Chapter 1733: CREDIT UNIONS

1733.01 Credit union definitions.

As used in this chapter, unless the context otherwise requires:

(A) "Credit union" means a corporation organized and qualified as such under this chapter. In addition to the powers enumerated in this chapter and unless restricted in this chapter, every credit union has the general powers conferred upon corporations by Chapter 1701. of the Revised Code. A credit union is a nonprofit cooperative financial institution and as such is organized and operates for the mutual benefit and general welfare of its members with the earnings, savings, benefits, or services of the credit union being distributed to its members as patron savers and borrowers and not to its members as individuals.

(B) "Corporate credit union" means a credit union, eligibility for membership in which is being a credit union qualified to do business in this state. Such credit union shall use the term "corporate" in its official name.

(C) "Foreign credit union" means a credit union formed under the laws of another state which are substantially similar to this chapter.

(D) "Member" means a person who is a member of a credit union.

(E) "Association member" means any member of a credit union other than a credit union or an individual member.

(F) "Voting member" means an association member or an individual member who is qualified to vote as provided by law, the articles, or the regulations.

(G) "Person" includes, without limitation, an individual, a corporation, an unincorporated society or association, or any other organization of individuals.

(H) "Articles" includes original articles of incorporation, agreements of merger, amended articles, and amendments to any of these.

(I) "Regulations" includes the code of regulations of a credit union and any amendments thereto or an amended code of regulations and any amendments thereto.

(J) Persons having a "common bond of association" include those persons and their families.

(K) "Membership share" means a share of the credit union, the subscription to which shall be a prerequisite for membership in the credit union.

(L) "Share account" means an account established for a member for which no share certificates are issued but which are included in the registry of shares, which includes all transactions of the credit union pertaining to such shares.

(M) "Undivided earnings" consist of all accumulated net earnings and reserves required under division (B) of section 1733.31 of the Revised Code.

(N) "State" means the United States, any state, territory, insular possession, or other political subdivision of the United States, including the District of Columbia.

(O) An "emergency" exists when an emergency exists for other corporations as the same is defined and described in section 1701.01 of the Revised Code.

(P) "Superintendent of credit unions" means the "division of financial institutions" or the "superintendent of the division of financial institutions of this state"; and whenever the context requires it, may be read as "director of commerce" or as "chief of the division of financial institutions." Whenever the division or superintendent of credit unions is referred to or designated in any statute, rule, contract, or other document, the reference or designation shall be deemed to refer to the division or superintendent of financial institutions, as the case may be.

(Q) "Outside auditor" means an accountant who is licensed to practice as a certified public accountant or public accountant by this state, and who is retained by a credit union to audit its accounts, but who is not otherwise employed by the credit union.

(R) "Regulated individual" means a director, committee member, officer, or employee of a credit union.

(S) "Financial institution regulatory authority" includes a regulator of business activity in which a credit union is engaged, or has applied to engage in, to the extent that the regulator has jurisdiction over a credit union engaged in that business activity. A credit union is engaged in a business activity, and a regulator of that business activity has jurisdiction over the credit union, whether the credit union conducts the activity directly or a subsidiary or affiliate of the credit union conducts the activity.

Effective Date: 06-18-2002

1733.02 Purpose of chapter.

It is hereby declared to be the purpose of the general assembly in enacting Chapter 1733. of the Revised Code:

(A) To enable credit unions to be formed for the purpose of promoting thrift among their members and, to that end, to establish, on a cooperative basis, facilities for savings, credit for provident and productive uses, assistance to members in budgeting and money management and the effective use of their assets and resources, and all activities necessary or incidental thereto;

(B) To delegate to the superintendent of credit unions rule-making power and administrative discretion, subject to this chapter, which will assure that the supervision and regulation of credit unions, chartered or qualified under the laws of this state, may be flexible and readily responsive to changes in economic conditions and in practices within the credit union movement;

(C) To provide for the protection of the interests of members, creditors, and the general public in credit unions doing business in this state;

(D) To permit credit unions to effectively serve the convenience and needs of their members and to permit continued improvement of such services;

(E) To provide the opportunity for the management of credit unions to exercise their business judgment, subject to this chapter;

(F) To clarify and modernize the laws governing credit unions.

Effective Date: 01-01-1979

1733.03 Purpose of credit union.

The purpose for which a credit union may be formed is to promote thrift among its members, and to that end to establish, on a cooperative basis, facilities for savings, credit for provident and productive purposes, assistance to members in budgeting and money management and the effective use of their assets and resources, and all activities necessary or incidental thereto.

Effective Date: 11-19-1971

1733.04 Authority of credit union.

(A) In addition to the authority conferred by section 1701.13 of the Revised Code, but subject to any limitations contained in sections 1733.01 to 1733.45 of the Revised Code, and its articles and regulations, a credit union may do any of the following:

(1) Make loans as provided in section 1733.25 of the Revised Code;

(2) Invest its money as provided in section 1733.30 of the Revised Code;

(3) If authorized by the code of regulations, rebate to the borrowing members a portion of the member's interest paid to the credit union;

(4) If authorized by the regulations, charge a membership or entrance fee not to exceed one dollar per member;

(5) Purchase group savings life insurance and group credit life insurance;

(6) Make reasonable contributions to any nonprofit civic, charitable, or service organizations;

(7) Act as 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 , 401(d) , 408 , 408A , and 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.

(B) The authority of a credit union shall be subject to the following :

(1) A credit union may not borrow money in excess of twenty-five per cent of its shares and undivided earnings, without prior specific authorization by the superintendent of credit unions.

(2) A credit union may not pay a commission or other compensation to any person for securing members or for the sale of its shares, except that reasonable incentives may be made available directly to members or potential members to promote thrift.

(3) A credit union, subject to the approval of the superintendent, may have service facilities other than its home office.

(4) Real estate may be acquired by lease, purchase, or otherwise as necessary and to the extent required for use of the credit union presently and in the future operation of its office or headquarters, and in case of a purchase of real estate, the superintendent must first be notified in writing prior to the purchase of the real estate. The superintendent shall notify the credit union not more than thirty days after receipt of the notification to purchase the real estate if the purchase is denied, approved, or modified. If the superintendent does not respond within thirty days after receipt of the notification to purchase the real estate, it shall be deemed approved. Nothing herein contained shall be deemed to prohibit a credit union from taking title to real estate in connection with a default in the payment of a loan, provided that title to such real estate shall not be held by the credit union for more than two years without the prior written approval of the superintendent. A credit union also may lease space in any real estate it acquires in accordance with rules adopted by the superintendent.

(C)

(1) As used in division (C) of this section:

(a) "School" means an elementary or secondary school.

(b) "Student" means a child enrolled in a school.

(c) "Student branch" means the designation provided to the credit union for the in-school services and financial education offered to students.

(2) A credit union, upon agreement with a school board, in the case of a public school, or the governing authority, in the case of a nonpublic school, and with the permission of the superintendent, may open and maintain a student branch.

(3) Notwithstanding any other provision of this section, any student enrolled in the school maintaining a student branch who is not otherwise qualified for membership in the credit union maintaining the student branch is qualified to be a member of that student branch.

(4) The student's membership in the student branch expires upon the student's graduation from secondary school.

(5) The student branch is for the express use of students and may not be used by faculty, staff, or lineal ancestors or descendents of students.

(6) Faculty, staff, or lineal ancestors or descendents of students are not eligible for membership in the credit union maintaining the student branch unless otherwise qualified by this section to be members.

(7) The superintendent may adopt rules appropriate to the formation and operation of student branches.

(D) A credit union may guarantee the signature of a member in connection with a transaction involving tangible or intangible property in which a member has or seeks to acquire an interest.

Effective Date: 07-14-1987; 04-14-2006

1733.041 Insurance protection for members' accounts.

Each credit union operating under this chapter or otherwise authorized to do business in this state shall obtain insurance for the protection of their members' accounts. Such share guarantee insurance may be obtained from the national credit union administration operating under the "Federal Credit Union Act," 84 Stat. 994 (1970), 12 U.S.C. 1751 , and any amendments thereto, or from the national deposit guaranty corporation, established under Chapter 1761. of the Revised Code, or from any insurer qualified under the laws of this state to write such insurance.

Effective Date: 06-26-1986

1733.042 Posting notice of insurance.

(A) As a condition of doing business in this state, every credit union with members' accounts insured by a credit union share guaranty corporation licensed pursuant to Chapter 1761. of the Revised Code shall post a notice at all public entrances at its place of business and at each of its service facilities. The notice shall be not less than eight and one-half inches by eleven inches and shall include all of the following in not less than twenty-four point type:

(1) A statement that members' accounts are insured by a share guaranty corporation;

(2) The name of the share guaranty corporation;

(3) A conspicuous underlined statement that reads as follows: "MEMBERS' ACCOUNTS ARE NOT INSURED OR GUARANTEED BY ANY GOVERNMENT OR GOVERNMENT-SPONSORED AGENCY."

(B) The notice required by division (A) of this section shall be approved by the superintendent of credit unions and copies of the approved notice shall be furnished to its participating credit unions by the share guaranty corporation at no cost to the credit unions.

(C) All literature provided by the share guaranty corporation for distribution to its participating credit unions shall contain a conspicuous underlined statement that reads as follows: "MEMBERS' ACCOUNTS ARE NOT INSURED OR GUARANTEED BY ANY GOVERNMENT OR GOVERNMENT-SPONSORED AGENCY."

(D) Every credit union described in division (A) of this section also shall include in any literature or other material that contains the name of the share guaranty corporation and that is distributed or intended for distribution to the public a conspicuous underlined statement that reads as follows: "MEMBERS' ACCOUNTS ARE NOT INSURED OR GUARANTEED BY ANY GOVERNMENT OR GOVERNMENT-SPONSORED AGENCY."

Effective Date: 03-17-1989

1733.05 Membership.

(A) Persons otherwise qualifying for membership in a credit union under this section, the articles, and the regulations, and who are elected to membership by the board of directors, shall become members of a credit union, provided that in lieu of electing persons to membership, the board of directors may elect or appoint one or more membership officers and delegate authority to any such membership officer to accept persons into membership.

(B) No person shall become a member of a credit union who has not subscribed to or purchased at least one membership share of such credit union. Each member is responsible for maintaining a current address with the credit union.

(C) The membership of a credit union shall be limited to groups having a common bond of occupation or association or groups within a well-defined neighborhood, community, or rural district; however, except as otherwise provided in the articles or regulations, a person shall be deemed to retain affiliation with the credit union so long as he remains a member of the credit union even though no longer within the field of membership.

(D) Unless otherwise provided in the articles of incorporation or the code of regulations, and subject to such conditions as the superintendent of credit unions may establish, groups composed of persons within the field of membership of a credit union may become members of such credit union.

(1) Any credit union may, with the approval of the superintendent, pursuant to section 1733.33 of the Revised Code, amend its articles of incorporation and, if appropriate, its code of regulations, to permit select groups having a common bond of occupation or association or select groups within a well-defined neighborhood, community, or rural district, to become members of such credit union in accordance with rules adopted by the superintendent.

(2) Before the select group is permitted membership in a credit union, the superintendent must approve, in writing, both the select group and the credit union.

(E) With the approval of the superintendent, any select group, within a field of membership and described in division (D)(1) of this section, may disaffiliate from the credit union with which it is associated if a majority of the persons within the select group vote for disaffiliation. Any such proposed disaffiliation must be pursuant to a written plan approved by the superintendent. This plan shall be distributed to such persons in advance of the vote on the proposed disaffiliation, which plan must have due regard for the equitable division of assets and liabilities, including share accounts and loans of the select group seeking to disaffiliate, and any other consideration required by the superintendent.

(F) Credit unions qualified to do business in this state have a common bond of association for the purpose of forming and operating a corporate credit union.

(G) No interstate charter amendment, conversion, merger, or other expansion of a credit union field of membership shall be authorized without the approval of all supervisory authorities affected, whether state or federal, in accordance with rules adopted by the superintendent in terms of administrative control and authority, the location of the surviving credit union in the case of a merger, or the home office in the case of an expansion, is controlling.

Effective Date: 09-29-1994

1733.06 Statutory agent.

Every credit union shall have and maintain a statutory agent upon whom any process, notice, or demand required or permitted by statute to be served upon a credit union may be served. The agent shall be one of the following:

(A) A natural person who is a resident of this state;

(B) A domestic or foreign corporation, nonprofit corporation, limited liability company, partnership, limited partnership, limited liability partnership, limited partnership association, professional association, business trust, or unincorporated nonprofit association that has a business address in this state. If the agent is an entity other than a domestic corporation, the agent shall meet the requirements of Title XVII of the Revised Code for an entity of the agent's type to transact business or exercise privileges in this state.

Amended by 130th General Assembly File No. 62, SB 98, §1, eff. 2/18/2014.

Effective Date: 11-19-1971

1733.07 Forming a credit union.

Seven or more persons who have a common bond of association, and a majority of whom are residents of the state, may form a credit union by:

(A) Executing articles of incorporation.

(1) The articles shall set forth:

(a) The name, which shall include the words "credit union" and shall not be so similar to the name of an existing credit union as to be likely to mislead the public;

(b) The place in this state where the principal office of the credit union is to be located;

(c) The purpose, which shall be "to conduct the business of a credit union";

(d) The persons and organizations constituting the field of membership;

(e) The authorized number of shares or a statement that the number of shares shall be unlimited; the express terms, if any, of the shares; and if the shares are classified, as permitted in section 1733.24 of the Revised Code, the designation of each class, their express terms, and par value, if any, per share.

(2) The articles may also include any provisions permitted under section 1701.04 of the Revised Code to be included in articles and not in conflict with sections 1733.01 to 1733.45 of the Revised Code.

(B) Executing regulations for the government of the credit union, the conduct of its affairs, and the management of its property, consistent with the law and the articles, which may include, without limiting the generality of such authority, provisions with respect to:

(1) The time and place for holding, the manner of and authority for calling, giving notice of, and conducting, and the requirements of a quorum for, meetings of members;

(2) The minimum age of a voting member;

(3) The number, classification, manner of fixing or changing the number, qualifications, and term of office of directors;

(4) The time and place for holding, the manner of and authority for calling, giving notice of, and conducting, and requirements of a quorum for, meetings of directors;

(5) The appointment of an executive and other committees of the directors, and their authority;

(6) The titles, qualifications, duties, term of office, compensation or other manner of fixing compensation, and removal of officers and directors;

(7) Defining, limiting, or regulating the exercise of the authority of the credit union, the directors, the officers, or all of the members; any provisions regulating rights respecting the purchase, ownership, method of payment for, alienation or transfer of shares;

(8) Rules governing loans, the furnishing of statements of account, investments, reserves and losses, and dividends;

(9) Emergency regulations permitted corporations under section 1701.11 of the Revised Code.

(C) Submitting to the superintendent of credit unions so many copies of the properly executed articles and regulations as he may by rule require, together with a properly executed form appointing a statutory agent in accordance with section 1701.07 of the Revised Code, and the fee required by the secretary of state for filing articles of a credit union.

(D) Upon receipt of the documents and fee described in division (C) of this section, the superintendent shall have thirty days in which to approve or disapprove the articles and regulations. An appeal, from an adverse decision of the superintendent, may be made in accordance with sections 119.01 to 119.13 of the Revised Code. The superintendent shall not approve the articles and regulations unless he determines that they comply with this chapter and the rules promulgated thereunder and that the credit union, if formed, will be in the interest of its members and the public.

(E) Upon approval of the articles and regulations, the superintendent shall certify such approval of the articles and regulations, and shall submit the articles to the secretary of state, together with the form appointing the statutory agent and the required filing fee, and shall return the regulations to the applicant or its representative. The superintendent shall maintain a copy of the articles and regulations as approved.

Effective Date: 01-01-1979

1733.08 Accepting articles by secretary of state.

(A) When the articles and other documents relating to the credit union have been submitted to the secretary of state, the secretary of state shall accept the articles and other documents for filing and record the same by microfilm or by any authorized photostatic or digitized process. Evidence of the filing shall be returned to the credit union.

(B) The legal existence of the credit union shall begin upon the filing of the articles with the secretary of state.

Effective Date: 07-29-1998

1733.09 Meeting of incorporators.

(A) When not less than twenty-five persons, five of whom shall be original incorporators, have met the requirements for membership set forth in section 1733.05 of the Revised Code, the articles and regulations, excepting having been approved by the board of directors for membership, and shall have subscribed for shares of the credit union in an aggregate amount of at least two hundred fifty dollars, the incorporators, or a majority of them, shall give notice of the first meeting of the applicants for membership to each such applicant.

(B) At any meeting of applicants a majority of the applicants for membership shall constitute a quorum; and the applicants, at any such meeting at which a quorum is present, shall pass upon and may admit to membership any or all applicants whose application for membership is received prior to the time the vote is taken.

(C) When not less than twenty-five applicants have been accepted for membership as provided in division (B) of this section, the members shall elect a board of directors.

Effective Date: 11-19-1971

1733.10 Initial meeting of board of directors.

(A) Within three business days following their election, the board of directors shall meet and elect or appoint officers and committees pursuant to the provisions of the regulations.

(B) At the first meeting of the board of directors, the directors shall take such other actions as are required of them by the articles or regulations, and may take any other actions authorized by the law, the articles, or regulations.

(C) Each director and officer of a credit union shall, when appointed or elected, take an oath that he will, so far as the duty devolves upon him, diligently and honestly administer the affairs of the credit union, and will not knowingly violate, or willingly permit to be violated, any law applicable to such credit union. Such oath shall be subscribed by the person making it, and certified by an officer authorized to administer oaths. A copy shall be filed in the records of the credit union.

Effective Date: 07-14-1987

1733.11 Action taken without meeting.

Unless the articles or regulations prohibit the authorization or taking of any action of the members or of the directors without a meeting, any action which may be authorized or taken at a meeting of the members or the directors may be authorized or taken by the respective body without a meeting with the affirmative vote or approval of, and in a writing or writings signed by all of the directors or two-thirds of the voting members, who would be entitled to notice of meeting for such purpose or in the case of members, such other proportion or number of voting members, not less than a majority, as the articles or regulations require. Any such writing shall be filed with or entered upon the records of the credit union. Any certificate with respect to the authorization or taking of any such action, which is required to be filed in the office of the superintendent of credit unions or the secretary of state, shall recite that the authorization or taking of such action was in a writing or writings approved and signed as specified in this section.

Effective Date: 01-01-1979

1733.12 Annual meeting.

(A) An annual meeting of members for the election of directors and the consideration of reports to be presented before such meeting shall be held on the first Friday in March of each year unless another date is provided for in the articles or regulations. When the annual meeting is not held or directors are not elected thereat, they may be elected at a special meeting called for that purpose. Such special meeting shall be called as promptly as possible but in no event later than sixty days after the regular date scheduled for the annual meeting unless the superintendent of credit unions has consented to some later date.

(B) Meetings of members shall be called and conducted in the manner and at the time and place stated in the regulations.

Effective Date: 01-01-1979

1733.13 Voting.

(A) Each voting member present in person, by proxy, or by mail ballot is entitled to cast one vote, irrespective of the number of shares the member owns, on each matter properly submitted to the members for their vote, consent, waiver, release, or other action.

(B) The chairperson of the board, the president, any vice-president, secretary, or treasurer of any association member of the credit union shall conclusively be presumed to have authority to cast the vote of such association member and to appoint proxies and execute consents, waivers, releases, on its behalf, unless before a vote is taken or a consent, waiver, or release is acted upon, it appears by a certified copy of the code of regulations, bylaws, or a resolution of the trustees, directors, or executive committee of the said association member, that such authority does not exist or is vested in some other officer or person. For the purposes of this section, a person exercising such authority as such officer is prima-facie to be considered duly elected, qualified, and acting as such officer.

(C) If the articles or regulations so provide, any person, who is entitled to attend a members' meeting to vote thereat, or to execute consents, waivers, or releases, may:

(1) Vote thereat, and execute consents, waivers, and releases, and exercise any of the person's other rights, by mail ballot delivered to the office of the credit union at least seven days prior to the date set for the meeting. At least thirty days' notice shall be given to all eligible members of the date set for such meeting. No mail ballot shall be valid after the expiration of eleven months after delivery to the credit union. The form of any mail ballot shall comply with criteria established by the superintendent or have the prior written approval of the superintendent of credit unions.

(2) Be represented at such meeting or vote thereat, and execute consents, waivers, and releases, and exercise any of the person's other rights, by proxy or proxies appointed by a writing signed by such person. No appointment of a proxy shall be valid after the expiration of eleven months after it is made. The form of any proxy shall comply with criteria established by the superintendent or have the prior written approval of the superintendent.

Effective Date: 07-14-1987; 2008 SB247 09-11-2008

1733.14 Quorum at member meeting.

Unless the articles or regulations otherwise provide:

(A) Ten per cent of the voting members of a credit union, whether they are present in person, by mail ballot, or by proxy, at any meeting of members constitute a quorum for such meeting.

(B) The act of a majority of the voting members represented in person, by mail ballot, or by proxy at a meeting at which a quorum is present shall control, but no action required by law, the articles, or regulations to be authorized or taken by a designated proportion of the members may be authorized or taken by a lesser proportion.

(C) The voting members represented at a meeting, whether or not a quorum is present, may adjourn such meeting from time to time.

Effective Date: 07-14-1987

1733.15 Board of directors.

(A) Except as otherwise provided by law, the articles, or regulations, the corporate powers of a credit union shall be exercised, its business conducted, and its property controlled by a board of directors, provided that the number of directors fixed by the articles or regulations shall not be less than five.

(B) All directors shall be voting members of the credit union.

(C) The articles or regulations may divide directors into two or more classes whose terms of office shall expire at different times and may fix the term of office of the directors or of any class of directors at not more than three years from the date of their election.

(D) For their own government, the directors may adopt or amend bylaws or adopt amended bylaws not inconsistent with the articles or regulations.

(E) In discharging official duties, a director may, when acting with reasonable care and in good faith, rely upon the books and records of the credit union, upon reports made to the credit union by an officer or employee or by any other person selected for the purpose with reasonable care by the credit union, and upon financial statements or written reports prepared by an officer or employee of the credit union in charge of its accounts or certified by a public accountant or firm of public accountants.

(F) A credit union shall not elect or appoint a person to its board of directors who is presently serving as a director of another credit union, unless either of the following conditions has been met:

(1) If the person presently serves on the board of directors of a credit union having assets of less than five million dollars, the credit union, prior to retaining the person's services, notifies the superintendent of credit unions in writing of the person's candidacy or appointment as a director.

(2) If the person presently serves on the board of directors of a credit union having assets of five million dollars or more, the superintendent has approved the person's candidacy or appointment.

(G) If the number of candidates for the board of directors does not exceed the number of director positions being elected, those candidates shall be deemed elected and shall serve as set forth in the articles or regulations.

Effective Date: 09-29-1994; 2008 SB247 09-11-2008

1733.151 Plan for educating directors, committee members, and senior management officials as to duties and responsibilities.

(A) The board of directors of each credit union shall annually prepare a plan for educating each of its directors, committee members, and senior management officials as to the duties and responsibilities that accompany their respective positions. One copy of the plan shall be maintained in the files of the credit union. Evidence of compliance with the plan by each director, committee member, or senior management official shall also be maintained in the files of the credit union. The plan may, without limitation, require the directors, committee members, or senior management officials to acquire and read materials, attend seminars or workshops, view films or tapes, or a combination of these.

(B) The preparation of and compliance with any educational plan under division (A) of this section shall not be construed to limit the civil or criminal liability of the directors, committee members, or senior management officials due to their omission of any duties and responsibilities that accompany their respective positions.

Effective Date: 09-29-1994

1733.16 Board meetings.

Unless otherwise provided in the articles, regulations, or bylaws, and subject to the exceptions applicable during an emergency, as that term is defined in section 1733.01 of the Revised Code:

(A) Meetings of the directors may be called by the chairperson, vice-chairperson, president, or any vice-president of the board or any two directors.

(B) Meetings of the directors may be held within or without the state. Unless the articles or regulations prohibit participation by directors at a meeting by means of communication equipment, meetings of the directors may be held through any communication equipment if all the persons participating can hear each other, and participation in the meeting pursuant to this division constitutes presence at the meeting.

(C) Notice of the place, if any, and time of each meeting of the directors shall be given to each director either by personal delivery or by mail, telegram, cablegram, overnight delivery service, or any other means of communication authorized by the director at least two days before the meeting, unless otherwise specified in the regulations or bylaws. The notice described in this division need not specify the purpose of the meeting.

(D) Notice of adjournment of a meeting need not be given, if the time and place to which it is adjourned are fixed and announced at the meeting.

Effective Date: 11-19-1971; 04-14-2006

1733.17 Quorum of board.

Except for regulations applicable during an emergency, as that term is defined in section 1733.01 of the Revised Code, and except that the articles or regulations may require a greater number, a majority of the entire authorized number of directors is necessary to constitute a quorum for a meeting of directors except that a majority of the directors in office constitute a quorum for filling a vacancy on the board. The act of a majority of the directors present at a meeting at which a quorum is present is the act of the board, unless the act of a greater number is required by the law, the articles, regulations, or bylaws.

Effective Date: 11-19-1971

1733.18 Vacancies on board - removal of director.

(A) The office of a director becomes vacant if he dies or resigns. Any resignation takes effect immediately or at such other time as the director specifies in a written resignation.

(B) The directors shall remove any director and thereby create a vacancy on the board:

(1) If, by order of court, he is found to be of unsound mind, or if he is convicted of a felony or any criminal offense involving dishonesty or breach of trust;

(2) If the board of directors, by a two-thirds majority at any meeting called for that expressly stated purpose, declares the office of a director to be vacant because such director has failed to live up to the standards specified for directors in the law, the articles, or regulations, or who otherwise fails to perform any of the duties required of him as a director.

(C) Any or all directors may be removed with or without cause by a majority vote of the voting members at any meeting of members called for that expressly stated purpose, and at such meeting the members may fill any vacancy created by a removal under this division.

(D) The board of directors may appoint a member to serve for the unexpired term of any director whose office becomes vacant for any reason set forth in division (A) or (B) of this section.

Effective Date: 09-29-1994

1733.181 Removal from office.

(A)

(1) Whenever, in the opinion of the superintendent of credit unions, any director, officer, committee member, employee, agent, or other person participating in the conduct of the affairs of a credit union has committed any violation of law or rule, or of a cease-and-desist order, or has engaged or participated in any unsafe or unsound practice in connection with the credit union, or has committed or engaged in any act, omission, or practice which constitutes a breach of his fiduciary duty as director, officer, committee member, or other person, and the superintendent determines that the credit union has suffered or will probably suffer substantial financial loss or other damage or that the interests of its members could be seriously prejudiced by reason of such violation or practice or breach of fiduciary duty, the superintendent may serve upon such director, officer, committee member, or other person a written notice of his intention to remove him from office.

(2) Whenever, in the opinion of the superintendent, any director, officer, or committee member of a credit union, by conduct or practice with respect to another credit union or other business institution which resulted in substantial financial loss or other damage, has evidenced his personal dishonesty or unfitness to continue as a director, officer, or committee member, and whenever, in the opinion of the superintendent, any other person participating in the conduct of the affairs of the credit union, by conduct or practice with respect to such credit union or another credit union or other business institution which resulted in substantial financial loss or other damage, has evidenced his personal dishonesty or unfitness to participate in the conduct of the affairs of such credit union, the superintendent may serve upon such director, officer, committee member, or other person a written notice of his intention to remove him from office or to prohibit his further participation in any manner in the conduct of the affairs of such credit union.

(3) With respect to any director, committee member, or officer of a credit union or any other person, the superintendent may, if he considers it necessary for the protection of the credit union or the interests of its members, by written notice to such effect served upon such director, committee member, officer, or other person, suspend him from office or prohibit him from further participation in any manner in the conduct of the affairs of the credit union. Such suspension or prohibition shall become effective upon service of such notice and shall remain in effect pending the completion of the administrative proceedings and until such time as the superintendent dismisses the charges specified in such notice, or, if an order of removal or prohibition is issued against the director, officer, or committee member or other person, until the effective date of any such order. Copies of any such notice shall also be served upon the credit union of which such person is a director, officer, or committee member or in the conduct of whose affairs he has participated.

(B) A notice of intention to remove a director, officer, committee member, or other person or to prohibit his participation in the conduct of the affairs of a credit union, as served under division (A)(1) or (2) of this section, shall contain a statement of the facts constituting the grounds therefor, and shall inform the director, officer, committee member, or other person that he may request an adjudication hearing on the question of his removal or prohibition. Such a hearing shall be conducted in accordance with section 119.09 of the Revised Code. If the director, officer, committee member, or other person does not request a hearing, he shall be deemed to have consented to the issuance of an adjudication order of removal or prohibition. In the event of such consent, or if upon the record of such hearing the superintendent finds that any of the grounds specified in the notice have been established, he may issue an adjudication order removing the director, officer, committee member, or other person, or prohibiting his participation in the conduct of the affairs of the credit union.

(C) Except as otherwise provided in this division, any person who is removed from the board of directors of a credit union under division (B) of this section, and who either does not appeal his removal or whose removal is upheld upon appeal, is forever disqualified from serving as a director of any credit union. If, however, the superintendent, upon written application of the person removed, and pursuant to an adjudication conducted in accordance with Chapter 119. of the Revised Code, finds a compelling reason for removing the disqualification of this division, he may issue an adjudication order removing the disqualification and declaring the person again eligible to serve as a director of a credit union.

Effective Date: 07-14-1987

1733.19 Establishment of committees - advisory board.

(A) The regulations may provide for the creation by the directors of an executive committee consisting of not less than three directors, and may authorize the delegation to any such committee of any of the authority of directors other than any action requiring more than a majority vote of the board of directors; provided, that the executive committee shall exercise only such authority in the interim between the meetings of the board and shall make a full report of, and the board shall review, all actions taken at any meeting of such committee at the next regular meeting of the board of directors following the meeting of the executive committee.

(B) Unless the articles or regulations provide a different method for the establishment of a supervisory audit committee, the board of directors shall appoint a supervisory audit committee of not less than three individual voting members for such term as is provided in the regulations. The committee shall audit the books of the credit union at least annually, using generally accepted auditing procedures and standards, and shall report its findings to the board. Under the supervision of the supervisory audit committee, accounts showing installment payments by members upon shares of the credit union shall be verified at least annually.

(C) In lieu of the appointment of a supervisory audit committee as provided in division (B) of this section, the board of directors may employ a public accountant or a firm of public accountants to perform the functions of a supervisory audit committee. The board of directors may appoint an audit committee to oversee the public accountant or firm of public accountants.

(D) The superintendent of credit unions may require at any time that a credit union have its accounts audited in accordance with generally accepted auditing standards by an outside auditor. The outside auditor shall be retained, and expense of any such audit shall be paid, by the credit union.

(E) Unless the articles or regulations provide for the appointment of loan officers in lieu of a credit committee, the board of directors shall appoint, or the members shall elect, a credit committee composed of not less than three individual voting members, which committee shall have such powers in the granting of loans and the supervision of lending practices as shall be delegated to it by the articles, regulations, or resolutions of the board of directors. The credit committee shall make regular reports of their activities to the board of directors, and the board of directors shall review the reports.

(F) If the articles or regulations so provide, a credit union may establish an advisory board consisting of persons selected by the board of directors or their designee. Persons serving on the advisory board need not be members of the credit union, they may be paid per diem not exceeding thirty dollars per day and expenses for their services on such board, and their duties shall be to make recommendations on financial and policy matters of the credit union.

(G) A credit union may establish such other committee or committees as shall be provided for in the articles, regulations, bylaws, or by resolution of the board of directors.

Effective Date: 06-18-1991; 2008 SB247 09-11-2008

1733.191 Notice of outside auditor.

(A) A credit union shall notify the superintendent of credit unions, on a form prescribed by the superintendent, within ten days after the retainment, of the name, address, and telephone number of each outside auditor who is retained by the credit union, whether or not the retainment is pursuant to section 1733.19 of the Revised Code. Whenever there is any change in the information provided under this division, such as by the retainment of a different outside auditor, the credit union, on a form prescribed by the superintendent, within ten days after the change, shall notify the superintendent of the change.

(B) A credit union may dismiss, release, or otherwise terminate its relationship with an outside auditor. Within fifteen days after such termination, the credit union shall inform the superintendent, in writing, of the fact of the termination, the reasons for the termination, and of the circumstances surrounding the termination. If for any reason the superintendent considers the information provided by the credit union to be insufficient, he shall request the credit union to provide the necessary information or otherwise investigate the reasons for and the circumstances surrounding the dismissal, release, or other termination of the outside auditor. For the purpose of any such investigation, the superintendent may subpoena witnesses, administer oaths, receive testimony, and order the submission of documents.

(C) The superintendent, by rule adopted in accordance with Chapter 119. of the Revised Code, shall prescribe forms on which credit unions shall provide the notifications required by division (A) of this section. The forms shall require credit unions to provide the information required by that division; the name, address, and telephone number of the credit union filing the form; and such other information as the superintendent considers necessary to enable him to carry out this section and sections 1733.19 and 1733.191 of the Revised Code. The superintendent shall provide blank copies of the form to each credit union.

Effective Date: 07-14-1987

1733.20 Officers - duties.

(A) The officers of the credit union shall consist of a president, a secretary, a treasurer, and, if desired, a chairman of the board, a vice chairman of the board, one or more vice-presidents, and such other officers and assistant officers as is provided for in the regulations, bylaws, or by resolution of the board of directors. The officers shall be elected by directors. The chairman and vice chairman of the board of directors shall be directors. Unless the articles or regulations otherwise provide, none of the other officers need be a director.

(B) Any two offices may be held by the same person, but no officer shall execute, acknowledge, or verify any instrument in more than one capacity if such instrument is required by law or by the articles, regulations, or bylaws, to be executed, acknowledged, or verified by two or more officers.

(C) Unless the articles or regulations otherwise provide, all officers shall be elected annually.

(D) Any officer may be removed, with or without cause, by the directors without prejudice to the contract rights of such officer. The election or appointment of an officer for a given term, or a general provision in the articles, regulations, or bylaws with respect to term of office, shall not be deemed to create contract rights.

(E) Except with the written consent of the superintendent of credit unions, no person shall serve as an officer of a credit union, if the person is convicted of a felony or any criminal offense involving dishonesty or a breach of trust.

(F) A credit union shall not retain the services of a person who is presently serving as a senior management official of another credit union, unless either of the following conditions has been met:

(1) If the person presently serves as a senior management official of a credit union having assets of less than five million dollars, the credit union, prior to retaining the person's services, notifies the superintendent in writing that it intends to appoint the person to a position of a senior management official.

(2) If the person presently serves as a senior management official of a credit union having assets of five million dollars or more, the credit union has obtained the approval of the superintendent to appoint the person to a position of a senior management official.

Effective Date: 09-29-1994

1733.21 Binding effect of acts of minor officer.

The act of any individual as a duly elected or appointed officer, director, or committeeman shall be binding upon the credit union although such person is not of legal age.

Effective Date: 11-19-1971

1733.22 Compensation.

(A) No officer, director, or employee of any credit union shall receive any commission, salary, or other emolument for services arising out of the officer's, director's, or employee's association with the credit union except per diem, wages, or salary which the officer, director, or employee receives, subject to rules adopted under section 1733.411 of the Revised Code, as compensation for services to the credit union.

(B) No director or member of any committee shall receive any compensation for services as such; however, unless otherwise provided in the articles or regulations, a credit union may provide, at its expense, a director or committee member reasonable health, accident, and related types of personal insurance protection. A director or committee member is entitled, subject to rules adopted under section 1733.411 of the Revised Code and when so authorized by the board of directors, to reimbursement for the director's or committee member's expenses incurred in connection with the business of the credit union.

Effective Date: 07-14-1987; 04-14-2006

1733.23 Fidelity bond.

The treasurer and all employees of every credit union who are responsible for administering and safekeeping the funds of the credit union, before entering upon the discharge of their duties, shall be covered by an individual, schedule, or blanket fidelity bond in favor of the credit union employing them, with terms and surety approved by the board of directors of the credit union and the superintendent of credit unions. Such bond shall be at the expense of the credit union. Its amount shall be increased if required by the superintendent.

Effective Date: 01-01-1979

1733.24 Deposits -shares and accounts - withdrawals.

(A) A credit union is authorized to receive funds for deposit in share accounts, share draft accounts, and share certificates from its members, from other credit unions, and from an officer, employee, or agent of the federal, state, or local governments, or political subdivisions of the state, in accordance with such terms, rates, and conditions as may be established by its board of directors.

(B) The shares and share accounts of the credit union may be of one or more classes, as designated by the board of directors, subject to approval of the superintendent of credit unions based on rules that shall assure equitable distribution of dividends among classes, considering costs and advantages of each class to the members of the credit union, including without limitation special services rendered, length of ownership, minimum investment, conditions of repurchase, and other appropriate standards or combinations thereof. In the event the articles of incorporation of the credit union indicate the authorized number of shares to be unlimited, the designation of classification of shares and share accounts of the credit union may be effected by the board of directors, subject to the approval of the superintendent, and does not require amendment of the articles of incorporation. All shares of the credit union shall have a par value per share as set by the board of directors. Redemptions and liquidating dividends shall be prorated to each member on the basis of the price paid the credit union for such share, irrespective of the class of such shares.

(C)

(1) Each credit union shall have one class of shares designated as "membership share." The membership shares, or if a credit union has but one class of shares, then all of the shares of the credit union, shall have a par value as set by the board of directors.

(2) Two or more persons that are eligible for membership that have jointly subscribed for one or more shares under a joint account each may be admitted to membership.

(D) A credit union need not issue certificates for any or all of its classes of shares but irrespective of whether certificates are issued, a registry of shares must be kept, including all of the transactions of the credit union pertaining to such shares.

(E) A credit union is authorized to maintain share draft accounts in accordance with rules prescribed by the superintendent. The credit union may pay dividends on share draft accounts, may pay dividends at different rates on different types of share draft accounts, and may permit the owners of such share draft accounts to make withdrawals by negotiable or transferable instruments or other orders for the purpose of making transfers to third parties.

(F) Unless otherwise provided by written agreement of the parties, the rights, responsibilities, and liabilities attaching to a share draft withdrawn from, transferred to, or otherwise handled by a credit union are defined in and governed by Chapters 1303. and 1304. of the Revised Code, as if the credit union were a bank.

(G) Unless otherwise provided in the articles or regulations, a member may designate any person or persons to own or hold shares, or share accounts with the member in joint tenancy with right of survivorship and not as tenants in common.

(H) Shares or share accounts may be issued in the name of a custodian under the Ohio transfers to minors act , a member in trust for a beneficiary, a fiduciary or custodian in trust for a member beneficiary, or a fiduciary or custodian in trust upon the death of a member. Redemption of such shares or payment of such share accounts to a member , to the extent of the payment, discharges the liability of the credit union to the member and the beneficiary, and the credit union shall be under no obligation to see to the application of the payment. Unless prior to the death of a member, the member has notified the credit union in writing in a form approved by the credit union of a different beneficiary to receive the proceeds of such shares or share accounts, then the proceeds shall be paid to the beneficiary or to the beneficiary's parent or legal representative. Any payment made pursuant to written instructions of the member or pursuant to the provisions herein contained shall be a valid and sufficient release and discharge of the credit union in connection with any such share or share accounts.

(I)

(1) Except as otherwise provided in the articles or regulations, and subject to the provisions thereof, a minor may purchase shares , share accounts, or other depository instruments, and except for qualification as a voting member, the credit union may deal with the minor with respect to shares , share accounts, or other depository instruments owned by the minor as if the minor were a person of legal age.

(2) If shares, share accounts, or other depository instruments are issued in the name of a minor, redemption of any part or all of the shares or withdrawal of funds by payment to the minor of the shares or funds and any declared dividends or interest releases the credit union from all obligation to the minor as to the shares reduced or funds withdrawn.

(J) The regulations may require advance written notice of a member's intention to withdraw the member's shares. Such advance notice shall not exceed sixty days.

Effective Date: 07-14-1987; 04-14-2006

1733.241 Payment on joint account - contract for payment on death.

(A) When a share, share account, or deposit is made in the name of two or more persons, payable to either or the survivor, the credit union may pay all of the share, share account, deposit, any part of the share, share account, deposit, or any interest earned on the share, share account, or deposit, to either of the named persons, or the guardian of the estate of either of the named persons, whether or not the other person is living. The receipt or acquittance of the person paid is a sufficient release and discharge of the credit union for any payments made from the account to that person.

(B) A credit union may enter into a written contract with a natural person for the proceeds of the person's shares, share accounts, or deposits to be payable on the death of that person to another person or to any entity or organization in accordance with the terms, restrictions, and limitations set forth in sections 2131.10 and 2131.11 of the Revised Code.

Effective Date: 2008 SB247 09-11-2008

1733.242 Acceptance of property for safekeeping - transactions with minors.

(A) On the terms and conditions the credit union prescribes, a credit union may do all of the following:

(1) Provide safes, vaults, safe deposit boxes, night depositories, and other secure receptacles for the uses, purposes, and benefits of its members;

(2) Receive tangible property and evidence of tangible or intangible property for safekeeping using the credit union's safes, vaults, secure receptacles, or safekeeping system; the safes, vaults, secure receptacles, or safekeeping system of another credit union; or the safekeeping system of a safekeeping agent or custodian.

(B)

(1) A credit union may enter into an agreement to rent a safe deposit box to a minor and accept the appointment of a minor as agent or deputy on any deposit or safe deposit box by any person, including a minor, maintaining the deposit or safe deposit box.

(2) When a credit union enters into a safe deposit box rental agreement with a minor pursuant to division (B)(1) of this section, all of the following apply:

(a) The terms and conditions of the safe deposit box rental agreement are binding on the minor the same as a person of legal age who rents a safe deposit box.

(b) The relationship between the credit union and the minor regarding the safe deposit box rental agreement is in all respects the same as if the minor were a person of legal age.

(c) The credit union shall incur no liability for any transaction regarding the safe deposit box solely because of doing business with a minor.

(3) Nothing in divisions (B)(1) and (2) of this section shall be construed to limit the parental rights provided under section 2111.08 of the Revised Code or to limit the rights of a guardian appointed pursuant to Chapter 2111. of the Revised Code.

(C) The superintendent of financial institutions shall promulgate rules to qualify a credit union, safekeeping agent, or custodian that may receive from another credit union tangible property and evidence of tangible or intangible property for safekeeping pursuant to division (A) of this section.

Effective Date: 2008 SB247 09-11-2008

1733.243 Claims to property in safekeeping - bond of claimant.

If any claim is made to any share, share account, deposit, safe deposit box, property held in safekeeping, security, obligation, or other property in the credit union's possession or control, in whole or in part, by any person, including any member, depositor, individual, or group of individuals, without clear authority to draw on or exercise any right or control with respect to the property, the credit union is not required to recognize the claim without one of the following:

(A) A court order, issued by a court of competent jurisdiction and served on the credit union, enjoining or restraining the credit union from taking any action with respect to the property or instructing the credit union to pay the balance of the account, provide access to the safe deposit box, or deliver the property as provided in the order;

(B) A bond, provided by the person making the claim, in the form and amount and with sureties satisfactory to the credit union, indemnifying the credit union against any liabilities, loss, and expenses the credit union might incur because of its recognition of the claim or because of its refusal, due to the claim, to honor or recognize any right with respect to the property.

Effective Date: 2008 SB247 09-11-2008

1733.25 Loans - interest.

(A) A credit union may make loans or other extensions of credit to members for provident and productive purposes as authorized by law, including rules adopted by the superintendent of credit unions; the articles; and the regulations; and subject to policies adopted by the credit committee and approved by the board of directors.

(B) Upon the approval of the board of directors, a credit union may make loans or other extensions of credit to other credit unions, provided that loans or other extensions of credit made to other credit unions need not have the approval of the board of directors on a per case basis. The total of all such loans or other extensions of credit, including the aggregate of all money paid into any trust established by one or more credit unions for the purpose of making loans or other extensions of credit to other credit unions, shall not exceed twenty-five per cent of the shares and undivided earnings of the lending credit union, except that this percentage limitation does not apply to corporate credit unions.

(C) The interest on any loan or other extension of credit made by a credit union shall not exceed one and one-half per cent per month on unpaid balances. Such interest may accrue and be chargeable upon a monthly basis, and may be computed upon the unpaid balance of the loan or other extension of credit as of the end of the previous calendar month.

Such interest may be accrued and charged by any technique approved by the superintendent so long as the effective interest rate on any loan or other extension of credit does not exceed the amount permitted to be charged by the computation authorized in this division.

(D) A credit union may accept security in such form and under rules as shall be set forth in the articles, the regulations, or established by the credit committee and approved by the board of directors.

(E)

(1) The credit union shall have a lien on the membership share, shares, deposits, and accumulated dividends and interest of a member in an individual, joint, trust, or payable on death account for any obligation owed to the credit union by that member or for any loan co-signed or guaranteed by the member or account holder; provided, however, that a credit union shall not have a lien upon the funds in an individual retirement account or an account established pursuant to the Internal Revenue Code of the United States.

(2) A credit union may refuse to allow withdrawals from any share or deposit account by a member while the member has any outstanding obligation to the credit union.

(F)

(1) Subject to division (F)(2) of this section and any restrictions or requirements established by the superintendent, in connection with any loan or extension of credit, a credit union may enter into a debt suspension agreement or debt cancellation contract with the borrower or borrowers.

(2) A credit union shall not offer or finance, directly or indirectly, a debt suspension agreement or debt cancellation contract requiring a lump sum, single payment for the agreement or contract payable at the outset of the agreement or contract, if the debt subject to the agreement or contract is secured by one to four family, residential real property.

(3) For purposes of division (F) of this section, "debt cancellation contract" and "debt suspension agreement" have the same meanings as in 12 C.F.R. part 37.

Effective Date: 07-14-1987; 04-14-2006; 04-06-2007; 2008 HB545 09-01-2008

1733.251 Alternative interest rate.

(A) As an alternative to the interest permitted in division (C) of section 1733.25 of the Revised Code, a credit union may contract for and receive interest at any rate or rates agreed upon or consented to by the parties to the contract for the loan or other extension of credit, but not exceeding an annual percentage rate of twenty-five per cent.

(B) The computation of the loan or other extension of credit balance on which interest is assessed and the method of compounding interest on the balance pursuant to this section shall be as agreed upon by the credit union and the member.

Effective Date: 02-11-1981; 04-14-2006

1733.252 Compliance with Secure and Fair Enforcement for Mortgage Licensing Act.

(A) As used in this section, "nationwide mortgage licensing system and registry" has the same meaning as in section 1322.01 of the Revised Code.

(B) Subject to division (C) of this section, each credit union, the subsidiaries of the credit union, and the loan originators employed by the credit union, shall comply with the "Secure and Fair Enforcement for Mortgage Licensing Act of 2008," 122 Stat. 2810, 12 U.S.C. 5101 , and register with the nationwide mortgage licensing system and registry.

(C) Unless otherwise preempted by federal law, compliance by a credit union insured by a credit union share guaranty corporation established under Chapter 1761. of the Revised Code, the subsidiaries of the credit union, and the loan originators employed by the credit union shall be determined by rules adopted by the superintendent of financial institutions in accordance with Chapter 119. of the Revised Code. At a minimum, the rules shall require loan originators to furnish to the nationwide mortgage licensing system and registry information concerning the loan originator's identity and be consistent with the requirements for federally insured credit unions adopted by the national credit union administration pursuant to the Secure and Fair Enforcement for Mortgage Licensing Act of 2008.

Amended by 128th General AssemblyFile No.17, SB 124, §1, eff. 12/28/2009.

Added by 128th General AssemblyFile No.9, HB 1, §101.01, eff. 10/16/2009.

1733.253 Permissible charges under a revolving credit agreement.

(A) As used in this section:

(1) "Revolving credit agreement" means an agreement pursuant to which a credit union contemplates repeated transactions and the amount of credit that may be extended pursuant to the agreement is made available to the extent that any outstanding balance is repaid. "Revolving credit agreement" does not include an agreement secured by a residential mortgage.

(2) "Residential mortgage" has the same meaning as in section 1109.181 of the Revised Code.

(B) Notwithstanding any limitations contained in sections 1733.25 , 1733.251 , or any other section of the Revised Code, a credit union may charge interest, fees, and other charges under a revolving credit agreement at the same or lower rates or amounts that a credit union located in another state may charge its revolving credit customers in this state.

Added by 129th General AssemblyFile No.109, HB 322, §1, eff. 9/4/2012.

1733.26 Loan officers.

(A) The credit committee may be delegated the authority to appoint one or more loan officers, and delegate to them power to approve loans within limits fixed by the regulations, bylaws, or resolutions of the board of directors. If the regulations so provide, the board may appoint one or more loan officers, and delegate to them the power to approve loans within limits fixed by the regulations, bylaws, or resolutions of the board.

The authority of loan officers may also be further restricted by policies established by the credit committee or the board. Such loan officers also may be loan originators registered with the nationwide mortgage licensing system and registry as provided in section 1733.252 of the Revised Code.

(B) Each loan officer appointed pursuant to division (A) of this section shall, within seven days of the filing of each loan application received by the loan officer from a member or by referral from another officer, furnish to the credit committee or to the board, whichever is applicable, a record of such application and the loan officer's disposition or recommendation for disposition of it. No person shall have authority to disburse funds of the credit union for any loan which has been approved by the loan officer in the capacity as a loan officer.

(C) If the regulations provide for a credit committee, all applications for loans not approved by a loan officer may be reviewed by the credit committee, and the approval of the majority of the members of the committee who are present at the meeting when the review is undertaken shall be required to reverse the decision of the loan officer, provided that a majority of the full committee is present.

In the absence of a credit committee, the board shall, upon the written request of a member, review a loan application denied by a loan officer.

Amended by 128th General AssemblyFile No.9, HB 1, §101.01, eff. 10/16/2009, and applicable on and after 1/1/2011.

Effective Date: 06-18-1991

1733.27 Fiscal year.

The accounting of all credit unions shall be on a calendar year basis unless otherwise authorized by the superintendent of credit unions.

Effective Date: 06-26-1986

1733.28 Financial statement.

(A) At the annual meeting of members, or the meeting held in lieu thereof, every credit union shall present to its members a financial statement consisting of a balance sheet and a profit and loss statement in such form, and containing such items as shall be acceptable to the superintendent of credit unions.

(B) The balance sheet required by division (A) of this section shall be as of the date not more than four months preceding the date of the meeting, and the profit and loss statement required by division (A) of this section shall be for a period commencing with the date marking the end of the period for which the last preceding statement of profit and loss required under this section was made and ending with the date of said balance sheet, or in the case of the first statement of profit and loss, from the incorporation of the credit union to the date of said balance sheet.

(C) The financial statement shall have appended thereto an opinion signed by the supervisory audit committee or the auditor performing the function of the audit committee to the effect that the financial statement presents fairly the financial position of the credit union and the results of its operations in conformity with generally accepted accounting principles, as defined by the American institute of certified public accountants, which will include the requirements set forth in section 1733.31 of the Revised Code, applied on a basis consistent with that of the preceding period.

(D) In addition to any member's right to inspect the books and records of the credit union as provided by law and upon the written request of any member made after notice of any such meeting has been given, the credit union, not later than the fifth day after receiving such request or the fifth day before such meeting, whichever is the later date, shall mail to such member a copy of the financial statement presented at such meeting.

(E) The superintendent may exempt certain credit unions from the reporting practices promulgated by division (C) of this section, based on the credit union's total assets or other appropriate criteria.

Effective Date: 06-26-1986

1733.29 Permanent records.

(A) A credit union shall keep a permanent record including:

(1) The original articles and regulations and amendments thereto and any amended articles or regulations and amendments thereto, all bearing the approval of the superintendent of credit unions, and the articles shall bear the certification of the secretary of state;

(2) The minutes of the incorporators, members, and board of directors.

(B) A credit union shall keep for a period of not less than six years the minutes of all committees of the board.

(C) A credit union shall keep and maintain such financial records as the superintendent shall stipulate in rules issued by the superintendent, which shall also include the minimum length of time such records must be retained.

(D) A credit union shall maintain an alphabetical listing or classified listing of the addresses of members of the credit union.

(E) A credit union shall maintain a copy of any suspicious activity report it files pursuant to rules adopted by the superintendent or national credit union administration regulation, and the original of all attachments to the report, for a period of five years from the date the report is filed.

(F) A credit union shall keep any other records of its business and transactions and maintain the authorized processes for recording or storing documents or instruments, as may be required by rules promulgated by the superintendent.

(G) A credit union may keep documents in electronic form if, in the regular course of business, a credit union possesses, records, or generates any document, representation, image, reproduction, or combination thereof, of any agreement, transaction, act, occurrence, or event, then the recording, comprising, or reproduction shall have the same force and effect as one comprised, recorded, or created on paper or other tangible form by writing, typing, printing, or similar means.

(H)

(1) A credit union may make use of digital signatures in any communication, acknowledgment, agreement, or contract between a credit union and its member or any other person, in which a signature is required or used.

(2)

(a) Any party to the communication, acknowledgment, agreement, or contract may affix a signature by use of a digital signature.

(b) The digital signature, when lawfully used by the person whose signature it purports to be, shall have the same force and effect as the use of a manual signature if it is unique to the person using it, is capable of verification, is under the sole control of the person using it, and is linked to data in such a manner that if the data are changed, the digital signature is invalidated.

(c) Nothing in this section requires any credit union to use or permit the use of a digital signature.

(d) As used in division (H) of this section, "digital signature" means an encrypted electronic identifier, created by computer, intended by the party using it to have the same force and effect as the use of a manual signature.

Effective Date: 01-01-1979; 04-14-2006; 2008 SB247 09-11-2008

1733.291 Preservation of records - retention period - disposal.

(A) Every credit union shall retain or preserve the following credit union records and supporting documents for only the following periods of time:

(1) For one year:

(a) Broker's confirmations, invoices, and statements relating to security transactions of the credit union or for or with its customers, after the date of transaction;

(b) Corporate resolutions, partnership authorizations, and similar authorizations relating to closed accounts, loans that have been paid, or other completed transactions, after the date of closing, payment, or completion;

(c) Ledger records of safe deposit accounts, after the date of last entry on the ledger;

(d) Night depository records, after the date of transaction;

(e) Records relating to closed Christmas club or similar limited duration special purpose accounts, after the date of closing;

(f) Records relating to customer collection accounts, after the date of transaction;

(g) Stop payment orders, after the effective date;

(h) All records relating to closed consumer credit loans and discounts, after the date of closing;

(i) Deposit tickets relating to demand deposit accounts, after the date of deposit.

(2) For six years:

(a) Deposit and withdrawal tickets relating to open or closed savings accounts, after the date of transaction;

(b) Individual ledger sheets or other records serving the same purpose that show a zero balance and that relate to demand, time, or savings deposit accounts, and safekeeping accounts, after the date of last entry, or, where the ledger sheets or other records show an open balance, after the date of transfer of the amount of the balance to another ledger sheet or record;

(c) Official checks, drafts, money orders, and other instruments for the payment of money issued by the credit union and that have been canceled, after the date of issue;

(d) Records relating to closed escrow accounts, after the date of closing;

(e) Records, other than corporate resolutions, partnership authorizations, and similar authorizations relating to closed loans and discounts other than consumer credit loans and discounts, after the date of closing;

(f) Safe deposit access tickets and correspondence or documents relating to access, after the date of transaction;

(g) Lease or contract records relating to closed safe deposit accounts, after the date of closing;

(h) Signature cards relating to closed demand, savings, or time accounts, closed safe deposit accounts, and closed safekeeping accounts, after the date of closing;

(i) Undelivered statements for demand deposit, negotiable order of withdrawal, savings, agency, brokerage, or other accounts for which customer statements are prepared, and canceled checks or other items, after the date of statement, provided the credit union has attempted to send the statements and checks or other items to its customer, has held them pursuant to the instructions of or an agreement with its customer, or has made them available to its customer.

(B) The superintendent of financial institutions may designate a retention period of either one year or six years for any record maintained by a credit union but not listed in division (A) of this section. The credit union shall retain or preserve records that are not listed in division (A) of this section and for which the superintendent has not designated a retention period for six years from the date of completion of the transaction to which the record relates or, if the last entry has been transferred to a new record showing the continuation of a transaction not yet completed, from the date of the last entry.

(C) The requirements of divisions (A) and (B) of this section may be complied with by the preservation of records in the manner prescribed in section 1733.29 of the Revised Code.

(D) In construing the terms set forth in division (A) of this section, reference may be made to general credit union usage.

(E) A credit union may dispose of any records that have been retained or preserved for the period set forth in divisions (A) and (B) of this section.

(F) Any action by or against a credit union based on, or the determination of which would depend on, the contents of records for which a period of retention or preservation is set forth in divisions (A) and (B) of this section shall be brought within the time for which the record must be retained or preserved.

(G) Where a record may be classified under either division (A)(1) or (2) of this section, the credit union shall retain or preserve the record for the period set forth in division (A)(2) of this section.

Effective Date: 2008 SB247 09-11-2008

1733.292 Process for retention of documents - approval - use as evidence.

(A) A credit union may, for any business purpose, retain a document, paper, or other instrument or record by use of a process to record, copy, photograph, or store a representation of the original document, paper, or other instrument or record, if all of the following apply:

(1) The process correctly and accurately copies or reproduces, or provides a means for correctly and accurately copying or reproducing, the original document, paper, or other instrument or record with regard to both its substance and appearance, except the copy or reproduction need not reflect the original paper or other medium, size, or color, unless the medium, size, or color is necessary to establish the authenticity of the original.

(2) The process does not permit the recording, copy, photographic image, or stored representation of the original document, paper, or other instrument or record to be altered or manipulated.

(3) Any medium the process uses to record, copy, photograph, or store a representation of the original document, paper, or other instrument or record is a durable medium for retaining and reproducing records.

(B) The superintendent of financial institutions shall identify and publish a list of processes that satisfy the conditions of division (A) of this section.

(C) Each credit union that uses a process authorized by this section to preserve any of its records shall also provide for safekeeping and for examining, viewing, or projecting the records preserved, and for producing reproductions of the original records.

(D) Recordings, copies, photographic images, or stored representations of original documents, papers, or other instruments or records made in accordance with this section, or reproductions of original documents, papers, or other instruments or records produced from recordings, copies, photographic images, or stored representations made in accordance with this section, when properly identified by the officer by whom or under whose supervision they were made or who has custody of them, have the same effect at law as the original records or records made by any other legally authorized means. They may be offered in the same manner and shall be received in evidence in any court where the original records, or records made by other legally authorized means, could have been introduced and received. Certified or authenticated duplicates of recordings, copies, photographic images, or stored representations of original documents, papers, or other instruments or records made in accordance with this section, or of reproductions of original documents, papers, or other instruments or records produced from recordings, copies, photographic images, or stored representations made in accordance with this section, shall be admitted in evidence in the same manner as the original documents, papers, or other instruments or records.

Effective Date: 2008 SB247 09-11-2008

1733.30 Investments.

(A) A credit union may make any investment of any funds not required for the purpose of loans, in state or national banks or state or federally chartered savings and loan associations , savings banks, or credit unions, doing business in this state; in accounts, deposits, or shares of federally insured savings and loan associations or savings banks or insured credit unions, doing business outside this state; in deposits or accounts of federally insured banks, trust companies, and mutual savings banks doing business outside this state; in the shares of a corporate credit union subject to the regulations of that corporate credit union; in shares, stocks, or obligations of any other organization providing services that are associated with the routine operations of credit unions; or in United States government securities or municipal bonds issued by municipalities of this state; and, with the approval of the superintendent of credit unions, in securities other than those specified in this division. All investments under this division shall be made in United States dollars.

(B) In accordance with rules adopted by, and subject to the approval of, the superintendent, notes or loans made by or to individual members of a credit union may be purchased by another credit union at such prices as may be agreed upon between the credit unions.

(C) A corporate credit union may make investments provided the investments are in accordance with rules adopted by the superintendent, are consistent with the safety and soundness of the credit union, and are made with due regard to the investment requirements established by the applicable insurer recognized under section 1733.041 of the Revised Code.

Effective Date: 09-29-1994; 04-14-2006

1733.31 Reserve accounts - liquidity fund.

For purposes of this section, "gross income" means all income, before expenses, earned on risk assets. "Risk assets" shall be defined by rule adopted by the superintendent of credit unions.

Each credit union shall establish and maintain reserves as required by Chapter 1733. of the Revised Code, or by rules adopted by the superintendent, including the following:

(A) Valuation allowances for delinquent loans, investments, other risk assets, and contingencies, which shall be established and maintained pursuant to rules adopted adopted by the superintendent.

(B) A regular reserve as follows:

(1) A credit union in operation for more than four years and having assets of five hundred thousand dollars or more shall reserve ten per cent of its gross income until its regular reserve equals four per cent of its total risk assets. Once the credit union has regular reserves equal to four per cent of its total risk assets, it shall reserve five per cent of its gross income until its regular reserve equals six per cent of its total risk assets.

(2) A credit union in operation for less than four years or having assets of less than five hundred thousand dollars shall reserve ten per cent of its gross income until its regular reserve equals seven and one-half per cent of its total risk assets. Once the credit union has regular reserves equal to seven and one-half per cent of its total risk assets, it shall reserve five per cent of its gross income until its regular reserve equals ten per cent of its total risk assets.

(3) The provision for loan losses, or other such provisions related to the valuation allowances described in division (A) of this section, recorded on the credit union's statement of income for the year shall be deducted from the appropriate regular reserve calculated under division (B)(1) or (2) of this section.

(4) Once the credit union has closed out its net income or loss to undivided earnings, it may allocate any extraordinary loss for the year, as defined by AICPA APB Opinion No. 30 or by rules as promulgated by the superintendent, to the regular reserve.

(5) If the regular reserve account becomes less than the percentage required by division (B)(1) or (2) of this section, then the schedule of allocation shall apply until the required percentages are achieved.

(6) The superintendent may decrease the reserve requirements under division (B)(1) or (2) of this section when, in the superintendent's opinion, a decrease is necessary or desirable and is consistent with the purposes of this section.

(7) Nothing herein shall prevent the superintendent from requiring a particular credit union or all credit unions to establish a regular reserve in excess of the percentages required by division (B)(1) or (2) of this section if, in the opinion of the superintendent, economic conditions or other appropriate circumstances so warrant.

(C) Except as otherwise provided in this division, each credit union shall maintain a liquidity fund equal to five per cent of its shares. The assets included in the liquidity fund shall be defined by rule adopted by the superintendent. The superintendent may require a particular credit union or all credit unions to establish a liquidity fund greater than or less than five per cent of total shares, if, in the opinion of the superintendent, economic conditions or other appropriate circumstances so warrant.

(D)

(1) Reserves for corporate credit unions shall be established by the superintendent with due regard for the reserving requirements for corporate credit unions set by the applicable insurer recognized under section 1733.041 of the Revised Code. Specific reserving requirements shall be established by rule of the superintendent, but shall substantially parallel the reserving formula set by the applicable insurer recognized under section 1733.041 of the Revised Code.

(2) Nothing in division (D)(1) of this section shall prevent the superintendent from requiring a particular corporate credit union or all corporate credit unions to establish a regular reserve in excess of those reserves established pursuant to division (D)(1) of this section if, in the opinion of the superintendent, economic conditions or other appropriate circumstances so warrant.

Effective Date: 09-29-1994; 04-14-2006

1733.32 Powers of superintendent of financial institutions.

(A)

(1) The superintendent of financial institutions shall see that the laws relating to credit unions are executed and enforced.

(2) The deputy superintendent for credit unions shall be the principal supervisor of credit unions. In that position, the deputy superintendent for credit unions shall, notwithstanding division (A)(3) of this section, be responsible for conducting examinations and preparing examination reports under that division. In addition, the deputy superintendent for credit unions shall, notwithstanding sections 1733.191 , 1733.41 , 1733.411 , and 1733.412 of the Revised Code, have the authority to adopt rules in accordance with those sections, and, notwithstanding section 1733.05 of the Revised Code, shall have the authority to approve issues and matters pertaining to fields of membership. In performing or exercising any of the examination, rule-making, or other regulatory functions, powers, or duties vested by division (A)(2) of this section in the deputy superintendent for credit unions, the deputy superintendent for credit unions shall be subject to the control of the superintendent of financial institutions.

(3) The superintendent of financial institutions shall develop and implement a system for evaluating the safety and soundness of credit unions and for determining when examinations and supervisory actions are necessary. Credit unions shall be subject to periodic examinations, as specified in rules adopted by the superintendent, and their books, records, and accounts shall be open to the inspection of the superintendent at all times. For the purpose of such examination or inspection, the superintendent may subpoena witnesses, administer oaths, receive testimony, and order the submission of documents.

(B) Every credit union shall prepare and submit, on forms provided by the superintendent, a financial report to the superintendent showing its assets and liabilities whenever requested to do so by the superintendent. Every financial report shall be verified by the oaths of the two principal officers in charge of the affairs of the credit union at the time of such verification and shall be submitted to the superintendent within thirty days after the superintendent requests the financial report.

(C) An annual financial report of the affairs and business of the credit union, showing its condition as of the thirty-first day of December unless otherwise authorized by the superintendent, shall be filed with the superintendent not later than the date authorized in the rules adopted by the superintendent.

(D) If a financial report or an annual financial report is not filed with the superintendent in accordance with division (B) or (C) of this section, the superintendent may do both of the following:

(1) Assess a fine, determined by rule adopted by the superintendent, for each day the report is in arrears;

(2) If the superintendent gives written notice to the president of the credit union of the superintendent's intention to do so, issue an order revoking the credit union's articles of incorporation and appointing a liquidating agent to liquidate the credit union in accordance with section 1733.37 of the Revised Code.

(E)

(1) Except as provided in division (E)(2) of this section, each credit union doing business in this state shall remit, semiannually and within fifteen days after billing, to the treasurer of state, a supervisory fee in an amount determined by the superintendent and confirmed by the credit union council. The supervisory fee described in division (E)(1) of this section shall be based on a percentage of the gross assets of the credit union as shown by its last annual financial report filed with the superintendent in accordance with division (C) of this section. The minimum supervisory fee shall be determined by the superintendent and confirmed by the credit union council.

(2) Each corporate credit union doing business in this state shall remit, semiannually and within fifteen days after billing, to the treasurer of state, a supervisory fee determined by rule adopted by the superintendent and confirmed by the credit union council. The aggregate annual amount of the fee shall not exceed the annual operating fee that the national credit union administration charges a federally chartered credit union pursuant to the "Federal Credit Union Act," 84 Stat. 994 (1970), 12 U.S.C.A. 1751 .

(3) The superintendent annually shall present to the credit union council for confirmation the supervisory fees to be billed credit unions and corporate credit unions pursuant to division (E) of this section.

(4) If any supervisory fee is not remitted in accordance with division (E)(1) or (2) of this section, the superintendent may assess a fine, determined by rule adopted by the superintendent, for each day that each fee is in arrears.

(5)

(a) Subject to division (E)(5)(b) of this section, the total amount of each semiannual billing to all credit unions and corporate credit unions combined shall equal one-half of the appropriation made by the main operating appropriation act, including any modifications made by the controlling board, to the division of financial institutions for the regulation of credit unions for the fiscal year in which the billings occur, except that the superintendent, in determining the supervisory fees, may take into consideration any funds lapsed from the appropriation made in the previous fiscal year.

(b) If during the period between the credit union council's confirmation of supervisory fees and when supervisory fees described in this section are collected, the credit union council determines additional money is required to adequately fund the operations of the division of financial institutions for that fiscal year, the credit union council may, by the affirmative vote of five of its members, increase the supervisory fees billed. The superintendent promptly shall notify each credit union and corporate credit union of the increased supervisory fees, and each credit union or corporate credit union shall pay the increased supervisory fees billed by the superintendent.

(6) The fees or fines collected pursuant to this section shall be credited to the credit unions fund created in section 1733.321 of the Revised Code.

(F) A report of such examination shall be forwarded to the president of each credit union after the completion of the examination. The report may contain comments relative to the management of the affairs of the credit union and also as to the general condition of its assets. Within thirty days of the receipt of the report, a meeting of the directors shall be called to consider matters contained in the report, and the president shall notify the superintendent of any action taken at the meeting.

(G)

(1) The superintendent shall furnish reports of examinations or other appropriate information to any organization referred to in section 1733.041 of the Revised Code when requested by the organization and authorized by the credit union. The superintendent may charge a fee for such reports and other information as may be established by rules adopted by the superintendent.

(2) A report of examination furnished pursuant to division (G)(1) of this section is the property of the division of credit unions and may be used by the examined credit union only in the conduct of its business. Under no circumstances may the credit union, its current or former directors, officers, employees, agents, shareholders, participants in the conduct of its affairs, or their agents disclose or make public, in any manner, a report of examination or its contents.

(H) Except as provided in this division, information obtained by the superintendent of financial institutions and the superintendent's employees as a result of or arising out of the examination or independent audit of a credit union, from required reports, or because of their official position, shall be confidential. Such information may be disclosed only in connection with criminal proceedings or, subject to section 1733.327 of the Revised Code, when it is necessary for the superintendent to take official action pursuant to Chapter 1733. of the Revised Code and the rules adopted thereunder regarding the affairs of the credit union examined. Such information may also be introduced into evidence or disclosed when and in the manner authorized in section 1181.25 of the Revised Code. This division does not prevent the superintendent from properly exchanging information relating to an examined credit union pursuant to division (F) or (G) of this section , with officials of properly authorized state or federal financial institution regulatory authorities , with any insurer recognized under section 1733.041 , or with any surety recognized under section 1733.23 of the Revised Code. This division also does not prevent the superintendent from disclosing information contained in the financial reports or annual financial reports described in division (B) or (C) of this section to recognized credit union trade associations, to share guarantee insurance organizations, to federal or state agencies, or to the general public. Financial reports and annual financial reports described in divisions (B) and (C) of this section, call reports, or financial statements required to be filed with the division of financial institutions are public records for purposes of section 149.43 of the Revised Code. Information relating to the examination or independent audit of a credit union, other than information that is permitted to be disclosed by this section or is a public record, is not a public record for purposes of section 149.43 of the Revised Code.

Effective Date: 06-18-2002; 04-14-2006

1733.321 Credit unions fund.

All fees, charges, and forfeitures collected under this chapter shall be paid to the superintendent of financial institutions, who shall deposit them into the state treasury to the credit of the credit unions fund, which is hereby established, and may be expended or obligated by the superintendent for the defrayment of the costs of regulation of credit unions. All actual and necessary expenses incurred by the superintendent, including any services rendered by the department of commerce for the benefit of credit unions, shall be paid from the fund. The fund shall be assessed a proportionate share of the administrative costs of the department of commerce and the division of financial institutions. The proportionate share of the administrative costs of the division of financial institutions shall be determined in accordance with procedures prescribed by the superintendent and approved by the director of budget and management. Such assessment shall be paid from the credit unions fund to the division of administration fund or the financial institutions fund.

Effective Date: 09-26-1996

1733.322 Requesting outside auditor to review results of examination.

The superintendent of credit unions may request any outside auditor retained by a credit union that has been examined under section 1733.32 of the Revised Code to review, evaluate, and comment to the superintendent upon the results of the examination or re-examination conducted under that section, and in such an instance the credit union shall sign a waiver of confidentiality with regard to the outside auditor. The purpose of such review is to enable the outside auditor to assist the board of directors of the credit union in formulating a management response to any supervisory inquiry or action that may result from such examination or re-examination. If the outside auditor undertakes such a review, the expense of the review shall be paid by the credit union.

Effective Date: 07-14-1987

1733.323 Issuing administrative guidelines.

(A) The superintendent of credit unions may issue administrative guidelines which interpret the requirements of this chapter or which define specific acts, practices, or circumstances that are considered by the superintendent to be unsafe or unsound practices or that constitute a violation of any section of this chapter or any rule adopted thereunder.

(B) The superintendent shall, at a minimum, issue guidelines pursuant to division (A) of this section which address the following:

(1) Collateralization limits that apply to particular transactions;

(2) All aspects of repurchase agreements and reverse repurchase agreements, including limitations on the amount of securities a credit union may assign as collateral for the amount of funds it receives from a securities dealer or broker, investment house, or other similar entity. In adopting these provisions, the superintendent shall give due consideration to rules governing the same subject that have been adopted by the national credit union administration and any other federal or state agency.

(3) Requirements that securities assigned by a credit union as collateral for the amount of funds it receives, or assigned to a credit union as collateral for the funds it provides, remain or be placed in the possession of the credit union or a qualified trustee.

Effective Date: 07-14-1987

1733.324 Issuing cease-and-desist order.

(A)

(1) If, in the opinion of the superintendent of credit unions, a credit union or a regulated individual is engaged in any unsafe or unsound practice in conducting the business of the credit union, has knowingly participated in or consented to a violation of this chapter or rules adopted thereunder, or has failed to comply with a supervisory agreement, he may serve upon such credit union or regulated individual notice that he is considering issuing an order against the credit union or regulated individual pursuant to division (A)(2) or (3) of this section.

(2) A notice served under division (A)(1) of this section that relates to matters other than an alleged violation of a supervisory agreement shall contain a statement of the alleged facts constituting the basis for an order and fix a time and place for a hearing. The hearing shall be conducted in accordance with section 119.09 of the Revised Code, except that, notwithstanding division (E) of section 119.01 of the Revised Code, the hearing shall not be a public hearing. The date for the hearing shall be not less than thirty nor more than forty-five days after such notice has been given by the superintendent to the credit union or regulated individual.

If, after conducting such hearing, the superintendent determines that the credit union or regulated individual is or has knowingly participated in or consented to a violation of this chapter, or engaged in an unsafe or unsound practice, he may issue a final cease-and-desist order. Such final cease-and-desist order may direct the credit union or regulated individual to remedy the violation of this chapter, the unsafe or unsound practice, or the failure to comply, in addition to refraining from such violations or unsafe or unsound practices in the future.

Such final order becomes effective upon service on the credit union or regulated individual and remains effective and enforceable as its terms provide, except to such extent as it is stayed, modified, terminated, or set aside by action of the superintendent or a reviewing court.

(3) If the superintendent proposes to issue a cease-and-desist order based on the violation of a supervisory agreement, he shall serve the credit union or regulated individual with a notice of noncompliance. Such notice shall specify the actions that are alleged to be in violation of the supervisory agreement. The notice shall also set a time and place for a hearing, which shall occur not less than thirty nor more than forty-five days after the notice has been served on the credit union or regulated individual. The hearing shall be conducted in the manner prescribed in section 119.09 of the Revised Code, except that, notwithstanding division (E) of section 119.01 of the Revised Code, such hearing shall not be a public hearing.

If, after such hearing, the superintendent determines that the credit union or regulated individual has knowingly violated the supervisory agreement, he may issue a final cease-and-desist order.

If, after such hearing, the superintendent determines that the credit union or regulated individual has violated the supervisory agreement but that the conduct in question does not constitute a knowing violation, the superintendent shall give the credit union or regulated individual an opportunity to remedy the violation. The superintendent shall issue a statement of specific actions that must be taken by the credit union or regulated individual, and establish a time frame in which the credit union or regulated individual must take such corrective action to comply with the supervisory agreement. If, by the end of such time frame, the credit union or regulated individual has failed to implement the corrective actions required by the superintendent, the superintendent may issue a final cease-and-desist order.

Nothing in this division shall be construed to prevent the superintendent from issuing a cease-and-desist order pursuant to divisions (A)(1) and (2) of this section or division (B) of this section based on the violation of Chapter 1733. of the Revised Code, or on an unsafe or unsound practice of the credit union or regulated individual, even though such violation or practice may also constitute a violation of an outstanding supervisory agreement.

(B) If, in the opinion of the superintendent, a credit union or regulated individual is or has engaged in any unsafe or unsound practice, or has participated in or consented to a violation of this chapter or rules adopted thereunder, he may issue a summary order requiring the credit union or regulated individual to cease and desist from such violation or practice.

The summary cease-and-desist order, which shall contain a statement of the facts allegedly constituting grounds for the order, shall be served upon the credit union or regulated individual and becomes effective upon receipt. The summary order shall include notification of the time and place of a hearing, which shall be held in accordance with division (A)(2) of this section. Unless the superintendent issues a final cease-and-desist order within ten days after conclusion of the hearing, the summary order issued pursuant to this division is void. Otherwise, the summary order remains effective and enforceable until it is replaced by the final order, except to such extent as it is stayed, modified, terminated, or set aside by action of the superintendent.

(C) A credit union or regulated individual who is adversely affected by a final cease-and-desist order may appeal from the order to the court of common pleas in accordance with section 119.12 of the Revised Code.

(D) In lieu of a hearing pursuant to division (A) or (B) of this section, a credit union or regulated individual may consent to the issuance of an order requiring such credit union or regulated individual to cease and desist from engaging in any activity or practice as specified in such order. A consent cease-and-desist order has the full force and effect of a final cease-and-desist order issued pursuant to division (A)(2) of this section and is enforceable in accordance with division (E) of this section. Any credit union or regulated individual that fails to attend a hearing set pursuant to division (A) or (B) of this section is deemed to have consented to the issuance of a final cease-and-desist order.

(E) If the superintendent has reasonable cause to believe that a lawful final or summary cease-and-desist order issued pursuant to this section has been violated, he may request the attorney general to commence and prosecute any appropriate action or proceeding. A court of competent jurisdiction shall enforce a lawful final order issued pursuant to this section and may grant such other relief as the facts warrant.

(F) Service on a credit union or regulated individual as provided for in this section shall be by actual written notice or certified mail to the regulated individual or, in the case of a credit union, to the managing officer of such credit union.

Effective Date: 07-14-1987

1733.325 Setting supervisory conference.

(A) If, at any time, the superintendent of credit unions has cause to believe that the actions or business practices of a credit union, its officers, or directors may cause harm to the credit union, its members or creditors, the superintendent may set a supervisory conference. The superintendent shall inform each director of the credit union of the date, time, and place of the supervisory conference. The directors of the credit union shall attend supervisory conferences set by the superintendent. Unless a director has a reasonable excuse for his refusal or failure to attend a supervisory conference, such refusal or failure shall be grounds for removal under section 1733.181 of the Revised Code.

(B) At the supervisory conference, the superintendent shall inquire into the actions or business practices at issue. If it appears to the superintendent that such actions or business practices are likely to cause harm to the credit union, its members or creditors, the superintendent may negotiate and conclude an agreement with the credit union, its officers, or directors as to action that is to be taken by the credit union, its officers, or directors to correct or prevent the actions or business practices which are the subject of the supervisory conference. Such an agreement shall be reduced to writing as soon as possible after it is concluded, and may be modified or terminated by a subsequent agreement.

(C) This section shall not be construed to mean that the superintendent cannot request a meeting with the management, board of directors, or agent of a credit union other than for the purpose of concluding a supervisory agreement.

Effective Date: 07-14-1987

1733.326 Forfeiture and civil penalty for noncompliance with order or agreement.

If a credit union or regulated individual fails to comply with any agreement concluded, or final or summary cease-and-desist order issued, under section 1733.324 or 1733.325 of the Revised Code, the superintendent may order the credit union or regulated individual to forfeit and pay a civil penalty in an amount fixed by the superintendent. The amount of the penalty shall be not more than ten thousand dollars for each day the noncompliance continues. In fixing the amount of a civil penalty, the superintendent shall consider all of the following factors:

(A) The seriousness of the noncompliance and the gravity of the risk occasioned by the noncompliance;

(B) The good faith efforts made by the credit union or regulated individual to perform his or its obligations under or otherwise to comply with the order;

(C) The history of previous violations or unsafe or unsound practices by the credit union or regulated individual that resulted in the service of a notice under division (A)(1) of section 1733.324 of the Revised Code;

(D) The financial resources of the credit union or regulated individual against whom the penalty is being assessed;

(E) Any other matters as justice may require.

If a credit union or regulated individual fails to pay a forfeiture assessed under this section, the superintendent shall bring a civil action to collect the forfeiture.

A regulated individual is personally liable for the payment of any civil penalty that is assessed against him under this section. No credit union that employs a regulated individual, or of which a regulated individual is a director or officer shall pay, or cause to be paid, on behalf of the regulated individual, or indemnify or otherwise reimburse the regulated individual for paying, any civil penalty that has been assessed against that regulated individual.

Effective Date: 07-14-1987

1733.327 Confidentiality.

(A) All conferences and administrative proceedings under sections 1733.324 and 1733.325 of the Revised Code, the fact of their actual or anticipated occurrence, and all notices, agreements, hearings, orders, records, evidence, transcripts, and other writings, happenings, or things pertaining to those conferences or proceedings, shall be kept confidential as among the superintendent of financial institutions, the director of commerce, the deputy director of financial institutions, the governor, the credit union or regulated individual who is party to the conference or proceedings, witnesses in the conference or proceedings, and other persons specifically designated by the superintendent or director. In designating specific persons who may be present or acquire knowledge of matters made confidential by this division, the superintendent and director shall not exclude attorneys or other suitable representatives of the credit union, or of any regulated individual, who is party to the conference or proceedings. If the conference or proceedings apply to a regulated individual, the superintendent and director shall not exclude suitable representatives of the credit union of which such regulated individual is an officer, director, or employee.

(B) Division (A) of this section ceases to apply upon the occurrence of any of the following:

(1) An action is brought to recover a forfeiture for the violation of an agreement concluded, or a final or summary cease-and-desist order issued, under section 1733.324 or 1733.325 of the Revised Code. A forfeiture, in the absence of such an action for recovery, does not waive division (A) of this section except insofar as the forfeiture must be reflected or reported in the financial records or reports of the credit union or regulated individual.

(2) Information made confidential by division (A) of this section is needed as evidence in a criminal proceeding; in proceedings under section 1733.37 of the Revised Code; or in the work of a committee of the general assembly.

(3) The superintendent furnishes information made confidential by division (A) of this section to the applicable insurer recognized under section 1733.041 of the Revised Code.

(4) The superintendent furnishes information made confidential by division (A) of this section to financial institution regulatory authorities as authorized in section 1733.32 of the Revised Code.

(5) Information made confidential by division (A) of this section is disclosed when and in the manner authorized in section 1181.25 of the Revised Code.

(C) No officer or employee of the division of credit unions, of the department of commerce or any of its other divisions, or of the governor's office shall violate division (A) of this section.

Effective Date: 06-18-2002

1733.328 [Repealed].

Effective Date: 09-29-1994

1733.329 Credit union council.

(A) There is hereby created in the division of financial institutions the credit union council, which shall consist of seven members. The deputy superintendent for credit unions shall be a member of the council and its chairperson. The governor, with the advice and consent of the senate, shall appoint the remaining six members.

(B)

(1) At least five of the six members appointed to the council shall have had credit union experience.

(2) At least four of the six members appointed to the council shall be, at the time of appointment, individuals currently engaged in the exercise of duties, responsibilities, rights, and powers of a director or chief executive officer of a state-chartered credit union having its principal office in this state and doing business in this state pursuant to this chapter under the authority of the superintendent of financial institutions.

(3) At least one of the six members appointed to the council shall be a director or chief executive officer of a state-chartered, federally insured credit union.

(4) At least one of the six members appointed to the council shall be a director or chief executive officer of a state-chartered, privately insured credit union.

(5) At least one of the six members appointed to the council shall be a director or chief executive officer of a state-chartered credit union with thirty-five million dollars or less in assets.

(6) At least one of the six members appointed to the council shall be a director or chief executive officer of a state-chartered credit union with more than fifty million dollars in assets.

(C)

(1) Initial appointments to the council shall be made within sixty days after the effective date of this section. Of the initial appointments, two shall expire one year after the effective date of this section, two shall expire two years after the effective date of this section, and two shall expire three years after the effective date of this section. Thereafter, terms of office shall be for three years.

(2) Each member shall hold office from the date of appointment until the end of the term for which the member was appointed. In the case of a vacancy in the office of any member, the governor shall appoint a successor, who shall hold office for the remainder of the term for which the successor's predecessor was appointed. Any member shall continue in office subsequent to the expiration date of the member's term until the member's successor takes office, or until sixty days has elapsed, whichever occurs first.

(3) If during a member's term on the council, the member ceases to be a director or chief executive officer of a credit union as described in divisions (B)(2) to (6) of this section for a period exceeding ninety days, the member shall be ineligible to continue to serve as a member of the council, and the member's position on the council shall be considered vacant.

(D) No person appointed as a member of the credit union council may serve more than two consecutive full terms. However, a member may serve two consecutive full terms following the remainder of a term for which the member was appointed to fill a vacancy or following any term for which the member was appointed prior to the effective date of this section.

(E)

(1) The council shall hold regular meetings at the time and place it fixes, but at least once every six months, and shall meet at any time on call of the deputy superintendent to conduct its business and to decide by vote of the members the location of future meetings. Each member shall be provided with written notice of the time and location of each council meeting at least two days prior to the scheduled date of the meeting, unless the council by resolution provides for a shorter time. Four of the members of the council constitute a quorum to transact and vote on all business coming before the council.

(2) The council, by a majority vote of those present at a meeting at which there is a quorum, may adopt and amend bylaws and rules the council considers necessary and proper. The council shall select one of its members as secretary, who shall keep a record of all its proceedings.

(3) No member shall participate in a proceeding before the council involving any credit union of which the member is or was at any time in the preceding twelve months a member of the board of directors, an officer, an employee, or a shareholder. A member may refrain from participating in the proceedings of the council for any other cause the member considers sufficient.

(F) The members of the council shall receive no salary, but their expenses incurred in performance of their duties shall be paid from funds appropriated for that purpose.

(G) The governor may remove any of the six members appointed to the council whenever in the governor's judgment the public interest requires removal. Upon removing a member of the council, the governor shall file with the superintendent of financial institutions a statement of the cause for the removal.

Effective Date: 09-22-2000; 2008 SB247 09-11-2008

1733.3210 Duties of council.

(A) The credit union council shall do all of the following:

(1) Consult with, advise, and make recommendations to the superintendent of financial institutions and the deputy superintendent for credit unions on matters relating to the business for credit unions, including field of membership, regulation, examination, safety and soundness, and applications of credit unions under this chapter;

(2) Consider and make recommendations upon any matter addressed in Chapters 1733. and 1761. of the Revised Code that the superintendent or deputy superintendent submits to the council for that purpose;

(3) Pass upon and determine any matter the superintendent or deputy superintendent submits to the council for determination;

(4) Submit to the governor recommendations concerning amendments to the credit union laws of this state or rules adopted pursuant to those laws that the council considers appropriate;

(5) Consider and determine whether to confirm the supervisory fees proposed by the superintendent of financial institutions in accordance with division (E) of section 1733.32 of the Revised Code.

(6) With respect to the adoption, amendment, or recission of rules adopted pursuant to this chapter, be present at the public hearing required by section 119.03 of the Revised Code and provide recommendations, advice, or assistance at the public hearing.

(B) Neither the deputy superintendent, nor any other member of the council, shall be liable, in any civil or criminal action or proceeding, for any mistake of judgment or discretion in any action taken, or in any omission made, in good faith by the deputy superintendent or other member.

Effective Date: 09-22-2000

1733.33 Amendments to articles or regulations.

(A) The voting members may adopt amendments to the articles or regulations or amended articles or regulations in a writing as provided in section 1733.11 of the Revised Code or in a meeting of members called for that expressly stated purpose by a vote of two-thirds of the voting members represented at such meeting; or, if the articles or regulations provide or permit, by the affirmative vote of a greater or lesser proportion, but not less than a majority of the voting members represented at such meeting. The board of directors may, at any duly held meeting, adopt amendments to the field of membership article or to the regulations, by an affirmative vote of two-thirds of the number of directors authorized by the articles or regulations.

(B) The directors may adopt the following amendments to the articles:

(1) Unless otherwise provided in the articles, an amendment changing the name of the corporation;

(2) An amendment changing the place in this state where the principal office of the credit union is located;

(3) An amendment changing the authorized number of shares; the express terms, if any, of the shares; and if the shares are classified, as permitted in section 1733.24 of the Revised Code, the designation of each class, their express terms, and par value, of any, per share.

(C) In the event amendments to the articles or regulations or amended articles or regulations are adopted pursuant to section 1733.11 of the Revised Code, a copy of the proposed amendments or proposed amended articles or regulations shall be distributed to all of the voting members at or prior to the date on which solicitation begins for written approval. In the event the amendments or amended articles or regulations are adopted in a meeting of members, copies of the proposed amendments or amended articles or regulations, as the case may be, shall be distributed to voting members upon request.

(D) Amendments to the articles or regulations or the amended articles or regulations shall include only such provisions as may be included in or omitted from original articles or the amended articles or regulations at the time the amendments or amended articles or regulations are adopted.

(E) Amended articles or regulations shall contain a statement that they supersede the existing articles or regulations, as the case may be.

(F) Any amendment or amended articles or regulations shall become effective only when it or they have been approved by the superintendent in the same manner as required for original articles or regulations under section 1733.07 of the Revised Code. Amendments to the articles or amended articles shall become effective upon the filing of the same with the secretary of state.

Effective Date: 09-29-1994; 04-14-2006

1733.34 Merger of credit unions.

(A) Any credit union may, with the approval of the superintendent of credit unions, merge with any other credit union under the existing charter of the other credit union, pursuant to any plan approved by the board of directors of each credit union joining in the merger, and approved by a majority of the members of each credit union represented at a meeting of members in person, by ballot, or by proxy, duly called for such purpose, at which a quorum of the entire membership is present, unless such meeting of members of either credit union has been waived by the superintendent. The superintendent may waive the members' vote if it is in the interest of the members, credit union, or for any other reason the superintendent deems proper. After such approval of the board and members of each credit union, the president or chairperson of the board and secretary of each credit union shall execute a certificate of merger, which shall set forth all of the following:

(1) The time and place of the meeting of the board of directors at which the plan was agreed upon;

(2) The vote in favor of adoption of the plan;

(3) A copy of the resolution or other action by which the plan was agreed upon;

(4) The time and place of the meeting of the members at which the plan agreed upon was approved;

(5) The vote by which the plan was approved by the members.

(B) Such certificates and a copy of the plan of merger agreed upon shall be forwarded to the superintendent and, upon approval, returned to the merging credit unions.

(C) Upon any such merger so effected, all property, property rights, and interests of the merged credit unions shall vest in the surviving credit union without deed, endorsement, or other instrument of transfer, and all debts, obligations, and liabilities of the merged credit unions shall be deemed to have been assumed by the surviving credit union under whose charter the merger was effected.

(D) This section shall be construed, whenever possible, to permit a credit union chartered under any other act to merge with one chartered under this act.

(E) All persons and associations eligible for membership, as provided in section 1733.05 of the Revised Code, of both credit unions effecting a merger shall be deemed to have a common bond of association.

Effective Date: 01-01-1979; 2008 SB247 09-01-2008

1733.341 Conversions.

Any credit union operating under this chapter may convert to a federally chartered credit union and any federally chartered credit union operating in this state may convert to a credit union organized under this chapter upon compliance with applicable state and federal laws, rules, and regulations.

Any production credit association organized under the "Farm Credit Act of 1971," 85 Stat. 583, 12 U.S.C.A. 2091 to 2097 , may convert to a credit union organized under this chapter upon compliance with applicable state and federal laws and regulations and with the approval of the superintendent of credit unions.

Effective Date: 09-29-1994

1733.35 Dissolution.

A majority of the entire membership may vote to dissolve the credit union at a regular or special meeting called for that expressly stated purpose. Any member, within twenty days of the date of the mailing of notice of such meeting, may vote on the question of dissolution by signing a statement in form approved by the superintendent of credit unions, and such vote shall have the same force and effect as any other vote. The credit union shall thereupon immediately cease to do all business except for the purpose of liquidation, and the president and secretary shall, within fifteen days following such meeting, notify the superintendent in writing of its intention to liquidate, and shall include in such notice a list of the names of directors and officers of the credit union together with their addresses.

Effective Date: 01-01-1979

1733.36 [Repealed].

Effective Date: 09-29-1994

1733.361 Appointment and removal of conservator - duties of conservator.

(A)

(1) The superintendent of credit unions may issue an order appointing a conservator for any credit union whenever he considers it necessary in order to conserve the assets of such credit union for members, depositors, and creditors. The superintendent shall appoint a conservator for any credit union whose status as an insured institution has been terminated.

(2) Within thirty days after the date of the order of appointment of a conservator, the credit union may commence a civil action in the court of common pleas of Franklin county to obtain an order compelling the superintendent to remove the conservator. The court shall give the action calendar priority over other civil business before the court and expeditiously proceed and make a determination on it. The Rules of Civil Procedure apply to the action except that the copy of the complaint and summons shall be served by the sheriff of Franklin county on the superintendent and shall be returnable within five days after the date of service, whereupon the allegations of the complaint are deemed to stand denied without necessity of filing an answer under Civil Rule 12.

(3) The credit union may consent to the appointment of a conservator by resolution of the majority of the board of directors of record on the date of the order of appointment.

(4) The superintendent may fix the compensation to be paid to the conservator, the bond or other security to be required of him, and may remove such conservator at any time.

(5) On or after the appointment of a conservator for any credit union, the superintendent may order the closing of the books of such credit union. He may thereafter permit such books to be reopened.

(B) The conservator:

(1) Shall take possession of the business and property of such credit union;

(2) Shall have and exercise, in the name and on behalf of the credit union, all the rights, powers, and authority of the officers, directors, and members of the credit union and may continue its business in whole or in part with a view to conserving its business and assets pending further disposition thereof as provided by law under the supervision of the superintendent and upon such limitations as are imposed by him;

(3) May give notice that he has taken possession of the assets of the credit union to all persons holding or having possession of any assets of such credit union;

(4) In all other respects, operate the credit union in accordance with, and remain subject to, the requirements of this chapter;

(5) May bring or defend suits or proceedings in the name of the credit union under the direction and supervision of the superintendent.

(C) This section does not vest title to any assets of the credit union in the conservator. No person, firm, corporation, or association, knowing that a conservator has taken possession of the business and property of a credit union or having been so notified shall have a lien or charge against any of the assets of such credit union for any payment, advance, or liability thereafter made or incurred.

(D) The superintendent may terminate the conservatorship and permit the credit union to resume the transaction of its business, subject to such terms and restrictions as he prescribes, when the superintendent determines that the termination of such conservatorship may be safely done and would be in the public interest. The superintendent may terminate the conservatorship and issue an order revoking the credit union's articles of incorporation and appointing a liquidating agent to liquidate the credit union in accordance with and on the grounds provided in section 1733.37 of the Revised Code.

(E) The conservator may, subject to the approval of the superintendent, submit a plan for the termination of the conservatorship to the members of the credit union. If the majority of the members vote to accept the plan, the members shall elect directors to manage the affairs of the credit union.

(F) The expenses of the conservatorship and compensation of the conservator if any, as provided in this section, shall be paid out of the assets of the credit union and shall be a lien thereon prior to any other lien.

Effective Date: 09-29-1994

1733.37 Liquidation.

(A) If it appears that any credit union is bankrupt or insolvent, that its shares are impaired, that it has violated this chapter or rules adopted by the superintendent of credit unions, or that it is operating in an unsafe or unsound manner, or if the credit union is experiencing a declining trend in its financial condition and a majority of its board of directors, by resolution, requests the issuance of an order under this division, the superintendent may issue an order revoking the credit union's articles of incorporation and appointing a liquidating agent to liquidate the credit union in accordance with this section.

(B) A credit union under order to liquidate or in the course of liquidation, shall continue in existence for the purpose of discharging its debts, collecting and distributing its assets, and doing all acts required in order to wind up its business, and may sue and be sued for the purpose of enforcing such debts and obligations until its affairs are fully adjusted. The board of directors, or in the case of involuntary dissolution, the liquidating agent, shall use the assets of the credit union to pay: first, expenses incidental to liquidation, including any surety bond that may be required; second, any liability due nonmembers; third, redemption of shares and share accounts. Assets then remaining shall be distributed to the members proportionately to the purchase price of shares held by each member as of the date dissolving was voted.

(C) As soon as the board or the liquidating agent determines that all assets from which there is a reasonable expectancy of realization have been liquidated and distributed as set forth in this section, it shall execute a certificate of dissolution on a form prescribed by the superintendent of credit unions and submit the certificate to the secretary of state who shall, after filing or recording and indexing, forward evidence of the filing to the superintendent, whereupon the credit union shall be dissolved.

(D) If the articles of a credit union have been canceled for cause, or if a credit union has filed a certificate of dissolution or has indicated an intention to file such certificate, and the directors and officers of the credit union, in the opinion of the superintendent, are not conducting the liquidation proceedings in an expeditious, orderly, and efficient manner or in the best interest of its members, the superintendent may terminate the liquidation proceedings and issue an order appointing a liquidating agent to liquidate the credit union in accordance with this section. Such liquidating agent shall furnish bond for the faithful discharge of the liquidating agent's duties in an amount to be approved by the superintendent.

(E) The liquidating agent may, under such rules as the superintendent prescribes:

(1) Receive and take possession of the books, records, assets, and property of every description of the credit union in liquidation; sell, enforce collection of, and liquidate all such assets and property; compound all bad or doubtful debts, sue in the name of the credit union in liquidation, and defend such actions as are brought against the liquidating agent in the capacity as liquidating agent or against the credit union;

(2) Receive, examine, and pass upon all claims against the credit union in liquidation, including claims of members;

(3) Make distribution and payment to creditors and members as their interests appear;

(4) Execute such documents and papers and do other acts that the liquidating agent deems necessary or desirable to discharge official duties.

(F) The expenses incurred by the liquidating agent in the liquidation of the credit union include the compensation of the liquidating agent and any other necessary or proper expenses connected therewith, all of which shall be paid in order of priority out of the property of the credit union in the hands of the liquidating agent. Expenses of liquidation, including the compensation of the liquidating agent, are subject to approval by the superintendent unless such agent is appointed by the court. In no event shall the total of the expenses exceed ten per cent of the assets of the credit union existing at the date of the appointment of the liquidating agent, nor shall the compensation of such agent exceed five per cent of assets upon that date or five thousand dollars, whichever is the lesser amount.

(G) Subject to the prior approval of the superintendent, a credit union may enter into a purchase and assumption agreement to purchase any of the assets or assume any of the liabilities of a credit union for which a liquidating agent has been appointed by order of the superintendent in accordance with this section. All persons, associations, and select groups eligible for membership in the credit unions that are parties to the purchase and assumption agreement shall be deemed to have a common bond of association. The assumption of the field of membership may be restricted, as specified in the purchase and assumption agreement.

Effective Date: 07-29-1998; 04-14-2006

1733.38 Qualification of foreign credit union.

A credit union organized and duly qualified as a credit union in another state or territory may qualify to do business as a credit union in this state provided:

(A) Such credit union is organized under credit union law substantially similar to sections 1733.01 to 1733.45 of the Revised Code;

(B) The interest rate of such credit union on loans made to members in this state does not exceed the maximum interest rate permitted by sections 1733.01 to 1733.45 of the Revised Code;

(C) A credit union organized and doing business under the laws of this state is permitted to do business in such other state or territory under conditions substantially similar to the provisions of this section.

Effective Date: 11-19-1971; 04-14-2006

1733.39 Requirements for doing business.

No credit union which is not organized under sections 1733.01 to 1733.45 of the Revised Code, or the "Federal Credit Union Act," 84 Stat. 994 (1970), 12 U.S.C. 1751 , as amended, shall transact any business in this state until:

(A) It submits to the superintendent of credit unions an application for qualification in such form as shall be prescribed by the superintendent. Such application shall be accompanied by a copy of the articles of such credit union duly certified by, and under the seal of, the secretary of state, or other proper official, of the state under the laws of which the credit union was incorporated, which, when approved by the superintendent, shall be transmitted to the secretary of state for filing;

(B) It furnishes to the superintendent a copy of its rules duly certified by its president and secretary;

(C) It files with the superintendent a duly authorized and properly executed document appointing the superintendent as its agent for service of process in this state;

(D) It submits to the superintendent a filing fee of fifty dollars payable to the treasurer of state, which shall be credited to the division of credit unions fund; provided, that in no event shall the fees paid for qualification in this state by any credit union domiciled in another state be less than the fees required to be paid by a credit union domiciled in this state for qualification in the state of domicile of such other credit union;

(E) Obtains a license to transact business as a foreign credit union from the superintendent.

Effective Date: 07-01-1985

1733.40 Annual report.

Each credit union qualified to do business in this state pursuant to section 1733.38 of the Revised Code shall:

(A) Annually file with the superintendent of credit unions a financial report which shall be the same as the report required of credit unions domiciled in this state under section 1733.32 of the Revised Code. Such report shall be accompanied by the same fee required to be paid by domestic credit unions, and failure to file such report in the time required under section 1733.32 of the Revised Code shall subject such credit union to the penalties therein provided for domestic credit unions which fail to make such filing.

(B) Within ten days following receipt thereof, file with the superintendent a copy of all audits performed by the credit union supervisory authority of the state of domicile of such credit union, which examination or audits shall have been duly certified by such supervisory authority;

(C) Within ten days following the effective date of any amendment to the articles or regulations, file a copy thereof, duly certified by the secretary of state or other appropriate regulatory body, with the superintendent;

(D) If it shall appear that any foreign credit union is bankrupt or insolvent, or that it has violated sections 1733.01 to 1733.45 of the Revised Code, pertaining to foreign credit unions or rules promulgated by the superintendent thereunder, or is operating in an unsafe or unsound manner, the superintendent shall issue an order suspending such foreign credit union's operation in this state for not less than thirty nor more than sixty days. The foreign credit union shall be given notice by certified mail of such suspension. Such notice shall include a list of reasons for such suspension and a list of specific violations of law or rules or unsafe or unsound practices. Upon receipt of such suspension notice, the foreign credit union shall immediately cease all operations in this state. The foreign credit union shall, within ten days of the receipt of such notice, file with the superintendent a reply to the suspension notice and request a hearing to present a plan of corrective actions proposed, if it desires to continue operations in this state. If the foreign credit union fails to answer the suspension notice within the time specified in such notice or to request a hearing before the superintendent or, upon hearing, the superintendent finds that the credit union has violated sections 1733.01 to 1733.45 of the Revised Code, pertaining to foreign credit unions or the rules promulgated by the superintendent thereunder or is operating in an unsafe or unsound manner and that it is in the public interest for the credit union to cease doing business in this state, the superintendent shall revoke the foreign credit union's qualification to do business in this state and may take possession of all assets of the foreign credit union in this state, appoint a liquidating agent, and liquidate the foreign credit union's assets and claims in this state in accordance with section 1733.37 of the Revised Code.

Effective Date: 09-29-1994

1733.41 Additional rules and regulations.

In addition to the specific authority given the superintendent of credit unions by other sections of this chapter, the superintendent may from time to time make, issue, amend, and rescind such rules and orders as he may consider necessary or appropriate to further the purposes of this chapter or to protect the public interest, including rules defining accounting, technical, trade, and other terms, whether or not used in this chapter, insofar as such rules do not contradict this chapter. Without limiting his power under this chapter, the superintendent may specify terms to be included in the articles or code of regulations of credit unions, requirements for notice of meetings of members, required and prohibited practices related to solicitation of proxies, limitations on credit unions' borrowing and lending practices, including loans to credit union employees, the form of and practices used in accounting for credit unions, including the form of financial statements and other records kept, the character of investments credit unions may make, and the operation of a credit union in dissolving or liquidating or petitioning for reorganization. The superintendent shall not prescribe uniform rules or provisions in regulations without due regard for the differences among credit unions. For the purpose of his rules, the superintendent may classify credit unions, persons, and matters within his jurisdiction and prescribe different requirements for different classes of credit unions, persons, or matters. Rules promulgated pursuant to this section shall be made subject to sections 119.01 to 119.13 of the Revised Code.

Effective Date: 01-01-1979

1733.411 Adoption of administrative rules.

The superintendent of credit unions, in accordance with Chapter 119. of the Revised Code and subject to section 1733.41 of the Revised Code, shall adopt the following rules:

(A) Rules regulating payments, by credit unions, to or on behalf of any business entity that employs, or that is owned or controlled by, a director or officer of the credit union;

(B) Rules prohibiting a credit union from paying or offering to pay compensation or any other remuneration to one of its members due solely to the member's status as a member. These rules shall not prohibit any member of a credit union from receiving dividends that have been properly declared, or from receiving compensation for services rendered to the credit union, so long as the compensation is reasonable in relation to the services rendered. The rules may, however, require the reporting of compensation received by members for services rendered.

(C) Rules prescribing accounting principles and practices that are to be observed and utilized by outside auditors in conducting audits under section 1733.19 of the Revised Code. The accounting principles and practices prescribed for outside auditors may exceed those otherwise prescribed in rules adopted under section 1733.41 of the Revised Code, but shall be generally in accordance with accepted accounting principles as defined by the American institute of certified public accountants.

Effective Date: 07-14-1987

1733.412 Powers of federal credit unions granted to state chartered credit unions.

(A) Notwithstanding any provision in Chapter 1733. of the Revised Code, if a credit union operating in this state that is organized or chartered under this chapter or the laws of the United States possesses any right, power, privilege, or benefit by virtue of a statute, rule, policy, regulation, interpretation, or judicial decision , the superintendent of credit unions shall adopt a rule under section 111.15 of the Revised Code granting any credit union doing business under authority granted by the superintendent authority to exercise the respective right, power, privilege, or benefit.

(B) The rule adopted by the superintendent pursuant to the authority of this section becomes effective on the later of the following dates:

(1) The date the superintendent issues the rule;

(2) The date the statute, rule, policy, regulation, interpretation, or judicial decision on which the superintendent's rule is based becomes effective.

(C) If the rule adopted by the superintendent pursuant to this section is not enacted into law or adopted in accordance with Chapter 119. of the Revised Code within thirty months from its effective date , the rule shall thereupon no longer be of any force or effect; however, the superintendent may adopt the rule under section 111.15 of the Revised Code pursuant to this section for an additional thirty-month period.

(D) The superintendent, upon thirty days' written notice to state-chartered credit unions, may revoke any rule issued by virtue of the authority of this section.

Effective Date: 09-29-1994; 04-14-2006

1733.42 Computing time for giving notice.

In computing the period of time for the giving of a notice required or permitted under sections 1733.01 to 1733.45 , inclusive, of the Revised Code, or under the articles, regulations, or bylaws of a credit union, or a resolution of its shareholders or directors, the day on which the notice is given shall be excluded, and the day when the act for which notice is given is to be done shall be included, unless the instrument calling for the notice otherwise provides. If notice is permitted to be given by mail, the notice shall be deemed to have been given when deposited in the mail.

Effective Date: 11-19-1971

1733.43 Exemption from franchise tax and report.

A credit union shall not be required to pay the annual tax imposed on domestic corporations for the privilege of exercising the corporate franchise, or to file the annual report on which such tax is computed.

Effective Date: 11-19-1971

1733.44 Prohibition against use of words credit union.

(A) No person, partnership, association, or corporation, other than credit unions and associations of such credit unions, to which all credit unions in their respective jurisdictions are eligible, shall use any name or title containing the words "credit union" or represent themselves, in advertising or elsewhere, as conducting business as a credit union.

(B) Subject to all of the following, a credit union may adopt one or more trade names:

(1) The credit union shall give written notice of the proposed trade name to the superintendent of credit unions at least thirty days before using the trade name.

(2) The superintendent may deny a credit union the right to use a given trade name or terminate a credit union's right to use a trade name for any reason.

(3) A credit union may use a trade name or a name other than its official charter name in advertising or signage, so long as it uses its official charter name in communications with the division of financial institutions and for share certificates or certificates of deposit, signature cards, loan agreements, account statements, checks, drafts, and other legal documents.

(4) A trade name shall be registered with the secretary of state pursuant to the laws of this state and the registration shall be accompanied by any written documentation issued by the superintendent relating to the right to use, denial to use, or termination of a trade name.

Effective Date: 11-19-1971; 04-14-2006

1733.45 Applicability of general corporation laws.

A credit union shall be created, organized, governed, and conducted and its directors and officers shall be chosen, in all respects in the same manner as provided in sections 1701.01 to 1701.99 , inclusive, of the Revised Code, for corporations generally, insofar as such manner is not inconsistent with this chapter.

Effective Date: 11-19-1971

1733.47 Criminal records check to be requested by superintendent.

Whenever the approval of the superintendent of credit unions is required under this chapter, or under an order or supervisory action issued or taken under this chapter, for a person to serve as an organizer, incorporator, director, or executive officer of a credit union, or to otherwise participate in the management of a credit union, the superintendent shall request the superintendent of the bureau of criminal identification and investigation, or a vendor approved by the bureau, to conduct a criminal records check based on the person's fingerprints in accordance with section 109.572 of the Revised Code. The superintendent of credit unions shall request that criminal record information from the federal bureau of investigation be obtained as part of the criminal records check. Any fee required under division (C)(3) of section 109.572 of the Revised Code shall be paid by the person who is the subject of the request.

Amended by 129th General AssemblyFile No.127, HB 487, §101.01, eff. 1/1/2013.

Effective Date: 2008 SB247 09-11-2008

1733.51 Deposit of moneys for preneed funeral or cemetery merchandise and services contract.

A credit union may, subject to sections 1721.211 and 4717.31 to 4717.38 of the Revised Code, receive and hold on deposit moneys under a preneed funeral contract or preneed cemetery merchandise and services contract.

Effective Date: 10-20-1999; 2008 SB196 07-06-2009

1733.99 Penalty.

(A) Whoever violates section 1733.44 of the Revised Code, or any order of the superintendent issued pursuant to this chapter, shall be guilty of a misdemeanor of the first degree.

(B) Whoever violates division (C) of section 1733.327 of the Revised Code is guilty of a misdemeanor of the first degree. A person who is convicted of violating such division is also subject to disciplinary action, including dismissal or removal from office.

Effective Date: 07-14-1987