deny the request within five business days of receiving the request. If the superintendent does not approve or deny the request within five business days the request is deemed approved.

Effective: 03/22/2012
R.C. 119.032 review dates: 03/22/2017
Promulgated Under: 119.03
Statutory Authority: 1733.41
Rule Amplifies: 1733.31

1301:9-2-10 Impairment.

(A) A condition of impairment shall be deemed to exist if the difference between total assets minus current and long-term liabilities (not including shares) is less than the total amount of all share accounts. Impairment also exists when a member's written intention to withdraw their shares cannot be met.

(B) Whenever it is determined that there exists an impairment, the board of directors shall notify the superintendent of such conditions. If required by the superintendent, the board of directors shall disclose to all account holders the fact of the impairment.

Effective: 03/22/2012
R.C. 119.032 review dates: 12/29/2011 and 03/22/2017
Promulgated Under: 119.03
Statutory Authority: 1733.41
Rule Amplifies: 1733.37(A)
Prior Effective Dates: 12/31/75, 9/1/79, 2/11/88

1301:9-2-11 Independent audit.

(A) Every credit union must maintain adequate, complete and correct accounts and shall observe generally accepted accounting principles (GAAP) and anything else the superintendent prescribes.

(B) A credit union must notify the superintendent on a form prescribed by the superintendent, within ten days after the retention of an outside auditor, of the name, address, and telephone number of such auditor, whether or not the retainer is pursuant to section 1733.19 of the Revised Code. Any changes in this information shall be reported to the superintendent within ten days of the change, on a form prescribed by the superintendent.

(C) A credit union may dismiss, release, or otherwise terminate its relationship with an outside auditor. All facts surrounding such termination and the subsequent investigation of the circumstances shall be submitted to the superintendent, in accordance with the provisions of division (B) of section 1733.19 of the Revised Code.

(D) The superintendent may require at any time that a credit union have its accounts audited in accordance with generally accepted auditing standards by an outside auditor, at the expense of the credit union. Before commencement of the independent audit, and within fifteen days of written notice from the superintendent that an audit of the books and records will be required, to be conducted by an independent qualified public accountant, the credit union shall submit in writing, the name and address of a qualified public accountant of its choosing, for approval by the superintendent.

(E) The credit union shall file with the superintendent a copy of the report of audit no later than fifteen days following the receipt thereof. For the purpose of this filing requirement, the term "report of audit" includes in addition to the audit report itself and the accountant's certificate, any special supplemental report, letter or reports to management, or any other documents which are related to the audit or the report thereof. Notwithstanding the foregoing, in no event shall the audit report itself and the accountant's certificate be filed with the credit union later than ninety days after the end of the reporting period for which the audit is conducted unless the credit union has received a prior written extension of the time for filing. All credit unions whose assets exceed twenty-five million dollars as of the prior year's filing shall have its accounts audited by a public accountant or certified public accountant licensed to do business in Ohio and an opinion given in accordance with AICPA guidelines, unless waived by the superintendent. The credit union shall submit such request for a waiver in writing to the superintendent. The superintendent shall respond to the waiver request within twenty business days of receiving the waiver request. If the superintendent does not respond within twenty business days to the waiver request such request is deemed approved. Such audits must be submitted to the superintendent within thirty days of the credit union's receipt of the audit report.

(F) Pursuant to section 1733.322 of the Revised Code, the credit union examined by an outside auditor shall waive the confidentiality with regard to discussion of the outside audit with the superintendent. The form of the waiver must contain the following:

(1) A statement to the effect that the waiver of confidentiality has been approved and recorded in the minutes of the credit union and the date of the board of directors' meeting on which the fact was recorded.

(2) A certification of the above statement of fact and a restatement of the intent to waive the confidentiality which is usually present between the auditor and client in order to allow discussion of the case between the auditor and the superintendent of credit unions. This waiver must be signed by the president and secretary of the credit union.

Effective: 03/22/2012
R.C. 119.032 review dates: 12/29/2011 and 03/22/2017
Promulgated Under: 119.03
Statutory Authority: 1733.41
Rule Amplifies: 1733.19
Prior Effective Dates: 3/25/76, 9/1/79, 2/11/88

1301:9-2-12 Reimbursement to credit unions for assembling or providing financial records.

(A) Except as proved in this rule or in section 9.02 of the Revised Code, any party, including a governmental authority, that requires or requests a credit union to assemble or provide a customer's financial records shall pay the credit union for all actual and necessary costs directly incurred in searching for, reproducing, or transporting these records according to the following schedule:

(1) Search and processing costs. Reimbursement of reasonable search and processing costs shall be the total amount of personnel direct time incurred in locating and retrieving, reproducing, packaging, and preparing financial records for shipment. The rate for search and processing costs is eleven dollars per hour per person, computed on the basis of two dollars and seventy-five cents per quarter hour or fraction thereof, and is limited to the total amount of personnel time spent in locating and retrieving documents or information or reproducing or packaging and preparing documents for shipment where required or requested by a party. Specific salaries of such persons shall not be included in search costs. In addition, search and processing costs do not include salaries, fees, or similar costs for analysis of material or for managerial or legal advice, expertise, research, or time spent for any of these activities. If itemized separately, search and processing costs may include the actual cost of extracting information stored by computer in the format in which it is normally produced, based on computer time and necessary supplies; however, personnel time for computer search may be paid for only at the rate specified in this paragraph.

(2) Reproduction costs. Reimbursement for reasonable reproduction costs shall be for costs incurred in making copies of documents required or requested. The rate for reproduction costs for making copies of required or requested documents shall not exceed two dollars for each page, including copies produced by reader/printer reproduction processes. Photographs, films, and other materials are reimbursed at actual cost.

(3) Transportation costs. Reimbursement for transportation costs shall be for necessary costs, directly incurred, to transport personnel to locate and retrieve the information required or requested; and necessary costs, directly incurred solely by the need to convey the required or requested material to the place of examination.

(B) A credit union is not entitled to reimbursement under this rule for costs incurred in assembling or providing the following records or information:

(1) Security interest, bankruptcy claims, and debt collection. Any financial records provided as an incident to perfecting a security interest, proving a claim in bankruptcy, or otherwise collecting on a debt owing to the credit union.

(2) Nonidentifiable information. Financial records that are not identified with or identifiable as being derived from the financial records of a particular customer.

(3) Records or information requested by the superintendent.

(C) Payment shall be limited to material required or requested. Payment shall be made only for costs that are directly incurred, actual, and necessary. No payment shall be made until the credit union satisfactorily complies with the request or requirement, except that in the case where the request or requirement is withdrawn or revoked, the credit union shall be reimbursed for the actual and necessary costs directly incurred in assembling financial records required or requested to be produced prior to the time the party notifies the credit union that the request or requirement is withdrawn or revoked. No payment shall be made unless the credit union submits an itemized bill or invoice showing specific details concerning search and processing, reproduction, and transportation costs.

(D) For the purposes of this rule, the term "costs directly incurred" means costs incurred solely and necessarily as a consequence of searching for, reproducing, or transporting books, papers, records, or other data, in order to comply with a request or requirement to produce a customer's financial records. The term does not include any allocation of fixed costs (overhead, equipment, depreciation, etc.). If a credit union has financial records that are stored at an independent storage facility that charges a fee to search for, reproduce, or transport particular records requested, these costs are considered to be directly incurred by the credit union.

(E) Where terms used in the rule are defined in section 9.02 of the Revised Code, they shall have the meaning set forth in that section.

(F) A credit union shall receive prior written approval from the superintendent to charge a rate or cost above the maximum amount as stated herein.

Effective: 03/22/2012
R.C. 119.032 review dates: 12/29/2011 and 03/22/2017
Promulgated Under: 119.03
Statutory Authority: 1733.41
Rule Amplifies: 9.02
Prior Effective Dates: 7/9/82, 7/1/06

1301:9-2-13 Compensation.

(A) As a fiduciary a director:

(1) Shall act for the benefit of the credit union;

(2) Has a duty not to profit at the expense of the credit union;

(3) Has a duty not to compete without the consent of the credit union;

(4) Has a duty to make full disclosure to, and to operate fairly when engaged in transactions with, the credit union;

(5) Must avoid all but arms-length transactions.

(B) All transactions, other than expenses reimbursement and employee wages, between the credit union and the members of the board of directors, committee members, employees, immediate family thereof or businesses controlled thereby shall be disclosed annually in writing to the superintendent and the board of directors and shall remain confidential.

(C) The board of directors shall adopt a travel and expense reimbursement policy . The policy and procedures shall, as a minimum, include:

(1) Board resolution adopting policy and procedures;

(2) Procedure for monitoring compliance with the policy and IRS guidelines, which shall include review by the credit union's accountant or audit committee;

(3) Audit trail with hard copy available for review by examiners;

(4) Criteria for reimbursement;

(5) If the policy is abused, reimbursement to the credit union by the individual or other options as defined per credit union policy; and

(6) Safety and soundness considerations.

(D) For purposes of this rule, if authorized by the board of directors and pursuant to Internal Revenue Service guidelines, reimbursement for guest expenses is not considered compensation.

Effective: 03/22/2012
R.C. 119.032 review dates: 12/29/2011 and 03/22/2017
Promulgated Under: 119.03
Statutory Authority: 1733.41
Rule Amplifies: 1733.22
Prior Effective Dates: 2/11/88, 8/3/93, 7/1/06

1301:9-2-15 Depreciation and amortization.

(A) The term "depreciation" means the systematic allocation of the cost of an asset to expense over the accounting periods making up the assets' useful life according to GAAP. To assure consistency and uniformity, the straight-line method of depreciation used for the following assets generally held by credit unions shall not exceed the following:

(1) Office furniture - ten years;

(2) Office equipment - seven years;

(3) Buildings :

(a) Concrete and steel - thirty to fifty-five years;

(b) Masonry - twenty-five to forty-five years;

(c) Wood frame - twenty to forty years; and

(d) Portable units - fifteen to thirty years;

(4) Automobiles - five years;

(5) Computer software - five years;

(6) Leasehold improvements shall :

(a) Amortize over the life of the lease or the usefulness of improvements, whichever has the shortest life. For purposes of this paragraph, life of lease may be for a fixed time period or for a time period that may be extended at the option of the credit union.

(b) Improvements to space provided free of charge by the sponsor, amortize over ten years or over estimated length of occupancy, whichever is less.

(c) Organization expenses shall amortize over five years.

(B) This rule applies to assets placed into service after the effective date of this rule.

Effective: 03/22/2012
R.C. 119.032 review dates: 12/29/2011 and 03/22/2017
Promulgated Under: 119.03
Statutory Authority: 1733.41
Rule Amplifies: 1733.04
Prior Effective Dates: 2/11/88, 8/3/93, 7/1/06

1301:9-2-16 Field of membership.

(A) The field of membership of a credit union may include the families of members; that is, persons related by blood, adoption or marriage to or living in the same household with a person having the common bond, as well as surviving spouses of persons who have left the field of membership in good standing. When the individual member of a credit union leaves the field of membership, all persons who are members by virtue of his or her membership may continue as members.

(B) A credit union may expand its field of membership through the submission of an application to the superintendent to add select groups having a common bond of occupation or association or groups within a well-defined neighborhood, community or rural district. Groups may be found to exist within a well-defined neighborhood, community or rural district, for purposes of this rule, on the basis of the geographic location of the person's residence, property, worship, school attendance, or employment. "Well-defined" means the proposed area has specific geographical boundaries, including a political subdivision of the state, or a clearly definable neighborhood.

(C) In its application to expand its field of membership, the applicant credit union shall submit to the superintendent the following:

(1) The articles of incorporation and, if appropriate, the code of regulations of the applicant credit union which authorize expansion of the field of membership to include the proposed group;

(2) A specific description of the group to be added, including the number of persons in the group, the potential membership size of the group, the dispersion of the group, and the general characteristics of the sponsor of the group, if any;

(3) Evidence that the group is within the operational area of the home office or a service facility of the applicant credit union or the applicant credit union provides evidence of one or more of the following:

(a) The associational or occupational group expresses its desire to obtain the credit union's services;

(b) The credit union has or will have the means to service the group;

(c) The majority of the potential new members can regularly access the credit union's services; or

(d) The credit union meets any additional conditions or considerations the superintendent may deem reasonable for approval of the credit union's application.

(4) Evidence that the associational or occupational group, through its authorized representative, has requested service from the applicant credit union;

(5) Evidence demonstrating the credit union is financially and organizationally sound to provide credit union service to the group;

(6) Certification of the applicant credit union vote to approve extension of membership services to the group; and

(7) Any other information the superintendent requires.

(D) A credit union may have multiple groups in its field of membership provided each group has its own common bond.

(E) To add multiple groups to a credit union's field of membership the credit union shall submit the following to the superintendent in addition to the requirements of paragraph (C) of this rule:

(1) Evidence that each affected associational or occupational group has requested service from the applicant credit union;

(2) Evidence that the applicant credit union is financially and organizationally sound to provide credit union service to each group;

(3) Evidence that the proposal is economically feasible and advisable;

(4) Evidence that each group is within the operational area of the home office or a service facility of the applicant credit union or the conditions of paragraphs (C)(3) to (C)(7) of this rule have been satisfied. "Operational area" means an area accessible by the home office, a service facility, a shared branch, shared service facility or any other means through which the credit union provides services that can reasonably be served by the applicant credit union as determined by the superintendent.

(F) Subject to the applicable requirements and approval of the superintendent as identified in paragraphs (D) and (E) of this rule, the following applies, for service to underserved communities:

(1) A field of membership may include, without regard to location, underserved communities, which are local communities, neighborhoods, or rural districts which are investment areas as defined in section 103(16) of the Community Development Banking and Financial Institutions Act of 1994. More than one credit union may serve the same underserved area.

(2) Once an underserved community has been added to the credit union's field of membership, the credit union must establish and maintain an office or service facility in the community. A "service facility" is defined as a place where shares are accepted for members' accounts, loan applications are accepted and loans are disbursed. This definition includes a credit union owned branch, a shared branch, an office or location operated on a regularly scheduled weekly basis, and a credit union owned electronic facility that meets these requirements, but not including an automated teller machine.

(3) The credit union adding the underserved community shall document that the community meets the definition of an underserved community in Ohio. The charter type of a credit union adding such a community group may change and the credit union may be able to receive the benefits afforded to low-income designated credit unions, such as:

(a) Expanded use of non-member deposits.

(b) Access to the community development revolving loan program for credit unions.

(4) The credit union must submit a business plan specifying how it will serve the underserved community. The business plan at a minimum must:

(a) Identify the credit, deposit, and other financial service needs of the community.

(b) Detail how the credit union plans to serve those needs.

(5) The credit union will be expected to regularly review the business plan to determine if the community is being adequately served. The superintendent may:

(a) Require periodic service status reports from a credit union about the underserved community to ensure that the needs of the area are being met.

(b) Require such reports before the superintendent permits a credit union to add an additional underserved community.

(G) Upon receipt of an application to expand a credit union's field of membership to an association, occupation, or community group, the superintendent shall notify the credit union not more than fifteen business days after the filing of the application to expand a credit union's field of membership to an associational, occupational, or community group whether the application is denied, approved or modified. If the superintendent does not respond within fifteen business days after the filing of the application it shall be deemed approved; unless the superintendent notifies the credit union in writing within fifteen business days of the credit union's request being filed that additional documentation is required. If additional documentation is required, the credit union shall have thirty days to file the additional documentation with the superintendent. If the superintendent does not respond within fifteen business days of receipt of the additional information, the application shall be deemed approved.

(H) If the superintendent denies an application to expand a field of membership, the superintendent shall notify the credit union of the basis or reason for the denial and the credit union may request a hearing in accordance with the provisions of sections 119.01 to 119.13 of the Revised Code.

(I) In considering whether to approve an application for expansion of a credit union's field of membership, the superintendent shall consider the following:

(1) Whether the convenience and needs of the members of the applicant credit union will be served by the proposed expansion;

(2) Whether the population and economic characteristics of the potential membership pool afford reasonable promise for adequate support for the proposed expansion;

(3) Whether the policies, condition and operation of the applicant credit union afford no basis for supervisory objection;

(4) Whether the proposed expansion shall occur within twelve months of approval unless the superintendent allows otherwise; and

(5) Any other pertinent factors relating to the field of membership expansion.

(J) If the proposed group expands the credit union's field of membership outside of Ohio, the state supervisory authority of the state where the proposed group is located must give permission for the expansion before final approval by the superintendent can be granted.

Replaces: 1301:9-2-16, 1301:9-2-17

Effective: 03/22/2012
R.C. 119.032 review dates: 03/22/2017
Promulgated Under: 119.03
Statutory Authority: 1733.41
Rule Amplifies: 1733.05
Prior Effective Dates: 2/11/88, 12/31/99, 7/1/06

1301:9-2-17 [Rescinded] Affiliation to expand field of membership.

Effective: 03/22/2012
R.C. 119.032 review dates: 12/29/2011
Promulgated Under: 119.03
Statutory Authority: 1733.41
Rule Amplifies: 1733.05
Prior Effective Dates: 12/31/99, 7/1/06

1301:9-2-18 Disaffiliation or dual membership.

(A) Definitions

(1) The term "group" for the purposes of this rule shall be as described in division (D)(1) of section 1733.05 of the Revised Code, except that for the purpose of a vote to disaffiliate group membership, shall not include a member who acquires his "common bond" for member status through familial relationship.

(2) "Original credit union" for the purposes of this rule shall mean the credit union from which the group intends to disaffiliate.

(3) "Applicant credit union" for the purposes of this rule shall mean the credit union with which the group intends to affiliate.

(B) Members of a group may disaffiliate from the field of membership of a credit union by a majority vote of the members of the group, subject to approval of the plan of disaffiliation by the superintendent. The group shall notify the superintendent of its intent thirty days before a membership vote.

(C) The vote to disaffiliate shall be in person, by proxy or by mail ballot, and each member of the group, except as provided in paragraph (A)(1) of this rule, is entitled to cast one vote on the issue, irrespective of the number of shares the memberowns.

(1) A copy of the disaffiliation proposal shall be distributed to all of the members of the group on or before the date on which solicitation begins for approval of the disaffiliation.

(2) Such disaffiliation proposal shall consist of the key points of the written plan of disaffiliation to be submitted to the superintendent for approval.

(3) The written plan of disaffiliation shall include, but not be limited to, the following:

(a) The services, the share accounts and loans and interest rates thereof, the size and composition of the field of membership, and the date of incorporation of the original credit union and the applicant credit union, if any, and in the instance of a group intending to form its own credit union, the articles of incorporation and the regulations, pursuant to section 1733.07 of the Revised Code, of the proposed credit union.

(b) The manner of disaffiliation:

(i) Whether group members intend to disaffiliate share accounts only or share accounts and loans.

(ii) If group members intend to disaffiliate loans, whether the loans are to be sold to or refinanced by the applicant credit union.

(D) Submission of disaffiliation proposal to original credit union.

(1) The group shall present the disaffiliation proposal to the board of directors of the original credit union in order that such credit union be given the opportunity to voluntarily release the group and the original credit union shall respond within thirty days to the proposal to the group and the superintendent.

(E) The majority vote of the group to approve disaffiliation from the original credit union shall be certified and submitted to the superintendent in conjunction with the written plan of disaffiliation, along with such financial information as the superintendent may require.

(F) Upon submission of the plan of disaffiliation, the superintendent shall contact the applicant credit union to verify orally and in writing such credit union's willingness and ability to serve the group.

(G) The superintendent may approve the plan of disaffiliation provided the plan has due regard for the division of share accounts and loans of the group seeking to disaffiliate, and such other factors as determined by the superintendent. No undivided earnings, reserves or other forms of equity shall be divided between the original credit union and the applicant credit union or transferred from the original credit union to the applicant credit union.

(H) Upon approval of the plan of disaffiliation, the member of the group who votes for disaffiliation shall transfer his membership account to the applicant credit union.

(I) Each member of the group seeking to disaffiliate shall be responsible for the identification and the maintenance of his or her share accounts and loans with either the original or applicant credit union, as the case may be. Each individual and association member of the group shall decide which share accounts, in addition to the membership account, shall be included in the disaffiliation. The plan of disaffiliation shall clearly set forth whether the loans of the group seeking to disaffiliate shall be purchased or refinanced by the applicant credit union or remain with the original credit union.

(J) A group may choose to be served by both the original and applicant credit union by seeking dual membership. The group shall request the original credit union give the applicant credit union permission to serve the group. If the original credit union approves the dual membership, this approval shall be sent to the superintendent on the original credit union's official letterhead.

Effective: 03/22/2012
R.C. 119.032 review dates: 12/29/2011 and 03/22/2017
Promulgated Under: 119.03
Statutory Authority: 1733.41
Rule Amplifies: 1733.05
Prior Effective Dates: 2/11/88

1301:9-2-19 Criteria for charter approval.

In addition to the requirements set forth in sections 1733.041 , 1733.07 , 1733.23 and 1733.47 of the Revised Code the incorporators shall submit to the superintendent along with the articles of incorporation and the code of regulations of the proposed credit union:

Commitment of share insurance as required by section 1733.041 of the Revised Code;

Evidence of a common bond and the number of potential members in the field of membership, as well as their stability of employment or association in the common bond group and the economic characteristics thereof;

Evidence of the character and fitness of the proposed incorporators which shall include proof of management experience and bondability;

Evidence of availability of credit union services to potential members and geographic dispersion of members;

The economic advisability of the establishment of the proposed credit union which shall include but not be limited to: three years forecast of financial performance and a business plan that supports a level of capital deemed to be appropriate by the superintendent which includes proposed operating policies; and

Any other information the superintendent determines is necessary.

.

Effective: 03/22/2012
R.C. 119.032 review dates: 12/29/2011 and 03/22/2017
Promulgated Under: 119.03
Statutory Authority: 1733.41
Rule Amplifies: 1733.041 , 1733.07 , 1733.23 , 1733.47
Prior Effective Dates: 2/11/88

1301:9-2-20 Loan authority.

(A) No credit union shall loan, directly or indirectly, to any member or other credit union more than ten per cent of its shares and undivided earnings. Fully share secured loans are exempt from the ten per cent limitation. A credit union may request in writing a waiver from the superintendent of this limit subject to a plan of participation. Within twenty business days from receiving the waiver request the superintendent will either grant or deny the request. If the superintendent does not respond within twenty business days after the filing of the waiver request, it shall be deemed approved.

(B) In the discretion of the superintendent, all loans made to the credit union as a corporation shall be reported quarterly to the superintendent by the borrowing credit union. This report shall contain the following information: name of borrowing credit union, name of lender, date of loan, repayment schedule, amount of loan and the aggregate total of notes payable to each source.

Effective: 03/22/2012
R.C. 119.032 review dates: 12/29/2011 and 03/22/2017
Promulgated Under: 119.03
Statutory Authority: 1733.41
Rule Amplifies: 1733.25
Prior Effective Dates: 8/3/93

1301:9-2-21 First mortgage purchase money real estate loans and refinancing.

(A) First mortgage purchase money real estate loans may be made only on a one to four family dwelling.

(B) All appraisals required by rule for loans greater than two-hundred fifty thousand dollars shall be made by a certified or licensed independent appraiser who has satisfied the requirements of Chapter 4763. of the Revised Code and applicable rules or other comparable statute.

(C) A credit union may make first mortgage real estate loans, provided it has, as a minimum, an approved and functioning asset/liability management committee; and policy and procedures, based on an asset liability management program which may include secondary market standards. However, nothing in this rule shall preclude a credit union from making non-conforming loans pursuant to the credit union's loan and risk management policies. No more than fifty per cent of the entire first mortgage portfolio shall be non-conforming, unless otherwise waived by the superintendent.

(D) Any credit union may make first mortgage real estate loans secured by liens not exceeding:

(1) The lesser amount of eighty per cent of the appraised value or eighty per cent of the sale price, if such real estate is in the process of being improved by a one to four family dwelling; and

(2) The lesser amount of ninety-five per cent of the appraised value or ninety-five per cent of the sale price, if such real estate is improved by a one to four family dwelling.

(E) A credit union may make first mortgage real estate loans secured by liens exceeding ninety-five per cent of the lesser amount of the appraised value or sale price, provided that the credit union files with the superintendent a copy of the loan policy and information regarding the placement of proper private mortgage insurance on the excess amount. The superintendent shall notify the credit union not more than ten business days after the filing of the policy whether it is denied, approved, or modified. If the superintendent does not respond within ten business days after the filing of the policy, it shall be deemed approved; unless, the superintendent notifies the credit union in writing within ten business days of the credit union's request being filed that additional documentation is required. If additional documentation is required, the credit union shall have thirty days to file the additional documentation . If the superintendent does not respond within ten business days of receipt of the additional information, the policy shall be deemed approved. However, nothing shall preclude a credit union from requesting a waiver for the requirement of private mortgage insurance when modifying an existing first mortgage real estate loan above ninety-five per cent loan to value if approved by the superintendent.

(F) Installment payments shall be required that are sufficient to amortize the entire principal and interest of the loan within a period of not more than forty years.

(G) A loan secured by real estate shall be in the form of an obligation or obligations secured by a mortgage, trust deed or other instrument, which shall constitute a lien on real estate. Any credit union may sell any obligations so secured in whole or in part.

(H) The limitations and restrictions set forth in this rule do not apply to loans made prior to the effective date of this rule, and do not apply to:

(1) Real estate loans that are insured under the National Housing Act, 48 Stat. 1246 (1934), 12 U.S.C. 1441 , as amended; or

(2) Real estate loans that are insured by the secretary of agriculture of the United States pursuant to Title I of the Bankhead-Jones Farm Tenant Act, 50 Stat 522 (1937), 7 U.S.C.1001 , as amended.

(I) The following are mandatory documents that shall be obtained by the credit union for a first mortgage loan:

(1) Note or bond which represents evidence of debt and contains the terms of repayment. This is in addition to the drafting of a valid purchase contract and approved application form;

(2) Mortgage deed or trust which establishes the credit union's rights to the property securing the loan. The mortgage deed or trust shall contain detailed property description;

(3) The application which represents a formal request for a loan detailing basic underwriting data such as security property offered. The purpose of the loan sales price if applicable and the borrower's capacity to repay, as a minimum of facts to be disclosed;

(4) An appraisal report dated within six months of application. The appraisal shall be made by a certified or licensed independent appraiser who has satisfied the requirements of Chapter 4763. of the Revised Code and applicable rules or other comparable statute, if the loan is greater than two-hundred fifty thousand dollars . Appraisals or determinations of the property value for loans two hundred fifty thousand dollars and under shall, at a minimum, be made by qualified staff personnel who have been approved by the board of directors and include a written report documenting the comparable sales, other information, and documentation that accurately reflect the appraised value. Appraisals shall be in writing, dated, and signed. Certified or licensed independent appraisers shall be paid the same fee whether or not the loan is granted. Sales price and loan information shall be withheld from the independent appraiser;

(5) A credit report dated within ninety days of application;

(6) Asset and liability verification or other acceptable verification requirements;

(7) Title evidence which establishes the validity of the association's lien position through title insurance or an attorney's opinion of validity;

(8) Hazard insurance coverage which insures the borrower and contains a loss payable clause in favor of the credit union;

(9) Termite inspection, if required in the locality;

(10) Flood insurance coverage when the property securing a loan is or will be located in a flood plain. Credit unions shall comply with all federal requirements including apprising the borrower of the fact that the property is located within a flood plain and maintaining records, placed in individual loan files, which indicate how the credit union determined whether flood insurance is required, a copy of the flood insurance policy, and the written acknowledgment of all parties of compliance with the federal requirements;

(11) A settlement and/or cost statement which indicates all charges and fees paid in connection with the loan, in compliance with "Truth in Lending Act", 82 Stat. 149 (1980), 15 U.S.C. 1606 , as amended and the "Real Estate Settlement Procedures Act" 88 Stat. 1724, 12 U.S.C. 2601 , as amended, the dates, amounts, receipts of each disbursement of loan proceeds, and evidence that the borrower received a copy of the statement;

(12) If applicable, a construction loan agreement which constitutes an agreement between the credit union and the borrower and/or contractor, setting forth in detail the rights and responsibilities of the parties involved pursuant to rule 1301:9-2-22 of the Administrative Code pertaining to construction loans;

(13) A commitment letter which specifies the terms and conditions under which the credit union promises to lend to the applicant; and

(14) If applicable, any other documents as may be required for certain types of loans, such as loans for land acquisition and development, or loans on developed lots and sites.

(J) The provisions of this rule shall be applicable to the refinancing of first mortgage purchase money real estate loans, with the exception of the use of the sale price.

(K) If requested by a credit union, the superintendent may approve a less restrictive real estate loan policy than provided by this rule. The request shall be made in writing and include a copy of the proposed real estate loan policy and a certified copy of the resolution of the board of directors adopting the policy. The credit union shall substantiate that it has the expertise, capital, management, and experience to implement the proposed policy. The credit union shall file with the superintendent a copy of the loan policy and information regarding the placement of proper private mortgage insurance on the excess amount. The superintendent shall notify the credit union not more than ten business days after the filing of the request or policy whether it is denied, approved, or requires modification. If the superintendent does not respond within ten business days after the filing of the request or policy, it shall be deemed approved; unless, the superintendent notifies the credit union in writing within ten business days of the credit union's request being filed that additional documentation is required. If additional documentation is required, the credit union shall have thirty days to file the additional documentation with the superintendent. If the superintendent does not respond within ten business days of receipt of the additional documentation, the request or policy shall be deemed approved.

(L) Nothing herein shall preclude the superintendent from requiring a more restrictive real estate loan policy than provided by this rule, as a matter of safety and soundness.

Effective: 03/22/2012
R.C. 119.032 review dates: 12/29/2011 and 03/22/2017
Promulgated Under: 119.03
Statutory Authority: 1733.41
Rule Amplifies: 1733.25
Prior Effective Dates: 8/3/93, 7/1/06

1301:9-2-22 Real estate construction loans.

(A) "Construction loans" are loans made for the purpose of building on vacant land or construction additions to existing structures. Because the incomplete structure and the land represent the security for the loan, funds are disbursed in installments as work progresses. One of three methods, or variants thereof, are used to ensure a lien free, and an adequately collateralized loan throughout construction. These three basic methods are:

(1) Progress payment, also referred to as a draw plan. Under this method, portions of the loan proceeds are disbursed to the borrower or general contractor when construction reaches certain stages of completion. These stages must be stipulated in the construction loan agreement. This method provides the least protection to the credit union since frequently no information is obtained as to whether the borrower or general contractor is compensating the subcontractors and materialmen;

(2) Voucher method, under which construction fund payments are usually made directly to the subcontractors and materialmen by the credit union. Payments are made on the basis of vouchers signed by the borrower, general contractor or other persons authorized in the construction loan agreement. Vouchers should be supported by lien waivers, appropriate to the requirements for the area in which the property is located. Under this method some credit unions hold back a percentage of the payments and disburse these funds at some predetermined time following completion of construction; and

(3) Title insurance method, under which a title company assumes responsibility for making construction disbursements and for obtaining the necessary assurance of an unencumbered first lien position for the lender. An updated title insurance policy is issued with each disbursement, insuring the lender to the full amount of the construction disbursements to date. It remains the credit union's responsibility to ensure, through construction inspections, that work is progressing in accordance with plans and specifications.

(B) Credit unions must establish standard procedures for the review and approval of construction loans. These procedures should be designed to provide the credit union with adequate safeguards to ensure lien-free construction of the improvements in accordance with approved plans and specifications. Records shall be available that include the following:

(1) Construction loan agreements that include:

(a) Allocation of loan proceeds and methods of disbursement; and

(b) Descriptions of documents required to support requests for reimbursement.

(2) Risk analysis work sheets;

(3) Copies of feasibility studies;

(4) Construction plans and specifications and the builder's cost estimates;

(5) Appraisal reports issued by a certified independent appraiser who has satisfied the requirements of Chapter 4763. of the Revised Code and applicable rules or other comparable statutes;

(6) Inspection reports;

(7) General ledger accounts for construction loans in process, and individual subsidiary ledger accounts for each loan;

(8) Construction progress and disbursement records;

(9) Reimbursement requests, supporting vouchers, lien waivers, affidavits, releases and receipted bills; and

(10) Surveys, soil tests, and data disclosing the availability of water, sewers and utilities.

(C) The following safeguards must be implemented to assure that construction loans are issued and serviced on a safe and sound basis:

(1) No disbursement of funds in advance of construction progress. As a result, the credit union will have sufficient undisbursed loan funds to ensure project completion;

(2) Loan agreements must include precautionary measures to avoid the filing of mechanics' liens or stop notices;

(3) Due consideration must be given to builder's past performance on similar projects including cost estimates to determine their accuracy and reasonableness;

(4) Loan agreements must provide for progress inspection to ensure that construction has been performed in accordance with approved plans and specifications, and that labor and material for which reimbursement is requested is evidenced by the construction progress prior to disbursement;

(5) Disbursement of construction funds that are properly supported by inspection reports;

(6) Loan agreements must provide that changes in plans and specifications can be made only with prior approval of the credit union; and

(7) Segregation of construction loan appraisal, inspection and disbursement functions. The disbursement function shall be separate and apart from appraisal and inspection, with all procedures documented as part of the policy.

Replaces: 1301:9-2-22

Effective: 03/22/2012
R.C. 119.032 review dates: 03/22/2017
Promulgated Under: 119.03
Statutory Authority: 1733.41
Rule Amplifies: 1733.25
Prior Effective Dates: 8/3/93

1301:9-2-23 Home equity and second mortgage loans.

(A) A "home equity loan or a second mortgage loan" is a loan secured by the equity in a dwelling, and is made for a purpose other than the purchase or refinancing of the dwelling, regardless of the lien priority. A home equity loan may be one with lines of equity credit which are either variable or fixed-rate. Home equity loans qualify as consumer credit. Home equity and second mortgage loans shall be made in accordance with disclosures required under the "Truth in Lending Act," 82 Stat. 149 (1980), 15 U.S.C. 1606 , as amended.

(B) Adequate insurance on properties securing home equity and second mortgage loans shall be in place and the borrower shall furnish a copy of a fire and casualty policy in at least the amount of any outstanding mortgage with a mortgage loss payable clause in favor of the credit union.

(C) Credit unions engaging in equity lending shall obtain a title search of the property securing home equity and second mortgage loans for outstanding liens and must retain a copy in the member's file. The title to the property securing a home equity or second mortgage loan shall be in fee-simple absolute.

(D) The combined aggregate amount of first mortgage and home equity or second mortgage loans shall not exceed one hundred per cent of the appraised value of the property securing the loan. An appraisal made by a certified or licensed independent appraiser who has satisfied the requirements of Chapter 4763. of the Revised Code and applicable rules or other comparable statute, shall be obtained for home equity or second mortgage loans of two-hundred fifty thousand dollars or more, or for ninety-five per cent of appraised value. Appraisals or a determination of the property value for home equity or second mortgage loans which are less than two hundred fifty thousand dollars or less than ninety-five per cent of appraised value shall, as a minimum, be made by qualified staff personnel approved by the board of directors and include a written report documenting the comparable sales or based on other acceptable information and documentation that accurately reflects the appraised value.

(E) A credit union may make home equity or second mortgage loans secured by liens exceeding ninety-five per cent of the appraised value, provided that the credit union files with the superintendent a copy of the loan policy and information regarding the placement of proper private mortgage insurance on the excess amount. The superintendent shall notify the credit union not more than ten business days after the filing of the request or policy whether it is denied, approved, or needs modification. If the superintendent does not respond within ten business days after the filing of the request or policy, it shall be deemed approved; unless, the superintendent notifies the credit union in writing within ten business days of the credit union's request being filed that additional documentation is required. If additional documentation is required, the credit union shall have thirty days to file the additional documentation with the superintendent. If the superintendent does not respond within ten business days of receiving the additional documentation the request shall be deemed approved. However, nothing shall preclude a credit union from requesting a waiver in writing for the requirement of private mortgage insurance when modifying an existing loan above ninety five per cent loan to value. The superintendent shall approve or deny the waiver within ten business days of receiving the request. If the superintendent does not respond within ten business days of receiving the waiver request it shall be deemed approved.

(F) The payment schedules for home equity and second mortgage loans shall provide for monthly installments but no less than quarterly, that include amortization of the principal and interest within terms of the loan agreement, and in no case shall the term exceed forty years .

(G) If requested by a credit union, the superintendent may approve a less restrictive real estate loan policy than provided by this rule. The request shall be made in writing and include a copy of the proposed real estate loan policy and a certified copy of the resolution of the board of directors adopting the policy. The credit union shall substantiate that it has the expertise, capital, management, and experience to implement the proposed policy. The credit union shall file with the superintendent a copy of the loan policy and information regarding the placement of proper private mortgage insurance the excess amount. The superintendent shall notify the credit union not more than ten business days after the filing of the request or policy whether it is denied, approved, or needs modification. If the superintendent does not respond within ten business days after the filing of the request or policy, it shall be deemed approved; unless, the superintendent notifies the credit union in writing within ten business days of the credit union's request being filed that additional documentation is required. If additional documentation is required, the credit union shall have thirty days to file the additional documentation with the superintendent. If the superintendent does not respond within ten business days of receipt of the additional documentation, the request or policy shall be deemed approved.

(H) Nothing herein shall preclude the superintendent from requiring a more restrictive real estate loan policy than provided by this rule, as a matter of safety and soundness.

Effective: 03/22/2012
R.C. 119.032 review dates: 12/29/2011 and 03/22/2017
Promulgated Under: 119.03
Statutory Authority: 1733.41
Rule Amplifies: 1733.25
Prior Effective Dates: 8/3/93, 7/1/06

1301:9-2-24 Member business loans.

(A) A "member business loan" is defined as any loan, line of credit or letter of credit which will be used for commercial, corporate, business, investment property or venture, or agricultural purpose. Exceptions to this definition are:

(1) Loans fully secured by a lien on an owner occupied one-to-four-family dwelling;

(2) Loans fully secured by shares in the credit union or deposits in other financial institutions;

(3) Aggregated member business loans to a member or an associated member for less than fifty thousand dollars;

(4) Loans fully insured or guaranteed by the federal, state, or local government, including its political subdivisions or by an agency of the federal, state, or local government; and

(5) Loans granted by a corporate credit union to another credit union, a credit union to another credit union, or a credit union to a credit union service organization(s).

(B) Definitions.

(1) "Associated member" means any member with a shared ownership, investment or other pecuniary interest in a business or commercial endeavor with the borrower.

(2) Specific to this rule, " immediate family member" means a spouse or other family member living in the same household.

(3) "Loan-to-value" (LTV) ratio means the quotient of the aggregate amount of all sums borrowed including outstanding balances plus any unfunded commitment or line of credit from all sources on an item of collateral divided by the market value of the collateral used to secure the loan.

(4) "Construction or development loan" means a financing arrangement for the purpose of acquisition of property or rights to property, including land or structures, with the intent of conversion into income-producing property including residential housing for rental or sale, commercial, industrial use, or similar use.

(C) For member business loans made other than to an individual, the credit union's records shall indicate the intended source of repayment and the borrower's capacity to service the debt. As a minimum, the credit union shall obtain financial statements of the business and tax returns for the three years immediately preceding the application for credit. Where there is security other than real estate, the file shall contain documentation indicating that a security interest has been created and perfected in favor of the lender. Financing statements are evidence of perfection for most types of collateral used in commercial financing. Credit unions may make working capital or seasonal loans which provide temporary capital in excess of normal needs and are repaid at the end of the cycle or season, by converting inventory and accounts receivable into cash. If a credit union engages in this type of lending, sufficient accounts receivable and/or inventory shall be pledged as collateral.

(D) Term member business loans granted for the purpose of acquiring capital assets such as plant and equipment shall be secured, and require amortization because of the time involved and the greater amount of risk inherent in such loans. Loan agreements on such credit shall contain certain restrictive covenants during the life of the loan.

(E) The board of directors shall adopt specific written member business loan policies, which shall be reviewed by the board at least annually. The policies shall take into consideration, and address the following:

(1) Particular types of member business loans which the credit union may make;

(2) The credit union's trade area for member business loans;

(3) Maximum amount of credit union assets, in relation to net worth, that may be invested in member business loans, and maximum amount to be invested in given categories or type of member business loans;

(4) Maximum amount of credit union assets in relation to reserves that may be lent to any individual member or group of associated members;

(5) An objective appraisal of the ability of the borrower to repay the loan;

(6) Qualifications and experience of personnel involved in making and administering business loans with a minimum of two years direct experience in business loans;

(7) Balance sheet data; trend and structure analysis; ratio analysis of cash flow income and expenses; leveraging; comparison with industry averages; receipt of and periodic updating of financial statements; and other documentation including tax returns;

(8) Collateral requirements, including loan to value ratios which shall not exceed the lesser amount of eighty per cent of the appraised value or eighty per cent of the sale price; appraisals; title search and insurance requirements; steps to be taken to secure various types of collateral; and how often the value and marketability of collateral is re-evaluated;

(9) Identification by position of those individuals prohibited from receiving member business loans;

No credit union shall make member business loans to the following non-volunteer senior management employees or to any associated member or immediate family member of such employees:

(a) The credit union's chief executive officer;

(b) Any assistant chief executive officer;

(c) The chief financial officer; or

(d) The chief lending officer.

(10) Provision for periodic disclosure to the credit union's members, of the aggregate dollar amount of business loans made by the credit unions;

(11) Loan monitoring, servicing and follow-up procedures, including collection practices;

(12) Loans shall be granted on a fully secured basis by collateral as follows:

(a) Second lien for LTV ratios of up to eighty per cent;

(b) First lien for LTV ratios of up to eighty per cent;

(c) First lien with an LTV ratio in excess of eighty per cent shall be granted only where the value in excess of eighty per cent is covered through acquisition of private mortgage or equivalent type insurance provided by an insurer acceptable to the credit union and the superintendent or insurance or guarantees by or subject to advance commitment to purchase by an agency of the federal, state or local government, and in no event shall the LTV ratio exceed ninety-five per cent.

(13) Guidelines for purchase and sale of business loans and business loan participations, if the credit union engages in that activity.

(F) Unless prior written approval is granted by the superintendent , allowing a greater amount to be lent to an individual member or a group of associated members, the aggregate business loans to such member or group shall not exceed fifteen per cent of the credit union's reserves (less allowance for loan losses account) net worth or one hundred thousand dollars, whichever is greater. If any portion of a member business loan is secured by shares in the credit union, or deposits in another financial institution, or fully or partially insured or guaranteed by the federal, state or local government including its political subdivisions, or by any agency of the federal, state or local government, such portion shall not be calculated in determining the fifteen per cent limit.

(G) Maturities on member business loans shall be consistent with the purpose, security, creditworthiness of the borrower, and sound lending policies.

(H) Construction and development loans granted under this rule to finance the construction or development of commercial or residential property shall be subject to the following additional provisions:

(1) The aggregate of all such loans, excluding any portion of a loan secured by shares in the credit union, or deposits in another financial institution, or fully or partially insured or guaranteed by, or subject to an advance commitment to purchase by the federal, state or local government, its political subdivision or by any agency of the federal, state, or local government, shall not exceed fifteen per cent of net worth;

(2) The borrower shall have a minimum of:

(a) Thirty per cent equity interest in the project being financed if the loan is for land development; or

(b) Twenty-five per cent equity interest in the project being financed if the loan is for construction or a combination of construction and development;

(3) Funds for such projects shall be released following on-site inspections by independent, qualified personnel in accordance with a preapproved draw schedule and any other conditions as set forth in the loan documentation.

(I) No credit union shall grant a member business loan where a portion of the amount of income to be received by the credit union in conjunction with the loans is tied to the profit of the business or commercial endeavor for which the loan is made. A credit union shall not take an equity interest in the commercial endeavor in lieu of payment.

(J) All loans, lines of credit, or letters of credit, the proceeds of which may be used for a commercial, corporate, business, investment property or venture, or agricultural purpose, shall be separately identified in the records of the credit union and reported as such in financial and statistical reports required by the superintendent.

(K) All member business loans shall be secured by collateral in accordance with this section, except the following:

(1) A credit card line of credit granted to nonnatural persons that is limited to routine purposes normally made available under such lines of credit;

(2) A loan made by a credit union if:

(a) The amount of the loan does not exceed one hundred thousand dollars; the aggregate of all unsecured member business loans does not exceed ten percent of the credit union's net worth; and

(b) The credit union has a net worth of at least seven percent.

(L) Unless otherwise determined by the national credit union administration or the superintendent, a credit union whose accounts are insured pursuant to 12 USC 1783 , as amended in 2009 are subject to the provisions of 12 USC 1757 a , as amended in 1998 and 12 CFR Part 723, effective as of 2012.

(M) If requested by a credit union, the superintendent may approve a less restrictive member business loan policy than provided by this rule. The request shall be made in writing and filed with the superintendent. It shall include a copy of the proposed member business loan policy and a certified copy of the resolution of the board of directors adopting the policy. The credit union shall also substantiate that is has the expertise, capital, management, and experience to implement the proposed policy. The superintendent shall notify the credit union not more than twenty business days after the filing of the request or policy whether it is denied, approved, or needs modification. If the superintendent does not respond within twenty business days after the filing of the request or policy, it shall be deemed approved; unless, the superintendent notifies the credit union in writing within twenty business days of the credit union's request being filed that additional documentation is required. If additional documentation is required, the credit union shall have thirty days to file the additional documentation with the superintendent. If the superintendent does not respond within twenty business days of receipt of the additional information, the request shall be deemed approved.

Effective: 03/22/2012
R.C. 119.032 review dates: 12/29/2011 and 03/22/2017
Promulgated Under: 119.03
Statutory Authority: 1733.41
Rule Amplifies: 1733.25
Prior Effective Dates: 8/3/93, 7/1/06

1301:9-2-25 Purchase of fixed assets or purchase of real estate and/or construction of an office building.

(A) As used in this rule:

(1) "Fixed assets" means any premises, furniture, fixtures, and equipment.

(2) "Furniture, fixtures, and equipment" include all office furnishings, office machines, computer hardware and software, automated terminals, heating and cooling equipment and machinery.

(3) "Premises" includes any parking lot, office, branch office, service facility as defined in rule 1301:9-1-01 of the Administrative Code, other facility, or real estate where the credit union transacts or will transact business.

(B) In the case of a purchase of real estate which does not raise the aggregate amount of fixed assets to more than five per cent of the shares and retained earnings, the credit union shall submit the following:

(1) A letter notice proposing the purchase that shall include all of the following:

(a) The circumstances surrounding the purchase such as the proposed use and complete description of the purchase;

(b) The amount of the proposed purchase;

(c) How the credit union intends to fund the purchase;

(d) The total amount the credit union has invested in fixed assets after the purchase; and

(e) Any other information the superintendent requires.

(2) The following supporting documents:

(a) Certified board resolution evidencing the directors' decision;

(b) Pro forma financial statements; and

(c) Certification that the proposed purchase when added to the total amount of current fixed assets does not exceed five per cent of the shares and retained earnings.

(C) A credit union may purchase and hold real estate, which is being used or is intended to be used as premises and other fixed assets in an amount aggregating not more than five per cent of the shares and retained earnings of the credit union unless otherwise approved by the superintendent.

(D) In the case of a purchase of real estate or other fixed asset which raises the aggregate amount of fixed assets to more than five per cent of shares and retained earnings, or a greater amount if approved, the credit union shall submit the following:

(1) A notice proposing the purchase of real estate or fixed asset that shall address all of the following:

(a) All of the items listed in paragraphs (B)(1) and (B)(2) of this rule;

(b) The level of fixed assets subsequent to the purchase an the calculated percentage of the fixed assts to shares and retained earnings of the credit union both prior to and after the purchase;

(c) A calculation projecting when the aggregate amount of fixed assets to shares and retained earnings will fall below the five per cent limit; and

(d) Any other information the superintendent requires.

(2) The following supporting documents if applicable:

(a) A copy of the offer, contingent upon the superintendent's approval, and acceptance of the agreement to contract for the purchase of real property intended to be used as premises; and

(b) A copy of the appraiser's report.

(E) If the purchase of real estate also includes the construction of an office building and raises the aggregate above five per cent of shares and retained earnings, the credit union shall submit, in addition to the items listed in paragraphs (D)(1) and (D)(2) of this rule, the following:

(1) A certified copy of the resolution of the board of directors awarding the general contract that includes the estimated cost of the construction; and

(a) The circumstances surrounding the purchase;

(b) The amount of the proposed purchase;

(c) How the credit union intends to fund the purchase;

(d) The total amount the credit union has invested in fixed assets after the purchase; and

(e) Any other information the superintendent requires.

(2) A copy of the blueprints and architect drawings of the proposed building.

(F) If the purchase of real estate also includes the construction of an office building and raises the aggregate above five per cent of shares and retained earnings, the credit union shall submit, in addition to the items listed in this rule, the following:

(1) A copy of the blueprints and architect drawings of the proposed building and estimates of the cost for such construction;

(2) Copies of all written bids by proposed general contractors, indicating the proposed cost of constructing the credit union building; and

(3) A certified copy of the resolution of the board of directors awarding the general contract.

(G) If requested by a credit union, the superintendent may approve a less restrictive fixed asset investment policy than provided in this rule. The request shall be made in writing and filed with the superintendent. It shall include a copy of the proposed fixed asset policy and a certified copy of the resolution of the board of directors approving the policy. The superintendent shall notify the credit union after the filing of the request or policy whether it is denied, approved, or needs modification. If the superintendent does not respond within ten business days after the filing of the request or policy, it shall be deemed approved; unless, the superintendent notifies the credit union in writing within ten business days of the credit union's request being filed that additional documentation is required. If additional documentation is required, the credit union shall have thirty days to file the additional documentation with the superintendent. If the superintendent does not respond within ten business days of the receipt of the additional information, the request or policy shall be deemed approved.

Replaces: 1301:9-2-25

Effective: 03/22/2012
R.C. 119.032 review dates: 03/22/2017
Promulgated Under: 119.03
Statutory Authority: 1733.41
Rule Amplifies: 1733.02 , 1733.03 , 1733.04 , 1733.25 , 1733.30
Prior Effective Dates: 8/3/93, 7/1/06

1301:9-2-26 Service fees.

By resolution of the board of directors, reasonable fees or service charges may be assessed, and such charges or fees shall be subject to proper disclosure to the membership.

R.C. 119.032 review dates: 12/29/2011 and 12/29/2016
Promulgated Under: 119.03
Statutory Authority: 1733.41
Rule Amplifies: 1733.15
Prior Effective Dates: 8/3/93

1301:9-2-27 Interest rebate.

The board of directors may authorize the payment of an interest rebate on loan accounts upon such reasonable terms as are consistent with the following provisions:

(A) The board of directors shall authorize the method of computation, payment and qualifications for participation in such rebate; and

(B) Any rebate of interest shall be recorded as a reduction of the loan interest for the accounting period to which it applies.

R.C. 119.032 review dates: 12/29/2011 and 12/29/2016
Promulgated Under: 119.03
Statutory Authority: 1733.41
Rule Amplifies: 1733.25
Prior Effective Dates: 8/3/93

1301:9-2-28 Credit card programs.

Prior to entering a credit card lending program, a credit union shall file with the superintendent a certification by the board of directors that the implementation of a credit card lending program will not negatively affect the operations of the credit union on a long-term basis. The credit union shall also file a credit card lending program policy with the superintendent. At a minimum the policy should address: the aggregate limit for the program, as a percentage, in relation to the credit union's net worth; a method for funding the program; a description of the collection procedures specific to credit card lending; and the lending guidelines which include a limit of aggregate unsecured credit, as a per cent of the member's gross income to qualify for a loan. The superintendent shall notify the credit union not more than ten business days after the filing of the certification and policy whether it is denied, approved, or needs modification. If the superintendent does not respond within ten business days after the filing of the certification and policy, it shall be deemed approved; unless, the superintendent notifies the credit union in writing within ten business days of the credit union's request being filed that additional documentation is required. If additional documentation is required, the credit union shall have thirty days to file the additional documentation with the superintendent. If the superintendent does not respond within ten business days of the receipt of the additional documentation, the policy is deemed approved.

Effective: 03/22/2012
R.C. 119.032 review dates: 12/29/2011 and 03/22/2017
Promulgated Under: 119.03
Statutory Authority: 1733.41
Rule Amplifies: 1733.25
Prior Effective Dates: 8/3/93, 7/1/06

1301:9-2-30 Shares and share drafts.

(A) In the case of a joint membership share the credit union shall do the following:

(1) Comply with membership requirements of the credit union;

(2) Disclose to the joint owners the requirements and benefits of joint ownership in a membership share account;

(3) Maintain and verify member service eligibility for members who have a joint membership; and

(4) Comply with paragraph (B) of this rule.

(B) The member listed first on the joint membership share account shall be the member qualified to vote as provided by law, the articles or the regulations.

(C) If each joint owner, under a joint account, has subscribed to a membership share, as provided for in the regulations, each shall have a vote as a qualified member.

(D) A credit union is authorized to receive funds for deposit in various types of accounts pursuant to division (A) of section 1733.24 of the Revised Code. Classes of shares are authorized pursuant to division (B) of section 1733.24 of the Revised Code.

(E) Share and share accounts may be of one or more classes, as designated by the board of directors, subject to approval of the superintendent, based upon assurance of equitable distribution of dividends among the classes, and other appropriate standards of fairness. A disproportionately high rate may not be paid on large accounts to the detriment of smaller accounts.

(F) As a part of the examination process, the number and classes of shares shall be reviewed and submitted along with the examination report to the superintendent for approval.

(G) A registry of all shares shall be kept, including all of the transactions of the credit union pertaining to such shares.

(H) All other transactions concerning shares and share accounts shall be executed in accordance with divisions (H) and (I) of section 1733.24 of the Revised Code.

(I) A credit union may maintain share draft accounts in accordance with division (E) of section 1733.24 of the Revised Code.

(J) The board of directors shall certify in writing to the superintendent, that the implementation of a share draft program will not negatively affect the operation of the credit union on a long-term basis.

Replaces: 1301:9-2-30

Effective: 03/22/2012
R.C. 119.032 review dates: 03/22/2017
Promulgated Under: 119.03
Statutory Authority: 1733.41
Rule Amplifies: 1733.24
Prior Effective Dates: 8/3/93, 7/1/06

1301:9-2-31 Credit union service contracts.

(A) Credit unions may act as a representative of and enter into a contractual agreement with one or more credit unions or other organizations for the purpose of sharing, utilizing, renting, leasing, purchasing, selling, and/or jointly owning fixed assets, or engaging in activities and/or services which relate to the daily operations of credit unions. Agreements must be in writing and shall advise all parties subject to the agreement that the goods and services provided shall be subject to approval by the superintendent .

(B) Where any agreement calls for or requires payment in advance of the actual or estimated charges for more than three months, such payment shall be deemed an investment in a credit union service organization and subject to the limitations in rule 1301:9-2-32 of the Administrative Code.

Effective: 03/22/2012
R.C. 119.032 review dates: 12/29/2011 and 03/22/2017
Promulgated Under: 119.03
Statutory Authority: 1733.41
Rule Amplifies: 1733.02 , 1733.03 , 1733.04
Prior Effective Dates: 8/3/93

1301:9-2-32 Credit union service organizations.

(A) A "Credit Union Service Organization" (CUSO) means any organization, as determined by the superintendent, in which a credit union can invest in and make loans if the CUSO primarily serves credit unions, its membership, or the membership of other credit unions and whose business relates to the daily or routine operation of the credit unions it serves, are incidental to the credit union, are provided for the benefit of the members of the credit union or whose activities or services are approved by the superintendent. A credit union may invest in or loan to a CUSO by itself, with other credit unions or with non-credit union parties.

(B) A credit union may invest in shares, stock or obligations of a CUSO in amounts not exceeding ten per cent of the credit union's total net worth, unless otherwise approved by the superintendent.

(C) A credit union may make loans to a CUSO in amounts not exceeding ten per cent of the credit union's net worth, which percentage is independent of the three per cent investment limit, unless otherwise approved by the superintendent.

(D) A credit union's maximum investment and loans in CUSOs may not exceed, in the aggregate, twenty per cent of its net worth, unless otherwise approved by the superintendent.

(E) A CUSO chartered as a corporation, a limited liability company, or a cooperative must be adequately capitalized and operated as a separate entity. A credit union making an investment in or loan to a CUSO structured as a limited liability company shall obtain written legal advice as to whether such organization is established in a manner that will limit the credit union's potential exposure to no more than the loss of funds invested in or lent to the CUSO.

(F) A credit union may participate only as a limited partner in a CUSO structured as a limited partnership. As such, the credit union shall not engage in those activities which may cause the credit union to lose its status as a limited partner, and correspondingly its limited ability, and thereby be treated as a general partner. A credit union shall obtain written legal advice to ensure it will not be treated as a general partner.

(G) A credit union may invest in or lend to a CUSO only if the organization primarily serves credit unions and/or the membership of affiliated credit unions.

(H) Investments in or loans to CUSOs shall be limited to organizations which engage in activities or services which relate to the daily operation of credit unions, are incidental to the credit union, are for the benefit of their members, or have been approved by the superintendent. The following are examples of activities or services in which a CUSO may participate:

(1) Operational services: credit card and debit card services; check cashing and wire transfers; internal audits for credit unions; ATM services; EFT services; accounting services; data processing; shared credit union branch (service center) operations; sale of repossessed collateral; management, development, sale or lease of fixed assets; sale, lease or servicing of computer hardware or software; management and personnel training and support; payment item processing; locator services; marketing services, research services; record retention and storage; microfilm, microfiche, optical and electrical imaging, CD-ROM data storage and retrieval services; alarm-monitoring and other security services; debt collection services; credit analysis; consumer mortgage loan origination; loan processing, servicing and sales, coin and currency services, and provision of forms and supplies; money orders; savings bonds; travelers checks; purchase and sale of U.S. mint commemorative coins services; courier services; facsimile transmissions and copying services; supervisory committee audits; electronic income tax filing; and cyber financial services;

(2) Financial services: financial planning and counseling; retirement counseling; investment counseling; securities brokerage services; estate planning; income tax preparation; acting as administrator for prepaid legal service plan; developing and administering IRA, Keough, deferred compensation, and other personnel benefit plans; trust services; acting as trustee, guardian, conservator, estate administrator, or in any other fiduciary capacity; real estate brokerage services; travel agency services; agent or agency for sale of insurance; personal property leasing; and provision of vehicle warranty programs; provision of vehicle warranty programs; provision of group purchasing program; real estate leasing of excess credit union service organization property; alarm-monitoring and other security services; disaster recovery services; student loan origination; all telephone and telecommunication services; and business loan origination.

(3) In connection with providing a permissible service, a credit union may invest in a non-credit union service organization service provider. The amount of the credit union's investment is limited to the amount necessary to participate in the service provider, or a greater amount if necessary to receive a reduced price for goods or services.

(4) The superintendent may expand the range of services, beyond those set forth in paragraph (H) of this rule or as otherwise determined by the superintendent, for purposes of investments in or loans to CUSOs as set forth in paragraph (N) of this rule. Such approval shall be obtained from the superintendent in writing.

(I) Individuals who serve as officials of, or are employed by, an affiliated credit union, and immediate family members of such individuals, may not receive any salary, commission, investment income, other income, or compensation from a CUSO either directly or indirectly, or from any person being served through the CUSO. This provision does not prohibit an official or employee of a credit union from assisting in the operation of a CUSO, provided the individual is not compensated by the CUSO. Further the CUSO may reimburse the credit union for the services provided by the individual.

(J) A credit union must follow GAAP in its involvement with CUSOs.

(K) An affiliated credit union must obtain written agreements from a CUSO, prior to investing in or lending to the organization that the organization will:

(1) Follow GAAP;

(2) Render financial statements (balance sheet and income statement) at least quarterly and obtain an annual audit of the financial statement by a public accountant or certified public accountant licensed to do business in this state and provide copies of such to the affiliated credit union;

(3) Provide the superintendent or his representatives with complete access to any books and records of the CUSO, as deemed necessary by the superintendent in carrying out his responsibilities.

(L) As used in this rule:

"Official" means directors or committee members.

(M) CUSOs are not permitted to acquire control of, either directly or indirectly, another depository financial institution, nor invest in shares, stocks, or obligations of an insurance company, trade association, liquidity facility or similar organization, corporation, or association.

(N) The superintendent may expand the range of activities and services a CUSO can offer for purposes of a credit union investing in or lending to the CUSO. Any request to expand the range of services shall be filed with the superintendent and shall include an explanation of the activity or services and how that activity or service relates to the daily operation of the credit union, is incidental to the operation of the credit union, or is being offered as a benefit to the members of the credit union. The superintendent shall notify the credit union not more than fifteen business days after the filing of the request for expansion of services or policy whether it is denied, approved, or requires modification. If the superintendent does not respond within fifteen business days after the filing of the request or policy, it shall be deemed approved; unless, the superintendent notifies the credit union in writing within fifteen business days of the credit union's request being filed that additional documentation is required. If additional documentation is required, the credit union shall have thirty days to file the additional documentation with the superintendent. If the superintendent does not respond within fifteen business days of receipt of the additional documentation, the request or policy shall be deemed approved.

Effective: 03/22/2012
R.C. 119.032 review dates: 12/29/2011 and 03/22/2017
Promulgated Under: 119.03
Statutory Authority: 1733.41
Rule Amplifies: 1733.02 , 1733.03 , 1733.04 , 1733.30
Prior Effective Dates: 8/3/93, 7/1/06

1301:9-2-33 Sale and leaseback.

Credit unions may enter into a valid sale and leaseback arrangement, which is consistent with safe and sound practices, subject to the prior written approval of the superintendent.

Effective: 03/22/2012
R.C. 119.032 review dates: 12/29/2011 and 03/22/2017
Promulgated Under: 119.03
Statutory Authority: 1733.41
Rule Amplifies: 1733.02 , 1733.03 , 1733.04 , 1733.15
Prior Effective Dates: 8/3/93

1301:9-2-34 Other real estate owned.

Credit unions shall report annually to the superintendent a list of other real estate owned pursuant to division (B)(4) of section 1733.04 of the Revised Code and carried on their books in accordance with GAAP. The report shall include the date the property was acquired, address of the property, amount of the purchase or mortgage balance, and appraised value of the property, name of the insurance company and specification of coverage.

Effective: 03/22/2012
R.C. 119.032 review dates: 12/29/2011 and 03/22/2017
Promulgated Under: 119.03
Statutory Authority: 1733.41
Rule Amplifies: 1733.04
Prior Effective Dates: 8/3/93

1301:9-2-37 Suspicious activity reports.

(A) All credit unions shall report any crime or suspected crime that occurs at its office(s),

on the "Suspicious Activity Report" (SAR) form provided by the "Financial Crimes Enforcement Network" (FinCEN), within thirty calendar days after discovery of a suspicious activity. Each credit union shall follow the instructions and reporting requirements accompanying the SAR.

(B) A SAR shall be completed following the discovery of:

(1) Insider abuse involving any amount;

(2) Violations aggregating five thousand dollars or more where a suspect can be identified;

(3) Violations aggregating twenty-five thousand dollars or more regardless of a potential suspect;

(4) Transactions aggregating five thousand dollars or more that involve potential money laundering or violations of the Bank Secrecy Act.

(C) For federally-insured credit unions, SARs are to be filed with FinCEN and a copy of the SAR shall be filed with the superintendent within thirty calendar days after discovery of a suspicious activity. The failure to file a SAR in accordance with the instructions accompanying the SAR may subject the credit union, its officers, directors, agents or other institution-affiliated parties to the assessment of civil money penalties or other administrative actions.

(D) Non federally-insured credit unions shall file SARs with the prosecutor's office in the county in which the credit union's principal office is located and a copy of the SAR shall be filed with the superintendent within thirty calendar days after discovery of a suspicious activity. The failure to file a SAR in accordance with the instructions accompanying the SAR and this rule may subject the credit union, its officers, directors, agents or other institution-affiliated parties to the assessment of civil money penalties, criminal penalties and other administrative actions.

(E) All credit unions shall maintain a copy of any SAR that it files and the original of all attachments to the report for a period of five years from the date of the report.

Effective: 03/22/2012
R.C. 119.032 review dates: 12/29/2011 and 03/22/2017
Promulgated Under: 119.03
Statutory Authority: 1733.41
Rule Amplifies: 1733.23 , 1733.32
Prior Effective Dates: 8/3/93, 7/1/06

1301:9-2-38 Powers and duties of liquidating agents.

(A) As soon as practicable after taking possession, the liquidating agent shall inventory the assets of such credit union as of the date of taking possession. The inventory shall show the value of the assets carried on the books of the credit union, and the security therefor, if any; contain a brief description of the assets and any security; and a list of the credit union's creditor and accounts liabilities. A copy of such inventory shall be furnished to the superintendent upon completion.

(B) The liquidating agent shall promptly publish a notice to the credit union's creditors to present their claims, together with proof, to the liquidating agent by a date specified in the notice. This date shall be not less than ninety days after the publication of the notice. The liquidating agent shall republish such notice approximately one and two months, respectively, after the initial publication. At the time of initial publication, the liquidating agent shall mail a notice similar to the published notice to any creditor shown on the credit union's books at the last address appearing therein. If the liquidating agent discovers the name of a creditor whose name does not appear on the credit union's books, a notice similar to the published notice shall be mailed to such creditor within thirty days after the discovery of the name and address.

(C) Any party wishing to submit a claim against the liquidated credit union must submit a written proof of claim in accordance with the requirements set forth in the notice to creditors. A failure to submit a written claim within the time provided in the notice to creditors shall be deemed a waiver of said claim and the claimant shall have no further rights or remedies with respect to such claim. The liquidating agent may require submission of supplemental evidence by the claimant and by interested parties in the event of a dispute concerning a claim against any asset of the liquidated credit union. The liquidating agent shall determine whether to allow or disallow a claim and shall notify the claimant within one hundred eighty days from the date a claim against a credit union is filed. Failure by the liquidating agent to determine a claim and notify the claimant within the one hundred eighty day period shall be deemed a denial of the claim.

(D) The liquidating agent shall collect all obligations and money due such credit union and may, to the extent consistent with its appointment, do all things desirable or expedient in its discretion to wind up the affairs of the credit union including, but not limited to, the following:

(1) Exercise all rights and powers of the credit union including, but not limited to, any rights and powers under any mortgage, deed of trust, chose in action, option, collateral note, contract, judgment or decree, or instrument of any nature;

(2) Institute, prosecute, maintain, defend, intervene, and otherwise participate in any and all actions, suits, or other legal proceedings by and against the liquidating agent or the credit union or in which the liquidating agent, the credit union, or its creditors or shareholders shall have an interest, and in every way to represent the credit union, its shareholders and creditors;

(3) Employ on a salary or fee basis such persons as in the judgment of the liquidating agent are necessary or desirable to carry out its responsibilities and functions, including, but not limited to, appraisers, certified public accountants and attorneys;

(4) Execute, acknowledge, and deliver any and all deeds, contracts, leases, assignments, bills of sale, releases, extensions, satisfactions, and other instruments necessary or proper for any purposes, including, but not limited to, the effectuation, termination, or transfer of real, personal or mixed property, or which shall be necessary or proper to liquidate the credit union, and any deed or other instrument executed pursuant to the authority hereby given shall be as valid and effective for all purposes as if the same had been executed as the act and deed of the credit union;

(5) Disaffirm or repudiate any contract or lease to which the credit union is a party, the performance of which the liquidating agent, in his sole discretion, determines to be burdensome, and which disaffirmance or repudiation in the liquidating agent's sole discretion will promote the orderly administration of the credit union's affairs;

(6) Deposit, withdraw, or transfer funds, and otherwise exercise complete control over all investment or depository accounts maintained by or for the credit union at financial depositories or similar institutions; and

(7) Exercise such other authority as is conferred by the laws of this state.

(E) The liquidating agent shall have power to:

(1) Pay all costs and expenses of the liquidation, subject to the approval of the superintendent;

(2) Pay off and discharge taxes and liens;

(3) Pay out and expend such sums as are deemed necessary or advisable for or in connection with the preservation, maintenance, conservation, protection, remodeling, repair, rehabilitation, or improvement of any asset or property of any nature of the credit union or the liquidating agent;

(4) Pay off and discharge any assessments, liens, claims, or charges of any kind against any asset or property of any nature on which the credit union or the liquidating agent has a lien by way of mortgage, deed of trust, pledge, or otherwise, or in which the credit union or liquidating agent has any interest; and

(5) Settle, compromise, or obtain the release of, for cash or other consideration, claims and demands against the credit union or the liquidating agent.

(F) The liquidating agent shall have power to:

(1) Sell for cash or on terms, exchange, assign, or otherwise dispose of, in whole or in part, any or all of the assets and property of the credit union, real, personal and mixed, tangible and intangible, of any nature, including any mortgage, deed of trust, chose in action, bond, note, contract, judgment, or decree, share or certificate of share of stock or debt, owing to the credit union or the liquidating agent; and

(2) Surrender, abandon, and release any chose in action, or other assets or property of any nature, whether the subject of pending litigation or not, and settle, compromise, modify, or release, for cash or other consideration, claims and demands in favor of the credit union or the liquidating agent.

Effective: 03/22/2012
R.C. 119.032 review dates: 12/29/2011 and 03/22/2017
Promulgated Under: 119.03
Statutory Authority: 1733.41
Rule Amplifies: 1733.37
Prior Effective Dates: 8/3/93

1301:9-2-39 Charter conversion.

(A) Any state chartered credit union may convert to a federally chartered credit union and any federally chartered credit union domiciled in Ohio may convert to a state chartered credit union subject to the approval of the superintendent.

(B) A credit union must submit the following documents to the superintendent for approval to convert to a federally chartered credit union:

(1) A letter requesting conversion and stating the reasons for the conversion;

(2) A copy of the application to convert submitted to the national credit union administration;

(3) A resolution adopted by a majority of the board of directors of the credit union stating its intention to convert;

(4) A certified copy of the results of the membership vote;

(5) A copy of the national credit union administration's final approval to convert to a federal or state charter; and

(6) Any other information the superintendent requires.

(C) If a credit union is federally chartered and converting to a state chartered credit union, the following information shall be submitted in addition to the items listed in paragraph (B) of this rule:

(1) A completed application for a federally chartered credit union to convert to a state chartered credit union by means prescribed by the superintendent; and

(2) Additional supporting documents including:

(a) A copy of the credit union's bylaws;

(b) The proposed initial articles of incorporation and code of regulations;

(c) All items listed in the conversion application; and

(d) Any other information the superintendent requires.

(D) If the proposed conversion also involves an insurance conversion, the credit union shall refer to the national credit union administration's rules and regulations for conversion of insurance.

(E) The superintendent shall not approve any proposed conversion by a state chartered credit union if:

(1) The superintendent has not received all of the required documents; or

(2) The credit union has not paid all supervisory or other fees due to the division of financial institutions before the proposed date of the conversion.

(F) A credit union which applies to the division for a charter conversion may appeal an adverse decision by the superintendent in accordance with sections 119.01 to 119.13 of the Revised Code.

Effective: 03/22/2012
R.C. 119.032 review dates: 12/29/2011 and 03/22/2017
Promulgated Under: 119.03
Statutory Authority: 1733.41
Rule Amplifies: 1733.341
Prior Effective Dates: 8/3/93, 7/10/98

1301:9-2-40 Trustee or custodian.

A credit union may act as a trustee or custodian, for which reasonable compensation may be received, under any written trust instrument or custodial agreement created or organized in the United States and forming part of a tax-advantaged savings plan that qualifies for specific tax treatment under sections 223, 401(d), 408, 408A, and 530 of the Internal Revenue Code, 26 U.S.C. 223 , 26 U.S.C. 401(d) , 26 U.S.C. 408 , 26 U.S.C. 408A , and 26 U.S.C. 530 , as amended, for its members or groups of its members, provided that the funds of such plans are invested in share accounts or share certificate accounts of the credit union. These services include, but are not limited to, acting as a trustee or custodian for member retirement, education, or health savings accounts.

R.C. 119.032 review dates: 12/29/2011 and 12/29/2016
Promulgated Under: 119.03
Statutory Authority: 1733.41
Rule Amplifies: 2101.161 , 2105.31 , 2109.13 , 2109.372 , 2109.41
Prior Effective Dates: 07/01/06

1301:9-2-41 Merger.

(A) As used in this rule:

(1) "Continuing credit union" means the credit union which will continue to be in operation after the merger.

(2) "Merging credit union" means the credit union that will cease to exist as an operating credit union at the time of the merger.

(B) Any credit union may, with approval of the superintendent, merge with or into another state chartered or federally chartered credit union.

(C) The merging and continuing credit unions must submit the following documents to the superintendent for approval to merge with a state chartered credit union or federally chartered credit union:

(1) A letter requesting approval to merge which states the proposed merger partners and the reasons for the merger;

(2) A completed merger application in a form approved by the division for federally chartered or state chartered credit unions to merge with and into another state chartered credit union;

(3) A resolution adopted by a majority of the board of directors for both the merging and continuing credit unions stating their intention to merge;

(4) A certified copy of the results of the membership vote for the merging and continuing credit unions unless waived by the superintendent;

(5) The merger agreement between the continuing and merging credit unions;

(6) The primary insurer's approval of the merger. If the merger involves an insurance conversion, the credit union should reference the national credit union administration rules and regulations for guidance; and

(7) Any other information the superintendent requires.

(D) In addition to the items listed in paragraph (C) of this rule, the continuing and merging credit unions shall submit the following additional supporting items:

(1) Financial statements of the merging and continuing credit unions including projected net worth calculations for the combined credit unions;

(2) Analysis of the allowance for loan and lease loss reserves for the merging and continuing credit unions and a probable asset to share ratio calculation; and

(3) The means by which the continuing credit union will notify the merging credit union's membership of services, locations, and any other pertinent information relating to the merger.

(E) The superintendent shall not approve any proposed merger by a state chartered credit union if:

(1) The superintendent has not received all of the required documents; or

(2) The credit union has not paid all supervisory or other fees due to the division of before the proposed date of the merger.

(F) Within ten business days after receiving an application required under paragraph (B) of this rule, the superintendent shall determine whether to accept the application. If the superintendent does not respond within ten business days of receipt of the application it shall be deemed accepted. If the transaction is with a credit union doing business under authority granted by a regulatory authority other than the superintendent, the superintendent shall notify the regulatory authority under which the credit union is doing business of the application and solicit that regulatory authority's comments. Within ninety days after accepting an application required under paragraph (B) of this rule, the superintendent shall approve or disapprove the application. If the superintendent does not respond within ninety days after accepting the application, the application shall be deemed approved.

(G) The superintendent may condition approval of an application under paragraph (F) of this rule in any manner the superintendent considers appropriate.

Effective: 03/22/2012
R.C. 119.032 review dates: 03/22/2017
Promulgated Under: 119.03
Statutory Authority: 1733.41
Rule Amplifies: 1733.34

1301:9-2-42 Conducting business out of state.

A credit union organized and doing business under the laws of this state is permitted to do business in such other state or territory of the United States under supervisory and regulatory conditions similar to the laws of this state and are required to meet such other conditions as determined by such other state or territory's supervisory agency.

Effective: 03/22/2012
R.C. 119.032 review dates: 03/22/2017
Promulgated Under: 119.03
Statutory Authority: 1733.41
Rule Amplifies: 1733.02 , 1733.03 , 1733.04